Don Pardee, a retired Teamster from Lapeer, Mich., collects a monthly pension check of $2,600. If a proposal by the Central States Pension Fund is approved, the 64-year-old’s monthly benefit will be reduced to about $1,050.
“They’ve cheated me, no doubt,” Pardee said. “We gave up raises to get a pension.
“It’s going to hurt a lot of people, because they haven’t prepared.”
Leland Wilkins and Barry Daniel are also among the hundreds of thousands of truck drivers who stand to have their pensions reduced if mediator Kenneth Feinberg decides Central States’ proposal falls under a controversial 2014 law.
The Pension Reform Act of 2014 allows plans deemed to be in “critical and declining status” to reduce benefits. Central States has told its retirees that the fund will run out of money by 2026 if cuts aren’t made. The Central States Pension Fund has 400,000 participants in 38 states. About 220,000 of them are retirees.
“You have to keep working,” said Wilkins, an OOIDA life member who continues to work as an owner-operator at age 70. “There are all kinds of guys who are going back to work, because you can’t make it. I was one who never planned to retire. I’m glad I never had that mindset. I’m just lucky I’m in good health.”
Wilkins said he would draw $590 a month once he retires, but the cuts will reduce that monthly payment to about $190. He said his brother, Don Wilkins, will be reduced from about $2,600 to $1,600 per month.
“So many guys worked hard for that pension,” Leland Wilkins said. “They earned that money. I went to a meeting in Detroit the other night. There were about 700 to 800 people there. Everybody’s upset, and you can’t blame them. They had plans for their retirement, and now they can’t do them.”
Daniel, 57, said he’d receive about $930 a month once he retires at age 65 under the current plan. But the OOIDA senior member from New Vienna, Ohio, said now he doesn’t know how much of his pension fund will be available once he’s ready to retire.
“It’s really not fair,” Daniel said. “I wonder whether or not Social Security is going to be there as well.”
The possibility of having to find a new way to fund their retirement is also discouraging to Barry’s wife, Bonnie.
“I told him that I guess we’re just going to work until we drop dead,” she said. “It’s disappointing, because he worked hard. We counted on that money.”
Retirees age 80 or older will not have their payments reduced. Those 75-79 will receive smaller cuts than younger retirees.
Pardee said he is prepared for the cuts, because he planned accordingly. However, Pardee doesn’t believe retirees 80 or older should be exempt since they already potentially cashed in as much as $1 million through the pension fund.
“If you’ve already drawn $1 million from the pension, you should have some money saved,” he said.
However, older retirees are protected under the 2014 law. Other limitations to cuts include:
A participant’s or beneficiary’s monthly benefit can’t be reduced below 110 percent of the Pension Benefit Guaranty Corp. guarantee.
Disability pensions are exempt from benefit suspensions.
Benefit suspensions shall be reasonably implemented to avoid plan insolvency.
Feinberg is expected to make a decision by May. If approved, the cuts would start in July.
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