With union pensions in jeopardy, Ohio members plead with Congress and the feds

Cleveland.com reports:

Alex Adams lifted his shirt so the panelists and audience could see the bandages and feeding tube.

"This is how I eat," he said in a halting voice.

The crowd, rapt in silence, moved to its feet to applaud when he was done. Adams, 73, a former truck driver, former president of Teamsters Local 407 and a current city council member from Maple Heights, Ohio, didn't want pity as he told a group of federal officials about his circumstances, including bouts with larynx and tonsil cancer.

But he wanted to explain why he needs his pension -- all of it, even though Congress has not only allowed it to be cut but, as he and others see it, facilitated the cut. Some pensions similar to his could be cut by more than 60 percent. Nearly 50,000 pensions in Ohio could be affected.

Adams is both a beneficiary and, some say, a victim of the Teamsters' Central States Fund, a multiemployer pension plan to which he contributed for 37 years. Multiemployer plans are administered on behalf of employers and unions in industries where workers might move from company to company but the work itself -- trucking, warehousing, machine operations, construction -- stays fairly constant.

The last recession clobbered financial returns on all kinds of investments, including those held by pension funds. Some multiemployer plans warned that they were not only deeply underfunded but also had few prospects for recovery. This prompted some members of Congress to worry that the pension obligations for up to 1.5 million workers could get dumped on the federal government.

The government's Pension Benefit Guaranty Corp., or PBGC, typically agrees to pay a share of pensions that go bust. But considering the financial state of many multiemployer plans, this could threaten the very solvency of the PBGC's multiemployer pool.

So last December, as Congress finished a last-minute government funding bill to avoid a federal shutdown, lawmakers threw in pension provisions. They attached a bill that had received little public attention, the Multiemployer Pension Reform Act of 2014, to the omnibus spending bill.

The bill allowed troubled multiemployer pension plans, like the one Adams paid into all his working life, to cut benefits. Although the Teamsters' Central States Fund, with about 400,000 members, has $18 billion in assets, it has $35 billion in liabilities, with annual payouts eclipsing contributions. The fund has said already that it plans to utilize the deal that lawmakers brokered in December. So that's why Adams and hundreds more union members came by the busload Thursday to Washington -- to urge federal officials and members of Congress to save their pensions.

You'll want to read the entire article, because the next bear market in stocks could really hurt some pension plan "assumptions".