Treasury Department Rejects Teamsters’ Central States Proposal to Cut Retiree Benefits. Proposed cuts would have slashed members’ pension checks by 50% or more .

The Wall Street Journal reports:

The Treasury Department rejected a proposal to cut retirement payouts for hundreds of thousands of truck drivers, construction workers and other service personnel, turning back an attempt to keep the Teamsters’ Central States Pension Fund afloat.

The decision by well-known mediator Kenneth Feinberg heads off planned reductions to pension checks of up to 90% for some, a win for labor unions and retirees. But the victory could prove short-lived. The plan, which represents 400,000 workers at 1,500 companies in the Great Plains, Midwest and Southeast, faces a funding shortfall that its administrators say could leave it insolvent in a decade.

Mr. Feinberg said he rejected the plan because it unfairly imposed uneven cuts among retirees, sent notifications to participants that were too technical to be understood and was based on overly rosy assumptions about investment returns. “We at Treasury do not believe that the plan as submitted will reasonably avoid insolvency,” Mr. Feinberg told reporters.

It is extremely rare for retirees’ pension benefits to be reduced. In most cases, it is illegal, but a 2014 federal law made it possible to impose cuts on participants in some cash-strapped plans covering workers and multiple employers. At Central States, some 270,000 retirees were facing benefit cuts.

The story that will not go away.