Nearly 35,000 New York Teamster members will have their benefits cut because the union’s pension fund is running out of money.
According to documents obtained by USA Today, retired members were warned that their monthly pension payments would be cut by more than 30% next year, and members who are currently working can expect future benefits to be cut by nearly 20%
The pension fund covers UPS drivers and many other New York-based trucking companies.
The fund currently has $1.58 billion in assets but owes more than $3 billion in near-term pension payments and other liabilities. The letter to members stated, “Our fund remains severely underfunded and cannot be saved unless we take additional and immediate action.”
“We are determined not to allow our fund to deteriorate to a point where the fund cannot be saved,” it continued.
In the past, unions were not allowed to cut benefits from retired workers, but a law passed in 2014 gave unions the power to cut pension payments from both retired and current workers if they are running out of money.
A Teamster representative blamed their financial shortfalls on stock market losses from the 2008 financial crisis. However, the stock market has since made a historic recovery and hit all times highs in 2016.
A representative also warned that if the cuts are not made immediately, that it may result in greater cuts for all members in the future.
“If we wait to take action, we will be forced to make even larger cuts later, and run the risk that the fund will end up paying no pensions at all,” the letter to members read.
