Proposed pension benefits cuts for some active and retired Teamsters, including about 5,200 in Western New York, are a step closer to happening.
The Treasury Department approved a plan submitted by the New York State Teamsters Conference Pension and Retirement Fund, requesting permission to implement the cuts. The reductions could take effect Oct. 1.
“No one wants to see pension benefits reduced,” fund officials said in a statement. “Unfortunately, the alternative — no pensions at all — is what would happen if the trustees had not filed this application.” Fund officials estimated that without the cuts, the fund would run out of money in less than 10 years.
Fund participants — there are 34,000 of them statewide — will now get a chance to vote on the plan. But even if participants vote “no,” the Treasury Department could allow the reductions to go through anyway. Government officials may decide the fund is “systematically important,” meaning that if the fund were allowed to go insolvent, it would impose too great a liability on the Pension Benefit Guaranty Corp., which acts as a backstop for pension funds that run out of money.
Under the plan, participants 80 or older would see no benefits reduction, and those ages 75 to 79 would have their benefits cut by lesser amounts, depending on their age. Participants receiving a disability benefit from the fund also would not see a reduction.
Active participants’ monthly benefits would be cut by 18 percent. Retirees’ benefits would be cut by 29 percent, instead of 31 percent.