A U.S. Treasury Department pension ruling will block a reduction in pension payments to hundreds of thousands of retirees, including roughly 15,000 in Minnesota. Friday’s decision drew praise from the state congressional delegation’s Democrats who said anything less would be a broken promise.
The decision involving the Central States Pension Fund headed off potential cuts of up to 50 percent.
U.S. Sen. Al Franken said Teamsters who paid into the fund and worked to build up benefits shouldn’t have had to worry about seeing their pensions sliced.
“I believe Minnesotans who work hard and are promised financial security ought to be able to retire with dignity,” Franken said in a news release.
Pension plans were allowed under a 2014 law change to apply for reduction in retiree benefits in the name of avoiding insolvency.
Thomas Nyhan, executive director of the Central States Pension Fund, said the entity was disappointed “as we believe the rescue plan provided the only realistic solution to avoiding insolvency.” He said the fund could run out of money in 10 years or less and retirees could face a more dire outcome if something isn’t done.
Nyhan said union official and others “now must move beyond talk and take action to secure the funding needed to protect the pensions of all current and future Central States Pension Fund participants and beneficiaries.”
U.S. Rep. Rick Nolan, who represents Minnesota’s 8th District, called on Congress to do more to address underfunded pensions in a way that doesn’t threaten promised benefits.
“If we fail to address this crisis, nobody’s pensions will be safe,” Nolan said in a statement Friday. “Make no mistake – there are powerful forces trying to do away with people’s pensions, and we will continue to fight them on every front.”