ADVERTISEMENT

ADVERTISEMENT

Local retirees rejoice after steep benefits cut delayed, but path forward unclear

FARGO--Transportation and warehouse retirees are rejoicing over a federal official's decision to reject a plan that would have slashed their pensions by up to 60 percent this summer.

Dennis Kooren, left, 63, and Dave Schmidt, 68, of Fargo are concerned about their financial futures after the retired UPS drivers had their pensions cut in half as a result of the Central States Pension Fund's recent slash of almost 300,000 retirees' plans. Dave Wallis / The Forum
Dennis Kooren, left, 63, and Dave Schmidt, 68, of Fargo are concerned about their financial futures after the retired UPS drivers had their pensions cut in half as a result of the Central States Pension Fund's recent slash of almost 300,000 retirees' plans. Photo by Dave Wallis / Forum News Service.

FARGO--Transportation and warehouse retirees are rejoicing over a federal official's decision to reject a plan that would have slashed their pensions by up to 60 percent this summer.

The U.S. Treasury Department recently rejected a proposal that would cut retirement payments under the Central States Pension Fund to 2,000 North Dakota families and 400,000 retirees nationwide. That blocked cuts set to take effect in July, but the next step is still unclear.

"It is exactly what we want at this stage," said Dennis Kooren, a retired UPS driver in Fargo and spokesman for the North Dakota Committee Protecting Seniors' Rights, which represents pensioners. "We won this battle, but we still have the war."

Kooren has said the pension cuts will affect at least 40 retired UPS drivers in the Fargo area.

The $16.1 billion fund for Teamsters union retirees covers workers from the trucking and grocery warehouse supply industries. The fund is in dire financial health. For every $3.46 it pays out in benefits, the fund takes in only $1 from employers, translating into an annual shortfall of $1 billion.

ADVERTISEMENT

To keep the pension plan from becoming solvent, Central States Pension Fund sought steep cuts in retirees' benefits, threatening their secure retirements. Workers often rely heavily on their pensions, since the heavy, repetitive lifting required of their jobs forced many to retire early.

Kooren, for example, retired with a partial disability eight years ago at age 55. He needed knee replacement surgery, and all of his joints were painful and swollen from lifting boxes as heavy as 150 pounds.

For his 30 years on the job, he contributed an average of $1,200 a month toward his pension--a sum that topped $400,000. But that nest egg is at risk because of the fund's losses, losses Kooren blames on mismanagement by Wall Street financial management firms.

Pensioners aren't seeking a bailout, Kooren said. Instead, they want to hold those who ran the fund aground held accountable.

"We want solutions," Kooren said, "not bailouts."

Legislation Congress passed in 2014 enabled the proposed steep pension cuts that Treasury has rejected as unfair and for failing to meet certain legal standards.

The provisions were included in an omnibus funding bill and continuing resolution--a critical budget bill that had to be passed to avert a government shutdown--under the Multistate Employer Pension Reform Act. The act gave pension fund trustees new powers to alter pension plans, detailed legislation buried in a budget bill that Kooren doubts many members of Congress understood when they approved it.

"Congress was led astray," Kooren said.

ADVERTISEMENT

Retirees covered by the Central States Pension Fund are seeking a forensic audit for a detailed understanding of what went wrong, and litigation is possible, Kooren said.

After Treasury officials informed the fund's trustees on May 6 that the rescue plan was rejected, they called on Congress and union officials to work on alternatives. Based on current projections, the fund will run out of money in a decade unless benefits are cut, trustees say.

Sen. Heidi Heitkamp, D-N.D., an outspoken critic of the plan to slash the pension benefits, applauded Treasury for declining to sign off on the plan.

"But we aren't out of the woods and still need to find a solution that both protects workers and retirees who did everything right while also getting this pension fund on a solid financial footing," Heitkamp said in a statement.

"It's now up to all of the stakeholders--Central States trustees, Congress and retirees--to come together and find a path forward that is fair to workers and retirees, and restores the long-term solvency of the Central States Fund, so all pensioners can afford a secure retirement."

Dave Schmidt of West Fargo, 68, said a 60 percent reduction in his pension would be devastating.

"I would lose my place where I live," he said. "I would possibly lose my car."

His health wouldn't permit him to work full time, and part-time work for someone his age would be difficult to find, he said.

ADVERTISEMENT

"Who's going to hire a 70-year-old man for part time?" Schmidt said.

Ruth Boland, 69, who drove a UPS delivery truck for 30 years and has a hip and knee replacement, said the 2014 law should be overturned to protect pensioners.

"We have to keep pressing to get that law turned around," she said. "It's got to be a permanent fix."

Because of the uncertainty over her pension, Boland has been cutting back on her spending. Her main form of entertainment is playing cards. If her pension is cut steeply, she would be able to scrape by, but would not have the comfortable retirement she'd expected.

"You have to watch every penny," Boland said. "Right now we're existing. We're not living."

It could take years before the pension mess is resolved, meaning retirees likely face prolonged uncertainty, she said.

"I don't think anybody has the answer to that," Boland said, referring to the date a solution will be found. "You hope for the best."

What To Read Next
The North Dakota Highway Patrol is investigating the crash.
The Dickinson Police Department responded to numerous calls for service over the past week, and these are just a few highlights of the incidents that occurred.
Dissenting city commissioner objects to rebranding, citing unknown cost, lack of public input and historical connection with old logo.
“Let’s put this in the rearview mirror,” Sen. Michael Diedrich, a Rapid City Republican said.