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Pension participants weigh in on Teamsters' plan to cut benefits

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Pension participants weigh in on Teamsters' plan to cut benefits

As the deadline for submitting comments nears, close to 2,000 participants in one of the nation's biggest multiemployer pension plans are voicing their concerns about the financially troubled Central States, Southeast and Southwest Areas Pension plan's proposal to cut benefits.

“I worked at United Parcel Service for 30 years. I gave them 100% every day. Now that I'm retired, I expect 100% of the pension that I earned and was promised me under our contract for life. I was told I would have to take a 50% cut. A cut of this size will destroy our quality of life,” plan member Wade Blackwelder of Bessemer City, North Carolina, wrote to the U.S. Treasury Department.

His comment is among the nearly 2,000 letters that participants have sent to the federal agency that has the final say on the plan's proposal to cut benefits to prevent its insolvency. Earlier, the financially distressed plan, which has more than 400,000 participants, reported that it had $35 billion in liabilities and just $17.8 billion in assets at the end of 2014.

Those cuts are allowed under a 2014 law that permits such reductions with regulatory approval to prevent multiemployer plans from becoming insolvent. Earlier, the Central States plan said cuts would be necessary “to prevent a real risk” of a total loss of benefits.

The law also allows participants to comment to the Treasury Department on proposed benefit cuts. Initially, the comment period for the proposed cuts to the Central States' plan was to have ended Dec. 7. But Treasury later extended the deadline to Feb. 1, with the agency having until May 7 to decide on the proposal that would cut, according to Central States, benefits for 272,600 of the plan's 407,000 participants.

Nearly all posted comments opposed the cuts.

“How do you want us to survive? Explain this to us retirees! The sad part is we retirees were not on welfare — we made our way and worked for our pension,” wrote Patty Perry of Redford, Michigan.

“I will not be able to stay in my home. What happened to the American Dream?” wrote Adrean Storhaug of Sioux Falls, South Dakota.

Some urged federal financial support to avoid benefit cutbacks.

“The federal government could have protected us, and should do the honorable thing and protect the fund now with a bail out,” wrote Robert Perris of Hillsboro, Missouri.

Some participants said they understood the Central States' financial difficulties, but said they should not bear the full burden — through benefit cutbacks — of shoring up the plan.

“There has to be better less painful way of fixing problems with CSPF. People will lose homes, autos, children's education etc. No one can take these kind of cuts. I am sure that the fund needs help but not the help that shores up the plan but destroys the retirements that we paid for,” wrote John Mays, who did not disclose where he resides.

And some suggested dissolving the plan.

“The Treasury Department should seize all assets, do a complete audit, prosecute, if any wrongdoing is discovered, dissolve the fund and distribute the remaining assets/funds back to the participants according to the amount of pension contributions made on each participant's behalf by employers,” wrote Buzz Sanders of Cincinnati.

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