Despite lopsided ‘no’ vote, Western States OPEIU cuts retiree benefits to halt slide to insolvency


If you see something like this in the mail, you’d better open it. This is the mail ballot Western States OPEIU Pension participants received — about whether to cut pension benefits 30 percent in order to prevent pension plan insolvency.

By Don McIntosh

As of Oct. 1, pension benefits were cut as much as 30 percent for retired members of Office and Professional Employees International Union (OPEIU) who worked in the Western United States — even though the proposal to make the cuts was rejected by a majority of participants who voted on the question.

Cutting pension benefits for current and future retirees is a new option for trustees at union-sponsored multi-employer pensions that are severely underfunded and running out of money. Under the 2014 Multi-employer Pension Reform Act (MPRA), trustees can cut current and future benefits if the cuts can stop the slide to insolvency and still leave benefits at least 10 percent above what retirees would have gotten in case of default from the Pension Benefit Guaranty Fund, the federally-sponsored pension insurer. The benefits can’t be cut for those over 80, and are proportionally less for those 75 to 80.

Under MPRA, cuts proposals go before pension plan participants for a vote, but can only be stopped if a majority of the total participants vote to reject them — NOT just a majority of those voting.

At the Western States OPEIU Pension Fund, ballots were mailed to all 7,232 participants on Aug. 20 and were due back Sept. 7. A total of 2,326 participants voted against the cuts, while 920 voted in favor of the cuts. That meant the cuts were opposed by 72 percent of those voting, but only 32 percent of the total participants. Because the 3,986 participants who didn’t return ballots were counted as de facto “yes” votes, the cuts were approved. Opponents would have needed another 1,300 “no” votes to reach a majority.

The Western States fund provides retirement benefits to current and former members of nine western union locals of Office and Professional Employees International Union (OPEIU)— mostly clerical staff at labor unions and defunct or no-longer-unionized trucking companies. Without the cuts, the fund was forecast to run out of money altogether in 2036.

Nationwide, five other pensions have held votes on benefit cuts under these rules so far, and the cuts have gone through despite majority opposition of those voting in four of those five. So far, Alaska Ironworkers Pension Plan is the one exception: Its proposed benefit cut of 26.5 percent was supported by 55 percent of those casting ballots.

As many as 100 union-sponsored multi-employer pension plans are headed for insolvency, but only 23 have so applied for permission to save themselves by making cuts. Of those, seven cuts have been approved, 10 are under review, two were withdrawn, and four were rejected by the U.S. Treasury Department.

[MORE: Find out more about the cuts at]


Ironworkers Local 16 Pension

  • Voting against: 352 
  • Voting for: 144
  • Ballots not returned: 542

Alaska Ironworkers Pension Plan

  • Voting against: 142
  • Voting for: 175
  • Ballots not returned:  507

Machinists Motor City Pension

  • Voting against:  371
  • Voting for:   126
  • Ballots not returned: 714

NY Teamsters Conference Pension

  • Voting against: 9,788
  • Voting for: 4,081
  • Ballots not returned: 20,767

United Furniture Workers Pension 

  • Voting against: 1,928
  • Voting for: 1,041
  • Ballots not returned: 6,304

Western States OPEIU Pension 

  • Voting against: 2,326
  • Voting for: 920
  • Ballots not returned: 3,986


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