The Central States, Southeast & Southwest Areas Pension Plan of the Teamsters was approved for federal aid Dec. 8. It’s by far the largest of a group of troubled union pension plans that became eligible for federal rescue funds as part of last year’s massive stimulus bill.
The Central States pension covers covers 357,056 workers and surviving spouses in transportation, construction, food processing, and other industries, but it fell into long-term decline after federal deregulation led to bankruptcy for union trucking firms. With fewer employers to contribute, the Central States pension plan was unable to make up for financial market losses, and was forecast to become insolvent in 2025. Central States is so big that its insolvency would have bankrupted the multi-employer pension insurance program run by the federal government Pension Benefit Guaranty Fund. Instead, Congress approved a pension rescue plan in 2021 as part of the American Rescue Plan.
Thanks to the pension rescue program, Central States will receive $35.8 billion in “special financial assistance” and will be able to pay all promised benefits to Teamsters who worked much of their lives in expectation of a secure retirement.
Fifty-three union-sponsored multi-employer pension plans have applied for the assistance so far, including Portland-based Plasterers Local 82 Pension Fund and Idaho Signatory Employers-Laborers Pension Plan.
So far the pension rescue program has approved over $45.3 billion in assistance to plans, covering over 550,000 workers, retirees, and beneficiaries.
