After ‘six years of purgatory,’ retirees celebrate pension fix with Smith

March 24, 2021 by

Sen. Tina Smith met with Central States pensioners at the St. Paul Labor Center in March 2018 to discuss the Butch Lewis Act, which she fought to include in the latest round of COVID relief. (file photo)

The $1,400 stimulus checks made headlines, but the $1.9 trillion American Rescue Plan, signed into law by President Joe Biden March 11, also includes $86 billion to stabilize distressed multiemployer pension funds over the next three decades.

The emergency funds will protect pension benefits earned by 1.5 million active and retired workers nationwide, including about 22,000 Minnesota retirees who paid into the Central States Pension Fund.

It’s a historic win for local retirees and their grassroots fight for pension relief, and for Sen. Tina Smith, who has championed the issue from her seat on the committee overseeing pension law since taking office three years ago.

During a Zoom call to celebrate the victory March 19, Teamster retiree Dennis Kooren, who lives in the Fargo-Moorhead area, told Smith it felt like he and other Central States pensioners had been through “six years of purgatory,” waiting to see if their earned benefits would be stripped or saved.

“This is bittersweet,” Kooren said. “We’ve been fighting so hard for so long, it’s hard to believe we even won.”

After the Great Recession, trustees for the troubled fund warned that, without federal relief, it would run out of money around 2025. Instead, Congress passed a law in 2014, authored by former Minnesota Rep. John Kline, allowing multiemployer pension funds to seek authorization to cut retirees’ benefits.

But retired Teamsters in Minnesota and across the Midwest pushed back hard against the proposed cuts.

Steve Baribeau, a Teamster retiree and co-chair of the Twin Cities-based group Save Our Pensions MN, remembered a hearing on the University of Minnesota campus, where people using “wheelchairs, walkers and canes” crowded into an auditorium to plead with a Treasury representative not to approve Central States’ proposed cuts.

“It was clear they could not go back to work, and they needed their pensions,” said Baribeau, who himself faced a 47% reduction in benefits under the proposal.

After the Treasury Department rejected Central States’ rescue plan, retirees in every corner of the state began organizing, mobilizing and lobbying in support of the Butch Lewis Act, named in memory of a Teamster from Ohio who led the fight to protect pension benefits.

Smith has often said a 2018 meeting with retirees in Duluth, during her first weekend as a U.S. Senator, stuck with her, guiding her work on the issue. In her call with pensioners, Smith recalled a conversation with one woman in Duluth who said she had no backup savings.

“She said, ‘Senator, I saved, and I did everything right. But it’s hard for me to work right now. And I don’t have a Plan B. My Plan B is living under a bridge if I lose my pension.’”

As negotiations played out over the latest round of COVID-19 relief, Smith fought for inclusion of the Butch Lewis Act. The measure provides funds to prevent benefit cuts, but also to stabilize multiemployer pension funds that are struggling financially, keeping intact the federal Pension Benefit Guaranty Corporation as a backstop for benefits.

Additionally, the Butch Lewis Act restores benefits to tens of thousands of retirees and workers whose pensions have been cut since Kline’s 2014 law took effect.

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Tina Smith: Fighting for working families in the U.S. Senate

November 4, 2019 by

Sen. Tina Smith talked with Steve Frisque, a steward with Local 722 and former local president, on the General Motors picket line in Hudson.

Tina Smith isn’t on the ballot this November, but for Minnesota’s junior U.S. senator, the reprieve from campaigning will be brief. The seat Smith won in 2018 goes back on the ballot in November 2020, and the race already has attracted a well-funded opponent in former 2nd District Rep. Jason Lewis.

For working families, the contrast couldn’t be sharper.

While Lewis’ signature achievement was a tax break that overwhelmingly benefited corporations and the wealthy, Smith has a track record of putting working people first, one that dates back to her work in Gov. Mark Dayton’s administration, when she worked closely with Minnesota’s unions.

Smith has maintained those ties in the Senate, where she’s emerged as a leading voice on the Committee on Health, Education, Labor and Pensions, advancing issues like equal pay and pension reform. She offered insight into that work last month in an interview with The Union Advocate.

UA: Your committee recently held the new labor secretary’s confirmation hearings. What did you learn?

TS: I voted against Gene Scalia for labor secretary because I felt that a person who dedicated his life to fighting for management and against labor is not the kind of leadership we need at the Department of Labor. The DOL was established as an agency that was solidly fighting for the needs of workers, whether it’s fair working conditions, safe working conditions, fair wages, a secure retirement – that’s the purpose of the DOL. To have somebody be nominated who has consistently fought on the other side of all those issues seemed to be completely wrong.

But now he’s in this role, and I will do everything I can to make sure he fulfills the promise of the DOL.

UA: You’ve been active in the fight to protect pensions since before you were appointed to the Senate. Where does that work stand, and what barriers are you running into?

TS: I’m proud to be a co-sponsor of the Butch Lewis Act, which is a practical and common-sense way to make sure people who did everything right, who paid into their pensions, who sacrificed current earnings for their retirement security aren’t penalized.

I raised this (issue) with Mr. Scalia when he came to my office for an interview, and I raised it again during the confirmation hearing. And I’m going to continue to raise it. This is an issue that is really important to the Central States Pension Plan, with upwards of 22,000 Minnesotans enrolled in it.

I tell my Republican colleagues this is an issue that’s not only affecting workers, but also affecting businesses. Many businesses also did everything right and paid into these pensions that now are facing a lot of insecurity… This is not an example of mismanagement or somebody doing something wrong. It is through no fault of anybody that these pension plans are struggling, and it’s going to be to the benefit of all of us if we step in and make sure they get stabilized.

What happens with Butch Lewis is really an open question after the work we did last year to try to come up with a compromise plan. We weren’t able to persuade the Republicans to come up with something, but we’re continuing to try to find a way. Time is of the essence.

UA: So much of the focus in Washington is on the president, whether it’s his Tweets or his scandals. Is there room for action on issues of importance to working families – like an infrastructure jobs bill – where there might be common ground?

TS: I think that the House of Representatives has demonstrated they can move forward positive legislation to improve people’s lives. They passed the Butch Lewis Act. The problem we have right now is that the U.S. Senate is the place where good ideas go to die. Mitch McConnell moves forward nominations like Gene Scalia for the DOL, but dozens of bills that would help working families sit at the doorstep of the U.S. Senate and he refuses to take them up. He doesn’t have do that, but that’s what he chooses to do. He’s turned the U.S. Senate into a personnel agency for the White House, and it’s a big problem.

UA: Minneapolis recently hosted a convention with 2,500 tradeswomen from across the country and Canada. What can Congress do to get more women into high-paying jobs like these?

TS: I had a chance to go and hang out with some of those amazing tradeswomen, and drink a beer made by a Minnesota women-owned brewery. I played hammerschlagen and did not do well, but it was great just to be with these powerful, energetic tradeswomen who are really breaking barriers every day in the building trades, fighting for their opportunity to fill those jobs. It was wonderful that the Twin Cities was able to host that group.

I know that many of my brothers and sisters in the building trades are focused on expanding opportunities for women. We need to especially support union apprenticeship programs in the building trades and other areas, and make sure that there’s lots of room for women. And I think we need to do the work in high schools and even middle schools so that young women are exposed to career opportunities, so they can find the good-paying jobs that are more than jobs, they are careers.

The other thing, since you mentioned infrastructure, I remember the work I did when I was lieutenant governor to get the new Vikings stadium built, and the large number of women trades members who participated on that work site. That’s just one example of the kind of big infrastructure projects we ought to be funding and supporting because they make our country more competitive, and they create such great jobs.

UA: You’ve worked closely with organized labor going back to your time in the Dayton administration, when we watched the tide turn for unions in Wisconsin. That pendulum has swung back. Unions have never been as popular as they are now. Why do you think that is, and what can federal lawmakers do to seize that momentum and help more people win a voice on the job?

TS: Wherever I go, when I’m talking to people, I remind them of the contributions organized labor has made. Whether you’re a union member or not, if you enjoy a weekend off, thank a labor union. If you enjoy overtime or a safe pension, thank a labor union. If you work in a safe job with good working conditions, thank a labor union – and remember the 150 who died in the Triangle Shirtwaist fire.

One of the challenges we have in this country is there has been a concerted, coordinated effort to weaken organized labor. You see it in so-called right to work laws. You see it in the challenges and barriers that have been thrown up to stop people who want to come together and organize for better wages and working conditions. And, I think, as people become more aware of those challenges, we become better able to fight back.

Last, I’ll say the blatant inequity in CEO salaries, compared to the wages regular workers are making, is becoming more and more apparent. We were talking about this … while I was walking the picket line with UAW workers. The CEO of General Motors took home $22 million in total compensation last year, yet UAW workers are fighting to get rid of this two-tiered wage system, which has people working side by side on the line and the non-legacy or temporary worker is making a fraction of what the long-term worker makes? That’s just wrong. And I think people are ready to rise to the occasion and fight back.

Filed Under: Labor Voices Tagged With: , , , , , ,

Smith hits the ground running in fight to save pensions

March 15, 2018 by

U.S. Senator Tina Smith met with retirees in St. Paul about her recent appointment to a congressional super-committee on pension reform.

When a Twin Cities-based trucking company abruptly closed three days before Thanksgiving 2016, Tina Smith, then Minnesota’s lieutenant governor, was among the first elected officials to respond.

Owners of Lakeville Motor Express, a union employer, had allegedly siphoned off the firm’s resources into a separate, non-union firm. LME drew public ire for failing to pay many of the 95 Teamsters left jobless.

But Smith also saw signs of what appeared to be a long game. Lakeville Motor Express’ “ability to go out of business on the one hand and start a new business on the other hand,” she said, “allowed it to evade its responsibilities around pensions.”

In fact, LME had followed “a roadmap for escaping pension liabilities,” Teamsters Local 120’s Paul Slattery said, that is “bankrupting” multi-employer pension funds nationwide.

Nearly 18 months later, Lakeville Motor Express’ owners face a state lawsuit alleging fraud, and Smith, who played a critical role in the Dayton administration’s LME investigation, is taking on the fight to protect working people’s hard-earned pension benefits in the U.S. Senate.

The newly appointed senator landed one of eight seats on a congressional “super-committee” formed last month to address the looming pension crisis, as underfunded multi-employer funds providing benefits to over 1 million retirees spiral further toward bankruptcy.

The newly formed committee has until Nov. 30 to agree on a plan to address the crisis. Any legislation that advances from the committee is guaranteed a vote on the Senate floor.

“This is like getting the rug pulled out from underneath you,” Local 120 retiree Chuck Justice (L) told Smith.

‘I’m terrified’

Before digging into the committee’s work, Smith met last week in St. Paul with some of the 22,000 Minnesota retirees covered by the Teamsters’ Central States Pension Fund. It’s the fund Lakeville Motor Express weaseled out of, and it’s on track to run out of money within 10 years.

Andrea Hovdestad of Andover attended the meeting with her father, Verlyn, who retired after 35 years as a Teamster driver. She listed the sacrifices her father made to keep contributing to his pension: missing birthday parties, working holidays, sometimes standing on picket lines in the freezing cold.

“This feels like an attack on labor, an attack on the working class,” Hovdestad told Smith, adding that her husband is vested the Central States fund as well. “I’m worried. I’m terrified.”

Smith stressed her opposition to cutting current retirees’ benefits as a part of a pension fix.

“These are people who did everything right,” Smith said. “They paid in, they sacrificed, they worked long hours and they worked many, many years for the promise that when they were done there was going to be a pension there so that they could take care of themselves.”

Smith’s preference: the Butch Lewis Act, legislation introduced last year and backed by the Teamsters. The bill would lend cash to Central States and other troubled funds, helping them meet their obligations to current retirees and regain the financial footing necessary to survive over the long haul.

Local retiree organization Save Our Pensions-Minnesota mobilized hundreds of people to rally in support of the Butch Lewis Act last December, and Smith’s support for the measure was met with a round of applause from retirees around the table in St. Paul.

“If we can figure out a way to bail out Wall Street when they need help, I just can’t believe that we can’t figure out a way to do this,” Smith said, adding that the Butch Lewis Act would be “way less expensive” than the bank bailout.

Too big to fail

The cost of federal inaction, retirees warned, would be far greater than the cost of shoring up their pension funds.

For starters, pension benefits are a major driver of consumer spending. A 2016 report by the nonpartisan National Institute on Retirement Security found that every dollar paid out in benefits supported $2.21 in total economic output nationwide.

Many retirees told Smith said they have no “Plan B” if their pension benefits disappear. Dave Erickson, a retired truck driver from Isanti, said 15 percent of his wages – sometimes more – went into the Central States fund, with little left over for individual retirement savings.

“I stayed in a job I didn’t always like because I had that carrot,” he said. “I wanted my pension… That was a promise.”

Without their pensions, many retirees would be left to rely on Social Security retirement benefits, which currently average $1,362 per month – or just over $16,300 annually. Not only would it severely undercut retirees’ standard of living, Central States pensioner Chuck Justice said, it would force many to access public assistance for food, housing and other needs.

“I take pride in the fact I am able to take care of myself,” Justice, a retired truck driver from Woodbury, told Smith. “This is like someone pulling the rug out from underneath you. It’s just not right.”

Filed Under: Labor Voices, Politics Tagged With: , , , , ,