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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Two years after Thanksgiving shock, Teamsters aren’t letting FLE off the hook

November 1, 2018 by

Teamsters who lost their jobs when Lakeville Motor Express abruptly closed shop two years ago raise their hand at a picket-line rally.

Nearly two years after Lakeville Motor Express abruptly closed shop, 90 members of Teamsters Local 120 are still fighting for the wages, vacation pay and other benefits the Roseville-based trucking company owes them.

To show they aren’t giving up, former LME employees rallied Tuesday with fellow union members and supportive politicians on a picket line outside the Finish Line Express terminal in New Brighton.

“We’re out here every single day, Monday through Friday,” Local 120 President Tom Erickson said from the picket line. “We’re not going away.”

Finish Line, Local 120 officers claim, absorbed LME’s business after the company shuttered without warning Nov. 20, 2016 – three days before Thanksgiving – and refused to pay union members for the previous two weeks of work.

Finish Line and LME have ties that predate LME’s closing, including executives who worked for both companies. Local 120 alleges those executives gradually shifted work from LME to Finish Line until LME’s payroll dipped below 100 – the legal threshold at which companies must provide 60 days’ notice of plant closings under the WARN Act.

The bosses’ objective, Local 120 alleges, was to shed the Teamsters contract and escape all ties with the severely underfunded Central States Pension Fund, a liability of $90 million, according to the company’s bankruptcy filings.

“It was a company that was profitable, and they did this for one reason: to make more money,” Erickson said. “FLE is LME. Everybody here knows that.”

U.S. Rep. Keith Ellison, the labor-endorsed candidate for attorney general, tells Teamsters he’s running for a new job because “the best any member of Congress can do is write the right law… An attorney general can take their ass to court.”
Teamsters and their supporters outside Finish LIne Express.
Julie Blaha, former Secretary-Treasurer of the Minnesota AFL-CIO and labor-endorsed candidate for state auditor, tells Teamsters Blaha remembers walking the FLE picket line two years ago as “one of the first picket lines I got to be on.”
Teamsters Local 120 President Tom Erickson spoke at a rally against wage theft at Finish Line Express in 2018.

Now, LME and Finish Line face legal challenges on a number of fronts: from the pension fund, from the National Labor Relations Board and from the state Department of Labor and Industry, which last year levied an $87,000 civil penalty against the firms.

A hearing on NLRB charges of unfair labor practices was postponed Monday after the employer expressed interest in negotiating a settlement. The two sides have since entered mediation, but it’s not the first time management has expressed interest in settling.

“They’ve asked what we want,” Erickson said. “What we want is these jobs restored. These should be good Teamster jobs.”

All 90 workers locked out of Lakeville Motor Express two years ago have since found other work or retired. But as the rally yesterday made clear, none has forgotten the debt LME still owes.

Local 120 invites supporters to join picketing any weekday between 7 a.m. and 4 p.m., at 50 14th St. NW, New Brighton.

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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.”

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Retirees back bill to get troubled pension funds on track

December 4, 2017 by

Retirees packed the UFCW Local 1189 union hall for a rally with U.S. Reps. Tim Walz and Rick Nolan.

Federal legislation introduced last month would lend cash to ailing pension funds so they can meet their obligations to current retirees and grow enough to serve people still working toward retirement.

The Butch Lewis Act, authored by Sen. Sherrod Brown of Ohio, received a full-throated endorsement from retirees, union leaders and lawmakers at a rally organized by Save Our Pensions-Minnesota on Saturday.

Over 100 people, mostly retired and active Teamsters in the beleaguered Central States Pension Fund, packed the United Food and Commercial Workers Local 1189 hall in South St. Paul to learn more about the new bill, which has bipartisan support.

“This is not a bailout,” Save Our Pensions co-chair Jeff Brooks told fellow retirees. “This is essentially a refinancing plan.”

The bill is named after the deceased Central States pensioner who led efforts to stop the fund from cutting benefits for 273,000 retirees. The Treasury Department rejected that so-called “rescue strategy” in May 2016, after Save Our Pensions-Minnesota and other grassroots organizations mobilized retirees in opposition to the plan.

Still, the fund claims it will run out of money sometime in the next 10 years, and it’s not the only U.S. multi-employer pension fund in trouble. An analysis by two actuarial consulting firms released earlier this year found 114  funds – covering nearly 1.5 million workers – in critical condition or worse.

The Butch Lewis Act would create a new federal office, funded by the sale of U.S. Treasury bonds, empowered to lend troubled pensions the money they need to remain solvent.

Funds would pay back the low-interest loans over 30 years. In exchange, they would be barred from making risky investments and required to deliver regular progress reports to federal administrators showing their progress in getting back on track.

For those plans needing additional help, the Pension Benefit Guaranty Corporation would be available to make up the difference.

Sen. Amy Klobuchar, in a previously recorded video address to Saturday’s rally, called the bill a “win-win” for retirees and pension plans alike. “No more stalling,” she said. “No more false promises. We need to act now.”

DFL Reps. Rick Nolan and Tim Walz attended the rally and pledged their support as well.

“If this country can’t provide a decent retirement to its people, then what do we stand for?” Walz asked.

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Retirees push lawmakers to stay vigilant for lame-duck attack on pension rights

December 5, 2016 by
Sen. Al Franken and U.S. Rep. Rick Nolan got an earful from retirees after a forum on threats to retirement security in St. Paul Dec. 5.

Sen. Al Franken and U.S. Rep. Rick Nolan got an earful from retirees after a forum on threats to retirement security in St. Paul Dec. 3.

 

Two years ago, Congress opened the door for troubled pension funds to cut retirees’ benefits, after Rep. John Kline slipped the provision into a must-pass bill keeping the federal government open.

Now, with Congress poised to pass a similar stopgap bill, Kline is back with another “pension reform” bill, and it’s just as bad as the 2014 measure – maybe even worse. But this time around, the element of surprise won’t be on Kline’s side.

A forum Saturday morning on Kline’s proposal drew a standing-room-only crowd of more than 200 retirees to the Macalester College chapel in St. Paul. It was the first in a series of public events to keep pension reform off the lame-duck agenda.

Retirees packed the chapel at Macalester College to learn more about potential legislation weakening defined-benefit pensions.

Retirees packed the chapel at Macalester College to learn more about potential legislation weakening defined-benefit pensions.

“We will be listened to,” retired truck driver Bob McNattin, a leader of Save Our Pensions-MN, told the assembled retirees. “They cannot treat us this way.”

[McNattin’s group will take its message directly to Kline this Saturday with a 10 a.m. demonstration outside the congressman’s Burnsville office, at 350 W. Burnsville Pkwy.]

While the Multiemployer Pension Reform Act of 2014 dealt a blow to the rights of retirees in critically underfunded multiemployer plans, Kline’s latest proposal, known in Washington as the “composite bill,” has a much broader reach.

It would allow healthy pension plans to split in two, with a “legacy plan” following the defined-benefit model and a “composite plan” that, pension attorney Ann Curry Thompson told forum-goers, more closely resembles a 401(k). The composite plan would base retirees’ benefits on the performance of its investments and, critically, receive no backing from the federal Pension Benefit Guarantee Corporation.

Allowing employers and pension administrators to divert money from defined-benefit plans and into composite plans would almost certainly increase the number of federally insured funds facing critical shortfalls – and make more retirees vulnerable to benefit cuts made legal by Kline’s 2014 reform bill, Curry Thompson warned.

Bill Moore, president of the Minnesota State Retiree Council, AFL-CIO, said the prevailing attitude in Congress regarding pension reform – that the only solution is to cut benefits earned by working people – is dangerously skewed in employers’ favor.

“A pension is not a legacy,” Moore said. “It is not a gift from our employers… It’s deferred compensation.” Despite retirees’ advancing age, Moore added, “one thing we don’t forget is the hours and days and number of years that we put in to earn our pensions.”

U.S. Rep. Rick Nolan checked a fact with pension attorney Ann Curry Thompson while addressing retirees Dec. 3.

U.S. Rep. Rick Nolan checked a fact with pension attorney Ann Curry Thompson while addressing retirees Dec. 3.

At least three members of Minnesota’s congressional delegation haven’t forgotten either. U.S. Rep. Rick Nolan and Sens. Amy Klobuchar and Al Franken – all DFLers – spoke at the forum Saturday in opposition to Kline’s composite bill.

“Promises made should be kept,” Klobuchar said.

Lawmakers also pledged to remain vigilant for any attempt to sneak the composite bill through the lame-duck Congress.

A day before the forum, Franken sent a letter to leaders of both parties in the House and Senate urging that any pension legislation “be carefully considered and debated openly and honestly, not enacted at the last minute with little debate, few hearings and no opportunity to offer amendments.”

Franken also offered a potential tool for the Pensions Benefit Guarantee Corporation to help struggling pensions, like the Teamsters’ Central States Pension Fund, meet their obligations: closing a tax loophole on carried interest – a provision of the tax code exploited only by “the top one-tenth of the 1 percent,” Franken said.

Regardless of how it happens, Curry Thompson said, Congress can’t afford to let pension funds leave retirees high and dry. The economic fallout of pension failure makes retirees “too big to fail.”

“As politically unpopular as it is, what is really needed is a … public solution,” Curry Thompson said, noting that pensioners spend money, pay taxes and contribute to economic growth. “I’ll call it what it is. You need a bailout.”

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