The U.S. Department of the Treasury will soon announce a new policy that could affect thousands of current and retired truck drivers and their families. Expected in the next few weeks, the decision could result in severe cuts in the pension benefits of those employed in the trucking industry.
At the center of the dilemma is the Central States Pension Fund. One of the nation's largest multi-layer pension plans, the fund is designed to provide financial security for more than a quarter of a million truckers and their family members. The plan is responsible for the collection and distribution of benefits for Teamsters union truck drivers in some states.
The plan to reduce benefits stems from legislation passed by Congress in 2014. This ruling allowed multi-layer pension plans facing financial hardships to reduce benefits to improve their solvency. The unprecedented law weakened the federal regulations that have for nearly half a century helped maintain the pension system in this country, which has itself served as the bedrock of financial security for Americans after they retire.
The Central States Pension Fund suffered heavy losses during the banking and financial crisis of 2008, which reduced the resources available to fulfill the pension obligations of those covered by the plan. Although the stock market has recovered from the downturn of eight years ago, selected industries continue to struggle. This has resulted in a decline in the number of companies contributing to the plan while, at the same time, the number of retirees collecting benefits has increased.
Consumer advocates have expressed concern that the 2014 legislation could result in a trend toward a general reduction in benefits available to American retirees by encouraging other plans to make similar cuts. The situation would under the circumstances develop into a national crisis that could eventually affect millions of Americans.
The promise of a guaranteed income after retirement once enticed workers to seek jobs offering such security, even to the degree that they sacrificed pay raises or more lucrative employment opportunities. After decades of problems that have left many pension plans in dire straights, the same workers are today facing the reality of fewer benefits. The promise of financial security in the years after retirement is today nearly extinct for younger workers and those who will begin their careers in the coming years.