Hundreds of retired Teamsters attend meeting to air concerns about proposed pension cuts. Rich Sugg rsugg@kcstar.com
Hundreds of retired Teamsters attend meeting to air concerns about proposed pension cuts. Rich Sugg rsugg@kcstar.com

Business

Teamster retirees fight massive pension cuts at Kansas City town hall, warn others at risk

By Mark Davis

mdavis@kcstar.com

February 16, 2016 08:32 PM

UPDATED February 18, 2016 07:59 PM

Dale Dorsey, after working 33 years, is facing a 51 percent cut to his pension. He’s not facing it alone.

He’s married. Dorsey’s mother lives with them. And, having gotten a late start on a family, so do his children, one in the fourth grade and one in the eighth grade.

“This is just going to cripple my family,” said Dorsey, who was one of 750 retirees and workers who attended a town hall meeting Tuesday in Kansas City.

They came to battle massive pension cuts proposed by the Central States Pension Fund, which covers 400,000 participants, 220,000 of them retired. The fund is so short of money, it will go broke in 10 years.

Never miss a local story.

Sign up today for a free 30 day free trial of unlimited digital access.

A controversial 2014 law allowed the pension to propose the cuts, many of them by half or more, as a way to perhaps save the fund.

Some at the session said that allowing the cuts — the first test of the law — meant others would follow. Two much smaller pensions also have sought similar relief under the law, and still more pensions are significantly underfunded.

“What’s happening to us is a microcosm of what’s going to happen to the rest of the pensions in the United States,” said Jay Perry, a longtime member of Teamsters Local 41 who worked for Yellow Freight, now called YRC Worldwide Inc.

For nearly two hours inside the Kansas City Convention Center, 30 speakers took their turns asking for help from Kenneth Feinberg. He’s the noted mediator who distributed billions of dollars to victims of the Sept. 11 terrorist attacks and has overseen General Motors’ compensation for accidents from faulty ignition switches.

The U.S. Treasury has named Feinberg special master to decide by May whether the proposal from the Central States Pension Fund meets the 2014 law. He has held seven other public sessions, with Kansas City’s being the last.

Those who spoke Tuesday asked him to reject the plan at least to give them and others a chance to find a less devastating solution. They said that cuts wouldn’t save the pension, that they’d still be out.

“This pension should be paid out in full until it’s gone,” said Larry Logston Jr., who said he’s among those facing a 50 percent pension cut.

Central States’ proposal would allow the retirees to work and still collect their reduced benefits. But some are no longer able to work, and the idea didn’t seem plausible to others.

“You know anybody hiring a 73-year-old mechanic?” Rod Heelan asked Feinberg. “I’m available.”

Tom Lemmons of Sweet Springs, Mo., and Gary Meyer of Concordia, Mo., grew up together and have spent recent months talking about how they’d get by if the pension cuts go through.

“I’ll have to go find a job. I don’t know. I’m 68,” Meyer said. “It would probably be a minimum-wage job.”

Meyer said that wouldn’t close the budget gap the Central States plan would open up.

“I guess food stamps. Hopefully not. It would be a last resort,” he said.

Central States has told its retirees that the cuts are needed because without them the fund will run out of money in 2026 and be unable to pay any benefits.

“We simply can’t stay afloat if we continue to pay out $3.46 in pension benefits for every $1 paid in from contributing employers,” said letters the fund sent to retirees facing the cuts.

Some at Tuesday’s session complained that some pensioners have not been notified of the plan, and Feinberg said he has heard that complaint in other cities. One speaker asked him to help fix that by getting a list from the pension fund of everyone covered.

“We’re trying to get that list,” Feinberg said to much applause.

The letters from Central States show each retiree the amount of his current monthly benefit and the reduced amount under the proposal. Among 16 such letters shared with The Star, the cuts ranged from 39.9 percent to 60.7 percent. Their average pension loss was more than $1,400 a month.

Feinberg called the public sessions, which are not required under the 2014 law, because he said the law had been passed with little attention. Kansas City was added to the traveling program thanks to a request by Rep. Emanuel Cleaver, a Kansas City Democrat.

At the meeting, Cleaver tried to explain how the law was passed as an add-on to a budget bill with no committee debates or hearings. He is seeking alternative proposals because, he said, the proposed cuts put $3 billion in Missouri pensions at risk. He also wants an investigation into how the Central States Pension Fund has been handled.

“These are real live human beings. These are people who worked all their lives …,” Cleaver said, with his final words drowned out by applause.

Central States Pension Fund covers workers and retirees in 37 states and at many different companies, including many that went out of business.

Hardest hit by the proposed cuts will be 43,400 retirees who spent most of their employment at companies that failed to pay into the pension fund all that they owed. These retirees have been dubbed “orphans” and include 72-year-old Charles Weatherman of Excelsior Springs.

Retirees 80 years old or older would see no cut in their benefits, the pension has said. Those 75 to 80 will see smaller cuts than those younger than 75.

If the plan is accepted, pension checks will be cut starting July 1.

“You’re holding us in the palm of your hands,” Dorsey told Feinberg.

Mark Davis: 816-234-4372, on Twitter @mdkcstar

How much the cuts hurt

Sixteen area retirees facing cuts from the Central States Pension Fund shared their notification letters. The proposed cuts to current monthly retirement checks averaged more than $1,400 and ranged from 39.9 percent to 60.7 percent. Here is a sample.

Current check

After cut

Loss of pension

$3,000.00

$1,179.79

-60.7%

$3,200.00

$1,462.12

-54.3%

$2,964.43

$1,482.09

-50.0%

$2,492.82

$1,341.97

-46.2%

$2,523.13

$1,515.68

-39.9%

Source: Central States Pension Fund notices