About 12,000 active and retired Syracuse-area Teamsters are among union members nationwide who could get relief for their pensions after significant cuts to payments and benefits. Senator Chuck Schumer stopped by the Local 317 union hall today to outline a restoration plan that could be included in the upcoming federal budget.
Schumer says pension plans are collapsing because they never recovered from risky investments made before the financial crisis struck. As a result, retirees across the state have seen their benefits cut by 30 percent after decades of paying into the system.
"I don't blame anybody for being really upset because the people who worked here put money aside. Or when the union negotiated, the [workers] said OK, we won't take a five percent increase, we'll take three, but make it a nice pension."
Schumer says the problem is connected in part to the pension benefit guarantee corporation or PBGC.
"That's a federal government agency that promised to back up the pensions should they run into trouble. But, the PBGC doesn't have all the funding it needs, and that's why people here have suffered a cut in their pensions unfairly and through no fault of their own."
So, Schumer has introduced the Butch Lewis Act, named in honor of a late Teamster who was active in the pension protection movement. Schumer says it would create the Pension Rehabilitation Administration in the treasury department, which would lend money to troubled pension funds.
"First, it prevents any further cuts. Second, depending on how the whole thing is structured, you might get some of the cuts that have already been made restored. Not retroactive, but for the future."
Schumer says the $10 to $15 billion in financing would essentially act like a mortgage, and be repaid over 30 years.
"The 30 year loans would buy time for the pension plan. That would mean that they could invest for the long-term health of the plan, and at the same time pay the loans."
Schumer says there's also a safeguard in the bill to make sure the pension investors don't make the same risky investments that got them into the current mess. He says it requires pensions that borrow to submit plans to the PRA every three years.
He says there’s a good chance the measure will be included and approved as part of the federal budget, which is due by Christmas.
A THANKSGIVING STORY
Most Central New Yorkers have a good Thanksgiving story or two, but perhaps Senator Chuck Schumer has one of the best. Today (Nov. 23) is his birthday, and he was born on Thanksgiving Day 67 years ago. He shared this story Wednesday day during his stop at the Teamster’s hall in Syracuse. Listen Below.