The Doom & Gloom Blame Game: After Losing Big, Teamsters Complain When Stock Market Rises

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Pension Time bomb

The Teamsters don’t like it when the stock market falls and, apparently, they don’t like it when the stock market rises as well.

Check this Teamster statement out:

A key Wall Street indicator, the Dow Jones Industrial Average, crossed above 16,000 for the first time this week. But for Teamsters and other working Americans concerned about economic security, the news meant damn near nothing.

While stockbrokers and their clients maybe counting their additional riches, the average middle-class family isn’t seeing much more money. A recent survey showed 62 percent of U.S. residents believe the economy is still getting worse. And less than half of all Americans have a 401(k) retirement fund that would potentially share in the good cheer if their profits weren’t eaten up by unnecessary fees charged by financial managers, that is.

By reading this (and the entire post), one is led to believe that the Teamsters hate the fact that the stock market is doing well.

However, various Teamsters’ pension plans are invested in the stock market–some more than others and, when the market does well, so too do the pensions.

Conversely, when the markets do poorly, so do the pensions, as was the case with the Teamsters’ infamous Central States Pension Fund.

The plight of the Teamsters’ Central States, Southeast & Southwest Pension Plan has been in the news lately and its prospects are not good.

Documents filed at the end of 2012 by the Rosemont, Ill.-based fund show that its liabilities are almost double its assets – $34.9 billion vs. $17.8 billion.

In short, the nation’s largest multi-employer pension fund is also one of its most troubled.

[snip]

A number of forces came together to put the fund in its current hole including market downturns with losses possibly exacerbated by heavier investments in stocks compared with other pension funds; company bankruptcies; businesses moving out of the country; and the withdrawal of UPS from the plan. [Emphasis added.]

After UPS paid $6.1 billion to get out of the Central States Pension Fund, Teamster trustees put a lot of that money into the stock market…right around the time of the market crash. They bet big with their members’ retirement security…and lost.

Why are the Teamsters now bashing 401[k]s and the stock market rising, when the union’s pension trustees invest so heavily?

Could it be that, as pension managers, they did a poorer job forecasting the market’s peaks and valleys than someone else could have if they managed their own money?

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