A group of Teamsters has filed a lawsuit against the federal government for approving cuts to their pensions, despite their plant being over $2.1 billion underfunded.
As of Jan. 1, 2017, the New York State Teamsters Conference Pension and Retirement Fund was 37.8% funded, with $1.28 billion in assets and $3.39 billion in liabilities. This means the fund is more than $2.1 billion underfunded.
As a result, the Treasury Department approved cuts to retiree pensions under the Multiemployer Pension Reform Act, which President Obama signed into law in 2014.
Now, affected retirees are suing the Treasury Department, according to Pension & Investments:
The retirees are proposing to represent a class of 22,000 retirees who started receiving reduced benefits Oct. 1 after the Treasury Department approved its MPRA application and less than 50% of participants voted against the action. In addition to the three named plaintiffs, more than 70 others have signed up to be added to the class action.
At the time of approval, it was the third multiemployer fund to receive approval for benefit reductions, and is the largest to date. As of Jan. 1, 2017, the plan was 37.8% funded, with $1.28 billion in assets and $3.39 billion in liabilities.
The lawsuit was filed in the U.S. Court of Federal Claims in Washington, which hears claims of regulatory takings by the federal government. It is asking that the federal government reimburse the retirees for 29% benefit cuts.
If it goes forward, the lawsuit is one of the first under the Multiemployer Pension Reform Act.