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For years, Butch Lewis fought to preserve his and his Teamster colleagues’ pensions. His widow says the fight finally killed him.
So Rita Lewis brought the battle to D.C., reopening a problem lawmakers thought they solved just over a year before. The pension crisis has touched off hearings and campaigns by rank-and-file union members nationwide, including in Duluth and the Twin Cities.
The fight is over the Multi-Employer Pension Reform Act, controversial legislation rolled into a massive spending bill at the end of 2014 to keep the government going.
The MPRA authorizes trustees of financially failing multi-employer pension plans — which are common in unionized trucking, grocery and construction industries, along with others — to cut present pensioners’ benefits to keep the plans going for future beneficiaries.
The largest financially failing plan is the Teamsters Central States plan. Its board approved such cuts to current beneficiaries and has asked the U.S. Treasury for authorization. But Central States beneficiaries, like Rita Lewis, talk about the practical consequences. And the Teamsters Union itself opposes the MPRA and is working with lawmakers to roll it back.
The alternative to cutting present pensioners’ payouts, MPRA proponents say, is to let plans such as Central States go broke and transfer those retirees to the federal Pension Benefit Guaranty Corp. PBGC guarantees some money – at most just over $12,000 yearly — for pensioners whose plans go bankrupt.
But PBGC is financially strapped. Sums retirees get when they’re transferred there are far less than their original pensions. Butch Lewis’ pension had been around $40,000.
Speaking for herself and other Teamster retirees, Lewis told the Senate Finance Committee of the practical impact of the MPRA on their lives, and on her husband, an injured Vietnam veteran who later drove for unionized USF Holland Trucking for four decades.
“I’m here today to urge you, to plead with you really, to stop the cuts in MPRA and to find a bipartisan solution to shore up underfunded multi-employer plans and protect retirees,” she told the solons.
“I’m here not just to help myself, but to speak for the 270,000 retirees, widows and spouses whose lives will be affected if Central States is allowed to go through with these cruel and unfair cuts, taking away as much as 40 percent to 70 percent of our hard-earned pensions. These cuts are unprecedented and just plain wrong.
“This is not a partisan issue. This is an issue of fundamental American values, of keeping promises to the nation’s retirees,” Lewis reminded lawmakers. That promise to her late husband was broken, she added.
After suffering a devastating knee injury in Vietnam, for which he had to have 37 surgeries throughout his life, Butch Lewis returned home to become a trained, professional trucker for 40 years, his widow explained. He willingly sacrificed some present pay to build up retirement security — his pension — for her, their children and their grandchildren. “That’s what responsible workers do,” Rita Lewis said.
But slightly more than a year after his retirement, Butch Lewis, by now a leader of the Retired Teamsters of Southwest Ohio pension committee, got a letter from Central States. The letter said because of its financial woes and to keep itself alive for future retirees, Lewis’ monthly pension would be cut from $3348.82 to $1998.65, pending that federal OK. He talked to fellow retirees and found some would suffer even more, percentage-wise.
That started Lewis on a crusade to reverse the cuts, Rita Lewis said. He became active in one of the dozens of Teamster retiree committees which nationwide rank-and-file unionists have formed to battle the Central States cuts and lobby for repealing the MPRA.
But the planned cuts to Lewis’ pension also led to endless worries and sleepless nights, trashing the health of a man after he spent years driving semi-tractor trailers with bad springs, jumping in and out of the cab to load and unload packages, and — following his retirement — several small strokes. His work and the strokes took a big toll, Rita Lewis said.
“After fighting hard, Butch died of a massive stroke last New Year’s Eve. The doctors all said the stress he was living with because of the impending destruction of our financial future contributed to the stroke.” Rita Lewis is left with a monthly widow’s pension that was $2511.61, but will be $1498.98. She’s working, but she’ll have to sell their house, among other sacrifices.
And there are millions of other people even worse off, all in financially failing multi-employer pension plans nationwide, she said. “They’re your constituents,” she told senators.
In Treasury Department hearings around the country in the past year on Central States and its woes, and in congressional testimony before the MPRA was passed, unions and wor-kers against the legislation — led by the Teamsters and the Machinists — argued MPRA under-mined the basic purpose of the 1974 federal pensions law, to preserve workers’ pensions.
Former PBGC Administrator Joshua Gotbaum disagreed with that analysis at the same Senate hearing on March 1. He said other unions which backed the MPRA did so “not to undermine these pensions — which pay lifetime benefits while other retirement forms increasingly do not — but to preserve them.”
The MPRA, crafted by a joint union-management coalition, would keep those “red zone” multi-employer plans, like Central States, which now cover 3.6 million workers, from collapse, Gotbaum said. Plans covering another 1 million-1.5 million workers could also be in danger.
But Gotbaum conceded a “double whammy” hit Central States and other pension plans starting in 2000: Many firms that contributed to multi-employer pensions went out of business, and the 2001 small recession and 2008-onwards Great Recession combined to trash the pension plans’ investments, leaving them without enough money to pay future retirees their promised benefits.