"I Guess It's Food Stamps": 400,000 Americans In Jeopardy As Giant Pension Fund Plans 50% Benefit Cuts

Tyler Durden's picture




 

Dale Dorsey isn’t happy.

After working 33 years, he’s facing a 55% cut to his pension benefits, a blow which he says will “cripple” his family and imperil the livelihood of his two children, one of whom is in the fourth grade and one of whom is just entering high school.

Dorsey attended a town hall meeting in Kansas City on Tuesday where retirees turned out for a discussion on “massive” pension cuts proposed by the Central States Pension Fund, which covers 400,000 participants, and which will almost certainly go broke within the next decade.

“A controversial 2014 law allowed the pension to propose [deep] cuts, many of them by half or more, as a way to perhaps save the fund,” The Kansas City Star wrote earlier this week adding that “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 Teamsters member.

Jay is probably correct.

Public sector pension funds are grossly underfunded in places like Chicago and Houston, while private sector funds are struggling to deal with rock bottom interest rates, which put pressure on expected returns and thus drive the present value of funds’ liabilities higher.

Illinois’ pension burden has brought the state to its knees financially speaking and in November, Springfield was forced to miss a $560 million payment to its retirement fund. In the private sector, GM said on Thursday that it will sell 20- and 30-year bonds in order to meet its pension obligations

"At the end of last year GM's U.S. hourly pension plan was underfunded by $10.4 billion," The New York Times writes. "About $61 billion of the obligations were funded for the plan's roughly 360,000 pensioners." Maybe it's time for tax payers to bail themselves out. 

Speaking of GM, Kenneth Feinberg - the man who oversaw the distribution of cash compensation to victims who were involved in accidents tied to faulty ignition switches - is now tasked with deciding whether the Central States Pension Fund's proposal to cut benefits passes legal muster. "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," the Star goes on to note.

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

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

To be sure, retirees' frustrations are justified. That said, the fund is simply running out of money. "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," a letter to retirees reads. 

The fund is projected to go broke by 2026. Without the proposed cuts, no benefits at all will be paid from that point forward

According to letters shared with The Star, cuts range from around 40% to 61%. "[The] average pension loss was more than $1,400 a month," the paper says.

As for what will become of those who depend upon their benefits to survive, the above quoted Gary Meyer summed it up best: "I guess food stamps. Hopefully not. It would be a last resort."

Don't worry Gary, you aren't alone...

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/18/2016 - 19:08 | 7204519 Fuku Ben
Fuku Ben's picture

Read it and protect yourself. They're going to steal it all.

http://www.zerohedge.com/news/2016-02-17/americas-largest-union-refuses-...

Thu, 02/18/2016 - 19:14 | 7204548 knukles
knukles's picture

So whom is gonna make up for all these income shortfalls piling up form reduced pensions, job losses, asset price decreases (of which y'all ain't seen 'nuffin', yet) etc.? 
And to think .... some head honcho from some telecom firm was on BBG yesterday calling the economy "Vibrant"
So when you come knocking for my money, I'll tell y'all ta fuck off.  Take it from the uber-Vibrant income earners.

Thu, 02/18/2016 - 19:22 | 7204568 OrangeJews
OrangeJews's picture

I just can't feel sorry for this guy or people like him.  They let this happen and enjoyed it so much, now it's time to repay.  They will all cry "how could this happen, we live in 'Merica?".  Lazy and stupid debt slaves.

Thu, 02/18/2016 - 19:30 | 7204623 Chuck Norris
Chuck Norris's picture

This is what it means to go to "cashless" society.  They get all the cash.  The surfs, get none. 

Thu, 02/18/2016 - 19:35 | 7204656 Handful of Dust
Handful of Dust's picture

The gubmint employees, like other non-union, average Americans, will have to tighten his belt a little like the rest of us who don't have the benefit of sucking the gubmint teats.

Thu, 02/18/2016 - 20:07 | 7204838 philipat
philipat's picture

And so, it begins...prepare. Pension funds (Both Public AND Private) have been operated as Ponzi schemes, using new investors money (aka contributions) to pay off old investors (aka retirees). They mostly need to make a 7-9% ROI to make the schemes work; impossible in today's NIRP environment, even if taking extremely risky positions. And, of course, there is less new money coming in as a result of mostly low-paid part-time jobs and enormous unemployment. And as they say, you can't taper a Ponzi.....

Thu, 02/18/2016 - 20:07 | 7204896 Bastiat
Bastiat's picture

They can't be bailed out . . . after all, who do they think they are?  Banks?

Thu, 02/18/2016 - 20:12 | 7204929 Soul Glow
Soul Glow's picture

Damn.  This is huge news.  Once it hits the average Joe there is nowhere to hide for the bankers.

Thu, 02/18/2016 - 20:28 | 7205013 DontGive
DontGive's picture

Bout time. Fucking assholes living it up on borrowed time.

Reap what you sow motherfuckers.

Thu, 02/18/2016 - 20:30 | 7205019 kliguy38
kliguy38's picture

lotta truth in what you say......too bad we are almost all in the same boat.......and its sinkin' fast

Thu, 02/18/2016 - 20:41 | 7205070 GernB
GernB's picture

I can't figure out the math. He worked for 33 years. is retired and has a kid in the fourth grade, which would make the kid about 10. So he had a kid less than 10 years from retirement. Huh?

Thu, 02/18/2016 - 20:51 | 7205120 inosent
inosent's picture

Its Michael Douglas

Thu, 02/18/2016 - 21:01 | 7205160 LowerSlowerDela...
LowerSlowerDelaware_LSD's picture

Gubmint pensions will NEVER be cut.  The one percent: Gubmint union members.  The gubmint can always point guns at people and take more for their retirees.

Thu, 02/18/2016 - 21:43 | 7205267 NoDebt
NoDebt's picture

What's going to go down in most pension plans that aren't backed by their own printing press is what Clint Eastwood said to the sheriff (Gene Hackman) in 'Unforgiven' just before he blew his head off:

"What you deserve's got nothing to do with it."

Pointing fingers (and there are plenty to point) won't make the slightest bit of difference in this.  Money's gone.  Party's over.  Hope you had a good time.  Good bye.

For future reference, maybe next time you shouldn't trust the promises of lying, corrupt politicians.

"But I was promised!" rings hollow in the ears of those my age and younger who never had and never will have a pension.  Or the promise of anything in retirement other than the near certainty that OUR OWN SAVINGS will eventually be taken from us to pay for others who saved nothing.

Thu, 02/18/2016 - 21:54 | 7205386 Cruel Aid
Cruel Aid's picture

Its all the moral hazzard of gov safety net. If you buy their bullshit, knowing it makes no sense, you get what you deserve.

Supposed to take care of your own during your early years by being frugal untill you can feel free of dependence. If you cant get there with your skills then educate yourself for better skills.

Its all here now the fiat money for nothing ponzi, very sad.

Many is being educated to that fact too late.

Thu, 02/18/2016 - 22:30 | 7205543 Blue Boat
Blue Boat's picture

+100

Thu, 02/18/2016 - 22:54 | 7205622 McCormick No. 9
McCormick No. 9's picture

You know what my pension plan is? Death. I will live until then somehow. Try to take that away from me fuckers.

I feel sorry for these dumb bastards, but not too sorry. Did they really think they could give their money to someone and that person wouldn't steal it?

Trust in the arm of flesh and all that. This is what you get for trusting.

Thu, 02/18/2016 - 23:02 | 7205653 Stuck on Zero
Stuck on Zero's picture

Dorsey is retired afer working 33 years?  Gees. Most people have to work 40-45 years to retire.

Thu, 02/18/2016 - 23:32 | 7205751 DontGive
DontGive's picture

Let's do the math.

Suppose starts punching clock at 18. (Forget about the fact that some start much earlier)

18+33 = 51

Then what? Sit on your ass for a decade or two thanks to vaporware ponzi!

By the time the money runs out, you'll be old, out of the labor force for a few years. But you can be a Walmart greeter for minimum wage joo bucks!

Great plan. Dumbfucks.

Fri, 02/19/2016 - 00:17 | 7205890 cheka
cheka's picture

free trade bitchez

import tariff or continue to get raped/killed by nyc/dc

Fri, 02/19/2016 - 00:49 | 7205968 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"18+33 = 51"~

Who the fuck started working at age 18? I was throwing newspapers at age 10!

Fri, 02/19/2016 - 04:34 | 7206303 AldousHuxley
AldousHuxley's picture

YRC World wide

2005 $18,800 / share

2016 $8 / share

 

Of course pensions are going to get wiped out if your employer loses 99.999% of equity value.

 

However, as expected business doesn't impact executive compensation: YRC CEO James Welch total annual comp package: $10,795,025

 


Fri, 02/19/2016 - 10:32 | 7207030 SixIsNinE
SixIsNinE's picture

+1  Theosobes - my paper route paid for all my expenses from 7th to 12th grade.  It would have covered 65% of our family's house rental.  (an oil conman conned my parents out of their savings when we moved to Oklahoma and they targeted churches with slick sales pitches and fake geological reports, etc.) 

today jobs like that for young boys,  hard to find

 

Fri, 02/19/2016 - 00:49 | 7205971 bonderøven-farm ass
bonderøven-farm ass's picture

The trade is cat food.

Long cat food.

 

Fri, 02/19/2016 - 07:09 | 7206404 Dr. Spin
Dr. Spin's picture

Sorry, I'm an Alpo kind of guy,,,

;-D  

Fri, 02/19/2016 - 08:48 | 7206591 Marge N Call
Marge N Call's picture

That's true. My father started work at a state university at the age of 25. He retired on a a full pension at 55. His pension is $80K/year plus guaranteed 3% COLA every year, plus BCBS FREE health care for life. WHen he dies his wife get's his benefits for 10 years. He is now 76 years old and shows NO SIGN of slowing down.

Do the math on that, plus the average lifespan, plus the state/local/fed employees that make even more money using overtime and such, plus the average wages these days. 

Yeah, not gonna work people. That's why there WILL be a BAIL IN. You're a complete idiot if you think there won't be.

Fri, 02/19/2016 - 10:38 | 7207057 WOAR
WOAR's picture

Reminds me of this...from 5 years ago.

https://www.youtube.com/watch?v=I5QwKEwo4Bc

Fri, 02/19/2016 - 09:49 | 7206827 PivotalTrades
PivotalTrades's picture

Unless he was a New York City Policeman then he worked 13 extra years. Guys I went to school with and joined NYPD have been retired for 15 years, I'm 55.

Fri, 02/19/2016 - 12:34 | 7207440 Pie rre
Pie rre's picture

Maybe it's time for euthinasia clinics like in Switzerland.

Fri, 02/19/2016 - 04:10 | 7206287 CC Lemon
CC Lemon's picture

This "Reset" is going to take a long goddamn time. Generation at least. The only good thing (after zero hedge is long gone) is that people are going to hate the FUCK out of any doucebag who suggests any form of government.

Fri, 02/19/2016 - 17:09 | 7208685 Panopticon 131
Panopticon 131's picture

Problem is, the "solution" TPTB already have waiting in the wings is a global totalitarian Technocracy overseen at the top by the international banksters.  It's govt on steroids, 1984 meets Brave New World meets The Matrix. 

That's the whole point of letting the system implode on itself while they construct and promote their seductive tracking and surveillance systems citing "efficiency" and "safety".  

How many people are already addicted to their smart phones?  Here come the smart cards (like the Hong Kong Biometric OCTOPUS card) being rolled out in large metropolises around the world, smart meters, smart grid, smart cities (including Russia, Iran), smart countries (e.g. Qatar), and smart regions (GCC).  It's all tied to UN Agenda 2030, 21, and carbon taxes, global wealth taxes, etc. - Bernie's Wall Street Tax being another iteration, a foot in the door not unlike the big bamboozle of the American income tax long ago.

In our dumbed down infantilized world, most people run to their government Big Daddy and Mommy for guidance.  That's why Bernie, an admitted socialist, is a frontrunner for POTUS - TPTB have been setting us up from day one.

Fri, 02/19/2016 - 08:31 | 7206545 Refuse-Resist
Refuse-Resist's picture

Back about 30 years ago when I was getting out of HS, my dad says "you should get on with the government like me", said he, a USBP agent.

I looked at his miserable attitude and the way he hated his job and said 'no fucking way'.

He said 'if they ever stop paying me, check or pension, that's the end of the US".  and "I'll be the last one still getting paid even after everoyone else stops".

He retired at 52, lives in Florida and is 70 years old.  I haven;t talked to him in over 10 years. He's making as much in pension than I've ever earned working.  I'm 48, and no chance of that kind of retirement.

Maybe I should have listened to him. I'd be retiring on full pension in 4 years instead of being an unemployable White middle aged  IT guy. Who is getting contacted by Indian IT recruiters from New Jersey for jobs in my tiny little town *(WTAF?)

My dad was right though. When the .gov pension checks stop it really will be over.

Fini. Kaput.

I say Let It Fucking Burn.

 

 

 

 

Fri, 02/19/2016 - 10:39 | 7207070 SixIsNinE
SixIsNinE's picture

do what you can to mend things -

say what you've said here.    You're not the only one in that position.   

 

Thu, 02/18/2016 - 21:14 | 7205223 Fester
Fester's picture

Michael Douglas

Who got cancer licking kitty.

Fri, 02/19/2016 - 00:27 | 7205919 cheka
cheka's picture

http://www.joc.com/regulation-policy/central-states-pension-fund-warns-i...

The Teamsters union’s Central States pension fund faces insolvency within 10 to 15 years unless Congress acts to stabilize the fund, its executive director said this week.

Responsibility for benefits paid to employees of failed companies should be transferred to the federal Pension Benefit Guaranty Corp., Thomas C. Nyhan told a Senate committee.

“I urge Congress to enact the ‘qualified partition’ proposal this year,” Nyhan said at a May 27 Senate Health, Education, Labor and Pensions Committee hearing.

Sen. Robert Casey, D-Pa., is sponsoring a bill that would allow “qualified partition” of multiemployer plans, and Nyhan and others urged Congress to pass that bill.

The Central States fund is one of the largest multiemployer plans in the country, covering nearly 342,000 retirees and their survivors and 81,000 active employees.

The fund faces an “unprecedented financial crisis” caused by consolidation in the trucking industry and the worst recession in decades, Nyhan said.

More than 40 percent of the fund’s benefits are paid to “orphaned” employees of defunct companies, he said, and responsibility for those benefits rests with surviving companies.

That is putting stress on companies such as YRC Worldwide, he added, that must support the benefits of thousands of retirees who never worked for its businesses.

An increase in contributions as the number of retirees grows could force more and more of those surviving employers out of business, leaving the fund insolvent, according to Nyhan.

More than 600 trucking companies that contributed to the fund in 1980 are gone, he said, noting that of the top 50 employers in the fund in 1980, only four are still in business.

The PBGC yesterday approved the partition of a smaller Chicago-area multiemployer fund into two sections, creating a new plan for employees of defunct companies.

Fri, 02/19/2016 - 01:22 | 7206058 warpigs
warpigs's picture

Damn. Is that possible?

Fri, 02/19/2016 - 18:01 | 7209079 gallistic
gallistic's picture

Only with bad kitty...

Thu, 02/18/2016 - 21:43 | 7205350 SILVERGEDDON
SILVERGEDDON's picture

Pensions are the ultimate lying sack of shit corporate Ponzi scheme.

It is criminal that folks were told what their plan guaranteed, just to have the company piss away the backstop for funding their obligation, and bail in bankruptcy or plead shareholder responsibility comes first.

Fucking people are getting fucked from all directions.

Better get used to it - there is more to come.

Thu, 02/18/2016 - 23:08 | 7205686 MontgomeryScott
MontgomeryScott's picture

Close, 'SILVER'. VERY close, but there is MORE to be thought about.

Microeconomics don't work well in a macroeconomic setting. Historical referents are crucial in an honest and well-thought-out 'point of view'.

The LIES told to the people by the FEDRES (et.al.) for several generations about how 'money' works are no coming to fruition. The 'educated' (edumacated) people who set up the 'retirement funding' accounts used the models of the INSURANCE racket (oops, I mean, um, Mr. Ponzi). 'INVESTMENTS' in the future hope of MOAR MONEY-PRINTING (and also more suckers that buy in to this) built up over the decades, and the 'printing presses' of those 'BIG SIX BANKS that are TOO BIG TO FAIL hit 'maximum velocity' after the PUBLIC announcement of 'Quantitative Easing, Round One'. STAWLKS were rising (artificially) once again, but the CORE VALUE of the companies/funds/ponzi scheme 'mutuals' wasn't (as is the way of things in the NATURAL, FINITE world).

Buying in to the lies of GREED and AVARICE strikes in BOTH directions, and takes NO PRISONERS (yes, everyone in the WHOLE WORLD [except those at the top of the Ponzi Game, behind the scenes, actually PULLING THE STRINGS] is getting FUCKED OVER).

 

Did you ever stop to think that the calls for ending the Federal Reserve System by those such as Ron Paul (and myself) MIGHT have been the ONLY THING that would have prevented the steamrolling, backsliding, totally destructive pennance and death of not only the financial 'system' as we now know it, but the lives of HUNDREDS of MILLIONS (in to the BILLIONS) of PEOPLE who will STARVE TO DEATH, NOW?

THEIR only answers in order to distract you from the REAL core issues are to start wars (WWIII in SYRIA), mass-migrate violent goat-fucking homosexual inbred males in to all corners of the globe, underinflate footballs at the Superbowl, show you the tits of female 'news' readers, poison your water and air and food, MAKE you take drugs and vaccines and Flouride, IRRADIATE you with EMF, and 'BAN LARGE-DENOMINATION CASH' so that you can't even use THEIR 'money' PRIVATELY as they prepare for the NEGATIVE INTEREST RATE looting of the WORLDWIDE POPULACE.

 

CULLING THE HERD, they openly steal and loot from the populace, as they skirt LAW and REASON ('pension funding' is NO LONGER 'VIABLE'). There are TWO movies that I highly recommend on this subject. 'Falling Down', and 'They Live'. TRUE art IMITATES life (false 'art' tries to shape and mold life). While I'm on the subject of art, what do you think of William Banzai (number 7)? HIS art KICKS ASS (in my humble opinion).

KANSAS: 'Sparks Of The Tempest' (a 'must-listen' if you want some 'predictive programming' information from the 1970's):

https://www.youtube.com/watch?v=cnijc9wNpV4

RON PAUL (et.al.) foretold by (you guessed it) KANSAS:

https://www.youtube.com/watch?v=eIHXhFJ4FoM

WHO the fuck am I? I'm not "Jack Handy"; I'm 'Montgomery Scott' (Lt. Commander; Chief Engineer and 'miracle worker' aboard the starship 'U.S.S. Enterprise'). DEEPER THINKING is required on the subject at hand, laddie.

NEVERTHELESS, a 'greenie' for you.

Thu, 02/18/2016 - 23:50 | 7205821 Dame Ednas Possum
Dame Ednas Possum's picture

Good... very good. A bit nutty... but very good.

(Those who don't know me that well tend to back away and provide a wide berth when I get worked-up into a rant. Most struggle despite being presented with facts. Cog.Dis. is tough on the shallow minded).

Fri, 02/19/2016 - 01:27 | 7206071 cheka
cheka's picture

all of those keystrokes....to recommend two MOVIES?

 

my good friend and topgun star ted cruise

Thu, 02/18/2016 - 23:43 | 7205793 Larry Dallas
Larry Dallas's picture

In my very humble opinion, TPTB are making extra sure to add as much pressure to the boomer and pensioners so they are incentivized to stop living – somehow - by any means necessary.

When history is written, this will be the known as the “Great Generational Genocide” (similar to the “Great Recession”…)

After that, no more pension obligations, and God willing, return to a more sustainable system.
This may or may not happen first with a revolution of some consequence, but it will fall on deaf ears as these diabetics on disability will not – fortunately or unfortunately – be able to fight.

Sad, but this is the end game for this generation.

(Larry’s Note: Why didn’t they have the same grit and gumption as their WW2 parents? What happened? If it was marijuana, we’re fucked.)

Fri, 02/19/2016 - 01:29 | 7206078 cheka
cheka's picture

parting them out?

there's a movement afoot to assume everyone is organ donor

have to fill out paperwork to be non-donor

Thu, 02/18/2016 - 21:59 | 7205420 So It Goes
So It Goes's picture

Don't blame the victim.

Every debt slave is going to be fighting for scraps.

Thu, 02/18/2016 - 22:12 | 7205477 MontgomeryScott
MontgomeryScott's picture

Guy gets a job when he's 18. He works 33 years and retires (that makes him 51). His kid is 10 years old. At WHAT age did he impregnate his wife/partner/'significant other'?

A) People in their early forties can't have sex, because the Pope said so.

B) 41-year-old males are too busy doing other stuff (like watching football and drinking beer with other men)to get a hard-on.

C) E = MC (squared), and NO MALE of age 41 can grasp this equation (A squared + B squared = C squared solves the length of the hypotenuse of a 90 degree triangle, but 41-year-old males can no longer get 'full length' hypotenuses; and therefore no ejaculative moments with their wives).

D) The answer is 41. The counting of the answer shall be 41 (not 40, not 60, not 'after you are dead').

I am trying to grasp your failure to grasp the math here.

HUH?

 

Thu, 02/18/2016 - 22:24 | 7205518 MissCellany
MissCellany's picture

The math can compute, so to speak. What I don't get is how anyone thinks retirement makes sense when you still have young kids to raise.

But then, I don't get why anyone would arrive at so-called retirement age and still have years to pay on a mortgage.

Silly me, I guess. I'm one of those shit-outta-luck GenXers who'll never see a pension...and probably no Social Insecurity either.

Thu, 02/18/2016 - 22:59 | 7205642 McCormick No. 9
McCormick No. 9's picture

You are one lucky bastard. They cannot steal your hopelessness from you!

If someone is selling you hope, that person is a con-artist. Hope is spelled D I S A P P O I N T M E N T (noun: disappointment

the feeling of sadness or displeasure caused by the nonfulfillment of one's hopes or expectations.)
Thu, 02/18/2016 - 22:45 | 7205600 azusgm
azusgm's picture

Not the same guy. This one probably retired at 50-55.

Thu, 02/18/2016 - 23:22 | 7205727 Lynx Dogood
Lynx Dogood's picture

IT's called sex, have to have a women that is not post menstral.

Thu, 02/18/2016 - 23:48 | 7205814 Arnold
Arnold's picture

Trophy wife for the man of leisure.

Do NOT follow this link or you will be banned from the site!