Over three years ago, when U.S. Sen. Tina Smith, D-Minn., met with retired Teamsters from Local 346 at Radisson Hotel Duluth-Harborview, the mood was somber and dire. The Teamsters were very worried they wouldn’t receive the full pension they were promised and paid into for many years.
On Friday, Smith met with a small group of Teamsters and the atmosphere was much more joyous.
“I’m sure it’s not every day where you get to go to a meeting where people aren’t bringing new concerns to you that need to be fixed,” said Jeff Oveson, business agent for Teamsters Local 346.
Teamsters Local 346 is part of Central States Pension Fund, which is on its way to being insolvent as it pays out $3.46 for every dollar it takes in. But due to legislation passed in the American Rescue Plan, the Pension Benefit Guaranty Corp. will be able to offer grants to struggling pensions, including Central States Pension Fund.
The details and process of payments are still being worked out by the U.S. Department of Treasury, but the legislation directs the U.S. Department of Treasury to give $86 billion in funding to the Pension Benefit Guaranty Corp.
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Multi-employer pension systems that meet eligibility requirements will be able to apply for a grant necessary for the plan to fully fund benefits for the next 30 years. It’s estimated that 185 plans nationwide, including Central States Pension Fund, will be eligible for a grant.
“Being able to come back today and celebrate with these Teamsters just means the world to me,” Smith said. “I think it just goes to show that if you keep the faith, work hard and you don’t give up you can get really important things done.”
After meeting with the Teamsters in January 2018, Smith said she fought to get on a bipartisan committee on pension solvency, and even though the work of that committee didn’t go anywhere, Smith believes it did help bring awareness to the issue of these pensions.
“I think that it helped to show my Republican colleagues that this is a human issue … and it's actually beneficial to the economy,” Smith said. “I think it also served to illustrate that this wasn't about pension mismanagement, and the cause for the instability was related to major economic shifts and transitions in the industry because of deregulation and loss of jobs. So I think all of that was good towards helping to kind of socialize the idea that this was an important step to take.”
When asked by the News Tribune why it took so long to get a fix to the issues facing these multi-employer pensions, Smith said it wouldn’t have happened without the Democratic majority in the House, the power of the tiebreaker vote by Vice President Kamala Harris in the Senate or President Joe Biden in the White House to sign it into law.
The American Rescue Plan, which is a $1.9 trillion economic stimulus bill, passed the House and Senate without a single Republican vote.
It was about six and half years ago retirees who are part of the Central States Pension Fund received a letter in the mail saying their pension payout was being cut in half, said Rod Alstead, secretary treasurer for Teamsters Local 346.
“It was devastating to open that letter,” Alstead said. “In those six and a half years, there probably wasn’t a day that went by where somebody didn’t ask me or us about what’s going on with the pensions. I didn’t think this was going to happen and you start to lose faith, but thank God it did.”