Oct 23, 2017
What is Bill Lickert’s reward for a lifetime of looking out for truck drivers, municipal employees, hospital workers and thousands of others covered by the beleaguered Western Pennsylvania Teamsters and Employers Pension Fund?
It’s being the person whom thousands of workers and retirees covered by the severely underfunded pension plan call to vent their anger and frustration as they wrap their heads around the idea that their monthly pension checks could be significantly cut.
The Western Pennsylvania Teamsters fund — which has about 48 cents for every $1 in benefits it owes to retirees and workers — notified participants in April that it is considering cutting benefits in order to insure that the fund doesn’t become insolvent. The plan is expected to pay out nearly $129 million in benefits this year but will collect only about $54 million in contributions.
If the current level of benefits is maintained, the fund is projected to run out of money in 2028.
While trustees of the pension fund decide how much to cut benefits, they appointed Mr. Lickert, a 69-year-old retired truck driver and former president of Teamsters Local 205, to represent more than 17,000 retirees currently receiving benefits, former workers who haven’t started drawing benefits yet, and beneficiaries of deceased retirees.
Mr. Lickert said he does not represent another 4,200 workers covered by the fund who are still on the job.
Employees of UPS and Giant Eagle are among those covered by the plan.
Since Mr. Lickert’s appointment, he has heard an earful, fielding as many as 90 calls a day from outraged retirees.
“It’s down to about seven or eight a day,” said Mr. Lickert, who retired in 2011. “I have the same frustration. I was told when I retired, ‘Don’t worry. Your pension is secure.’”
‘I’m going to be cut the same as everyone else,” he added.
Mr. Lickert, whose father was president of Local 205 for more than three decades, isn’t paid for the thankless task. But the pension fund is paying for him to hire a lawyer and an actuary to analyze whatever benefit reduction proposal the trustees suggest. Only the trustees, not Mr. Lickert, will vote on the proposal.
“Bill isn’t taking money from anybody. He’s a shoulder to cry on,” said Jason Mettley, the Meyer, Unkovic & Scott attorney Mr. Lickert hired.
Thousands of other people covered by so-called multiemployer pension plans in the U.S. have already had their benefits slashed or could have them reduced in the future.
The cuts were made possible by 2014 legislation that was rushed through Congress with little debate. The law was designed to prevent the troubled plans from bankrupting the Pension Benefit Guaranty Corp., the federal agency that insures the pension benefits of nearly 40 million Americans covered by almost 24,000 private sector pension plans.
Those protected by the PBGC include about 10 million workers and retirees in multiemployer plans, which were created by collective bargaining agreements. The plans generally cover workers who are in the same industry or who are represented by the same labor union, such as the Teamsters or the United Mine Workers. Collective bargaining agreements determine how much companies contribute to the plans.
Like pension funds that cover only workers at a specific company, multiemployer plans were damaged by the bear markets that followed the dot.com bubble and the 2008 financial crisis.
UPS workers are among those covered by the Western Pennsylvania Teamsters and Employers Pension Fund. (Associated Press file photo)
But they were also hurt because employer funding of multiemployer plans is based on the number of active workers and how much work they do.
Recession-induced layoffs slammed many multiemployer plans. Should the teetering plans of the Central States Teamsters and the UMW go under, it would deplete the PBGC fund that ensures multiemployer plans.
The PBGC projects that fund will be exhausted in 2025, three years before the Western Pennsylvania Teamsters fund is expected to go under.
If that happens, “Their safety net essentially goes away,” said Mark Johnson, a Grapevine, Texas, pension consultant.
The fact that the Pension Benefit Guaranty Corp. may not be there to pay at least a portion of their pensions weighs on the minds of the people Mr. Lickert represents.
“I think, after a while, people will realize that if we don’t do something, there’s going to be nothing left,” he said.
The 2014 legislation requires troubled multiemployer plans to submit benefit reduction plans to the U.S. Treasury for approval. So far, 15 funds have submitted proposals, including four that submitted a second plan after withdrawing their first proposal.
Only three proposals — covering iron workers in northeastern Ohio, furniture workers and New York Teamsters — have been approved.
Benefit cuts for those workers and retirees varied. Some saw their monthly check reduced by about 13 percent, while others saw their benefits reduced by as much as 60 percent, according to the Pension Rights Center, a privately funded organization that promotes retirement security.
Treasury has rejected five proposals, largely because they relied on too-optimistic financial assumptions for rescuing the plan. For example, the Central States Teamsters plan assumed that assets in the pension fund would earn 7.5 percent annually — an unrealistic rate of return according to most pension consultants.
“Treasury has been pretty consistent in how they’ve handled them,” said John Lowell, an actuary with October Three in Woodstock, Ga.
Mr. Lickert and Mr. Mettley speculate that trustees for the Western Pennsylvania Teamsters fund will submit their proposal to Treasury no later than the first quarter of next year.
If Treasury approves it, benefits could be cut late next year. Under the 2014 law, retirees over 80 would be exempt from the cuts and those between 75 and 79 would receive smaller reductions than younger retirees.
“I have no idea how much it’s going to be cut,” Mr. Lickert said.
He encouraged those who want more information to visit the website he has set up: www.wpatrr.com, or email him at email@example.com, or call 724-382-4956.
“I’m here almost every day,” he said. “I’m trying to be straightforward and honest with people as best as I can.”
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