Washington (GRAY DC) -- South Dakota pensioners are in trouble. The Central States Pension Fund is on the brink of failure and expected to run out of money within 10 years. Hundreds of thousands who rely on these funds are pleading for help.
“This could conceivably destroy all unions,” said Dennis Kooren, a form UPS driver and pension fund advocate.
A variety of factors led to its extreme underfunding, including a lack of employees contributing.
“We all lost our rights to a secure pension because of it. This is the reason all of us worked for 30 years,” said Kooren.
He says in 2015 Central States applied to the U.S. Treasury for a rescue plan that would reduce monthly payouts but keep the fund intact. The Treasury said no, arguing even reducing payouts would not save the fund. Richard Sagness says the Federal Government needs to act.
“I can’t see why they cannot help the Teamsters,” said Sagness.
The government’s safety net insurance program for multiemployer plans is also running out of money. Senator John Thune (R-SD) says Congress is working on a solution. They created a special committee to come up with legislation to solve the crisis.
“Hopefully they’ll come out with some recommendations. I know it’s not just our state. There are a lot of states impacted by this,” said Thune.
The committee has to come up with answers by November, when midterm elections will take place. Sumit Agarwal from Georgetown University says a quick fix to attract voters is no way to address this.
“We’ll just kick the can further down to fix the broader issue, and that will not happen,” said Agarwal.
He says pensioners who planned their futures around these plans deserve some money. But, he says the plans should be restructured so taxpayers don’t have to bail them out again in the future.
“We have to think of better solutions than just giving another half a billion of taxpayers money to save these pension plans,” said Agarwal.
The select Committee is made up of 12 Representatives and Senators. They are required to hold at least five public meetings.