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Is Central States pension fund ready to go under?
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<blockquote data-quote="JonFrum" data-source="post: 231163"><p>When a plan is 100% FULLY FUNDED, like the Western Conference of Teamsters Fund, that means that it has enough money on hand, right now, to pay off all its pension benefit obligations. In other words, if every Contributing Employer stopped contributing simultaneously, and permanently, right now, the fund could still pay every benefit it is obligated to, just from its pool of Assets. Every current retiree would continue to receive their full benefit check every month until they die, and every vested participant would get his full series of checks when he eventually retires. Where selected, surviving spouses would get their full series of checks as well. Notice I'm not including any Withdrawal Liability payments, since there wouldn't be any, because the fund was fully funded.</p><p></p><p>If a plan is less than fully funded, the plan would not be able to pay every last benefit check. At some point years down the road, the fund's asset pool would run out. If a fund actually got to that point, it is declared INSOLVENT. Normally it doesn't get that far. Plan Actuaries calculate the fund's ability to pay benefits, not only in the current year, but in all future years. If a shortfall is predicted in a future year, this is called a FUNDING DEFICIENCY. By law the fund must cure the future funding deficiency right now, so it never becomes an actual Insolvency. Either benefit accruals are cut, or contributions are increased, or both.</p><p></p><p>If a multi-employer plan in the future actually got to the point of not being able to pay all its (then) current retirees, the PBGC would LEND it the money to get it past its temporary crisis. The PBGC wouldn't take over the fund unless it actually collapsed!</p><p>_ _ _ _ _</p><p></p><p>I wonder how many of you who thought Central States was in crisis, didn't know that almost every Contributing Employer, all 3000 or so, guarantee to pay their Withdrawal Liability to the fund should they withdraw from the Fund for any reason? It's a kind of built-in insurance plan. I wonder how many had no idea UPS alone owed (guaranteed) a $4 billion payment to the fund. I wonder how many who knew of the $4 billion, are suprised to learn the amount is now said to be $6 billion. If $6 billion proves to be the correct figure, that must be like "found money" to those of you who had no idea. Well, now you know that Central States is owed many billions from almost all of its Contributing Employers, even the bankrupt ones, like Consolidated Freightways. (Although, bankrupt employers, of course, won't pay their Withdrawal Liability in full. Maybe they will only pay 25% or so. But every little bit counts.) </p><p></p><p>On the other hand, Engineer79 wants you to know:</p><p> "The Teamsters and CS controlling the pension is doomed for bankruptcy in approximately 7-8 years." </p><p>Mark your calendar.</p></blockquote><p></p>
[QUOTE="JonFrum, post: 231163"] When a plan is 100% FULLY FUNDED, like the Western Conference of Teamsters Fund, that means that it has enough money on hand, right now, to pay off all its pension benefit obligations. In other words, if every Contributing Employer stopped contributing simultaneously, and permanently, right now, the fund could still pay every benefit it is obligated to, just from its pool of Assets. Every current retiree would continue to receive their full benefit check every month until they die, and every vested participant would get his full series of checks when he eventually retires. Where selected, surviving spouses would get their full series of checks as well. Notice I'm not including any Withdrawal Liability payments, since there wouldn't be any, because the fund was fully funded. If a plan is less than fully funded, the plan would not be able to pay every last benefit check. At some point years down the road, the fund's asset pool would run out. If a fund actually got to that point, it is declared INSOLVENT. Normally it doesn't get that far. Plan Actuaries calculate the fund's ability to pay benefits, not only in the current year, but in all future years. If a shortfall is predicted in a future year, this is called a FUNDING DEFICIENCY. By law the fund must cure the future funding deficiency right now, so it never becomes an actual Insolvency. Either benefit accruals are cut, or contributions are increased, or both. If a multi-employer plan in the future actually got to the point of not being able to pay all its (then) current retirees, the PBGC would LEND it the money to get it past its temporary crisis. The PBGC wouldn't take over the fund unless it actually collapsed! _ _ _ _ _ I wonder how many of you who thought Central States was in crisis, didn't know that almost every Contributing Employer, all 3000 or so, guarantee to pay their Withdrawal Liability to the fund should they withdraw from the Fund for any reason? It's a kind of built-in insurance plan. I wonder how many had no idea UPS alone owed (guaranteed) a $4 billion payment to the fund. I wonder how many who knew of the $4 billion, are suprised to learn the amount is now said to be $6 billion. If $6 billion proves to be the correct figure, that must be like "found money" to those of you who had no idea. Well, now you know that Central States is owed many billions from almost all of its Contributing Employers, even the bankrupt ones, like Consolidated Freightways. (Although, bankrupt employers, of course, won't pay their Withdrawal Liability in full. Maybe they will only pay 25% or so. But every little bit counts.) On the other hand, Engineer79 wants you to know: "The Teamsters and CS controlling the pension is doomed for bankruptcy in approximately 7-8 years." Mark your calendar. [/QUOTE]
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