A lot of truckers who are trying to retire are discovering that pension promises were never trustworthy.
The Central States Pension Fund is the first of many that is revealing the true nature of pension promises. Here’s Elizabeth Warren capitalizing on the outrage:
As loathsome as I find Warren, she is partially right on this issue. According to the Washington Post:
More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money.
Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans.
The potential cuts are possible under legislation passed by Congress in 2014 that for the first time allowed financially distressed multi-employer plans to reduce benefits for retirees if it would improve the solvency of the fund. The law weakened federal protections that for more than 40 years shielded one of the last remaining pillars that workers could rely on for financial security in retirement.
The legislation was pushed by both Republicans and the White House. The Intercept reports,
The bill that enables this — known as the “CRomnibus” because it was partially a continuing resolution to fund the government (CR) and partially an omnibus spending package to fund other parts of the government for a full year — was littered with riders, nonbudget changes in law that attached themselves to the legislation like barnacles to a ship. These riders included the elimination of an entire section of Dodd-Frank derivatives regulations (as written by Citigroup lobbyists) and a large increase in the donation limits to party committees.
Despite the riders, Obama endorsed the bill and even whipped for its passage, assisted by JPMorgan Chase CEO Jamie Dimon.
The bottom line is that the money isn’t there. If the pensions don’t make cuts now they will cease to exist soon and no one will get a cent from them.
Pensions promises have never been enforceable. People think that pensions are less risky than personal investments, but that is mostly an illusion. Pension managers have to take risks with funds just like you do.
As far as Elizabeth Warren’s complaints about Wall Street making money, everyone loves it when the system produces an economic bubble that artificially raises pay and employment. If we don’t like the results of economic crashes, then we need to stop the mechanism by which government corruption produces them. In other words: we need to abolish the Federal Reserve and end fiat currency.
But politicians like Warren want the power to produce artificial growth so I doubt the changes that need to be made will happen soon.
In the meantime, workers need to demand the highest wages they can get and never settle for pension promises. The Washington Post describes the fraudulent system:
For many workers, the promise of a guaranteed income stream for life — a benefit now nearly extinct for younger generations — was at times strong enough to convince them to sacrifice pay raises or other job opportunities.
There is no guaranteed income stream for life. The entire system is a hoax designed to get people to work for less. Americans need to save for themselves. No pension manager making unenforceable promises is worth trusting.