Much of the mainstream media has focused on the financial demise of Yellow trucking, which owes upwards of $1.5 billion in debt, including a $700 million pandemic loan. But the less-than-truckload outfit also informed 22,000 union members, among 30,000 employees, they no longer had jobs. For members of the International Brotherhood of Teamsters, thousands of households now risk losing their healthcare and pension benefits at a time when inflation continues to make financial life difficult.
For a Teamster to be vested in the retirement fund, they must reportedly put in at least five years of full-time work. Drivers and dockworkers at Yellow with less than five years will need to catch on with another union outfit to meet the standard. But even those who meet all the requirements may be at risk as well. That’s largely because Teamsters pension funds have suffered mismanagement and cuts in the past.
In 2022, Pres. Joe Biden funneled a record $36 billion to avert a Teamsters pension collapse that would have impacted 350,000 workers nationwide. The taxpayer funds were taken from the $1.9 trillion American Rescue Plan, designed as a coronavirus relief package. According to reports, Teamsters would likely have suffered a 60 percent benefits loss had the federal government not intervened.
“Union workers and their families are finally able to breathe a huge sigh of relief, knowing that their hard-earned retirement savings have been rescued from steep cuts,” Lisa Gomez, assistant labor secretary for employee benefits security, reportedly said.
With Yellow not making good on its promise to pay a $50 million pension and benefits installment, rank-and-file union members could experience cuts. In New York, thousands of Teamsters suffered benefits reductions as deep as 29 percent for five years. The 2022 infusion of taxpayer money buoyed the New York State Teamsters Conference Pension and Retirement Fund. Approximately 3,900 retired union workers from Buffalo’s locals 264 and 449 endured losses of $1,300 monthly.
“Teamsters and their families who rely on these plans could have lost the benefits they earned over a lifetime of work, through no fault of their own – putting their financial security, retirements and families’ futures at risk,” New York Sen. Chuck Schumer reportedly said.
Fund managers had warned the Teamsters that market setbacks and the loss of contributions put their retirement benefits at risk. With Yellow unlikely to pay its $50 million obligation and 22,000 workers sidelined, the scenario appears to be another perfect storm.
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