Earlier this month YRC–the conglomerate of Roadway and Yellow trucking companies–requested TARP funds to pay off a portion of its Teamsters pension debt. The problem, YRC’s CEO explained, is that only half of YRC pension liability is going towards former YRC employees. The remaining $1 billion is subsidizing their now-banktupt competitors’ retirees.
A few years ago, UPS saw the writing on the wall and left the failing fund in exchange for a one-time $6.1 billon payoff. More than $3 billion of that went to pay for non-UPS employees pensions.
The Teamsters Central States fund is one of the most notorious multi-employer pensions in the country. Before the economic meltdown it was less than 70% funded, which put it in the “red zone.” Now, after losing 9 billion in the economic meltdown, it has $17 billion in project assets and an estimated $33 billion in liabilities. To make matters worse, it has more than 200,000 retirees, but only 93,000 active contributers.
This graph, from an internal Teamster report, couldn’t be clearer.
Oh, and by the way, I was on CNBC last night to talk about this with “labor lover” Phil Dine. Here’s the video: