Investigation To Reform Teamsters' Central States Pension Fund Found Inadequate (2024)

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Highlights

For many years, the Teamster's Pension Fund trustees have been the subject of allegations of misuse of the Fund's assets. Therefore, the Department of Labor initiated an investigation of the Fund and, in response to a congressional request, GAO reviewed the Government's investigation.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service 1.The Commissioner of Internal Revenue should direct IRS officials to closely monitor the Fund's financial operations to ascertain that the Fund meets the minimum funding standards of the Employee Retirement Income Security Act in 1981 and in the future and, if not, take whatever action is needed to ensure that the Fund meets the Act's requirements.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 2.The Secretary of Labor and the Commissioner of Internal Revenue should direct their investigative staffs to review the trustees' management and use of the benefits and administration account to determine the appropriate reserve the Fund should maintain in the account.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 3.The Secretary of Labor and the Commissioner of Internal Revenue should direct their investigative staffs to review the trustees' management and use of the benefits and administration account to determine the appropriate reserve the Fund should maintain in the account.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 4.The Secretary of Labor and the Commissioner of Internal Revenue should direct their respective investigative staffs to more closely cooperate to prevent coordination problems, duplication between investigators, and giving the Fund an excuse not to cooperate because the Government is not speaking with one voice.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 5.The Secretary of Labor and the Commissioner of Internal Revenue should direct their respective investigative staffs to more closely cooperate to prevent coordination problems, duplication between investigators, and giving the Fund an excuse not to cooperate because the Government is not speaking with one voice.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 6.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should take action to require that the proposed reorganization and any other reforms imposed on the Fund be included in a formal written, enforceable agreement signed and agreed to by Labor, IRS, and the Fund's trustees.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 7.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should take action to require that the proposed reorganization and any other reforms imposed on the Fund be included in a formal written, enforceable agreement signed and agreed to by Labor, IRS, and the Fund's trustees.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 8.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should obtain further written enforceable commitment from the trustees to reorganize the way the Fund handles and controls the employer contributions and its other moneys to remove the trustees' control over any of these funds. The proposed reorganization should provide for: (1) the Fund to employ a financial custodian; (2) IRS and Labor to have a veto power over the selection of the investment manager and financial custodian, if the trustees' selections do not meet the Government's qualifications; and (3) limiting the trustees' roles and responsibilities to establishing overall investment objectives, determining eligibility requirements for pension benefits and employers' contributions, monitoring the investment manager's and the custodian's activities, and administering relevant collective-bargaining requirements.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 9.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should obtain further written enforceable commitment from the trustees to reorganize the way the Fund handles and controls the employer contributions and its other moneys to remove the trustees' control over any of these funds. The proposed reorganization should provide for: (1) the Fund to employ a financial custodian; (2) IRS and Labor to have a veto power over the selection of the investment manager and financial custodian, if the trustees' selections do not meet the Government's qualifications; and (3) limiting the trustees' roles and responsibilities to establishing overall investment objectives, determining eligibility requirements for pension benefits and employers' contributions, monitoring the investment manager's and the custodian's activities, and administering relevant collective-bargaining requirements.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 10.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should obtain an enforceable commitment from the trustees for the Fund to: (1) continue to have an independent investment manager to control and manage the Fund's assets and investments after the present managers' contracts expire in October 1982; and (2) use the same selection criteria and qualifications as in the past should the trustees decide to replace the present investment managers after October 1982.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 11.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should obtain an enforceable commitment from the trustees for the Fund to: (1) continue to have an independent investment manager to control and manage the Fund's assets and investments after the present managers' contracts expire in October 1982; and (2) use the same selection criteria and qualifications as in the past should the trustees decide to replace the present investment managers after October 1982.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 12.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should require that future Fund trustees meet the criteria and qualifications similar to those established in 1977, closely monitor the selection of future trustees, and veto the selection of a trustee not meeting the criteria.

Closed – Implemented

Please call 202/512-6100 for information.

Internal Revenue Service 13.The Secretary of Labor, in consultation with the Commissioner of Internal Revenue, should require that future Fund trustees meet the criteria and qualifications similar to those established in 1977, closely monitor the selection of future trustees, and veto the selection of a trustee not meeting the criteria.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 14.The Secretary of Labor should direct the Office of the Solicitor to carry out the recommendations in the Kotch-Crino report to honor the memorandum of understanding with Justice by: (1) establishing a more effective written system of referring potential criminal violations to Justice; (2) suggesting a single Justice coordinator for all Fund activities; (3) establishing procedures wherein Justice periodically orients and briefs officials of the Office of the Solicitor; (4) suggesting one designated receiver in Justice for all Fund records; and (5) establishing a system wherein the Office of the Solicitor automatically forwards to Justice pertinent additional records regarding any matter previously referred.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 15.The Secretary of Labor should direct the Office of the Solicitor to establish a more effective system to process referrals of potential criminal violations to Justice.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Justice 16.The Secretary of Labor and the Attorney General should take action to have their December 1978 coordination agreement revised to define the higher officials who should or would resolve litigation strategy problems the working group members cannot resolve or consider reestablishing an Interdepartmental Policy Committee similar to the one established in 1975.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 17.The Secretary of Labor and the Attorney General should take action to have their December 1978 coordination agreement revised to define the higher officials who should or would resolve litigation strategy problems the working group members cannot resolve or consider reestablishing an Interdepartmental Policy Committee similar to the one established in 1975.

Closed – Implemented

Please call 202/512-6100 for information.

Department of Labor 18.The Secretary of Labor should direct the Labor-Management Services Administration (LSMA), during its current investigation at the Fund, to: (1) ensure that the LSMA Chicago staff performing the investigation receives proper training and uses all investigative techniques and procedures, particularly third-party interviews, to detect and develop potential criminal violations for referrals to Justice; and (2) effectively coordinates its investigative efforts with the Office of the Solicitor.

Closed – Implemented

Please call 202/512-6100 for information.

See All 18 Recommendations

Full Report

Full Report (207 pages)
Investigation To Reform Teamsters' Central States Pension Fund Found Inadequate (2024)

FAQs

Why is the Teamsters pension fund in trouble? ›

Highlights. For many years, the Teamster's Pension Fund trustees have been the subject of allegations of misuse of the Fund's assets. Therefore, the Department of Labor initiated an investigation of the Fund and, in response to a congressional request, GAO reviewed the Government's investigation.

What is the federal bailout of Central States Pension Fund? ›

A failing pension fund that received a $35.8 billion federal bailout has returned $126.5 million to the government following a determination that its application for aid included about 3,500 dead people.

Can you lose your pension if your company goes out of business? ›

Generally, your retirement assets should not be at risk when a business declares bankruptcy, because ERISA requires that promised benefits be adequately funded and that retirement funds be kept separate from an employer's business assets and held in trust or invested in an insurance contract.

Has Central States Pension Fund been funded? ›

2023 Funding Level 98.5% Funded

In April 2024, Central States Pension Fund reported that its actuary determined the funding level of the plan to be 98.5% funded as of January 1, 2023, and on track to reach full funding in coming years.

Why are pension plans in trouble? ›

If there is any “crisis” for pension plans, it starts with the costs of paying for growing unfunded liabilities. State and local pension funds reported more than $1 trillion in unfunded liabilities in 2020. They reported just under $1 trillion in funding shortfall for 2021.

What happens when a pension fund fails? ›

When this happens, the bankruptcy courts may allow the company to terminate the plan and the PBGC is then forced to step in and continue the pension payments to the employees.

Is Central States Pension Fund safe now? ›

Since 1955, the Central States Pension Fund has paid retirees and beneficiaries all promised benefits. The Central States Pension Fund is now on solid ground as we move over time toward the goal of being fully funded.

Are union pensions guaranteed? ›

These plans are insured by a federal agency – the Pension Benefit Guaranty Corporation (PBGC) – which provides partial protection of the benefits of approximately 11.2 million workers and retirees in approximately 1,400 private-sector multiemployer, union-connected plans.

Are yellow freight workers losing their pensions? ›

As notified previously, Yellow's participation in the Central States Pension Fund remains terminated effective July 23, 2023. As of July 23, 2023, active members stopped earning additional pension benefit accruals on that date.

Can a company take away your vested pension? ›

However, if you have a traditional pension plan that your employer is contributing money toward, your employer can take back that money in the event that you are fired. However, if you are vested in the pension, then all the money in the account is yours to keep, even if you quit or are fired.

Can a pension run out? ›

Key Takeaways. Pension payments are made for the rest of your life, no matter how long you live. Lump-sum payments allow you to immediately spend or invest your pension as you like. People who take a lump sum may outlive the payment, while traditional pension payments continue until death.

Can a company keep your pension if you quit? ›

If you are in a cash balance or 401(k)-type plan you will have the right to either leave your retirement money in your employer's plan when you leave the job or, if the plan rules permit, take your money out.

Which state pension funds are in trouble? ›

California, Illinois, New Jersey, and Texas have the most public pension debt. Newly released forecasting by the Pension Integrity Project indicates that state pension systems will likely remain at historically high debt levels.

What states have the most underfunded pensions? ›

Worst States For Pensions
  1. Nevada. 2021 Unfunded Liabilities: $82,252,281,510.
  2. Alaska. 2021 Unfunded Liabilities: $31,331,382,418. ...
  3. California. 2021 Unfunded Liabilities: $1,530,649,405,907. ...
  4. Hawaii. 2021 Unfunded Liabilities: $58,122,692,070. ...
  5. Alabama. 2021 Unfunded Liabilities: $92,734,851,779. ...
  6. Illinois. ...
  7. Massachusetts. ...
  8. New Jersey. ...
Jan 16, 2024

How much pension do teamsters get? ›

A UPS (or freight, carhaul, etc) Teamster with 30 years can presently retire with $3,050 at age 62, or $2,913 at age 57. 25-at-57 is presently $2,413.

Who bailed out Teamsters pension fund? ›

Statement: Joe Biden's $36 billion for a union pension fund is “the largest private pension bailout in American history.” When President Joe Biden directed $36 billion to a Teamsters pension fund, he said it would prevent drastic cuts in pension benefits for 350,000 union workers and retirees.

Why are companies eliminating pension plans? ›

Traditional pension plans have been on the decline, primarily due to the economic strain they place on companies. Employers often bear the heavy responsibility of fully funding these plans; a task made more challenging by unpredictable market volatility and fluctuating investment returns.

What state pensions are in trouble? ›

Worst States For Pensions
  1. Nevada. 2021 Unfunded Liabilities: $82,252,281,510.
  2. Alaska. 2021 Unfunded Liabilities: $31,331,382,418. ...
  3. California. 2021 Unfunded Liabilities: $1,530,649,405,907. ...
  4. Hawaii. 2021 Unfunded Liabilities: $58,122,692,070. ...
  5. Alabama. 2021 Unfunded Liabilities: $92,734,851,779. ...
  6. Illinois. ...
  7. Massachusetts. ...
  8. New Jersey. ...
Jan 16, 2024

Are the Teamsters still a strong union? ›

Being a Teamster member means that you belong to the strongest and most democratic labor union in the world. For more than 100 years the Teamsters Union has been a leader in setting the standard for higher wages, better benefits and improved working conditions for workers throughout the United States and Canada.

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