The Next Big Bailout? Treasury Rejects Proposal To Cut Pension Benefits
UPS, and roughly 270,000 retired truck drivers, construction workers, and other service workers can breathe a collective sigh of relief... for now. As we previously reported, the Central States Pension Fund had submitted a plan to Treasury that if approved would have cut member benefits, and triggered UPS to take an estimated $3.8 billion charge.
As the WSJ reports, Kenneth Feinberg (who was appointed by the Treasury to review all such applications)rejected the plan presented by the CSPF. Feinberg cited a few reasons for his decision, one being that it imposed cuts in a disproportionate manner, another was that the notifications sent to participants were too technical to be understood, but namely Feinberg didn't agree with the assumption that the fund would achieve 7.5% yearly investment returns going forward. Those returns "were too optimistic and unreasonable" Feinberg said.
"You get to breathe again, you get to exhale. Our life was on hold." said Bill Orms, a 69 year-old retired truck driver from Akron, Ohio who would have seen his $2,400 a month benefit cut in half had the proposal been accepted.
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