Mike Walden

“They want to take our promised retirement benefits from us, that were guaranteed to us. It’s our savings plan. We were promised them through our contracts, through our pension fund … we were promised them by our government which told us once you are retired those pension benefits are yours.” Michael Walden

They don’t know each other, but Clifford Kennedy and Michael Walden have something in common. Both retired, they are engaged in efforts to ensure that pension promises made, are pension promises kept.
One is American, the other Canadian.
Kennedy, a retired public servant from New Brunswick, is spokesperson for the Pension Coalition NB, currently engaged in a court action to overturn legislation that created a shared risk pension model from the defined benefit plan that promised retirees a set of benefits.
Walden is a retired truck driver from Cuyahoga Falls, Ohio, who, as chairman of the Northeast Ohio Committee to Protect Pensions, one of 26 connected committees in the United States, is fighting to preserve his Teamsters’ pension from federal legislation that allows trustees of troubled plans to cut benefits as a means of restoring solvency.
The Central States Pension Fund, a multiemployer plan that administers the pensions of current and retired Teamsters’ truckers, among others, is the first fund to file a rescues plan made possible by legislation passed last year by the federal government.
If adopted, benefits could be cut by an average of 23 per cent, according to information released by Central States. That number, says Walden, seems to includes retirees who won’t see any benefit cuts. Among those whose benefits will be cut, the average is in the 45-65 per cent range, he says, adding his own pension stands to be cut 50 per cent, or $18,000 a year.
The New Brunswick plan makes the provision of some benefits, like cost-of-living allowances, conditional on market performance.

“They want to take our promised retirement benefits from us, that were guaranteed to us. It’s our savings plan. We were promised them through our contracts, through our pension fund … we were promised them by our government which told us once you are retired those pension benefits are yours,” Walden told ARIA during a recent conversation.

His comments about the promise of pensions echo those of Kennedy, who told ARIA that “our pensions are vested and they’re deferred earnings.” That’s the same message from the Canadian Coalition for Retirement Security, formed in response to flirtations from Stephen Harper’s government about target benefit plans, and the ongoing fight by Quebec labour groups against that province’s Bill 3, legislation that unilaterally changed the promise of pension benefits.
Last year, to avoid a government shutdown, Congress passed an omnibus budget bill that, at the last minute, included a new law – the Multiemployer Pension Reform Act (MPRA) – allowing trustees of financially troubled plans to cut benefits under a rescue plan, says Walden. The new law, he adds, allows trustees to override provisions of the Employee Retirement Income Security Act (ERISA) of 1974.
It was introduced and passed in such haste that Walden doubts politicians who voted for it, including many Democrats, understood what they were voting for, or had even read the legislation.
“Under ERISA, once you retired they couldn’t touch your pension. The new law gives trustees the power to reduce pensions to bring the plan back to what is considered solvency.”
Any multiemployer plan under 65 per cent funded is considered to be in a critical zone, and subject to restructuring. The $18 billion Central States Pension Fund is 53 per cent funded, says Walden, and has been below 65 per cent funded since the financial meltdown of 2008, he adds.
The fund covers more than 220,000 retirees and 400,000 members from 250 union locals across 37 states. There are about 1,400 multiemployer plans in the United States, and about 10 per cent are in the critical zone, says Walden, who acknowledges funding problems that include one worker for three retirees drawing benefits, and ‘orphans’ – retirees from employers that have gone out of business and are no longer paying contributions.
The MPRA exempts some retirees from benefit cuts, including retirees 80 or older; disability benefits would also be protected. However, a plan to move the orphans to the Pension Benefit Guarantee Corporation (PBGC), a federal agency designed to protect pension benefits, although not all of them, would seriously impact their pension income, says Walden.
“What they want to do, and what they are now allowed to do, is move that person to … the Pension Benefit Guarantee Corporation (benefit), which in some cases, could see individual pensions reduced by 60 per cent or more.”
The current maximum benefit paid out by the PBGC, says Walden, is about $1,250 a month.
While there are problems, there are solutions that don’t include massive cuts to pensions, and that’s where the focus should be, he adds. He points to the Pension Accountability Act introduced by Ohio Senator Rob Portman, which “aims to give workers and retirees a voice when a looming multiemployer pension bankruptcy requires major pension reforms.”
Portman’s bill would give retirees a seat at the table when rescue plans are being discussed by making “the participant vote binding in all situations.” It would also ensure that only returned ballots are counted. Currently, ballots not returned are counted as a yes for a rescue plan.
“And if we did vote no, the Treasury Department could overturn our vote if it impacts the PBGC. So, we really don’t have a voice in it,” says Walden.
He and others fighting for their promised pensions also like presidential candidate Senator Bernie Sanders’ plan to close tax loopholes for wealthy Americans and use that money to strengthen the pension corporation, allowing it to pay out higher benefits to pension orphans, bolstered by contributions from pension funds.
Greater ability to organize and have corporations contribute to pensions would also help solve funding issues, he adds.
The real effort, continues Walden, springs from the grassroots level. With 26 connected committees, he is on the road a lot, meeting and organizing. Logistical problems include getting the word out to elderly retirees, many of who don’t have cell phones or email.
“Our main goal right now is to get this law changed, repealed, have hearings on it … give us a fair chance and look at all the solutions. We don’t know if they considered any other solution than reducing pensions.”

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