Anyone who retired from Central States prior to January 1, 2008, or who stopped working but was not yet eligible to begin collecting a retirement check, will get only what Central States can provide. UPS is out of the picture. UPS abandoned those retirees. After complaining about other companies creating "orphan" retirees, UPS did the same thing. These former UPSers were also abandoned by everyone nationwide who voted "Yes" to approve the National Master and thereby approve the pension deal.
When a Teamster member retires, he no longer is a Teamster and can't vote for contracts, or vote at union meetings, or in union elections. He is at the mercy of the Company, the Pension Fund, the Health & Welfare Fund, and the younger members, most of whom don't care about retirees or their issues.
Central States is required to improve its funding percentage by first cutting future benefits and raising contribution rates as often as necessary. If that isn't enough then they reduce pensions to whatever the fund can afford to pay. If that isn't enough and they actually get to a point where they are Insolvent, meaning they don't have enough money to pay all the pension checks for the current month, then pensions are reduced to the PBGC-guaranteed rate, which for a thirty year retiree is $12,870. The PBGC then lends the fund money from its multi-employer pension insurance fund to cover the current shortfall. (This PBGC-run insurance fund is funded by $9 per participant annual premiums paid by Central States and all other multi-employer plans; no taxpayer funds are involved.) The PBGC does not take over the troubled fund or pay benefits. It provides a
loan that must be repaid when the fund's funding level improves. The fund stays in existence and pays the benefits, not the PBGC.
Multi-employer funds in trouble don't normally go bankrupt as a company would. They just dwindle down (and down), and presumably recover eventually as the lower benefits paid out and the higher contributions paid in improve the financial condition of the fund over time.
When a company owes a lot more money than it has, it usually owes it in the form of a payroll that is due by the end of the week, and bills to suppliers that are due by the end of the month. This creates and immediate crisis and leads to a declaration of bankruptcy. A multi-employer pension fund, on the other hand, owes almost all its money to present and future retirees who aren't due the money until five, ten, twenty, thirty, forty, fifty, sixty, seventy or more years from now. The crisis isn't quite so immediate. Only a fund's inability to pay curent retirees this month's check (Insolvency) would be an immediate crisis.
You can read all about the difference between how the single-employer and multi-employer insurance funds are run by the PBGC here:
http://www.pbgc.gov/practitioners/multiemployer-plans/content/page13108.html
