A variety of factors led to Central States Pension Fund’s dire underfunding problem:
- The deregulation of the trucking industry in the 1980s resulted in the loss of more than 10,000 employers that used to contribute to the Fund. The challenges in our industry continue today, and we’ve experienced the loss of many employers even in the past five years.
- Many employers went bankrupt or out of business without making their full contributions to the Fund. About half of all benefit payments currently go to “orphaned” retirees, whose employers never fully paid the Fund to cover their pensions. Since 2008, Allied Systems, Hostess Brands and Leaseway/E&L Transport went bankrupt, leaving the Fund short $1.7 billion. Recently, employers such as YRCW have substantially scaled back their contributions and many other employers have withdrawn completely.
- Baby Boomers are retiring in record numbers and the union workforce has been steadily declining for years. As a result, for every $3.46 that the Fund pays out in pension benefits, only $1 is collected from employers, resulting in an annual shortfall of $2 billion. That math simply doesn’t work.
- Additionally, two major recessions since 2000 torpedoed the U.S. economy, driving down the Fund’s investment assets and pushing many contributing employers out of business or into bankruptcy.
If action is not taken soon to address this funding problem, by 2026, Central States Pension Fund will run out of money and be unable to pay any benefits to current and future retirees.