Teamsters Local 707 Goes Bankrup
by Martin Armstrong, Armstrong Economics:
The Pension Crisis on the horizon is far worse than anyone can imagine. This is the final straw that will break the back of socialism the same as communism fell. Pensions are in a state of crisis for they lost money in stock in the 2007-2009 crash and then sold the bottom shifting to government bonds and then interest rates plummeted when they needed 8% to survive. The management skills have been nonexistent for the propaganda has always been that government bonds present no risk when in fact they are UNSECURED DEBT and the riskiest of all investments long-term.
Yellow Roadway company is one example of how things have changed. The company was allowed to skip its pension contributions for 18 months. When the company restarted paying again, it was at 25% of the previous rate. The Pension Fund for local 707 began to implode, with roughly 700 workers paying into a fund supporting more than 4,000 retirees. Local 707’s fund pays out $48 million a year — and takes in $7.5 million in contributions. Those who have been contributing will get nothing at all for the contributions. The whole thing is a house of cards that caves in.
We wrote in the Pension Report: “As we approach 2017, everything you once thought was secure for your future will unravel.” Indeed, the Sovereign Debt Crisis and the Pension Crisis start to surface here in 2017.
Yellow Roadway doesn’t have their own Pension fund . They are part of a large multi employer pension fund through the Teamsters Union (Trucking Division) . Union locals don’t directly pay their members pension payments ! A large insurance company administers the funds payments to the retirees .The pension funds are divided in Conferences . The Western conference of 13 states being the strongest and most secure financially and the Central conference (in the midwest) being the weakest and nearly broke at this point from bad investments as well as being raided in the 1960′s , 1970′s and 1980′s by corrupt Teamster bosses in league with the Mafia (Jimmy Hoffa Sr. and Company) ! If the pension funds in any of the conferences drop below a certain amount of contributions to the fund then the government regulators step in and reduce pension payments to the retirees until the fund reaches it’s former level of stability and goes back to operating the way that it did before the drop in the pension contribution level . For all of the conferences funds to be in Serious default and danger of collapsing the entire U.S. economy and banking system would have to fall and if THAT were to happen Everyone’s funds and accounts everywhere in the country would fail as well !