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Gino Arilotta

Dec.6, 2003

Teamsters' pensions gutted LABOR:
Because of investment losses, 10,000 Minnesotans will have their retirement benefits cut.
Saturday, December 06, 2003

At least 10,000 Minnesota workers will see their pension benefits slashed as the Teamsters Central States Pension Fund -- the nation's second-largest union pension plan -- struggles to manage heavy investment losses.
Retirees are not affected by the federally administered pension fund's reduction of future benefit payouts, but active workers were told recently to expect cuts in their anticipated benefits when they retire. Fund officials said the reductions were court-mandated to meet the fund's regulatory obligations, but the fund is not in danger of insolvency. Still, union officials say their members are confused and concerned. "They are destroying early retirement plans that Teamsters fought for decades to win," said Ken Paff, a national organizer of the Teamsters reform wing in Detroit. "There's no doubt that these people have either completely mismanaged it or completely misled people." But Judy Mazo, a multi-employer pension fund expert in Washington, D.C., described the Central States Pension Fund as "absolutely squeaky clean" since it began operating under government oversight in 1982. The fund -- which has a long, colorful history in and out of court, including an era in which it was known as the "mob's bank" -- now operates under a court-supervised consent decree with the Labor Department. J.P. Morgan Chase Inc. and Goldman Sachs are the court-appointed fund managers and the Teamsters union has no control over the fund's management or investments. The $17.1 billion fund, based in Chicago, and the Teamsters union have known for some time that the fund was in trouble. The Teamsters last year hired independent investment experts to evaluate its assets. But only recently did the fund's trustees decide to cut benefits. The fund finished sending out notices announcing the cuts to union members across the country Dec. 1. The Central States fund provides retirement benefits for more than 400,000 people across the country, and the changes will affect at least 10,000 people in Minnesota. The fund dropped from $21 billion in 1999 to $15.3 billion at the end of 2002 -- a 27 percent loss. Buoyed by better returns on investments this year, assets now stand at $17.1 billion. The plan is not reducing existing pension benefits, but is reducing the rate at which people earn new benefits. Starting Jan. 1, the plan will reduce the rate at which workers accrue pension benefits. Workers will earn 1 percent, not the current 2 percent, of what their employer pays into the fund on their behalf each week.

March 28, 2003

TEAMSTER PENSION FUNDS WIN SECOND LARGEST SECURITIES FRAUD RECOVERY EVER; Lucent Technologies Agrees to Pay More Than $600 Million to Settle Class Action Lawsuit.

WASHINGTON, March 27 /PRNewswire/
-- Investors in Lucent Technologies won a historic victory today as a settlement was reached in an accounting fraud class action lawsuit led by Teamsters West Virginia Pension Trust Funds.
More than $600 million dollars will be repaid to investors as part of the settlement.
"The Teamsters take our responsibility to our members' pensions very seriously," said Ken Hall, President of Teamsters Local 175 in Charleston, WV. "These lost investments will be restored to Teamster pensions and we will continue our battle to hold corporations accountable for their actions."
Pension Trust Funds at Local 175 and Local 505 in Huntington, WV were the court-appointed lead plaintiffs in the lawsuit. All purchasers of Lucent Technologies stock during the class period are eligible to file claims in the settlement.
Last month, the Teamsters West Virginia Pension Trust Funds also scored an important victory in a securities fraud class action against America West Airlines. The U.S. Court of Appeals for the Ninth Circuit upheld a securities fraud class action complaint against America West for manipulating repair costs and artificially inflating revenues. Shareholders, including the Teamsters West Virginia Pension Trust Funds, lost millions of dollars when the truth about America West was revealed.
"Our efforts to protect our members' retirement savings and to punish corporate fraud and malfeasance are clearly working," said James P. Hoffa, Teamsters General President. "West Virginia Teamsters should be proud of the fight waged on their behalf by its leaders and the law firm Milberg, Weiss, Bershad, Hynes & Lerach. We will continue to protect our investments and fulfill our fiduciary duties to our membership."




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