News # 1

N.Y. Teamsters Fund to Seek US Approval to Slash Retiree Pension Benefits By 31%

The New York State Teamsters Conference Pension and Retirement Fund later this month plans to seek federal approval to cut retiree pension benefits by 31%, becoming the second trucking union planning to announce that step as a way of preserving future benefits. The move follows the application by the Central States Pension Fund, the largest Teamsters plan, with about 400,000 members, that would have cut retirees under age 75 by 50% or more. The Treasury Department rejected Central States application in May, and trustees subsequently announced they have no plans to refile. Instead, fund leadership in May appealed to Congress to fix Central States finances that are on course to run out of money in a decade. The New York Fund, covering about 35,000 people, also plans to cut pensions by 20% for active workers. An Aug. 25 Treasury filing date was targeted for the New York Fund, which includes eight upstate locals and one in Union City, New Jersey. If approved, cuts would be effective July 1, 2017. “We are determined not to allow our fund to deteriorate to a point where the fund cannot be saved,” a letter sent to participants last week said, labeling the effort as the Pension Preservation Plan, or PPP. “This is a difficult decision. We recognize the hardship these proposed benefit reductions will create. The PPP needs to be implemented now. If we wait to take action, we will be forced to make even larger cuts later.” The Multiemployer Pension Reform Act of 2014 established a process for troubled funds to seek government approval to make the cuts, including an option to enforce them even if participants vote to reject the reductions. New York’s fund proposed no cuts for those age 80 and older on July 31, 2017. Proportional cuts would be made for participants between 75 and 79, based on age.
The proposal also outlined how it would make “fair and equitable” cuts, in line with the 2014 law. Central States’ application was rejected in part because the agency said it was neither fair nor equitable. New York’s fund also justified the percentage differences for active and retired participants by noting that actives’ benefits have been cut several times in recent years, while retirees have not. Though Central States and New York proposed cuts, some other Teamsters Funds, such as the one covering western U.S. workers, remain solvent. Meanwhile, several steps are continuing in Washington on the pension front. The Government Accountability Office continues to study union pension issues, with no fixed completion date. In addition, Senate Democrats have tried, so far without success, to press Republican leadership to address pension issues. The Finance Committee hasn’t yet tackled the Teamsters situation. However, the committee plans to vote later this year on a separate measure covering some union mine workers’ benefits that are slated to expire in December, said a spokesman for Ohio Republican Sen. Rob Portman, a committee member. Portman is one of two senators who have sponsored legislation to address Teamsters pensions. The other bill was sponsored by Sen. Bernie Sanders (I-Vt.). Neither bill has advanced. Union officials tell Transport Topics they’re continuing to address pension reform. “The [International Brotherhood of Teamsters] is working on getting bipartisan support for legislation that will change the debate in Congress,” Teamsters Vice President John Murphy said Aug. 17. He has compared the issue to “a runaway freight train” because pensions haven’t been addressed for decades while funds dwindled. New York pays about $2.65 in benefits for each dollar collected. Central States pays even more at $3.46

News #2

Transportation Groups Urge Lawmakers to Preserve Funds for State Infrastructure

Groups representing state transportation agencies said they want congressional funding leaders returning to Washington next month to ensure that state transportation departments are not stripped of funds they could use for big-scale infrastructure projects. The National Governors Association, the National Conference of State Legislatures and the American Association of State Highway and Transportation Officials are among the groups opposed to a proposal that would cancel $2.2 billion in unused budget authority from a federal highway account. The proposal, referred to as rescissions in congressional parlance, is sponsored by Republican transportation funding leaders in the Senate. It would rescind highway funds traditionally meant for state DOTs. The proposed rescission is included in a Senate-passed fiscal 2017 transportation funding bill, and it is a way for its sponsors to cut down on federal spending. House lawmakers are expected to advance their transportation funding bill next month. The House version does not include the proposed rescissions.

The groups called on Senate and House appropriations leaders to reject the rescissions during the chambers’ conference negotiations to draft a final fiscal 2017 transportation funding bill. They warned that a rescission of $2.2 billion in contract authority for state DOTs would impede investments in highways and bridges. “Requiring the rescissions to come from only a portion of the unobligated contract authority balances means that programs important to state DOTs will bear the brunt of these cuts,” AASHTO and the other state groups said in a letter to funding leaders before Congress adjourned for its summer recess. “These rescissions will significantly hamper a state DOT’s flexibility to program federal dollars. They could go so far as to force states to cut actual highway expenditures at a time when we need to be investing in our nation’s infrastructure, potentially eliminating the modest investment gains made in the FAST Act,” they added.
Aside from the Senate bill’s proposal, the 2015 FAST Act highway law requires a cancellation of $7.6 billion in contract authority to states by July 1, 2020. If Congress were to approve the Senate proposal in the final version of a fiscal 2017 transportation bill, state DOTs could see rescissions totaling $9.8 billion by 2020, the groups noted. The Obama administration had proposed a rescission of $2.4 billion. Jim Tymon, AASHTO’s chief operating officer, stressed that rescissions should not be seen as basic budgetary maneuvers. “The Senate’s proposed 2017 rescission would cause big programming headaches for state DOTs because many states have planned for projects that would be funded from the specific federal program categories that would be subject to that rescission,” Tymon said. Lawmakers return to Washington after the Labor Day holiday, and House Republican leaders say they would like to advance the transportation measure to avoid budget battles later in the fall. Calls to the Senate funding leaders – Susan Collins (R-Maine) and Jack Reed (D-R.I.), who developed the proposal, as well as to the chairmen of the House and Senate committees with jurisdiction over the funding process – were not returned. An aide with the office of House Majority Leader Kevin McCarthy (R-Calif.) told Transport Topics last week that a vote on a transportation funding bill is likely in September. McCarthy manages legislation on the floor of the House.

If Congress does not advance a transportation funding bill or the other fiscal 2017 funding bills to the White House by the end of the 2016 fiscal year on Sept. 30, the House and Senate would need to approve legislation that would avoid a shutdown of the federal government. The new funding legislation, which would be called omnibus, would include the fiscal 2017 bills for each agency and new provisions, such as the funding rescission for state DOTs. The alternative measure would be a continuing resolution that maintains the funding status quo until lawmakers agree on the final versions of their fiscal 2017 funding bills.

Latest news 2

Heavy Truck Speed Limiter Rule Clears OMB

A joint proposed rule to limit the top speed of heavy trucks has cleared a review by the White House Office of Management and Budget. The OMB clearance, completed Aug. 12, is the final step required for publication of the Federal Motor Carrier Safety Administration/National Highway Traffic Safety Administration proposal. Latest projections call for publication on Aug. 28, according to this month’s Department of Transportation Significant Rulemakings Report. The pursuit of a heavy truck speed limiter rule began in 2006 when American Trucking Associations and Road Safe America each filed petitions claiming that limiting the top speed of trucks would save both lives and fuel. FMCSA and NHTSA said the rule would decrease the estimated 1,115 fatal crashes annually involving vehicles weighing more than 26,000 pounds on roads with posted speed limits of 55 mph or above