The Teamsters pension fund is at risk of folding due to deep funding shortfalls and companies pulling out of the plan.
The fund, founded by late Teamsters President Jimmy Hoffa, has just 60 cents of assets for every $1 in obligations, The
Wall Street Journal reported Friday. The Pension Benefit Guaranty Corp, the agency that backstops failed pensions, considers the fund in "critical" condition.
"There is a reasonable possibility that this plan could run out of money in about a dozen years," Thomas Nyhan, executive director of the Teamsters' Central States Funds, told the Journal.
Robbed: Secret ‘Financial War’ Will Wipe Out Your Wealth, Warns Pentagon Adviser
Central States has about $18 billion in assets, down from $27 billion in late 2007. But it is still the second largest multiemployer pension fund in the country. It pools money from about 1,900 companies, but a number of companies are rushing to pull out of the plan, despite high exit costs.
Sysco Corp. removed its last Teamster unit from Central States in January, while Republic Services Inc. is trying to pull out some 800 sanitation workers, even though it could end up paying $146 million to get out, the Journal reported. United Parcel Service has already left Central States, but paid $6.1 billion to exit.
"Our employees who participate in this failing pension fund and our Company deserve better," Catharine Ellingsen, senior vice president of human resources at Republic, said in a statement.
"Employees only stand to gain in benefits by getting out of a pension fund that is going insolvent," she added.
The Teamsters plan pays about $2.8 billion in benefits a year but takes in only about $700 million in employer contributions.
© 2013 Newsmax. All rights reserved.