The reduction and even suspension of pension benefits isn’t something anyone wants. However, a growing number of financially troubled multiemployer benefit plan managers may find it to be an inescapable eventuality.

The Teamsters Union's troubled Central States Pension Fund is a good example of how bad things could turn out. Projections show that it will be insolvent by 2026, unless it takes the drastic step of cutting back benefits.

“Their leader testified before Congress that this is a time when arithmetic becomes reality,” said Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans in Washington, D.C. “The fund’s actuaries ran the numbers both ways. If reform legislation is enacted, they can pay $72 million in benefits over the next 50 years. Without it, they can pay only $28 million. That’s a big difference.”