William B. Cassidy | Mar 24, 2011 11:26AM EDT
The Teamsters Central States Pension Fund is cutting into benefits for YRC Worldwide employees as the trucking operator struggles to restructure its finances.
The fund will no longer allow YRC Teamsters who retire after 25 or 30 years with the company to receive full pension benefits before they turn 65 years old.
The benefit cuts are needed to compensate for the loss of $1.3 billion in pension contributions from YRC through 2015, the pension fund said in a letter.
YRC Worldwide and the Teamsters pension funds are negotiating terms for the interest rate charged for the deferred 2009 pension payments.
The Central States decision affects thousands of YRC Teamsters working for reduced wages who have not received company pension contributions since mid-2009.
Teamsters who retired before Sept. 24, 2010, won't be affected by the cuts, according to the Central States Pension Fund, the largest Teamster pension plan.
A grandfather clause also protects working YRC Teamsters who reached age 55 by July 9, 2009, and had 25 or more years of service. They can retire at 62.
But the rest of the YRC Central States members will be penalized if they retire before they turn 65, losing a percentage of their benefits per year below the age limit.
YRC avoided bankruptcy in 2009 after securing a wage and benefit agreement with the Teamsters that included an 18-month suspension of pension contributions.
The company had already deferred $100 million in pension contributions as it fought to preserve its dwindling liquidity - then a threat to its survival.
The $4.3 billion less-than-truckload operator is scheduled to resume partial pension contributions in June, but at about 25 percent of the previous level.
-- Contact William B. Cassidy at wcassidy@joc.com.
