This is another article in our series which has focused on the deterioration and downward spiral of the multi-employer defined benefit pension fund.

Death Notice

Decedent:  The New York Teamsters Road Carriers Local 707 Pension Fund

Date of Death:  March 2017

Cause of Death:  The failure of successive administrations and Congresses to address the serious underfunding of multi-employer defined benefit pension funds.

Immediate mourners: The 4,000 retirees in the pension fund.

Other mourners:   The American working person.


The New York Teamsters Road Carriers Local 707 Pension Fund (the “Local 707 Pension Fund”) is dead, reportedly having run out of money in early March 2017.

The Pension Benefit Guaranty Corporation (“PBGC”) the federal insurance agency created by ERISA to “back stop” pension payments reportedly has taken over pension payments to retirees. However, those will be paid at a reduced rate.

The projected impact upon retirees will be dramatic. According to the PBGC, prior to its takeover, the average Local 707 Pension Fund retiree was receiving $1,313 per month.  The average monthly payment will be slashed by the PBGC to $570.  This is a reduction of 56% for a population which is aging and unlikely to be able to engage in full-time employment.  This a crisis which is going to get worse.

For a historical perspective, the Local 707 Pension Fund was one of several pension funds that sought relief under the Multiemployer Pension Reform Act of 2014 (“MPRA”) to be permitted to have its participants consider a reduction of core benefits. However, its application was rejected by the Department of Treasury.  At that time, the fate of the Local 707 Pension Fund was clear.

The Central States Southeast and Southwest Areas Pension Fund, one of the largest pension funds in the country, also sought relief under the MPRA. Like the Local 707 Pension Fund’s submission, its application was rejected by Department of Treasury after a much publicized campaign spearheaded by Senator Elizabeth Warren of Massachusetts. More than twenty Senators formally joined Senator Warren in expressing their disapproval of granting relief.

Although the financial impact upon retirees is clear, employers should not lose sight that they are not immune. Moneys which employers agree to contribute on behalf of their employees to the multi-employer defined benefit pension funds in future negotiations will not benefit their employees.   Therefore, employers should consider strategies to address this problem.

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Photo of Paul A. Friedman Paul A. Friedman

Paul A. Friedman is a principal in the White Plains, New York, office of Jackson Lewis, P.C. His legal practice is focused on ERISA litigation, labor and Multiemployer Pension Plan Amendments Act (MPPAA) arbitrations and is well grounded in his earlier experience as…

Paul A. Friedman is a principal in the White Plains, New York, office of Jackson Lewis, P.C. His legal practice is focused on ERISA litigation, labor and Multiemployer Pension Plan Amendments Act (MPPAA) arbitrations and is well grounded in his earlier experience as outside counsel to numerous union pension funds. During years of litigating cutting-edge ERISA issues before the U.S. Department of Labor, U.S. district courts, bankruptcy courts and courts of appeal on behalf of employers, plan sponsors and ERISA plan fiduciaries, Paul sometimes finds his own prior landmark decisions cited to him.

For Paul, MPPAA has all the excitement of a trial – it is an intricate and counter-intuitive statute. He has first chair experience in more than 40 jury trials and has handled hundreds of arbitrations and bench trials on all aspects of ERISA. ERISA knows no organizational bounds and so Paul has defended cases for clients representing many industry sectors, including life sciences, financial services, energy, hospitality, and construction.

Paul has served as litigation counsel for numerous multi-employer and single-employer employee benefit plans in ERISA matters, where he:

  • Devotes his practice mainly to the defense of employers, plan sponsors, fiduciaries, and financial institutions against claims brought under ERISA by benefit funds, plan beneficiaries, and the U.S. Department of Labor. He handles issues related to breach of fiduciary duties, excessive plan expenses, benefit entitlement issues retiree health benefits, and functional fiduciary liability
  • Successfully represents companies as plan sponsors against claims of participants and qualified beneficiaries for violations of COBRA
  • Defends employers that have been assessed withdrawal liability under MPPAA or have experienced increased liability due to the passage of the Pension Protection Act of 2006
  • Performs employee benefits due diligence for buyers or sellers in mergers and acquisitions transactions, filling a knowledge gap between labor and financial counsel, ensuring that buyers and sellers price-in or mitigate against ERISA violations and potentially millions of dollars in liabilities
  • Conducts comprehensive strategic reviews of clients’ current operations to avoid or mitigate against exposure to ERISA enforcement and risk of civil and criminal charges brought against company executives, principals, and trustees

In the last decade, he has developed a business model for use by businesses across a broad spectrum of ERISA issues from the beginning of the ownership of these companies to their sale. He also provides benefits guidance to Mergers and Acquisitions counsel in complex transactions.

Outside of work, Paul is an ardent Civil War and World War I buff. He expressly enjoys traveling to Europe and touring World War I battlefields.