Joe Yuhnke, who has spent 23 years working on the loading dock at trucking company YRC Worldwide, was looking forward to retiring in about seven years.
Now, the Pendleton resident's retirement dreams are crumbling.
The Teamsters pension fund that controls the retirement benefits for Yuhnke and thousands of other Western New York workers is in deep financial trouble, with just a fraction of the money it needs to pay the pensions promised to its participants.
So deep is the financial hole that the fund now is being forced by federal rules to make major changes in the pension benefits that will be available to workers who retire next year and beyond.
Those workers, including Yuhnke, will face a triple-whammy of reduced benefits, later retirement dates and increased contributions to the pension fund by their employers or from their own pockets.
"It's a young man's job," said Yuhnke, 44. "If they say I have to work until I'm 65 on the loading dock, I'll be a crippled old man. I won't be able to enjoy my retirement."
Yuhnke's pension is part of the New York State Teamsters Benefit Funds, which operates the retirement plans for unionized local workers at more than 200 companies, from United Parcel Service and Erie Logistics to warehouse employees at Tops Markets and drivers for beverage distributors like Certo Brothers. About 14,000 unionized workers across upstate New York are covered by the Teamsters pension fund.
The Teamsters fund became critically underfunded last year, with enough assets in its investment portfolio to cover less than 60 cents of every $1 in pension benefits that it is obligated to pay.
"You have to make adjustments to the fund to make it solvent," said Ronald G. Lucas, one of the pension fund's trustees and the president of Teamsters Local 264 in Cheektowaga.
It's far from the only pension fund with money troubles. The Empire State Regional Council of Carpenters' pension fund suffered losses of nearly $100 million on investments it made in scams orchestrated by Bernard L. Madoff.
Multiple-employer pension plans are common in the trucking, hotel and construction industries, which have suffered huge job losses and company failures. The plans cover about 10 million workers across the country, or roughly one of every four employees who have a private pension.
Moody's Investors Service estimates that multiple-employer pension plans, like the Teamsters fund, were underfunded by $165 billion last year. A report it issued last September lists 108 multiple-employer union pension funds that are considered by federal standards to be endangered or in critical condition.
Those shortfalls have spurred new legislation in Congress that potentially would provide a federal bailout. One bill would give troubled plans more time for their investments to rebound before they are forced to take the steps the Teamsters fund is facing to reduce future benefit accruals, increase corporate pension subsidies and impose stiff early retirement penalties.
Another bill, sponsored by Sen. Bob Casey, D-Pa., would make a federal agency, the Pension Benefit Guaranty Corp., responsible for the long-term costs of some troubled plans.
Administrators of the Teamsters fund said it has been hit by a series of broadsides that have severely weakened its finances. An aging work force means that it now has more retirees drawing benefits than active workers contributing to the fund.
The financial troubles of several big participants in the plan, from the bankruptcy of supermarket chain Penn Traffic Corp. to YRC, which is in the midst of an 18-month period when it has suspended its contributions to the pension fund, further exacerbated the weakness. Penn Traffic and YRC are two of the five biggest contributors to the pension fund.
And the stock market's plunge in 2008, which led to a nearly 30 percent drop in the pension fund's investments, left a gaping hole in the fund's asset base, which had dwindled to $1.6 billion at the end of April from $2.3 billion in 2007.
"In 2008, it was devastating," said Kenneth R. Stillwell, the funds' executive administrator.
Although the fund's portfolio rebounded by almost 24 percent last year, it still is paying out more than $3 in benefits for every $1 in contributions, leaving a shortfall of almost $15 million a month that plan administrators must try to make up through returns on investments.
As a result, the Labor Department, which oversees multiple-employer pension plans like the Teamsters fund, is forcing it to make a series of mandatory changes in the pensions that it offers to its participants.
Many of those workers are in physically demanding jobs, driving delivery trucks and doing warehouse work, which the pension fund traditionally has recognized by allowing participants to retire with full pensions once they accumulated 30 years in the plan.
Under the revisions taking effect next year, that retirement age could jump as high as 65, with steep benefit reductions for workers who retire early. Individual employee groups within the Teamsters fund also will be able to select options that would reduce the normal retirement age in exchange for a cut in how fast future benefits accumulate and even further increases in the contributions to the fund from workers and their employers.
One option, for instance, would allow workers to collect full pensions at age 55 in exchange for a 60 percent cut in how quickly future pension benefits accumulate and contributions to the plan from companies and their employees that would rise by between 5 percent and 11.5 percent per year.
"It's very confusing right now," said Dan Kurczewski of Buffalo, a USF Holland worker who has 29 years in the Teamsters fund.
"It's basically going to force me to work five more years and take a 10 percent to 20 percent reduction in my pension," he said. "I'm not happy about it, but at least I still have a pension."
Kevin O'Shea, a Certo Brothers deliveryman, said his retirement plans will hinge on which of the six available options, with normal retirement ages ranging from 55 to 65, his co-workers collectively elect to accept.
With 25 years on the job, O'Shea could retire with a full pension at age 55, if his co-workers vote for that option. But if they vote for an option with a later retirement age, O'Shea could be forced to give up his dream of working as a delivery man for just five more years and then finding a new job that is less demanding physically.
"That would really wreak havoc on how I plan my retirement," the Youngstown resident said. "It would be really punitive with how much I would lose."
Kevin Swan, a worker at Allied Waste in the City of Tonawanda who has 28 years in the plan, said the changes won't have a huge effect on him. "I will wind up losing a small percentage," he said.
But Swan sympathizes with younger workers, who now will accrue benefits more slowly. "The more years you've got left, the more you're going to hurt," he said. "It's unfortunate, but times are tough. You've got to make choices."