Among the thousands of unionized trucking-industry workers whose collective bacon was saved on Friday by the Treasury Department's rejection of a large pension fund's plan for deep benefit cuts, few are breathing easier today than the already aggrieved employees at less-than-truckload (LTL) carrier YRC Worldwide Inc.

Treasury, represented by Special Master Kenneth Feinberg, denied a proposal from the Central States, Southeast, and Southwest fund to make cuts that the fund said were needed to keep it solvent. Feinberg's decision, grounded in the belief Central States failed to comply with federal law requiring it to show the proposal would put it on the path to solvency, staved off sizable pension cuts to the fund's 400,000 participants that would have begun around July 1. It also took Atlanta-based transport and logistics giant UPS Inc. off the hook for as much as $3.8 billion to make up what would have been foregone pension payments had Feinberg blessed the proposal.

For the roughly 13,000 working YRC Teamsters in Central States, and the thousands more in the fund who are retired from YRC and the old Roadway Express, which Overland Park, Kan.-based YRC acquired in 2003, Feinberg's ruling avoids adding insult to a massive injury. As part of a series of mid-2009 concessions to help a financially hemorrhaging YRC conserve cash, its Teamster employees agreed to let the carrier suspend pension payments for 18 months, and resume them at about one-fourth the levels that were in place before the concessions were agreed to. The pension agreement was continued through April 1, 2019, under a 2014 extension to the existing collective-bargaining agreement between the Teamsters and YRC.

Ken Paff, national organizer for the Teamster dissident group Teamsters for a Democratic Union (TDU), said the cuts are more severe than that because the payments are based on a 40-hour workweek; most unionized YRC workers clock more hours but don't receive credit for it, Paff said.

If Treasury had approved the Central States plan, YRC's current workers and retirees would have faced pension cuts ranging between 50 percent and 70 percent on top of what they had given back years ago, Paff said. For example, a worker in the Central States fund who spent 30 years at YRC, or 15 years each at YRC and another firm still in business, would have lost exactly one-half his or her pension, according to Paff. An employee with 15 years at YRC and 15 years with a firm that had become defunct would have faced about a 60-percent cut, according to TDU estimates. An employee with 30 years at a defunct company would have been hit with an estimated 70-percent haircut, Paff said.

The different retiree classifications reflect the structure of multiemployer pension plans that have been a staple of labor-management relations for decades. Covering workers of two or more companies in accordance with a collective-bargaining agreement, the plans are designed to protect workers through the pooling of risk and through economies of scale. It also provides portability of benefits and eligibility for workers who move from employer to employer within the industry covered by the plan.

The program worked fine as long as there were numerous unionized truckers to equitably allocate the costs of meeting the pension obligations. However, as the ranks of trucking companies thinned over the decades due to bankruptcies and consolidations, companies remaining in the plan, such as UPS, became liable for a larger share of the obligations. That share included funding the pension for workers who were employed at bankrupt companies but were never employed at those companies that remained. In 2007, UPS made a $6.1 billion lump-sum payment to Rosemont, Ill.-based Central States to withdraw from the plan, and an additional $1 billion payment to cover transition costs.

The fund has also been hurt by high expenses and subpar investment returns after the sharp decline in asset values during the 2007-08 financial crisis. According to a published report, the fund pays out $2 billion more in retirement benefits each year than it takes in from employers, and there are more than five retired members for every active member contributing to the fund.

Following Feinberg's ruling, Central States officials said that without legislative action or an approved rescue plan, participants could see their pension benefits dwindle to "virtually nothing." Pension-reform legislation has been introduced, but it is stalled in Congress. The fund has the option of submitting a modified application that meets the requirements of the 2014 pension-reform law that Feinberg based his decision on. Fund executives said Friday that they were weighing their next steps.

Paff of TDU said he doesn't dispute Central States' assertions that, absent any changes, the fund will eventually run out of money. He urged the fund to join a broad range of stakeholders, including the Teamsters, TDU, and AARP (formerly known as the American Association of Retired Persons), which are lobbying for pension reform in Congress.