Ill-feeling lingers

The Calvin image remains on the window of a union member’s truck, a daily reminder that the animus from the strike still festers — and that the issues that originally drove it remain unresolved.

The pension, which is administered by a group of labor officials and corporate executives from the 200 participating companies, has sued the company, alleging it improperly tried to stop enrolling new employees in the pension without paying the withdrawal fee. The company has sued the union, demanding “monetary damages” and alleging the strike was illegal.

Companies, labor leaders and retirees are watching closely, because the multiemployer pension that Peeps workers depend on is one of close to 1,300 around the country.

In total, 10 million current and retired workers participate in multi-employer pensions, according to the Pension Benefit Guaranty Corporation. These pensions allow employees to move from one job to another within the same pension and carry their retirement benefits with them.

Many of these multiemployer pensions are on track to run out of money. If the pension runs out of money, retired workers might only get a small percent of the money they thought they had earned through decades of work.

Further complicating matters: If one of the companies paying into the multiemployer plan falters, the other firms are left on the hook to pay even more to stabilize the fund.

Just Born’s union employees participate in the Bakery and Confectionery Union and Industrial International Pension Fund, which was flush with cash several years ago, even after the financial crisis. At one point, it had so much money that it paid pensioners 13 monthly checks each year.

The company and the pension seemed healthy, but when disaster struck it seemed far outside their control.

Hostess Brands, maker of Twinkies and Ding Dongs, accounted for 24 percent of all those contributions to the multiemployer pension. It stopped making contributions in 2011 and then filed for bankruptcy in 2012, weighed down by weakened demand, rising competition, and large levels of debt. Federal courts allowed it to escape without paying the pension fund $1 billion in obligations.

The pension fund immediately went from being one of the healthiest in the country to one of the most at risk.

The pension was now in a category known as the “red zone,” which means if changes are not made it will likely become insolvent, and beneficiaries might just get pennies on the dollar when they retire. Some other pensions are even in worse shape.

“The crisis is looming on the horizon,” said Kenneth Feinberg, who worked at the Treasury Department until last year and was tasked with scrutinizing rescue proposals from multi-employer plans.

In February, as part of a new budget law, Congress created a commission to try to stabilize struggling pension funds. In the meantime, many existing companies like Just Born are on the hook to pay higher premiums.