Central States Pension Fund will be insolvent by 2025

or left the fund. It annually pays out far more money in benefits to current retirees than it receives in retirement contributions from the current employers in the plan and from its investment holdings.

There also have been complaints about the handling of the fund, and the Government Accountability Office began an investigation of the pension fund.

Nyhan said the fund held $15 billion at the end of March, but annually pays out $2 billion more than it takes in.

A proposal to avoid the insolvency by cutting retiree benefits — many by half — had been rejected by a U.S. Treasury appointee in May 2016. Retirees fought hard to defeat the plan, which was made possible by a controversial 2014 law.

At the time the U.S. Treasury rejected the plan, Nyhan said that congressional action was the pension plan’s only hope.

Nyhan laid out changes in the fund’s investment that he said are underway and would make its remaining lifespan more predictable. Central States is selling off much of its stock investments and other holdings that could generate higher returns and delay the insolvency but also carry the risk of losses that would push the fund into insolvency sooner.

It is investing the proceeds from those sales in low-risk bonds and cashlike holdings.

With that plan in place, Nyhan said, the fund will not have enough money at the start of 2025 to pay all of the benefits it would expect to owe retirees that year. Laws governing pension plans dictate that the fund at that point would be considered insolvent. It also would have to adjust benefits to spread out payments throughout that year.

And as of Jan. 1, 2026, the fund would expect to reach a zero balance, Nyhan said.

Retirees celebrated the rejection of the controversial 2016 benefits cuts. Committees organized by retirees in many of the states where Central States has members have been lobbying Congress in search of support for a better solution.

One proposal called the Butch Lewis Act has gotten support as a way to solve severely underfunded multi-employer pension plans, including Central States.

Nyhan said that members of Central States should remain flexible as Congress and a special committee formed to seek solutions works on ideas.

Pressing for “Butch Lewis or nothing,” he said, likely will lead to nothing.