Teamsters are known as a strong bunch. Our work builds the American dream and keeps it moving forward. It’s work we take deep pride in, but it can be tough work.
That’s why the fight for workers’ pensions is so critical to us. A hard day’s work deserves a fair pension at retirement. It’s how our members keep their own American dreams alive.
Today, our pensions are in crisis, with an uncertain future. Cuts in promised benefits and continued insolvency issues already threaten the future of as many as 1.5 million active and retired workers.
We’ve been working with Senators Rob Portman and Sherrod Brown to stop retirees from facing pension cuts as large as 70 percent because of cuts in benefits through the Central States Pension Fund, and we were excited to see it announced that Sen. Brown co-leading a bipartisan committee to address the pension crisis. We hope, through that work, that we can also hold Peru accountable for its role in this crisis.
Why Peru? The government of Peru has failed to pay $5 billion – yes billion with a ‘b’ – back to investors who bought into their land bonds. These bonds were created to compensate landowners who had property seized by the country’s former communist military government. Peru was able to open up these bonds to secondary investors, as a way to ensure the exploited landowners could be made whole.
Government-backed bonds are considered the most secure investment and are, therefore, a favorite of pension funds. They are, usually, low-risk with a steady rate of return. We put our hard-earned retirements in these bonds not only based on the rationale that responsible countries pay their debts, but also because of the additional protections provided to investors in the United States-Peru Free Trade Agreement.
It sounds like a pretty safe bet. It would have been, if Peru had kept up its end of the bargain. Without reason or rationale, Peru has refused to pay back its investors. It is not facing a financial or constitutional crisis – there is no valid reason that the bonds remain in default. In 2016 a newly elected, reform-minded president promised to make good on the country’s financial commitments, but rather than resolve this outstanding debt, he issued convoluted decrees that minimized the bonds’ value.
As of today, they are getting away with it. However, there are actions that our government can take, and we need all the help we can get. In fact, one little-known trade deal, the United States-Peru Free Trade Agreement, is currently the key to saving the pensions of thousands of hard-working Americans and retirees, if it were just enforced.
Through this trade agreement, the U.S. Department of State can obtain the amount currently offered by Peru to pay back the bonds – an important first step in making sure our retirees get what they deserve. The U.S. Department of Treasury can take steps to ensure Peru is accurately disclosing the amount owed on the agrarian reform bonds to the International Monetary Fund (IMF), the Inter-American Development Bank (IADB) and the Organization for Economic Co-operation and Development (OECD).
Most importantly, both the U.S. Department of Commerce and the U.S. Trade Representative can hold Peru accountable for the lack of compliance with the U.S. – Peru Trade Promotion Agreement, represented by this default, especially in light of the current Administration’s commitment to full compliance with U.S. Trade Agreements.
Our leaders must use every tool we have to protect our workers, and we have the power of trade deals to hold Peru’s leaders accountable. With the commitment from the Administration to enforce our trade deals, our workers hope to see this dealt with once and for all.
Nick “Sonny” Nardi is president of Teamsters Local No. 416 in Cleveland.