The Teamsters' Central States Pension Fund looks all but certain to fail, crushing the retirement dreams of thousands of Minnesotans and many thousands more in other states.

For a calamity like this, it's important to understand how the problem came about. Forget the conventional explanations, some version of union mismanagement of assets or unanticipated bear markets.

This fund is going to fail because of an upheaval put in motion more than 35 years ago in the principal industry that employed its participants, trucking and warehousing.

That makes this coming crash a little like a truck careening into the gorge after the driver repeatedly blew past "Danger! Bridge out ahead" signs — with the first one maybe 1,000 miles back.

Central States isn't the only pension fund in trouble, of course. But at more than 400,000 participants and beneficiaries, it gets a lot of attention. The news lately has been about the fund's plan to stay solvent, enabled by 2014 legislation that permitted reducing the monthly retirement benefits for about 270,000 people, beginning this summer.

Nobody was happy about this possibility, certainly not retirees who had worked years counting on their promised pension benefits. It's hard to imagine how even the most frugal could easily figure out how to live when a monthly check of $3,500 gets cut to $1,400.

The Treasury Department then decided to kill Central States' rescue plan. The leaders of Central States considered the Treasury's decision and in late May said they had no further ideas on how to rescue the fund and wouldn't even try to come up with one.

At least they didn't sugarcoat what this meant, writing to participants that "at this time, only government funding … will prevent Central States participants from losing their benefits entirely."

In looking at what went so wrong here, the thing to rule out is the structure of the plan itself. Multi-employer pension plans actually can work pretty well, especially in industries with a lot of unionized workers and many smaller employers, like construction.

In looking at how an $18 billion fund like Central States could become insolvent, you have to look instead to the structure of the main industry it served, transportation and warehousing.

In the 1970s, the fund clearly benefited from the fact that more than six in 10 "for hire" truckers belonged to a union. But according to a Bureau of Labor Statistics (BLS) study, by 1996 only two truckers in 10 were union members.

What had happened in the meantime, of course, was trucking industry deregulation, beginning at the federal level in 1980.

As a BLS economist observed, "with the onset of price competition, nonunion carriers easily won business on the basis of lower labor costs, causing union representation in the trucking industry to decline sharply."

In 1980 the Central States plan had just one retiree or former worker for every four participants still working. In 2014 that ratio was reversed, according to the Center for Retirement Research at Boston College, with about five retirees or former workers for every one still working.

"A lot of this imbalance is not due to retirees, [but rather] a demographic shift," said Jean-Pierre Aubry, an assistant director with the Boston College program. "It's really more that employers left the system and they left their members there."

Hundreds of trucking firms had filed for bankruptcy protection and thousands more simply disappeared. Just two bankruptcies in the early 2000s, of a big trucker and a grocery wholesaler, together cost Central States more than $400 million in unpaid liability.

The Boston College research team, in a 2014 report, noted that of the 50 largest employers participating in Central States in 1980, only four of them were still alive in 2014.

It's no surprise that about half of every dollar paid in benefits as of 2013 went to "orphaned" participants, those left behind when their employer exited. Distributions from the fund have exceeded contributions since 1984, and the ratio of retirees to active participants crossed the threshold of one-to-one in the mid-1990s.

Investment income masked the problem for a while, but after the 2000 dot-com bust, benefits started being paid out of principal, not investment income.

Among other steps to fix the fund, the trustees slashed the rate of future pension accruals and demanded increased contribution rates. By January 2008 the fund's consultants projected full funding by 2029. Then came the Great Recession.

Central States turned to Congress for the authority to reduce retiree checks, Aubry said, as "everyone else had paid whatever they could pay, and retirees had not."

Among analysts who follow the issue, Aubry said, it's assumed that no taxpayer-funded bailout is coming for Central States.

He put the Central States crisis in context, saying that as bad as this is, the cumulative financial hole for government-run pension plans for public employees is far deeper. The smaller size of the problem here may increase the odds of some congressional action to provide assistance.

And then, of course, there's the even broader context of dismal American retirement finances, including a 2015 study that showed that about three out of 10 households headed by somebody 55 or older had nothing but Social Security to rely on.

For those aged 55 to 64 who had a retirement savings account, the median balance was about $104,000. Converted into an annuity that pays monthly, the 2015 report added, that's only worth a little more than $300 a month.

Knowing that their story is just another episode in the ongoing American scandal of retirement finances, though, isn't likely to make Central States beneficiaries feel any better. • 612-673-4302