Pension Alert: Solutions, not bailouts
Volume 115, No. 1January, 2015
As a member of the board of trustees of the AFM pension fund, I received the following communication authored by members of the union-side trustees. I am aware that there are some concerns and questions regarding the recently passed legislation regarding multi-employer pension funds. As a trustee to the fund, I agree with the following statement.
“As you may be aware, last week Congress passed a spending bill to prevent a federal government shutdown. Attached to the legislation were 162 pages of changes to the government’s multi-employer pension rules. Many of these were technical modifications to the existing law. However, a significant new provision would allow certain financially troubled funds to lower benefits already earned by participants, including those receiving pensions. The provisions would apply only to those funds facing imminent insolvency (within 10 to 20 years). Each eligible fund’s trustees could decide whether or not to use the provisions and, should they decide to apply them, there is a provision for a participant vote to reject the reductions, although it is at present unclear how that would work. No benefit could be lowered to less than 110 percent of the Pension Benefit Guarantee Corporation’s guarantees, right now just under $13,000 a year. Those provisions would not apply to the AFM-EPF at present since it is currently projected to be solvent through at least 2047, which is the longest period for which the actuaries have made projections.” – AFM-EPF Trustees Bill Moriarity, Laura Ross, Brian Rood and Phil Yao.
This expresses our individual views. If the board of trustees subsequently issues an official statement, we will provide it to you right away.