Inside
MEETING
NOTICES
See
Page 6
Volume 114
Number 22
November 15, 2013
Portland
To remain solvent
Congress weighs letting union pension plans cut benefits
Wall Street losses and government
pension rules are putting pension
plans — and union construction
firms — at risk
By DON McINTOSH
Associate Editor
More than 10 million American union members are banking on
union-sponsored multiemployer pension plans to provide a secure
retirement after a lifetime of work. But a fraction of those pension
plans are at risk of insolvency thanks to massive financial market
losses.
When pension plans run out of money, the government insur-
ance agency known as the Pension Benefit Guaranty Corporation
(PBGC) takes them over and pays out benefits. But PBGC doesn’t
guarantee the full pension benefit: Its current maximum benefit for
multiemployer pension plans is $12,870 a year for a worker retiring
at age 65 with 30 years of service. In some cases that’s only a frac-
tion of the benefits the workers were promised. And the agency it-
self is at risk of insolvency; one or two big multiemployer pension
plan failures would burn through PBGC’s reserves, leaving only
current premiums to pay pension benefits. In that scenario, retirees
who now get $1,000 a month would get $125.
Making matters worse, under the law, participating employers
have to make up for pension plan financial losses. And if they want
to leave the plan while it’s underfunded, they must pay an exit fee,
known as “withdrawal liability,” equal to the total amount needed to
pay current and future benefits for their employees. Those require-
ments are putting stress on many small unionized employers, mak-
ing it harder for them to compete on price, and causing some to go
out of business. And when participating employers fail, responsi-
bility for rescuing the pension plan falls to the remaining employ-
ers, which makes it more likely that they too will fail.
All that has led a trade group representing union benefit plans to
propose the formerly unthinkable: a bill in Congress to let dis-
tressed pension plans reduce benefits for all participants — even
current retirees — in order to prevent the plans from going under.
“This is a crisis that’s going to affect people,” said Randy DeFrehn,
executive director of the National Coordinating Committee for Mul-
tiemployer Plans (NCCMP). “And it can’t go on the way it is.”
In 2011, staff members from the relevant committees of the U.S.
House and Senate approached DeFrehn’s group to come up with
legislative recommendations. NCCMP formed a Retirement Secu-
rity Review Commission, composed of dozens of representatives
from more than 40 unions, union employer groups, and pension
plans. After more than a year of study and debate, the Commission
published a report: “Solutions not Bailouts: A Comprehensive Plan
from Business and Labor to Safeguard Multiemployer Retirement
Security, Protect Taxpayers and Spur Economic Growth.”
The Commission and its report start from the assumption that
union pensions will have to rescue themselves. Congress bailed out
the banks. It bailed out General Motors. But when it comes to union
retirees, DeFrehn says Congressional leaders told him not to ex-
(Turn to Page 8)
Bricklayers recognized for work on historic Oswego Iron Furnace
Portland-based Bricklayers Local 1
and signatory contractor Pioneer Water-
proofing received the 2013 Craft Award
for Best Restoration/Rehabilitation/
Maintenance Project from the Interna-
tional Union of Bricklayers and Allied
Craftworkers (BAC).
The award is for “their exceptional
collaboration on the restoration of the Os-
wego Iron Furnace.” The historic furnace
is located at George Rogers Park in Lake
Oswego.
Built in 1866 at the confluence of Os-
wego Creek and the Willamette River, the
Oswego Iron Furnace was the first iron
furnace on the Pacific Coast. It began op-
Local 1 member Cameron Orvin restores brick arches inside the furnace to look
identical to their original construction.
erating in August 1867, and closed in
1885. It is the only surviving iron furnace
west of the Rocky Mountains.
Over the years the furnace suffered
from partial collapse, deterioration of the
brick, displacement, and cracks. In 2003,
citizens and the Lake Oswego City Coun-
cil set out to restore the furnace. Work be-
gan in July 2009 and was completed in
May 2010. The restoration cost $918,000
and was funded through the City’s hotel
tax, which was raised in 2008.
In consultation with Miller Consulting
Engineers, 18 members of Local 1 em-
ployed at Pioneer Waterproofing repaired
the damage and restored the 44-foot-tall
structure to its original glory. Grout was
inserted in the interior cavities and verti-
cal tie rods were installed to hold the rock
in place. It is stabilized to the point that it
can now withstand an earthquake.
Last year, the National Trust for His-
toric Preservation named the Oswego
Iron Furnace project one of its 22 Na-
tional Preservation Honor Award winners.
BAC has handed out its Craft Awards
since 1986 to recognize exceptional
achievement in masonry construction and
craftsmanship, and distinguished union
and community service by BAC mem-
bers.
An awards ceremony was held in
Philadelphia in September in conjunction
with the international union’s Executive
Council meeting.
The Oswego
Iron Furnace
was listed on
the National
Register of
Historic Places
in 1974.
Accepting the Craft Award for Best Restoration Project were
from left to right: Bricklayers Local 1 member and Project
Manager Gary Vonada, Pioneer Waterproofing President
Michael Crawford, and Bricklayers Local 1 Business Manager
Matt Eleazer.