NORTHWEST LABOR PRESS | July 3, 2015 | PAGE 3
Distressed pension plans can start cutting benefits
By Don McIntosh
Associate Editor
The Pension Benefit Guarantee
Corporation (PBGC) is getting
ready to implement a new law
that allows distressed union
multi-employer pension plans to
reduce retiree benefits—if that
can halt them from sliding into
insolvency. On June 17, PBGC
announced “interim final” regu-
lations telling pension plans how
to apply for permission to cut re-
tiree benefits. And the same day,
the U.S. Treasury Department
appointed a “special master” to
be in charge of reviewing those
applications.
Meanwhile, U.S. Sen. Bernie
Sanders (I-Vt.) and U.S. Rep.
Marcy Kaptur (D-Ohio) have in-
troduced a bill in Congress to re-
peal the new law.
The new law, known as
Kline-Miller Multiemployer
Pension Reform Act of 2014,
was tucked into a much larger
bill to continue funding of the
federal government, which
passed in December. Kline-
Miller allows a multi-employer
pension plan to reduce pension
benefits for current retirees if the
pension plan is projected to run
out of money over the next 15
years (or over the next 19 years
if the plan is less than 80 percent
funded or has a greater than 2-
to-1 ratio of inactive to active
members). The pension plans
can’t cut benefits for retirees
aged 80 or over, and retirees
aged 75 to 79 are subject to
smaller cuts than those under 75.
Plans also can’t cut benefits
more than needed to restore sol-
vency, or below 110 percent of
the PBGC’s own guarantee for
retirees of plans that become in-
solvent.
The proposal at the heart of
Kline-Miller was developed by
the National Coordinating Com-
mittee for Multiemployer Plans
(NCCMP), an organization that
represents the interests of multi-
employer benefit plans. Multi-
employer plans, also sometimes
called Taft-Hartley plans, are
jointly sponsored by unions and
groups of employers. There are
about 1,500 such plans nation-
ally, with about 10 million par-
ticipants—active, inactive, and
retired. The multi-employer
plans are especially common in
the construction industry. When
they work well, which is most of
the time, they provide an afford-
able benefit at a low administra-
tive cost. But when they get into
financial trouble—usually a
combination of financial asset
losses and large numbers of “or-
phaned” employees of compa-
nies that have gone bankrupt—
their distress runs the risk of
bankrupting the surviving union
employers. PBGC has projected
that about 10 percent of multi-
employer pension plans are
heading toward insolvency.
In February, the Center for
Retirement Research at Boston
College put together a list of 100
plans that might seek permission
to cut benefits. [See the list on-
line at bit.ly/1FKMUrF] The list
uses data from financial reports
that pension plans are required to
file each year with the Depart-
ment of Labor. But the list is
speculative, because the reports,
known as 5500s, show what
shape a plan is currently in, not
whether it’s headed for insol-
vency. Also, even plans that are
headed for insolvency might not
seek to cut benefits; that would
be up to trustees, and pension
plan participants would get a
chance to vote down the cuts.
No plans based in Oregon or
Washington were on the list, but
at least one national plan on the
list has participants who live and
work in the Northwest—the
Bakery & Confectionery Union
& Industry International Pen-
sion. That plan, which has
114,000 participants, is typical
of the failing plans, in that it has
Turn to Page 8
Building Trades leader Willy Myers tapped
for Portland Development Commission
Mayor Charlie Hales appoints
Myers to succeed John Mohlis of
the Oregon State Building Trades
Council
Willy Myers, executive secre-
tary-treasurer of the Columbia
Pacific Building Trades Coun-
cil, has been appointed to the
Portland Development Com-
mission (PDC) by Mayor Char-
lie Hales. He will succeed John
Mohlis, head of the Oregon
State BCTC, whose PDC term
expired June 30.
The PDC is Portland’s eco-
nomic development and urban
renewal agency. About 70 em-
ployees there are members of
AFSCME Local 3769.
Hales nominated both Myers
and Gustavo J. Cruz Jr. to the
five-member board. Cruz, a sen-
ior counsel at the law firm Ater
Wynne, will succeed Charles A.
Wilhoite, whose term also ex-
pired at the end of June.
Both nominees still must be
approved by the City Council. A
vote is expected later this
month.
Other members of the PDC
are Chair Tom Kelly, president
of Neil Kelly Company; Vice
Chair Aneshka Dickson, chief
financial officer of Colas Con-
struction, Inc.; and Commis-
sioner Mark Edlen, CEO of
Gerding Edlen Development.
Myers, 47, is in his second
term heading the Columbia Pa-
cific Building and Construction
Trades Council. The Council is
an umbrella organization of 25
unions that represent some
20,000 construction workers
employed by more than 2,000
signatory contractors in Mult-
nomah, Clackamas, Washing-
ton, and Columbia counties.
Prior to that, Myers was an or-
ganizer and later an elected
business agent for Sheet Metal
Workers Local 16.
Among his community activ-
ities, Myers sits on the state’s
Prevailing Wage Advisory Com-
mittee and the Metropolitan Al-
liance for Workforce Equity.
“Portland is a model for ur-
ban growth and development,”
Myers said. “The opportunity to
bring a different perspective to
the table is what drove my inter-
est in serving. As a union leader,
equitable job creation is of great
interest to me and I am looking
forward to working with others
on the board to serve our city in
this endeavor.”
Willy Myers
Mohlis, 58, was first ap-
pointed to the PDC in January
2007 by former mayor Tom Pot-
ter. Prior to that, PDC had not
had a representative from labor
on the Commission for decades.
Mohlis has served three terms,
and has played a key role in
PDC’s utilization of minority
contracting and apprenticeship
training programs.
Mayor Hales, in a press re-
lease, said the leadership that
Myers and Cruz will bring to the
PDC is much needed right now.
“Portland is growing and that
growth won’t end any time
soon,” he said. “We are a richly
diverse community with pock-
ets of dire inequity. The PDC is
tasked with developing our
economy so that everything we
love about Portland is shared by
everyone in Portland.”