Northwest labor press. (Portland , Ore.) 1987-current, May 18, 2018, Page 2, Image 2

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May 18, 2018 | NORTHWEST LABOR PRESS
NORTHWEST
LABOR
PRESS
...Pension crisis sparks reform debate
From Page 1
(International Standard Serial Number 0894-444X)
Established in 1900 in Portland, Oregon as a voice of the la-
bor movement. Published on a semi-monthly basis on the
first and third Fridays of each month by the Oregon Labor
Press Publishing Co. Inc., a non-profit mutual benefit corpo-
ration owned by 20 unions and councils including the Ore-
gon AFL-CIO. Serving more than 120 union organizations in
Oregon and Southwest Washington.
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aster for its 397,492 participants
— including 165,000 now-re-
tired truck drivers and factory
workers who worked their
whole lives expecting a pension.
It would also push the govern-
ment’s pension insurance pro-
gram into insolvency — the
Pension Benefit Guaranty Cor-
poration (PBGC) multi-em-
ployer program provides funds
to pensions that run out of
money so they can pay benefits
to retired workers.
And that’s not all. A Central
States collapse could also push
several national trucking compa-
nies into bankruptcy, and even
threaten the viability of UPS,
America’s biggest commercial
package delivery company.
Combined, UPS and those
trucking companies account for
a sizable fraction of contribu-
tions to the Western Conference
pension. If they fail, the now-
healthy Western Conference
pension could be at risk.
Mack, the Western Confer-
ence pension co-chair, has been
traveling all over the Western
United States to talk about com-
ing crisis of pensions, and op-
tions in Congress to fix it.
Central States is only the
biggest of an estimated 102
multi-employer pension trusts
that are projected to run out of
money within 20 years, leaving
1.2 million active and retired
union workers with just a frac-
tion of the pension benefit they
were promised.
At least three of those declin-
ing plans have members in the
Portland area: Operative Plaster-
ers Local No 82 Pension Trust
Fund; Western States Office And
Professional Employees Pension
Fund, which includes union of-
fice employees and workers at
Northwest Natural who are
members of OPEIU Local 11;
and Bakery & Confectionery
(B&C) Union & Industry Inter-
national Pension Fund, which
includes workers at the Portland
Nabisco plant. In B&C’s case,
the pension’s troubles are at the
heart of a dramatic two year con-
tract standoff with Nabisco [See
related article on Page 1.]
What went wrong
Union-sponsored multi-em-
ployer pension plans have long
been an extraordinarily stable,
efficient and flexible way for
unionized employers to provide
secure retirement benefits. The
way they work, the employers
typically contribute a certain dol-
lar amount for each hour an em-
ployee works, the amount
spelled out under the terms of
collective bargaining agree-
ments they negotiated with the
union. The funds are collected
and invested long-term by the
pension trusts. The trusts are
overseen by equal numbers of
union and employer trustees,
who are advised by actuaries, ac-
countants, administrators, attor-
neys and investment managers.
Based on how well they expect
investments to perform, trustees
promise a retirement benefit that
grows or “accrues” for every
dollar the employer contributes.
By the time workers retire, the
pension trusts will have invested
decades of contributions on their
behalf.
Multi-employer pensions are
most common in manufacturing,
trucking, and industries like con-
struction that have lots of small
employers and workers that
move from one employer to an-
other.
All told there are about 1,300
multi-employer pension trusts.
All were battered by the 2000
and 2008 financial crashes, but
more than nine tenths of them
Turn to Page 3
FIVE FAILING FUNDS
Central States Teamsters
397,492 participants, 83.8 % inactive
33% funded
7 years until insolvency
United Mine Workers
1974 Plan
104,258 participants, 92.1% inactive
39.8% funded
5 years until insolvency
Western States OPEIU
7,830 participants, 88.3% inactive
15 years until insolvency — except
that the trust has asked the Treasury
Department for permission to cut
benefits 30 percent and thereby
prevent insolvency
Bakery & Confectionery
Pension
113,040 participants, 79.9% inactive
42.6% funded
12 years until insolvency
Operative Plasterers Local
82 Pension
274 participants, 74.4 percent inactive
62% funded
16 years to insolvency — except that
the trust has asked the Treasury
Department for permission to cut
benefits 22 percent (31 percent for
inactives) and thereby prevent
insolvency