Archive for the ‘Multiemployer Pensions’ Category

Breaking News: Ninth Union Plan Files

On August 30, 2016 trustees of the New York State Teamsters Conference Pension and Retirement Fund out of Syracuse, NY became the ninth multiemployer (union) plan to file for benefit cuts under MPRA in an attempt to avoid insolvency and this one has a twist (all retirees @ 12/31/15).

From their latest 5500 form here is the plan’s relevant data:

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Political vs. Fewl Numbers

When Citrus Pest Control District No. 2 decided last year to leave the California Pubic Employee Retirement System (Calpers) they got a sour surprise.

It turns out that Calpers, which managed the little pension plan, keeps two sets of books: the officially stated numbers, and another set that reflects the “market value” of the pensions that people have earned. The second number is not publicly disclosed. And it typically paints a much more troubling picture, according to people who follow the money.

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The two competing ways of valuing a pension fund are often called the actuarial approach (which is geared toward helping employers plan stable annual budgets, as opposed to measuring assets and liabilities), and the market approach, which reflects more hard-nosed math.

For those involved  with multemployer (union) plans this is nothing new since when a participating employer looks to leave a union plan they have to cope with another surprise – withdrawal liability – which is calculated using actuarial assumptions that inflate benefit values (rather than those used for funding which are designed to accommodate what is available to deposit) so as to squeeze as much money as possible from those leaving.

However it is the naming of these two methods that is confusing.  Both are ‘actuarial’ as they involve interest rates and mortality tables and both involve ‘market’ principles as it suits their purposes.

So I propose more appropriate names for low-ball and high-ball estimates of pension liabilities…..

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Breaking News: Eighth Union Plan files

On August 17, 2016 trustees of the United Furniture Workers Pension Fund A out of Nashville, TN became the eighth multiemployer (union) plan to file for benefit cuts under MPRA in an attempt to avoid insolvency.

From their latest 5500 form here is the plan’s relevant data:

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Breaking News: Another Union Plan Files

On August 4, 2016 trustees of the Bricklayers and Allied Craftsmen Local No. 5 Pension Plan out of Newburgh, NY became the seventh multiemployer (union) plan to file for benefit cuts under MPRA in an attempt to avoid insolvency.

From their latest 5500 form here is the plan’s relevant data:

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Another Union Plan Files

On June 28, 2016 while the City of Cleveland, OH was preparing for the Republican National Convention, 68 miles away in Austintown, OH real life was going on.

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Who Gives Up What

Kenneth R. Feinberg in 2012 wrote Who Gets What which is something of an autobiography with a focus on five cases he was involved in where a pot of money generated to ease the impact of a tragedy was allocated without recourse to standard legal procedures.

These days Mr. Feinberg is engaged in overseeing the fund for victims of the Orlando shooting while also involved in a polar opposite case where he is charged with deciding how and how much participants in six (and counting) multiemployer pension plans will have taken away from them.

After reading these excerpts:

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Second Union Plan Roadblocked

Pensions may be cut to ‘virtually nothing’ for 407,000 people in the Central States Pension Fund but that could be ten years away.

Last week another multiemployer (union) plan was put in a similar position except that it: