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:
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.
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:
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:
The Washington Post ran a scare story warning that the Pension Benefit Guaranty Corporation (PBGC) is “running out of cash” noting:
With roughly $2 billion in assets, the fund for multi-employer plans does not have enough money to pay benefits for the plans that are expected to become insolvent over the next decade.
The Central States fund alone, which pays about $2.8 billion in benefits each year and is the largest multi-employer plan in financial trouble, would overwhelm the multi-employer insurance program if it went under.
Yes, the Central States Pension Fund (CSPF) is likely to get PBGC money but two important facts and one speculation are omitted from the story since upon a PBGC takeover:
Multiemployer (union) plans, for a variety of reasons*, will all go bankrupt. So what happens to promised benefits? The Road Carriers Local 707 Pension Fund (RC707) ** could tell us.
If the Department of the Treasury will not approve benefit suspensions under the Multitemployer Pension Reform Act (MPRA) for participants in the Central States Pension Fund (CSPF) then how will other multiemployer plans lined up for approvals fare?