via The National Law Review,
by Jackson Lewis, natlawreview.com,
January 13, 2016,
On October 28, 2015 we reported that the Central States Southeast and Southwest Area Pension Fund, (“Central States”) one of the largest multi-employer pension plans in the country had filed an application with the Department of Treasury in which it sought to reduce core benefits under the Multiemployer Pension Reform Act of 2014 (“MPRA”) and had sent a notice of its application to its approximately 400,000 participants. Central States was also required to provide participants with an individualized estimate of reduced benefits.
On January 8, 2016, the Iron Workers Local 17 Pension Fund (the “Iron Workers Fund”) which operates from Cleveland, Ohio became the second multi-employer pension plan to file an application to the Treasury Department to reduce core benefits. In its application, the Iron Workers Fund’s trustees advised that the Fund’s actuary had certified that the Fund was in “critical and declining status” for the plan year beginning May 1, 2015. Moreover, without approval of the application, the Fund was projected to become insolvent within ten years in 2025.
The application stated that the Iron Workers Fund’s most recent Form 5500 for the plan year ending April 30, 2014 reflected assets of $85.7 million and liabilities of $223.2 million which means that the Fund had approximately 38 cents to pay for every single dollar of vested benefits.
This filing demonstrates that the underfunding plight impacts both large and smaller plans as the Iron Workers Fund had 2,021 participants of which 641 were active.