More Union Plans Apply to Cut Benefits
According to the Pension Rights Center, the Iron Workers Local 17 Pension Fund, based in Ohio, was the second multiemployer plan to apply to the U.S. Treasury Department for permission to cut benefits under the Multiemployer Pension Reform Act of 2014 (MPRA).
Under the MPRA, plans that are in “critical and declining status,” are allowed to avoid insolvency by reasonably cutting benefits, including those already in pay status. The Iron Workers Local 17 Pension Fund applied for this relief on December 23, 2015. The Department of Labor (DOL) issued notice that the plan was in critical status in 2012.
In addition, the Teamsters Local 469 Pension Plan, based in New Jersey, also filed an application to reduce benefits on December 28, 2015. The DOL gave notice of this plan’s critical status in 2013.
The Treasury Department has 225 days to review each plan’s application to determine if the plan has met the conditions set by MPRA necessary to cut benefits. It is currently taking comments about the requests.
The Teamsters Central States, Southeast and Southwest Areas Pension Fund was the first plan to ask the Treasury Department to allow it to cut benefits, filing its application last September. The department must make a decision by May 7, 2016.More information is in this Pension Rights Center fact sheet.
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