Four union pension funds covering various industries recently asked the U.S. Department of Treasury for permission to reduce the amount of benefits they pay to retirees. Two out of those four union pension funds are from Ohio. The Ohio unions are the Southwest Ohio Regional Council of Carpenters Pension Plan and the Toledo Roofers Local No. 134 Pension Plan.
The multi-employer pension plan is created through an agreement between two or more employers and a union, usually in the same or related industries. The Multi-Employer Pension Reform Act of 2014 allows a multi-employer pension that is projected to go insolvent to reduce pension benefits payable to participants and beneficiaries if certain conditions are met.
To reduce benefits, the plan sponsor must submit an application to the Secretary of the Treasury. The applications are approved or denied. As of June 2013, twenty-seven multi-employer plans had requested benefit cuts, but only five have received approval. About 130 of the multi-employer plans that are insured by the Pension Benefit Guaranty Corporation have declared that they will face insolvency over the next twenty years. This covers 1.3 million participates.
For more about the decline in multi-employer pensions, click here.
Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.