Citing the threat of future insolvency, a New Jersey Teamsters Local Pension Fund has applied to the U.S. Treasury Department for permission to reduce by 40 percent the vested member benefits in the Fund.

The Fund’s application is the third pension fund reduction application filed by unions in recent months. The Teamsters Local 469 Pension Fund’s Board of Trustees cited a growing concern that the Fund was “in ‘critical’ status, and … projected to become insolvent (that is, not have enough assets to pay benefits) in the year 2029.” The Board of Trustees argued the reduction is necessary to avoid insolvency despite the Fund’s having taken “all reasonable measures” to avoid it.

Multiemployer pension plans may apply for a reduction in vested benefits under the Multiemployer Pension Reform Act of 2014 (“Act”). The Act is aimed at helping pension funds avoid insolvency by proposing alternative solutions. Applications must be designed to help avoid insolvency, but also not be so broad as to seek a greater benefit reduction than necessary.

Under the Act, a pension plan’s Board of Trustees must provide notice to all employers and unions contributing to the plan, as well as plan participants and beneficiaries. Once the Treasury Department approves a reduction, pension fund participants and beneficiaries have the opportunity to vote on the proposal.

Two other multiemployer pension funds recently have applied for similar relief. On December 23, 2015, the Iron Workers Local 17 Pension Fund submitted an application for reduction in benefits, citing apparent insolvency by 2032. Last September, the Teamsters Central States, Southeast & Southwest Areas Pension Fund also submitted an application for a reduction in benefits.

The anticipated effective date of the Teamsters Local Pension Fund benefits reduction is October 1, 2016. A decision from the Treasury Department is expected within the next few months.

 

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.