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  #811  
Old 10-08-2019, 12:37 PM
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https://www.freep.com/story/money/bu...is/3819098002/
Quote:
Southeast Michigan carpenters union is facing a pension crisis. Here's why

Spoiler:
A private-sector pension crisis is hitting roughly 19,000 current and retired unionized skilled trades workers in southeast Michigan, another sign of the precarious nature of some pension promises made to workers years ago.

Leaders of the Michigan Regional Council of Carpenters and Millwrights are asking the federal government for permission to cut the size of their southeast Michigan members' pension checks, saying that if nothing is done, their pension fund will run dry by 2035.

The fund, called the Carpenters Pension Trust Fund — Detroit and Vicinity, has entered a financial death spiral, due, in part, to more retirees drawing monthly checks than active workers paying in. The pension fund has $772 million and was considered 34.5% funded as of a year ago. There is a 2.4 ratio of inactive to active pension plan participants.

Southeast Michigan members of the Michigan Regional Council of Carpenters and Millwrights are facing possible pension cuts
Southeast Michigan members of the Michigan Regional Council of Carpenters and Millwrights are facing possible pension cuts (Photo: Michigan Regional Council of Carpenters and Millwrights)

A separate union pension fund for retirees outside southeast Michigan — the Michigan Carpenters Pension Fund — is not affected.

Last week, the union submitted its application to the U.S. Treasury Department for the pension cuts, which could go into effect on July 1, 2020.

Treasury has up to 225 days to approve or deny the proposal. If approved, the proposal would then be subject to a vote by the pension fund's beneficiaries.


Yet even if a majority vote to reject the proposed cuts, Treasury could still force the proposal to take effect because of a special rule that applies to the largest pension funds in the country.

The proposed pension cuts were first reported by Crain's Detroit.

Pummeled by recessions, fewer work hours
Union leaders say that little could have been done that hasn't already been tried to avert the future pension crisis.


The pension fund suffered investment losses in the early 2000s recession and even bigger losses in the 2007-09 recession. Then, amid changes in the Michigan economy, the fund was pummeled by a reduction in total work hours by its union members that resulted in fewer employer contributions into the fund.

Work hours exceeded 14 million per year in the early 2000s, bottomed out at about 5.7 million in 2010 and are only back to about 8 million hours, according to the union.

"The decline in hours was much more severe, and the recovery much slower, than trustees had predicted," the union says in its Treasury application. "The actuary projected that this new level of hours (approximately half of the levels seen in the early 2000s) would not be sufficient to support the (pension) plan as currently in effect."

In 2013, in one attempt to avert a crisis, pension trustees raised the minimum retirement age for full pension eligibility to 62. Eligibility had been based on a point system that considered age and years of service.

Michael Barnwell is president of the Michigan Regional Council of Carpenters and Millwrights
Michael Barnwell is president of the Michigan Regional Council of Carpenters and Millwrights (Photo: Michigan Regional Council of Carpenters and Millwrights)

“That was part of the problem. We had people retiring at 50, 51, 52 years old," said Michael Barnwell, president of the Michigan Regional Council of Carpenters and Millwrights.

Barnwell, who became a pension trustee six years ago, said he didn't know whether criminal matters that involved the pension fund in the 2000s had any effect on the fund's current trajectory.

A former chairman of the pension fund's board, Walter Ralph Mabry, pleaded guilty in 2011 to taking kickbacks in the form of $5,000 to $10,000 in hotel and entertainment reimbursements from an investment consultant and one of the fund's investment managers. He was sentenced to one year supervised release.

The investment manager was convicted of embezzling $24 million from the pension fund and other union pension funds.

And the consultant pleaded guilty to promising to give Mabry a kickback in connection to the pension fund's $70 million investment in the construction of a Hard Rock casino in Biloxi, Mississippi.

In the end, the casino proved to be a good investment, according to Barnwell.

"I believe it was actually a moneymaker for the pension fund, but I was not a trustee at the time," he said.

Managing payouts
The union is seeking to reduce its pension payouts under a relatively new process created by a 2014 law for multi-employer pension plans that are projected to go insolvent in less than 15 years.

The carpenters fund is classified as a multi-employer plan because multiple companies hire the union's workers and make contributions toward their pensions.

A Troy-administered Sheet Metal Workers Local Pension Fund, which has 1,564 participants, also applied to Treasury earlier this year to make average pension cuts of 18.7% for its retirees. Its application is still pending. That pension fund is not connected to Sheet Metal Workers Local 80.

Nationwide, 28% of all participants in pension plans are in multi-employer plans. Most pension plans are just for one employer.

To try and save their pension fund — and comply with federal law — the carpenters' trustees raised the fund's contribution rate for companies hiring their members to nearly $16 an hour, up from just over $3 in 2000. But that ultimately wasn't enough to avoid a future crisis. And any further increases would make it harder for union members' employers to successfully bid on construction jobs.

"The pension fund was essentially 'taxing itself out of existence' by increasing the hourly pension contribution level ever higher," the Treasury application says.

A union representative told the Free Press that they could not provide a common example of a retiree's current pension check because there is tremendous variation in the pensions.

However, in aggregate, the proposed cuts would pare the pension fund's average monthly benefit 13% to $1,273 from $1,465, according to the union's application to Treasury.

Union leaders say the proposed cuts are still less drastic than what would occur if they allowed the fund to run out of money and become eligible for a bailout from the federal Pension Benefit Guaranty Corporation.

The corporation has maximum guaranteed limits for beneficiaries of multi-employer plans, such as $12,870 per year for a retiree with 30 years of service.

But even that backstop is no longer assured.

Without a federal intervention, the Pension Benefit Guaranty Corporation's multi-employer program is expected to become insolvent by 2025. And if that happens, "it is likely that only a fraction of the 'guaranteed' benefits would be paid to plans that run out of money," the union says in its Treasury application.

Cuts would not hurt everyone
Under the proposed cuts to the carpenters fund, pension benefits earned prior to 2007 would be slashed by 16%, and the fund's deferred vested participants would see 26% cuts.

Michigan Regional Council of Carpenters Local 687 as they march in Detroit's annual Labor Day Parade along Michigan Avenue in Corktown in 2015.
Michigan Regional Council of Carpenters Local 687 as they march in Detroit's annual Labor Day Parade along Michigan Avenue in Corktown in 2015. (Photo: Regina H. Boone, Detroit Free Press)

Pension benefits earned after 2007 wouldn't be affected, as that was the year the fund's monthly multiplier benefit was reduced to 1%, meaning that each $100 in new pension contributions would generate $1 in future monthly pension benefits.

Members who are 80 or older or have disability-based benefits would not see cuts. Those between ages 75 and 80 would see smaller cuts.

Unlike some public-sector workers with pensions who do not pay withholding taxes, the retired carpenters are eligible to receive Social Security in addition to their pensions.

In 1997, the pension fund's trustees boosted the monthly multiplier to 4.3% because the plan was more than 100% funded and therefore in danger of triggering Internal Revenue Service pension overfunding penalties.

Under IRS rules at the time, employer contributions to overfunded pension would no longer be considered tax deductible. A detailed article in The Daily Beast describes how other pension funds faced similar predicaments and acted to increase their benefits to stay in line with the IRS.


However, the pension fund ratcheted back the monthly multiplier after its market returns got battered in the wake of the early 2000s recession.

The carpenters union workers are among the 17% of private-sector workers in the U.S. who still have access to a pension plan for retirement, also known as a defined-benefit plan, according to Bureau of Labor Statistics data. That is down from 35% in 2005 and 88% in 1975.

About 65% of private-sector workers have access to a defined-contribution retirement plan, such as a 401(k).

Pensions are more common among unionized public-sector employees.

.

Marick Masters, director of labor at Wayne State University, said private employers in the 1970s started to move away from pensions, also known as defined-benefit plans, and toward defined-contribution plans for their workers like 401(k)s.

“A big reason for the shift was to reduce the liability that companies incurred that went on their balance sheets for the defined-benefit plans," he said.

Legislation seeks to help multi-employer plans
Pensions are generally considered a more secure retirement system for workers because the money is guaranteed to come in like an annuity payment, no matter how long the retiree and his or her spouse live. By comparison, the money in defined-contribution plans can run out.

In July, the U.S. House of Representatives passed a bill that could prop up multi-employer pension plans such as the carpenters fund and the Central States Pension Plan, which covers Teamsters in Detroit and across the country.

The legislation, which was cosponsored by eight Michigan members of Congress, including both Democrats and Republicans, would establish a new federal agency that could finance loans to pension funds that are struggling and whose recipients are threatened with benefits cuts.

A version of the bill is still pending in the U.S. Senate.

"We bailed out the financial industry, we bailed out the auto companies, it’s hard to say we shouldn’t bail out these folks, if we follow that same sort of logic," Masters said.

Net market returns for the Carpenters Pension Trust Fund
2000: +6%

2001: -2.8%

2002: -4.4%

2003: +8.5%

2004: +14%

2005: +6%

2006: +13.6%

2007: +9%

2008: +0.6%

2009: -20%

2010: +13.4%

2011: +10.6%

2012: -3.6%

2013: +6.3%

2014: +10.5%

2015: +4.4%

2016: -0.2%

2017: +11.1%

2018: +7.9%


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  #812  
Old 10-08-2019, 04:42 PM
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BENEFIT CUTS

https://www.ai-cio.com/news/michigan...paign=CIOAlert

Quote:
Michigan Pension Fund Seeks Benefits Reduction
Detroit Carpenters plan to become insolvent in 15 years without government intervention.

Spoiler:
The Michigan Regional Council of Carpenters and Millwrights union has applied for a reduction of benefits with the US Treasury Department in a move to help prevent the Detroit Carpenters’ Pension Trust Fund from becoming insolvent.

The Treasury Department has approved the last 13 benefits reduction applications, and hasn’t denied such a request since May 2017 when it rejected the application submitted by the Automotive Industries Pension Fund. Since the Kline-Miller Multiemployer Pension Reform Act of 2014 was enacted the Treasury department has approved 14 benefits reduction applications, rejected five, and four are currently under review, including the Detroit Carpenters’ Pension.

“We worked hard to keep the cuts equitable and fair,” said the plan on its recovery program website. The plan added that if the application is not approved and the plan becomes insolvent, “participants will have to rely on the shaky Pension Benefit Guaranty Corporation (PBGC) for an even lesser benefit.”

In 2018, the plan’s actuary certified that the pension was in critical and declining status for the plan year beginning May 1, 2018. As of that date the plan’s funded percentage was 34.5%, and the actuary projected that without any action the plan would become insolvent during the plan year ending April 30, 2036. [Source 2]

The benefits reduction application was submitted on Sept. 23, and the Treasury Department has 30 days from that date to post the application on its website, and 225 days to complete its review. If the application is granted, approved, and adopted the proposed suspension will take effect on July 1, 2020.

“This has been perhaps the most difficult decision the board has ever had to make,” said the plan. “Reducing pensions for current retirees and beneficiaries is not something we ever thought we’d have to do. If the pension recovery program works as we expect it to, the result will be a pension plan you can count on for generations to come.”


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  #813  
Old 10-09-2019, 12:45 PM
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BENEFIT CUTS

https://www.plansponsor.com/multiemp...it-reductions/

Quote:
Multiemployer Plans Still Applying for Benefit Reductions
Even as lawmakers are scrambling to find a solution to the multiemployer pension crisis, the trustees of the Detroit Carpenters’ Pension Plan recently submitted a Pension Recovery Program application to the U.S. Treasury Department.
Spoiler:
On September 23, 2019, the trustees of the Detroit Carpenters’ Pension Plan submitted a Pension Recovery Program application to the U.S. Treasury Department.

The Multiemployer Pension Reform Act of 2014 (MPRA) allows plans in “critical and declining status to avoid insolvency by reasonably cutting benefits, including those already in pay status. After first requiring approval from the Department of Labor (DOL), the Pension Benefit Guaranty Corporation (PBGC) and the Department of the Treasury, benefit suspensions will only go into effect if a majority of all participants vote to approve them.

The Department of Treasury’s website currently shows 37 applications and their status. The Detroit Carpenters’ application is not yet published on its website.

In a notice to employer members of the plan, the Detroit Carpenters’ Pension Plan noted that it has been in the Red Zone (per Pension Protection Act (PPA) rules) since 2006 and was certified to be in Critical and Declining status in 2018. It says the fund is projected to run out of money in 15 years unless action is taken.

“As you also know, we have been trying to fix the Plan’s finances since 2006. The Trustees have reduced the accrual rate and the multiplier, as well as increased the contribution rate. Despite these efforts to keep the Plan on sound financial footing, a combination of forces largely beyond our control has battered the Plan’s finances and now threatens the Plan’s survival,” the notice says.

The trustees attribute the “battering” of the fund’s finances to investment losses due to the 2000 and 2008 stock market crashes, bad government regulations, job losses and declining hours, and an unsustainable ratio of 2.4 retirees and deferred vested participants to every one active participant. These are common problems in multiemployer pension plans.

Of the applications received by the Treasury so far, 14 have been approved, five have been denied, and the others have either been withdrawn or are in review.

Benefit reductions under the MPRA have faced controversy. In 2018, participants in a multiemployer pension plan that received permission from the Treasury Department to reduce member benefits filed a lawsuit challenging whether the government can indeed authorize a private pension plan’s trustees to cut vested benefits.

Meanwhile, legislators are working hard to find another way to keep multiemployer plans solvent. The Ways and Means Committee of the U.S. House of Representatives marked up and voted along party lines to advance a new bill formally titled the Rehabilitation for Multiemployer Pensions Act, setting the stage for full floor consideration and the amendment process. As passed by the committee, the act would provide funds for 30-year loans and new financial assistance, in the form of grants, to financially troubled multiemployer pension plans.

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  #814  
Old 10-17-2019, 06:44 PM
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https://www.wymt.com/content/news/Co...563255472.html

Quote:
'If I lose my pension, I've lost everything': Coal miners worry about losing pensions
Spoiler:
(WYMT) - Miners' pensions could disappear even faster than originally thought.


West Virginia Senator Joe Manchin joined miners, both working and retired, in Washington Wednesday looking for relief from congress.

They are calling on Senate Majority Leader Mitch McConnell to schedule votes on bills like Manchin's which are designed to save those pensions.

Following news of an Ohio coal company's possible bankruptcy, Manchin and the miners say pension funds could be gone by 2020. They also say congress can not delay help any longer.

"They didn't hesitate to bailout the banks. They didn't hesitate to bailout the auto industry. And all we are saying is can we at least protect the people who made America – the workers," said Manchin.

"If I lose my pension, I've lost everything I've worked for 35 years. Cause I'm not going to be able to keep a house, keep the taxes paid keep upkeep on the house so I got to sell everything I've worked for," said retired West Virginia miner Rick Ryan.

Manchin says miners also have to worry about losing access to health insurance for them and their families.

His bill would help keep pensions financially afloat through low-interest loans from the Treasury Department.

In a statement, a Senator McConnell spokesperson said the senator is worried about the problems facing pension plans and supports finding a bipartisan solution.


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Old 10-18-2019, 05:33 PM
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CENTRAL STATES

https://burypensions.wordpress.com/2...tral-states-2/

Quote:
5500 Day After – Central States
Spoiler:
Another 5500 filing season has passed leaving some time, but little energy, for this blogging. Fortunately there were a lot of calendar year filings recently submitted for pensions in the news so it is the perfect time to do some updating – starting with the plan that is most likely to bring the PBGC (and the entire private pension system) down – Central States.


We had some 5500 history in an earlier blog through 2016. Based on the 2018 filing:

Plan Name: Central States, Southeast & Southwest Areas Pension Plan

EIN/PN: 36-6044243/001

Total participants @ 12/31/18: 383,658 including:

Retirees: 196,361
Separated but entitled to benefits: 125,438
Still working: 61,859
Asset Value (Market) @ 1/1/18: 15,011,652,100

Value of liabilities using RPA rate (3.00%) @ 1/1/18: $58,688,471,093 including:

Retirees: $33,858,122,109
Separated but entitled to benefits: $15,214,682,815
Still working: $9,615,666,169
Funded ratio: 25.58%

Unfunded Liabilities as of 1/1/18: $43,676,81819931

Asset Value (Market) as of 12/31/18: $13,168,043,721

Contributions 2018 (MB): $1,142,643,317

Contributions 2018 (H): $586,188,858

Payouts 2018: $2,830,161,339

Expenses 2018: $61,302,763

Historical information going back to 2007 in a spreadsheet:



https://burypensions.wordpress.com/2...es-gone-money/
Quote:
Central States – Gone Money
Spoiler:
With the Central States Pension Plan about to go bankrupt and bring the PBGC (and the entire private-sector pension system) down with it, some might ask where did all their money go?

Over one-hundred million dollars of it went down ratholes like Argentina, Venezuela, Lehman Brothers, and David’s Bridal.


Schedule G requires reporting of:

Schedule of Loans or Fixed Income Obligations in Default or Classified as Uncollectible: Complete as many entries as needed to report all loans or fixed income obligations in default or classified as uncollectible. Check box (a) if obligor is known to be a party in interest. Attach Overdue Loan Explanation for each loan listed.

From 2007 these obligors were reported:




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  #816  
Old 10-21-2019, 10:16 AM
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BAILOUT

http://wvmetronews.com/2019/10/15/ma...-for-pensions/
Quote:
Manchin, again, urges Senate to pass protections for pensions
Spoiler:
CHARLESTON, W.Va. — Tuesday marked 285 days since U.S. Sen. Joe Manchin, D-W.Va., introduced the American Miners Act in his respective congressional chamber.

The bill was sent to the Senate Committee on Finance, where it has been since Jan. 3.

“The miners rely on their hard-earned pensions and retirement. They should be secured, even if coal companies file bankruptcy,” Manchin said on the Senate floor. “We must act, and this cannot happen without bipartisan support.”

Manchin previously said 87,000 retired coal miners could lose their pensions if nothing is done by 2022, and 20,000 additional beneficiaries who have yet to draw their pensions would not have funds available when they retire.


U.S. Congress

U.S. Sen. Joe Manchin, D-W.Va.
The American Miners Act would require the Department of Treasury to transfer funding to the 1974 United Mine Workers of America Pension plan, as well as increase the limit on transfers from $490 million to $750 million, and extend health care access to coal miners whose employers recently entered bankruptcy.

Manchin and Democratic colleagues spoke on the Senate floor in August in favor of the legislation. Manchin was also among the senators who wrote to congressional leaders in September urging the bill’s passage.

West Virginia’s senior senator said Tuesday if the pension fund becomes insolvent, it will affect the pensions of workers in other fields.

“An absolute snowball for the central pensions. If that happens, it’s been said that the recession of 2007 and 2008 will be a blip on the radar screen compared to what this will do to our economy nationwide. And the companies are going to walk away scot-free,” he said.

“It is unacceptable that some of our hardest workers have to beg for the money that they put into the pension fund over years and years of hard work.”

Sen. Shelley Moore Capito, R-W.Va., on Tuesday tweeted support for her legislation, the Miners Pension Protection Act. The bill is similar to Manchin’s measure; the American Miners Act would restore the Black Lung Liability Trust Fund excise tax through December 2028.

“These aren’t lavish pensions. The average benefit is $590/month. But for thousands of retired miners, it makes a big difference!” Capito tweeted. “We can make this right. We can fulfill the promise. Let’s get this done!”
https://www.pionline.com/legislation...urce-qpam-fees
Quote:
Legislation proposes new PBGC funding source from QPAM fees
Spoiler:
Legislation aimed at giving the PBGC more money for distressed multiemployer pension funds by imposing fees on asset managers that want to keep managing retirement plan assets following criminal convictions was introduced Monday by Sen. Tammy Baldwin, D-Wis.

Money managers affiliated with financial institutions that have criminal convictions must get Department of Labor exemptions to continue serving retirement fund clients. In recent years, the DOL has granted such qualified professional asset manager, or QPAM, exemptions for money management units of Deutsche Bank, Citigroup, Barclays Capital, J.P. Morgan Chase & Co. and UBS Group, among others.

Ms. Baldwin is a member of the Senate Health, Education, Labor and Pensions Committee and a co-sponsor of House-passed multiemployer pension fund reform legislation, the Butch Lewis Act, which has not been scheduled for Senate action.

Her proposed Pension Stability Act calls for the Department of Labor to create a fee structure for QPAM exemption applications, with a minimum $1 million fee per application that would be multiplied by the number of previous applications.

Those new revenues would be sent to the Pension Benefit Guaranty Corp. to help reduce a multiemployer pension program deficit that was $54 billion at the end of fiscal year 2018.

"Financial institutions convicted of a crime should have to pay a penalty that will provide funding to support workers and retirees who saw massive cuts to their pensions through no fault of their own," Ms. Baldwin said in a statement. Her bill is supported by the Pension Rights Center.
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Old 10-21-2019, 08:46 PM
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BAILOUT

https://www.news10.com/washington/wa...n-protections/
Quote:
Union workers urge Senate to pass pension protections
Spoiler:
WASHINGTON (Nexstar) — A group of Democratic Senators continue to sound the alarm, saying that the pension you will one day depend upon could be at risk.

That’s because the Pension Benefit Guaranty Corporation, the government agency that insures private sector pensions, could run out of money as soon as 2026. That means if your employer defaults on your pension, the PBGC won’t have the money to cover your loss.

Democrats say they have a plan to fix this, but accuse Senate Republicans blocking it.

“I worry every day,” said retired union baker Mike Offenback. He wants lawmakers to know that losing his pension means going bankrupt. “I hope they hear me.”

“We are in a situation now where it is incumbent upon us to step forward to support your capacity to be able to get your pension,” said Sen. Debbie Stabenow (D-MI).

The House passed a fix earlier this year, but now Democrats say the Senate isn’t doing its part.

“If one person would just put it on the floor. You know who that is? Mitch McConnell,” said Sen. Chuck Schumer (D-NY).

In a statement, McConnell’s office says he is ‘concerned about insolvency issues’ and ‘supports the ongoing process to find a bipartisan solution.’

Democrats say they’re doing what they can, but that it’s also up to workers to keep the pressure on Senate Republicans.

“But if you don’t come and show up, and they don’t see a real person behind this, a family that’s going to be hurting, then we’re not going to have any success whatsoever,” said Sen. Joe Manchin (D-WV).

“it’s so important that people are made whole that contributed so much,” said Sen. Sherrod Brown (D-OH).

McConnell’s office didn’t say whether he’d be willing to put the House version up for a vote on the Senate floor. Democrats say that needs to happen soon.
https://www.wboy.com/news/west-virgi...loyer-pension/
Quote:
Manchin, Senators host press conference regarding legislation to protect multi-employer pension
Spoiler:
WASHINGTON, D.C. – Senator Joe Manchin hosted a press conference with a group of senators on Wednesday about legislation to protect and secure multi-employer pensions for American workers, including West Virginia coal miners through the American Miners Act.

Manchin, as well as Chuck Schumer (D-NY), Debbie Stabenow (D-MI), Sherrod Brown (D-OH), Patty Murray (D-WA) and Ron Wyden (D-OR) joined United Mine Workers of America (UMWA), joined United Mine Workers of America (UMWA), Teamsters, International Brotherhood of Electrical Workers (IBEW) and AFL-CIO workers and retirees from across the country to demand that the Senate take action to protect the pensions and healthcare that workers have earned.

The pension crisis threatens the retirement of up to 1.5 million workers and retirees nationwide and could put small businesses across the country in jeopardy. These coal miners, truck drivers, carpenters, bakers and others worked hard all their lives and gave up raises at the bargaining table in order to put that money toward retirement for themselves and their families. Now that retirement is at risk.

If Congress fails to take action, by the end of this year, 1,200 coal miners, their widows and family members could also lose their healthcare coverage. Democrats rallied with workers and retirees to advocate for action from Senate Leader McConnell.

“The Miners’ Pension Fund alone, a critical plan which covers 82,000 retired miners – 25,000 in West Virginia – and 20,000 full vested current workers, is projected to become insolvent by 2022. If one major coal company goes bankrupt soon, the timeline for pension fund insolvency is significantly soone,” Said Senator Manchin. “By September 2020 coal miners could see drastic cuts to their benefits if we don’t do something now.”

Numerous pension plans, including the United Mine Workers Pension Plan, are currently on the brink of failure. Several other plans have already had to cut benefits. If nothing is done to the plans, they will fail and retirees will face massive cuts to the benefits they earned over decades of work.

“I worked in a coal mine for more than 30 years, always giving up wages at the bargaining table so that it could go into my pension and retiree healthcare,” said retired West Virginian coal miner Rick Ryan. “When you work in a coal mine for so many years, your body gets beat up. We know we will need benefits in retirement. Congress saved my healthcare in 2017, and I am very grateful for that. But the job isn’t finished. Our pension plan is on the edge of insolvency and we need action now.”

If the plans are allowed to fail, not only will they no longer be able to pay promised benefits, but taxpayers and small businesses would be at risk of having to pay billions because the Pension Benefit Guaranty Corporation (PBGC) would be on the hook for billions of dollars it cannot pay. PBGC is the arm of the federal government that insures pension plans.

There are several causes for this crisis, including the fact that the economic collapse of 2008 devastated these plans and the people who depend on them. These retirees and workers who have done everything right did not cause this crisis, and Congress must not turn its back on them.

Those interested in seeing the full conference, can do so below. Click here for more information about the crisis.



https://www.cleveland.com/open/2019/...-congress.html
Quote:
Retirees want pension fix from Congress

Spoiler:
WASHINGTON, D.C. - The potential bankruptcy of Ohio-based Murray Energy is adding new urgency to pleas of retired workers who want the federal government to shore up failing multi-employer pension plans that serve 1.3 million Americans.

Retirees from a variety of unions gathered on Capitol Hill on Wednesday to urge Senate action on a bailout bill the Democrat-controlled U.S. House of Representatives adopted in July that would create a new Treasury Department office, which would keep the pension funds solvent by issuing long term bonds and loaning money to the pension funds. An estimated 60,000 Ohioans participate in the affected pension systems.


“We need you, Congress, to stop kicking the can down the road,” retired Teamster Mike Walden of Cuyahoga Falls said at a press conference that urged Senate Republican Leader Mitch McConnell to assist the pension plans. “Let’s do it before the national economy and our lives that earned, paid for and built this great nation diminish because of power politics.”

In addition to Teamsters, representatives of the United Mine Workers of America, AFL-CIO, and International Brotherhood of Electrical Workers urged assistance for the pension plans that cover pools of union members who work for different companies in industries like trucking, mining, baking and construction.

Many ran into trouble when the tech stocks they bought took a nosedive around 2000 as retirements swelled and the number of active workers paying into the plans decreased. Retirement benefits for workers in some of the affected plans have been cut by as much as 70 percent.

Some of the companies that paid into the plans also went bankrupt, which increased the amount surviving companies had to pay.


West Virginia Democratic Sen. Joe Manchin said the Miner’s Pension Fund - which covers 82,000 retired miners and 20,000 fully vested current workers - is projected to become insolvent by 2022, but is likely to grow insolvent much sooner if Murray Energy, which is based in St. Clairsville, goes bankrupt.

Rep. Marcy Kaptur addresses Teamsters rally
House of Representatives votes to shore up failing multi-employer pensions

An estimated 1.3 million Americans - including 60,000 Ohioans - have multi-employer pensions that could be bailed out under the bill.

“We are one bankruptcy away from accelerating this two years,” said Manchin. “If Murray Energy goes down, which it looks like it’s going to happen in the bankruptcy courts, next year they start facing tremendous cuts.”

Insolvency of the miners’ pension fund would create a “snowball effect,” Manchin predicted, with other pension plans following suit.

A Murray Energy spokesman referred reporters to a statement posted on the company’s website that said the company has entered into forbearance agreements with its lenders and is discussing options with them to “strengthen the Company’s business, liquidity and capital structure.”

Democratic Senators at the press conference including Manchin, Senate Democratic Leader Chuck Schumer and Ohio’s Sherrod Brown blamed Republicans for failing to pass the legislation.

“You have Mitch McConnell, the Republican leader, and the President of the United States who don’t want to solve this, who will continue to block us from doing things,” said Brown, who added that he’s working with Ohio Republican Sen. Rob Portman to find a bipartisan solution to the problem. “These workers didn’t cause this. The problem, fundamentally, is far too many people in this body don’t understand collective bargaining, that you give up something in wages today to have health insurance and a pension. They have earned that, and many of these workers will lose half their pensions if we don’t act.”


Portman spokesperson Emily Benavides said that without action, the multi-employer pension system will collapse, leaving many Ohio workers and retirees impoverished and forcing many employers to go bankrupt. She said Portman views that outcome as unacceptable.

While Portman supports the goals of the legislation that passed the House of Representatives, she said he has “significant concerns” about its cost to taxpayers and whether it addresses structural problems that currently face the Pension Benefit Guaranty Corporation, the arm of the federal government that insures pension plans.

"He will continue to work with Republicans and Democrats, including Senator Brown, to develop a comprehensive bipartisan solution to the multi-employer pension crisis based on the bipartisan framework developed by last year’s Joint Select Committee,” said Benavides.

A McConnell spokeswoman said he’s also concerned about the insolvency issues facing a number of multi-employer pension plans and backs the ongoing process to find a bipartisan solution for pension reform.


“He also believes this effort must address the challenges facing the UMWA pension plan, which is critical to Kentucky coal miners and their families,” said a statement from McConnell spokeswoman Stephanie Penn. “Earlier this year, Leader McConnell was happy to welcome UMWA members from Kentucky to his office in the U.S. Capitol where they discussed a number of issues and the group expressed gratitude for Senator McConnell’s leadership in securing the permanent health care fix for Kentucky coal retirees and families.”


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Old 10-23-2019, 06:45 AM
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FAILING PLANS

https://burypensions.wordpress.com/2...aiting-to-die/
Quote:
IBEW 237 – Waiting to Die
Spoiler:
Last April one of the worst funded multiemployer plans to file for benefit cuts under MPRA (I.B.E.W. Local Union No. 237 Pension Plan out of Niagara Falls, NY) withdrew their application. Last week they submitted their 5500 filing for 2018 (3 times):

October 9, 2019 (72 pages)
October 15, 2019 (74 pages)
Later that day (81 pages)
What changed?


Not the current liability interest rate reported on all three submissions to be 298.00%:



The change in the second filing was the insertion of the Plan Provisions attachment and one change in the final filing was the insertion of an Amortization Schedule attachment (the software we use does not allow you to submit DB plans without these exhibits). The other change in that final filing was the insertion of a funding deficiency of $12,954,612 (left blank on the first two filings) which had been $7,511,641 on the 2017 filing. How do you miss reporting a $13 million funding deficiency? Pretty easily these days.

To encourage sponsors to fund their plans taxes are imposed on funding deficiencies (10% on single-employer plans and 5% on multiemployer plans and then 100% if not corrected – which in this case would be the value of the entire fund). However pursuant to IRC 4971(g)(1), the IRC 4971 excise tax doesn’t apply to any multiemployer plan in critical status for years beginning in 2008 and after thus making reporting funding deficiencies in multiemployer plans little more than afterthoughts.

From that last filing:

Plan Name: IBEW Local Union 237 Pension Fund
EIN/PN: 16-6094914/001
Total participants @ 12/31/18: 416 including:
Retirees: 174
Separated but entitled to benefits: 68
Still working: 174

Asset Value (Market) @ 1/1/18: $19,322,588
Value of liabilities using RPA rate (298.00%) @ 1/1/18: $123,934,144 including:
Retirees: $65,742,323
Separated but entitled to benefits: $13,538,380
Still working: $44,653,441

Funded ratio: 15.5918%
Unfunded Liabilities as of 1/1/18: $104,611,556

Asset Value (Market) as of 12/31/18: $16,481,151
Contributions: $3,364,254
Payouts: $4,950,543
Expenses: $425,294


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Old 10-28-2019, 11:30 AM
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BENEFIT CUTS

https://burypensions.wordpress.com/2...k-mpra-cuts-2/
Quote:
Breaking News: Detroit Carpenters To Seek MPRA Cuts
Spoiler:
Crain’s Detroit reported it last month but it finally made it onto the MPRA website this afternoon.

From their latest 5500:


Plan Name: Carpenters’ Pension Trust Fund – Detroit and Vicinity
EIN/PN: 38-6242188/001
Total participants @ 4/30/18: 20,126 including:
Retirees: 8,635
Separated but entitled to benefits: 6,592
Still working: 4,899

Asset Value (Market) @ 5/1/17: $734,239,796
Value of liabilities using RPA rate (3.05%) @ 5/1/17: $3,775,320,326 including:
Retirees: $2,204,910,506
Separated but entitled to benefits: $593,844,625
Still working: $976,565,195

Funded ratio: 19.45%
Unfunded Liabilities as of 5/1/17: $3,041,080,530

Asset Value (Market) as of 4/30/18: $761,729,009
Contributions: $123,147,221
Payouts: $148,373,816
Expenses: $6,882,158


https://thehill.com/homenews/campaig...its-if-elected
Quote:
Sanders promises to block cuts to pension benefits if elected

Spoiler:
Sen. Bernie Sanders (I-Vt.) vowed on Wednesday to place a moratorium on cuts to pension benefits overseen by the federal government if he is elected president in 2020.

Speaking at the International Association of Machinists and Aerospace Workers legislative conference in Washington, Sanders decried the passage of a 2014 law empowering the Treasury Department to approve cuts to multiemployer pension plans that are at risk of running out of money before all benefits are paid out.

“This should not be happening in the United States of America. A promise made must be a promise kept,” Sanders said to applause. “If I’m elected president, my administration will impose an immediate moratorium on any future pension cuts to multiemployer pension plans.”

That plan, Sanders said, involves appointing a Treasury secretary who will agree not to approve cuts to such pension plans.

He also pledged to “reverse the pension cuts the Trump administration has already approved” and push legislation that would permanently ban such deep cuts.

Pension plans covering more than half a million people have applied with the Treasury Department to slash plan benefits under the 2014 law, according to data compiled by the Pension Rights Center, a nonprofit organization that advocates for retirement benefits.

To date, the Treasury Department has approved 13 plan restructurings, according to the advocacy group.

Sanders’s pledge to block approval of further pension cuts largely aligns with his labor-forward campaign message, and comes as nearly two dozen presidential candidates vie for critical support from trade unions.

In addition to Sanders, six other presidential contenders addressed Machinists union members at the group’s conference this week.


https://burypensions.wordpress.com/2...n-update-2018/
Quote:
MPRA Approved Plan Update – 2018
Spoiler:
Bernie Sanders is right:

Speaking at the International Association of Machinists and Aerospace Workers legislative conference in Washington, Sanders decried the passage of a 2014 law empowering the Treasury Department to approve cuts to multiemployer pension plans that are at risk of running out of money before all benefits are paid out.

“This should not be happening in the United States of America. A promise made must be a promise kept,” Sanders said to applause. “If I’m elected president, my administration will impose an immediate moratorium on any future pension cuts to multiemployer pension plans.”

That plan, Sanders said, involves appointing a Treasury secretary who will agree not to approve cuts to such pension plans.

He also pledged to “reverse the pension cuts the Trump administration has already approved” and push legislation that would permanently ban such deep cuts.

I agree this should not be happening here and the fact it has happened speaks volumes about legislators, like Sanders, who, on the financial advice of their donor-base, largely ignored the crisis until a bailout became their only solution.

Now that calendar year 2018 5500 filings are online, let’s look at the numbers* for those 14 plans approved for benefit cuts under MPRA.



Compare that to our last update (same 14 plans):


The New York State Teamsters Conference Pension & Retirement Fund cut benefits as of 10/1/17 and we now have a comparison based on a valuation prepared as of 1/1/18 which had to include the reductions. Benefit payments were cut by about 18% while the funded ratio went from about 22% to 31%.



* Taken from the latest available 5500 filings. FR-BOY stands for Funded Ratio – Beginning of Year which is taken from the Schedule MBs. The participant counts are as of the end of the plan year and the payouts are what was reported on the Schedule H as being paid out during the year. The ‘Ben Cut’ column is the date benefits were cut according to the Final Authorization letters (except for Plasterers Local #82 which did not have the letter on the website).


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Old 11-01-2019, 10:29 AM
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MINEWORKERS

https://burypensions.wordpress.com/2...d-umw-pension/
Quote:
Murray Energy Bankruptcy and UMW Pension
Spoiler:
Murray Energy, the largest private coal miner in the United States, filed for bankruptcy protection Tuesday and the status of the United Mine Workers (UMW) of America 1974 Pension Plan is a concern:

In addition to threatening the jobs of around 7,000 current Murray Energy employees, the company’s bankruptcy filing could also spell disaster for tens of thousands of retired miners.

“Murray Energy is the last major company contributing to the pension plan of the United Mine Workers of America,” CNN reported. “The pension plan’s depleted funding will only get worse if Murray Energy is relieved of its pension requirements.”

Cecil Roberts, president of the United Mine Workers, predicted in a statement that Murray Energy will attempt in bankruptcy proceedings to shed “its obligations to retirees, their dependents, and widows.”

“We have seen this sad act too many times before,” said Roberts. “But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees.”

What will happen to those pensions?


Murray Energy retirees will have a large part of their benefits protected by the PBGC (as long they exist – the PBGC that is). What bankruptcy does, and several other coal companies took that route recently, is it allows those bankrupt companies to avoid making their share of withdrawal liability payments of over $3 billion for other people’s benefits.

From the latest UMW 5500 filing:

Plan Name: United Mine Workers of America 1974 Pension Plan
EIN/PN: 52-1050282/002
Total participants @ 6/30/18: 93,030 including:
Retirees: 83,877
Separated but entitled to benefits: 6,613
Still working: 2,540

Asset Value (Market) @ 7/1/17: $2,779,954,000
Value of liabilities using RPA rate (3.04%) @ 7/1/17: $9,285,479,900 including:
Retirees: $8,202,479,207
Separated but entitled to benefits: $612,497,098
Still working: $470,503,595

Funded ratio: 29.94%
Unfunded Liabilities as of 7/1/17: $6,505,525,900

Asset Value (Market) as of 6/30/18: $2,450,655,937
Contributions H-Employers: $30,067,243
Contributions H – Others: $3,880,972
Contributions MB: $112,301,000
Payouts: $613,836,688
Expenses: $26,401,292
https://www.commondreams.org/news/20...t-already-says
Quote:
'If These Miners Were Bankers, Congress Would Have Bailed Them Out Already,' Says Sanders as Bankrupt Murray Coal Threatens Pensions
"My Green New Deal will protect the pensions workers were promised and provide a just transition for all fossil fuel workers."
Spoiler:
Sen. Bernie Sanders on Thursday emphasized the need for a Green New Deal that guarantees "a just transition for all fossil fuel workers" after coal mining giant Murray Energy filed for bankruptcy this week—potentially imperiling the jobs, pensions, and healthcare benefits of tens of thousands of miners.

"If these miners were bankers, Congress would have bailed them out already," said Sanders, a 2020 Democratic presidential candidate. "My Green New Deal will protect the pensions workers were promised."

"We have seen this sad act too many times before. But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees."
—Cecil Roberts, United Mine Workers of America
Sanders' Green New Deal plan, released in August as part of his presidential campaign platform, stresses the importance of ensuring financial security for any fossil fuel workers displaced by the transition to 100 percent renewable energy.

"This plan will prioritize the fossil fuel workers who have powered our economy for more than a century and who have too often been neglected by corporations and politicians," Sanders' proposal states. "We will guarantee five years of a worker's current salary, housing assistance, job training, healthcare, pension support, and priority job placement for any displaced worker, as well as early retirement support for those who choose it or can no longer work."


Murray Energy, the largest private coal company in the U.S., filed for Chapter 11 bankruptcy protections Tuesday morning. Robert Murray, the company's founder and a vocal supporter of President Donald Trump, agreed to relinquish his role as CEO and president but will remain chairman.

In addition to threatening the jobs of around 7,000 current Murray Energy employees, the company's bankruptcy filing could also spell disaster for tens of thousands of retired miners.

"Murray Energy is the last major company contributing to the pension plan of the United Mine Workers of America," CNN reported. "The pension plan's depleted funding will only get worse if Murray Energy is relieved of its pension requirements."

Cecil Roberts, president of the United Mine Workers, predicted in a statement that Murray Energy will attempt in bankruptcy proceedings to shed "its obligations to retirees, their dependents, and widows."

"We have seen this sad act too many times before," said Roberts. "But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees."


https://www.cnn.com/2019/10/29/busin...tcy/index.html
Quote:
America's largest private coal miner files for bankruptcy
Spoiler:
New York (CNN Business)The slow death of the American coal industry has forced Murray Energy, the largest private coal miner in the United States, to file for bankruptcy protection Tuesday.

Murray Energy's bankruptcy has been telegraphed for years. It recently failed to make payments to lenders, and the company entered into a forbearance agreement that bought it time to negotiate a restructuring. But that grace period came and went, and Murray Energy was unable to pay its bills. S&P Global Ratings downgraded the company's credit rating to "default" earlier this month.
The coal company formed a restructuring agreement with some of its lenders, representing about 60% of Murray's $1.7 billion in liabilities. The company announced Tuesday it has received $350 million in credit to keep its business operational through bankruptcy.
Robert Murray, the self-proclaimed king of the coal industry, has been replaced as CEO. Murray Energy announced Tuesday that former Chief Financial Officer Robert Moore will take over as the company's new chief executive. Robert Murray will remain as the company's chairman.
Sponsor content by IAB
IAB Founders Stories | Brooklinen
Rich Fulop, Founder and CEO of Brooklinen, highlights how creating a non-neutral brand is a crucial part of his company’s identity.
"Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success," said Robert Murray in a statement.
The bankruptcy underscores the enormous pressure facing coal miners. A string of coal companies have already filed for bankruptcy, but Murray Energy is among the most powerful and well-connected firms in the industry. Murray Energy and its subsidiaries have 7,000 employees and operate 17 active mines in Alabama, Illinois, Kentucky, Ohio, Utah, and West Virginia.
President Donald Trump's election in 2016 had raised hopes in the coal industry for a revival. The president moved swiftly to slash environmental regulations and even installed a former coal lobbyist to lead the US Environmental Protection Agency. But the deregulatory push has been overwhelmed by market forces. Coal just can't compete with cheap natural gas and the plunging cost of solar, wind and other forms of renewable energy.
Power companies are ditching coal in favor of cleaner alternatives at a rapid pace. US power plants are expected to consume less coal next year than at any point since President Jimmy Carter was in the White House, according to government forecasts released earlier this month.

US coal exports are estimated to have dropped to 20.9 million short tons in the third quarter, according to the US Energy Information Administration. That represents a 28% drop from the same period of 2018. The agency expects coal exports to keep falling, slipping to 17.3 million by the end of 2020.
Mine workers stand to lose in the bankruptcy — not just in jobs but potentially in the erosion of healthcare and pension benefits. Murray Energy is the last major company contributing to the pension plan of the United Mine Workers of America. The pension plan's depleted funding will only get worse if Murray Energy is relieved of its pension requirements.
In August 2017, Robert Murray, a forceful Trump supporter, wrote a letter to the Trump administration urgently requesting an emergency order to protect coal-fired power plants from being closed. In the letter, he warned the White House that failure to issue the order would spark the immediate bankruptcies of his company and a major customer.
"Our time is running out. Please fight for us," the executive wrote in the letter.
However, the Trump administration rejected that cry for help because officials determined there wasn't enough evidence to warrant the use of emergency authority.
In 2017, Robert Murray filed a defamation lawsuit against John Oliver, HBO and CNN owner Time Warner (now called WarnerMedia), alleging "character assassination" during an episode of "Last Week Tonight." That lawsuit was dismissed last year.

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