I’m a vested former contributor to this pension
Recently I heard from a union official that;
This pension is in great condition.
That the government is mandating a 15% increase in contributions/funding.
This mandate is across the board of union pensions and is no indication of this pension’s health.
I can’t find anything online about this alleged mandate. Does anyone know where to find that sort of information?
Thanks.
Given that your point number 1 appears to be substantially in question, I’d be leery of taking this union official’s word for points 2 and 3.
From the website you linked to, navigate to “Plan Feature and Documents.” Under “Plan Documents” on that page, read “Annual Funding Notice” (which is last year’s) for some background information, mainly that in the 2008-09 year, the pension was 80.1% funded, using actuarial values rather than market values. As the AFN goes on to state, any pension that is funded below 80% is considered “Endangered.” You see now why the plan is at 80.1% – it barely squeaks by.
Next, back on the website, click on the poorly labeled document below the one we just looked at, called “The Pension Protection Act (PPA) Certification Notice,” which, when you open it, is actually titled “AFN – Endangered Status.” That notice indicates that for the 2009-10 year, the pension is now below 80% funded and the the pension will now take steps to bring its funding level above 80%.
I recognize that this doesn’t answer your question, but merely calls into question the assumptions on which the question is built. That said, in a few minutes of looking I didn’t find any governmental mandate that all pensions regardless of funding level must increase contributions 15%, and I suspect I won’t. But if you’re curious (or an insomniac), take a look through section 1085 of title 29 of the US Code (forget how to cite it, sorry). A little way down, it begins to explain how underfunded pensions like yours must bring the pension back up over the 80% threshold, including increasing contributions.
IANAERISAL (I am not an ERISA lawyer), so I don’t know how all this works; but if there are any ERISA folks here, I’d love to see their thoughts.
29 usc 1085. Actually, it should be capitalized, but the board software keeps uncapitalizing it.
Thanks Campion. I could’ve found that if I’d looked far enough. Clearly you have a stronger stomach than me.
That’s the answer I’m looking for I think; that the condition of the pension is the reason for the increased funding.
Thanks again.
Duh. Thanks for that. I suppose if I hadn’t started happy hour early tonight I’d have remembered that. Or at least that’s my excuse. 
You’re welcome. Two points: after a decade as a lawyer, it’s no longer an issue of stomach strength so much as an ability to blow through legalese a lot faster. Also, and I should have said this before, I don’t really know whether having a pension fund at less than 80% (but more than 65%) funding level is important. I mean, I know it’s important in the sense that the government deems the fund “endangered” but I don’t know if it’s the functional equivalent of a yellow light or a red light in an intersection.
Well, I think yellow light, but it serves my purposes. It helps to inform my pals who are still contributing to the pension. They’ll be asked this year to put any hourly raise into the pension. They may even be asked to reduce their hourly scale for it.
This will provide a better explanation of why than the union rep did.