ATPA is the administrator for the Automotive Industries Health & Welfare and Pension Trust Funds.

Contact us at 510-836-2484

Visit page 3 of the February /March 2010 Edition of the Sparkplug to find frequently asked questions by IAM members preparing for retirement.

For additional FAQs visit: www.aitrustfunds.org!

PENSION REFORM

Legislation pending to strengthen multi-employer pension funds

Many pension plans experienced drastic losses as a result of the financial collapse of 2008, and many companies now cannot meet unexpectedly large pension obligations. Without funding relief, more jobs may be lost, and the economic recovery will stall even further.

In response to this crisis and to shore up definited-benefit pension plans, Congressman Earl Pomeroy (DND) introduced HR3936 -- the Preserve Benefits and Jobs Act (PB&J).

Defined benefit pension plans are an important means of ensuring workers' lifetime income security in retirement and should be preserved, Congressman Pomeroy said when introducing the bill last October. Without additional relief more employers may elect to freeze their pension plans.

The bill would give businesses some breathing room from the strict funding rules imposed by the landmark pension reform bill that went into effect in 2008.

This stuff is really complex, says Area Director Don Crosatto but it's also vitally important. All pension plans lost a lot of value— first in 2001-2004 and then again in 2008. Rather than helping the situation for multi-employer plans, the recent pension reform bill made matters worse. This bill is an attempt to fix the problems caused by the last so-called reform.

Some of the issues HR3936 deals with are amortization, asset smoothing, and easing the credit balance and accrual restrictions.

Other changes for multi-employer plans, such as the Automotive Industries plan, include:

1. A one-time Funding Fresh Start: Allows multi-employer plans to elect a one-time fresh-start of the Standard Account, with the sum of the outstanding balances amortized over a single 30-year period.
2. Longer funding relief: Extends the Rehabilitation Period and the Funding Improvement Period by five years.
3. Creation of Multi-employer Pension Alliances to facilitate the merger of multi-employer pension funds.
4. Eases adoption of rehabilitation or Funding Improvement Plan as the default schedule once it has been approved in collective bargaining agreements covering at least 75% of the plan's active participants.

As Trustees on the AI Pension Plan, we're studying these provisions to make sure they are in the best interest of our plan. We'll be calling on our members to support these reforms when they start being debated seriously in Congress, Crosatto added.