https://nwcarpenters.archive.s360.is Wed, 27 Jun 2018 21:57:43 +0000 en-US hourly 1 https://wordpress.org/?v=6.0.14 https://nwcarpenters.archive.s360.is/wp-content/uploads/2021/06/cropped-PNWCarpenters-Primary-Emblem-Full-Color-transparent-sq-32x32.png https://nwcarpenters.archive.s360.is 32 32 https://nwcarpenters.archive.s360.is/faq/%e2%9e%a4-im-concerned-about-our-medical-benefits-it-seems-like-the-benefit-amounts-proposed-isnt-enough-to-keep-up-with-the-costs/ Thu, 21 Jun 2018 18:36:56 +0000 https://www.nwcarpenters.org/?post_type=faq&p=20474 Read More]]>

We’ve kept up with healthcare costs over the years and made changes to adjust with shifting costs and legislative changes.

The trust is always examining ways to be fiscally responsible and provide good benefits to members and their families. Based on varies projections, the trustees believe the current contribution level allows the plan to maintain its current eligibility and benefit structure even with medical inflation.

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It is not lower. A Spring 2018 Multiemployer Pension Funding Study indicates that pension plans on average achieved an aggregated funding status of 82-83%, the highest since the market collapse in 2008 (when the average was 85%). The 2017 rate of our plan was funded at 81.2%. It is already rising.

We are currently on track to be 100% funded by 2027.

Some trades have higher funded plans. Most of those plans are putting a lot of money: $8, $10, $12 per hour into non-accrual (funds that are not accruing a direct benefit for plan participants) to raise the funding status.

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While SIB accruals start out lower, your SIB is expected to grow during your career and likely outpace what you would have earned under the traditional income benefit. SIBs continue to grow through investment gains during your career and during your retirement years, an advantage unavailable with traditional income benefits.

Your 2017 SIB accrual increased by 1.13% on 1/1/2018. Because of a 15.3% investment return in 2017, your 2017 and 2018 SIB accruals will increase by 6.0% on 1/1/2019. Additional 2017 investment earnings will be added to the stabilization reserve which is available to shore up SIBs in years when the plan earns less than 4%.

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The plan funding status as of January 2017 was 81.2%.

The fund is still absorbing the “smoothing” effects that were adopted to reduce the impact of the 2008 recession on investment returns.

The plan funding status lags by one year. We will see the results of the SIB (plan change) start to show in coming years.

The plan is currently slated to be 100% funded by 2027.

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This is not correct. The retirement plan has always paid and will continue to pay 100% of the benefit promise to its retirees.

The 80% may be a reference to the current (2017) funding status (81.2%) of the plan. What that number means is if the plan had to meet all of its retirement promises today, it would fall short of that promise. But, of course, no pension plan works that way.

With the existing funding surcharge and the move to sustainable income benefits, the funding status is projected to be 100% by 2027

Preliminary numbers for 2018 show the funding status already improving.

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No. With the move to Sustainable Income Benefits in 2017, the proposed amount in the previous two TA’s is sufficient to keep the plan financially healthy.

If projections are met, the plan should be fully funded in 2027.

The trustees are bound by federal law to make responsible financial decisions for the fund. Trustees cannot promise to, nor would we want them to, ignore a reallocation of funds if necessary. Keeping the plan properly funded means we keep our promise of a secure retirement to all our members.

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The benefit contribution increase in the two tentative agreements would have increased the benefit accrual by 23% over the life of the contract.

Because the pension plan is a green-zone plan projected to be fully funded in 2027, the bargaining committee wanted members to get pay raises so some of the financial benefits are on the check as well.

Members working under both the AGC Area Master Agreement and the Wall and Ceiling Agreement contribute the same amount to benefits. Until a new contract is signed, members working under the Wall and Ceiling Agreement will see the full rate on their checks. At the time a contract is reached, members working under the Wall and Ceiling contract will have the ratified benefit contributions backed out of their checks and they would not get their anticipated raise the first year of the AGC contract.

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