Pension benefits changing, argh!
August 24, 2007 5:58 AM   Subscribe

They're changing the pension benefits. Can anything be done?

Ever since I joined the union, the pension benefits have been the same. The major benefit is, on retirement or leaving the union, you could take a lump sum, or at 55 collect monthly payments. I just got a letter from the union today. It explained that due to an increase of retirees, the lump sum option has been eliminated.

This has completely thrown many of my coworkers retirement plans in the trash. We complained to the union president, who told us he had nothing to do with the pension, but if we raised a stink, there were other benefits that could be changed or eliminated.

Is this even worth talking to a lawyer, or are we just "in the hands of a vast and capricious power," where we just have to smile and take it.
posted by Marky to Work & Money (9 answers total)
 
Talk to a lawyer, even if there are other benefits that can be lost, some may still be more beneficial to individual members than others, as with the example you provide.

Then start campaigning to get a new union president.

You might want to say where you live, people might be able to give some local guidance.
posted by biffa at 6:21 AM on August 24, 2007


Sounds like the Prez sold you guys down the river. I bet he is better off with the new plan. To not even implement the plan gradually is a crime against decency. Whether a legal crime has been committed is hard to say. Somewhere there are rules for the pension and they will spell out what changes can be made and by whom.
posted by JohnnyGunn at 6:31 AM on August 24, 2007


You're in a union, and the union can fight back. That's the whole point of collective bargaining. However, pension plan costs have escalated dramatically, because the accounting wasn't really done well,* and people live longer. If yur union is not doing a good job of working for your needs, elect better union officials.

* companies assumed that their growth pattern would continue, accounting rules didn't force them to fund retirement plans. IANA Lawyer or Accountant or Economist, just an opinionated person who reads a lot.
posted by theora55 at 6:45 AM on August 24, 2007


I used to work in an office that managed two pension plans and a health plan for a labor union local. I'm assuming that you are in the US, and my answer is based on that. I don't don't if you are referring to a local plan or a national or a regional plan; I assume the president you spoke with was your local's president.

Your plan probably has a board of trustees comprised of representatives from both labor and management. You should contact the board first, specifically the labor representatives on the board.

If you do not get a reasonable answer from the board, you could contact a lawyer to look into options. That may range from contacting the PBGC, NLRB, or other agencies, but you'd need legal help to sort that out.
posted by Robert Angelo at 8:26 AM on August 24, 2007


I don't don't = I don't know
posted by Robert Angelo at 8:27 AM on August 24, 2007


This is a bad sign. Your pension plan could be in trouble because it has lost equity. If it has lost equity, your union needs to take a close look at the management of your fund to make sure that's not a consequence of incompetence or corruption (usually in the form of kickbacks from the purchase of dodgy, high commission securities).

Frantically looking around for a box of sand to bury one's head in, as your president seems to prefer to do, is not very wise, especially considering recent rises in per capita cat ownership.
posted by jamjam at 9:45 AM on August 24, 2007


I assume this is union-sponsored plan, or is it a company-sponsored plan? If it's a company plan, you guys voted negotiated for, and then specifically voted for, that change. If it's a union plan, to which the company just makes a negotiated contribution, the union manages the plan and can change it. Whether members get a vote on changes depends on the union's bylaws and plan details.

You have an absolute right, under ERISA to obtain a financial report on the plan. Ask HR, if it's a company plan, or the union. If you have literature on the plan it should tell you how to obtain financial reports.
posted by beagle at 10:06 AM on August 24, 2007


You have an absolute right, under ERISA to obtain a financial report on the plan. Ask HR, if it's a company plan, or the union. If you have literature on the plan it should tell you how to obtain financial reports.

Following up on that, when or soon after you joined the plan, you should have received a "Summary Plan Description" describing how the plan works and who makes the decisions. You should annually receive a "Summary of Material Modifications" and a statement of the plan assets and financial condition (I don't remember what that one is called formally). I used to draft or edit these, 20-odd years ago.
posted by Robert Angelo at 10:43 AM on August 24, 2007


Please see this link from the IRS on eliminating lump sum and other benefit forms:

http://www.irs.gov/retirement/article/0,,id=146266,00.html

The regulations are complicated, so you do need to talk to an ERISA lawyer, but this might very well be an impermissible benefit cutback.
posted by bananafish at 12:03 PM on August 24, 2007


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