Iron Workers Local 16 Pension Fund, Towson, Md., was denied permission by the Treasury Department to cut benefits for participants, including retirees, as part of a proposed rescue plan.
The $80.6 million pension fund was 61% funded as of Dec. 31, 2014, according to its latest Form 5500. The trustees of the pension fund had applied under the Multiemployer Pension Reform Act of 2014 to implement the reductions on Jan. 1, 2017.
Kenneth Feinberg, Treasury's special master overseeing the MPRA application process, said in a letter to trustees Thursday that the proposed cuts were not reasonably estimated to allow the plan to avoid insolvency, because the mortality and hours-of-service assumptions used “are not reasonable.”
Using more refined mortality assumptions based on relevant and historical demographic data “would produce materially different results,” Mr. Feinberg wrote. He also disputed the trustees' projections about future contributions, noting “systemic changes affecting union employment in the Baltimore ironwork industry.” Despite two potential projects mentioned in the application, the plan “has provided no reliable evidence … that the declining trend in (collectively bargained units) will change,” he said.