A second application by Alaska Ironworkers Pension Plan, Anchorage, to reduce benefits was approved by the Treasury Department.
The $49.4 million pension fund, projected to be insolvent by 2031, applied for a second time on Dec. 19 to reduce benefits, known as suspensions, under the process established by the Multiemployer Pension Reform Act of 2014. At the time, fund trustees said in a letter to participants that the proposed 26.5% cuts to benefits earned as of July 2016 were "only big enough, and will only last long enough, to keep the plan from running out of money."
The narrative with the second application, approved May 3, said that, "despite all of the trustees' best efforts, the funded ratio has not recovered significantly from 2009, reaching only 55.4% by 2016, despite reductions in benefits and annual increases in funding contributions."
The pension fund's first application in March 2017 that was later withdrawn called for cuts of 34.5%. At the time, it had 1,573 participants, $56.5 million in assets and a 59% funding level. Since then, the number of active participants has declined.
Before the suspension plan can take effect, participants must vote to approve it. Plan officials have until May 10 to identify eligible voters. If the proposal is accepted by at least 50% plus one vote, the suspension plan goes into effect no later than July 1.
If finalized, this would be the fifth application approved under MPRA. Another five applications have been denied, and six are under review.
