Western States Office and Professional Employees Pension Fund, Portland, Ore., has submitted its third application to the Treasury Department for permission to cut benefits for participants, including retirees, as part of a proposed rescue plan. Previous applications were withdrawn.
Pension fund assets as of Jan. 1 were $336 million and liabilities were $525 million, for a funded status of 64%. Without benefit reductions, known as suspensions, the plan is projected to be insolvent by 2036.
The proposed benefit reductions would be 30% for active participants, terminated vested participants and retirees under the age of 80. Retirees older than 80 or under disability would see no change in benefits under the proposed plan.
In materials to participants, trustees said that since 2008 the number of active participants dropped 73%, with retirees now outnumbering them 11 to 1, and the number of employers dropped to 168 from 280 in 2008.
While investment returns have stabilized in recent years, they have not been enough to make up for losing 32% in 2008, plus reduced contributions due to decreasing membership, the trustees said.
The Treasury Department has 225 days to respond to the application, which was filed May 15.