Roofers Local No. 88 Pension Fund, Merrillville, Ind., applied to the Treasury Department to reduce benefits to avoid plan insolvency.
Pension fund trustees said in the application that benefit cuts starting in November would help the $25.4 million pension fund remain solvent. The pension fund is 61.4% funded and projected to be insolvent by the 2036 plan year.
Trustees said in the application that they have taken multiple steps to attract and retain contributing employers, and that significant contribution increases in recent years "were not enough to repair the damage from the 2008 and 2014 investment losses." Other factors were decreased benefit accrual levels, lower pension contributions in neighboring locals and increased non-union competition in the area, the trustees said.
Benefit reductions, known as suspensions, are allowed under the Kline-Miller Multiemployer Pension Reform Act of 2014. To date, the Treasury Department has approved 18 applications.
Legislation to help struggling multiemployer pension funds was introduced Jan. 21 in the House and is expected to be bundled with a COVID-19 relief measure now before Congress.
The proposed Emergency Pension Plan Relief Act of 2021 would remove the option of applying for benefit reductions under the MPRA.