By: Richard H. Wessels, Esq.
We have received lots of comments about our memo on underfunding in multi-employer pension plans. In that memo, we listed the U.S. Department of Labor's "red zone" funds impacting Upper Midwest employers. As we indicated, there are several factors which can determine whether a multi-employer pension plan is classified as being "red zone," but being less than 65% funded is the general rule of thumb. We also mentioned that US DOL not only has a list of "red zone" pension plans, but also has a listing of endangered funds. Those are in bad shape, but not quite as bad as "red zone." The general rule for the endangered category is a pension fund that is less than 80% funded.
Here is a sample of US DOL's listing of endangered funds impacting Upper Midwest employers. We included a couple from the professional sports world that made the endangered list.
- Bert Bell/Pete Rozelle NFL Player Retirement Plan
- Cement Masons Employers Pension Plan
- IBT Union Local No. 710 Pension Fund
- Iron Workers Mid-America Pension Plan
- Local 705 IBT Pension Plan
- Local 731 IBT Excavators and Pavers Pension Plan
- Local 731 IBT Private Scavengers and Garage Attendants Pension Trust Fund
- National Basketball Association Players Pension Plan
- Operating Engineers Construction Industry and Miscellaneous Pension Fund
- Rockford Pipe Trades Industry Pension Fund
Again, if you have concerns about multi-employer pension plans to which you are contributing, give Dick Wessels a call at 630-377-1554.
