Benefits November 4, 2024

Four Distressed Pension Funds Approved for PBGC Grants

Support is approved for Teamsters Local 111, Marine Carpenters Fund, UFCW Tri-State Plan and I.B.E.W Pacific Coast Fund.

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The Pension Benefit Guaranty Corporation on Friday approved financing through the Special Financial Assistance Program to four distressed pension funds. Pension funds facing insolvency may apply for special financial assistance.

Teamsters Local 111, a Brooklyn-based plan with 1,600 participants, will receive $17.1 million in SFA funds. According to the PBGC, the plan was projected to become insolvent in 2041. According to Local 111’s Form 5500 for plan year 2022, the plan had $55 million in assets and $51 million in liabilities.

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In addition, the Marine Carpenters Fund, a Pleasanton, California-based plan with 1,198 participants in the construction industry, will receive $34.6 million in SFA financing. The pension fund was projected to become insolvent in 2034.

The PBGC also granted financing to the United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Penson Plan, which will receive $684.4 million. The Plymouth Meeting, Pennsylvania-based plan, which was projected to become insolvent in 2028, has 29,322 participants.

Approximately $75.5 million was granted to the I.B.E.W Pacific Coast Pension Fund. The Tacoma. Washington-based fund covers 3,318 participants in the construction industry. The plan had $228 million in assets as of plan year 2022, according to the fund’s Form 5500, and a funded status of 63%.

The PBGC has approved $69.5 billion in special financial assistance for pension funds covering 1.2 million beneficiaries, according to a November 1 news release.

The SFA Program was enacted as part of the American Rescue Plan Act of 2021.

Pension funds that receive SFA funds must monitor earnings from the grant money as separate from other sources of funding. The PBGC requires that at least two-thirds of the money it provides be invested in “high-quality fixed income investments.” The Final Rule on Special Financial Assistance, issued in July 2022, states that the other third can be invested in “return-seeking investments,” such as stocks and stock funds.

Benefits November 4, 2024

Union Workers Approve Boeing’s Latest Contract Proposal Monday

The International Association of Machinists and Aerospace Workers District 751 recommended that the union workers accept Boeing’s latest contract offer.

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This story has been updated. 

Union factory workers at the Boeing Co. voted to accept a new labor contract on Monday, ending the strike that lasted more than seven weeks and caused Boeing to shut down production of most of its passenger planes.

Machinists voted 59% in favor of the new contract. Boeing will now be able to resume production.

While the union members rejected Boeing’s last two proposals, in part because the company would not restore the union members’ pension fund, the International Association of Machinists and Aerospace Workers District 751 President Jon Holden endorsed the latest contract offer and argued that it is time to “lock in gains.”

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“During every negotiation and strike, we must continually evaluate where our leverage stands going forward,” Holden said in statement. “We believe that we have secured one of the strongest contracts in the aerospace industry.”

The new contract offer includes a 38% pay raise over the next four years, a $12,000 ratification bonus and a 100% 401(k) match, up to 8% of pay. This is a slight improvement over the previous contract, which proposed a 35% rise in wages.

It does not include a restoration of the workers’ pensions, but Boeing is offering a $215 per year pension multiplier for those vested in the Boeing Co. Employee Retirement Plan. Boeing froze its pension plan in 2014.

The ratification bonus combines the previous $7,000 ratification bonus offer and the $5,000 lump sum contribution into workers’ 401(k) plans. Members would be able to choose how the total bonus amount is received—in a participant’s paycheck, as a contribution to their 401(k) or a combination of both.

Boeing said average annual pay for machinists is $75,608 and would rise to $119,309 in four years under the latest offer.

Acting Secretary of Labor Julie Su has been involved with the negotiations in Seattle and said in a press briefing that the first-year wage increase in the new contract is more than what the union’s members have received in recent years combined. She said it is a “sign of collective bargaining working.”

According to S&P last week, Boeing’s sale of $24.3 billion in stock and other securities will cover upcoming debt payments and reduce the risk of a credit downgrade. However, S&P found that Boeing has limited flexibility to absorb further pressure on its cash flow generation that would delay improvement in its credit measures.

Because the contract was approved, workers must return to work by Tuesday, November 12, according to the union.

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