The Pension Benefit Guaranty Corporation (PBGC) has approved the facilitated merger of the Laborers International Union of North America 1000 Pension Fund (Local 1000 Plan) with the Laborers Local 235 Pension Fund (Local 235 Plan). As part of the merger, PBGC will provide three annual installments of $8.9 million to the plan beginning this month.
The approved facilitated merger was the first under the Multiemployer Pension Reform Act of 2014 (MPRA). Under this authority, PBGC may provide financial assistance to help merge two multiemployer plans in order to extend the solvency of a financially distressed plan.
The Local 235 Plan is a “green zone” plan covering over 1,100 participants. The Local 1000 Plan covers over 400 participants and was projected to become insolvent in 2026. PBGC expects that this merger will reduce the agency’s long-term loss with respect to the Local 1000 plan and will not affect participants and beneficiaries of the Local 235 Plan.
“Hardworking New Yorkers deserve to know that the pensions they’ve earned through decades of hard work will be safe and solvent for years to come. I’m encouraged by the news of the historic merger of Local 1000 and Local 235 by the Pension Benefit Guaranty Corporation, which will protect the benefits of 1,400 workers and retirees, including folks right here in the Hudson Valley,” said Rep. Sean Patrick Maloney. “This also underscores the need for Congress to take action to solve the multiemployer pension crisis. It’s time for the Senate to take up the Butch Lewis Act, a strong bipartisan bill I was proud to help pass last year.”
Local 1000 is based in Poughkeepsie and Local 235 is based in Elmsford.
“As a Trustee on Laborers’ Local 1000 (LIUNA 1000), I am extremely grateful that the PBGC (Pension Benefit Guarantee Corp) has decided to approve our application for a facilitated merger with Laborers’ Local 235 (LIUNA 235),” said Alan Seidman, executive director of the Construction Contractors Association of the Hudson Valley. “In making this the first ever approved merger by PBGC, the action will save the retirement income of the many Laborers who over the course of their careers worked on so many important projects in our region. Although there are many struggling pension funds, we are fortunate and grateful that the PBGC has granted this relief to our pensioners and workforce.”
Under MPRA, PBGC has the authority to facilitate plan mergers under certain conditions, including when one or more of the plans involved is projected to run out of money within 20 years. Plans can apply to PBGC for financial assistance to help facilitate a merger, provided that the assistance does not impair the agency’s ability to meet its existing financial assistance obligations to other multiemployer plans.
“PBGC’s mission is to protect the retirement security of workers and retirees in defined benefit plans, and helping plans merge is one way we can do that,” PBGC Director Gordon Hartogensis said. “Through this facilitated merger, we are preventing a failing plan from going broke and preserving benefits in a financially responsible way.”
Plan participants can contact Local 235 Plan at (914) 592-3331 with any questions regarding the anticipated effects of the merger. For more information, visit PBGC.gov.