Longshoremen Pension
Pension Plans for Longshoremen
Does your pension cargo match its manifest?
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"By manipulating payroll records to fraudulently obtain medical, pension, and other benefits, these defendants harmed workers who legitimately earned their benefits. This case demonstrates that benefits fraud is a serious crime that will be prosecuted to the full extent of the law."
-- Ann L. Combs,
Massachusetts Assistant Secretary of Labor
Indictments of 20 in Boston on August 9, 2006
“The committee recommended that in the 2008 negotiations the union ‘remains committed not to accept any increases in co-pays of any type.’ Once the union opens the door to co-pays, the committee contended, there’s no telling where it will stop or how high it might go.”
-- The Dispatcher, San Francisco, June, 2006
“Estimates vary, but Fidelity Investments recently said a 65-year-old couple retiring without employer-provided health benefits likely will need $200,000 just to cover medical costs in retirement beyond federal Medicare coverage... the figure could be $250,000 or more, given the rapidly rising costs of medical care and how long many Americans are living.”
-- Newsday, July 18, 2006
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What’s New . . .
In 1974 Congress passed ERISA to guard against mismanagement of pension funds, including those run by labor unions. Labor officials must account for revenues and expenses on an annual basis.
The DOL requires union officers and non-clerical employees to file a Labor Organization Officer and Employee Report, known as Form LM-30, if they, their spouses or minor children have interests or dealings related to pensions. The LM-30 should contain a record of all financial transactions whose workers the union represents or seeks to represent.
At an August 7 session of the American Bar Association’s annual meeting in Honolulu, Joyce Mader, a lawyer from Washington, D.C., cautioned the audience the government is in the process of revising LM-30 rules and that managers and trustees of union plans should prepare for fishing expeditions by the DOL’s Employee Benefit Security Administration (EBSA). “Get your expense policies in order before LM-10 and LM-30 come around,” she said, “or there is a ready-made discovery package as to how much was paid for individual trustees.”
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Since ports in the U.S. basically break down onto four areas – west coast ports, New York area ports, Charleston area ports, and Gulf ports – the longshoreman locals representing dockworkers in those districts negotiate contracts with the maritime associations representing shipping interests in those same areas. So-called “master contracts” usually set the outlines for such negotiations.
Master contracts in different areas may use different formulas for calculating pension contributions. Shippers’ contributions to pension funds are based on some combination of total man hours worked and/or the tonnage moved. Since imports into west coast ports, for instance, have been soaring for decades, it is in the unions’ interest to tie pensions to tonnage so pension levels can be maintained and increased even if technology, rather than manpower, is used to handle the increase.
Company contributions go into funds managed by the maritime associations, which are subject to increasingly strict government rules, and to union-managed funds where reporting rules are less strict.
The eligibility of individual dockerworkers for defined levels of pensions are crucial in union negotiations. Eligibility is obviously important to individual dockworkers, but structuring of pension levels also drives the total contribution shippers must make.
While elsewhere in the economy, pension benefits are rocked by bankruptcies and global competition, longshoremen pensions are tied in part to the volume of tonnage which continues to rise. In effect, rather than being hurt by overseas outsourcing, dockworkers are actually helped by it, and so their pension negotiations turn increasingly to job security and eligibility issues.
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In what could be a pace-setting contract for East-coast longshore labor negotiations, the International Longshoremen's Association's Local 1964 finalized a new 3 year agreement with Evergreen America Corporation covering 115 office clerical workers in the company’s Jersey City, New Jersey facility. Details have not been released but union officials assured members that the contract brings increases in wages, maintenance of health and pension benefits, as well as better job security. The settlement reportedly gives the company the flexibility it needs – based on continuing negotiations on the introduction of new technology – to remain competitive and responsive to customer needs. The new three-year agreement goes into effect retroactively on August 1, 2006.
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On Thursday, Aug. 17, President Bush signed into law the Pension Protection Act of 2006, which he called the "most sweeping reform" of US pension law since the enactment of the Employee Retirement Income Security Act (ERISA) in 1974. The compromise measure will have broad impact on the way future pension plans are structured and funded, but to a much greater degree on single employer plans than on the multiemployer plans more common for longshoremen. It will affect pension outcomes, not only for tens of thousands of employees whose plans are currently hanging on the contents of the bill, but for millions of Americans who do not follow pension issues closely.
Affected groups everywhere are weighing in with commentary. With some 44 million Americans covered by private pension plans, bipartisan support for private sector reform was made possible by not stirring up a hornet’s nest of debate about stricter funding guidelines for public employee defined-benefit plans, which remain generous and are woefully underfunded. In any case, the bill may well signal the end of the era private defined-benefit pension plans. As recently as 25 years ago, more than 80 percent of large and medium-sized companies offered such plans. Today, fewer than a third do.
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Late in the day on August 3, the Senate approved a compromise Pension Reform Bill and sent it on to the White House. It tightens rules for employers with defined-benefit pension plans and clamps down on companies that have fallen behind in meeting their funding obligations. Negotiated multiemployer plans common in longshore industries involve some 60,000 to 65,000 employers. Many have fewer than 100 employees, but some are large companies with potentially large liabilities.
Underfunding of Defined Benefit plans is now estimated at $450 billion. The bill requires that companies bring their plans to 100 percent funding within seven years, although certain major airlines are given a longer period. Plans that are seriously underfunded face restrictions, such as a ban on increasing benefits, and must make accelerated catch-up contributions. President Bush, who has taken a tough stance on forcing full funding of company promises, is expected to sign the legislation shortly.
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In June meetings in San Francisco, The Longshore Division Caucus continued preparations for what promises to be a contentious round of negotiations in 2008. With new government port security regulations and booming trade changing the workplace since the 2002 contract, Caucus members set out strategies on a wide range of fronts, with pension and health care issues high on the list. The Pension and Welfare Benefits Committee maintained that the industry can well afford the Longshore Divisions demand for Maintenance of Benefits (MOB). The report also stressed continuation of the longshore Defined Benefit Pension plan, and the importance of members being aware that their prescription coverage was to come through the ILWU Welfare Plan, not through enrollment in any Medicare Part D Prescription Drug Benefit plan.
Recent Longshoremen Industry Pension News
Union officials urged to disclose pension expenses
The backup for multi-employer pension plans
ILA Master Contract for East and Gulf Coast
ILA negotiates 3 year agreement with Evergreen America Corp
Pay and benefit fraud along the Boston waterfront
Bush signs pension reform bill into law
Pension bill: Many changes, mostly positive
Congress Reforms Corporate Pensions
Varied Response to Passage of Pension Bill
Plan may hasten shift away from pensions
Impasse over allocations to longshoremen’s pension fund
Pensioners Battle Over Health Insurance
Longshore Caucus prepares for 2008 negotiations
Long plagued by Johnny Friendlys, dockworkers fight to take back a mob-infested union
New York: Labor movement's broadest alliance since 1970s fiscal crisis comes together over health care, pensions
Longshoremen Leader Fallout May Help Fed Prosecution
Strike talk sweeps docks
AFL-CIO President John Sweeney Announces Billion Dollar Labor Sponsored Gulf Coast Revitalization Program
Bush Energy Dept. Backs Off Plan to Dump Pensions
Republican leaders push for pension reform bill
Big companies in red on their pension plans
Longshoremen Pension Questions & Answers
So you’re a longshoreman . . .
It’s good now … will it be good later?
Is my pension seaworthy?
Where do I go to find out about my pension?
Contact info for longshoremen
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