Frequently Asked Questions

According to communication I've received, reduced payments will start May 1, 2017. Am I reading this correctly and what is the timeline for review of the Pension Rescue Plan and implementation of benefit changes?

How and when will the vote be conducted?

Won’t Bernie Sanders' Keep Our Pension Promises Act (Senate Bill 1631) save the Bricklayers Local No. 7 Pension Plan?

I’m currently an active employee not yet receiving benefits. How will the Pension Rescue Plan impact me? Will I continue to accrue benefits for the time I work after the Rescue Plan is implemented?

I am disabled and won’t be able to return to work. I don’t receive a disability pension, but I receive disability benefits from the Social Security Administration. Will my pension be protected from benefit reductions?

Why can’t you just give me my money back? Can you take the current assets in the Pension Plan and provide a lump-sum payment to each participant or beneficiary in the fund to invest on his or her own?

I’m retired. What does it matter to me that active participants continue earning a meaningful benefit based on future employer contributions?

How did the existing Pension Plan become so severely underfunded?

What is the Multiemployer Pension Reform Act of 2014 (MPRA) and what does it have to do with benefit cuts?

Why is the U.S. Department of the Treasury involved in decisions about our pension benefits?

What is the Pension Benefit Guaranty Corporation (PBGC)? If it’s supposed to help failing pension funds, what happens if it goes broke?

If the Bricklayers 7 Pension Plan runs out of money and the PBGC steps in, how much will my benefit be? How is that benefit determined?

Why is there such urgency to implement the Pension Rescue Plan? Don’t we have 10 years before the fund becomes insolvent?

Is there a possibility of transitioning to a 401(k) or hybrid model, as discussed at a recent U.S. Senate Subcommittee meeting in Washington?

Can't the Pension Plan recoup some of its investment losses under the Employee Retirement Income Security Act (ERISA)? Wouldn’t that help our financial position?

If benefit cuts go into effect under a rescue plan, can you guarantee that the Pension Plan will remain fully funded forever—and no further cuts will be needed in the future?

How were the levels of cuts chosen and how will they impact members’ current benefits?

I heard some other plans making cuts limited the size of the cuts to no more than 50% of the current benefits. Why was that not done for this Rescue Plan?

What if I think my proposed benefit reduction was not calculated correctly?

I received an estimate titled “How Your Monthly Benefits Will Be Affected.” Did everyone receive the same kind of estimate?

On my estimate, there is a line that says “Non-forfeited contributions to the Plan on your behalf total…” Then, there’s a line that says “1.3% of the non-forfeited contributions after adjustment for retirement age and form of benefit equals…” But the number that’s showing is not 1.3% of the non-forfeited contributions.  Why is that?

Why am I being “penalized” for retiring early and for the form of benefit I elected?

I will be between ages 75 and 80 on May 31, 2017. My estimate says that because of my age the amount of my benefit reduction is less than it would be if I was below 75. Can you explain that?

Why is May 31, 2017 such an important date?

According to communication I've received, reduced payments will start May 1, 2017. Am I reading this correctly and what is the timeline for review of the Pension Rescue Plan and implementation of benefit changes?

The U.S. Department of the Treasury has up to 225 days after the Pension Rescue Plan is filed to review it. We filed on June 28, 2016, with the proposed timing of the suspensions effective May 1, 2017. That means if everything is approved, the first reduced check will in fact be May 1, 2017. The U.S. Department of the Treasury has a list of all plans that have applied for benefit suspension, but it can take up to 30 days for plans to show up on their website.

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How and when will the vote be conducted?

Once the Treasury approves the Rescue Plan, you will have 30 days in which to vote. The federal government will conduct the voting, and ballots will be sent via U.S. Mail, although you will actually cast your vote on-line or via an automated phone system.

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Won’t Bernie Sanders' Keep Our Pension Promises Act (Senate Bill 1631) save the Bricklayers Local No. 7 Pension Plan? 


Senate Bill 1631 – the Keep Our Pension Promises Act (KOPPA) sponsored by Bernie Sanders (I-VT) – is one of nearly 500 bills currently referred to the Senate Committee on Finance. To put that in perspective, only 30 bills reached the next step of being reported by the committee last year. Of those 30, just three were Democrat-sponsored bills.

In today’s political climate, Senator Sanders has very few Republican allies. Some extraordinary things would have to happen in order for KOPPA to reach the Senate floor for a vote.

More importantly, KOPPA saves pensions by changing rules for something called a partition, where the PBGC takes over payments for part of a pension plan. However, the Bricklayers Local No. 7 Pension Plan does not qualify for the partition rules because the maximum benefit suspensions have not been made. Under KOPPA, new rules would be added for partitions, but they would be based on special treatment of bankrupt and withdrawn employers. These are not issues that impact the Bricklayers Local No. 7 Pension Plan and it would not qualify. Many of you are aware of the failure of the Central States Pension Fund due to its high profile. KOPPA exists in no small part because of Central States, and it would help that fund to stay solvent because many of its problems are related to special situations in that industry with bankruptcy and withdrawal liability.

Read more about KOPPA in our blog post.

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I’m currently an active employee not yet receiving benefits. How will the Pension Rescue Plan impact me? Will I continue to accrue benefits for the time I work after the Rescue Plan is implemented?

If pension benefit reductions are implemented under the Multiemployer Pension Reform Act of 2014 (MPRA), they will apply to benefits earned up to the implementation date of a Pension Rescue Plan. Moving forward, additional pension benefits, based on future employer contributions, will continue to accrue in addition to your MPRA benefit. If the Rescue Plan is approved and implemented, active participants will accrue additional benefits based on a 0.30 to 1.00 percent rate of employer contributions (you received communication about a change to this in April 2016). This additional accrual will be added to your existing MPRA benefit. Should an employer increase its contribution rates, the amount of additional monthly accruals will also increase.

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I am disabled and won’t be able to return to work. I don’t receive a disability pension, but I receive disability benefits from the Social Security Administration. Will my pension be protected from benefit reductions?

No. Under MPRA, participants receiving disability benefits from a multiemployer pension fund are protected from reductions under a pension rescue plan. Participants receiving disability benefits from the Social Security Administration will be subject to benefit reductions under the Rescue Plan unless the participants also receives disability benefits from the Bricklayers Local No. 7 Pension Plan.

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Why can’t you just give me my money back? Can you take the assets in the current Pension Plan and provide a lump-sum payment to each participant or beneficiary in the fund to invest on his or her own?

Federal law prohibits underfunded multiemployer plans like ours from making large lump-sum payments.

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I’m retired. What does it matter to me that active participants continue earning a meaningful benefit based on future employer contributions?

Contributions from employers into the Pension Fund are agreed to during union wage package negotiations. If active union brothers and sisters weren’t continuing to accrue pension benefits, they’d probably ask employers to put the money in another retirement investment vehicle. If that happened, there would be even less money to invest and pay retirees. That would lead to more drastic reductions. We need active participants to stay in the Pension Plan.

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How did the existing Pension Plan become so severely underfunded?

A combination of a volatile economy, a declining housing market, fewer active union brothers and sisters and poor government oversight have led the Pension Plan to approach insolvency. Read the full story about how we got here.

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What is the Multiemployer Pension Reform Act of 2014 (MPRA) and what does it have to do with benefit cuts?

The MPRA was signed into law in December of 2014. It allows trustees of severely underfunded multiemployer pension funds to develop rescue plans. Those plans may include benefit reductions for active workers and retirees, in order to save the funds. This law was based on the suggestions of a diverse group of industry experts, including trustees of many large multiemployer plans.

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Why is the U.S. Department of the Treasury involved in decisions about our pension benefits?

The U.S. Department of the Treasury, the Department of Labor and the Pension Benefit Guaranty Corporation (PBGC) are tasked with making sure the PBGC isn’t wiped out by the failure of multiemployer pension funds. To accomplish this, they review every multiemployer pension fund rescue plan created under the MRPA.

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What is the Pension Benefit Guaranty Corporation (PBGC)? If it’s supposed to help failing pension funds, what happens if it goes broke? 

The Pension Benefit Guaranty Corporation (PBGC) is a government agency that insures pensions, covering payments if they run out of money. But when the PBGC assumes pension payments, many benefits are automatically reduced to a guarantee level based on years of service. There are more than 200 multiemployer pension plans covering 1.5 million people, many of which are likely to fail in 10 years. Because of that, the PBGC is also expected to run out of money. When the PBGC fails, benefits will disappear, including any that Bricklayers Local No. 7 members are receiving. Politicians say that if the PBGC goes broke, it will not get a bailout.

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If the Bricklayers 7 Pension Plan runs out of money and the PBGC steps in, how much will my benefit be? How is that benefit determined?

The PBGC benefit amount is based on your current benefit and your years of service. You take your current benefit and divide it by your years of service. For example: Participant A had 30 years of service and would have earned a monthly benefit of $4,600.00 at normal retirement age. However, Participant A chose to take the early retirement benefit of $3,300.00. $3,300.00 divided by 30 = $110.00. So Participant A is receiving $110.00 per year of service.

But if the PBGC steps in, the benefit amount cannot go above what is called the PBGC guarantee. In most cases, that guarantee is $35.75 per month times your years of service. So for Participant A, his PBGC monthly benefit will be $35.75 x 30, or $1,072.50 per month. Compare this to the fact that under the Rescue Plan, this Participant would receive $1,216.80 per month, or $144.30 more per month than the PBGC guarantee.

You should also keep in mind that if the PBGC steps in, it can cut benefits for nearly everyone, including people who are age 80 or over or who are receiving disability benefits from the Pension Plan. Under the Bricklayers 7 Rescue Plan, individuals age 80 or over and those receiving disability benefits from the Pension Plan will see no cuts. People between the ages of 75 and 79 will receive smaller cuts than other retirees. And, under the Rescue Plan, your benefit cannot be lower than 110% of the PGBC guarantee.

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Why is there such urgency to implement the Pension Rescue Plan? Don’t we have 10 years before the fund becomes insolvent?

Any delays in approval will end up increasing future proposed cuts up to when the Pension Benefit Guaranty Corporation (PBGC) might step in, putting all benefits at risk. The current level of the PBGC guarantee may decrease in the future due to multiple pension plans requiring help.

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Is there a possibility of transitioning to a 401(k) or hybrid model, as discussed at a recent U.S. Senate Subcommittee meeting in Washington?

Anything discussed by the subcommittee is not actionable until it is turned into law. These proposals are also currently concerned about future benefits and do not deal with past underfunding. Right now the focus must be on strengthening the Pension Plan for current retirees and active workers. That said, we are committed to looking into any viable options to support the Pension Plan once they become legally accessible.

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Can't the Pension Plan recoup some of its investment losses under the Employee Retirement Income Security Act (ERISA)? Wouldn’t that help our financial position?

Statutes like ERISA were set up so pension funds could recover losses if there is a “breach of duty.” But our Pension Plan didn’t suffer from a breach of duty or any other legal cause of action. The Pension Plan’s assets were mainly affected by the same rough economy that affected all other investors in a similar way.

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If benefit cuts go into effect under a rescue plan, can you guarantee that the Pension Plan will remain fully funded forever — and no further cuts will be needed in the future?

The trustees are mandated by MPRA that any rescue plan they put in place must be designed so the Pension Plan doesn’t run out of money in the future. While that would have been their goal regardless, the trustees are aware that the fund is affected by factors that are well beyond their control, like market vulnerabilities and the number of active participants. In building the Rescue Plan, the trustees did take those factors into consideration in order to make the Pension Plan viable for years to come.

However, the law also requires cuts not be larger than needed. Therefore, the Rescue Plan will have some vulnerability to future conditions.

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How were the levels of cuts chosen and how will they impact members’ current benefits?

Under the proposal, the benefits of four groups of participants will not be cut or changed:

  1. Participants who are age 80 or over at the time the cuts are made (only partial cuts can be made for participants between ages 75 and 79).
  2. Participants who were disabled under the terms of the plan at the time of their initial retirements.
  3. Participants whose benefits are already less than 110% of the PBGC-guaranteed benefit level at the time the cuts are made.
  4. Participants whose benefits are less than the proposal’s targeted amount (i.e., less than 1.4% of total contributions made on each participant’s behalf).

It should be noted that any plan put forth (PBGC or otherwise) would ask a small number of members to take a significant cut and a majority of participants to make some sacrifice. But in the end, it all adds up to a Pension Plan that remains solvent for you and all your union brothers and sisters. 

 The following is a chart showing the size of the proposed benefit cuts and the percentage of members whose benefits would be impacted. This is based on retirees and beneficiaries still living when statements were issued, active members, and inactive members who are vested or have not had a two year break in service:

Size of Benefit Cuts

% of Participants Impacted

None

45%

0.01%  to 10%

8%

10.01% to 30%

11%

30.01% or more

36%

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I heard some other pension plans making cuts limited the size of the cuts to no more than 50% of the current benefits. Why was that not done for this Rescue Plan?

If one group were cut less, then another group would need to be cut more to achieve the needed savings. The trustees felt it was more important to preserve a larger portion of the medium-sized benefits, and that the largest cuts should be made to the largest benefit amounts.

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What if I think my proposed benefit reduction was not calculated correctly? 

If you disagree with the calculation on your estimate, you can appeal to the Board of Trustees. Your appeal must be in writing and it must include your name, current address, and the date of the decision you are appealing. You may also send any other comments, documents, or information you feel will help the Trustees in considering your appeal. 

Send your appeal to:

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

33 Fitch Blvd.

Austintown, Ohio 44515

For more information, please contact the Plan Office at (330) 270-0453 or refer to your Summary Plan Description.

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I received an estimate titled “How Your Monthly Benefits Will Be Affected.”  Did everyone receive the same kind of estimate?

No, the estimates are unique depending on your situation.  For example, retirees under 75 received one kind of estimate while active members under age 62 received a different kind of estimate.  But the numbers on your estimate are unique to you.

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On my estimate, there is a line that says “Non-forfeited contributions to the Plan on your behalf total…”  Then, there’s a line that says “1.3% of the non-forfeited contributions after adjustment for retirement age and form of benefit equals…”  But the number that’s showing is not 1.3% of the non-forfeited contributions.  Why is that?

First, this language is on estimates for people currently receiving monthly benefits. Second, it is 1.3% of non-forfeited contributions with a reduction based on your age at retirement and also based on the type of benefit you chose. This is because your benefit must last longer if you retire early or if you have a beneficiary who will continue getting a benefit after you pass away.

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Why am I being “penalized” for retiring early and for the form of benefit I elected?

This is not a penalty.  Instead, it is an adjustment based on the length of time over which you are likely to receive your benefit payments.  The younger you are when you start receiving a benefit, the longer the Plan must pay you benefits.  In other words, the Plan will need to pay benefits to a 58 year old for more years than to someone who is 62.  Similarly, if you elect a form of benefit that pays benefits to a beneficiary after you die, the plan is expecting to pay benefits for a longer period of time.

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I will be between ages 75 and 80 on May 31, 2017. My estimate says that because of my age the amount of my benefit reduction is less than it would be if I was below 75. Can you explain that?

Under Federal regulations, individuals who are between ages 75-80 at the time the benefit suspension begins are partially protected.  The regulations require the Plan to apply a formula to the individual’s benefits to account for how close the individual is to age 80. This is because the law says individuals who are age 80 or over cannot have their benefits reduced (however, remember that if the rescue plan fails and the PBGC steps in, there is not a definite protection depending on age). This partial protection only applies to someone who is between ages 75 and 80 as of May 31, 2017.

Please note that this protection does not “kick in” when you turn age 75. So if you are 74 years old on May 31, 2017, you do not get the benefit of the partial protection when you turn 75. The law requires that the Plan take a snapshot of ages as of May 31, 2017. Your age on that date determines whether you get this age-based protection or not.

The formula for calculating the age production adjustment is as follows:
Suspension benefit before age adjustment + (months over 75 / 60) * (current benefit - suspension benefit before age adjustment) = Age protection adjustment

You can see this formula being used in the last illustration on the Rescue Plan detailed page. In that example, our retiree is 75 years, 6 months old and has a current benefit of $1,697. Their suspension benefit before age adjustment would be $826 under the Rescue Plan. So the formula would work in this manner for our sample retiree: $826 + (6 / 60) * ($1,697 - $826) = $913.

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Why is May 31, 2017 such an important date?

The Plan decided that if the rescue plan is approved, the benefit suspensions will begin May 1, 2017.  Under Federal regulations, the Plan is required to look at individuals’ ages as of the end of the month that the benefit suspension begins.  So, May 31, 2017.

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