I have no problem with the concept and operation of the IAM pension fund.
There is one fact you need to be aware of, and one concern going forward. This is how it worked out over at U fleet, represented by the IAM.
The fact: Assume you are a 40 year old employee with 20 years of service. Your current pension is frozen, terminated, or whatever. The IAM negotiates the IAM pension fund into your new contract.
You CANNOT roll any of your old pension over into the IAM fund. We asked, we tried, and the answer was, the pension rules do not allow it. The jist of the answer was the fund did not want to get in a situation where the income from distressed and cancelled plans would not meet current and future obligations. From a fiduciary point of view, that is correct. Also, your years of service, so far as the IAM fund is concerned, begins the year you make contributions to the fund. So in our example, the 40 year old, with 20 years of service, has ONE YEAR OF SERVICE the first year he contributes to the plan. So at 55, he will have 35 years of company service, but only 15 years of service for retirement calculations in the IAM plan.
I find very interesting that UA is being told they CAN roll their retirement over into the IAM fund. U fleet was adamantly told, at every level including the fund manager, that the fund's rules did not allow a rollover.
We all need to check this out very carefully. Can someone at UA cite an authoritative source, because if you can, U fleet is going to have a lively conversation with the IAM.
The concern: The employees contributing to the fund are spread out across many employers. But the IAM base is shrinking - look at the IAM jobs lost at U and UA in the past few years. No matter how well the fund is managed, will there be enough assets down the line to meet the obligations. While the fund seems to be well managed, and currently in good condition, as best as I can tell, will that be the case going forward?
Now, a lot of major companies have screwed the pooch on DB plans. Certainly, the PBGC funding guidelines for and oversight of these plans was grossly inadequate. You will note in all of the plan terminations across industries - steel, airlines, etc. - no company I am aware of has been charged with or indicted for pension fund mismanagement. That speaks volumes as to the latitude companies have with your pension.
There is one fact you need to be aware of, and one concern going forward. This is how it worked out over at U fleet, represented by the IAM.
The fact: Assume you are a 40 year old employee with 20 years of service. Your current pension is frozen, terminated, or whatever. The IAM negotiates the IAM pension fund into your new contract.
You CANNOT roll any of your old pension over into the IAM fund. We asked, we tried, and the answer was, the pension rules do not allow it. The jist of the answer was the fund did not want to get in a situation where the income from distressed and cancelled plans would not meet current and future obligations. From a fiduciary point of view, that is correct. Also, your years of service, so far as the IAM fund is concerned, begins the year you make contributions to the fund. So in our example, the 40 year old, with 20 years of service, has ONE YEAR OF SERVICE the first year he contributes to the plan. So at 55, he will have 35 years of company service, but only 15 years of service for retirement calculations in the IAM plan.
I find very interesting that UA is being told they CAN roll their retirement over into the IAM fund. U fleet was adamantly told, at every level including the fund manager, that the fund's rules did not allow a rollover.
We all need to check this out very carefully. Can someone at UA cite an authoritative source, because if you can, U fleet is going to have a lively conversation with the IAM.
The concern: The employees contributing to the fund are spread out across many employers. But the IAM base is shrinking - look at the IAM jobs lost at U and UA in the past few years. No matter how well the fund is managed, will there be enough assets down the line to meet the obligations. While the fund seems to be well managed, and currently in good condition, as best as I can tell, will that be the case going forward?
Now, a lot of major companies have screwed the pooch on DB plans. Certainly, the PBGC funding guidelines for and oversight of these plans was grossly inadequate. You will note in all of the plan terminations across industries - steel, airlines, etc. - no company I am aware of has been charged with or indicted for pension fund mismanagement. That speaks volumes as to the latitude companies have with your pension.
