Checklist Item #20 Application for Approval of a Suspension of 

Benefits Under MPRA

Iron Workers Local 17 Pension Fund EIN: 51-0161467

Plan No.: 001

Does the application 

describe how the plan 

sponsor took into account

– or did not take into

account – the factors

listed in section 5.02 in the

determination that all

reasonable measures

were taken to avoid

insolvency. 

See section 5.03.

The Board of Trustees for the Iron Workers 

Local 17 Pension Fund has continuously worked, 

since 2002, through a series of new possible 

solutions to the funding problems facing the 

Pension Fund. The steps they took are detailed 

in Checklist Item #18. 

As stated in several other sections of this 

Application, the Board of Trustees had already 

determined that there was no reasonable 

measures that the Trustees could take to avoid 

insolvency, so the Trustees were working with the 

contributing employers, Groom Law Group and 

PBGC to negotiate the termination of the Pension 

Fund when MPRA was passed. 

Increases in Contributions & Reductions in 

Benefits Not Considered Reasonable Measure 

to Undertake at this Time

With this said, the Trustees did take another look at 

possible increases to the contribution rate and 

elimination of the remaining early retirement 

subsidies as part of the Suspension Plan. 

However, as described previously, the current 

active participants are already paying in such a 

large portion of their wages, any further reduction 

to their benefits or increase in the contribution rate 

would only decrease their support for this Pension 

Fund, while making the contributing employers less 

competitive at the same time. 

The Board of Trustees determined that the 

potential increase in contributions is detrimental to 

the continuing support of the active participants. 

These participants, if allowed to invest their current 

contribution in a defined contribution plan, would 

have $19,000 per year invested. Even in the 

unlikely event of a 50% loss in the market, they 

would end up with an $8,000 contribution to their 

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own accounts, not merely a $50.00 credit. While 

this argument does not reflect the long term value 

of the defined benefit plan over the defined 

contribution plan, it is one faced by the Board of 

Trustees in communicating with the participants 

and beneficiaries. Additionally, lowering the 

Benefit Credit rate below $50.00 was also 

considered, and determined to be unreasonable 

based upon the inequity between the contributions 

paid and benefit recieved. 

Further Reductions in Adjustable Benefits Not

Considered Reasonable Measure to Undertake 

at this Time

The Board of Trustees did review and evaluate the 

impact of the changes adopted in May 2009 under 

the initial Rehabilitation Plan when making this 

determination that they exhausted all reasonable 

measures. As of May 1, 2009, all adjustable 

benefits were eliminated with the exception of the 

subsidy to participants who earned 30 years of 

Vesting Service who retire between age 62 and 65 

and those participants that were determined by 

Social Security to be totally and permanently 

disabled. 

As part of the updated Rehabilitation Plan in 2011, 

the Board of Trustees struggled with elimination of

any further adjustable benefits and determined to 

leave only the small remaining subsidy for the long 

time (30+ year) participants who work until age 62

contributing almost $20,000 per year to receive this 

small subsidy. The bargaining parties added 

contributions to avoid eliminating the disability 

pension for those participants that are no longer 

able to work in gainful employment. The Trustees 

still believe that based upon the adverse impact the 

elimination of these last two adjustable benefits 

would have on the current participants, there were 

no other adjustable benefits to be eliminated 

Evaluation of Industry Rates and Economic 

Impact on Contributing Employers 

The Board of Trustees believe that the termination 

of the Pension Fund under a managed mass 

withdrawal may result in a better benefit for new 

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iron workers just joining the industry. It would also 

provide the contributing employers with a finite 

liability to this Pension Fund. However, the 

termination of the Pension Fund under a managed 

mass withdrawal would hasten the insolvency of 

the Pension Fund resulting in significant benefit 

reductions for the participants currently in pay 

status and those that have contributed for years 

toward these retirement benefits. Accordingly, 

when provided with this new legislative solution 

that would help avoid insolvency and place the 

Pension Fund back on a path to eventual recovery, 

the Trustees determined that filing the application 

was in the best interest of all participants and 

beneficiaries. Since there is no scheduled increase 

in contributions, it was also determined that the 

Suspension Plan would not harm the existing 

contributing employers.

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