The commission had no clue that the Laborers pension fund ignored its filing obligations for five consecutive years, Gullone admitted, until it audited the fund's file in the fall of 1995. They are required filings. The financial statements have since been filed with the commission. Early in 1996, the commission began asking the Laborers pension fund to file a strategic plan within a time limit to show how it intended to eliminate the unfunded liability, a requirement of the Pensions Benefit Act. After several delays and extensions, the commission has given the fund a June 30 deadline to file the strategic plan.
Sources say it plans to seek a further extension.
If the commission becomes convinced that the plan has dug such a deep hole that it can't ever get out, it has the authority to dissolve the pension fund and order the remaining assets to be paid out to members. While the contribution level is determined by collective agreements between individual employers and union locals, it is usually 80 cents per hour worked. Malcolm Hamilton, a pension actuary with William M. Mercer Ltd., said multi-employer pension funds can develop an unfunded liability when premiums plummet due to high unemployment. But if a multi-employer fund is prudently managed, Hamilton said, its unfunded liability should remain manageable. He noted that, as a group, pension funds have enjoyed unprecedented prosperity in the past few years.