Labor Trust Funds
Federal law requires health and welfare, pension and apprentice training trust funds be jointly administered by management and labor. The MCA maintains the sole authority to appoint the management trustees for these three trust funds. The MCA executive vice president automatically serves as the lead management representative and alternates annually as the trusts’ chairman position with the union business manager. The trustees have the fiduciary responsibility and liability for setting sound operating policies to ensure the continuation of defined benefits promised to union workers.
Health and welfare
The Local 525 Plumbers and Pipefitters maintains three multi-employer trust funds; a health and welfare, a pension and a Joint Apprentice Training Committee (JATC). The health and welfare plan was established in 1951.
In 2018, the labor and management trustees of the Plumbers & Pipefitters Local 525 health and welfare trust fund approved a plan to control runaway healthcare costs while simultaneously offering its participants top-notch quality care. As part of this plan, the trustees hired a clinic manager, began tenant improvements on two clinic facilities, one in the northwest and one in Henderson, brainstormed and trademarked the name Collective Union Health and commenced with hiring the best and brightest providers in Southern Nevada. These Collective Union Health clinics offer top-of-the-line primary care, preventative care, gynecological, pharmacy and laboratory services that cover the majority of basic health needs. These modern facilities staff four dedicated full-time medical professionals and are open six days a week.
Website: https://wp.activatehealthcare.com/collectiveunionhealth/
Pension
The pension plan originated in 1962 and the JATC took form in 1965.
Withdrawal liability often serves as a deterrent in a contractor’s decision to become signatory. The Local 525 pension fund, as a multi-employer fund, relies on each contractor to pay their share toward the bottom line of this fund. The nature of the pension fund is that it may from time-to-time be underfunded and therefore may not have enough assets to cover the fund’s expectant liabilities. Even in this circumstance of underfunding, Local 525 employees are still entitled to their full pension benefits. In which case, the responsibility for this unfunded amount – whether through inadequate contributions or inadequate investment returns – falls squarely on each signatory contractor and therefore each is liable for their piece of the vested benefits that must be paid, even if the signatory contractor leaves the pension plan altogether. Therefore, each signatory contractor “owns” a proportionate share of the unfunded liability, also known as, withdrawal liability. Withdrawal liability is therefore an exit fee for signatory contractors who cease contributions to a multi-employer defined benefit pension plan with unfunded vested benefits.
Fortunately, for signatory contractors contributing to the Local 525 pension fund, the fund is exceptionally well-funded. In fact, the pension trustees approved a Fresh Start, with respect to withdrawal liability, effective June 30, 2019. This means that any withdrawal liability signatory contractors have accrued since the fund’s last Fresh Start in July 2015 was wiped clean. This is highly unusual and a true testament to the management of the fund.
Additionally, the pension fund trustees dedicated numerous hours to researching long term strategies for funding and benefits aimed at keeping the fund healthy and in the green zone for years to come. As such, in September 2019, the pension trustees approved a first-ever Funding and Benefits Policy for the pension plan. The policy establishes a set of funding ratio triggers, the projected year those triggers are expected to occur and ties those triggers to benefits, such as a pension credit increase. The goal of this policy is to get the pension plan to 120 percent funded by or about the year 2038. Adopting this policy is crucial for several reasons, 1) it helps manage the union employees’ expectation of pension credit increases, 2) stabilizes the plan for future recessions and 3) minimizes or eliminates contractors’ withdrawal liability going forward.
Third-Party Administrator
BeneSys, Inc. is the third-party administrator (TPA) for the UA Local 525 health and welfare and pension trust funds.
Website: https://www.benesys.com/
JATC
The Joint Apprenticeship Training Committee (JATC) is charged with the responsibility of recruiting and training apprentices to meet the ever-growing needs of the mechanical signatory contracting industry. The JATC oversees the direction of funding and operations for the Pipe Trades Training Center. This is a joint and equal commitment from both labor and management to provide quality tradesmen through superior training. In addition to the five-year apprenticeship programs, the training center also offers continuing journeymen upgrade education opportunities. It is also a testing facility for the United Association Welding Certification Program.