A defined benefit pension plan is a type of pension plan in which an employer promises a specified monthly benefit upon retirement that is pre-determined by a formula based on the employees earnings history, tenure of service and age rather than depending directly on individual investment returns. One man had the foresight to look to the future to ensure workers in America had an opportunity to retire with dignity. That man was Harry Van Arsdale Jr. In the1939 negotiations, for the agreement to begin January 1, 1940 one of the first concepts agreed to was the establishment of a joint committee, composed of three employer representatives, and three members of Local 3, IBEW to study the feasibility of creating a pension plan for the New York electrical industry. On January 1, 1941 the Pension Plan of the Electrical Industry was put into effect as a result of the negotiations that took place the prior year. It was the first Multi-Employer Pension Plan established in the country. It marked a milestone in the history of employer and employee relations and cooperation.
The pension plan we have today has undergone many changes in design and function. The original plan only paid a Standard Pension. The plan today has a Disability, Early, Vested and a Standard pension payout. The pension benefit at the beginning was an all-inclusive $40.00 per month. The pension plan now pays out $85.00 per year of service for “A” rated members, a far cry from the original implementation. In the Agreement and Working Rules dated January 1, 1944, it specifically provided for the administration of the Pension Plan of the Electrical Industry by the Joint Industry Board of the Electrical Industry. The contributions up until 1945 were made solely by the participants. That changed in the collective bargaining agreement in 1945 which stated it is necessary for employers to begin contributing on a fair basis to the pension plan.
The pension plan has evolved over the years but one thing has remained constant, the retired and active participants of the pension plan of the electrical industry have had no need to worry about present and future pension benefits. Through wise and prudent investments and excellent management, the funds have grown to be able to accommodate all present commitments and all future obligations as well. Independent actuaries regularly review and study the soundness of the plan and assure the trustees the plan is adequately funded.
The Pension Trust Fund pension plan currently has 11,495 pensioners enjoying the benefits of the first multi-employer pension plan in the United States. On April 1, 2017 the plan paid out $17,554,126.88 in monthly benefits to retired participants. The Pension Trust Fund pension plan will retire approximately 1,100 participants yearly from all divisions of the electrical industry. Fortunately the Pension Trust Fund is in excellent financial shape. It is in what the actuaries refer to as the Green Zone. The certification by the accounting firm indicates the funding percentage of the plan is 81.7% funded as of October 1, 2015 and the plan has assets of $3,126,694,649. The most recent zone certification has the plan at 81.8% funded as of October 2016.
We all are or will be the recipients of this innovative and at the time of its creation a revolutionary idea. The Pension Trust Fund is one of the essential building blocks to a healthy and dignified retirement.
To use a quote from the former Business Manager Thomas Van Arsdale when he was speaking to a group of retirees in 1988, “All of you here today are beneficiaries of your collective contributions in building a healthy, viable electrical industry in the city of New York and a strong and vibrant union. We who have inherited your legacy appreciate all that you accomplished.” We should be proud of what we did and how it has come into existence. We must do our part to pass it on to future generations of Local 3; it is our duty and obligation to those who came before us.
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