Annual Funding Notice & Green Zone Notice

The Pension Protection Act of 2006 (PPA), added requirements for measuring the financial health of multiemployer pension plans such as ours. PPA requires the Laborers' Pension Fund’s ("Fund"/"Plan") actuary to determine and certify the Fund’s financial status annually. If the Plan’s status is critical (“Red Zone”) or endangered (“Yellow Zone”), the Trustees must notify all plan participants, beneficiaries, participating unions and contributing employers in writing and take corrective action to restore the financial health of the plan. Retirement plans that are in good financial condition (what is referred to as the “Green Zone”) are not required to take any action.

In addition, the PPA expanded upon the amount of, and type of information that Pension Plans must send out to participants, beneficiaries, local unions, employers and others with an interest in the Plan. The Fund sends an Annual Funding Notice within four months after the Plan Year; therefore, the Fund has sent this notice each September from 2009 through 2020.

We are pleased to announce that our Plan is certified as being Green / good financial condition for the 2010-2011 through 2020-2021 Plan years.  Pension plans with green zone status must have a funded percentage of at least 80 percent and meet other conditions as well. Notice of our current PPA zone certification was mailed in September 2020, along with your Annual Funding Notice. The following table contains the Plan's historical funded percentage results:

Plan Year
Valuation Date
Funded Percentage
 
Plan Year
Valuation Date
Funded Percentage
2020-2021
June 1, 2020
84.9% (estimate)
 
2014-2015
June 1, 2014
84.0%
2019-2020
June 1, 2019
84.1%
 
2013-2014
June 1, 2013
82.1%
2018-2019
June 1, 2018
83.1%
 
2012-2013
June 1, 2012
82.4%
2017-2018
June 1, 2017
82.1%
 
2011-2012
June 1, 2011
83.0%
2016-2017
June 1, 2016
81.8%
 
2010-2011
June 1, 2010
81.7%
2015-2016
June 1, 2015
82.4%
 
 
 
 
             

To improve the Plan's funding, the hourly contribution rate has increased over the years (see following table for the Plan's historical contribution increases):

Effective
Date
Increase from Prior Rate
Contribution Rate
 
Effective
Date
Increase from Prior Rate
Contribution Rate
June 1, 2009
$2.20/hour
$8.37/hour
 
June 1, 2015
$0.60/hour
$10.72/hour
June 1, 2010
$0.20/hour
$8.57/hour
 
June 1, 2016
$0.85/hour
$11.57/hour
June 1, 2011
$0.25/hour
$8.82/hour
 
June 1, 2017
$0.75/hour
$12.32/hour
June 1, 2012
$0.20/hour
$9.02/hour
 
June 1, 2018
$0.25/hour
$12.57/hour
June 1, 2013
$0.50/hour
$9.52/hour
 
June 1, 2019
$1.04/hour
$13.61/hour
June 1, 2014
$0.60/hour
$10.12/hour
 
June 1, 2020
$0.60/hour
$14.21/hour
             

The Trustees approved the following benefit improvements effective June 1, 2019:

  1. For Pension Effective Dates on/after June 1, 2019, the benefit rate increases to $109 per year of service for all Pension and Bonus Credits earned prior to June 1, 2019 and after any five year absence from Covered Employment, but only if (i) participant earned at least 1/2 year of Pension Credits during the two Plan Years ending May 31, 2019 or (ii) works at least 1000 hours in 2 consecutive Plan Years during the five Plan Years ending May 31, 2024.
  2. Benefit rate increase to $111 per year of service for the Pension and Bonus Credits earned after May 31, 2019.
  3. One-time payment of $1,500 to eligible pensioners/beneficiaries in payment status as of June 1, 2019 with Pension Effective Dates prior to June 1, 2019 (eligibility excludes reciprocal pensions with less than 10 years of Pension Credits earned under the Chicago Laborers' Pension Fund in Westchester, IL).

In recent years, the Trustees have taken other steps to help ensure that the Fund is in good financial condition, which includes instructing the Fund’s actuary to anticipate higher levels of mortality, early retirement and disability. Increasing these predictions lowers the funding percentage; however, this helps mitigate the potential negative financial impact of these actions on the Plan’s financial condition and strengthen the Plan for the future.

The Trustees will continue to work closely with our plan professionals to monitor the financial markets and manage the Plan in a manner that will preserve its future health.