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 2024.
We are pleased to announce that our Plan is certified as being Green / good financial condition for the 2010-2011 through 2023-2024 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 2024, 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
|
|
2024-2025
|
June 1, 2024
|
90.9% (estimate)
|
|
2016-2017
|
June 1, 2016
|
81.8%
|
|
2023-2024
|
June 1, 2023
|
89.2%
|
|
2015-2016
|
June 1, 2015
|
82.4%
|
|
2022-2023
|
June 1, 2022
|
87.8%
|
|
2014-2015
|
June 1, 2014
|
84.0%
|
|
2021-2022
|
June 1, 2021
|
88.3%
|
|
2013-2014
|
June 1, 2013
|
82.1%
|
|
2020-2021
|
June 1, 2020
|
85.4%
|
|
2012-2013
|
June 1, 2012
|
82.4%
|
|
2019-2020
|
June 1, 2019
|
84.1%
|
|
2011-2012
|
June 1, 2011
|
83.0%
|
|
2018-2019
|
June 1, 2018
|
83.1%
|
|
2010-2011
|
June 1, 2010
|
81.7%
|
|
2017-2018
|
June 1, 2017
|
82.1%
|
|
|
|
|
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, 2024
|
$1.01/hour
|
$16.92/hour
|
|
June 1, 2016
|
$0.85/hour
|
$11.57/hour
|
|
June 1, 2023
|
$0.70/hour
|
$15.91/hour
|
|
June 1, 2015
|
$0.60/hour
|
$10.72/hour
|
|
June 1, 2022
|
$0.50/hour
|
$15.21/hour
|
|
June 1, 2014
|
$0.60/hour
|
$10.12/hour
|
|
June 1, 2021
|
$0.50/hour
|
$14.71/hour
|
|
June 1, 2013
|
$0.50/hour
|
$9.52/hour
|
|
June 1, 2020
|
$0.60/hour
|
$14.21/hour
|
|
June 1, 2012
|
$0.20/hour
|
$9.02/hour
|
|
June 1, 2019
|
$1.04/hour
|
$13.61/hour
|
|
June 1, 2011
|
$0.25/hour
|
$8.82/hour
|
|
June 1, 2018
|
$0.25/hour
|
$12.57/hour
|
|
June 1, 2010
|
$0.20/hour
|
$8.57/hour
|
|
June 1, 2017
|
$0.75/hour
|
$12.32/hour
|
|
|
|
|
The Trustees approved the following benefit improvement effective June 1, 2024:
The Benefit Accrual Rate increases to $122 for all Pension and Bonus Credits earned on/after June 1, 2024.
For Pension Effective Dates on/after June 1, 2024, the Benefit Accrual Rate increases to $122 per year of service for all Pension and Bonus Credits earned prior to June 1, 2024 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, 2024 or (ii) works at least 1000 hours in 2 consecutive Plan Years during the five Plan Years ending May 31, 2029.
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.