Central States Official Defends Retiree Rep Selection

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By David B. Brandolph

Nov. 9 — Despite criticism from Central States Pension Fund participants, a fund official said that he wouldn't change its process for selecting the rescue plan retiree representative.

Thomas C. Nyhan, executive director and general counsel of the Central States, Southeast and Southwest Areas Pension Fund, told Bloomberg BNA that “there wasn't anything he would change in the selection process the fund trustees used” to pick the representative. He and the rest of the fund's trustees were satisfied that in picking Susan Mauren for the retiree representative post, they picked a capable and independent person, he said.

Attorney George M. Kraw, a partner with Kraw Law Group in Mountain View, Calif., told Bloomberg BNA that given the controversy surrounding the Central States choice, he would recommend that trustees of multiemployer plans going through the benefit suspension process in the future make the process for selecting a retiree representative “completely transparent, tell the retirees how the fund is going about selecting the representative and allow the membership some input in the ultimate selection.”

Mauren has drawn bitter criticism from some of the fund's participants, as many Central States Pension Fund retirees face severe cuts to their retirement benefits.

No Guidance 

Nyhan said there wasn't any road map or any other guidance available for the trustees to use in deciding how to go about selecting the retiree representative. As the Multiemployer Pension Reform Act—also known as the Kline-Miller Act—provides that a representative must be selected at least 60 days before a fund files its rescue proposal, Nyhan said the trustees saw this as suggesting that Congress “wasn't looking to have the representative conduct an extremely in-depth review.”

Although the law permits the trustees to appoint a retired trustee as the representative, the existing trustees decided that the representative needed to be totally independent from the board, Nyhan said.

The Kline-Miller Act, passed in late 2014, gives financially distressed multiemployer pension plans the option to reduce retiree benefits and provides details on the process .

In searching for the right candidate to represent the retirees, Nyhan said the trustees looked for someone with a “demonstrated track record of advocacy—someone with the ability to intelligently hire law firms and actuary firms” that the person would need for assistance.

Nyhan said that he was skeptical of giving participants a say in the selection process since there were many different interest groups within the participant population and no one representative would could represent them equally.

Nyhan said that the trustees found what they were looking for in selecting Mauren for the post in that she had served as a principal in a local union and was appointed as the head of the International Teamster Women's Caucus. He said she was totally independent of the fund and did her job well by keeping the trustees informed about the participants' concerns.

Kraw said he would make the selection process more open, but that the fund's retirees would have been upset with whoever was selected to serve as the retiree representative given some of the circumstances involved: that benefit cuts were inevitable to prevent the fund's insolvency and that the cuts needed to be distributed unequally.

While the trustees may have in theory seen the benefit of giving retirees more choice in selecting the representative, the trustees would have been rightly concerned that an overly forceful representative could have been disruptive to the process and jeopardized the ultimate goal of preventing the fund's insolvency, Kraw said.

To contact the reporter on this story: David B. Brandolph in Washington at dbrandol@bna.com

To contact the editor responsible for this story: Phil Kushin at pkushin@bna.com