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July 22 — An Ohio-based multiemployer bricklayers' pension fund has become the latest fund to seek Treasury Department approval to reduce benefits.
The Bricklayers & Allied Craftsmen Local No. 7 Pension Plan, based in Austintown, filed an application on June 28 for benefit cuts under the 2014 law that opened the door to such moves, the Multiemployer Pension Reform Act, according to Treasury's website.
Under the MPRA, also known as the Kline-Miller Act, plan trustees must demonstrate to Treasury that proposed benefit cuts are necessary to prevent future insolvency. Treasury has considered several applications but has yet to approve one.
The pension fund didn't submit a request to the Pension Benefit Guaranty Corporation to partition the plan. In a partition, the PBGC transfers some liabilities from a plan in danger of becoming insolvent to a new plan—and provides financial assistance to that plan—allowing financially healthy employers to maintain the original plan.
A town hall was held for participants May 23 detailing the rescue plan. The plan won't be able to fund benefits in 2025 unless benefits are reduced, according to a notice to participants about the proposed reduction of benefits.
Forty-five percent of participants won't see a reduction in benefits, 36 percent will see a benefit reduction of 30 percent or more, 11 percent will see a benefit cut of 10 to 30 percent, and 8 percent may have benefits cut between 0 and 10 percent, according to the fund's website on the proposed cuts,
The fund joins the Teamsters Local 469 Pension Plan in Hazlet, N.J., and the Iron Workers Local 17 Pension Fund in seeking benefit cuts. Treasury denied the applications of the Central States, Southeast and Southwest Areas Pension Fund and the Road Carriers Local 707 Pension Fund.
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The full application for suspension of benefits is at: https://www.treasury.gov/services/Pages/Bricklayers-and-Allied-Craftsmen-Local-No.-7-Pension-Plan.aspx.
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