In the first of its kind, members of an international construction union voted to make drastic cuts in their already earned pensions. Members of Local Ironworkers 17 in Cleveland, Ohio approved serious cuts in January of this year to their pension plan. It was the first time ever the employees of a multi-employer pension fund had ever conducted such a vote, let alone voted to cut their own benefits. There are over 2,000 plan participants and while less than half actually voted, two-thirds of the votes did vote in favor of the cuts.
Was this a good decision by the union current and future retirees? Who knows? However, the pension fund was in what is known federally as a “critical and declining” status and therefore eligible under the new multi-employer pension reform act to take such drastic action. Cuts can only be made under the new federal law if the plan’s trustees conclude that all reasonable steps to avoid bankruptcy had been made and that only a suspension or cut in benefits would allow bankruptcy.
Following this action, apparently there are 4 other unions looking at submitting the same type of draconian cuts to their membership to forestall the inevitable.
Probably this was the only decision they could make: cut it to stop the bleeding and get some of your promised pension or do nothing and get nothing.