President's Corner

 

May 2019 Pension Fund Returns to Green

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President’s Corner

The day has finally come, Brothers and Sisters. After a decade-long roller coaster ride of volatile market returns and senseless government intervention, our Pension Fund has fully emerged from the Great Recession. As of April 1, 2019, we are back in the “green zone.”

As many of you know, the fiscal year for the Pension Fund ends each year on March 31, and on that day, a “snapshot” is taken of investment values and actuarial performance data, which are used to calculate the funding percentage for the year. The final numbers are still being calculated and will be certified in the weeks to come, but we know that our total funding percentage is back above 80 percent.

After the markets fell deep into the red at the end of last year, I wrote about the need for a turnaround in the markets, and it came. The rally in the first quarter was not enough to get us back to the 7.5 percent return that we need to break even, but the abundance of work last year helped us exceed our projected work hours by enough to get across the line.

For 10 years, I have waited for this day, and the joy that I feel is matched only by the pride that I have in the foresight and judgment of our membership. After all, these years have been spent adapting to a market loss that was almost inconceivable and then pivoting with every hit the markets delivered and every mandate dictated to us from Washington. Sometimes it seemed like for every step we took forward, we were pulled back two strides by something completely outside of our control.

My fellow trustees and I faced some difficult decisions in the aftermath of the financial crisis. There were no quick fixes, but moves had to be made quickly. Like any family navigating a financial blow, we had to have some frank conversations with the membership about the seriousness of what we faced and what it would take to right the ship.

I have often said that the average Local 150 member is more educated on the workings of a pension fund than many union officials I have met, and I am not kidding. To support the solutions, members had to understand the problems, and no matter how complicated the issues we faced were (or how many slides I walked you through at the General Membership Meetings), you never failed to impress me with your intelligence and vision. Few things in my career have given me more pride in this union than the amount of thoughtful questions and comments I got from members on topics that sometimes even confuse benefit consultants.

In the days when we had to lower the multiplier and create a reserve fund, nobody was jumping for joy. These adjustments meant sacrifice on every member’s part, and even though they weren’t popular, members understood that we had collectively committed to a disciplined approach to getting healthy without gimmicks or cutting corners. It wouldn’t be quick, and it sure wouldn’t be easy, but we took a path with as little unnecessary risk as possible.

The most recent move, which brought us back to green even earlier than we had projected, came after a Sunday morning meeting at the Rosemont Convention Center in 2017. By taking an unprecedented approach and shifting existing benefit dollars into the Pension Fund, we were able to expedite our return to the “green zone” by approximately two years. Like many of the strategies that our union has implemented over the course of its history, this one was an original, and the gravity of the decision required the final say to be left to the membership. After the plan was presented and dozens of questions were asked, the membership voted unanimously to accept the plan. That plan was intended to get us back to green, and without your solidarity, we wouldn’t be here today.

Since we began tightening our belt in the aftermath of the financial collapse, we’ve looked forward to the day when we could take steps to implement improvements to the Pension Fund. I can’t tell you how many times I’ve been asked when the multiplier is going to be raised. While I can’t give you an answer to that question, I can tell you that by putting ourselves back in the green, we have given ourselves options, which is a great place to be.

Right now, we are working with our consultants, actuaries, and Benefit Fund staff to determine our strongest options and set out several potential paths forward for our Pension Fund. When we met in 2017 to vote on the last big move, I told you that once we got back to green, we would have another meeting where the members would vote on what to do next. Once we have finished exploring various options and determining their viability, we will set a date for that meeting and let you make the call.

Sorting through these scenarios will undoubtedly be a complex process, but I’ll take our options today over those from a decade ago all day long (and twice on Sunday). For now, let’s all take the opportunity to celebrate this milestone and reflect back on how far we’ve come by working together. Thank you all for proving once more that Local 150 is the greatest union in America.

There is one more piece of news from this month that I am proud to share with you. As many of you know, we have spent more than three years in court fighting against the Village of Lincolnshire, Illinois over the municipal “right-to- work” ordinance it passed in 2015. The National Labor Relations Act only empowers states and territories to pass these laws, and Lincolnshire clearly is neither.

We have won every level of the lawsuit against the village, which is being represented by the same lawyers who brought the Janus case. After being handed their lunch in appeals court, Lincolnshire petitioned the United States Supreme Court to hear the case. Frankly, given the Supreme Court’s recent decisions, whichstretch the law in any way necessary to hand a loss to workers, taking this issue there becomes a roll of the dice.

To avoid this situation and bring Illinois law clearly in line with federal law, we’ve supported a state law that outlaws local “right-to-work” ordinances. Disgraced former Governor Rauner used his veto power to defeat that legislation. This was the issue that inspired Lance Yednock, a Local 150 member who has served as an Executive Board member and business representative, to run for office and make a change.

After winning a seat in the House of Representatives, Yednock served as the chief sponsor on a new bill to ban local “right-to-work” laws, and he worked tirelessly to ensure its passage in the legislature. Governor J.B. Pritzker signed the bill into law on April 12, wiping out Lincolnshire’s illegal ordinance and signaling Illinois’ rejection of these attacks on workers. Our enemies will surely continue their efforts to lower the bar for workers, but when we stand and fight together, my money will always be on us.

United We Stand, Divided We Fall.