Brothers and Sisters,
It was another great turnout with a full house at the General Membership Meeting on July 26th, where we honored the new Lifetime Members who received their Gold Cards, and I reported on the State of the Union. Local 150 grows stronger with each work season based on factors that we closely monitor and actively try to influence, these include current and upcoming projects, organizing, property investments, legislative action, negotiations, and safeguarding our healthcare, retirement and pension plans. At Local 150, we keep a number of plates spinning at once. By doing this, we ensure our union not only protects its members, but also working men and women across the country.
For the sake of ensuring the topic of the bucket repayment hits home, I’d like to start by sharing what I explained toward the end of the meeting. I walked through the history of the Pension Fund, starting back in 1999, when the Plan was 129% funded with sufficient reserves. The IRS warned us the Plan was overfunded. Thus, we were required to spend our reserves, which was done by retroactively increasing the multiplier to 3.6%. Just a few years later, the government reversed course and required plans to keep a credit balance (financial reserve) and the multiplier was then reduced to 3%. In 2009, the Plan experienced a nearly $1 billion loss in assets due to the financial collapse. This caused our funding level to drop down to 75%, landing us in what the government termed the Yellow Zone. The government then enacted the Pension Protection Act, which required us to get our funding levels up above 80% or the Green Zone. To accomplish this, the multiplier was reduced to 2%, and Supplemental Contributions, otherwise termed as “Bucket Contributions” were started in October 2009.
In 2019, after a 10-year climb back, our funding level reached 81%, putting our Plan back into the Green Zone – five years ahead of original projections. A special membership meeting was held in Tinley Park, and a vote was taken to end Bucket Contributions effective March 31, 2020. Of course, we all know what happened in March of 2020, the pandemic hit, sending the investment markets into free fall. Acting quickly, it was decided to delay freezing the Bucket Contributions. By March of 2021, the investment markets completely reversed course, and the Plan reached 100% funding on the strength of a 34% return on investments, the largest return in the history of the Plan. Based on this, I announced at the July 2021 General Membership meeting that we could afford to freeze the Bucket Contributions retroactive to April 1, 2020. This resulted in an increase to all active members’ pension benefits. In addition, we would issue a 13th check to retirees, representing 40% of the individual’s Bucket Contributions, plus 2% interest. Lastly, I announced that the Plan’s assumed rate of return would be reduced from 7.5% down to 7% allowing us to de-risk our investment portfolio four years ahead of schedule. After this review, I reported that as of our latest valuation, March 31, 2024, our Plan stands at 92% funded.
If you’re saying, this is a lot of numbers, and asking what does it really mean? I shared with those in attendance we could once again afford to pay out more bucket money and that half of the bucket contributions will be returned.
Here is the plan: Retired members, who received a 13th check (40% bucket repayment) in December 2021, will receive another 13th check this December for an additional 10%, plus 2% interest to bring their total bucket repayment to 50%. Individuals who retired between July 1, 2021 and before July 1, 2024, will receive a 13th check in December equal to 50% of their bucket, plus 2% interest. All remaining active members will have 50% of their bucket contributions converted to a pension benefit increase effective June 1, 2024. The Fund Office Staff is working to provide all impacted members with a letter detailing the specifics of your situation.
We continue to monitor our funding levels; and when we can afford to do so, it is our intention to continue our path to repaying the full bucket.
With that great news, I’ll step back and talk about some of the ever-important factors that got us to the point where we could repay half of the bucket. As I’ve stated over the last few months at meetings and in my reports, Local 150 has faced tough negotiations this season. In fact, it was the biggest year for contracts that we have ever had in the history of the Local. Juggling these negotiations, while ensuring work continued was key to our approach. Some of these were our largest contracts, which happen to be taking place at a time when we have seen rampant inflation over the last few years.
As we approached negotiations, we had to make the argument that we needed to catch up from inflation before we even could start considering raises. This made for a lot of back and forth, even pushing us to the final hour on some agreements. However, Local 150 has been able to use our strength of market share to our advantage to bring back strategic and important wins.
Some of the first agreements out of the gates were our rental shop agreements that set the bar high. We continued with our crane barn agreements, which unified measures that protect our members in each district. Huge for us were the Districts 1-2-3 and 5 Heavy- Highway-Underground and Building agreements. Other major contracts also ratified include the Indiana Highway, Heavy, & Railroad Construction Agreement (ICI-LRD) (10-County) (HHU); and Northern Indiana Independent Contractors Group (14 County) (NIICG) (HHU), as well as Republic Services, Landscaping, agreements for Surveyors and Technical Employees, the Diving Addendum to the Great Lakes Floating Agreement, several stand-alone agreements for material producers, and numerous agreements in our public sector. All of these agreements are significant wins for our members, with some of the best contracts for unions in North America.
At the meeting, I shared that it was a tribute to the incredible work being done that every one of these contracts was brought in without having to stop work. We have our Brothers and Sisters in the quarry industry to thank for this. By holding tight, and never bending during an eight-week strike in 2022, every contractor we work with today saw our solidarity. It’s a powerful force, and now, when Local 150 comes to the table, they know we’ve done our homework and that we mean business. To date, Local 150 Officers, business agents, and staff have worked on over 125 agreements; and we are not finished. I’m happy to share the total transfer of wealth in these three-year and five-year contracts is nearly a staggering $1 billion.
The projected man-hours in 2024 is 26,863,198, which is a step over last year’s amazing number, and on target to surpass the high-water mark in 2008. This many man-hours is taking place at a time when we have lost some major jobs, like the shutdown of the Peoples Gas project and Nicor pipeline replacement program. Even with that, we are healthy and continue to have more work for members in each of our eight districts.
Thus far in 2024, the Illinois Department of Transportation lettings have exceeded the past several years for the same period, as 791 projects have been let totaling $2.45 billion. In June alone IDOT let $730 million. The Illinois Tollway had capital expenditures reach almost $400 million as of May, with total 2024 capital expenditures expected to be $1.4 billion. Additionally, we recently had the announcement of the largest highway improvement program ever for Fiscal Year 2025-2030, totaling $29.65 billion. This funding program is for transportation projects that will include work for our members for the next six years. It includes $1 billion for I-290 improvements in Cook County scheduled for coming years; $800 million of I-80 work to continue through Will County, and $625 million for I-90 reconstruction.
A massive amount of funding through the Federal Infrastructure Bill is slated for Illinois. The Federal Highway Authority has $2 billion for Fiscal Year 2025 for Illinois and an additional $908 million for Fiscal Year 2025 for Illinois’ public transportation. This boom has been helped by the Inflation Reduction Act (IRA), which provides tax credits to create jobs across solar, wind, storage, and other clean energy industries, and includes bonuses for businesses that pay a prevailing wage.
In addition, $3.2 billion has been dedicated for a nationwide competitive grant program for certain types of transportation projects. The CTA received $111 million from this program for Blue Line improvements. The City of Chicago received $2 million from this program for a “reconnecting communities” plan on Chicago’s west side – along the I-290 corridor. The City of Rockford received $7.1 million from this program for an interchange reconfiguration. Thus far, Illinois has received from IRA programs a total of $1.3 billion, and there is potential for more.
The Indiana Department of Transportation lettings for Local 150’s jurisdiction total $165 million for 2024 so far with 34 projects having been let. In federal infrastructure money, $1.3 billion has been earmarked for Fiscal Year 2025 for Indiana from the Federal Highway Authority. An additional $137 million has also been designated for Fiscal Year 2025 for Indiana public transportation.
Across Local 150’s jurisdiction, enormous economic investments are taking place. From solar farms to ethanol plants, to battery plants, to data centers, our members’ talents are needed. Illinois, just a day before the membership meeting, landed the Illinois Quantum and Microelectronic Park. It is the first U.S.-based quantum computer and initially comes in at $1.5 billion and will grow. This is the future of computers, and it will be in our backyard at the old U.S. Steel South Works on Lake Michigan. Projects of this magnitude are important for our members. We have over 350 projects that range from $5 million all the way to $11 billion. This work alone, outside of numerous other projects the local takes on, totals $90 billion.
Beyond solidifying work for members, Local 150 also has looked for opportunities to further endow our pension through investments in infrastructure and land. I’ve shared our venture with the Houbolt Road Bridge. In just three short years, our investment has more than doubled to the current value of $27.4 million. We also purchased 70 acres in New Lenox near Silver Cross Hospital ten years ago. We currently are under contract for $4 million for a 163% return on investment. Roughly a year ago, Local 150 purchased 22 acres of land near the old Sears Headquarters in Hoffman Estates. We’ve received an offer for a portion of the land for just over $1 million more than what we paid for it. Another key investment project for the union is the roughly 700 acres of land we own adjacent to our Training Center in Wilmington. At this stage, we are working with interested parties in co-investing in a data center campus.
The growth of our benefit funds is directly linked to Local 150’s efforts in capitalizing on work, legislative changes, and investment opportunities.
With Health and Welfare, we continue to partner with the Midwest Coalition of Labor for our health centers. In May we held the Grand Opening of the center at our District 5 Hall in Utica. As part of Local 150’s new District 8 Hall in Rock Island, plans now include a health center that will service members, as we continue to look for ways to increase access to quality care for you and your families.
Including all the credits in members’ credit banks, the Health and Welfare Fund has around $873.5 million in assets between the active and retired plans. The average credit bank as of July 2024 is 43,300 credits, which equates to coverage for a family on Plan A to just over 20 months. That is an important number because when we had the collapse of the housing market in 2009, we ran out of health care. At that time, the most someone could bank was eight months, and no one had that. We’ve made changes to our fund so that would never happen again, and to further insulate our members from economic downturns.
Our Retirement Enhancement Fund (REF), administered by Fidelity, has grown to $485 million in assets since the fund was started in 2008. I’ve shared this before, but as a reminder, we successfully negotiated down the fees paid to Fidelity and are currently receiving revenue credits from Fidelity.
The Retiree Medical Savings Plan (RMSP), which to this day I say is one of the best things our administration has done for the nearly 16 years we have been in office. This plan targeted a 4% return for members and was started to provide a vehicle for younger members to cover retirement healthcare costs while we gradually reduced our retiree subsidy. When I took this over, it was a $2.2 billion unfunded liability. This was money we didn’t have that came with an obligation to cover members and their families for healthcare for life. This plan helped eliminate the burden of this liability. Today, Local 150 RMSP accounts hold an average of $43,800, with total assets for the RMSP at $1.21 billion.
In 2018, the Apprenticeship Fund was in the red with a $10 million deficit. We spent all the money we had to retool member training as industries shifted. Today, we have more than $83 million in the Apprenticeship Fund. Because of this, we just broke ground on the indoor training arena expansion, which will double the size of the indoor arena at the Training Center. Local 150 will have the largest indoor arena in the country. The $16 million project is being paid for by interest from reserves of the Fund, so when the project is complete, it will be covered at no loss to the Fund.
The Pension Fund currently has more than $5.6 billion, and remember we were down to close to $2 billion after the Great Recession collapse. All of you, our members, should be so proud of what you did. Our Brothers and Sisters bit the bullet and took cuts in their multipliers to bail out the Pension Fund. It wasn’t anyone’s fault except Wall Street, and no one went to jail for that. Our own government was trying to kill our Pension Fund because it gives us leverage as a unit, as a mass of people. They wanted you to instead have IRAs. Yet, Local 150 said, “No.” We kept our power and fixed it on our own. Today, I’m pleased to share that our total fringe benefit funds assets are now just over $8.26 billion.
We have a lot to be proud of as Local 150 members. We heard from Lifetime Members who shared they owe everything they have to Local 150. They spent their careers working and knowing that one day they could retire. With the initiatives we have taken, we are establishing a stronger, more resilient union for all of us. My goal is to ensure the things we put in place now will keep Local 150 thriving for a hundred years and beyond.
This year and in the coming years, we anticipate a substantial influx of large projects through ongoing programs. With the workload on the horizon, our next step is to determine how to ensure we have enough members for all these projects. It’s a good problem to have for just this one busy little local in the Midwest.
United We Stand, Divided We Fall.