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BATH — Members of Bath Iron Works’ largest union are unsure whether they can still retire after 30 years, after a letter outlining changes to the pension fund triggered confusion.
Jay Wadleigh, business representative for District 4 of the International Association of Machinists and Aerospace Workers, confirmed last week that a letter was sent to union members detailing changes to the pension plan. The wording left some concerned that they’d no longer be able to retire after 30 years of work unless they’ve already turned 65.
It’s left some workers wondering whether they should retire before the changes take effect.
Local union officials stressed there’s no cause to worry until they’re able to get more clear answers about what the changes mean for employees.
Wadleigh said these are changes pension fund trustees made to strengthen the fund, rather than changes handed down by General Dynamics. These are changes that apply to 300,000 union members across the U.S. While there will be impacts on Local S6 participants, it’s too early to say what those will be, according to union officials.
One part of the letter that caused alarm was the notice on the elimination of unreduced age/service pensions for the “20 and age 62” pension and “30 and out” pension.
Currently, participants are eligible to receive their full normal retirement age benefit if they retire with 20 years of certified service and have reached 62 years of age; or with 30 years of certified service, regardless of age.
According to the letter, it is possible participants wouldn’t be eligible for a full retirement benefit until age 65.
The IAM National Pension Fund is one of the largest retirement plans in the U.S., with assets exceeding $18 billion, according to a May 1 post on the IAMAW District Lodge 141 website. The post notes that the pension fund’s board of trustees voluntarily chose to move the fund into “red zone” status, requiring employers to pay a surcharge to help improve the fund’s status.
According to a video statement by Ryk Tierney, executive director of the pension fund, it remains well-funded at 89%.
The statement adds that the news “isn’t exactly as bad as it sounds. For example, the decision will not impact current retirees or any accruals that have already been earned.” Beneficiaries are protected by federal law requiring a rehabilitation plan. This would reduce some variable benefits like death benefits, payout time frames and accruals. These reductions will not impact basic benefits collected at normal retirement.
Most of the changes are related to the way the fund collects subsidies from employers, according to the release.
Based on the notices beneficiaries got in the mail, there are already many people rushing to retire Wadleigh said, but he cautioned that they should wait and see how the changes play out.
“I don’t want to cause a panic,” he said May 3.
It would be Dec. 31, 2021, at the earliest before workers under 65 wouldn’t be able to retire after 30 years, Wadleigh said.
Concern among workers prompted Local S6 to post a message on its Facebook page April 30.
“The recent changes enacted by the Corporate and Union trustees of the IAM National Pension Fund have left all of us with many questions and uncertainty,” the post states.
“At this point we are being cautious about putting out any information without 100% certainty that it is accurate,” the post adds. “As soon as we have further clarification and confirmed answers, we will pass it along to the membership.”
Once educated on how the different variables impact each person, the local union leaders will have to choose one of two rehabilitation plan options to negotiate with BIW.
“Through our collective bargaining agreement the company is required to fund (pension plans) at a certain rate for every hour we work, as is negotiated,” he said.
A Bath Iron Works crane hovers over the Bath landscape.