By now you have likely received a communication from the International Painters and Allied Trades Industry Pension Fund regarding certain changes to the Fund. We have received a number of questions about that communication.
The below is a high-level summary of the information in the communication, distilled to the points contractors need to know:
- For the 2022 Plan Year, the Fund’s Trustees have elected to be in Critical Status (or Red Zone). The reason the Trustees chose to do so was that it gives them access to additional ‘tools’ to strengthen the Fund’s funding position.
- The Rehabilitation Plan adopted by the Trustees does not require any change to the contribution rates so long as the contribution rate under the CBA meets what was required by Funding Improvement Plan 2 – to our knowledge, all local area agreements’ contribution rates are consistent with FIP2.
- The Rehabilitation Plan includes an Alternate Schedule 2, which requires higher contribution rates and offers higher accrual rates. Your District Council may wish to increase the contribution rate to take advantage of this.
- The Rehabilitation Plan also implements certain modifications to participants’ benefits, including changes to early retirement benefits, and eliminates certain forms of payment, including lump sums. Refer to the communication from the Fund office for more information.
- The Fund’s accrual rate has been modified to vary based on the Fund’s trailing three-year average return on investments. This Variable Benefit Accrual Rate (VBAR) will more closely align participants’ accruals with the Fund’s investment returns, and also eliminates the possibility of a year in which there are zero accruals. The communication from the Fund office provides a detailed explanation of the mechanics of the VBAR.
Pension, Red Zone, Rehabilitation Plan, FIP2, Funding Improvement Plan