International Pension Update 

FCA International CEO, Anthony Darkangelo, invited Fund Administrator Dan Williams to provide an update and have a conversation on the status of the plan, asset allocation, collections, and audit procedures.

 

Executive Summary 

The International Painters and Allied Trades Industry Pension Fund is making steady progress under the Rehabilitation Plan adopted in 2022. The current funding status has reached 70 percent.

In recent years, the Fund has greatly improved its ability to safeguard assets. Annual collections now exceed $20 million and expanded audit activity ensures consistent oversight. With new procedures in place, audits are conducted on regular cycles, with added checks for new and existing employers.

On the investment side, the Fund has modernized its portfolio with a balanced allocation strategy that emphasizes cost savings, efficiency, and professional oversight. Returns in 2024 were strong at +10.5%, and 2025 performance is tracking positively at +7.5% year-to-date. While work hours have dipped slightly compared to 2024, the Fund’s diversification and proactive strategy position it to remain resilient.

Overall, the Fund is strengthening its foundation through more effective collections, smarter audits, and a modernized investment approach. Contractors can be confident that the Rehabilitation Plan is helping stabilize the Fund today while building a more secure future for tomorrow. The following provides further detail on these initiatives and their impact.

 

A Look into the Past:

When starting from the beginning, it puts into perspective how IPAT got to where it is today. In 2008 the Global Financial Crisis caused IPAT to lose 23% of its value. Investment returns could not reach the expected level. The result of this crisis enacted the Funding Improvement Plan (FIP). During 2013-2017, fund contributions increased only $0.16. The second FIP was introduced but did not provide the expected results. Trustees were able to see that more action needed to be taken, so the Rehabilitation Plan was established.

 

The Rehabilitation Plan

In efforts to get the fund to where it needed to be, the trustees replaced key professionals in oversight roles. New legal, actuarial, collection counsel, investment advisors and an oversight manager were hired. Starting in 2024, payroll audits expanded. The main goal was to focus on consistent contributions along with investment performance.

 

Challenges

The fund is part of 1,083 active collective bargaining agreements with 6,694 active rates and serves over 25 District Councils where each council is structured differently. Some District Councils handle their reporting on their own, others use third-party administrators. With so many councils and different reporting strategies, the information received gets harder to articulate and understand. The fund continues to work toward a consistent way of messaging out to contractors and participants.

 

Investment Objectives

The Pension Fund’s investment strategy is designed to balance long-term stability with responsible growth. To achieve this, the Fund has identified the following clear objectives:

  1. Reduce fees- Cut unnecessary fees and eliminate extra layers of charge to keep more returns working for the fund.
  2.  Simplify portfolio- Streamline the number of managers and strategies to make the portfolio more transparent and easier to manage.
  3. Outsource private market for best leverage- Use specialized partners to access private market opportunities.
  4. Index where appropriate- Apply Strategic index placements in areas where they provide reliable cost-effective growth.
  5. Active/ Engaged board to manage expectations- Hold professionals accountable by setting clear expectations.
  6. Monitor Professionals and Asset Managers- Regularly review and track investment managers and professionals to make sure they are meeting the Fund’s goals.

 

Collections and Audits: Tracking the Money

Collections Activity

From 2012-2022, the Fund collected approximately $16 million, which averaged $1.6 million per year. With the changes that were made in 2022, the Fund collected approximately $20 million per year, totaling almost $75 million to date. It should be noted that the total includes all collection activity- audit findings, delinquencies, and withdrawal liability. The total does not include any payment plan activity that the fund is entered into with delinquent contractors.

 

Audit Activity

Local auditors collected data and share costs for the Fund, averaging anywhere from 250- 450 audits per year from 2012-2023. All employers are routinely audited on a three-year cycle. All new employers are audited every six months. When any issues or disputes arise, communication is needed for employers to review and dispute any findings. All information shared with the fund is confidential. Refusal to provide records to the auditor where the funds legal professionals have to get involved will result in additional charges.  The trustees urge anyone receiving communication on a dispute to contact the fund office and/or FCA International. Audit costs apply only when issues are found; if no issues are found, there is no charge.

 

Asset Allocation

The Fund’s assets are diversified across multiple investment categories to balance growth and stability. As of the most recent update, the allocation includes 33% public equities, 24% fixed income (with 5% cash match), 10% private equity, 10% private debt, 8% real estate, 8% infrastructure, 5% opportunistic credit, and 2% cash. This mix is designed to reduce risk through diversification while maintaining steady returns, ensuring the Fund can meet its long-term obligations to participants and employers.

 

Unfunded liability 

Withdrawal liability is an employer’s share of the Fund’s unfunded liability and is calculated by the Fund’s actuaries. Each year, contractors receive an annual notice with key plan data, similar to the benefit estimates sent to participants.

The combination of annual notices and available estimates is designed to balance transparency with administrative efficiency. Employers are encouraged to review their annual notice carefully and, when necessary, request an updated withdrawal liability estimate to better understand their potential obligations. In certain cases where data must be analyzed by an outside actuary, fees may apply.

 

Goals of the Rehabilitation Plan

The Rehabilitation Plan adopted in 2022 is designed to strengthen the Fund while protecting both contractors and participants. The focus is on stability, fairness, and long-term sustainability—without placing added cost burdens on contributing employers. The following are the key goals of the plan:

  • Preserving earned benefits.
  • No contribution increase.
  • Fairer penalties for participants who left the industry.
  • Providing meaningful early and special early retirement options.
  • Simplify accruals.
  • Conservative financial modeling.

 

Experience since Trustees adopted Rehabilitation Plan 

Since the Trustees adopted the Rehabilitation Plan in 2022, the Fund has seen both challenges and progress. Hours worked have remained relatively stable, averaging between 58–61 million per year, while investment performance has rebounded strongly after early losses in 2022.

  • 2022 – hours expectation was 52 million, actual hours were 58 million, investment returns -8.8%
  • 2023 – hours expectation was 53 million, actual hours were 61 million, investment returns +9.7%
  • 2024 – hours expectation was 54 million, actual hours were 58 million, investment returns +10.5%
  • Through September 2025, year-to-date investment returns are tracking at approximately +7.5%, while work hours are running about 3% lower than 2024 levels.

 

The Fund continues to take proactive steps to strengthen its financial position, protect earned benefits, and provide stability for both participants and contributing employers. With stronger collections, expanded audits, a modernized investment approach, and the Rehabilitation Plan in place, the Fund is better positioned for long-term sustainability. Contractors are encouraged to stay informed through the annual notices, review updates carefully, and reach out when additional guidance is needed. Together, these efforts help ensure a more secure future for our industry and its workforce.