The Alaska Ironworkers Pension Plan has withdrawn its application seeking a suspension of benefits with the Treasury Department, but says it intends to submit a new application on or before Dec. 29.
In its original application, which was submitted March 30, the plan’s benefit suspension proposal called for the reduction of all benefits earned through June 30, 2016, by 34.5% across the board for all participants and beneficiaries.
The amount of the benefit due to each individual would have been multiplied by 0.655 to calculate the new amount. It also would not have reduced any benefit below 110% of the level guaranteed by the Pension Benefit Guaranty Corporation PBGC.
The Alaska Ironworkers Pension Plan was determined to be in critical and declining status for the fiscal year starting July 1, 2016, by its actuary, which said the plan would become insolvent by July 2030.
“The trustees have determined that a level percentage suspension to all benefits is the fairest option available, as well as being the easiest option to understand, and will have the greatest likelihood of success in this attempt to rescue the plan,” said the plan in its now-withdrawn application.
“In particular, the union representatives on the board have determined that any suspension that provides for different treatment for different groups of participants or beneficiaries would generate controversy and hard feelings within the group, and would not be fairer than a flat-percentage reduction.”
It’s unclear which, if any, of the changes suggested in the original application the plan will keep when it reapplies for a suspension of pension benefits. Charles Dunnagan, attorney for the Alaska Ironworkers Pension Plan, was unable to respond to questions in time for publication.