After healthcare, another issue weighing on me is pensions.
The decrepit pension system is another issue that affects many in the construction industry. A high percentage of the labor unions have underfunded pension plans. This was caused by a dramatic decrease in construction employment that directly reduced the contribution amount.
Our country also has an aging workforce so the number of people covered by most pension funds is rapidly increasing. Add to these factors a challenging investment environment and you can easily see why many pension plans are close to broke. How does this affect you?
The Pension Protection Act of 2006 applies the burden of funding a pension to the employer. So if you are signatory to a union and that union has an underfunded pension plan, you might have to contribute additional money to correct the shortage.
We frequently receive reports from our union affiliations across the country informing us of the precarious conditions of the local union pension plans. Very few plans are in a healthy standing.
One plan was placed in critical status and we were required to pay thousands of dollars in addition to what was originally part of the standard plan. It can be an unsettling experience to be confronted with a major payment after you have dutifully contributed according to the tenets of the original plan.