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Central Pension Fund Union
Pension Plans: Union-sponsored pension plans have a proud history in the United States. They were originally created to fill an important gap in the private pension system. Today, as more and more employers are either terminating their pension plans or replacing them with 401(k) savings accounts, the role of union plans has become even greater. The most recent statistics of the U.S. Department of Labor disclose that less than half of non-union workers (47%) are covered by pension plans of any kind, while more than three quarters of union workers (77%) have coverage. This means that union members are roughly 50% more likely than non-union workers to have pension protection. Union pension plans emerged in large numbers following World War II. In 1935 Congress had passed the Wagner Act which provided the first federal protection of the rights to organize and bargain collectively. The combination of the Great Depression and World War II delayed the full utilization of these rights until after the War. Several events in the years immediately following World War II accelerated the growth of union-sponsored pension plans. In 1946 the United Mine Workers of America negotiated the first industry-wide multiemployer pension plan. In 1947 Congress passed the Taft-Hartley Act which specifically authorized the establishment of pension plans by labor unions, so long as the contributing employers were given equal representation on the governing boards of such plans. Finally, in 1948 the U.S. Supreme Court favorably resolved a lingering legal question when it declared that the Wagner Act required employers to bargain with unions over pensions just like any other condition of employment. The combination of these events resulted in unions in all of America’s major industries demanding, and securing, defined benefit pension plan coverage for their members. However, for unions such as the International Union of Operating Engineers that represented workers in industries characterized by small employers and intermittent work patterns, negotiated pension coverage was a much bigger challenge than in other industries. Small employers could not afford to set up their own pension plans, and the majority of employees didn’t stay with one employer long enough to obtain a vested right to any benefit that might be available. Accordingly, commencing in the early 1950s, IUOE Local Unions throughout the United States and Canada began establishing multiemployer pension plans to meet the retirement security needs of their members. These plans were structured in compliance with the Taft-Hartley Act and permitted employers of any size to make pension contributions for the benefit of IUOE members, without any additional administrative costs or obligations. Members could freely move between participating employers with no breaks in coverage. In 1960 the International Union created the Central Pension Fund of the International Union of Operating Engineers and Participating Employers (CPF) to serve as a nationwide plan for all Local Unions that had not yet been able to offer pension protection to their members. Over the ensuing 39 years CPF has become by far the largest IUOE plan and serves as the flagship of the network of U.S. and Canadian Local Union plans that form a seamless web of pension coverage for all IUOE members. Today, as the commitment of corporate America to providing pensions is waning, union-sponsored retirement plans remain as rock solid protection for operating engineers and union members throughout society.
Originally
published in the International Operating Engineer |