In August 2006 the Pension Protection Act (PPA) became law. While the funding provisions of the
PPA for multiemployer plans will not become effective until 2008, IUOE Local
Unions and participating employers have inquired what the status of the Central
Pension Fund (CPF) would be if the PPA were applicable today.
The PPA ranks the funded status of multiemployer pension plans depending
upon a plan’s current and projected funding. A plan is in the Red Zone
(Critical) if it has a current funded percentage less than 65%. A plan
is in the Yellow Zone (Endangered) if it has a current funded percentage
of less than 80%, or projects a credit balance deficit within seven
years. A plan is in the Green Zone (Healthy) if it has a current funded
percentage greater than 80% and does not have a projected credit balance
deficit within seven years.
Based upon its most recent actuarial valuation, the Central Pension Fund
falls within the Green Zone (Healthy) of PPA, with a funded percentage
of 93% and no credit balance deficit projected within seven years.
|
|
|
|
Pension Protection Act Funding
(FY2006) |
|
|
|
100%
CPF: 93%
|
GREEN ZONE
(Healthy) |
|
80% |
YELLOW ZONE
(Endangered) |
65%
0% |
RED ZONE
(Critical) |
|