Eastern Region

Pension & Welfare Notes

by Louis Bertini

The merger that successfully created a national Editors Guild in 1998 did not merge the Pension and Welfare plans for the East and West Coasts. This has led to some confusion about how the plans work. Nearly everyone in Local 700 agrees that the merger of the plans is desirable. But unlike the Guild itself, the plans are controlled by contractual trust agreements and run by union and management trustees. As a result, members cannot vote to

The plans are controlled by contractual agreements and can only be merged via negotiation with management.

merge the Pension and Welfare plans; management has an equal say and the issue must be negotiated, like any other deal point.

I have been a trustee of the East Coast plans since 1991. Because we have a smaller number of participants than the plans on the West Coast, we have faced some unique and sometimes difficult management challenges. Our primary problem is that with a smaller group, insurance costs can be difficult to contain. A welfare plan pays for insurance based on an average of the health care costs of its participants during a given year. With a smaller group, a few expensive medical cases can cause a sharp increase in insurance premiums for everyone. Such a situation did exist for us several years ago. But by moving to a different plan structure, which combined elements of traditional insurance and managed care, we were able to bring cost increases under control, and we have so far been able to keep them that way.

A small pension fund has similar problems. It cannot diversify to the same extent as a large fund. If we heavily invest in a particular sector of the market, and that sector experiences a drop, a lot of money can be lost. On the East Coast, our fund was never heavily invested in technology stocks. Consequently, we did not benefit much from the rise that sector experienced several years ago; however, we did not lose much during its recent collapse, either.

We have continued to work to improve the plan for members. Recently, we were able to raise the pension credit level from $65 to $70 per year. This credit is used to calculate a person’s monthly pension payment at their retirement. A person who works at least 1,500 hours of covered employment during the year will receive a full credit of $70 per year. Working less than 1,500 hours qualifies the person for a percentage of the credit, according to a pro-rated formula. At the time of retirement, a person’s years of employment are multiplied by the credit. For example, 20 years of employment multiplied by $70 equals a monthly pension of $1,400.00. While there are some other factors that affect the exact amount, this describes the basic formula.

Since the merger, eligibility restrictions for placement on the West Coast roster have been modified so that work experience in all 50 states is acceptable. This means that editors living in the Eastern Region are now able to work under the West Coast Basic Agreement. But Pension and Welfare benefits on a job must be paid according to the terms of the contract covering it and members working under the West Coast agreement cannot have their Pension and Welfare contributions sent back to New York. As a result, if their period of employment under the Agreement is too short for them to qualify in the West Coast plans, they lose their contributions for that job.

This is a situation that would be remedied if a merger between the East and West Coast plans could be negotiated. I believe that in the future, such a merger will be possible, and we are working hard to make it a reality. Until that time, benefits will continue to be provided through our existing plans, and we will keep improving them independently.