UNDERSTANDING OUR TRUSTS
As part of our series on the nuts and bolts of the union, we will look at benefit trusts. You have probably heard the phrase “multi-employer pension” or “health and welfare plan” or “Taft-Hartley Trust” at some point in your career. Simply put, these are your benefits. Below, we’ll break down how these plans function and how they’re funded.
A multi-employer trust is what we have as union carpenters. This means that many employers contribute to funding the plan. This differs from other single-employer plans, where employees receive contributions so long as they remain employed with that employer. As our work is transient in nature, union carpenters often work for many employers throughout their careers. Our benefit structure ensures that you continue building pensions and healthcare as long as you are a union carpenter, no matter which contractor you work for.
Signatory contractors contribute money for every hour a union carpenter works into the different funds. These amounts are spelled out in your schedule A in your collective bargaining agreement. The plans are overseen by a Board of Trustees, which has an equal number of representation from both employers (Management Trustees) and the union (Labor Trustees).
The Trustees are the plan guardians and act only in the best interest of the plan and its members. The Board acts as fiduciaries, which means they act solely in the interest of the plan participants (UBC members) with the exclusive purpose of providing benefits to them. They carry out their duties following the plan documents and protecting the health of the plan.
The goal of all Trustees is to ensure the plan stays well-funded and the benefits of members, retirees, and future members are there when members need them. To help manage multi-million dollar and billion dollar plans, the Board of Trustees will hire trust professionals to advise. Trust attorneys, actuaries, investment consultants, and auditors all help manage funds under the board’s guidance. It takes a team of people to make sure benefits are there when you go to retire or need to visit a doctor.
It takes UBC carpenter hours for contractors to pay on to keep the plan funded, which is why organizing and growing our union is essential. It takes trust administrators at the trust offices to provide members with plan information and service.
Unions are some of the last groups to have these types of pension plans. Many employers have turned to 401(k) instead. As union carpenters, we are lucky to have both in many areas. This is the power of collective bargaining and strength through unionization.
Multi-employer plans have a lot of moving pieces. While we tried to give a short overview of how they work, there is always more to learn. The International Foundation for Employee Benefits is an excellent resource for information. Check them out HERE