Posted:
November 19, 2010
The following AMO Plans bulletin has been mailed to AMO Pension Plan participants.
Under the Rules and Regulations of the AMO Pension Plan currently in effect, deep-sea and Great Lakes AMO pensioners receiving a monthly pension benefit who meet certain age, service and retirement date criteria under the Plan receive cost of living adjustments to their monthly benefits, as outlined in this notice.
Please be reminded that, effective January 1, 2011, there will be no further cost of living adjustments for any current or future pensioners and survivors, regardless of retirement date, as is required by the AMO Pension Plan rehabilitation plan adopted in compliance with federal law. As you know, cost of living adjustments are applied when the Consumer Price Index increases by three percent or more, which has not occurred in recent years.
Although the elimination of the cost of living adjustments effective January 1, 2011 had been previously announced in the March 5, 2010 edition of AMO Currents, the law requires that this notice be mailed to you.
The joint union-employer trustees of the AMO Pension Plan adopted the rehabilitation plan to restore stability to the Plan. The rehabilitation plan was required by the Pension Protection Act of 2006.
It is the hope of the trustees that the Plan will be sufficiently funded in the near future so that they may reinstate cost of living adjustments for the affected pensioners while continuing to ensure that stability is restored to the Plan as soon as possible.
A rehabilitation plan was required because the AMO Pension Plan was considered to be in "critical status" for the fiscal year that began on October 1, 2009. Under the 2006 law, a defined benefit retirement plan reaches critical status if, among other things, it is projected to have an accumulated funding deficiency within a specified period. The AMO Pension Plan had been driven to this point by the severe worldwide recession, the collapse of investment markets in 2008 and persistent market instability, and difficult funding requirements under the Pension Protection Act.
Under the law, a rehabilitation plan for a retirement plan in critical status must be based on reasonable actuarial projections and reasonably anticipated experience. The law provides that a rehabilitation plan may take up to ten years to restore stability to a retirement fund. However, the trustees intend to make every effort to move the Plan out of critical status as soon as possible while retaining a member's ability to receive an unreduced 20-and-out pension. It is for this reason that the rehabilitation plan provides for the elimination of cost of living adjustments for all pensioners and survivors regardless of retirement date.
If you have any questions with respect to the elimination of the cost of living adjustments, or any other matter concerning the AMO Pension Plan, please contact the Plan Office at (800) 348-6515, Ext. 7300.
Notice to AMO Pension Plan participants: elimination of COLAs
The following AMO Plans bulletin has been mailed to AMO Pension Plan participants.
Under the Rules and Regulations of the AMO Pension Plan currently in effect, deep-sea and Great Lakes AMO pensioners receiving a monthly pension benefit who meet certain age, service and retirement date criteria under the Plan receive cost of living adjustments to their monthly benefits, as outlined in this notice.
Please be reminded that, effective January 1, 2011, there will be no further cost of living adjustments for any current or future pensioners and survivors, regardless of retirement date, as is required by the AMO Pension Plan rehabilitation plan adopted in compliance with federal law. As you know, cost of living adjustments are applied when the Consumer Price Index increases by three percent or more, which has not occurred in recent years.
Although the elimination of the cost of living adjustments effective January 1, 2011 had been previously announced in the March 5, 2010 edition of AMO Currents, the law requires that this notice be mailed to you.
The joint union-employer trustees of the AMO Pension Plan adopted the rehabilitation plan to restore stability to the Plan. The rehabilitation plan was required by the Pension Protection Act of 2006.
It is the hope of the trustees that the Plan will be sufficiently funded in the near future so that they may reinstate cost of living adjustments for the affected pensioners while continuing to ensure that stability is restored to the Plan as soon as possible.
A rehabilitation plan was required because the AMO Pension Plan was considered to be in "critical status" for the fiscal year that began on October 1, 2009. Under the 2006 law, a defined benefit retirement plan reaches critical status if, among other things, it is projected to have an accumulated funding deficiency within a specified period. The AMO Pension Plan had been driven to this point by the severe worldwide recession, the collapse of investment markets in 2008 and persistent market instability, and difficult funding requirements under the Pension Protection Act.
Under the law, a rehabilitation plan for a retirement plan in critical status must be based on reasonable actuarial projections and reasonably anticipated experience. The law provides that a rehabilitation plan may take up to ten years to restore stability to a retirement fund. However, the trustees intend to make every effort to move the Plan out of critical status as soon as possible while retaining a member's ability to receive an unreduced 20-and-out pension. It is for this reason that the rehabilitation plan provides for the elimination of cost of living adjustments for all pensioners and survivors regardless of retirement date.
If you have any questions with respect to the elimination of the cost of living adjustments, or any other matter concerning the AMO Pension Plan, please contact the Plan Office at (800) 348-6515, Ext. 7300.