An actuarial report prepared for the trustees of our Local 804 pension plan reveals several alarming facts about our pension fund that Local 804 members were kept in the dark about.

The report from AON consulting revealed that:

• The Local 804 pension fund had a $378 million shortfall as of November 2006 and approximately $100 million of this was due to poor investment performance.

• Our Local 804 pension fund earned dramatically substandard returns on its investments for a decade. AON Consulting reported that, “The average investment returns over the past five years have been a little more than 3%; over the past 10 years the average return has been just 6%.

• Local 804’s pension investment returns were worse than the Central States Pension Fund over the same five and ten-year periods-and worse than other funds managed by AON Consulting.

AON reported that, “For comparison purposes, we looked at another substantial fund we work with and the average returns over similar periods were 6% over the last 5 years and nearly 10% over the past 10 years.”The AON actuarial report was used by the company to force through the 30 percent cut in our pension accrual in 2006.

Fortunately, Local 804 members united last year and won a contract that reversed those cuts and stopped the company from eliminating 25 & Out pension benefits for new hires.

The AON report only came to light because it was leaked by the trustee from IAM Local 447 to try to justify voting with the company and cutting our pensions.

We all understand that the stock market has its ups and downs. Investing is for the long term and not every year is going to deliver the stock market gains that you hope for.

But how is it that our pension fund suffered a five and ten-year stretch of substandard investment performance? And why were Local 804 members never told a thing about it? On the contrary, members were repeatedly assured that our pension fund was in great shape.

That’s why Local 804 members have proposed that our bylaws be amended to mandate a report on our pension and health and welfare funds at every Local 804 meeting.

We should never be blindsided about our pensions again.

Click here to read the AON report for yourself.

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