To: Local Unions and Employers with employees in the
NAS Metal Trades Welfare Fund
From: The Board of Trustees
The economic downturn continues to put financial pressure on employees, employers and on the National Automatic Sprinkler Metal Trades (“NASMT”) Welfare Fund itself. In the last year, many families have lost eligibility for NASMT Welfare Fund coverage. The number of hours of work on which contributions to the NASMT Welfare Fund are made is down significantly from recent years, and the recovery is expected to be slow in coming.
The Trustees are faced with financial projections that show the Fund’s reserves being significantly depleted over the next few years. Increasing medical costs, new federal requirements and dwindling reserves would make it difficult for the plan to recover if the Trustees did not take immediate action.
It was in this environment that the Trustees advised Participants late last year of significant changes to the benefits provided by the NASMT Welfare Fund that were effective January 1, 2011.
As you almost certainly know, health care costs continue to rise on a nationwide basis. The NAS Metal Trades Welfare Fund has managed to provide health care benefits with only one increase in the hourly contribution rate since 2005.
One action that must be taken to address this financial situation, in addition to the benefit reductions already enacted, is to require an increased level of contribution even for the reduced level of benefits now being provided.
Be advised that effective September 1, 2011, the contribution requirement for each level of coverage will increase by $0.50 per hour. Therefore, for work performed as of September 1, 2011, and after, the contribution rates will be as follows:
Plan A $3.50 /hour
Plan B $3.20 /hour
Plan C $2.65 /hour
You should also be aware that the Trustees have been advised by the Fund’s consultant that the NASMT Welfare Fund’s contribution rates will need to be increased again as of September 1, 2012, for each of the three benefit plans, likely in the $0.50 per hour range. Neither the contribution increase nor the exact amount(s) of that increase has, as of yet, been determined to be required by the Board of Trustees. You are advised of this information so you can plan accordingly. The Trustees will continue to review the financial experience of the Fund and will decide, next Spring, the amount of contribution increase required as of September 1, 2012, if any. You will be advised of their decision promptly after it is made.
The NASMT Welfare Plan provides that employees will receive Plan A or B benefits as of September 1st if the contribution rate being made on their behalf is sufficient for that level of benefits. Any employee covered by a collective bargaining agreement that provides for a contribution rate that is not sufficient for Plan A or B, will be covered by Plan C until the contribution rate applicable to the employee increases, or the collective bargaining agreement terminates or the employer’s participation in the Plan is terminated by the Trustees.