What Is the National Retirement Fund?
The National Retirement Fund is a trust fund created in the mid-2000s through the merger of many pension plans across industries such as clothing, hospitality, food service, gaming, laundry and textile, according to Unite Here. The purpose of the fund is to provide pension benefits for the legacy plan of the National Retirement Fund, which includes more than 162,000 active retirees and more than 150,000 participants or former participants who have not yet retired.
The legacy plan is a multiemployer-defined benefit plan that provides a guaranteed monthly benefit to retirees until they die, reports Unite Here. The benefit is based on years of service, earnings, age at retirement and spousal benefit elections. The National Retirement Fund is the investment fund for the defined benefit plan. It is administered by 48 trustees. One-half of the trustees is appointed by the Unite Here and Workers United unions, and the other half is appointed by the employers who sponsor the plan.
While the National Retirement Fund has assets of more than $2.5 billion, actuarial projections estimate that the assets are substantially less than the money the fund needs to pay current and future retirees of the legacy plan. As of Jan. 1, 2015, the legacy plan was frozen and is no longer accepting participants. The trustees of the legacy plan are determining the steps they need to take to meet their legal obligations under the Employee Retirement and Income Security Act, or ERISA, given the projected shortfall of the National Retirement Fund.