2011 IPF/IHF Annual Report: Forty Years of Service, $2 Billion in Benefits Paid and Customized, Affordable Healthcare

JOURNAL: ISSUE 4 - 2012

Published in September, the 2011 IPF/IHF Annual Report highlights the 40-year history of the International Pension Fund (IPF) and its achievements in improving the financial security of participants through sound investment strategies and management practices. In addition to updates on financial data, program options, and other useful details on the benefits offered by IPF and the International Health Fund (IHF), the Report features human interest stories and focuses on the steps that IPF and IHF have taken to improve services using technological innovation.

As of May 2012, IPF paid out a cumulative $2 billion dollars in benefits since the Plan's inception in 1972. This milestone represents more than a three-fold acceleration in the Fund's level of disbursements in the past decade. This increase is the product of both a rise in the number of pensioners, which has increased 21% over the past nine years, as well as in the amount of individual benefits paid, which is up 47% for the same period. More than 92 percent of BAC's membership participates in IPF.

IPF Update

Throughout the last four decades, IPF has provided pension coverage to members without access to a local plan, and supplemental pension benefits to those who do. IPF has also allowed traveling members to pay into a single pension plan even when their work took them away from home. Since its inception, the Fund's Board of Trustees have worked to develop new programs to provide additional financial security for participants. These programs include the BAC SAVE Retirement Savings Plan, the BAC SAVE 401(k) Plan,  the Trowel Trades S&P 500 Index Fund and its proxy voting activities, Direct Deposit benefit disbursement, and job-producing real estate investments.

As outlined in the Report, IPF adopted a Funding Improvement Plan (FIP) as required by the Pension Protection Act of 2006 (PPA). To this end, the FIP approved in December 2010 outlines a path to improve funding levels over time by formulating adjusted accrual structures and increases in current contribution levels, including the following key measures:

• No changes in Plan benefits paid or already earned
• Contribution and accrual rates unchanged through 2012
• Annual 3% or 4% IPF PPA rate increases starting in 2013
•  Current accrual rates remain in place for Locals which negotiate initial 4% IPF PPA contribution rates in 2013, and specified increases in later years
• Ten-year IPF FIP will be reviewed annually and improved as conditions warrant
• If neither 3% nor 4% PPA rate increases are achieved, all future accruals will cease

While no adjustment in benefit accruals or contributions was required in 2012, the FIP will be reviewed on an annual basis and adjusted as needed.

BAC SAVE

Established in 1989, the BAC SAVE Retirement Savings Plan, a savings vehicle designed specifically for trowel trades workers, boosts the capacity of participants to provide for their families through their working years and into retirement. Participation in BAC SAVE's supplemental annuity and 401(k) programs are available to all collective bargaining groups who pay a combined minimum of $1.00 per hour into IPF and Local defined benefit pension plans. Both plans offer limited hardship withdrawals.

IHF Update

True to its founding mission, the International Health Fund offers high quality, cost-effective health care and prescription drug benefits to participating members through a self-funded arrangement with United Healthcare® and Sav-RX. In addition, IHF provides dental, vision, life, accidental death and dismemberment insurance to all covered members. IHF continues to maintain its modified eligibility hours' reduction, ensuring that more participants are covered as the economy rebounds. IHF ended 2011 with $20 million in net assets, its 7th year of asset growth.

In implementing the provisions of the Patient Protection and Affordable Care Act (ACA), IHF now covers all dependent children up to the age of 26 years old. In addition, IHF has removed all pre-existing condition limitations for dependent children up to the age of 19. IHF has also removed the Lifetime Maximum, as well as annual limits on Essential Health Benefits and all rescission provisions with the exception of rescissions due to fraud or intentional misrepresentations.

Also in 2011, IHF began providing Medicare eligible retirees with a Part D prescription drug plan through AARP and United Healthcare®, and supplemented this plan with a wrap around plan by Sav RX, providing significant savings to both retirees and the Plan. In addition to the Medicare Part D Plan, United Healthcare® created Pharmacy Saver as a further commitment to help participants save money. United Healthcare® has negotiated with some of the AARP network pharmacies to give members even lower costs on many commonly prescribed drugs. Hundreds of generic drugs now cost as little as $2 for a 30-day supply. These include drugs to treat high cholesterol, high blood pressure, diabetes and many more. Most recently, IHF introduced the Not Me Diabetes program which allows enrollees to receive diabetic drugs and testing supplies at no cost to our members.

IHF Canada remains strong and growing, and continues to provide supplementary health, dental, life, accidental death and dismemberment and a weekly indemnity benefit.

In the U.S. and Canada, IHF remains committed to providing the optimal health and welfare solutions for participants and continues to evaluate new programs to provide the best possible healthcare benefits and discounts.