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Wheelhouse Weekly – February 14, 2013

February 14th 2013

 

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Volume 17 . . . Special Edition. . . Feb. 14, 2013

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Groundbreaking Hybrid Pension Plan and Long-Term Agreements Are Ratified

MM&P Members Choose Employment Security and Retirement Security

Yesterday, members of the MM&P Offshore Group voted overwhelmingly to ratify a series of long-term collective bargaining agreements that will be implementing a new type of “adjustable” pension plan.

Following a membership survey that indicated MM&P members were open to change, the plan was presented to elected delegates at the 84th MM&P Convention in July 2012, where it received a favorable reception. The new plan–the Adjustable Pension Plan, or APP–was then negotiated into collective bargaining agreements that were specifically reopened for this purpose. The APP will replace MM&P’s traditional defined benefit plan with all major deep-sea employers. It paves the way into the future for the membership of MM&P.

By a margin of about 10 to 1, MM&P members ratified eleven collective bargaining agreements covering Licensed Deck Officers aboard approximately 80 deep-sea U.S.-flag merchant vessels. The agreements extend the duration of current commercial-sector collective bargaining agreements for a minimum of ten years from their current expiration dates. They will provide long-term job security to MM&P members and preserve industry-leading MM&P standards of wages and working conditions aboard our contracted vessels. At the same time, the Adjustable Pension Plan will open new doors of employment.

The traditional MM&P defined benefit plan will be frozen, with all vested benefits for current and future pensioners protected. There will be full reciprocity between the traditional plan and the adjustable plan, so that service in both plans will count toward all eligibility and vesting.

The Adjustable Pension Plan includes a baseline defined benefit and a variable component that can increase participants’ benefits depending on the financial performance of plan investments. The baseline benefit is designed on the assumption of a 5 percent rate of return, with the variable benefit calculated on returns above that amount. The variable benefit constitutes a shared risk between the employer and the participant. Complementing this feature, which gives the plan the ability to absorb economic ups and downs, is a low-risk investment strategy that is integral to the plan design.

The membership and leadership of MM&P, as well as MM&P employers, are confident this plan will be sustainable into the future. Furthermore, the plan will enable existing and new MM&P employers to recruit and retain quality personnel.

In keeping with the MM&P Constitution, the vote on the collective bargaining agreements that incorporate the Adjustable Pension Plan was tallied after a 75-day, mail-in ratification process conducted and certified by a rank and file ballot committee and the impartial balloting agency True Ballot, Inc.

“The MM&P General Executive Board extends its gratitude to MM&P members for sharing our belief in the need for change and voting to act on it,” said MM&P International President Don Marcus. “We also extend our thanks to the many pension plan experts who assisted us in developing the plan and, of course, to our employers who have stood with us as we worked through the many challenges of providing retirement security to our members over very difficult economic times.”