NECA TransmissionsNotes from the front lines of the electrical contracting industry

Q&A With Larry Bradley

Posted on Mar 07, 2008 by John M Grau

All the news about troubled financial markets is enough to make anyone nervous about their own investments. So I asked Larry Bradley, Secretary-Treasurer for the National Electrical Benefit Fund, a couple of the questions that had been on my mind recently about the NEBF.

JG: It seems like every time I read a newspaper or turn on the news there’s another big company, like GM, with a pension plan in trouble. This leaves me concerned for NEBF’s future. Is the Fund in trouble?

LB: No, NEBF is classified by the government as a “green zone,” plan, meaning it is a healthy, well-funded pension plan.

JG: But what does the government mean by “green zone” exactly?

LB: When the Pension Protection Act became effective in 2007, it contained a provision that required all pension plans to carry a rating regarding the plan’s status. A pension plan can be classified as healthy, endangered, or critical. A healthy plan is considered in the “green zone” while an endangered plan is in the “yellow zone.” A critical plan is in the “red zone.”

A “red zone” plan is only about 60 percent funded and may carry a disproportionate ratio of retirees to active workers. A plan in the “yellow zone” is about 70 percent funded and is expecting a funding deficiency in seven years. A “green zone” plan is more than 80 percent funded and has no expected deficiencies in the near future.

In NEBF’s case, our funding level is squarely within the “green zone.” In fact, the Fund is fully funded with respect to vested benefits based on our most recent actuarial evaluation, so the NEBF has no withdrawal liability—which is important for our covered employers.

 

 

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NECA Transmissions is a collaborative effort from CEO John Grau and NECA staff to provide insight and feedback on key issues from the front lines of the electrical contracting industry.

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