PLANSPONSOR - April/May 2019 - 47

2019
The Elevator Constructors Annuity
And 401(k) Retirement Plan
Plan Sponsor of the Year Honoree
W
hile the nation's 28,532 elevator
constructor mechanics, apprentices
and helpers are all covered by
the National Elevator Industry Pension
Plan, many of these union workers retire
before age 65 because of the physical
demands of their job. That is why, a little
over two decades ago, the International
Union of Elevator Constructors (IUEC)
created the Elevator Constructors
Annuity and 401(k) Retirement Plan.
Over 650 employers throughout
the U.S. maintain the plan-managed
by the National Elevator Industry
benefits office in Newtown Square,
Pennsylvania-for their employees,
who are covered by collective bargaining
agreements requiring the employers to
make nonelective contributions to the
annuity on their behalf. The IUEC has
bargained to increase employer annuity
contributions from $5 an hour to $9.50 an hour by January 1,
2022. The annuity presently has $2.4 billion in assets.
Nonetheless, the IEUC sees the value of its workers contrib " The
new administration for the
elevator constructors made participation
in the 401(k) a top priority, "
McGann says. " The education process
is what has driven this number up. " The
plan uses email, print, virtual webinars
and on-site meetings at the local union
halls to encourage members to maximize
their retirement benefit, he says.
MassMutual works closely with
the IUEC to obtain worker data in
order to encourage the workers to
participate in the plan, Morabito says.
" Once we have demographic data, this
allows us to paint a picture of their true
retirement readiness and may reveal
they need to save more outside of their
Chairman of the Board of Trustees Larry McGann
annuity in order to retire. "
" To encourage the workers to put
more money into the 401(k), the IUEC
and MassMutual visited every one of
uting to their retirement savings and is successfully conveying that
message. Fifty-four percent of the union's workers participate in
the 401(k), deferring an average of 7.18% of their salary, says Una
Morabito, head of client management for the workplace solutions
unit at MassMutual, the plan's recordkeeper. Participation has
risen considerably from 34% in 2013 and continues to be a focus of
the union, Morabito says. The plan has $1.1 billion in assets.
The workers covered by the 401(k)-a multi-employer plan-
are represented by 71 local unions nationwide. Due to the regulatory
complexities related to monitoring the 650 employers, it is not
feasible for the board of trustees to automatically enroll employees
into the 401(k), notes Larry McGann, the board's chairman.
Therefore, seven years ago, the IUEC, MassMutual and the
plan's trustees-five of whom are union members and five of
whom, employers-decided to focus on educating the workers
about the 401(k) plan's benefits, says John McIntire, legal
counsel to the union.
the 71 local unions in every state in the country over the past five
years, " says McIntire, noting, " This is possibly the largest multiemployer
plan in the nation. To reach 53% participation without
automatic enrollment ... is really an amazing success story. "
Morabito agrees. " I can't express how critical the on-site
education is. Even as the workers move from one employer to
another, we're a constant they can find at their local union office.
This education has been part of our success. " -Lee Barney
Plan at a Glance
TOTAL PLAN ASSETS: $2.4 billion in annuity; $1.1 billion in 401(k)
NUMBER OF PARTICIPANTS: 28,532
401(k) PARTICIPATION RATE: 53%
AVERAGE 401(k) DEFERRAL RATE: 7.18%
EMPLOYER ANNUITY CONTRIBUTIONS: $5 an hour
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