Pension and Reciprocity Department Director Bruce Burton heard of a misleading rumor making the rounds this summer that brought back memories. But this time he was in a position to do something about it.
|International Secretary-Treasurer Salvatore “Sam” Chilia gives a presentation on the health of the Pension Benefit Fund during the IBEW’s 39th International Convention in September. The PBF, he reported, is much improved in health today over where it was following the Great Recession of 2008.
The tall tale dealt with the return IBEW members receive on their pension contributions, with a member of one local union spreading the claim that the average IBEW retiree received only 18 monthly benefit checks before dying.
“I’d been hearing people say stuff like this since I was an apprentice electrician in Detroit back in the ‘80s,” said Burton, whose department is responsible for the Pension Benefit Fund, more popularly known as the International Office pension. “It was clearly ridiculous. Everyone knows IBEW retirees are living long lives, including my own father.”
Burton’s dad, 89, has been retired from Detroit Local 58 for more than 24 years. “He’s in excellent health, still mows his own lawn, and has been happily collecting IBEW pension checks for two and a half decades,” Burton said. “It’s anecdotal, of course, but I thought we should take a look and see if we could determine the real number anyway.”
So Burton reached out to actuaries at the National Electrical Benefit Fund, a supplementary pension for ‘A’ members run jointly by the IBEW and the National Electrical Contractors Association, reasoning that they would have the most accurate data for IBEW retirees nationwide.
“It turns out we were right,” Burton said. “Not only was 18 a completely made-up number, it was so far from the truth that we thought it was only right we share the data with all of our members.”
In reality, the average life expectancy for NEBF participants – and likely for IBEW members in general – is 82.3 years.
Since roughly 53 percent of IBEW members choose early retirement at 62, that means the average retiree receives benefits for more than 20 years before passing away.
“That’s 244 pension checks on average, not 18,” Burton said. “It’s disappointing to see that this kind of rumor still has legs after all these years, but I hope we can put it to rest once and for all. The truth is, an IBEW pension is still one of the best investments a person can make in their retirement security, and it’s good to see the numbers to back it up.”
The PBF, which Burton runs, is the modern version of the original death benefit that Henry Miller and the IBEW’s founders established in 1891. In 2015, it made pension payments of more than $127 million and paid $18.6 million in death benefits.
The NEBF, which managed more than $12.6 billion in pension funds at the close of 2015, remains one of the healthiest defined benefit pensions in the labor community, investing in a diverse portfolio that includes real-estate projects that put active IBEW members to work all over America.
“We’re proud of the systems this union has set up to take care of our brothers and sisters in retirement,” said International President Lonnie R. Stephenson. “Making sure our members are able retire with dignity and security is one of the most important jobs we have, and the PBF and the NEBF are key parts of that.”