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NEBF Project Millennium Builds for Future

January/February 1999 IBEW Journal

When IBEW Local 48 member Rod Mai straps on his tools each morning for Friberg Electric at the Beaverton Creek Industrial Complex in Portland, Oregon, he does so knowing that he is employed on a union only project made possible by financing from the National Electrical Benefit Fund (NEBF). On the other side of the continent in Freehold, New Jersey, Phil Karrberg of Local 400 performs the same tool belt ritual each morning for Kleinknecht Electric at the Freehold Raceway Mall, another construction project made possible by the NEBF, the largest labor-management pension fund in which the IBEW participates, covering nearly 412,000 active and retired participants. Their pension dollars are at work for them in a very real way, a situation that will be repeated all across the country under the leadership of NEBF Trustees Edwin D. Hill, International Secretary-Treasurer of the IBEW and John M. Grau, Executive Vice President of the National Electrical Contractors Association (NECA).

The trustees' vision has a name - NEBF Project Millennium. Building on the NEBF's rich tradition of real estate investing, the fund is preparing to meet the challenges of the new century with a bold real estate initiative that targets more than one billion dollars in NEBF assets for investment in a diversified real estate portfolio spanning the United States. As part of this program, the trustees of the NEBF have assembled a new real estate investment team. These seasoned real estate professionals are committed to seeking out the most desirable real estate projects nationwide, assessing their quality, and negotiating superior risk adjusted rates of return for the fund (see International Secretary-Treasurer Hill's message on page 3).

The outstanding past performance of the NEBF's total portfolio has made Project Millennium possible. By diversifying some of the fund's gains into real estate investments, the Trustees avoid "putting too many eggs into one basket." Additional real estate investments will also provide a hedge against future inflation, generate current income for benefit payments and help reduce total fund investment risk. All of these are sound, established reasons for real estate investing.

An important economic by-product of every NEBF real estate investment is job creation. Past NEBF real estate investments have created millions of hours of employment for union workers throughout America. Project Millennium will insure that this commitment to job creation continues in the next century. In the words of International Secretary-Treasurer Hill, "Our policy on job creation is simple - NEBF investment in a project guarantees union construction."

There are many economic benefits to job creation beyond the paychecks received by NEBF participants. Those advantages to the NEBF include:

• Additional plan contributions - union built real estate projects create union jobs; more union jobs create more NEBF contributions, and those NEBF contributions make your fund even stronger.

• Participants working on union projects accrue more NEBF vesting and benefit service.

• Financially sound union contractors are necessary to actuarially fund the NEBF.

• 100 percent union jobs avoid work stoppages which can occur on mixed jobs.

• Efficient union labor can build better projects, more effectively and on time, enhancing the NEBF's economic security.

The first priority of the NEBF real estate staff has been to assist the trustees in developing a new strategy and creating a new business plan and procedures necessary to move the NEBF real estate program forward into the next century. The results of the trustees efforts will be that many more participants like Rod Mai in Oregon, and Phil Karrberg in New Jersey will witness their pension dollars from their pension fund at work, building an economically strong NEBF while creating union jobs.