The Electrical Worker online
October/November 2016

FOCUS: Growth

Delegates Approve Increased Funding for General Fund and PBF

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After electing International President Lonnie R. Stephenson to his first full term Sept. 19, delegates to the 39th International Convention overwhelmingly approved his plan to grow the IBEW with an increase in the IBEW's general fund a day later.

Delegates also approved Stephenson's plan to shore up the Pension Benefit Fund for "A" members by voice vote.

"Our goal is 100 percent market share in the IBEW, and we need to build the coffers and expand our resources to do that," Stephenson said before the vote. "Foremost in our minds at all times is that we maintain our standing as the premier union, able to do the work that needs to be done, and representing our current and future membership at the highest levels."

After International Secretary-Treasurer Salvatore "Sam" Chilia delivered overviews of the financial status of the general fund and the PBF, Law Committee Chair Marvin Kropke recommended amending Article IX, Section 2 of the Constitution to increase the per capita tax by $2 over the course of the next five years and PBF dues by $3 a month over the same period. The proposal was approved overwhelmingly.

Funding the Future

Chilia's presentation began by looking back to the goals set at the last convention in 2011.

At the 38th Convention, delegates called for a 1 percent increase in membership per year but based budget projections on a more conservative 0.5 percent increase. Unfortunately, Chilia noted, the reality fell short.

"We have had some challenges during the last five years, and membership gains did not meet even the modest goals we set for the budget," Chilia said.

"A" membership — primarily the construction membership — increased 8.3 percent over the last five years, but "BA" membership — mainly professional and industrial members — fell by 5.3 percent.

"They really took it on the chin over the last five years," Chilia said of the non-construction branches.

The result, Chilia said, was that expenses outstripped income from per capita payments since 2011.

In response to the financial report, Stephenson and Chilia proposed a $1 per month increase in per capita payments starting Jan. 1, 2018, and again on Jan. 1, 2020.

The increase, Chilia said, puts the IBEW's dues close to the median for all North American unions, 10th out of 14 for all trades unions and in the bottom half for all unions with more than 100,000 members.

"We would be able to have a few bucks to spare and have some cushion there for any downtimes," Chilia said.

Delegates from several locals, some small, others among the largest in the Brotherhood, rose to speak in support of the increase.

"As our forefathers protected our future, it's important that we protect the future of those coming behind us," said Fredericton, N.B., Local 37 President Stephen Hayes.

The vote passed in the hall without a dissenting voice raised in opposition.

PBF a 'One-of-a-Kind' Benefit for 'A' Members

Turning delegates' attention to the IBEW's Pension Benefit Fund, Chilia spoke of the "one-of-a-kind" nature of the benefit, which is entirely funded by "A" member dues. The PBF may not be the largest, he said, but its retirement and death benefits are significant and remain "a symbol of the vision and determination" of IBEW leaders long ago.

Pointing to dramatic increases in the PBF's solvency since the last convention in 2011, Chilia noted that there is still work to do to reach 100 percent funding. Currently, the PBF has more than 360,000 active members and 111,000 retirees, paying out $134 million in benefits annually.

Without action, however, Chilia said the trend line runs dangerously in the wrong direction. At the direction of the Law Committee, IBEW leaders recommended shoring up the PBF by implementing a modest increase to "A" member contributions, starting with $2 per month additional on Jan. 1, 2017, and another $1 per month on Jan. 1, 2019.

Doing this doesn't get us all the way there, Chilia said, but it keeps the PBF on solid footing and well-positioned to take advantage of membership growth and strong investment returns in the future.

Speaking in support of the increase, Victoria, B.C., Local 230 Business Manager Phil Venoit said the "cup-of coffee" sized increase over five years is a small price to pay for the important financial cushion the PBF provides IBEW retirees. "Don't consider this a hardship," he said. "It's really taking $3 from your front pocket and putting it in your back pocket for when you're really going to need it."

The assembled delegates approved both amendments by voice vote.


International Secretary-Treasurer Salvatore "Sam" Chilia reported on the health of the IBEW general fund and Pension Benefit Fund before asking the delegates to increase support for both.


Anchorage, Alaska, Local 1547 Business Manager Mike Hodsdon rose in support of the proposed per capita increase before it was approved by convention delegates.