The IBEW and its contractor partners have agreed on a historic package of retirement benefit improvements.
The union and NECA created the first new retirement benefit since 1946, agreed to the first increase in existing retirements benefits in nearly a quarter-century and approved a one-time “13th month” check for current retirees for the first time ever.
The changes were jointly announced by the trustees of the National Electrical Benefit Fund — International President Kenneth W. Cooper, International Secretary-Treasurer Paul Noble and the two leaders of the National Electrical Contractors Association.
“Together, these changes amount to the largest benefits enhancement in the history of the NEBF,” Cooper said. “It is a sign of the strength of the partnership between the IBEW and NECA and the wisdom of the trustees who preceded us that we can increase benefits to our members and bolster the solidity and stability of the NEBF.”
The NEBF is one of the largest and most stable multi-employer pension plans in the country. While most inside construction members will continue to get their largest pension benefit from their local, the NEBF and the Pension Benefit Fund are critical components to the dignified retirement that was an impossible dream when the union was founded.
Founded just after the end of World War II, the NEBF now manages more than $18 billion, has more than 665,000 participants and sends retirement checks out to 167,000 pensioners every month.
Introducing the NEIB
For many members, the most significant change in the Feb. 9 announcement was the creation of the National Electrical Individual Benefit.
Like the NEBF, the NEIB is an employer-funded defined-benefit pension. Yet while the NEBF benefit is based on how long a member participated in the system and is funded by a general 3% fee paid by NECA contractors on all the hours worked by all participating members, the NEIB benefit is based entirely on the number of hours a member worked. If two members worked the same number of months but one worked twice as many hours, the benefit of the one will be double the benefit of the other.
Under the language agreed to by NECA and the IBEW, individual chapters and local unions will have the ability to negotiate an additional contribution into the NEIB for every hour a member works throughout their career. When that member retires, they get a monthly check worth 1.5% of that total every month for life.
“The NEIB is a promise, not a prayer,” Noble said. “For the future generations coming into the trade, the NEIB will be a significant increase to their retirement security.”
And since the NEIB contributions will be added to the $18 billion NEBF war chest, the NEBF will grow stronger, Noble said.
“These were complex negotiations with NECA and there were many interests to balance. It took time to get here, but I think this is a model of what labor relations can be,” Noble said. “There are only so many times when you can stand back after making a deal and say every person involved in our industry is better off now than they were.”
NEBF Benefit Increase and ‘13th Month’ Check
On top of the NEIB, the trustees approved the first increase in NEBF pension benefits since 2001.
Starting with retirees who leave the trade after Jan. 1, 2025, the NEBF will send out a monthly check worth $33 per year of service to the IBEW.
For everyone already receiving an NEBF check or who retires before 2025, they will find a one time “13th month” check in the mail between Thanksgiving and Christmas 2025, provided the fund continues to perform at expected levels.
“These are generational changes for the retirement security of our current members and our future members,” Cooper said.
But the increased retirement benefit might be most appealing to the many thousands of foremen, general foremen and superintendents the IBEW needs to organize in the coming years to meet the coming tidal wave of work. Jobsite leaders — the workers who don’t come alone but bring entire teams of journeymen and apprentices with them — will see the full value of a stable and more generous pension plan.
“As one of the greatest labor unions in North America, we have many great concerns. We are committed to bringing power to working people on the job and in the political arena. We fight for safety on the job and an economy that benefits working families,” Cooper said. “And yet, we never lose sight of the primary commitment to increase the benefits we earn with the labor of our hands.”
More information and updates can be found at nebf.com, and the details of any individual’s retirement benefits are kept in the Online Benefits Portal at onlinebenefits.nebf.com.