The 2015 Pension 40: Terry O’Sullivan

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Terry O’Sullivan
General President / Laborers’ International Union of North America
Last year: Not ranked

Terry O’Sullivan would like to escape from the Pension Benefit Guaranty Corp. He means no disrespect to the PBGC, an insurance scheme established under ERISA to take over troubled or failed pension plans and continue the flow of benefits. But with a net deficit of $52.3 billion, the PBGC, by its own estimate, lacks the capital to cover anticipated needs. “We see it as something that’s broken and cannot be fixed,” says O’Sullivan, 60, a San Francisco native and a member of a local in Charleston, West Virginia, who has run the Laborers’ International Union of North America since 2000. “We believe in solutions, not bailouts,” he says. “If you give us the tools and the flexibility, we can fix our own problems.” From the start, the relationship between multiemployer plans and the PBGC has been uneasy. Multiemployer funds do not have the same type of default risk as single-employer funds dependent on a corporation. Historically, the PBGC has not stepped in to save multiemployer funds until all their assets have been depleted, and the funds have paid lower premiums than single plans. The Kline-Miller Multiemployer Pension Reform Act of 2014, which O’Sullivan generally supported, sought unsuccessfully to hike multiemployer premiums from $12 per participant per year to $40. The rate is now $26. O’Sullivan contends that hiking the premium merely punishes healthy funds and retirees. As a result, he and others are pushing for legislation that would take away the PBGC backstop and empower trustees to fix their funds. “We’re not calling for the dissolution of the PBGC,” O’Sullivan says. “What we’re saying is it is not suitable long-term for [multiemployer] funds. We don’t want to pay any more premiums, and the PBGC can’t handle any more liabilities.”

The 2015 Pension 40

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1. Bruce Rauner Illinois 2. John & Laura Arnold Laura and John Arnold Foundation 3. Chris Christie New Jersey 4. Randi Weingarten AmericanFederation of Teachers 5. Phyllis Borzi U.S. Department of Labor

6. Kevin de León California 7. Alejandro García Padilla Commonwealth ofPuerto Rico 8. Laurence Fink BlackRock 9. Rahm Emanuel Chicago 10. Sean McGarvey North AmericanBuilding Trades Unions

11. John Kline Minnesota 12. J. Mark Iwry U.S. Treasury Department 13. Damon Silvers AFL-CIO 14. Jeffrey Immelt General Electric Co. 15. Joshua Gotbaum Brookings Institution

16. Robin Diamonte United Technologies Corp. 17. Mark Mullet Washington 18. Terry O’Sullivan Laborers’ International Union of North America 19. Raymond Dalio Bridgewater Associates 20. Ted Wheeler Oregon

21. Thomas Nyhan Central States Southeast and Southwest Areas Pension Fund 22. Karen Ferguson & Karen Friedman Pensions Rights Center 23. Randy DeFrehn National Coordinating Committee forMultiemployer Plans 24. Robert O’Keef Motorola Solutions 25. Caitlin Long Morgan Stanley

26. Kenneth Feinberg The Law Offices of Kenneth R. Feinberg 27. Orrin Hatch Utah 28. Kathleen Kennedy Townsend Center for Retirement Initiatives, Georgetown University 29. Ian Lanoff Groom Law Group 30. Joshua Rauh Stanford Graduate School of Business

31. Ted Eliopoulos California Public Employees’ Retirement System 32. Edward (Ted) Siedle Benchmark Financial Services 33. Teresa Ghilarducci New School for Social Research 34. Denise Nappier Connecticut 35. W. Thomas Reeder Jr. Pension BenefitGuaranty Corp.

36. Hank Kim National Conference on Public Employee Retirement Systems 37. Paul Singer Elliott Management Corp. 38. Bailey Childers National PublicPension Coalition 39. Amy Kessler Prudential Financial 40. Judy Mares U.S. Labor Department