Navigating Union Benefit Trust Reporting

Benefit plan administrators provide guidance and peace of mind

By Adam Keck

rguably the most important factor for the success of a business is a good employee. As an employer, you understand that in today’s economic environment the benefits package you offer can help attract and retain the best workers. These benefits also impact your financial success because the cost of benefits increases over time and is likely one of your largest financial expenditures.

AGC contractors who employ union workers purchase benefits through tax exempt trust funds with tremendous purchasing power. The purpose of this article is to encourage you to use your benefit plan administrator to help you understand and avoid common mistakes employers make when participating in union benefit trust funds.

In the world of trust fund benefits, employers work collaboratively with local unions to negotiate a competitive and robust benefits package to provide health and security for their employees. The trust funds are administered by third-party administrators or in-house trust employees, and whether it’s for retirement, healthcare coverage, vacation withholdings, legal service benefits, or life insurance benefits, the goal is to have efficient and accurate employer reporting to ensure benefits are provided for your employees and their families.

Experienced employers understand that the administration of trust fund benefits is a complicated business. You are faced with the difficult task of ensuring the employees who work year-round, seasonally, or on a project basis, are reported in a timely and accurate fashion. Whether you have employees who are traveling into different areas across the state, working under different union affiliations or job classifications, or even different project labor agreements with varying contribution rates, each trust fund is a separate entity that may have unique reporting requirements. Payroll departments that are tasked with benefit reporting responsibilities have resources at trust administration offices to help navigate the nuances of the employer contribution and reporting process. Trust administration evolved directly from the unique set of services needed to assist employers and unions in handling these negotiated benefits in an economical and efficient basis for the benefit of the worker.

A large part of the negotiated benefits package is the healthcare benefit. Alaska has some of the highest healthcare costs in the nation and many health trusts seek strategic partnerships to provide cost containment or economies of scale which can lead to overall cost savings. A large partner in this cost savings effort is the Pacific Health Coalition (PHC), which partners with various clinics, a preferred-provider network, and administration offices across Alaska to make certain as much of the trust assets as possible are going directly to pay employee benefits.

These lower costs not only save out of pocket costs for your employees but also help drive down plan expenditures that are funded by employer contributions. Aside from a cost perspective, with today’s uncertain times, most health trusts are “self-insured” and able to quickly adopt federal mandates and provide benefits they know will create direct value for covered employees in Alaska. Some benefit trusts allow employees to travel to perform seasonal work while keeping their same benefits package, whether in Alaska or elsewhere. While this is beneficial to the employee, it can be confusing for employers. Make sure to call the trust office if you have questions from or about traveling employees. Please also check with your trust office to hear more about possible COVID-19-related benefit extensions.

Not only is the global economy shifting and in a state of volatility, as employers, you know Alaska has a unique economy and you have had to adapt to succeed. You have seen the highs of the pipeline construction days in the 1970s and the lows of falling oil prices and federal infrastructure budgets in more recent years. Through the decades, the pension trust funds providing employees’ retirement have also had to adapt, and as a result these pensions can seem complicated. The trust office is an integral part of communicating any changes or answering questions for employers and helping employees calculate their benefits when it comes time to retire. Working with your respective trust office to ensure proper reporting will give peace of mind to your employees that they are taken care of after their years of hard work. Like healthcare benefits, every retirement trust is unique. Be sure to ask questions and use the trust office as a resource, we are here to help!