Pension Increase for 27,000 HTC Members on January 1st!
Happy New Year!
In fact, we are sure that this will be a very happy new year for many Hotel Trades Council members who are thinking of retiring in the near future, as well as for all others who are thinking more long term. The Board of Trustees of the Industry-Wide Agreement Pension Fund has voted to enact what is by far the largest pension increase in the 80-year history of our union. This is particularly impressive when one realizes the HTC pension is already the largest pension anywhere in the hotel industry.
The increase is, at minimum, a full and immediate 50% for eligible members who retire (stop work in covered employment) on or after January 1, 2019 with 25 years of service, and it’s an even higher percentage increase for members with more than 25 years of service—as high as 85%! And, yes, you read it correctly: the increases take effect on January 1st, 2019, making it indeed a happy new year.
Any eligible HTC member who retires on or after January 1, 2019 will enjoy this substantial increase in the pension. This major increase applies to more than 27,000 Hotel Trades Council members who are currently employed in New York City shops that are part of the Industry-Wide Agreement. Division A hotels and GRIWA shops have separate pension plans.
As almost all members are aware, pension amounts are determined by the number of pension credits that have been earned. On January 1, 2019, the value of the pension credit for those still working increases immediately from $40 per credit for the first 25 years of employment (and $20 for up to 15 additional years of employment) to $60 per credit. That’s a $1,500 a month pension—a 50% increase for members who retire at age 65 with 25 years of service! And since many members work more than 25 years, the rate of the increase will often be more generous than 50%. That’s because the bonus for years of credited service past 25 has been hiked from $20 per year to $60 per year! As an example, there are quite a number of members with 40 years or more on the job who on January 1 will qualify for a pension of $2,400 per month! The current maximum pension is $1,300 a month, so for members who qualify for the new $2,400 maximum monthly pension, the increase is an amazing 85%.
How much is your pension now worth if you work in a New York City shop that is part of the Industry-Wide Pension Plan? Well, if you retire at age 65 after January 1, 2019 with 25 years of service (25 pension credits) you will collect $1,500 a month instead of the current $1,000 per month. If you retire at 65 years of age or older and you have more than 25 years of credited service, add $60 for each additional year of credited service, as opposed to the current $20 for each additional year of credited service. Members who work 1,000 or more hours in a year (an average of 20 hours per week) earn one pension credit for that year. Members who work 750 hours in a year earn ¾ credit, and 500 hours earns ½ credit. Banquet servers receive one credit for 100 or more functions, ¾ credit for 75 functions and ½ credit for 50 functions. There is no change in the current Age and Service pension, and there is a chart following this article that further explains the changes that take effect January 1.
“This is the happiest day in my career in the hotel industry in New York,” Neil Johnson, an employee of the Plaza Hotel, told Hotel Voice on December 18. “I had hoped that the increased pension fund contributions Peter Ward and the union won from management in the 2012 contract would eventually result in an increase in the monthly pension, but this far, far better than I expected! I am beyond happy, believe me. This is absolutely wonderful news.”
The pension increase was announced by Peter Ward at the December 18 Local 6 Delegate Assembly meeting. “When I became president of the union the Pension Fund was only 65% funded,” he said. “I knew we had to make changes. We were able to get management to increase pension fund contributions. We hired new financial consultants. We reached good funding levels several times but then the economy and stock market went downward. Our pension fund lost 30% of its value in 2008 alone and that was actually a better result than most other plans. But we righted the ship, we won increases in management’s contributions and now have a pension that we can be proud of.”
Ward’s announcement was greeted with a standing ovation and shouts of “Thank you, Peter!” from the Assembly Delegates.
“I honestly believe that this pension increase is large enough that many members can now think more seriously about retirement,” Ward said. He was proved correct moments later.
“This is absolutely amazing news,” said John Giannotti, an employee of the Hotel Pennsylvania with more than 40 years of service. Giannotti, who is a Local 6 Assembly Delegate, said it may very well change his plans. Under the increase he will collect $2,400 a month instead of the current maximum of $1,300 a month. “Now I’m thinking of retiring in May,” he said with a wide grin.
News of the pension increase spread fast and more than a few members said they may move up their retirement dates. But the news was also good for members who plan on still working.
“I’m not ready to retire,” said Aissata Bocoum, an employee of the New Yorker Hotel. “But this pension increase means a happier retirement and it’s certainly something to look forward to,”
“I’m so grateful to the union for this pension increase,” said Moustafa Ghoneim, an employee of the Millennium Hilton. “I’m not planning on retiring yet, but it’s so nice to know that I can have a respectable pension when I do stop working.” The next day Ghoneim reported to us that members in his hotel were delighted with the news.
Members who were thinking they couldn’t afford to take the early retirement allowed under the pension plan may also reconsider when they can stop working. Eligible members with 25 years of service who take early retirement at age 62 will now collect $1,200 a month instead of the current $800. Members with 40 years of credited service who take early retirement at age 62 will now collect $1,920 per month instead of $1,040. The following chart shows the increases in monthly pensions.
Pension Fund Increases Explained
There is exciting news for members who are part of the Industry-Wide contract (IWA). How much is your pension now worth if you work in a New York City shop that is part of the IWA? How does it compare to the former pension? This chart provides the answers:
| Old Rates & Benefit | New Rates & Benefit |
| $40.00 for first 25 credits | $60.00 for first 25 credits |
| $20.00 for the next 15 credits (maximum 40) | $60.00 for the next 15 credits (maximum 40) |
| Minimum Vested benefit with 5 Credits at age 62 $160.00 | Minimum Vested benefit with 5 Credits at age 62 $240.00 |
| 25 Credits benefit at age 62 $800.00 | 25 Credits benefit at age 62 $1,200.00 |
| 25 Credits benefit at age65 $1,000.00 | 25 Credits benefit at age65 $1,500.00 |
| 40 Credits benefit at age 62 $1,040.00 | 40 Credits benefit at age 62 $1,920.00 |
| 40 Credits benefit at age 65 $1,300.00 Current Maximum | 40 Credits benefit at age 65 $2,400.00 New Maximum |
| Age & Service (Age 55+ and 25 or more credits) $875.00 | No change |
