Child Welfare League of America Sheds Pension Plan

The Child Welfare League of America, a 94-year old membership organization representing public and private child welfare agencies, took a major step toward survival when a federal agency agreed to terminate the organization’s pension plan.

The Chronicle of Social Change has learned that the Pension Benefit Guaranty Corp. (PBGC), which is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans, has ended the plan and will assume responsibility for paying out its obligations to the 120 current and former employers covered by it.

CWLA filed a distressed termination application with PBGC in 2011, which in effect is a declaration that an entity’s pension obligations will soon prevent it from paying employees and keeping the lights on.

The 120 CWLA pensioners will collect a maximum of $54,000 at the age of 65 from the remaining pension funds, according to PBGC spokesman Marc Hopkins. The pension was 63 percent funded in September of 2011 when the termination attempt was initiated, he said.

CWLA Executive Director Christine James-Brown, in an e-mail yesterday, acknowledged that the plan had been terminated but said her organization and PBGC were “in the final stages of negotiations.”

She would not comment on what issues remained.

“It will not be over until it is over and all [of] the paperwork is signed,” James-Brown said.

Asked if any funds outside the pension would be used to supplement the payments to pensioners – such as CWLA’s restricted assets or money dedicated for former employees that took pension buyouts – Hopkins said, “I don’t see that happening.”

CWLA has for a decade struggled with waning membership rolls and a subsequent drop in revenue. Obligations to the pension plan cost the organization nearly $1 million per year before the distress termination application was filed. According to its most recent public tax return, from fiscal 2011, the organization is $3 million in debt and operated at a $2.1 million loss from 2010 to 2011.

James-Brown’s, predecessor at CWLA, current Center for Juvenile Justice Reform Director Shay Bilchik, oversaw a staff reduction from 130 to 90 before he left in 2006.

James-Brown was forced to cut back to 60 staff in 2008; by 2011, only 28 staff remained. She said the organization has recently cut operating costs by consolidating its Washington office space, with more of its employees working from home.

She was informed this summer that PBGC would make a determination on the pension plan by October, but the process was delayed when the federal government shut down for weeks.

PBGC ultimately made the decision to terminate the plan in late December, Hopkins said. The plan’s termination is retroactive to September of 2011, the month the agency took up CWLA’s application.

John Kelly is the editor-in-chief of The Chronicle of Social Change.

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John Kelly is editor-in-chief of The Chronicle of Social Change.