Juan de la Cruz Farm Workers Pension Plan
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United Farm Workers of America, AFL-CIO
United Farm Workers founder Cesar Chavez created the Juan de la Cruz Farm Workers Pension Fund in 1979 as the first—and only—functioning pension plan for farm workers in the United States. The plan is a joint union-management trust fund regulated by the Employee Retirement Income Security Act of 1974 (ERISA) and qualifies as a tax-exempt trust under the Internal Revenue Code.
A joint board of trustees consisting of three employer trustees and three union trustees manages the pension fund. The pension plan is financed through contributions from growers for every hour worked by a union member covered by the pension plan under UFW contract. Day-to-day operations of the fund are managed by a salaried administrator with a professional support staff equivalent to four permanent, full-time employees at the farm workers’ headquarters in Keene, Calif.
Funds for the pension plan are kept fully invested at all times by using the services of five professional investment managers who invest under varying disciplines, resulting in a balanced and well diversified portfolio. Investment results are reviewed on a routine basis by the pension plan administrator and an investment consultant, and on a quarterly basis by plan trustees. Professionals are also retained to provide audit, legal, benefit consulting and actuarial support.
The plan currently has more than 10,000 participants and provides pension benefits under the rules of a defined benefit plan. Over the past several years the level of benefits has been significantly improved. The actuarial liability is 100% funded, and there has never been any withdrawal liability for an employer who may pull out of the plan. All pension benefits are self-administered. Pension applications are processed within a few days after receipt and checks are issued monthly.
A vesting credit is earned with at least 500 hours being worked in a calendar year. One hundred per cent vesting is earned with five years of vesting credits. The normal retirement age is 65. The earliest age at which a participant can retire is 55. Both pre- and post-retirement surviving spouse benefits are provided. The plan also includes pre- and post-retirement death benefits.
The amount of monthly pension benefits is primarily determined by the number of years of vesting credits, the number of hours worked in each year and the amount contributed per hour by the employer. The amount of employer contributions is negotiated as a part of the collective bargaining agreement with the UFW.
The staff is supported by a state-of-the-art computer system with specialized software designed specifically for trust fund operations. With this system, the staff can maintain complete records of the hours reported for each participant and the monthly employer contributions owed and paid, determine individual eligibility of participants and surviving spouses for benefits, calculate the benefit amounts and issue monthly checks. The system also includes extensive reporting capabilities.
In late 2000, the plan was amended to give active participants the opportunity to save some of their own money for their retirement by investing in this trust fund. The pension plan’s professional investment managers invest their savings, but a separate account is maintained for each participant and they are guaranteed a minimum of 6.5% interest income on their retirement savings.
The pension plan was named for Juan de la Cruz, a 60-year old grape striker shot to death on a Kern County, Calif. picketline in 1973. Cesar Chavez died on April 23, 2003.
The Juan de la Cruz Farm Workers Pension Plan is dedicated to providing top-quality, cost-effective benefits and services to its farm worker participants. Most of the staff is bilingual and participants are encouraged to call the plan’s toll-free telephone numbers for assistance. From the US they can call: 800-321-6607 or 888-735-5352 or from Mexico they can call at: 01 800 288 2872, then ask for 800-321-6607. They can also inquire on-line at: http://ufw.org/jdlc.htm.