Promoting a practical AMO retirement security agenda

By Paul Doell
National President

Retirement security for all deep-sea, Great Lakes and inland waters AMO members remains a top personal priority to me, and we’ve accomplished much on this front in the last four years, including a 10-percent increase in AMO Pension Plan benefits calculated for active members vested in this frozen plan and an actuarial assessment of the cost of a potential COLA benefit increase for current retirees.

In addition, we applied a long overdue reform of the AMO Defined Contribution Plan after nearly a year of joint union-employer DC Plan trustee analysis and the development of nine working models – ending the fundamental inequity of AMO members with between 10 and 15 years of service drawing the same employer contribution rates as newcomers to our union with between one and five years of covered employment.

Under this reform, many AMO members in the 10-15-year service group saw their DC Plan employer contribution rates double immediately. But, as many of the new engine and deck officers reached the required three-year DC Plan vesting, they left AMO and took their DC Plan account balances with them – a waste of employer money that could have gone to much better use in other AMO Plans benefit funds.

Now we must reverse the honest premise on which this DC Plan reform was based. We have to develop a way to boost the employer contribution rates paid into the accounts of individuals with between one and five years of service as part of a comprehensive strategy to end or at least ease the impact of a nagging, industry-wide shortage of merchant mariners on our union. In AMO, this shortage is most conspicuous among 2nd Assistant Engineers and 3rd Assistant Engineers. There are shortages in other AMO engine and deck ratings as well.

On another front, AMO will revive its “first responder” initiative, under which active AMO members experienced in strategic sealift and other military support services and eligible for “20 and out” retirement would be permitted to receive earned monthly AMO Pension Plan benefits for direct rollover to qualified retirement savings accounts while remaining active at sea and available for service in national security emergencies.

This proposal drew the support of the AMO Pension Plan trustees and the Plan’s actuarial consultants, and I had presented it initially in a letter to then-Treasury Secretary Steven Mnuchin during the Trump Administration. I had asked for an exemption from the Internal Revenue Code to allow the proposed direct rollover of AMO Pension Plan benefits.

“The issue here is a perilous shortage of civilian American merchant mariners the Department of Defense relies on exclusively for shipping services in support of U.S. military personnel deployed overseas in a crisis,” I wrote to Secretary Mnuchin. “These merchant mariners staff fleets of cargo vessels owned by the U.S. Navy’s Military Sealift Command and by the Maritime Administration in the U.S. Department of Transportation – ships standing by for immediate mobilization in wartime.

“These mariners also work aboard active, privately owned and operated U.S.-flagged cargo ships serving commercial trade markets – ships that are available on demand to the Department of Defense for sustained supply and resupply of U.S. Armed Forces abroad during prolonged conflict,” my letter continued. “These ships and their civilian officers and crew complements delivered 95 percent of the critical cargoes to U.S. military personnel in Afghanistan and Iraq during the long-term response to the terrorist attacks upon the United States on September 11, 2001 – a mission that lasted some 14 years.”

Early in this promotional effort, I received significant direct help from longtime AMO Chief Engineer and personal friend Chad Morin, a Maine Maritime Academy alumnus and Maine resident who referred this proposal to Maine Republican Senator Susan Collins, a solid friend to the U.S. maritime industry.

The Senator and her staff believed in the issue and the cause, dealing directly and near daily with the IRS. Chad and I spoke often with the Senator, including a Zoom call in which Morin made a clear, convincing case for this initiative.

But, after nearly a year of team effort, the IRS dismissed the proposal without explanation. As a consequence, our “first responder” bid – comparable to specific tax breaks for law enforcement officers, firefighters and health care workers – now has to move through the House Ways and Means Committee, where all federal tax legislation must originate. This is a typically a lengthy and more cumbersome process than securing an exemption from IRS rules.

I have drawn positive interest in our proposal among staff to a key New York Congressman ally with direct interest in labor and retirement issues, and members of the broad, bipartisan support base our union has cultivated on Capitol Hill now serving on Ways and Means, and we will bring this cause to them.

I will also try to secure “first responder” tax breaks for merchant mariners living in those states, counties and cities where law enforcement officers, firefighters and health care workers pay no local taxes or gain from reduced tax obligations. More on this as we go …

Thank you for listening. As always, I welcome your comments, questions and opinions.