The Regional Union of Carpenters suffered a loss of $ 250 million in its pension fund

$250 million

This is what the retirees of a regional union of carpenters have lost, thanks to the fraud committed by a pension fund manager. Luckily for the Oregon members, the fund recovers some of the money.


Oregonians live and work on a foundation built by members of the Pacific Northwest Regional Council of Carpenters. The organization represents 29,000 active members in five Northwestern states, including about 7,500 in Oregon.


On July 1, 2021, the regional union announced the merger of pension and benefit trusts between its Oregon-Southwest Washington and Western Washington affiliates, effectively consolidating all the money employers pay into funds earmarked for retirement and health care benefits for 40,000 active and retired members.


In March 2020, according to a written communication from the union’s national office to members, obtained by WW, the pension and benefit funds of the Carpenters Trusts of Western Washington took a huge hit in the stock market ahead of the merger. The losses came more than a year before the merger, but many Oregon retirees learned about it six months after the merger.

“The losses total more than $250 million, or about 17% of pension funds,” wrote Douglas J. McCarron, general secretary-treasurer of the national union in a Dec. 17, 2021 letter to local union members.


This loss has not been previously reported in Oregon, possibly because the losses predated the merger and therefore did not directly affect Oregon members. According to McCarron’s letter, officials who then ran the Pacific Northwest Regional Council closely guarded information about the fiasco.

“It was not until February 2021, nearly a year after the losses, that the Executive Secretary Treasurer and the Union Trustees informed members of the massive pension losses, and it was only after the President general informed them to do so,” McCarron told members. The regional council’s executive committee expelled the union leaders over pension losses and several other alleged failures, including neglecting to obtain liability insurance to protect against the misdeeds of fund managers. The regional union was placed in trusteeship last fall, meaning the national union took over the Pacific Northwest Regional Council.


Last year, the Carpenters sued Allianz Global Investors, the German fund management firm responsible for the pension losses. A subsequent federal investigation determined that Allianz executives suffered significant losses when the stock market fell in March 2020, at the start of the pandemic.

On April 14, 2022, the Northwest Carpenters Trusts informed its members that it had reached an agreement with Allianz that would allow it to “recover 2020 investment losses”.

Then, on May 17, the US Department of Justice released more details. The DOJ announced the indictment of a senior Allianz fund manager for “conspiracy, securities fraud, defrauding an investment adviser and obstructing justice in connection with a scheme to defraud investors” . The ad included a notice that two of the indicted manager’s subordinates had agreed to plead guilty in the case.

Allianz agreed to pay damages to customers and fines and penalties of nearly $5.8 billion. This is a benefit for all members, but especially those in Oregon and Southwest Washington, who have had their funds mixed with a badly damaged partner.

Jim Gleason, who was appointed supervisor of the regional council last November, says the union has recovered around $120 million from Allianz. “We hope to make up the losses over time,” Gleason says, “but there has been no reduction in pension payments.”

Dolores W. Simon