CANDY DISPUTE GETS STICKY

companies will bar it from staying competitive against businesses that make their sweets overseas.

Just Born, which also makes Mike & Ike and Hot Tamales, wants new hires to pay into a 401(k) plan instead of a pension — and they’re also hoping to avoid a $60 million federal liability for withdrawing from the pension.

The fee is meant to ensure future retirees’ benefits are covered.

The employees at the Peepsmaking plant are covered by the Bakery and Confectionery Union and Industrial International Pension Fund, which was devastated after Hostess, the famed brand behind Twinkies and HoHos, stopped paying in in 2011. The company went bankrupt the following year.

Similar funds across the country are in equally bad shape, experts warn.

According to Boston College, the country’s 1,400 multi-employer pension plans — which typically include joint investments from employers and labor unions — are facing a $553 billion shortfall. The problem is so dire that Congress quietly sneaked a provision forming a committee to use federal funds to bail out as many as 200 such pension plans into the budget bill last month. The Bakery and Confectionery Union and Industrial International Pension Fund has sued Just Born, alleging that its efforts to stop new employees from enrolling in the pension plan is improper and that the company is attempting to wrongly avoid the withdrawal fee. Union officials fear that if Just Born’s request to withdraw goes through it would prompt other firms to do the same — jeopardizing the pensions of thousands. “They’re trying to take from those who gave them so much,” McKay said.

But Just Born executives say they’re just trying to ensure the future of the plant in Bethlehem and contend the company wants what’s best for its employees.

“Leadership feels a responsibility to protect the long-term interest of our company and associates,” Pye said.

“Under our proposal, we continue to contribute required pension fund premiums for all existing employees,” Pye said. “Despite Just Born always fulfilling its obligation to contribute to a multi-employer pension plan, the plan is severely underfunded and heading towards insolvency.”