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The Regional Carpenters’ Union Suffered a $250 Million Pension Fund Loss

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That’s how much pensioners in a regional carpenters’ union lost, thanks to fraud committed by a pension fund manager. Fortunately for Oregon members, the fund is getting some of the money back.


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 pooling all the money that employers pay into funds set aside for retirement and health care benefits for 40,000 active and retired members.


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

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


That loss has not previously been reported in Oregon, perhaps because the losses preceded the merger and so didn’t directly hit Oregon members. Officials then leading the Pacific Northwest Regional Council guarded information about the fiasco closely, according to McCarron’s letter.

“It was not until February 2021, almost a year after the losses occurred, that the executive secretary treasurer and the union trustees informed the members of the massive pension losses, and that was only after the general president informed them to do so,” McCarron told members. The regional council’s executive committee forced out leaders of the union because of the pension losses and several other alleged failures, including neglecting to obtain liability insurance to protect against the bad acts of fund managers. The regional union was placed under trusteeship last fall, which means 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 managers suffered large losses when the stock market plummeted in March 2020, at the beginning of the pandemic.

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

Then, on May 17, the U.S. Department of Justice elaborated further. The DOJ announced the indictment of a senior Allianz fund manager on charges of “conspiracy, securities fraud, investment adviser fraud, and obstruction of justice offenses in connection with a scheme to defraud investors.” The announcement included notice that two of the indicted manager’s subordinates had agreed to plead guilty in the case.

Allianz agreed to pay restitution to clients and fines and penalties of nearly $5.8 billion. That’s a benefit to all members but especially to those in Oregon and Southwest Washington, who’d seen their funds commingled with a very damaged partner.

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