PBGC PIMS Peer Review

Evaluation Report of the 

ME PIMS Recoded Model

Produced by Cheiron

 Gene Kalwarski

 Peter Hardcastle

 Christian Benjaminson

 Alex Godofsky

 Chris Mietlicki

November 2020
TABLE OF CONTENTS

Section Page

Letter of Transmittal ....................................................................................................................i

Section I Background..........................................................................................................1

Section II Summary of Key Findings ...................................................................................5

Section III Approach and Analysis ........................................................................................8

Section IV Conclusions .......................................................................................................27
November 6, 2020

Mr. Ted Goldman, FSA, EA, MAAA, FCA

Pension Benefit Guaranty Corporation

Director of Policy, Research, and Analysis

1200 K Street, NW, Suite 11201

Washington, DC 20005-4026

Dear Mr. Goldman:

We are pleased to submit the Evaluation Report of the ME PIMS Recoded Model. The purpose 

of this report is to provide a targeted analysis, including the methodologies and integrity, of the 

PBGC’s ME PIMS Recoded Model. Our independent review satisfies the annual peer review 

requirement under Section 40233(a) of MAP-21.

In the Background section we review the objectives of the project, give an overview of the 

Legacy and Recoded model, and discuss the data provided for the project as well as limitations 

in our review. The Summary of Key Findings section is a condensed version of the results of our 

review with further information found in the Approach and Analysis section. Finally, we 

summarize our findings in the Conclusion section based on the four objectives:

 Confirm the methodologies used to develop cash flows, liabilities, and other pertinent 

calculations are performed consistent with multiemployer program provisions.

 Identify changes in methods and assumptions from the Legacy model by comparing 

outcomes and evaluate whether those changes are likely to improve the results of the 

modeling.

 Review actuarial calculations in the Recoded Model to assure accuracy.

 Summarize findings and provide recommendations to address those findings based on the 

results of the review. 

As you’ll see, we conclude the Legacy and Recoded Models are not generally the same because 

of differences in the underlying data, assumptions, and methods. However, based on our review 

and knowledge of the model, the Recoded Model produces results that are an appropriate 

reflection of the Multiemployer Pension universe and PBGC’s Net Position.

This report and its contents have been prepared in accordance with generally recognized and 

accepted actuarial principles and practices and our understanding of the Code of Professional 

Conduct and applicable Actuarial Standards of Practice set out by the Actuarial Standards Board 

as well as applicable laws and regulations. Furthermore, as credentialed actuaries, we meet the 

Qualification Standards of the American Academy of Actuaries to render the opinion contained 

in this report. This report does not address any contractual or legal issues. We are not attorneys,

and our firm does not provide any legal services or advice.
Mr. Ted Goldman

November 6, 2020

Page ii

This report was prepared exclusively for PBGC’s Board of Directors for the purposes described 

herein and satisfies the annual peer review requirement under Section 40233(a) of MAP-21.

Other users of this report are not intended users as defined in the Actuarial Standards of Practice, 

and Cheiron assumes no duty or liability to such other users.

Sincerely,

Cheiron

Gene Kalwarski, FSA, EA Peter Hardcastle, FSA, EA Christian Benjaminson, FSA, EA

Principal Consulting Actuary Principal Consulting Actuary Principal Consulting Actuary

cc: Christopher Mietlicki, ASA, EA

Alex Godofsky, ASA
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION I - BACKGROUND

1

Cheiron has been hired to provide the Pension Benefit Guaranty Corporation (PBGC) with a 

review of its MultiEmployer Pension Insurance Modeling System (ME-PIMS) valuation models. 

The primary objective of the review is to provide a targeted analysis including the methodologies 

and integrity of the PBGC’s ME PIMS Recoded Model.

ME-PIMS was entirely recoded during 2018 to make it more efficient and powerful. The result –

the ME PIMS Recoded Model – provides an increased level of flexibility and allows the PBGC 

to better respond to congressional and other stakeholder questions as the insolvency of the 

program approaches.

This report reviews the methodologies and integrity of the newly developed Recoded Model. The 

stated objectives of the review are as follows:

 Confirm the methodologies used to develop cash flows, liabilities, and other pertinent 

calculations are performed consistent with multiemployer program provisions;

 Identify changes in methods and assumptions from the Legacy model by comparing 

outcomes and evaluate whether those changes are likely to improve the results of the 

modeling;

 Review actuarial calculations in the Recoded Model to assure accuracy; and

 Summarize findings and provide recommendations to address those findings based on the 

results of the review.

The objective of the review is to assure accuracy of the calculations in the model rather than 

identify improvements to the structure. This evaluation report focuses solely on identifying any 

differences in assumptions, methodologies, or calculations between the Recoded Model and the 

Legacy Model. For each potential issue identified in the review, the report explains the nature of 

the concerns, assesses the significance on overall results, and recommends alternatives.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION I - BACKGROUND

2

The Models

In this report we refer to the earlier model as the “Legacy Model” and later models as “Recoded” 

models. Key features, assumptions, and descriptions of the models are summarized in the table 

below.

Legacy Model Recoded Model

Programming Language C++ (500,000 lines of code, 

difficult to model Technical 

Assistance changes)

Microsoft Excel with Visual 

Basic programming (reduces 

run time and brings added 

flexibility to more easily 

model Technical Assistance 

changes)

Projection Period Up to 20 years, 500 stochastic 

trials

50 years, 500 stochastic trials

Economic Assumptions Projected interest rates, various 

bond yields, inflation and equity 

returns (see PIMS System 

Description)

Same

Data Source Form 5500 (mainly Schedule 

MB, H and I)

Same

Plan Universe 300 Plans All Plans

Development of Benefit 

Payment Streams

Projects census data from 

age/service scatter forward each 

year with mortality experience

Calibrated in separate model, 

adjusted to match current 

liability and expected benefit 

payments for the starting year

Mass Withdrawal 

Probabilities

Based on ME-PIMS regression 

formula

None assumed

The PBGC completed an independent review of the two models, reconciled results, and resolved 

differences. The Recoded Model was reviewed by PRAD staff, outside contractors (Lynchval 

and Bolton), and CBO. PRAD presented the findings of the Recoded model to the Board of 

Directors on July 19, 2019 (see PowerPoint “Support for ME-PIMS FY2018 Transition to 

Updated Model”). 
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION I - BACKGROUND

3

Data Provided

In preparing this report, we relied on information (some oral and some written) supplied by the 

PBGC. This information includes, but is not limited to the following:

 the ME PIMS Recoded Model after enhancements (ME2019 2016MB PR MPRA fixed claim 

20190601 new MPRA assump – PR F.xlsb)

 sample plan results from the ME PIMS Legacy Model and Recoded Model before 

enhancements for eight plans (five plans that are expected to require financial assistance and 

three healthy plans),

 system documentation for the Legacy and Recoded Models (see files listed below), and

 documents reconciling the results of both models (see files listed below).

Files Provided

 FY18 ME Crosswalk_Stochastic_No_MPRA PR.xlsm

 PlanAvgsBaseline_(20190506)_PIMS_1to1280 with SP v2 NoMPRA PR.xlsx

 scenario template 2019 v2 - 2018 No MPRA PIMS Assump.xlsb

 PlanAvgsBaseline_(.....).csv

 ScenariosBaseline_(.....).csv

 ME2019 2016MB PR MPRA fixed claim 20190601 new MPRA assump – PR F.xlsb

 MultiEmployer Spreadsheet Model Description.docx

 Data Dictionary 20190708.xlsx

 fy-2018-projections-report.pdf

 MultiEmployer Spreadsheet Model FY 2019 Release.docx

 FY 2019 ME Crosswalk PR.xlsx

 ME Model Enhancement Tracking.xlsx

 ME PIMS Transition 20190719.pptx

Limitations

In responding to the PBGC’s request to bid on this project the assumption was that Cheiron 

would have access to the program code used for the Legacy Model, the Recoded Model, and an 

enhanced Recoded Model. However, due to concerns about the readability of the Legacy code 

and concerns about the sensitivity of changes made to the original Recoded Model, to assist 

PBGC in answering technical questions from Congress, only the code for the enhanced version 

of the Recoded Model was made available.

The Recoded Model includes input benefit payment streams by plan, which were generated 

outside of the model. The development of these streams is a critical component of the overall

model but was outside the scope of this project. We comment in our report, that given the 

significance, PBGC may consider an independent review of the model used to create the benefit 

payment vectors.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION I - BACKGROUND

4

Cheiron appreciates PBGC’s assistance throughout this project. They were extremely helpful in 

providing explanations and supporting information to answer our questions. There are certain 

sections in this report where we relied upon PBGC’s descriptions of the assumptions and 

methods used in the Legacy Model.

Disclosures

This report and its contents have been prepared in accordance with generally recognized and 

accepted actuarial principles and practices and our understanding of the Code of Professional 

Conduct and applicable Actuarial Standards of Practice set out by the Actuarial Standards Board 

as well as applicable laws and regulations. Furthermore, as credentialed actuaries, we meet the 

Qualification Standards of the American Academy of Actuaries to render the opinion contained 

in this estimate. This report does not address any contractual or legal issues. We are not 

attorneys, and our firm does not provide any legal services or advice.

This report was prepared exclusively for PBGC’s Board of Directions for the purpose described 

herein and satisfies the annual peer review requirement under Section 40233(a) of MAP-21. 

Other users of this report are not intended users as defined in the Actuarial Standards of Practice, 

and Cheiron assumes no duty or liability to such other users.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION II - SUMMARY OF KEY FINDINGS

5

Based on our review, we have determined that, while the Legacy and Recoded models are 

different, the Recoded Model includes enhancements and refinements and produces results that 

are an appropriate reflection of the Multiemployer Pension universe and PBGC’s Net Position. 

The differences between the models are explained by either the underlying data, assumption 

changes, or methodology changes which were generally known and intentionally different. For 

example, in our opinion, the contribution assumption changes made as part of the enhanced 

Recoded Model are a better reflection of what is likely to happen upon plan insolvency. 

Ultimately, we conclude, the enhancements and assumption changes between the Legacy and 

Recoded models are appropriate and improve the results of the model.

Below we summarize our key findings; additional support and analysis is found in the 

“Approach and Analysis” section of this report. 

The key findings are as follows:

 The Recoded Model and Legacy Model produced similar Net Positions (the Recoded Model 

producing a Net Position that is $1.82 billion lower on 10/1/2028 and $1.27 billion lower on 

10/1/2018). The table below shows the breakdown of the Net Position between the two 

models. As you can see, there are differences in the key components, but these are generally 

explained by the underlying data differences, changes in assumptions, or changes in methods 

which are described throughout our report. Overall, the results of the model accurately reflect 

PBGC’s Net Financial Position.

$ Billions

Legacy

Model

Recoded Model

Before 

Enhancements $ Change % Change

10/1/2028 Values

1. Assets of PBGC Multiemployer Program ($4.426) ($6.987) ($2.56) 57.9%

2. PV of projected Partition Payments $0.160 $0.217 $0.06 35.6%

3. PV of projected Assistance Payments $66.582 $62.145 ($4.44) -6.7%

4. Net Position on 10/1/2028

[1. – 2. – 3]

($71.168) ($69.349) $1.82 -2.6%

Net Position discounted to 10/1/2018 ($52.329) ($51.059) $1.27 -2.4%
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION II - SUMMARY OF KEY FINDINGS

6

 The Present Value of Financial Assistance (“PV FA”; for Scenario 1 out of 500) is 

significantly different in three of the five sample plans we reviewed: 100% for Plan #4, 69% 

for Plan #13, and 20% for Plan #14. While some of the sample plans use different starting 

data, the main differences are due to the assumption and methods changes to contributions

and/or benefit payments which are discussed later in the report. The differences are generally 

logical and rational.

Sample Plan # $ Billions PV FA Legacy PV FA Recoded % Change

#1 -- Critical & Declining, 390,000 Participants, 

Actuary projected insolvency in 2025

$16,191 $16,869 4%

#3 -- Critical & Declining, 100,000 Participants, 

Actuary projected insolvency in 2022

$3,749 $3,993 7%

#4 -- Critical & Declining, 73,000 Participants, 

Actuary projected insolvency in 2028

$1,882 $3,762 100%

#13 -- Critical & Declining, 35,000 Participants, 

Actuary projected insolvency in 2021

$807 $1,360 69%

#14 -- Critical & Declining, 50,000 Participants, 

Actuary projected insolvency in 2020

$1,296 $1,561 20%

 Both models have the same starting value of PBGC’s assets, and the discount rates and asset 

return parameters appear to be consistent. 

 The models use the same economic scenarios including a fixed investment return assumption 

for the largest Critical and Declining plan (based on that plan’s revised asset allocation and 

its plans for an orderly passage to insolvency this is a reasonable change).

 The Legacy and Recoded models use starting data from different years (a known difference).

The Recoded Model was simplified to use the same plan year data for all plans (the 2016 

Form 5500 data) to avoid adjusting timing differences for different plan years. From the 

sample plans we reviewed Plan #1, Plan #3, and Plan #4 used the 2017 Form 5500 

information in the Legacy Model. This data difference was known by PBGC.

 The models have different methodologies for determining benefit payments (a known 

difference and enhancement to the Recoded Model to permit projecting the full universe of 

plans). The Legacy model used the age/service scatters included as attachments to the Form 

5500 to project the census data profile forward annually; the Recoded Model used sample 

benefit payment curves, fitted to the information on the Form 5500 using a separate model. 

From the sample plans reviewed, the impact appears to have reduced the Net Position.

The graph below illustrates the methodology difference for Plan #14. Note the dotted line 

(only available from the Recoded Model) represents benefits before reduction to the PBGC 

Guarantee). As shown the annual benefit payments are lower in the Recoded model, which 

by itself should reduce the Present Value of Financial Assistance. However, the Present 
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION II - SUMMARY OF KEY FINDINGS

7

Value of Financial Assistance for Plan #14 is 20% higher which is attributable to the lower 

contributions (see next bullet) and earlier insolvency. 

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

 The Recoded Model (with enhancements) included changes to assumptions for plan 

contributions, mass withdrawal, and rate of decay and a different algorithm for timing of 

mass withdrawal. These assumption changes were reasonable and improved the accuracy of 

the projections. As shown in PBGC’s July 19, 2019 PowerPoint, the contribution assumption 

changes increased the Net Deficit by $16.2 billion.

Again, we illustrate the methodology difference for Plan #14. The contributions are similarly 

reduced upon insolvency, but the Legacy model remains fixed thereafter while the Recoded 

model declines over time. This accounts for the earlier insolvency date and the higher Present 

Value of Financial Assistance. In our opinion, the contribution assumption changes in the 

Recoded model are a better reflection of what is likely to happen upon plan insolvency.

$0

$10

$20

$30

$40

$50

$60

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Contributions

Legacy Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

8

This section describes how we reviewed PBGC’s Legacy Model and Recoded Model and 

presents the differences we discovered. Please review the “Limitations” in the Background 

Section of this report for the constraints we encountered.

The Net Position of PBGC’s Multiemployer Guaranty program relies on two processes: 1) 

projecting PBGC assets and liabilities, and 2) testing for insolvency for all insured plans. The 

first process includes a projection of PBGC assets with premium income, investment returns, and 

financial assistance payments from previously insolvent plans and plans that are expected to 

become insolvent in the future. The second process includes a projection of cash flows for each 

insured plan to test for insolvency and subsequent PBGC financial assistance.

In the Legacy Model, both processes were completed in one program. Following the recoding 

exercise, the process is performed using two separate models. The first model provides input for 

the benefit payments taking vectors of future payment streams for currently retired participants, 

currently terminated vested participants, the accrued benefits of current actives, and the next 

year’s accrual for current actives. This is obtained from a model that manipulates known 

projected cash flow vectors from actual multiemployer plans so that the manipulated cash flows 

have present values equal to the current liability values reported on the Schedule MB. Cheiron 

was instructed to accept the cash flows input to the model used for the first step outlined here. 

The second model (of which we were provided the version “ME 2019 2016 MB PR MPRA fixed 

claim 20190601 new MPRA assump – PR F.xlsb”) completes the first process and produces 

output files used to develop results and graphs for PBGC’s Projection Report (“scenario template 

2019 v2 – 2018 No MPRA PIMS Assump PR”).
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

9

Simplified Flow Chart of ME PIMS Recoded Process

(Processes in tan color were not examined as part of this review.)

Given the data available, we decided to review the Legacy and Recoded models from a

Top-Down and Bottom-Up approach. The next sub-sections describe our analysis under each 

approach.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

10

Top-Down Approach

In the top-down approach, we consider the first part of the process outlined in the prior section –

projecting the PBGC’s assets and liabilities. The Recoded and Legacy models produced similar 

Net Positions ($1.8 billion less on 10/1/2028 and $1.2 billion less on 10/1/2018). The differences 

in the key components are generally explained by the underlying data differences, changes in 

assumptions, or changes in methods. Overall, the results of the model accurately reflect PBGC’s 

Net Financial Position. See the table below and our commentary and observations on each 

component that follows.

$ Billions

Legacy

Model

Recoded Model

Before 

Enhancements Change

10/1/2028 Values

1. Assets of PBGC Multiemployer Program ($4.426) ($6.987) ($2.561)

2. PV of projected Partition Payments $0.160 $0.217 $0.057 

3. PV of projected Assistance Payments $66.582 $62.145 ($4.437)

4. Net Position on 10/1/2028

[1. – 2. – 3.]

($71.168) ($69.349) $1.819 

Net Position discounted to 10/1/2018 ($52.329) ($51.059) $1.270

Present Value of Financial Assistance

The graph below shows the differences in the Present Value of Financial Assistance between the 

Legacy Model, the Recoded Model using the same plans and scaling factors as the Legacy 

Model, and the Recoded Model using the full universe.

Overall the Recoded Model, based on the same sampling and scaling methodology as the Legacy 

Model, produces Financial Assistance that is comparable to the Legacy Model. Removing the 

scaling and adding all of the plans results in a lower financial assistance and is a better reflection 

of the system.

$66.582 $65.803 $62.145 

$0

$10

$20

$30

$40

$50

$60

$70

$80

Legacy Model

(300 Plans, Scaled

Up)

Recoded Model

(300 Plans, Scaled

Up)

Recoded Model

(Full Universe)

Billions

2028 PV Financial Assistance
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

11

Assets 

The starting point for the value of PBGC’s assets is the same in both Legacy and Recoded 

models at $2.311 billion. The discount rates and asset return parameters appear to be consistent. 

The Legacy Model fund projection components are not consistent with Recoded fund projection 

in several ways. 

 The Legacy Model assumes only part of PBGC’s assets, labeled “ast_t_bill”, gets interest at 

the discount rate of interest. Premiums and assistance payments counted as part of the assets 

are not included in this amount. In the Recoded Model, the full portfolio is assumed invested.

 Because the Legacy model does not assume a return on premiums, assets are lower in the 

Legacy Model than the Recoded Model.

 The income and expense items in the Legacy Model do not match the Recoded Model. Since 

these items are outputs from the second process, they will be covered in the description of the 

bottom-up approach in the next section.

Present Value of Partition Payments

The difference here is small reflecting the limited resources available for partitions. Also the 

Recoded Model was knowingly modified to improve the estimate of the cost of partitions.

Present Value of Projected Assistance Payments

The numbers behind the present value of projected assistance payments come from the second 

process and will be covered in the description of the bottom-up approach in the next section. 

These differences are explained further below, but are ultimately different due to differences in 

the underlying data, assumption changes, or methodology changes which were generally known 

and intentional differences.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

12

Observations

As mentioned above, the asset roll-forward in the Legacy and Recoded models are not 

consistent. We think the Recoded Model roll-forward could be improved upon. Currently the 

Recoded Model calculates the ending year assets as follows:

Beginning Assets x (1+r) + Premiums x (1+r/2) – Assistance – Partition Payments x (1+r/2) 

where r is the return for the year.

PBGC should consider adopting the formula (changes bold red)

Beginning Assets x (1+r) + Premiums x (1+ r/4) – Assistance x (1+r/2) – Partition Payments x 

(1+r/2) – Expenses x (1+r/2)

Rationale

The program assumes all plans are calendar year plans, so premiums payable on or before 10/15 

are only investable during the last three months of the assumed year. Assistance is paid 

throughout the year so ought to impact the asset return – a more exact formula could be used to 

take into account the advanced payment to plans of the assistance.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

13

Bottom-Up Approach

The bottom-up approach mainly concerns the second process in getting to PBGC’s net position 

projecting the financial condition of individual plans and any obligations from PBGC resulting 

from insolvency.

The model is set up with parameters to select an individual plan and an individual economic 

scenario. There is an automation macro written in Visual Basic so that a plan can be selected and 

then run through up to 500 pre-input economic scenarios and the results written out to an output 

file. Because the model produces results in this way, the output can be compared with sample 

plan output from the earlier Recoded Model and the Legacy Model provided by PBGC. Based on 

our review of sample plans, the differences were due to the data differences, assumption 

changes, and method changes. In our opinion, these changes improve the results of the Recoded 

model.

Comparison of Results for Specimen Plans for the Legacy and Recoded Model

Because the guaranty program provides assistance once a plan is unable to pay benefits, we 

concentrated our analysis on sample plans drawn from those that were certified as Critical & 

Declining with the 2016 5500 Filing. The table below shows the Present Value of Financial 

Assistance for the five plans. The number is significantly off in three of the five sample plans we 

reviewed – double for Plan #4, 69% higher for Plan #13, and 20% higher for Plan #14.

Sample Plan # $ Billions

PV FA

Legacy

PV FA

Recoded

% Change

#1 -- Critical & Declining, 390,000 Participants, 

Actuary projected insolvency in 2025

$16,191 $16,869 4%

#3 -- Critical & Declining, 100,000 Participants, 

Actuary projected insolvency in 2022

$3,749 $3,993 7%

#4 -- Critical & Declining, 73,000 Participants, 

Actuary projected insolvency in 2028

$1,882 $3,762 100%

#13 -- Critical & Declining, 35,000 Participants, 

Actuary projected insolvency in 2021

$807 $1,360 69%

#14 -- Critical & Declining, 50,000 Participants, 

Actuary projected insolvency in 2020

$1,296 $1,561 20%
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

14

The largest plan had the smallest percentage change, but since the projections for this plan have 

been given extra consideration and scrutiny by PBGC and because there was much publicly 

available projection data provided by the plan for an MPRA benefit suspension application, this 

is perhaps not surprising. While the Legacy Model uses a different base year for the 5500 data 

for this plan, the Recoded Model uses plan specific investment returns to roll-forward the data to 

the start of the projection period and then uses a fixed investment return assumption rather than a 

stochastic approach.

Below we summarize the key differences and similarities:

 The Legacy and Recoded Models sometimes use starting data from different years (a known 

difference). All Plans in the Recoded Model start with the 2016 Schedule MB data. However, 

three of the sample plans we were provided from the Legacy Model are based on 2017 MB 

data (Plan #1, #3, and #4). If a significant event took place in 2016, e.g. a change in industry 

activity, this would change the projections, but in aggregate this is unlikely to materially 

affect PBGC’s Net Position.

 The models have different methodologies for determining benefit payments and headcounts 

(a known difference and enhancement to the Recoded Model). The Legacy Model uses the 

age service scatters attached to the Schedule MB to generate a plan population and also a 

new entrant vector. These are then used in a valuation system within the Legacy Model to 

generate the cash flows. In contrast, the Recoded Model relies on fitting benefit payment 

vectors from known actual plan benefit projections to the current liability numbers in the MB 

and the expected benefit payments for the starting year (also found on the MB). The 

headcounts of all plans in the Legacy Model were modeled with a 1.3% per year decline,

whereas in the Recoded Model Critical and Declining plans suffer no decline in headcount,

and other plans have a stochastic decline with mean of 1.3% and a standard deviation of 8% 

(although the deviation is limited to +/- 12%). 

 Both the Legacy and Recoded models have the same discount rates and asset returns for all 

plans. 

 The Recoded Model uses a fixed investment return assumption for the largest plan (known 

changes, based on that plan’s revised asset allocation this a reasonable change).

 The following table compares key assumptions from the Legacy and Recoded models. All 

assumption changes were made by PBGC as part of the Recoded model. We reviewed the 

assumption changes and found them to be reasonable and overall improve the results of the 

model.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

15

Assumption Legacy Recoded

1 Active population decline Average of 1.3% decline per year. 

Changes from year to year are 

modeled as autoregressive and have a 

lognormal distribution. Each plan has 

a unique random draw for every 

scenario/year. Variance in percentage 

changes is smaller for larger plans. 

Annual changes are correlated with 

economic simulation.

Same average of 1.3% decline per 

year. However, changes from year to 

year are not modeled as 

autoregressive and has a uniform 

distribution. Random draws vary 

across scenario/year but are the same 

for all plans. Variance is the same for 

all plans. No correlation with 

economic simulation.

2 Contribution Rate increases Increase based on historical per capita 

rate, adjusted for FIP/RP and NAWI, 

PPC increases 7% per year

Same, except Critical & Declining 

Plans have no increase, PPC 

increases 3.6% per year

3 Maximum Contribution 

Rates

2 or 3 times 2008 rate (1.5 times for 

Critical and Declining or ERM plans) 

adjusted with NAWI

3 times 2009 rate (1.5 times for 

Critical and Declining plans) 

adjusted with NAWI. ERM plans are 

not modeled in the Recoded model.

4 Mass Withdrawal Liability 

assumption at insolvency / 

Payments Collection

Mass withdrawal upon insolvency, 

annual payments are assumed to be 

40% of prior contribution, no decay

Mass withdrawal upon insolvency, 

annual payments are assumed to be 

43% of prior contribution with a 1% 

annual decay rate

5 Actuarial assumptions Static throughout the projections Same

6 Administrative Expense Maximum of 5% of annual benefit 

payments

Same

7 Census and form of payment 100% male, 100% single life annuity Assumptions for percent male, 

females 3-year younger, assumptions 

for 50% J&S, 80% married for 

PRDB

8 Mortality experience Static RP-2014 combined health 

male/female tables

Same

9 MPRA take up assumptions Not programmed Not programmed when converted. 

Later programed 30% for suspension 

and 10% for partition for FY18 

Projection Report model.

10 Benefit Improvement Varies stochastically, reflects 

restrictions for critical and endangered 

plans

None assumed

11 Pre-insolvency Mass 

Withdrawal

Varies stochastically None assumed pre-insolvency

12 FIP/RP Maximum changes occur in the first 

applicable year (enhanced Recoded 

Model delays impact by 2-years)

Same

13 Withdrawal assumptions None explicitly assumed. However, 

withdrawal liability payments are 

included in the per capita contribution 

rate which implicitly accounts for 

future regular withdrawal liability 

payments

Same

14 New Entrants Same distribution as starting active 

population

Same
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

16

The charts on the following pages compare assets, contributions, and benefit payments between 

the Legacy Model and the Recoded Model for the eight sample plans (for Scenario 1 out of 500).

Following those charts are charts showing the financial assistance payments for the five plans 

that become insolvent within the first 10 years of the projection.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

17

Assets

Below we show asset projections for the eight sample plans. With the exception of Plan #4, the 

Recoded Model is consistent with the Legacy Model. Plan #4 had lower contribution and benefit 

payments, and insolvency was projected farther out in the period. The results of the Recoded 

Model are in line with the projections prepared by Plan #4’s actuary based on the 5500 Filing. 

See additional explanation in the Contribution and Benefit Payment sections that follow.

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #3: Assets

Legacy Recoded before Recoded after

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #4: Assets

Legacy Recoded before Recoded after

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #13: Assets

Legacy Recoded before Recoded after

$0

$50

$100

$150

$200

$250

$300

$350

$400

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Assets

Legacy Recoded before Recoded after

$0

$20

$40

$60

$80

$100

$120

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #128: Assets

Legacy Recoded before Recoded after

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #129: Assets

Legacy Recoded before Recoded after

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #130: Assets

Legacy Recoded before Recoded after

$0

$2

$4

$6

$8

$10

$12

$14

$16

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #1: Assets

Legacy Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

18

Contributions

Next we show contribution projections for the sample plans. Here is where we see most of the 

differences due to the contribution assumption changes that were made as part of the Recoded 

Model with enhancements. Plans #1 and #14 both have similar patterns in the models while 

Plans #3, #4, and #13 have material differences after insolvency. These are a result of the 

intentional contribution assumption changes made as part of the enhanced Recoded Model, and 

in our opinion, are a better reflection of what is likely to happen upon plan insolvency.

The contribution projections for Plan #4 are different because the initial contribution in the 

Legacy Model includes withdrawal liability payments as part of the employer contributions. This 

input difference is reflected in the starting per capita contribution rate which is then used for later 

years. As noted earlier, the per capita contribution increase is higher in the Legacy Model 

(known assumption change) which causes the contribution projections in the models to diverge. 

This, combined with the benefit payments, delays insolvency for Plan #4 until after the period 

shown.

The Recoded Model (with enhancements) made several assumption changes for plan 

contributions, mass withdrawal, and rate of decay and a different algorithm for timing of mass 

withdrawal. In our opinion, these are reasonable and appropriate. The changes are listed below

(see PBGC’s Multiemployer Spreadsheet Model FY 2019 Release dated 11/19/2019 for more 

information).

 Plans that fall into Endangered status under PPA during the projection are assumed to have 

12% annual increases for the next 10 years. The model was adjusted to have the increases be 

delayed for two years. A delay is common in practice as increases generally do not occur 

until the next round of collective bargaining, so this change is reasonable. This lowered the 

Net Position by $0.4 billion.

 Adjustment to the withdrawal liability payment period (rounding impact on the Net Position).

 Adjustment to the Per Capita Contribution Cap programming to avoid having the amount 

reset during the projection. This mainly affected large green-zone plans and improved the 

Net Position by $3.5 billion.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

19

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #1: Contributions

Legacy Recoded before Recoded after

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #3: Contributions

Legacy Recoded before Recoded after

$0

$100

$200

$300

$400

$500

$600

$700

$800

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #4: Contributions

Legacy Recoded before Recoded after

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #13: Contributions

Legacy Recoded before Recoded after

$0

$10

$20

$30

$40

$50

$60

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Contributions

Legacy Recoded before Recoded after

$0

$1

$2

$3

$4

$5

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #128: Contributions

Legacy Recoded before Recoded after

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #129: Contributions

Legacy Recoded before Recoded after

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #130: Contributions

Legacy Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

20

Benefits

Next we show benefit payment projections for the sample plans. The solid lines represent 

benefits paid from the plans before (full plan benefit) and after insolvency (at PBGC Guarantee). 

The dotted lines (only available for the Recoded Model) are the full plan benefits that would 

have been paid absent the PBGC Guarantee. We showed these to illustrate the impact of the 

reduction, which in our opinion is appropriate.

All plans, with the exception of Plan #4, have projected benefit payments that are consistent 

between models. Similar to the contributions, Plan #4 benefit payments are different because the 

starting data was different. This affects the development of the entire stream of payments. The 

lower benefit payments in the early part of the projection allow the plan to remain solvent over 

the period shown compared to the Recoded Model.

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #1: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$100

$200

$300

$400

$500

$600

$700

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #3: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$200

$400

$600

$800

$1,000

$1,200

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #4: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$20

$40

$60

$80

$100

$120

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #13: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$1

$2

$3

$4

$5

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #128: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

21

$0

$1

$1

$2

$2

$3

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #129: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after

$0

$1

$1

$2

$2

$3

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #130: Benefit Payments

Legacy Recoded before Recoded after

Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

22

Financial Assistance (5 plans)

Finally, we show projected financial assistance for the five sample plans that are projected 

insolvent. Plans #1, #3, and #14 are consistent between models. The deviation for Plans #4 

and #13 is a result of the different contribution assumption that we showed earlier.

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

2018 2021 2024 2027 2030 2033

Billions

Recoded ID #1: Financial Assistance

Legacy Recoded before Recoded after

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #3: Financial Assistance

Legacy Recoded before Recoded after

$0

$20

$40

$60

$80

$100

$120

$140

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #4: Financial Assistance

Legacy Recoded before Recoded after

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #13: Financial Assistance

Legacy Recoded before Recoded after

$0

$20

$40

$60

$80

$100

$120

2018 2021 2024 2027 2030 2033

Millions

Recoded ID #14: Financial Assistance

Legacy Recoded before Recoded after
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

23

Observations on the Recoded Model

These observations relate to the Recoded Model with respect to the plan level projections only

(the second process). Observations on the projecting PBGC’s assets and liabilities (the first 

process) are discussed earlier.

Pre-Projection Roll-Forward

While the model is complex, the output relies heavily on a number of assumptions and 

approximations. In the Recoded Model, the assumption is made to treat all plans as having a 

calendar year for their plan year and for the PBGC’s measurement date to coincide with that 

year. With the Recoded plan taking 2016 Form 5500 data as its starting point, the model first 

projects the plan to the 1/1/2019 measurement date (a proxy for a 10/1/2018 measurement date). 

Since this three-year period is already over, the investment market performance is known;

therefore, the projection uses one set of investment return assumptions for 2016, 2017 and 2018. 

With the exception of the largest plan that is soon projected to become insolvent, the actual 

returns used are 7.42% for 2016, 13.98% for 2017, and 3.71% for 2018. The average returns are 

appropriate for calendar year plans with a 60/40 asset mix. However, not all plans have the same 

investment return assumption or asset allocation, and only 60% of plans weighted by assets are 

calendar year. PBGC may consider modifying the returns for this purpose to choose returns that 

take into account the assumed rate of return and plan year. However, we do not anticipate this 

refinement to change the Net Position when rounding to the nearest 0.1 billion.

Projection

Contributions – Bargained Employer Contributions, Withdrawal Liability Payments and Mass 

Withdrawal Liability Payments

The solvency projection depends on assumptions made as to the level of employer contributions 

and withdrawal liability payments for already withdrawn employers. As documented in the 

model material provided, this is a difficult variable to program using the Form 5500 data because 

the inputs often include withdrawal liability payments. The input issue aside, we agree with the 

methodology used in the roll-forward of employer contributions which is done on a per capita 

basis while the plan is solvent and limited to 150% of the 2009 level with inflation. The model 

uses different per capita increase assumptions depending on the plan’s zone status, but increases 

are not below the National Average Wage Index. Endangered plans approximate the increase 

under the Funding Improvement Plan, and Critical plans approximate the increase under the 

Rehabilitation Plan. Plans in “Safe” status have their per capita contribution set equal to the 

plan’s actual per capita increase since 2009, but phased down to the National Average Wage 

Index over 15 years. 

Ultimately, the employer contributions are equal to the annual per capita contribution multiplied 

by the annual active membership count. The active count is stochastically modelled as noted 

previously. 
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

24

A different approach to contributions is taken for Critical and Declining status plans. For these 

plans, the headcount and the contribution rate is kept level, the overall assumption being that the 

plans will maintain a level total employer contribution until insolvency occurs. We recommend 

this assumption be reconsidered since Critical and Declining plans typically have declining 

headcounts.

Once a plan becomes insolvent, the model assumes a mass withdrawal occurs. The model allows 

the user to input an assumption of how the mass withdrawal payments relate to the pre-mass 

withdrawal regular contributions and also input a decline assumption. The Recoded Model sets 

the withdrawal liability collection percentage at 43% with a 1% annual decline. We tested the 

sensitivity of this assumption by running all plans through the first five trials using the Recoded 

Model with enhancements and comparing the impact on the 2028 Present Value of Financial 

Assistance. With a 10% higher (or lower) initial collection percentage, the Present Value of 

Financial Assistance was approximately 5% lower (higher) a change in the reported PBGC net 

position at 9/30/2018 of about $3 billion.

Benefit Payments – Before and After Insolvency

The next key component of the solvency projection is the plan benefit payments. This may 

arguably be the most important projection item in the model since it is used for the solvency 

projection and is used in the development of the PBGC guaranteed benefit payments, which 

determines the Net Position. The model pulls the benefit streams by participant status, both at the 

full plan benefit level and at the PBGC Guaranteed Benefit level, that were calibrated outside the 

model (see tabs CalibInactCF and CalibActCF).

PBGC may consider an independent review of the model used to create the benefit payment 

vectors (which was outside the scope of this project) and how alternative benefit streams would 

affect the Net Position. The fitting of payment vectors to match the liability values and expected 

first year benefit payments is not a novel idea, and we have used various techniques in our own 

work over the years.

We note that the model recalibrates the active accrued benefit input vector so that the present 

value of the payments equals the active current liability value shown in the Form 5500 database, 

but there is no similar recalibration of the retiree or deferred vested vectors. While we would 

expect no recalibration to be required for any of the vectors, the changes observed were minor. 

We recommend the calibration should take into account the 10-year benefit payment stream that 

was required to be attached for the Form 5500 beginning for the 2018 plan year.

MPRA Partitions and Suspensions

The full plan benefits are adjusted for Partition if applicable. However, the partition adjustment 

is only necessary until the plans file a Form 5500 with the partition reflected, otherwise the 

program would double-count the partitioned off benefits. Furthermore, for Partition, we noticed 

that Plan ID #53, which was granted partition during 2017, still has full benefit payments used in 

the initial projection to the start year. The model does not reflect the Partition until Plan Year 

2020. The model only has three plans programmed with Partition so the impact of this change 

will be minor and is unlikely to move the Net Position when rounded to the nearest $0.1 billion 

given that partitioning is expected to result in troubled plans avoiding insolvency. If more plans 

are approved for partition, this could have greater impact, and we suggest the programming be 

updated to reflect the partition effective date.
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

25

The model includes 11 plans approved for MPRA Suspension of Benefits and makes adjustments 

for the suspended level of benefits. As noted with Partition, we think this methodology is 

appropriate until these plans file a Form 5500 reflecting the adjustment, unless PBGC is taking 

this into account in the models used to establish the benefit payment vectors. Also, the model 

calculates a Weighted MPRA Percentage which applies to all participant statuses even though 

the inputs are available to do this by status. However, as with Partition, a Suspension is aimed at 

avoiding insolvency so Suspension plans should not materially add to PBGC’s net position.

Expenses

We confirmed the programming for administrative expenses is appropriate. The initial amount is 

pulled from the Form 5500 and projected forward with 2% inflation, but limited to 5% of benefit 

payments. However, we found a very minor formula error in cell J94. The formula compares the 

greater of: 1) the prior year expenses increased by 2% inflation, but as a negative number and 2) 

expenses as a percentage of benefit payments, but as a positive number. With the signs off, the 

second will always be greater. Again, this is a very minor change in only one year and should 

have no effect on the Net Position rounded to the nearest $0.1 billion.

Stochastic Trials

We tested the reasonableness of the stochastic process in the Recoded model by reviewing the 

output from the 500 stochastic trials for the five sample plans that are expected to go insolvent. 

The table below summarized the probability of insolvency through 2038. With the fixed 

investment return assumption for Plan #1, it is appropriate for there to be 100% probability. 

However, the variability in investment returns for the other plans shows how insolvency will 

vary over time. Plans #3 and #13 have a higher probability of insolvency in the short term, while 

Plans #4 and #14 have a 50% change to have insolvency delayed until after 2038. These results 

are in line with our expectations.

Recoded ID: #1 #3 #4 #13 #14

Probability of Insolvency

None 0.0% 0.0% 0.0% 0.2% 0.0%

2018 to 2022 0.0% 72.2% 0.0% 61.8% 0.2%

2023 to 2027 100.0% 20.6% 25.2% 29.6% 25.0%

2028 to 2032 0.0% 5.6% 11.2% 5.0% 11.2%

2033 to 2037 0.0% 1.6% 11.0% 2.8% 11.0%

2038+ 0.0% 0.0% 52.6% 0.6% 52.6%

100.0% 100.0% 100.0% 100.0% 100.0%
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION III -APPROACH AND ANALYSIS

26

To illustrate this further, the graphs that follow compare the Financial Assistance for 25 of the 

500 trials; the average is shown as the dotted black line. Similar to the above table, this shows 

the random outcomes that can occur under different economic scenarios. Plan #1 has all 25 trials 

in the same shape due to the fixed investment return assumption. However, the other four plans 

show the variability in outcome. With Plans #3 and #13 having a near-term expectation of 

insolvency, it is expected that their 25 trials would show a tighter dispersion of assistance 

payments than Plans #4 and #14 with their more distant expectations of insolvency. The charts 

below confirm this expected pattern.

$0.0

$0.1

$0.1

$0.2

$0.2

$0.3

$0.3

$0.4

$0.4

$0.5

2018202020222024202620282030203220342036203820402042204420462048205020522054205620582060206220642066206820702072

Billions

Recoded ID #3: Assistance

1 21 41 61 81 101 121

141 161 181 201 221 241 261

281 301 321 341 361 381 401

421 441 461 481 Avg

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2018202020222024202620282030203220342036203820402042204420462048205020522054205620582060206220642066206820702072

Millions

Recoded ID #4: Assistance

1 21 41 61 81 101 121

141 161 181 201 221 241 261

281 301 321 341 361 381 401

421 441 461 481 Avg

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2018202020222024202620282030203220342036203820402042204420462048205020522054205620582060206220642066206820702072

Millions

Recoded ID #13: Assistance

1 21 41 61 81 101 121

141 161 181 201 221 241 261

281 301 321 341 361 381 401

421 441 461 481 Avg

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2018202020222024202620282030203220342036203820402042204420462048205020522054205620582060206220642066206820702072

Millions

Recoded ID #14: Assistance

1 21 41 61 81 101 121

141 161 181 201 221 241 261

281 301 321 341 361 381 401

421 441 461 481 Avg
EVALUATION REPORT OF THE ME PIMS RECODED MODEL

November 6, 2020

SECTION IV - CONCLUSIONS

27

Based on our review, we have determined that, while the Legacy and Recoded models are 

different, the Recoded Model includes enhancements and refinements and produces results that 

are an appropriate reflection of the Multiemployer Pension universe and PBGC’s Net Position.

A summary of our response to each of the key objectives is shown in the table below.

Key Objective Response

Confirm the methodologies used to 

develop cash flows, liabilities, and other 

pertinent calculations are performed 

consistent with multiemployer program 

provisions.

Based on our review and understanding of the 

model, we have confirmed the model is 

consistent with multiemployer program 

provisions.

Identify changes in methods and 

assumptions from the Legacy model by 

comparing outcomes and evaluate whether 

those changes are likely to improve the 

results of the modeling.

Changes in methods and assumptions were 

identified and summarized in Section II and in 

our opinion have improved the results of the 

model.

Review actuarial calculations in the 

Recoded Model to assure accuracy.

Based on our review, the Recoded Model is 

following the funding rules laid down by 

ERISA closely enough for the purposes of the 

projection. 

Summarize findings and provide 

recommendations to address those findings 

based on the results of the review.

This report serves to summarize our findings 

and recommendations.