13.1

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Checklist Item #13

Does the application include a demonstration that the proposed suspension is equitably distributed, 

including:

 Information on the effect of the suspension on the plan in the aggregate;

 Information on the effect of the suspension for different categories or groups;

 a list of the factors taken into account;

 an explanation of why none of the factors listed in § 432(e)(9)(D)(vi) was taken 

into account (if applicable); 

 for each factor taken into account that is not one of the factors listed in § 

432(e)(9)(D)(vi), and explanation why the factor is relevant; and

 how any difference in treatment among categories or groups of individuals results 

from a reasonable application of the relevant factors?

See section 4.04.

Documents 13.1 and 13.2 present the Pension Plan’s demonstration, in consultation with its 

actuary, that the proposed suspension is equitably distributed. 
13.2

4.04 Demonstration that the Proposed Benefit Suspension Is Distributed Equitably

Document 13.1

The Pension Plan’s Demonstration

of Equitable Distribution

The proposed benefit suspension is distributed equitably across the participant and 

beneficiary population. The terms of the proposed suspension do not explicitly apply differently 

to any groups. However, the Pension Plan’s accrual rate formula has changed multiple times,

leading to different impacts of the proposed suspension depending on the periods during which 

members worked. 

A summary of the changes in the accrual rate follows:

 Participants with service prior to February 1, 1968: a benefit of $1 per year of past 

service.

 Participants who retired prior to May 1, 1996: a future service benefit of less than 

3.3% of contributions that varied based on when they last worked.

 Participants who retired after May 1, 1996: a minimum of 3.3% of contributions 

even if they last worked prior to that date.

 The accrual rate was increased to a maximum level of 4.1% effective May 1, 1999.

 For the two plan years beginning May 1, 2003 and May 1, 2004, the accrual rate 

was 3.0% of contributions.

 Beginning May 1, 2005, the accrual rate was 1% of contributions with some 

contributions becoming non-credited effective May 1, 2006.

 On May 1, 2016, the benefit accrual rate was changed to 0.3% for the first $6.66 in 

contributions and 1.0% of contribution in excess of $6.66.

In support of this determination are attached the following summaries of benefits:

 Exhibit 13.1: Distribution of benefit suspensions in 10% increments for all 

participants.

 Exhibit 13.2: Distribution of benefit suspensions by category under regulations.

 Exhibit 13.3: Distribution of benefit suspensions by alternate categories.

 Exhibits 13.4 and 13.5: Distributions of benefit suspensions for in pay status and 

not in pay status in 10% increments.
13.3

Exhibits 13.1 and 13.2 contain the demonstrations required by Revenue Procedure 2016-

27, section 4.04(1).

For the demonstrations requested by Revenue Procedure 2016-27, section 4.04(2)(A), the 

Board of Trustees, in consultation with the Pension Plan’s actuary, relied on regulations at 26 

C.F.R. § 1.432(e)(9)-1(d)(6)(iv) and (v) to guide in its selection of the relevant groups. In 

particular, Examples 2 and 7 of the regulations discuss situations in which the plan’s formula 

changed over time, yet the Examples seem to reach different conclusions. Based on the Board of 

Trustees’ best interpretation of the most relevant factors, and in consultation with the Pension 

Plan’s actuary, the Pension Plan has shown results for the following categories:

• Retiree before May 1, 1996, formula less than 3.3%

• Retiree, all years at 3.3% formula

• Retiree, all years at 4.1% formula

• Retiree, with multiple rates

• Retiree, all years at 3.85% formula

• Retiree, all years at 4.05% formula

• Active, all years at 1%

• Active, with multiple rates

• Inactive, all years at 1% 

• Inactive, all years at 3.3%

• Inactive, all years at 4.1%

• Inactive, with multiple rates 

The Board of Trustees did not further divide these groups for the following reasons:

• There was limited data about service earned before 1968 and most participants from 

that era are age 80 or older and, thus, not subject to the proposed suspension.

• All but three (3) participants and beneficiaries who retired prior to May 1, 1996,

are now age 80 or older. Any additional subgroups would provide limited useful 

information.

As discussed elsewhere in this proposal and after careful consideration of the various 

factors, the Board of Trustees decided that the most important of the statutory factors as listed in 

§ 432(e)(9)(D)(vi) are the following:

• The amount of benefits.

• The history of benefit increases and reductions.

• The differences between active and retiree benefits.
13.4

• The extent to which active participants were reasonably likely to withdraw support

of the Pension Plan.

Exhibit 13.3 demonstrates which groups of participants have suspensions larger than the 

110% of PBGC minimum. Although defined by a single alternate formula, in practice the alternate 

formula helps two (2) groups of participants. In response to recent decreases in benefits and the 

need to maintain active support, the 1.3% accrual rate formula prevents any cut for seventy-three

(73) active members and inactive members not yet in pay status. These participants worked only 

or mostly under the 1% accrual rate formula. They are shown as Combined Group 1 at the end of 

the Exhibit 13.3. Without the alternate formula, this group would have been reduced on average 

about 25% under the 110% PBGC guarantee limit.

The 1.3% alternate accrual rate formula also helps lessen the reduction for an additional 

143 participants with benefits farthest away for the PBGC guarantee. These three groups were 

combined into an additional bold summary row at the end of Exhibit 13.3 (Combined Group 2). 

On average, this group is proposed to be reduced from approximately $1,688 to $836 (or a 50.5% 

reduction). If they were reduced to 110% of the PBGC guarantee, the average benefit would be

approximately $541 (or a 68% reduction). Thus, the proposed reduction design is related to the

amount of benefit. 

The following factors explain why additional adjustments were not made for other factors 

listed in § 432(e)(9)(D)(vi):

 Age and life expectancy of the participant or beneficiary: The Board of Trustees 

determined that the statutory requirements for members age 75 or older adequately 

accounted for this factor.

 Length of time that benefits have been in pay status: The Board of Trustees did not think 

application of this factor would be well understood or lead to better perceived equity by 

the members.

 The type of benefit (e.g., survivor benefit, normal retirement benefit, early retirement 

benefit, etc.): The 1.3% alternative formula preserves existing adjustments for early 

retirement and the form of benefit. Additional recognition of these factors was not deemed 

advisable.

 The extent to which a participant is receiving a subsidized benefit: For participants who 

attained age 55 after May 1, 2009, the Pension Plan no longer provides any meaningful 

subsidy. Prior to that date, the subsidy was somewhat modest (a 28% reduction at age 55 

compared to the current 49% reduction). The Board of Trustees did not think application 

of this factor would be well understood or lead to better perceived equity by the members.

 The extent to which a participant or beneficiary has received post-retirement benefit 

increases: The last such increase was granted in 1999. The number of participants under 

age 80 who benefited from such an increase is so small that any change would not produce

meaningful savings for the Pension Plan.
13.5

 The number of years to retirement for active employees: The Board of Trustees did not 

think application of this factor would be well understood or lead to better perceived equity

by the members.

 The extent to which a participant’s or beneficiary’s benefit was attributable to service with 

an employer that has failed to pay its full withdrawal liability assessment: There have been 

no withdrawal liability assessments, so this factor was not applicable. 
13.6

Document 13.2

Exhibits

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.1 – Distribution of Benefit Suspensions in 10% Increments for All Participants

Percentage 

Range Count Impacted

0% 227 45.0%

0.001% 10% 43 8.5%

10.001% 20% 20 4.0%

20.001% 30% 34 6.7%

30.001% 40% 26 5.2%

40.001% 50% 40 7.9%

50.001% 60% 43 8.5%

60.001% 70% 71 14.1%

70.001% 80% 0 0.0%

80.001% 90% 0 0.0%

90.001% 100% 0 0.0%
13.7

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.2 – Distribution of Benefit Suspensions by Category under Regulations

Description Count

Average 

Before 

Suspension 

Average 

After 

Suspension 

PV 

Reduction in 

Benefits 

Retiree before 5/1/1996; formula less than 3.3% 63

 

576 

 

575 

 

4,525 

Retiree all years at 3.3% formula 57

 

481 

 

427 

 

315,653 

Retiree all years at 4.1% formula 21

 

1,725 

 

1,371 

 

696,075 

Retiree multiple rates 70

 

1,911 

 

970 

 

7,220,741 

Retiree all years at 3.85% formula 5

 

1,379 

 

1,351 

 

11,539 

Retiree all years at 4.05% formula 4

 

1,287 

 

1,163 

 

44,094 

Active all at 1% 54

 

68 

 

68 0 

Active multiple rates 56

 

1,643 

 

1,160 

 

1,612,702 

Inactive all at 1% 54

 

36 

 

36 0 

Inactive all at 3.3% 20

 

373 

 

231 

 

249,983 

Inactive all at 4.1% 5

 

897 

 

287 

 

196,521 

Inactive multiple rates 95

 

1,189 

 

502 

 

3,098,645 

Notes

Retirees include surviving spouses and alternate payees.

Present value as of 5/1/2015 using assumptions specified in Checklist #6.
13.8

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.3 – Distribution of Benefit Suspensions by Alternate Categories

Description Count

Average 

Before 

Suspension 

Average 

After 

Suspension 

Average 

with 110% 

PBGC Only

Unreduced age or disability (in payment) 79

 

773 

 

773 

Unreduced 110% PBGC (in payment) 16

 

97 

 

97 

Partial age protection 110% PBGC greater than 

1.3

35

 

1,218 

 

980 

Partial age protection 110% PBGC less than 1.3 4

 

1,489 

 

1,167 

 

1,149 

Under 75 reduced to 110% PBGC (in payment) 63

 

1,257 

 

683 

Under 75 reduced to 1.3% contributions (in 

payment)

23

 

2,408 

 

1,048 

 

783 

Active unreduced 110% PBGC 25

 

22 

 

22 

Inactive unreduced 110% PBGC 35

 

19 

 

19 

Active unreduced 1.3% contribution 47

 

325 

 

325 

 

240 

Inactive unreduced 1.3% contribution 26

 

142 

 

142 

 

116 

Inactive reduced 110% PBGC 31

 

531 

 

278 

Active reduced 1.3% contribution 38

 

2,103 

 

1,390 

 

807 

Inactive reduced 1.3% contribution 82

 

1,293 

 

520 

 

350 

Combined Group 1: Unreduced 73

 

260 

 

260 

 

196 

Combined Group 2: Reduced and 1.3% 

Proposed Formula Controls 143

 

1,688 

 

836 

 

541 
13.9

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.4 – Distributions of Benefit Suspensions by Category and 10% Increments, in 

Pay Status

Retiree Before 5/1/1996; Formula Less than 

3.3% Retiree All Years at 3.3% Formula

Percentage Percentage 

Range Count Impacted Range Count Impacted

0% 60 95.2% 0% 21 28.0%

0.001% 10% 3 4.8% 0.001% 10% 20 26.7%

10.001% 20% 0 0.0% 10.001% 20% 5 6.7%

20.001% 30% 0 0.0% 20.001% 30% 4 5.3%

30.001% 40% 0 0.0% 30.001% 40% 3 4.0%

40.001% 50% 0 0.0% 40.001% 50% 4 5.3%

50.001% 60% 0 0.0% 50.001% 60% 0 0.0%

60.001% 70% 0 0.0% 60.001% 70% 0 0.0%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%

Retiree All Years at 3.85% Formula Retiree All Years at 4.05% Formula

Percentage Percentage 

Range Count Impacted Range Count Impacted

0% 4 80.0% 0% 0 0.0%

0.001% 10% 1 20.0% 0.001% 10% 3 75.0%

10.001% 20% 0 0.0% 10.001% 20% 1 25.0%

20.001% 30% 0 0.0% 20.001% 30% 0 0.0%

30.001% 40% 0 0.0% 30.001% 40% 0 0.0%

40.001% 50% 0 0.0% 40.001% 50% 0 0.0%

50.001% 60% 0 0.0% 50.001% 60% 0 0.0%

60.001% 70% 0 0.0% 60.001% 70% 0 0.0%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%
13.10

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.4 – Distributions of Benefit Suspensions by Category and 10% Increments, in 

Pay Status (Continued)

Retiree Multiple Rates Retiree All Years at 4.1% Formula

Percentage Percentage 

Range Count Impacted Range Count Impacted

0% 6 8.6% 0% 3 14.3%

0.001% 10% 4 5.7% 0.001% 10% 4 19.0%

10.001% 20% 1 1.4% 10.001% 20% 3 14.3%

20.001% 30% 5 7.1% 20.001% 30% 6 28.6%

30.001% 40% 6 8.6% 30.001% 40% 2 9.5%

40.001% 50% 12 17.1% 40.001% 50% 2 9.5%

50.001% 60% 20 28.6% 50.001% 60% 1 4.8%

60.001% 70% 16 22.9% 60.001% 70% 0 0.0%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%
13.11

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.5 – Distributions of Benefit Suspensions by Category and 10% Increments, Not 

in Pay Status

Active All at 1% Active Multiple Rates

Percentage Percentage 

Range Count Impacted Range Count Impacted

0% 54 100.0% 0% 18 32.1%

0.001% 10% 0 0.0% 0.001% 10% 0 0.0%

10.001% 20% 0 0.0% 10.001% 20% 7 12.5%

20.001% 30% 0 0.0% 20.001% 30% 11 19.6%

30.001% 40% 0 0.0% 30.001% 40% 11 19.6%

40.001% 50% 0 0.0% 40.001% 50% 9 16.1%

50.001% 60% 0 0.0% 50.001% 60% 0 0.0%

60.001% 70% 0 0.0% 60.001% 70% 0 0.0%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%

Inactive All at 1% Inactive All at 3.3%

Percentage Percentage 

Range Count Impacted Range Count Impacted

0% 54 100.0% 0% 2 10.0%

0.001% 10% 0 0.0% 0.001% 10% 8 40.0%

10.001% 20% 0 0.0% 10.001% 20% 1 5.0%

20.001% 30% 0 0.0% 20.001% 30% 1 5.0%

30.001% 40% 0 0.0% 30.001% 40% 2 10.0%

40.001% 50% 0 0.0% 40.001% 50% 3 15.0%

50.001% 60% 0 0.0% 50.001% 60% 1 5.0%

60.001% 70% 0 0.0% 60.001% 70% 2 10.0%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%
13.12

Bricklayers & Allied Craftsmen Local No. 7 Pension Plan

Exhibit 13.5 – Distributions of Benefit Suspensions by Category and 10% Increments, Not 

in Pay Status (Continued)

Inactive All at 4.1% Inactive Multiple Rates 

Percentage Total Percentage 

Range Count Impacted Range Count Impacted

0% 0 0.0% 0% 5 5.3%

0.001% 10% 0 0.0% 0.001% 10% 0 0.0%

10.001% 20% 0 0.0% 10.001% 20% 2 2.1%

20.001% 30% 0 0.0% 20.001% 30% 7 7.4%

30.001% 40% 0 0.0% 30.001% 40% 2 2.1%

40.001% 50% 0 0.0% 40.001% 50% 10 10.5%

50.001% 60% 0 0.0% 50.001% 60% 21 22.1%

60.001% 70% 5 100.0% 60.001% 70% 48 50.5%

70.001% 80% 0 0.0% 70.001% 80% 0 0.0%

80.001% 90% 0 0.0% 80.001% 90% 0 0.0%

90.001% 100% 0 0.0% 90.001% 100% 0 0.0%