Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

Po sutivan

The charts below show the Plan’s projected funded percentage and credit balance as of the 3/31/2016 snapshot
date. These charts assume that there are no gains or losses on demographic assumptions and that the market
value of assets returns the assumed rate of 6.50%.

Funded Percentage (PPA) as of March 31

Projected Credit Balance as of March 31

100% $50
80% 2 6p
= keosneexrsnerexsg
= FsssSsssegaeggass
- Sagres Geggagangg
60% -$50
40% -$100
20% $150 \
$200

$250

N\

not Expected to Emerge from Critical Status

Explanation of Why Pla

The severe economic downturn of 2008 has created a tremendous funding burden related to the investment
loss and reduction in employment (future contributions). As a result, the plan sponsor determined that, based
on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reason-
ably be expected to emerge from critical status by the end of the rehabilitation period.

Next the Trustees considered reasonable measures to emerge from critical status at a later time. The Trustees
believed that such required contribution increases would cause employers to withdraw from the Plan leading
to insolvency, financial assistance from the PBGC, and benefit cuts.

Based upon the above, the Trustees have selected the schedule of benefits described above as permitted by
IRC §432(e)(3)(A)(ii), also known as a “reasonable measures” schedule, which is intended to forestall insol-

vency.


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016 s

7.4 Historical Participation

As of Separated
March 31 Active Vested Retired Total
2007 650 460 970 2.080
2008 647 456 977 2.080
2009 638 482 960 2,080
2010 583 508 963 2,054
2011 569 514 952 2,035
2012 597 521 964 2,082
2013 569 536 966 2,071
2014 588 544 960 2,092
2015 492 608 965 2.065
2016 430 596 971 1,997
Historical Participant Counts
1800 as of March 31
1600 ee |
1400 ;—=
1200
1000
800
600 | (ae see
400
200
0 T , T T T T T T T
<\ > S) Sy < > & S AS]
aS se Sr rk SP SF S ss
——Total Active —s—Total Inactive

35


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

4.3.4 Funded Percentage

Funded Percentage
Plan Present 100% as of March 31
Years Market Value of 90%
Ending Value Accrued Funded 30%
3/31 of Assets Benefits Percentage 70%

2011 $77,615,659 $ 134,175,975 57.8% 60% —

2012 71,300,012 136,331,942 523 io —
%
2013 67,919,811 138,241,282 49.1 30%

2014 66,933,598 138.296.016 48.4 20%

2015 62,149,280 158,912,439 39.1 oe

2016 $51,672.207 $ 163,427,314 31.6% € = = s s s
—At Market

The Funded Percentage is a statistic commonly followed by Trustees. It provides an alternative measure of the
Plan’s current level of funding. The Funded Percentage compares the market value of assets to the value of
benefits accrued as of the valuation date. Based on the market value of assets of $51,672,207 and the total
value of accumulated benefits of $163,427,314, the Funded Percentage is 31.6% as of March 31, 2016.

The fact that the Funded Percentage is under 100% means that there are unfunded accumulated benefits when
valuing the Plan on an ongoing basis. It does not necessarily imply that the Plan is underfunded on a long term
basis because it makes no consideration of future contributions relative to future costs. The Margin is the best
single statistic to get a sense of how well funded the Plan is on a long term basis.

Moreover, the Funded Percentage is not a measure of funding on a Plan termination basis. That would require
a different interest assumption.

The Funded Percentage as per the Pension Protection Act uses the actuarial value of assets and is 36.7% as of
March 31, 2016.


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

66 50%

67+ 100%
If the participant had at least 20 years of Credited Service as of April 1, 2009, there is a
one-time additional retirement incidence of 60% when the participant reaches age 55 and
at least 25 years of Credited Service. This additional incidence applies immediately for

participants who are already age 55 with 25 years of Credited Service.

The future service assumption was reduced from 5,910 months per year to 4.997 months,
due to an employer withdrawal.

The assumed interest rate was changed from 6.75% per year to 6.50%

22


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

2.

Valuation Summary

A. Long-Term Funding

Projected annual contributions of $1.55 million ($309.87 per month) plus the value of expected future
withdrawal liability payments of $0.24 million ($49.01 per month) fall short of the total annual cost of
benefits of $11.62 million ($2,325.47 per month). This leaves a negative margin of $9.83 million or
$(1.966.59) per month.

. Withdrawal Liability

White Rose Trucking withdrew from the Plan in 2014 and was assessed $13.5 million dollars in with-
drawal liability. The employer is currently in bankruptcy proceedings and it is unclear how much
money the Plan will receive.

We continue to assume White Rose will not pay any of its withdrawal liability assessment.
In addition, Center Candy withdrew from the Plan in 2016, and YRC incurred a partial withdrawal in

the Plan Year ended 3/31/2013. These companies are currently paying their assessments, and their
payments are included in our funding projections.

. Pension Protection Act

As of April 1, 2016 the Plan’s funding percentage is 36.7% and it has a negative credit balance. Ad-
ditionally, the Plan is projected to become insolvent within the current or next 19 years, and its ratio
of inactive to active participants is in excess of 2 to 1. Therefore, as of April 1, 2016, the Plan is in
Critical and Declining Status.

The Trustees have adopted a Rehabilitation Plan to address the Plan’s funding issues, which is ex-
plained in detail in Section 4.4 of the report.

. Assumption Changes

We updated the retirement assumption as shown in Section 6.1, and changed the assumed interest rate
from 6.75% per year to 6.50%.


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

7.2 Distribution of Months Worked

Months Count

1 3

2 3

3 4

4 1

5 6

6 4

7 3

8 2

9 1

10 7

11 3

12 393

Total 430

Actives by Months Worked
400
350
300
Py 250
2
Z 200
150
100
50
0 T = —-
1 2 3 4 5 6 7 8 9 10 11 12
Weeks Worked

33


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

5. ASC No. 960 Disclosures
5.1 Present Value of Accumulated Plan Benefits

As of March 31, 2016
A. Present Value of Vested Benefits:

1. Participants currently receiving payments $ 113,013,788
2. Other vested benefits 49.961.337
3. Subtotal vested benefits $ 162,975,125
B. Present Value of Non-Vested Benefits 452.189
C. Present Value of Accumulated Benefits (A+B) $ 163,427,314

The ASC No. 960 values were computed using the same assumptions as those used for determining funding
requirements.
5.2 Reconciliation of Changes in Present Value of Accumulated Benefits
A. Present Value of Accumulated Benefits at Prior Valuation Date $ 158,912,439

B. Changes During the Year Due to:

1. Benefits accumulated and net gains 3,350,036
2. Benefits paid (11,704,972)
3. Assumption changes 2,538,264
4. Method changes 0
5. Plan amendments 0
6. Passage of time 10,331,547
7. Total change $ 4,514,875
C. Present Value of Accumulated Benefits at Current Valuation Date $ 163,427,314


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Age requirement None

Service requirement 20 years of Credited Service, with at least 20 years of Credited Service earned
through April 1, 2009

Must have worked on or after January 1, 1999
Amount $1,250 per month

Rehabilitation Plan: Default Schedule
Removed from Plan for all Participants not in pay status

Disability Retirement Pension

Rehabilitation Plan: Preferred Schedule

Age requirement 55
Service requirement 15 years of Credited Service
Amount Normal Retirement Pension

Rehabilitation Plan: Default Schedule
Removed from Plan for all Participants not in pay status

Vested Pension
Age requirement: None
Service requirement: 5 years

Amount: For Participants who did not work prior to January 1, 1999:
The Early Retirement Pension or Normal Retirement Pension as appropriate

For Participants with less than 15 years of Credited Service who worked prior
to January 1, 1999, the greater of their actuarially reduced Early Retirement
Pension, or the minimum Early Retirement Pension table above, multiplied

by a fraction:
e The numerator of the fraction is the Participant's years of Credited
Service

¢ The denominator of the fraction is 30

Pre-retirement death
Married
Age requirement: None

Service requirement: 5 years

Amount: 100% of the benefit Participant would have received had he retired the day
before he died and elected the 100% joint and survivor option. Benefits com-
mence to beneficiary when Participant would have first been eligible to retire.

Non-Married None
25


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Percent Married

Age of Spouse

Expenses

Value of Assets

Funding Method

Interest Rate for
Withdrawal Lia-
bility:

RPA 94 Current
Liability As-
sumptions

Defined Contri-
bution Dollars

Assumption
Changes

80%

The marital assumption is based upon future demographic expectations and professional
judgment.

Females are 3 years younger than their spouses.

The expected spouse age is based upon historical and current demographic data, as well
as future demographic expectations and professional judgment.

$440,000 payable at the beginning of the year

The Plan expense assumption is based upon historical expense experience, adjusted for
future expense expectations.

Average Fair Market Value (without-phase-in). Averaging period is 3 years.
Adjusted under the Pension Relief Act of 2010 for a 10-year recognition of the 2008/2009
Plan Year loss.

Unit Credit

6.50% per annum

Interest: 3.23%; Last year 3.40% was used
Mortality: As per IRS Regulation §1.430(h)(3)-1

The liabilities were grossed up to include the value of the defined contribution plan for
certain YRCW participants. Pursuant to the audit, this amount is $112,477 as of March
31, 2016.

The retirement assumption was change from:

Participants with 20 years of Credited Service as of April 1, 2009 are assumed to retire
3.25 years following 25 years of Credited Service for those credits accrued through March
31, 2005. The remaining credits accrued after April 1, 2005 are assumed to be payable at
age 55.

Participants with fewer than 20 years of Credited Service as of April 1, 2009 are assumed
to retire upon age 65 and 5 Years of Participation.

To the following table:
Percent
Age Retiring
55 20%
56-61 5%
62 25%
63-64 5%
65 70%

21


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

7.3 Flow of Lives

Inactive Retired &

Actives Vested Disabled Beneficiaries Total
Beginning of year 492 608 13 952 2,065
To Inactive Vested -12 12
Terminated Non-Vested -51 -51
To Retired -10 -24 34
To Disabled
New Alternate Payee
Deaths -1 -43 -44
Returned to work
New entrants ll ll
New Beneficiaries 13 13
Data adjustments 1 2 3
End of year 430 596 13 958 1,997

34


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016
3) Alternative Schedule

Benefit Changes to Plan
None

Contribution Requirements
Must contribute $556 per participant per month

e The Alternative Schedule only applies to participants employed by Yellow Freight.

Update as of April 1, 2014
1) Default Schedule
Benefit Changes to Prior RP

Accruals not to exceed $50 per year of Credited Service.

Contribution Requirements
3.0% increases annually

2) Preferred Schedule (Also referred to as Alternative Schedule I)

Benefit Changes to Prior RP
The monthly accrual rates per year of Credited Service for each Plan Year beginning April

1,2014 are as follows:

Year Accrual
2014 $ 35.00
2015 35.65
2016 36.40
2017 37.10
2018 $ 38.25

For Plan Years beginning after March 31, 2019, the accrual increases 3% annually. In no case
would accruals exceed $50 per year of Credited Service or be less than the accrual rate in effect
as of March 31, 2014.


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

AmMMOOw>

=

4.2.4 Total Gain/Loss

Unfunded accrued liability (UAL) at 3/31/2015

Annual cost of benefits and expenses at 3/31/2015

Less contributions

Interest on A, B, and C

Expected unfunded accrued liability as of 3/31/2016 (A+B+C+D)
Preliminary UAL before changes as of 3/31/2016

Total gain/(loss), (E-F)

Change due to:

1. Assumption changes
2. Plan amendments

3. Method changes

4. Subtotal changes

Actual unfunded (surplus) accrued liability as of 3/31/2016 (F+H4)

Gain/(loss) due to:
1. Asset experience
2. Expenses
3. Demographic experience
4. Total gain/(loss)

Po-suttiven

$ 90,068,644

908,193
(1,582,883)
6.092.544

$ 95,486,498
100,961,599
$ (5.475.101)

$ 2,538,264
0
0
$ 2,538,264

$ 103,499,863

$ (2,631,820)
3,267

(2.846.548)
$ (5,475,101)


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

6.8 Amortization Schedule for Minimum Required Contribution

Amortization Charges

Date
Established: Base Type
2005 Combined and offset
2006 Actuarial Loss
2006 Plan Amendment
2007 Actuarial Loss
2007 Plan Amendment
2008 Actuarial Loss
2009 Actuarial Loss
2010 Actuarial Loss
2011 Actuarial Loss
2012 Actuarial Loss
2013 Actuarial Loss
2014 Actuarial Loss
2015 Assumption Change
2016 Actuarial Loss
2016 Assumption Change
Total Charges

Amortization Credits

Date
Established:
2008
2008
2009
2009
2015

Total Credits

Total

Base Type
Funding Method
Assumption Change
Plan Amendment (RP)
Method Change
Experience Gain

6.9 Equation of Balance

Po-suttiven

Outstanding Years Amortization
Balance Remaining Amount
$ 20,743,457 10.927 $ 2,544,892
4,220,388 10 551,245
464,432 25 35,751
2.770.629 ll 338,342
289,349 26 21,924
3,098,338 12 356.580
8,724,234 8 1,345,394
246,606 9 34,788
909,741 10 118,826
1,553,651 ll 189.728
2,811,473 12 323.565
520,022 13 56.779
20,556,358 14 2,141,345
5.475.101 15 546,753
$2.538.264 15 $253.476
$ 74,922,043 $ 8,859,388
Outstanding Years Amortization
Balance Remaining Amount
$ (630,166) 2 $ (325.001)
(3,959,113) 7 (677.813)
(443,876) 8 (68,452)
(2,676,578) 3 (948,930)
(429.525) 14 $ (44.743)
$ (8.139.258) $ (2,064,939)
$ 66,782,785 $ 6,794,449
$ 66,782,785

A. Net Outstanding Balance of Bases
B. Credit Balance
C. Unfunded Actuarial Accrued Liability (A-B)

31

$ (36.717.078
$ 103,499,863


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

6.4 Contribution Rates by Employer

Plan Year ending 3/31/2017

(a) (v) ©
Expected
Annual
Expected Monthly Conts.
Employer Months Cont. Rate (a) x (b)
YRC 9 $ 317.20 $2,855
Tobacco 527 303.39 159.887
Panasonic 357 350.00 139,230
IBT 805 29 390.00 10.150
Harold Levinson Associates 4.075 $ 303.39 1.236.314
Total 4,997 $ 1,548,536

Average expected monthly contribution rate (a) / (c) / 12: $309.87

28


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

4. Plan Cost

4.1

A.

E.
F.
G.
There are two component costs to funding a pension plan: the cost of benefits eared in the year and the
amortization of the unfunded liability. The costs above are calculated consistent with a funding policy of

paying off the unfunded liability over 15 years assuming asset retums of 6.50% annually. The margin, found
on Line D above, indicates that the Plan needs an average additional amount of $1,966.59 per month (off the

Contributions, Cost and Margin

As of

. Actuarial liability

. Actuarial value of assets

. Unfunded actuarial liability (1-2)

. Normal cost

. Expenses

. Total cost of benefits (4+5)

. Amortization of unfunded liability

NAW wWNE

. Anticipated Contribution Income*

1. Projected months
2. Projected contribution rate

3. Anticipated annual contribution (1x2)
4. Value of future withdrawal payments
5. Total

. Actuarial Costs*

1. Cost of benefits earned in the year
2. Amortization of unfunded liability
3. Total annual costs (1+2)

. Margin (B3-C5)

Market value of assets
Spread Statistic
Margin using assets at market

accrual rate) to pay for all future benefits.

There are many actuarial measures and statistics to measure the state of the Plan’s funding. The margin is
designed to provide a single simplified statistic for a Trustee to get a sense for whether the Plan is keeping up
with its costs. As long as the margin is positive, it is a strong indication that the current benefits are affordable
on a long-term basis. If negative, it is an indication that the overall funding may need to be improved before

benefits are affordable.

3/31/2016

$ 163,427,314
59.927.451

$ 103,499,863
456,807
440,000

$ 896,807

$ 10,335,679

4,997
$ 309.87

$ 1,548,436
$244,922
$ 1,793,358

$ 927,774
10.692.570

$/Month

$ 309.87
49.01
$ 358.88

$ 185.67
2.139.80

Po-suttiven

Asa % of
Contributions
100.0%
1B.7%
113.7%

59.9%
690.5%

$ 11,620,344
$(9,826,986)

$ 51,672,207
-16.0%
$(10,679.836)

* Assumes contributions and costs are paid at the end of the month.

$ 2,325.47

$(1,966.59)

$(2,137.26)

750.4%

-636.7%

-689.7%


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

3. Summary of Funding Measures

1. Current

Assets
a at Market

b at Actuarial
¢ Actuarial / Market (b/a)

Present Values
d Vested Benefits
e Accrued Benefits (Accrued Liability)

Funding Percentages
f Vested at market (a/d)

g Vested at actuarial (b/d)
h Accrued at market (a/e)
i Accrued at actuarial (b/e)

2. Prospective

Contributions

a Minimum Required
b Anticipated

e Actual

d Maximum Deductible

Credit Balance
f Minimum to preserve Credit Balance
* projected
g WL PMTs received m year
h WL PMTs receivable spread over 15 years
* Projected

°

Costs

i Cost of benefits earned in year
j Amortization of Unfunded Liability

k Total Cost (i+)
1 Margin (b+h-k)

3. Assumptions

a Interest rate per annum
b Total Months

Po-suttiven

As of March 31

2016 2015
$ 51,672,207 $ 62,149,280
$ 59.927.451 $ 68,843,795
116.0% 110.8%
$ 162,975,125 $ 158,491,026
$  163.427,314 $ — 158,912.439
31.7% 39.2%
36.8% 43.4%
31.6% 39.1%
36.7% 43.3%

For Plan Year Ending March 31

2017 2016

$ 47,294,876 $ 38,348,354

$ 1,548,436 $ 1,777,517

thd $ 1,582,883

$ 261,624,998 $ 246,184,995
$ (45,555,942) * $  (36,717.078)

$ 10275165 * $ 9.125.471

$ 140,747 * $ -

$ 244,922 * $ -

$ 927,774 $ 940,735

$ 10,692,570 $ 9,444,724

$ 11,620,344 $ 10,385,459
$ (9.826986) $ (8,607,942)
6.50% 6.75%

4997 5,904


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Contribution Requirements
The monthly contribution rates each Plan Year beginning April 1, 2014 are as follows:

Year Rate
2014 $291.61
2015 297.44
2016 303.39
2017 $ 309.46

For Plan Years beginning on or after April 1, 2018, contributions will increase 3% per year.
Notwithstanding the preceding sentence, in no event shall the contribution rate per partici-
pant determined under this updated RP, effective April 1, 2014, result in a contribution rate
per participant for any employer that is less than the contribution rate per participant that
was in effect for such employer as of March 31, 2014.

3) Alternative Schedule I

Benefit Changes to Prior RP
No changes

Contribution Requirements
No changes

Update as of November 30, 2016

1) Default Schedule

Benefit Changes to Prior RP
No changes

Contribution Requirements
No changes

2) Preferred Schedule (Also referred to as Alternative Schedule IT)

Benefit Changes to Prior RP
80% increases to the contribution rate in effect for the prior year per for each year through
the Plan Year ending 3/31/2024, beginning as of the end of the current CBA.

Contribution Requirements
For increases not already bargained for and ratified under a current collective bargaining
agreement as of the date this RP update is provided to the bargaining parties, there are no
increases in contributions.


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

4.2.3, Actuarial Asset Gain/(Loss)

A.

B.

m

AST HO

Po-suttiven

Actuarial assets at 3/31/2015 $ 68,843,795
Investment income:
1. Expected income (net of investment expenses) $ 3,838,184
Development of amount recognized
Year Ending Unexpected Percentage Recognized
March 31 Amount Recognized Amount

2009 $ (30,094,302) 10% $ (3.009.430)

2014 5.456.954 33% 1,818,985

2015 772,221 33% 257,395

2016 (3,740,669) 33% 1.246.890)

2. Total recognized amount

3. Forced recognition (due to +/-20% corridor)
4. Total investment income (1+2+3)
Employer contributions

Withdrawal Liability Payments

Distributions:

1. Benefit payments

2. Administrative expenses

3. Total distributions

Actuarial value as of 3/31/2016

. Average actuarial value (A+.5 x (C+D+E3))
. Rate of return (B4+G)

Assumed rate of return
Expected income (G x I)

. Asset gain/(loss) (B4-J)

$ (2,179,940)

$0
$ 1,658,244
$ 1,582,883

0

$ (11,704,972)

(452.499)
$ (12,157,471)

$ 59,927,451

$ 63,556,501
2.6%

6.75%
4,290,064
(2,631,820)


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

6.2 Summary of Plan Provisions

Participation Immediate

Credited Service Effective Definition
March 31, 2010 and prior —_ 1,000 hours equals one year

April 1, 2010 and after 1/12" ofa year for each month or part thereof
for which a contribution is obligated to be

made
Vesting Credit 1,000 hours equals one year
Break Year A year with less than 501 hours worked
Suspension of Benefits A member’s benefit is suspended while working over the Hour Threshold

while in Prohibited Employment.

Prohibited Work in an industry covered by the Plan in the same geographical area cov-
Employment ered by the Plan
Hours Threshold 40 hours per month, except as follows:

Credited Hours
Age Service Threshold
50 25 years 70
65 15 years 70

Normal Retirement Pension

Age requirement: 65
Service requirement: Five years of Credited Service, or the fifth anniversary of participation
Amount: Monthly Benefit per year of Credited Service
(Preferred Schedule) Period Cc Non-YRC
Prior to 4/1/2005 $100 $100
4/1/2005-3/31/2006 $100 $0
4/1/2006-3/31/2010 $50 $50
4/1/2010 and after* 1% of 1% of

contributions contributions
* The monthly accrual for this period is 1/12 of $50 per month of Credited
Service earned until the Participant’s employer switched to the 1% formula.
The accrual will not exceed $50 per month in any case.

Minimum for Participants who worked prior to January 1, 1999 who earn 15
or more years of Credited Service:

YRC  Non-YRC
$2,500 $2,100

23


Local 805 Pension and Retirement Plan
Actuarial Valuation
3/31/2016

1236 Brace Road, Unit E
Cherry Hill, NJ 08034
(856) 795-7777

January 2017

Z:\065 805\p\Val\2016\Linked Report 805 16.docx

O'Sullivan


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

4.3.2 Asset Information

With-

drawal Market Market ROR ROR
As of Liability Investment Value At At
3/31 Contributions Payments Benefits Expenses Income of Assets Market Actuarial
2012 = $ 1,333,334 $- $11,224,000) $ (389,562) $ 3,964,581 $71,300,012 54% 8.2%
2013 1,616,634 - (11,428,240) (385.567) 6.816.972  67.919.811 10.0 4.6
2014 ‘1,784,266 20,000 (11,534,520) (410,313) 9,154,354 66,933,598 1448.2
2015 1,770,559 - (11.666.983) (545,186) 5,657,292 62,149,280 8.7 8.6
2016 1.582.883 : (11.704.972) (452.499) 97.515 $51,672,207 0.2% 2.6%

Totals $ 8.087.676 $20,000  $(57,558,715) $ (2,183,127) $25,690,714

5-year geometric average 76% 64%
The average geometric return on the market value of assets for the 5 years ending March 31, 2016 was 7.6%.
The performance of the actuarial value of assets as measured by the rate of return smooths out the market value

performance. As seen in the table above, the market value return in Plan Year ended 3/31/2016 was 0.2%. The
actuarial rate of return was 2.6%.

Historical Rates of Return
by Plan Year ending March 31
20% =
15%
10%
5% SS
0% T T T T 1
&) » &) o
55% ~ = ~ ENS s
-10%
-15%
-20%
—AtMarket —e—At Actuarial ——Assumed



Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

4.3 Historical Information

4.3.1 Gain/(Loss)

Plan
Year
Ending Demographic Total
3/31 Assets Expense Assumptions Gain/(Loss)
2012 $ 557,831 $ 56,563 $ (2,493,973) $ (1,879,579)
2013 (2,264,932) 19,058 (970,540) (3,216,414)
2014 477,351 (8.979) (1,034,657) (566,285)
2015 771,764 (118.898) (205,180) 447.686
2016 $ (2,631,820) $3.267 $ (2.846.548) —-$ (5.475.101)
5-year
Average $ (617.961) $ (9.798) — $ (1,510,180) $ (2,137,939)

Gain/loss analysis is one of the most important tools available to an actuary to ensure that the actuary’s model
of the Plan’s funding is accurate. The exhibit above shows the total gain/(loss) broken down into two compo-
nents: assets and demographic assumptions.

The gain/(loss) on assets is very unpredictable due to the unpredictable returns on the market value of assets.
Moreover, the gain/(loss) on assets is greatly influenced by the smoothing method. The pattern of asset gains
is discussed later in this report.

After itemizing the gain/(loss) on assets and administrative expenses, what remains is the gain/(loss) on all the
other demographic assumptions including retirement, turnover, disability, and mortality. Over time, to remain
confident in the future funding, it is important that the gains and losses on the demographic assumptions aver-
age zero, or at least a relatively small number.

For the last five years the Plan has averaged a loss on demographic assumptions. We will continue to monitor
the gain and losses and make assumption changes in the future as necessary.


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

6.7 Current Liability at Beginning of Plan Year
Current liability is the present value of accrued benefits under the Plan using actuarial assumptions as pre-
scribed by the Retirement Protection Act of 1994 (RPA ‘94). The liability is determined using the same as-

sumptions used to determine the Plan’s funding requirements, except for the interest rate and mortality table.
These values are used for specific, prescribed purposes.

RPA ‘94 Current Liability:

A. Assumptions:

1. Interest rate 3.23%
2. Mortality table As per IRS Regulation §1.430(h)(3)-1
B. RPA ’94 Current Liability Vested Benefits Total Benefits
1. Retirees and beneficiaries receiving payments $ 142,792,445 $ 142,792,445
2. Inactive vested participants 40.425.695 40,425,695
3. Actives 43.600.361 44.339.157
4. Total $ 226,818,501 $ 227,557,297
C. Expected Increase in Liability $ 903,187
D. Expected Benefits To Be Paid During the Year $ 11,704,972

30


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

6.5 Funding Standard Account and Minimum Required Contributions

Rules for determining minimum required and maximum deductible contributions are set forth in IRC Sections
431 and 404, respectively. Since deductibility may be affected by factors not considered here, the deductibility
and timing of contributions should be reviewed with tax counsel.

Actual Projected
For Plan Year ending March 31: 2016 2017
Charges to the FSA:
a. Funding Deficiency $ 28,943,893 $36,717,078
b. Normal cost 908,193 896,807
c. Amortization charges 8.144.333 8.859.388
d. Interest on a, b andc 2.564.758 3.020.763
e. Total charges $40,561,177 $49,494,036
Credits to FSA:
f. Credit Balance at beginning of year $0 $0
g. Employer contributions (including withdrawal payments) 1,582,883 1,689,183
h. Amortization credits 2,072,902 2,064,939
i. Interest on above 188.314 183.972
j. Total credits $ 3,844,099 $ 3,938,094
Credit Balance at end of year $ (36,717,078) $(45,555,942)
Minimum Required Contribution (e - (f+ h) x (1.065)) $ 38.348.354 $47,294,876
Minimum Without Regard to the Credit Balance $38,348,354 $47,294,876

(e-hx (1.065)

A Plan’s Credit Balance represents a cumulative measure of all prior contributions (since the initial ERISA
effective date) against all prior minimum requirements. If cumulative contributions exceed cumulative mini-
mums, then the Plan will maintain a Credit Balance which can be used to offset any current year minimum
requirements. As of 3/31/2016, the Plan has a Funding Deficiency of $(36,717.078). The minimum require-
ment for the year ending 3/31/2017 is $47,294.876 .

6.6 Maximum Deductible Contribution

A. Traditional Maximum Deductible $ 14,883,816
B. 140% of Projected RPA Current Liability, less Projected Actuarial Value of Assets 266,131,230
C. Minimum Required Contribution 47.294.876
D. Greatest of A, B, and C $ 266,131,230

The maximum allowable deduction for the fiscal year ending 3/31/2017 is $266,131.230. To be deductible for
a given fiscal year, a contribution should be made by the time the tax return for that fiscal year is filed with the
IRS (including extensions). Specific advice on the deductibility of contributions and timing should be re-
viewed with your tax counsel.

29


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

4.2 Development of Plan Asset Values

amoo ww

4.2.1 Market Value of Assets

Po-suttiven

Total Fund
A. Assets at 3/31/2015 $ 62.149.280
B. Employer contributions $ 1,582,883
C. Withdrawal Liability payments received $0
D. Investment income:
1. Interest and dividends $ 1,019.430
2. Realized/unrealized gain/(loss) (707,588)
3. Investment fees (214.327
4. Total investment income $97,515
E. Distributions:
1. Benefit payments $ (11,704,972)
2. Administrative expenses 452.499)
3. Total distributions $ (12,157.471)
F. Market value as of 3/31/2016 $ 51,672,207
G. Average invested assets $ 56,861.986
(A+5 x (B+C+E3))
H. Rate of retun, D4+G 0.2%
4.2.2. Actuarial Value of Assets
Market value as of 3/31/2016
Development of amount deferred
Year Ending Unexpected — Percentage Deferred
March 31 Amount Deferred Amount
1. 2009 $ (30,094,302) $ (6.018.860)
2. 2015 772,221 257,395
3. 2016 (3,740,669) 2.493.779)

Total deferred amount

Preliminary actuarial value of assets (A-B)

80% of market value

120% of market value

Actuarial value as of 3/31/2016 (C not less than D or greater than E)

$ 51,672,207

$ (8,255,244)
59,927,451
41,337,766
62,006,648

$ 59,927,451


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

6. Government Reporting

6.1 Summary of Assumptions

Po-suttiven

These are the assumptions used for the ongoing valuation calculations, unless otherwise noted.

The long-term funding rate assumption is based upon expected returns for the asset classes
selected under the Plan’s investment policy. The expected asset returns were generated
using a building block approach that includes inflation expectation and anticipated risk

RP-2014 healthy mortality with blue collar adjustment, separate for male and female par-

RP-2014 disabled mortality, separate for male and female participants, adjusted with mor-

The mortality rates are based upon historical and current demographic data, as well as

Interest Rate 6.50% per annum
premiums for each asset class.
Mortality
Healthy
ticipants, adjusted with mortality improvement Scale MP-2014 from 2015.
Disabled
tality improvement Scale MP-2014 from 2015.
future demographic expectations and professional judgment.
Temnination Sarason T-8 Table

Retirement Age

Employment

The termination rates are based upon historical and current demographic data, as well as
future demographic expectations and professional judgment.

Percent
Age Retiring

55 20%
56-61 5%
62 25%
63-64 5%
65 70%
66 50%

67+ 100%

If the participant had at least 20 years of Credited Service as of April 1, 2009, there is a
one-time additional retirement incidence of 60% when the participant reaches age 55 and
at least 25 years of Credited Service. This additional incidence applies immediately for
participants who are already age 55 with 25 years of Credited Service.

The retirement rates are based upon historical and current demographic data, as well as
future demographic expectations and professional judgment.

4,997 total months annually

The future employment assumption is based upon the current Plan population, and in-
cludes input from the Plan sponsor regarding its expectation of future employment.

20


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

7.7 Distribution of Monthly Pensions

Po sutivan

$0- $250- $500- $750- $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750
249 499 749 999 1.249 -1.499 -1,749 -1.999 -2.249 -2.499 -2.749 -2,999 $3.000+ Total
<50 2 2 4
50-54 2 2 1 3 4 3 7 22
55-59 10 4 13 4 6 4 6 9 7 8 71
60-64 19 17 10 9 3 7 6 4 4 3 9 4 95
65-69 36 35 28 14 6 14 7 7 19 7 13 8 9 203
70-74 43 26 24 9 7 9 ll 4 ll 3 7 1 7 162
75-79 49 26 18 14 7 7 ll 2 6 1 5 2 5 153
80-84 27 21 17 13 13 10 5 1 5 1 2 1 3 «119
85-89 13 15 18 21 3 6 4 3 4 1 1 89
90-94 5 10 ll 7 4 3 1 4l
95-99 1 4 3 1 1 1 ll
100+ 1 1
Unk.
Total 203 159 146 94 53 63 48 30 67 22 45 16 25 971
The average age of the retirees is 73.3 and the average pension is $1,004.
250 Retirees by Pension Amount 25 Retirees by Age
200
200
5
150
yw 150 y
g $% ns
“ 100 2 100
15 |
50 50
23 +
0
SF oes? oF gh ooh oF who? g?_C °
POKES SSO SKS MF ee ee
Pension Amount Age

37


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

7.8 Distribution of Separated/Vested Participant Accrued Monthly Pensions

$0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250
2249 -499 -749 -999 -1,249 -1.499 -1,749 -1.999 -2.249 -2.499 2.500+ Total

<25 0

25-29 5 2 7

30-34 9 3 19
35-39 8 25 17 7 2 59
40-44 4 33 20 9 1 5 72
45-49 11 33. 19 16 2 8 89
50-54 26 18 21 34 12 3 7 1 122
55-59-21 29 18 15 5 1 15 1 105
60-64 26 20 9 9 5 4 1 2 76
65-69 9 9 4 1 1 24
70-74 «11 4 1 1 17
75+ 3 1 1 1 6

Total 133 181 112 93 27 8 1 0 39 1 1 596

The average age of the separated vested is 51.6 and the average accrued benefit is $614.

Terminated Vesteds by Accrued Benefit Terminated Vesteds by Age
200 140
180
120
160
2 140 100
z 4
% 120 2
2 2 80
100 3
2
2 60
5
2
40 4
40
20 20
of
2 >» a a 2 & g
os PP et PF Fs
Age

38


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Post-retirement death

Qualified Joint & Survivor If married, pension benefits are paid in the form of an actuarially reduced

Annuity joint and survivor annuity unless this form is rejected by Participant and
spouse. If rejected, or if not married, benefits are payable for the life of the
Participant.

26


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

*** This Page Has Been Left Intentionally Blank ***


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

43.5 Actuarial Value of Assets Expressed as a % of Market Value

Plan Actuarial Spread Statistic
Years Actuarial Assets as a 20% as of March 31
Ending Value Percent 15%
3/31 of Assets of Market °
2011 $87,486,251 112.7% _—| 10%
2012 83,943,698 117.7 5%
2013 77,394,976 114.0 0%
2014 73,161,479 1093 5%
2015 68,843,795 110.8 10%
2016 $59,927.451 116.0% see LN pea _N
-15%
SS ~~
-20%
~ ~” s s ~~ we

The three primary measures that help an actuary assess how well funded a plan is on a long-term basis are:

1. Margin,

2. Gain/loss analysis and an assessment of assumptions, and

3. Spread, defined as the difference between the market and actuarial value of assets expressed as a per-
centage of the market value of assets.

The margin and assumptions were covered in earlier sections.

The third factor is the Spread statistic. When positive it represents a cushion to help offset potential future
unfavorable investment experience. Conversely, when the actuarial value is greater than the market value the
Spread turns negative. When this is the case future investment retums over and above the assumed return are
necessary over time to restore the market value of assets equal to the actuarial value.

Currently the Spread is -16.0%.


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

4.4 Pension Protection Act

The Plan continues to be in the Red Zone as of April 1, 2016 because it has a funding deficiency. Moreover,
the Plan is in Critical and Declining Status (a Red Zone category) as of 4/1/2016 due to the following:

The Plan meets the criteria for Critical Status, and
The Plan is projected to become insolvent in the current or next 19 years and
The Plan’s ratio of inactive to active participants is in excess of 2 to 1.

VVV

The following is a history of the Plan’s Zone Status under the Pension Protection Act:

As of 4/1 Zone Status
2008 — 2014 Critical (Red)
2015-2016 Critical and Declining (Red)

The Trustees have implemented a “reasonable measures” Rehabilitation Plan (RP) as per the Pension Protec-

tion Act (PPA) intended to forestall insolvency under IRC §432(e)(3)(A)(ii). The Rehabilitation Plan and im-
portant dates are as follows:

Adoption Period: 4/01/2008 — 3/31/2011
Rehabilitation Period: 4/01/2011 — 3/31/2024

Original Rehabilitation Plan
1) Default Schedule

Benefit Changes to Plan
Future accruals decreased to 1% of employer contributions

Elimination of the following adjustable benefits:
e "25-Years-and-Out"

e "20-Years-and-Out"

e Disability Retirement

Contribution Requirements
12.4% increases annually

2) Preferred Schedule

Benefit Changes to Plan
Future accruals decreased to 1% of employer contributions

Elimination of the following adjustable benefits for participants who do not have at least 20
years of Credited Service as of April 1, 2009:

e "25-Years-and-Out"
e "20-Years-and-Out"

Contribution Requirements
13.3% increases annually


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016

1. Certification of Results

This report was prepared on behalf of the Teamsters Local 805 Pension Plan based on employee data, asset
statements and Plan documents provided by the Plan Sponsor or its representatives. We relied upon the data
as submitted, without formal audit. However, the data was tested for reasonableness, and we have no reason
to believe that any other information which would have had a material effect on the results of this valuation
was overlooked.

Therefore, to the best of our knowledge and belief, the information presented in this report is complete and

accurate, and in our opinion, each assumption used represents our best estimate of anticipated experience under
the Plan.

Certified by:

Enrolled Actuary No.: 14-05537


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

7.5 New Pensioners

Monthly Pension
Average
Class Count Age Min Average Max
Disabled
Normal 18 679 $150 $1,131 $3,055
Early 1g 581 SL 87S. 8A
Total 36 63.0 $150 $1,003 $3,055
Monthly Pension
Average
Class Count Age Min Average Max
Survivor 13 745 $122 $675 $1,411
Alternate Payee
Total 13 74.5 $122 $675 $1411
7.6 All Pensioners
Monthly Pension
Average
Class Count Age Min = Average Max
Disabled 13 64.6 $1,365 $1945 $3,265
Normal 173 76.8 45 1,229 5,594
Early 617 713 7 104 3,800
Subtotal 803 72.4 $7 $1,098 $5,594
Monthly Pension
Average
Class Count Age Min Average Max
Survivor 166 778 $5 $557 $2,601
Alternate Payee 2 56.2 155 503 850
Subtotal 168 Zs SS £554 f2601
Grand Total 971 73.3 $5 $1,004 $5,594

36


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Early Retirement Pension

Age requirement 55
Service requirement 15 years of Credited Service
Amount Normal Retirement actuarially reduced, with a minimum as below.

Minimum for Participants who worked prior to January 1, 1999.

YRC _Non-YRC

55 $800 $ 672
56 877 737
357 991 833
58 1,109 931
59 1,247 1,048
60 = 1,380 1,159
61 1,559 1,309
62 1,751 1,471
63 1,950 1,638
64 = 2,200 1,848

65 $2,500 $2,100

25-Year Service Retirement Pension
Rehabilitation Plan: Preferred Schedule
The following was eliminated for all Participants except those with at least 20 years of Credited Service
earned through April 1, 2009.

Age requirement None

Service requirement 25 years of Credited Service

Must have worked on or after January 1, 1999
Amount: Age Monthly Benefit
Less than 55 Benefit earned prior to 4/1/2005 unreduced

55 and older Entire benefit unreduced

The benefit payable is based on the Participant’s age on the date the payment
is made, not the age of retirement.

Poe Def

Removed from Plan for all Participants not in pay status
20-Year Service Pension
Rehabilitation Plan: Preferred Schedule

The following was eliminated for all Participants except those with at least 20 years of Credited Service
earned through April 1, 2009.

24


Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

Table of Contents

1. CERTIFICATION OF RESULTS ...........cccccccssssssssssssseesseesseeseesccsescseeseeeeeseseeeeeeeseenseescseeeeees 1
2. VALUATION SUMMARY 3
3. SUMMARY OF FUNDING MEASURE 4
4. PLAN COST sees 5
4.1 Contributions, Cost and Margin..... 5

4.2 Development of Plan Asset Values 6
4.2.1 Market Value of Assets. 6

4.2.2 Actuarial Value of Assets 6

4.2.3. Actuarial Asset Gain/(Loss). 7

4.2.4 Total Gain/Loss. 8

4.3 Historical Information. 9
4.3.1 Gain/(Loss) . 9

4.3.2 Asset Information . 0

4.3.3. Employment

4.3.4 Funded Percentage

4.3.5 Actuarial Value of Assets Expressed as a % of Market Value

4.3.6 Summary of Withdrawal Payments by Employer

4.4 Pension Protection Act..

5. ASC NO. 960 DISCLOSURES
5.1 Present Value of Accumulated Plan Benefits

5.2 Reconciliation of Changes in Present Value of Accumulated Benefit

6. GOVERNMENT REPORTING.
6.1 Summary of Assumptions.

6.2 Summary of Plan Provisions.

6.3 Recent Plan Changes

6.4 Contribution Rates by Employer

6.5 Funding Standard Account and Minimum Required Contributions.

6.6 Maximum Deductible Contribution.........

6.7 Current Liability at Beginning of Plan Year

6.8 Amortization Schedule for Minimum Required Contribution

6.9 Equation of Balance

7. DATA SUMMARY.
7.1 Actives by Age and Credited Service

7.2 Distribution of Months Worked..

7.3. Flow of Lives.............

7.4 Historical Participation .

7.5 New Pensioners.

7.6 All Pensioners..

7.7 Distribution of Monthly Pensions.....

7.8 Distribution of Separated/Vested Participant Accrued Monthly Pensions.



Actives

Local 805 Pension and Retirement Plan

Actuarial Valuation as of 3/31/2016

7. Data Summary

7.1 Actives by Age and Credited Service

Po sutivan

Over
O-l 1-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40 Total
20-24 1 15 16
25-29 1 25 6 32
30-34 17 18 5 40
35-39 12 9 5 8 34
40-44 1 17 16 14 50
45-49 22 «214 13 16 6 1 72
50-54 1 7 15 9 17 12 5 2 1 69
55-59 2 27 9 14 13 6 5 66
60-64 3 6 4 10 6 3 3 2 37
65-69 2 1 4 2 1 1 2 14
Over 70 0
Unknown 0
Total 4 131 93 48 83 39 16 ll 3 2 430
The average age of the actives is 46.6 and the average pension service is 11.5 years.
Actives by Pension Credits Actives by Age
140 80
120
60
100
8 g
£404
60 <
40 4
20 +
20 4
0 0
eg VPS eX = ” PPP KS
Age

Pension Credits

32



Local 805 Pension and Retirement Plan | O'Sullivan
Actuarial Valuation as of 3/31/2016

6.3 Recent Plan Changes

Effective Plan Change
4/1/2014 (RP Preferred Plan
update) ¢ Accruals are not to exceed $50 per year.
Default Plan

¢ Accruals are not to exceed $50 per year.

2/24/2009 Preferred Plan
(RP) ¢ The accrual rate was reduced to 1% of annual employer contributions.

e The 20-Year Service Pension and 25-Year Service Pension was removed for
Participants who did not have 20 years of Credited Service as of April 1, 2009.

Default Plan
e The accrual rate was reduced to 1% of annual employer contributions.

e The 20-Year Service Pension and 25-Year Service Pension was removed for
all Participants.

e The Disability Retirement Pension was removed for all Participants not in pay
status.

3/31/2005 Effective March 31, 2005, all benefits accrued under the Plan were frozen and no addi-
tional benefits would accrue for all active participants except those employed by Yel-
low Freight. However, an arbitrator's decision awarded the frozen participants a $50
per month accrual for the period April 1, 2006 to March 31, 2007 and the Trustees
approved a $50 per month accrual for the period April 1, 2007 to March 31, 2009.

27


Local 805 Pension and Retirement Plan _| O'Sullivan
Actuarial Valuation as of 3/31/2016 s

43.3 Employment

Weighted Estimated

Plan Year Average Total
Ending Contribution Contribution Units of
3/31 Income Rate Employment
2013 $ 1,616,634 $ 257.85 6,270
2014 1,784,266 293.24 6,085
2015 1,770.559 296.18 5,978
2016 $ 1,582,883 $ 301.07 5,258

Total Units of Employment
by Plan Year ending March 31

6,500

6,300
6,100 SS

—\
5,900
5,700 ay
5,500 SS
5,300 aN

Y
5,100
& rs *

4,900
4.700
4,500 1 r 1

> > 6 S

‘Ss ~ ‘

* - - a

—Actual Annual Units 9—#—Units Assumption

The employment assumption included in the valuation is 4,997 total units annually.


Local 805 Pension and Retirement Plan
Actuarial Valuation as of 3/31/2016

4.3.6 Summary of Withdrawal Payments by Employer

Employers Continuing to Make Quarterly Payments

Total Expected
Payments Annual
As of Payments 2016
Employer 3/31/2016 and Beyond
Center Candy $0 $77,338
YRC 0 136.104
Total $0 $ 213.442

Po-suttiven