1 

NOTICE OF APPLICATION BY THE SHEET METAL WORKERS LOCAL 

PENSION PLAN FOR APPROVAL OF 

A PROPOSED REDUCTION OF BENEFITS 

NOTICE OF A PROPOSED REDUCTION OF YOUR LOCAL PENSION PLAN 

BENEFITS 

On March 30, 2018, the Board of Trustees of the Sheet Metal Workers Local Pension 

Plan (“the Plan”) will submit an application to the U.S. Treasury Department for approval 

to reduce benefits under the Plan. This type of benefit reduction, allowed by Federal law, 

is the Multiemployer Pension Reform Act of 2014. You are getting this notice because 

you have a pension benefit under the Plan. The end of this notice describes the 

proposed reduction of YOUR monthly payments.

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This notice will also answer the following questions for you: 

 Why is the Board of Trustees proposing to reduce benefits? 

 What will happen if the Plan runs out of money? 

 How did the Board of Trustees decide to reduce benefits and by how 

much? 

 What are the proposed reductions in benefits? 

 What comes next? 

Why is the Board of Trustees proposing to reduce benefits? 

The Plan’s actuary estimated that, unless benefits are reduced, the Plan will not have 

enough money to pay benefits in the year 2035. This estimate is based on how much 

money the actuary expects the Plan to receive and pay out each year. The Plan’s actuary 

has estimated that, with the reduction of benefits that the Board of Trustees has proposed, 

the plan is projected to remain solvent. 

What will happen if the Plan runs out of money? 

If the Plan does not have enough money to pay benefits, then only the amount guaranteed 

by the Pension Benefit Guaranty Corporation (“PBGC”) will be paid. The PBGC is an 

independent agency of the federal government. The Plan pays premiums to the PBGC’s 

insurance program to protect benefits (up to limits set by law), if the Plan becomes 

 

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 A version of this notice that does not include the estimate of the effect on your benefit is being sent to the 

Local Union that represents Plan participants and to all of the employers who make contributions to the 

Plan. 

SMW0024
2 

insolvent. You will find the amount of YOUR benefit that is guaranteed by PBGC, 

at the end of this notice. 

How did the Board of Trustees decide which benefits to reduce and by how much? 

Under Federal law, the Board of Trustees must apply the following rules to the proposed 

reduction: 

 The total reduction in everybody’s benefits must be estimated to be large 

enough to keep the Plan from running out of money but not larger than 

what is needed to do that; 

 Your monthly benefit and the benefit of your beneficiary cannot be 

reduced below 110% of the amount guaranteed by PBGC (defined as the 

MPRA guaranteed amount); 

 The law does not permit any reduction in disability benefits. The plan as 

amended does not currently provide for disability retirement, but 

those participants who obtained a disability retirement when the plan still 

allowed it cannot have their benefit reduced; 

 The benefits of people who are at least 80 years old on May 31, 2019 and 

their beneficiaries cannot be reduced; 

 The benefits of people who are at least 75 years old on May 31, 2019 and 

their beneficiaries, are partially protected and the closer the person is to 

age 80 the less the benefits can be reduced; and 

 The reduction of benefits must be spread fairly among the people who 

have a pension benefit under the Plan. 

In deciding whether the proposed reduction is spread fairly, the Board of Trustees took 

into account the following: 

 The extent to which a participant or beneficiary is receiving a subsidized 

benefit 

 Retirees prior to the adoption of the Pension Fund’s Rehabilitation 

Plan, have early retirement and optional form subsidies. 

 The Plan’s history of benefit increases or reductions 

 The Plan accrual rates were reduced after April 30, 2003, and 

again after April 30, 2006, until all accruals were eventually 

suspended after July 31, 2013; 

 Participants with benefits earned from 1994 through 2003 earned 

the highest accrual rates; 

SMW0025
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 Any differences between active and retiree benefits 

 Participants who retired before April 1, 2003 generally have 

benefited from higher accrual rates than current active participants. 

After considering the above factors, the Trustees ultimately decided on a reduction in the 

benefit accrual rates earned under the Plan to a level accrual rate amount for all 

participants. This type of reduction protects more of the participants with the lowest 

benefits and reduces disparity in benefits earned among participants due to the decreases 

in benefit accruals after April 30, 2003 and the removal of other benefit subsidies in 2009 

as part of the Rehabilitation Plan. 

What are the proposed reductions in benefits? 

The Board of Trustees proposes the following reduction of benefits: 

 

 A reduction in monthly benefits such that the revised monthly amount is 

based on a level accrual rate of $48.00, multiplied by the years of service 

earned through April 30, 2019. 

 The resulting benefit cannot be less than the MPRA guaranteed amount; 

and 

 Participants whose current level accrual rate is already less than the $48.00 

level accrual rate, will not have their benefit reduced. 

 A participant’s current level accrual rate is determined by dividing their 

benefit amount by their years of service. 

The $48.00 level accrual rate was determined by the Plan actuary as the amount of 

reduction in benefits that is projected to keep the Plan from running out of money. 

The reduction would take effect May 1, 2019. 

No groups of participants will be treated differently than any others except the following, 

which are required by law to be treated differently: 

 Participants or beneficiaries with benefits based on disability (please see 

above and note that this refers to participants who became disabled and 

qualified for a disability pension when the Pension Plan still provided that 

benefit) will have no reduction; 

 Participants or beneficiaries who are at least 80 years of age on May 31, 

2019, will have no reduction; and 

SMW0026
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 Participants or beneficiaries who are at least 75 years of age on May 31, 

2019, will have a smaller benefit reduction. 

Although the proposed reduction does not include a different set of benefit reductions 

that applies to different categories of participants or beneficiaries, each participant has a 

different work history and retirement date. The Plan has had a number of benefit level 

changes over time. This means that the proposed reduction will impact participants in 

different ways. The chart below summarizes the categories of participants based on the 

pre-reduction benefit formula. 

Participants in Categories 1-4 will not be impacted by the proposed reduction because all 

in those categories either have benefit protections under Federal law (as described 

previously in this notice) or have a current level accrual rate that is already less than the 

proposed $48.00 level accrual rate. 

Participants in Category 5 – 7 who have a benefit that is eligible for a reduction, will be 

impacted as follows: 

 Category 5 – average current level accrual rate reduced from $75* to $48 

 Category 6 - average current level accrual rate reduced from $74* to $48 

 Category 7 - average current level accrual rate reduced from $69* to $48 

* A participant’s current level accrual rate is determined by dividing their benefit amount 

by their years of service. The current level accrual rate shown above is the average for 

all participants in the category eligible for reduction. Each individual participant has a 

Retirement/Termination 

Date 

% of Employer Contribution 

 Accrual Rate

Category 1 May 1, 1983 – April 30, 1984 2.6% 

Category 2 May 1, 1984 – April 30, 1987 2.8% 

Category 3 May 1, 1987 – April 30, 1990 3.0% 

Category 4 May 1, 1990 – April 30, 1994 3.5% 

Category 5 May 1, 1994 – April 30, 2003 3.65% 

Category 6 May 1, 2003 – July 31, 2009 3.65% of contributions through April 30, 2003; 

plus 2.2% of contributions from May 1, 2003 

through April 30, 2006; 

plus .36% of contributions from May 1, 2006 

through July 31, 2009 

Category 7 On or after August 1, 2009 3.65% of contributions through April 30, 2003; 

plus 2.2% of contributions from May 1, 2003 

through April 30, 2006; 

plus .36% of contributions from May 1, 2006 

through July 31, 2013; 

plus 0% of contributions after August 1, 2013. 

As of August 1, 2009, subsidies for early 

retirement and optional forms of payment were 

eliminated from the Plan. 

SMW0027
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different current level accrual rate depending on their years of service, annual hours 

worked, and hourly contribution rate made on their behalf. 

Participants entering the Plan after July 31, 2013 are excluded from the analysis because 

those participants have not earned any benefits under the Plan and thus, are not impacted 

by the proposed reduction. 

Attached to the end of this notice is a statement that describes the impact of 

proposed reduction of YOUR monthly payments

The proposed reduction will remain in effect indefinitely. The benefit reduction is 

expected to stabilize the Plan and keep it solvent. This expectation is based on a number 

of assumptions – such as projected future work hours, contribution rates, and investment 

returns. Even with these and other assumptions carefully considered, it is possible that the 

reduction may not work as intended. 

What comes next? 

Approval or denial of the application by the Treasury Department. 

The Treasury Department will review the application to see whether it meets all of the 

legal requirements under Federal law. If the application meets all of the legal 

requirements, the Treasury Department is required to approve the application. If the 

application does not meet the legal requirements, the Treasury Department will deny the 

application. The Treasury Department will have until November 11, 2018, to make a 

decision. 

You can get more information from the Treasury Department. 

More information about the proposed benefit reductions and a copy of the application 

will be available at www.treasury.gov/mpra, within thirty (30) days after the Treasury 

Department receives it. The application includes more information about the proposed 

reduction, including details regarding: 

 

 the Plan actuary’s certification that the Plan will run out of money (that is, 

that the plan is in a “critical and declining status”); 

 how the proposed reduction would satisfy the requirement that it be large 

enough so that the Plan is estimated to not run out of money, while not 

being larger than needed; and 

 the sensitivity of these estimates to the assumptions used. 

The application describes the steps the Board of Trustees has already taken to keep the 

Plan from running out of money and why the Board of Trustees believes that a benefit 

reduction is the only remaining option to keep the Plan from running out of money. In 

SMW0028
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addition, the application explains why the Board of Trustees believes that the proposed 

reduction is spread fairly among those people who have a pension benefit under the Plan. 

The Treasury Department website will also provide updated information on the 

application, such as whether the application has been withdrawn. 

For further information and assistance, you can also write to the Treasury Department at 

the following address: 

Department of the Treasury 

Attn: MPRA Office, Room 1204 

1500 Pennsylvania Avenue, NW 

Washington, DC 20220

You can comment on the application to reduce benefits. 

You will be able to submit a comment on the application by going to 

www.treasury.gov/mpra. Comments may also be mailed to the Treasury Department, at 

the address listed above. All interested parties can make comments, and the comments 

will be publicly available. 

Retiree Representative. 

The Board of Trustees is not required to select a retiree representative, because the Plan 

has fewer than 10,000 participants. The Board of Trustees has not chosen to select a 

retiree representative. 

Vote on the proposed benefit reduction. 

If the application for the proposed reduction of benefits is approved by the Treasury 

Department, you will then have the opportunity to vote on the proposed reduction. 

Unless a majority of all participants and beneficiaries of the Plan vote to reject the 

reduction, the Treasury Department must allow the reduction of benefits to take effect. 

This means that not voting counts the same as voting to approve the reduction. 

Your right to see Plan documents. 

You may want to review Plan documents to help you understand your rights and the 

proposed reduction to your benefits. The Plan Administrator must respond to your 

request for the following documents, within thirty (30) days: 

 The Plan document (including any amendments adopted to reflect an 

authorized reduction of benefits), trust agreement, and other documents 

governing the Plan (such as collective bargaining agreements); 

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 The Plan’s most recent Summary Plan Description (SPD or plan brochure) 

and any Summary of Material Modifications (SMM); 

 The Plan’s Form 5500 annual reports, including the accountant’s report 

and audited financial statements, filed with the U.S. Department of Labor 

during the last six years; 

 The annual funding notices furnished by the Plan during the last six years; 

 Actuarial reports, including reports prepared in anticipation of the benefit 

reduction, furnished to the Plan within the last six years; 

 The Plan’s current rehabilitation plan, including contribution schedules, 

and, if the proposed benefit reduction goes into effect, annual plan-sponsor 

determinations that all reasonable measures to avoid running out of money 

continue to be taken and that the Plan would run out of money if there 

were no benefit reductions; and 

 Any quarterly, semi-annual, or annual financial reports prepared for the 

Plan by an investment manager, fiduciary, or other advisor and furnished 

to the Plan within the last six years. 

The Plan administrator may charge you the cost per page to the Plan for the cheapest way 

of copying documents, but cannot charge more than 25 cents per page. The Plan’s Form 

5500 Annual Return/Report of Employee Benefit Plan is also available free of charge at 

www.dol.gov/ebsa/5500main.html. Some of the documents may also be available for 

examination, without charge, at the Plan administrator’s office, your worksite, or union 

hall. 

Your right to challenge incorrect calculations. 

If you think the Plan miscalculated the reduction to your benefits, you have the right to 

submit a claim to the Plan to have the calculation corrected. The Plan’s Summary Plan 

Description (“SPD”) tells you how to submit a claim. The SPD also describes your right 

to have a court review the Plan’s final decision on your claim. If you believe the 

information used to calculate your estimate at the end of this notice is incorrect, please 

contact the Plan office at: 

Sheet Metal Workers Local Pension Plan 

c/o BeneSys, Inc.

Attn: Mary Weir, Plan Administrator 

PO Box 368 

Troy, MI 48099-0368 

(248) 641-4902 

pensionannuitydept@benesysinc.com

 

SMW0030
Template 1 - In pay status with no change 

PBGC Guaranteed 

Benefit 

$535

The difference between 

your reduced MPRA benefit 

($640) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($535) is $105.

Proposed MPRA 

Benefit 

$640

Current 

Benefit 

$640

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current monthly benefit is $640. Under the proposed reduction your monthly benefit will 

not change when it takes effect on May 1, 2019. 

Your monthly benefit will not be reduced because you meet the following criteria: 

Your current level accrual rate is no greater than $48 per month per year of service* 

and/or your benefit is less than the MPRA guaranteed amount 

You will be age 80 or older as of May 31, 2019 

You retired under a Disability Retirement from the Plan 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

This estimate is based on the following information from Plan records: 

• You have earned 20.00 years of service* under the Plan through the date of your 

termination from covered service. 

• Current level accrual rate: $32.02 

• You will be 70 years and 2 months as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*You earned one year of service for each plan year during which you worked at least 435 hours 

under covered employment. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $535. This amount was calculated based on the 20.00 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

X

SMW0031
Template 2 – In pay status with reduction ages 75-79 

PBGC Guaranteed 

Benefit 

$358

The difference between 

your reduced MPRA benefit 

($931) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($358) is $573.

Proposed MPRA 

Benefit 

$931

Current 

Benefit 

$1,232

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current monthly benefit is $1,232. Under the proposed reduction your monthly benefit will 

be reduced to $931 beginning on May 1, 2019. 

The benefit under the proposed suspension was calculated based on multiplying your years of 

service* under the Plan through your date of termination from covered service by the revised 

level accrual rate (see below). 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

Before your benefit changes, you will receive a statement showing your new benefit amount as 

well as your authorized reductions (such as health plan premiums and income taxes) to give you 

an opportunity to make any changes before the reduction takes effect. 

The proposed reduction will remain in effect indefinitely. 

This estimate is based on the following information from Plan records: 

 You have earned 10.00 years of service* under the Plan through your date of termination 

from covered service. 

 Current level accrual rate: $123.22 

 Revised level accrual rate: $93.13 Because you are over age 75 your revised average 

level accrual rate is not reduced as much as for younger participants. 

o You will be 78 years and 0 months as of May 31, 2019. 

o The portion of your benefit that is based on disability is $0. 

*You earned one year of service for each plan year during which you worked at least 435 hours 

under covered employment. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $358. This amount was calculated based on the 10.00 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

SMW0032
Template 3 – In pay status with reduction under age 75 

PBGC Guaranteed 

Benefit 

$608

The difference between 

your reduced MPRA benefit 

($816) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($608) is $208.

Proposed MPRA 

Benefit 

$816

Current 

Benefit 

$909

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current monthly benefit is $909. Under the proposed reduction your monthly benefit will 

be reduced to $816 beginning on May 1, 2019. 

The benefit under the proposed suspension was calculated based on multiplying your years of 

service* under the Plan through your date of termination from covered service by the revised 

level accrual rate (see below). 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

Before your benefit changes, you will receive a statement showing your new benefit amount as 

well as your authorized reductions (such as health plan premiums and income taxes) to give you 

an opportunity to make any changes before the reduction takes effect. 

The proposed reduction will remain in effect indefinitely. 

This estimate is based on the following information from Plan records: 

 You have earned 17.00 years of service* under the Plan through your date of termination 

from covered service. 

 Current level accrual rate: $53.47 

 Revised level accrual rate: $48.00 

 You will be 59 years and 7 months as of May 31, 2019. 

 The portion of your benefit that is based on disability is $0. 

*You earned one year service for each plan year during which you worked at least 435 hours 

under covered employment.

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $608. This amount was calculated based on the 17.00 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

SMW0033
Template 4 – Not in pay status with no change 

PBGC Guaranteed 

Benefit 

$203

The difference between 

your reduced MPRA benefit 

($229) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($203) is $26.

Proposed MPRA 

Benefit 

$229

Current 

Benefit 

$229

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current accrued monthly benefit payable at Normal Retirement Age is $229. Under the 

proposed reduction your monthly accrued benefit will not change when it takes effect on 

May 1, 2019. 

Your monthly accrued benefit will not be reduced because you meet the following criteria: 

Your current level accrual rate is no greater than $48 per month per year of service* 

and/or your accrued benefit is less than the MPRA guaranteed amount. 

You received a disability benefit from the Plan that is protected. 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

This estimate is based on the following information from Plan records: 

• It is estimated you will have 17.00 years of service* under the Plan through April 30, 2019. 

• Current level accrual rate: $13.49 

• You will be 38 years and 9 months as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*You earned one year of service for each plan year during which you worked at least 435 hours 

under covered employment. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $203. This amount was calculated based on the 11.24 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

X

SMW0034
Template 5 – Not in pay status with reduction under Normal Retirement Age 

PBGC Guaranteed 

Benefit 

$977

The difference between 

your reduced MPRA benefit 

($1,584) and what you 

would get if the Plan were 

insolvent and relying on the 

PBGC ($977) is $607.

Proposed MPRA 

Benefit 

$1,584

Current 

Benefit 

$2,946

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current accrued monthly benefit is $2,946 payable at Normal Retirement Age under the 

single life annuity form of payment. Under the proposed reduction your monthly benefit 

payable at Normal Retirement Age in the same form will be reduced to $1,584 effective 

May 1, 2019. 

The benefit under the proposed suspension was calculated based on multiplying your estimated 

years of service* under the Plan through April 30, 2019 by the revised level accrual rate (see 

below). 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. In addition, the actual amount you receive will depend on other 

factors, like when you begin receiving payments, which payment form you choose, and whether 

you have an alternate payee entitled to a portion of your benefits. For more information see 

the Summary Plan Description available at www.ourbenefitoffice.com/SheetMetalWorkers33 

The proposed reduction will remain in effect indefinitely. 

This estimate is based on the following information from Plan records: 

• It is estimated you will have 33.00 years of service under the Plan through April 30, 2019. 

 Current level accrual rate: $89.28 

 Revised level accrual rate: $48.00 

• You will be 53 years and 3 months as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*You earned one year service for each plan year during which you worked at least 435 hours 

under covered employment.

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $977. This amount was calculated based on the 27.32 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

SMW0035
Template 6 – Not in pay status with reduction under Normal Retirement Age 

PBGC Guaranteed 

Benefit 

$1,117

The difference between 

your reduced MPRA benefit 

($1,776) and what you 

would get if the Plan were 

insolvent and relying on the 

PBGC ($1,117) is $659.

Proposed MPRA 

Benefit 

$1,776

Current 

Benefit 

$2,760

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current accrued monthly benefit is $2,760 payable in the single life annuity form of 

payment. Under the proposed reduction your monthly benefit payable in the same form will be 

reduced to $1,776 effective May 1, 2019. 

The benefit under the proposed suspension was calculated based on multiplying your estimated 

years of service* under the Plan through April 30, 2019 by the revised level accrual rate (see 

below). 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. In addition, the actual amount you receive will depend on other 

factors, like when you begin receiving payments, which payment form you choose, and whether 

you have an alternate payee entitled to a portion of your benefits. For more information see 

the Summary Plan Description available at www.ourbenefitoffice.com/SheetMetalWorkers33 

The proposed reduction will remain in effect indefinitely. 

This estimate is based on the following information from Plan records: 

• It is estimated you will have 37.00 years of service* under the Plan through April 30, 2019. 

 Current level accrual cate: $74.59 

 Revised level accrual rate: $48.00 

• You will be 67 years and 5 months as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*You earned one year service for each plan year during which you worked at least 435 hours 

under covered employment.

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $1,117. This amount was calculated based on the 31.25 years of 

service that you earned under the Plan through July 31, 2013, which is the date after which no 

future service credits could be earned under the Plan. However, there is concern about the 

health of the PBGC. If the PBGC becomes insolvent, your benefit could be significantly less.

SMW0036
Template 7 - Alternate Payee in Pay Status with No Change 

PBGC Guaranteed 

Benefit 

$184

The difference between 

your reduced MPRA benefit 

($189) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($184) is $5.

Current 

Benefit 

$189

Proposed MPRA 

Benefit 

$189

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current monthly benefit is $189. Under the proposed reduction your monthly benefit will 

not change when it takes effect on May 1, 2019. 

Your monthly benefit will not be reduced because you meet the following criteria: 

Your current level accrual rate is no greater than $48 per month per year of service* 

and/or your benefit is less than the MPRA guaranteed amount 

You will be age 80 or older** as of May 31, 2019 

 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

This estimate is based on the following information from Plan records: 

• Your 15.42 years of service* under the Plan based on the terms of the QDRO. 

• Current level accrual rate: $12.27 

• You will be 70 years and 11 months** as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*Your former spouse earned one year of service for each plan year during which you worked at 

least 435 hours under covered employment. 

**Based on your former spouse’s age for shared payment QDROs. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $184. This amount was calculated based on the 15.42 years of 

service that your former spouse earned under the Plan through July 31, 2013, which is the date 

after which no future service credits could be earned under the Plan. However, there is concern 

about the health of the PBGC. If the PBGC becomes insolvent, your benefit could be 

significantly less.

X

SMW0037
Template 8 - Alternate Payee in Pay Status with Reduction 

PBGC Guaranteed 

Benefit 

$837

The difference between 

your reduced MPRA benefit 

($1,124) and what you 

would get if the Plan were 

insolvent and relying on the 

PBGC ($837) is $287.

Proposed MPRA 

Benefit 

$1,124

Current 

Benefit 

$1,213

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Your current monthly benefit is $1,213. Under the proposed reduction your monthly benefit will 

be reduced to $1,124 beginning on May 1, 2019. 

The benefit under the proposed suspension was calculated based on multiplying your years of 

service* under the Plan based on the terms of your Qualified Domestic Relations Order (QDRO) 

by the revised level accrual rate (see below). 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

Before your benefit changes, you will receive a statement showing your new benefit amount as 

well as your authorized reductions (such as health plan premiums and income taxes) to give you 

an opportunity to make any changes before the reduction takes effect. 

The proposed reduction will remain in effect indefinitely. 

This estimate is based on the following information from Plan records: 

 Your 23.42 years of service* under the Plan based on the terms of the QDRO. 

 Current level accrual rate: $51.79 

 Revised level accrual rate: $48.00 

 You will be 68 years and 10 months** as of May 31, 2019. 

 The portion of your benefit that is based on disability is $0. 

*Your former spouse earned one year of service for each plan year during which he or she 

worked at least 435 hours under covered employment. 

**Based on your former spouse’s age for shared payment QDROs. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $837. This amount was calculated based on the 23.42 years of 

service that your former spouse earned under the Plan through July 31, 2013, which is the date 

after which no future service credits could be earned under the Plan. However, there is concern 

about the health of the PBGC. If the PBGC becomes insolvent, your benefit could be 

significantly less.

SMW0038
Template 9 - Alternate Payee Not in Pay Status with No Change 

PBGC Guaranteed 

Benefit 

$702

The difference between 

your reduced MPRA benefit 

($858) and what you would 

get if the Plan were 

insolvent and relying on the 

PBGC ($702) is $156.

Proposed MPRA 

Benefit 

$858

Current 

Benefit 

$858

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

This estimate of the effect of the proposed reduction of benefits has been prepared for: 

[Affected Individual’s Name] 

[Address] 

[Town, State, Zip] 

Based on the terms of your qualified domestic relations order (QDRO), it is estimated that you 

are entitled to receive a monthly benefit of $858. Under the proposed reduction your monthly 

benefit will not change when it takes effect on May 1, 2019. 

Your monthly benefit will not be reduced because you meet the following criteria: 

Your current level accrual rate is no greater than $48 per month per year of service* 

and/or your benefit is less than the MPRA guaranteed amount 

You will be age 80 or older** as of May 31, 2019 

 

This is an estimate of the effect of the proposed reduction on your benefit under the Plan. It is 

not a final benefit calculation. Final calculations will be made when the reduction is approved. 

This estimate was prepared assuming that the proposed benefit reduction starts on 

May 1, 2019. If the benefit reduction starts later, the effect of the proposed reduction on your 

benefit might be different. 

This estimate is based on the following information from Plan records: 

• Your 21.33 years of service* under the Plan based on the terms of the QDRO. 

• Current level accrual rate: $40.22 

• You will be 56 years and 9 months** as of May 31, 2019. 

• The portion of your benefit that is based on disability is $0. 

*Your former spouse earned one year of service for each plan year during which you worked at 

least 435 hours under covered employment. 

**Based on your former spouse’s age for shared payment QDROs. 

PBGC Guaranteed Benefits 

If the Plan does not have enough money to pay benefits, your monthly benefit would be no 

larger than the amount guaranteed by PBGC. The amount of your monthly benefit guaranteed 

by PBGC is estimated to be $702. This amount was calculated based on the 21.33 years of 

service that your former spouse earned under the Plan through July 31, 2013, which is the date 

after which no future service credits could be earned under the Plan. However, there is concern 

about the health of the PBGC. If the PBGC becomes insolvent, your benefit could be 

significantly less.

X

SMW0039
Sheet Metal Workers Local Pension Plan Voter's Guide 

Vote by _______________, 2018 

Cast your vote on the proposed benefit reduction by [deadline]:

Phone: 

Or 

Online: 

Call X-XXX-XXXX to vote by phone. 

Go to www.XXXXXXX.com to vote online. 

 The proposed benefit reduction will go into effect May 1, 2019, unless a majority of participants reject 

it. Not voting has the same effect as voting yes. 

 The vote is being run by a company selected by the Treasury Department to ensure the integrity of the 

voting process. 

YOUR CHOICE: 

Voting YES means: Voting NO means: 

On May 1, 2019 monthly benefits for some 

participants will be lowered 

There will be no reduction on May 1, 2019 but the 

Plan may be on the path to running out of money in 

about 17 years (2035) 

Disabled members and those who are age 80 or 

older on May 1, 2019 will NOT have their monthly 

benefits lowered at all 

When the Plan runs out of money benefits will be 

paid by the PBGC and will be much lower that 

benefits will be if the members vote “YES” on the 

proposed reduction 

All members who are between age 75 and 80 on May 

31, 2019 will have their benefits lowered 

When the plan runs out of money benefits will drop 

for most participants. Others will not see a drop 

because their benefit is already lower than the 

PBGC’s guaranteed amount 

Review pages x – x for statements for and against 

the reduction 

Review pages x – x for statements for and against 

the reduction 

 See the enclosed personalized benefit estimate for how your benefit would change 

under the proposed reduction or, if the plan ran out of money and benefits were paid by the 

PBGC.

* All participants’ benefits will be calculated using this formula: $48 x Your Years of Service = Your 

Monthly Benefit. This change is intended to prevent the Plan from running out of money.

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2

 This voter's guide provides information to help you make an informed decision on the proposed benefit 

reduction for the Sheet Metal Workers Local Pension Plan: 

 About the Proposed Reduction 

 Statement For the Reduction 

 Statement Against the Reduction 

 What's Next 

Please read this guide and see the enclosed benefit estimate before you make your decision. 

About the Proposed Reduction 

__________________________________________________________________________________________________________________________________________________ 

 Unless rejected, effective May 1, 2019, there will be a reduction of benefits earned through April 

30, 2019 for active participants, retirees, beneficiaries, and inactive participants with a vested benefit.

 The amount of your benefit earned through April 30, 2019 will be determined by multiplying $48 by 

your years of service under the plan, earned through April 30, 2019. See the enclosed benefit estimate for 

your actual reduced benefit amount. 

 No special groups will be treated differently except those required by law: 

• Participants or beneficiaries with benefits based on disability will have no reduction.

• Participants or beneficiaries who are at least age 80 on May 31, 2019 will have no reduction. 

• Participants or beneficiaries who are at least age 75 on May 31, 2019 will have a smaller benefit 

 reduction. 

There is no set date when the benefit reductions will end; they will remain in effect indefinitely. 

However, the benefit reductions will be in effect only until the Plan is no longer projected to run out of 

money without the reductions in place. We expect reduced benefits to be in place for a long time. For 

some, that means reduced benefits for the rest of their retirement. For others, there is at least a 

possibility that their benefit would come back up to the unreduced amount at some point in the future.

 This proposed benefit reduction has been approved by the Secretary of Treasury, in consultation with 

the Pension Benefit Guaranty Corporation (PBGC) and the Secretary of Labor. 

See the enclosed benefit estimate for information about YOUR benefit and how much YOUR 

benefit will be it will be if the reduction is approved.

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3

What if we do nothing? 

 The Plan's actuary estimates that, unless benefits are reduced, the Plan will not have enough money 

to pay benefits in the year 2035. This estimate is based on how much money the actuary expects the Plan to 

receive and to pay out each year. This estimate, which is based on several assumptions, will change every 

year based on actual investment returns, plan contributions, and other experience. So the actual date could 

be sooner or later than 2035. 

 If the Plan does not have enough money to pay benefits, then only the amount guaranteed by the 

Pension Benefit Guaranty Corporation ("PBGC") will be paid. You can find the amount of your benefit that is 

guaranteed by the PBGC on the enclosed benefit estimate. 

 If the PBGC runs out of money, benefits will likely be quite a bit lower than the PBGC-guaranteed 

amount shown. 

Effects of the proposed benefit reduction. 

 This reduction would take effect on May 1, 2019 and would apply to benefits earned through April 30, 

2019. 

 See the enclosed benefit estimate for information about your benefit and how much it would be if 

reduced.

 The Plan's actuary has certified that, with the reduction of benefits that the Board of Trustees has 

proposed, the plan should not run out of money. This expectation is based on a number of assumptions; if 

reality differs significantly from these assumptions, the reduction might not work as intended. However, we 

have used realistic assumptions to give the Plan the best chance of success.

Statement in Favor of the Reduction: 

We, the Trustees of the Sheet Metal Workers Local Pension Plan, believe the plan can be saved with 

this reduction. If we thought it was hopeless, we wouldn't be going through this process. Our goal is to keep 

paying as much as we can in benefits for many years to come. 

 Our options were to try to save the plan or let it run out of money. As we looked at both options, it 

became clear that we need to try to save the plan. The chart below shows why we want to save the plan, and 

not let it run out of money. 

Try to Save the Plan Let the Plan Run Out of Money 

The most prudent course of action is to do everything 

possible to keep the Plan from running our of money 

and to keep paying benefits from the Plan – even if 

that means paying them at a lower level. 

If we let the Plan run out of money those receiving 

benefits now will continue to get their full amount – 

but only for a number of years. Everyone else would 

get lower benefits or, in the worst case, nothing. This 

hurts the active participants the most, and they are 

already earning a lower benefit, and paying a higher 

contribution, than members did in the past. 

The proposed reduction applies equally to all 

participants. In other words, everyone’s benefit will be 

determined based on the same formula: $48 x Your 

Years of Service 

There is concern about the financial health of the 

Pension Benefit Guaranty Corporation (PBGC) – the 

government corporation that insures pension plans. 

The PBGC itself may very well run out of money. In 

that case, it is likely that only a fraction of the PBGC’s 

“guaranteed” benefits would be paid to plans that run 

SMW0042
4

out of money. 

If we keep the Plan going, we have a better chance of 

maintaining a strong contribution base – increasing 

the likelihood of being able to pay benefits over a 

longer period of time. 

If the Plan runs out of money and goes to the PBGC, 

no one will receive more than the PBGC guaranteed 

amount. 

The Plan still has assets at this time. If benefits are 

lowered now we can use those assets to earn 

investment income. Investment income pays for 

benefits and will help us to restore the Plan. 

Right now the Plan has almost $43 million of assets. 

If we do nothing, the amount of money we have to 

invest will go down, we will get fewer dollars of 

investment earnings, and ultimately, the plan will run 

out of money. 

Under this proposal, the reduction applies to 

benefits earned through April 30, 2019.

If the plan runs out of money, perhaps the hardest hit 

group would be current active participants, who have 

already made significant sacrifices. 

The current level of benefits being earned is already 

very low (and the contributions are very high) 

compared to the benefits and contributions of the 

past. The benefits being earned by current actives 

are already reduced. We owe it to them to do 

everything we can to make sure some of the money 

they are paying into the fund is left to pay their 

benefits in the future. 

PBGC benefits would be lower than benefits under 

this proposed reduction. And if the PBGC runs out of 

money, it's likely benefits would be even smaller.

For all participants, benefits under the proposed 

reduction are higher than what you would receive 

from the PBGC. See the enclosed benefit estimate 

for a comparison. 

If the Plan goes to the PBGC, not only would 

benefits be lower than under the proposed 

reduction, but the decrease would be permanent. 

Under the proposed reduction, the people who are 

least able to recover from a reduced retirement 

income, including disabled participants and those 

more than 80 years old are protected from any 

reduction. 

If the Plan runs out of money, benefits will be cut 

across the board. No population of participants will 

be protected from reductions. 

 

SMW0043
5

Statement Against the Reduction:

 _____________________________________________________________________________________________ 

[to be completed] 

SMW0044
6

What Happens Next: 

 [Deadline]: Last day to vote 

[7 days after deadline]: Results of the vote announced

The Trustees will mail an update with the results of the vote 

following the announcement

May 1, 2019: Reduction takes effect, unless rejected 

SMW0045