International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

Does the application include plan information required by section 5.02? 

The application includes (Checklist Item #18) a detailed year-by-year analysis of the 

annual changes from 2007 through 2016 along with the series of steps taken by the 

Board of Trustees to avoid the impending insolvency in 2026. 

Document 19.1 provides additional related information concerning the following “Plan 

Factors” for the past ten (10) Plan years. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.1

Document 19.1 

1. Summary of Contribution Levels 

 

Employers make contributions to the Pension Plan pursuant to individual collective 

bargaining agreements or participation agreements. The contribution rates vary among 

the employers and employee classes. The Board of Trustees considered contribution 

levels and the fact that contribution increases beyond those required by the Pension 

Plan’s initial Rehabilitation Plan would drive an increasing number of contributing 

employers out of the Pension Plan. 

The contribution rates for each employer from July 1, 2006 to the establishment of the 

rehabilitation plan in 2008 is as follows: 

Number Employer Credited Non-Credited Effective Date

1100 ABC Paving Co. $191.00 $ 0.00 8/1/2005

$191.00 $10.00 8/1/2006

$191.00 $20.00 8/1/2007

1503 Borman’s Inc. $100.00 $ 0.00 1/1/2005

1803 Concrete Delivery $111.00 $ 0.00 6/1/2005

2103 Delta Trucking $ 94.00 $ 6.00 7/1/2007

$ 94.00 $ 8.00 7/1/2008

2700 Doan Construction $134.70 $16.00 6/5/2006

$134.70 $41.08 6/2/2008

2500 E&L Transport Co. $248.70 $24.00 6/1/2006

2603 Eagle Trucking $ 94.00 $ 6.00 7/1/2007

$ 94.00 $ 8.00 7/1/2008

4703 Edward C. Levy Co. $ 93.00 $ 0.00 6/1/2005

$ 93.00 $10.00 6/1/2006

2903 Falcon Trucking $ 94.00 $ 6.00 7/1/2007

3003 Faygo Trucking Co. $121.55 $ 0.00 11/1/2005

$121.55 $ 6.08 11/1/2006

$121.55 $12.46 11/1/2007

3303 Gravel Trucking Co. $ 94.00 $ 6.00 7/1/2007

$ 94.00 $ 8.00 7/1/2008

1150 George P. Johnson $ 21.60 $ 0.00 2/1/2005

$ 21.60 $ 2.16 2/1/2008

3900 Holland Motor Express $173.00 $24.00 5/1/2006

$173.00 $65.37 5/1/2008

4200 I.A.M. District 60 $173.00 $ 0.00 5/1/2005

4600 Koenig Fuel & Supply Co. $134.70 $16.00 6/5/2006

$134.70 $41.08 6/2/2008
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.2

Number Employer Credited Non-Credited Effective Date

5700 Motor City Electric $302.70 $ 0.00 11/1/2005

$302.70 $10.00 5/1/2007

$302.70 $15.00 11/1/2007

5900 Motor Rail Delivery $173.00 $24.00 5/1/2006

6050 Penske Truck Leasing Co. $106.60 $ 0.00 11/1/2005

$106.60 $10.66 11/1/2006

$106.60 $23.09 11/1/2007

6400 Pyrek Transport, Inc. $292.70 $10.00 1/1/2006

6900 Roadway Express $173.00 $24.00 5/1/2006

$173.00 $65.37 5/1/2008

7103 Ryder - Saunder-Taylor $ 80.00 $ 0.00 9/15/2005

$ 80.00 $ 4.00 9/15/2006

$ 80.00 $ 8.00 9/15/2007

7104 Ryder - Highland Park $ 70.00 $ 0.00 12/1/2005

$ 70.00 $ 2.00 12/1/2006

$ 70.00 $ 5.00 12/1/2007

7300 Ryder Truck Lease Div. $ 80.00 $ 0.00 4/1/2005

$ 80.00 $ 4.00 4/1/2006

$ 80.00 $ 8.00 4/1/2007

$ 80.00 $12.00 4/1/2008

7313 Ryder - Sherwood $ 60.00 $ 7.00 2/1/2006

$ 60.00 $15.00 2/1/2007

$ 60.00 $22.50 2/1/2008

7450 Stacey Trucking Co. $ 94.00 $ 6.00 7/1/2007

$ 94.00 $ 8.00 7/1/2008

1803 Superior Materials LLC $111.00 $ 0.00 6/1/2004

7505 Trailer Inspection Service $ 15.00 $ 0.00 10/1/2001

7800 Yellow Freight System $164.70 $24.00 5/1/2006

7703 (Bill) Wink Chevrolet/Geo $ 30.00 $ 0.00 2/1/2005

Refer to the rehabilitation plan, Document 39.1 pages 39.4 to 39.7, for the contribution 

rate history on each employer from July 1, 2008 to present. The exception is with 

Penske Trucking, which made additional non-credited contribution rate increases in 

2014 and 2015 as noted in Document 18.1 on page 18.6. 

Refer to Document 26.1 on page 26.1 for a 10-year history of the average weekly 

contribution rates and the total contributions by plan year. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.3

For collective bargaining agreements effective or renewed on or after June 30, 2008, the 

Board of Trustees prohibited any decrease in the contribution rate while the Pension 

Plan is in critical status. 

2. Summary of Benefit Accrual Levels 

Plan Year Benefit Accrual Multiplier 

July 1, 2006 through June 30, 2007 0.5% 

July 1, 2007 through June 30, 2008 0.5% 

July 1, 2008 through June 30, 2009 0.5% 

July 1, 2009 through June 20, 2010 0.5% 

July 1, 2010 through June 30, 2011 0.5% 

July 1, 2011 through June 30, 2012 0.5%

July 1, 2012 through June 30, 2013 0.5% 

July 1, 2013 through June 30, 2014 0.5% 

July 1, 2014 through June 30, 2015 0.5% 

July 1, 2015 through June 30, 2016 0.5% 

Under the terms of the Pension Plan, a participant’s accrued monthly benefit is 

determined by applying the applicable multiplier(s) to the amount of contributions 

made to the Pension Plan on the participant’s behalf. The multiplier was significantly 

reduced by the Board of Trustees, to its current level of 0.5%. The multiplier was 3.5% 

for contributions made prior to July 1, 2004, and 2.0% for contributions made from July 

1, 2004 to June 30, 2006. 

In addition, any contribution increases after June 30, 2006 are deemed non-credited, 

meaning that no additional benefit has accrued to any Pension Plan participant based on 

any contributions made on such participant’s behalf above the contribution level in 

place as of June 30, 2006. All contribution increases since June 30, 2006 are used solely 

to improve the Pension Plan’s funding.

3. Summary of Benefit Reductions 

In 2008 the Pension Plan’s actuary certified the Pension Plan to be in critical status 

under the Pension Protection Act. The Pension Plan adopted a Rehabilitation Plan and 

as part of the Rehabilitation Plan, the Board of Trustees amended the Plan effective as 

of January 1, 2009, to reduce or eliminate several benefits in an effort to take all 

reasonable measures to forestall insolvency. The changes to adjustable benefits 

included: 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.4

1. The disability pension benefit was eliminated. 

2. The pre-retirement lump sum death benefit was eliminated. 

3. The qualified pre-retirement survivor annuity subsidy was eliminated 

resulting in a benefit reduction to pay for such coverage. 

4. The post retirement lump sum death benefit was eliminated. 

5. The early retirement reduction factors were increased, resulting in the 

elimination of virtually all the early retirement subsidies. However, the 

participants eligible for an unreduced early retirement pension based on 

25 years of credited service at the effective date of the amendment were 

grandfathered and not affected. The Board of Trustees determined it 

was more financially advantageous to the Pension Plan for such 

participants to continue active employment, with ongoing contributions, 

rather than force their retirement at that time in order to secure the 

unreduced pension. This followed from the reduced benefit multiplier of 

0.5% that was then applicable. 

6. The five year certain and life was changed from the “normal form” of 

benefit, to an optional form of benefit, including an adjustment to the 

actuarial equivalent of the normal form of benefit (life annuity with no 

guarantee). 

4. Prior Benefit Suspensions (If Any) 

The Pension Plan has not implemented any other benefit suspensions under Code 

Section 432(e)(9) prior to this application. 

5. Measures Undertaken to Retain or Attract Contributing Employers 

Retention of contributing employers in the Pension Plan has been difficult over the past 

10 years as a result of the economic and financial crises since the late 1990s and early 

2000s. Over that time period, the Board of Trustees, with the assistance of the Pension 

Plan’s actuary, has studied and implemented what it determined to be appropriate 

contribution level increases and benefit reductions in an effort to retain the contributing 

employers already in the Pension Plan. They also succeeded to a certain extent in 

encouraging current employers to remain in the Pension Plan. Nevertheless, over the 

course of the past 10 years the number of contributing employers has decreased by 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.5

approximately 75%. The Board of Trustees also has monitored potential withdrawal 

liability assessments and pursued any unpaid amounts to the fullest extent of the law. 

Among the specific measures taken by the Board of Trustees to retain or attract 

contributing employers was the adoption of the “free look rule” in 2007. The “free look 

rule” allows employers to avoid withdrawal liability if they withdraw from the Pension 

Plan within five years, before the time when its employees would vest, thereby allowing 

employers a greater incentive to participate in the Pension Plan and hopefully remain as 

a contributing employer. If such an employer elected not to stay, the Pension Plan 

retains the employer’s contributions even though its participants did not become 

vested. 

Further, as more fully described in Checklist Item #18, the Board of Trustees suspended 

the absolute annual 10.3% contribution rate increase after the initial five years of the 

Rehabilitation Plan. Such increases were hopefully to be continued where feasible but 

not at the risk of losing further employers. 

6. Impact of Solvency on Plan Subsidies and Ancillary Benefits 

The Board of Trustees eliminated almost all subsidies and there are no other ancillary 

benefits provided to the participants and beneficiaries. 

7. Compensation levels of active participants relative to employees in the 

Participant’s same industry

Compensation levels for active participants of the Pension Plan were historically greater 

than non-participants employed in the same industry. In the Pension Plan’s geographic 

area, industry competition has impeded wage growth for Union members, although 

overall compensation costs for union members are higher due to better benefits. 

The rising costs of pension benefits have caused a downward pressure on Union wages 

in general. Employers have experienced rising pension costs due to the cumulative 

supplemental employer contributions imposed by the Rehabilitation Plan. The overall 

pension costs will continue to rise. This increase in the pension costs has come out of 

the non-pension portions of the total compensation package and led to slower wage 

growth for participants. 

At the same time, Pension Plan participants have experienced a reduction in the amount 

of benefit accruals they could expect to receive for each dollar contributed on their 

behalf along with the reduction or elimination of other benefits, as described above. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #19 – 5.02 Plan Factors 

19.6

The confluence of the cumulative supplemental employer contributions and the benefit 

reductions has meant that an increasing portion of pension contributions are being used 

to pay unfunded pension obligations, which has led to a decline in support for the 

Pension Plan among active participants and made it more difficult to attract and retain 

contributing employers. 

8. Competitive and other economic factors facing contributing employers 

Economic factors over the past 15 years have affected the Pension Plan’s contributing 

employers and directly impacted the Pension Plan’s funding status. There has been 

steady decline in the number of the Pension Plan’s contributing employers and the 

Pension Plan’s financial condition. 

This decline, coupled with the economic recessions over the last 15 years, have had a 

great impact on the local economy in the Union’s jurisdiction. Pension Plan employers 

are engaged in a fragmented, competitive industry and have higher labor costs. 

Specific examples of this would include the extremely competitive trucking and 

transportation industry that confronts YRC, one of the Pension Plan’s largest 

contributing employers. In addition, the Pension Plan’s largest contributing employer, 

Penske Truck Leasing, faces direct competition from Ryder Truck which has already 

withdrawn from the Pension Plan due to its increased cost factors and is thereby 

competing very favorably with Penske Truck Leasing as it is no longer obligated to pay 

the Pension Plan’s increased contributions or its future unfunded liability. Furthermore, 

other participating employers have openly contemplated withdrawing from the Pension 

Plan. Factors affecting an employer’s decision to withdraw from the Pension Plan 

include alleviating the economic burden imposed by the Rehabilitation Plan, eliminating 

the withdrawal liability reported on an employer’s financial statements and taking 

advantage of the 20 year cap currently imposed on the withdrawal liability calculation, 

all of which factors worked in favor of Ryder Truck’s decision to leave the Pension Plan.