International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #21 – 5.03 Benefit and Contribution Levels 

Does the application describe how the plan sponsor took into account – or did not take 

into account – in the determination that all reasonable measures have been taken to 

avoid insolvency the impact of: 

 benefit and contribution levels on retaining active participants and 

bargaining groups under the plan; and 

 past and anticipated contribution increases under the plan on employer 

attrition and retention levels? 

See section 5.03. 

Document 21.1 provides a description of the benefit and contribution levels taken into 

account to avoid insolvency. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #21 – 5.03 Benefit and Contribution Levels 

21.1 

Document 21.1 

Benefit and Contribution Levels Taken into Account to Avoid Insolvency 

To avoid insolvency over the past 10 years, the Board of Trustees has considered the 

following factors, as listed Code Section 432(e)(9)(c)(ii)(VIII) and Code Section 

432(e)(9)(c)(ii)(IX). See also Revenue Procedure 2016-27, section 5.03. 

1. The Impact of Benefit and Contribution Levels on Retaining Active 

Participants and Bargaining Groups under the Pension Plan 

The Board of Trustees considered the impact of benefit and contribution levels 

on retaining active participants and bargaining groups under the Pension Plan. 

The active participants’ adjustable benefits were previously eliminated under the 

Rehabilitation Plan and the future benefit accrual rate reduced as much as 

possible in the default schedule, including to a very low benefit accrual rate of 

0.5%. Due to the impact of the Rehabilitation Plan, active participants have 

already been seeking alternatives instead of remaining in the Pension Plan. For 

example, participants have proposed new retirement money should be 

bargained into a 401(k) plan or a different pension plan. Any further reductions 

to the benefit accrual rate would put the Pension Plan at increased risk of losing 

support from active participants. Nevertheless, once informed about MPRA, 

active participants tend to support the Pension Plan making an application 

because they believe that the Pension Plan’s projected insolvency will mean they 

will receive little, if any, of their pension when they retire. 

The Board of Trustees did consider the impact of making changes to the 

contribution rate and determined that this was not a reasonable measure to 

take at this time to avoid insolvency. The Trustees believe that the current 

contribution rates are sustainable for the contributing employers; however, 

increases will continue to erode the employer base. 

The Board of Trustees believe that the current contribution rates are even 

detrimental to attracting new active participants; however, if the suspension 

plan is approved, at least the participants and beneficiaries will have the ability 

to receive the benefits and not be subject to the reductions that will occur upon 

insolvency. It is the hope of the Board of Trustees, that the implementation of 

the suspension plan will reassure the contributing employers so they continue to 

support this Pension Plan. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #21 – 5.03 Benefit and Contribution Levels 

21.2 

2. The Impact of Past and Anticipated Contribution Increases under the 

Pension Plan on Employer Attrition and Retention Levels 

As noted above, the impact of past and anticipated contribution increases under 

the Pension Plan has had a significant detrimental impact on employer attrition 

and retention levels. The Pension Plan has lost the following contractors over 

the last 10 years: 

Employer Name 

ABC PAVING 

BORMAN FOODS/FARMER JACK 

CONCRETE DELIVERY 

DOAN CONSTRUCTION 

DELTA TRUCKING CO. 

E&L TRANSPORT 

EAGLE TRUCKING 

FALCON TRUCKING CO. 

GRAVEL TRUCKING CO. 

I.A.M. DISTRICT 60 

KOENIG FUEL & SUPPLY CO. 

LEVY, EDWARD C. 

MOTOR CITY ELECTRIC 

PYREK TRANSPORT INC. 

RYDER 

STACEY TRUCKING COMPANY 

SUPERIOR MATERIALS LLC 

WINK CHEVROLET, INC.