SHEET METAL WORKERS LOCAL PENSION PLAN 

APPLICATION ON RESUBMISSION FOR APPROVAL OF 

SUSPENSION OF BENEFITS 

UNDER THE 

MULTIEMPLOYER PENSION REFORM ACT OF 2014 

MARCH31,2019 

NovARA, TESIJA & CATENACCI, PLLC 

0002
SECTION 1. BACKGROUND AND PROCEDURE 

The Board of Trustees of the Sheet Metal Workers Local Pension Fund (the "Plan") 

submits this application and the accompanying Exhibits to the Secretary of the Treasury for 

approval of a proposed suspension of benefits. The application is made pursuant to Internal 

Revenue Procedure 2017-43 (the "Revenue Procedure") and the Department of the Treasury's 

final regulations issued under§ 432(e)(9) of the Internal Revenue Code of 1986 (the "Code") as 

published in the Federal Register on April 28, 2016 (the "Regulations"). 

Under §432(e)(9)(G) of the Code the Secretary of the Treasury shall approve an 

application for the approval of suspension of benefits upon finding that the Plan is eligible and 

has satisfied the criteria of subparagraphs (C), (D), (E) and (F) of §432(e)(9) of the Code. As set 

out in detail below, the Plan is eligible to suspend benefits and has satisfied each of the criteria 

under the Regulations. This is a resubmission application pursuant to §432(e)(9)-l(g)(3) of the 

Regulations. On December 14, 2018, a representative ofthe Department of the Treasury affirmed 

to the Plan that its initial application (filed on March 31, 2018, and which was withdrawn on 

October 4, 2018, by way of a letter dated October 2, 2018) is a candidate for resubmission 

review. The Plan respectfully requests that the Secretary approve this resubmission application 

(hereafter "application") to suspend benefits. 

SECTION 2. APPLICATION PROCEDURES 

2.01 Application submitted by plan sponsor. 

This application for approval of a proposed benefit suspension is submitted by the Plan 

Sponsor as defined at §432G)(9) of the Code and as required under the Regulations. The 

application is signed by the current Chairman Trustee of the Plan who is so authorized under the 

Plan's agreement and declaration of trust and the letter of authorization executed by the full 

Board of Trustees for purposes of the application. 

2.02 Term of the plan's proposed suspension of benefits. 

(1) Effective date. 

The Trustees of the Plan propose to make the suspension effective (the "Effective Date") 

after the application has been approved and the result of the participant vote has been 

determined, on the first day ofthe next Plan Year beginning after the approval, May 1, 2020. 

(2) Expiration date. 

The proposed suspension shall remain in effect indefinitely. It will not expire by its own 

terms. 

(3) The proposed suspension. 

The application proposes that there shall be a reduction in monthly benefits such that the 

revised monthly amount is based upon a specific percentage reduction of a participant's benefit 

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depending upon into which "group" of participants an individual is categorized. The proposed 

reductions are subject to the individual limitations described in §432(e)(9)(D)(i), (ii), and (iii) 

and aggregate limitations described in §432(e)(9)(D)(iv). 

The groups defined for purposes of this application and the proposed percentage 

reduction in their benefits are: 

Non-Active Particioants Retirement Date1 

Pronosed Susnension 

Reduction 

Group 1 Before August 1, 20092 and all 

Terminated Vested Participants 

35% 

Group 2 On or after August 1, 2009 30% 

Active Particinants Hire Date 

Group 3 Before May 1, 20063 25% 

Group 4 On or after May 1, 2006 No reduction 

Active Participants are Plan Participants who worked at least 435 hours during the plan 

year ended April 30, 2017 or April 30, 2018 and who have not retired as of April 30, 2018. NonActive Participants include Terminated Vested Participants, Retired Participants, Disabled 

Participants, Beneficiaries of Participants, and Alternate Payees. 

The proposed suspension as described above will impact the Plan population as follows4: 

45% ofActive Participants will have a benefit reduction (296 of 655), 

76% of Terminated Vested Participants5 will have a benefit reduction (287 of 379) 

65% of Retired Participants will have a benefit reduction (265 of 408) 

0% of Disabled Participants will have a benefit reduction (0 of 16) 

29% of Beneficiaries of Participants will have a benefit reduction (26 of 89), and 

76% of Alternate Payees will have abenefit reduction (13 of 17) 

Of the total Plan population (1,564 individuals), 57% will experience a reduction. 43% 

will experience no reduction. 

The average percentage reduction per class of Plan Participant, excluding those with no 

reduction, is: 

1 Member's Retirement Date for Beneficiaries of Retired Participants and for Alternate Payees of shared-payment 

QDROs. 

2 Effective date of the Plan's Rehabilitation Plan. 

3 Effective date of the Plan's amendment reducing the rate of accrual from 2.2% to 0.36% of contributions. 

4 Analysis based on census data used for the May I, 2017 actuarial valuation. 

5 Includes two participants with deferred benefits based on disability. 

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Active Participants 19.6% 

Terminated Vested Participants 20.7% 

Retired Participants 18.7% 

Dis.abled Participants 0% 

Beneficiaries of Participants 8.8% 

Alternate Payees 12.5% 

The average percentage reduction across the entire affected portion of the participant 

population is approximately 19.3%. Notably, under the Plan's withdrawn initial application the 

average percentage reduction was approximately 27%. The decrease in the average percentage 

reduction is due to the fact that the revised suspension methodology affects a larger proportion of 

the Plan's population, thereby lowering the average reduction required per participant among 

affected individuals. The Trustees note that there is a larger population of Non-Active 

Participants (909) than there are of Active Participants (655)6 and, although numerically more 

Non-Active Participants are affected, their average percentage reduction is slightly lower than 

that of Active Participants. Relatedly, a larger proportion of the Non-Active participant 

population is protected from suspensions by the individual limitations, resulting in a slightly 

lower average percentage reduction for affected Non-Actives compared to affected Actives. The 

Trustees also note that of the 290 Active Participants who are affected, 202 will experience a full 

25% reduction. These are Participants who were hired before May 1, 2006 and accrued their 

vested benefits under the Plan's higher accrual rate structures. 

2.03 Penalties of perjury statement. See, Exhibit 1. 

2.04 Public disclosure statement. See, Exhibit 1. 

SECTION 3. DEMONSTRATION THAT THE PLAN IS ELIGIBLE FOR SUSPENSION 

3.01 Plan actuary's certification of critical and declining status. 

The Plan actuary's required certification (issued July 27, 2018) is found at Exhibit 2 to 

the application as required under Code §432(b)(3)(A). The Plan is certified as being in critical 

and declining status for the Plan Year beginning May 1, 2018. The certification is supported by 

the May 1, 2017 actuarial valuation (issued March 22, 2018) and Exhibit 4, the actuary's 

Supplemental Information to Actuarial Certification for the Plan Year Beginning May I, 2018 

(issued March 29, 2019), which includes a year-by-year projection of the Plan's available 

resources and the benefits under the Plan demonstrating that the Plan is projected to become 

insolvent during the Plan Year beginning May 1, 2033. The documentation includes descriptions 

of the assumptions and methods applied. The year-by-year projection separately identifies the 

market value of assets as of the beginning and end of the Plan Years beginning May 1, 2017 

though April 30, 2034, and the following cash-flow items for those years: (1) employer 

contributions, (2) withdrawal liability payments, (3) benefit payments (by category), (4) 

administrative expenses, and (5) investment returns. 

6 Indeed, the "mature" quality ofthe Plan's population was and is a substantial driver of its forecast insolvency. 

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3.02 Plan actuary's certification that the plan is projected to avoid insolvency. 

Exhibit 4 is the Plan actuary's Report ofRequired Actuarial Information -Application 

for Proposed Benefit Suspension as of May 1, 2020. This certification (dated March 29, 2019) 

includes at Part C. the actuary's Deterministic Projection of Current Plan Without Proposed 

Suspension. Part C. includes a year-by-year solvency projection that demonstrates that the Plan 

will become insolvent in the Plan year beginning May 1, 2033. Part D. Deterministic Projection 

of Proposed Suspension of the certification satisfies the requirements of §432(e)(9)(C)(i) by 

providing a year-by-year projection demonstrating that with the proposed suspension taking 

effect on May 1, 2020, the Plan is projected to avoid insolvency within the meaning of Code § 

418E. The Report also separately identifies the available resources during each year and the 

market value of assets and changes in cash flow. 

3.03 Plan sponsor's determination of projected insolvency. 

The Trustees of the Plan have made a prudent determination under Code 

§432(e)(9)(C)(ii), after consideration of all of the available information and possible plan 

changes that the Plan is projected to become insolvent unless benefits are suspended as proposed 

in the application. The Trustees have determined this to be so even though they have taken all 

reasonable measures to avoid insolvency. The Trustees determination of projected insolvency 

includes consideration of all measures taken to avoid insolvency over the past 10 plan years, as 

discussed below. 

On July 1, 2009, the Plan's actuary certified the Plan's funding status as critical for the 

2009 Plan Year. The Plan was considered to be in critical status because the funded percentage 

was 47.2% and there were projected funding deficiencies starting at the end of the 2009-2010 

Plan Year. The decline in funding that lead to this certification was largely a function of the 

crisis in the financial markets in 2008, and the "Great Recession" that followed, which resulted 

in a reduction in work hours. 

In the years since being first certified as "critical" under the PP A the Trustees have 

adopted steps under the auspices of a Rehabilitation Plan and further "all reasonable measures" 

intended to forestall insolvency and improve the funding status of the Plan. The Plan was 

certified as "critical" under the PPA in each plan year from 2009 through 2015. For 2016, the 

Plan was certified to be in "critical and declining" status based on a projected insolvency in the 

2033-34 plan year and a funded percentage of 53.6%. For 2017 and 2018, the Plan continued to 

be certified to be in critical and declining status, with a funded percentage of 43% and 41.4%, 

respectively. 

The Trustees adopted a Rehabilitation Plan as required under PP A and further availed the 

Plan of the ability under Code§ 432(e)(3)(A)(ii) to reduce all of the Plan's adjustable benefits, 

including the future accrual of benefits, in order to take "all reasonable measures" to forestall 

insolvency. 

The Trustees have now reasonably and prudently determined that notwithstanding those 

steps, the Plan cannot be projected to avoid insolvency if the proposed suspension of benefits is 

not approved and applied to the Plan. 

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3.04 Consideration of Specific Plan Factors. 

(1) The determination that all reasonable measures have been taken to avoid 

insolvency includes the consideration of the Plan factors specified in Section 

432(e)(9)(C)(ii) for the 10 plan years immediately preceding 2019. 

(a) Current and past contribution levels. 

Contribution rates have increased by at least 50% of the pre-2009 levels due to the 

Rehabilitation Plan. Under the preferred schedule to the Plan's Rehabilitation Plan there were 

cumulative contribution increases of 10% in 2009, 2010, and 2011. In 2012, there was a 

contribution rate increase of 14%. These contribution rate increases resulted in significant wage 

deferments to the Plan by its active participants and have made it very difficult for signatory 

contractors to remain competitive in the sheet metal construction market. The Trustees believe 

that additional contribution rate increases will result in a loss of members by the Union and will 

make it extremely difficult for the Union to. attract new members. This could result in a decrease 

in future contributions to the Plan and, if that were to occur, cause a net decrease in future 

funding of the Plan. Further contribution rate increases are therefore counterproductive to the 

goal of avoiding insolvency. 

(b) Levels of benefit accruals including any prior reductions in the rate of 

benefit accruals. 

The future benefit accrual rate has been reduced multiple times since 2003 and was 

frozen effective August 1, 2013. The table below contains the history of percentage of 

contribution accrual rates under the Plan from May 1, 1983, through August 1, 2013 (for service 

after which date the accrual rate is 0.0%). 

Retirement/ 

Termination Date 

% of Employer Contribution 

Accrual Rate 

May 1, 1983 - April 30, 1984 2.6% 

May 1, 1984-April 30, 1987 2.8% 

May 1, 1987 -April 30, 1990 3.0% 

May 1, 1990-April 30, 1994 3.5% 

May 1, 1994-April 30, 2003 3.65% 

May 1, 2003 - April 30, 2006 3.65% of contributions through April 30, 2003; 

plus 2.2% of contributions from May 1, 2003 through 

April 30, 2006. 

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. 

(c) Prior reductions of adjustable benefits under Section 432(e)(8). 

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The benefit reductions in the Plan's Rehabilitation Plan include all permissible adjustable 

benefit reductions, excepting an increase to the Plan's normal retirement age. 

(d) Prior suspension of benefits under Section 432(e)(9). 

Not applicable as the Plan has not had a prior suspension of benefits under Section 

432(e)(9). 

(e) Measures taken to retain or attract contributing employers. 

At present, any would-be contributing employer is faced with participation in a Plan that 

is projected to become insolvent, that imposes a substantial contribution rate, and for which new 

participants will accrue a 0% future benefit notwithstanding the deferral of wages into the Plan 

as contributions. Additionally, any would-be employer who commences participation in the Plan 

could face withdrawal liability. Under these circumstances, it is the belief of the Trustees that 

rational employers face a difficult decision in determining whether to sign a CBA that requires 

contributions to the Plan. Ameliorating this view is the fact hat the CBAs under which 

contributions are made to the Plan include a menu of fringe benefits of which the Plan is but one 

of several. For example, for all new CBA employees, employers are required to contribute to the 

Sheet Metal Workers National Plan as well as a defined contribution plan and other fringe 

benefits. The financial position of the Plan standing alone makes it difficult to attract new long 

term participating employers. However, taken in conjunction with the other CBA-required 

fringes the Plan has in fact been able to maintain and modestly increase its contributing employer 

base since the reduction of the future benefit accrual rate to 0.0%,7 supporting the reasonableness 

of the expectation that the contribution base units will ultimately remain stable that are part of i 

the proposed suspension of benefits. 

The Trustees are committed to retaining the contribution base that the Plan has. This is 

reflected in their determination not to seek additional contribution rate increases from the 

existing employers, which could foresee-ably lead to employer bankruptcies and possible 

uncollectible withdrawals. That there have been new employers signatory to the CBAs since 

2013 and since the Plan's 2018 application, is objectively a confirmation of the prudence of the 

Trustees' approach to the issue. Specifically, subsequent to the filing and withdrawal of the 

Plan's initial application to suspend benefits four new contributing employers have commenced 

participation in the plan. 8 

(2) The impact on plan solvency of the subsidies and ancillary benefits available to 

active participants. 

As noted above, all adjustable benefits have been eliminated under the Rehabilitation 

Plan, excepting an increase to the Plan's normal retirement age. 

7 Confirmation of this was provided to Treasury in a supplemental response to post-application questions. 

8 The four employers who commenced contributing subsequent to March I, 2018 are identified in the list of current 

contributing employers, Exhibit 8 to the application. 

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(3) Compensation levels of active participants relative to employees m the 

participants' industry generally. 

Sheet Metal Workers Local Union #33 represents over 4,500 skilled craftsmen 

throughout most of Ohio and West Virginia. Hourly wage rates for active participants in the Plan 

were on average $25-$27 /hour in 2017. The average national hourly wage in 2017 for Sheet 

Metal Workers was $25.05/hour. The 2017 average hourly wage for Sheet Metal Workers in 

Akron Ohio was $24.25/hour and $26.19/hour in the Wheeling, West Virginia according to the 

Bureau of Labor & Statistics ("BLS") study published in March 2018. 

(4) Competitive and other economic factors facing contributing employers. 

Significant contribution increases to the Plan have been made by signatory contractors 

since May, 2008 (See, Exhibit 10, Narrative Statement). This has resulted in significant wage 

deferments by members. These significant contribution increases have made it very difficult for 

signatory contractors to remain competitive in the sheet metal construction market. 

How Plan factors were taken into account/other factors considered 

The impact of benefit and contribution levels on retaining active participants and 

bargaining groups under the plan. 

With reference to the descriptions above, the Trustees observe that current active 

participants are making significant wage deferments to the Plan but are not accruing any 

additional pension benefits. Any further increase in the contribution rate would likely result in 

employer withdrawals and a loss of members by the Union. 

The impact of past and anticipated contribution increases under the plan on 

employer attrition and retention levels. 

With reference to the description above, there are no further plans to increase the required 

contribution rate as such an action is reasonably anticipated to have a significantly detrimental 

impact on the Plan's future funding. 

SECTION 4. DEMONSTRATION THAT THE PLAN'S PROPOSED SUSPENSION 

SATISFIES THE STATUTORY REQUIREMENTS 

4.01 Demonstration that limitations on individual suspensions are satisfied. 

Exhibit 6 to the application demonstrates how the proposed suspension satisfies the 

limitations described in Code§ 432(e)(9)(D)(i), (ii) and (iii). Section 4.01 of Revenue Procedure 

2017-43 requires information demonstrating that certain statutory limitations with respect to the 

proposed suspension are satisfied. The limitations set forth in Section 4.01 are satisfied based 

upon the following (summarized) individual demonstrations. 

(1), (2) and (3) Sample Calculations 

• Example IA - Group 1 individual currently rece1vmg benefits below 110% PBGC 

Guarantee (including contingent beneficiary) 

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• Example 1B - Group 1 individual currentlyreceiving benefits reduced to 110% PBGC 

Guarantee (including contingent beneficiary) 

• Example IC - Group I individual currently receiving benefits between age 75 and 80 and 

limited by 110% PBGC Guarantee (including contingent beneficiary) 

• Example ID - Group 1 individual currently receiving benefits based on disability (pre5/1/1995 disability award) (including contingent beneficiary) 

• Example IE - Group 1 future retiree below 110% PBGC Guarantee 

• Example IF - Group I future retire~ reduced to 110% PBGC Guarantee 

• Example 1 G - Group I future retiree between ages 75 and 80 

• Example IH - Group I future retiree with benefits based on disability (post 5/1/1995 

disability award) 

• Example 2A - Group 2 individual currently receiving benefits between age 75 and 80 

(including contingent beneficiary) 

• Example 2B - Group 2 individual currently receiving benefits between age 75 and 80 and 

limited by 110% PBGC Guarantee* 

• Example 2C - Group 1 individual currently receiving benefits based on disability (post 

5/1/1995 disability award) (including contingent beneficiary) 

• Example 3A - Group 3 future retiree below 110% PBGC Guarantee 

• Example 3B - Group 3 future retiree reduced to 110% PBGC Guarantee 

* There are no participants that fit this criterion who have a contingent beneficiary. 

Note that that all participants in Groups 3 and 4 are under age 75 as of May 31, 2020; 

therefore there are no demonstrations to be included for those groups. 

The proposed suspension does not affect any participant or beneficiary that is at least 80 as of 

May 31, 2020. 

In determining the extent to which any participant's benefit will be reduced pursuant to the 

proposed suspension, no participant's monthly guaranteed benefit as calculated under §4022A of 

ERISA is reduced on account of any of the following limitations or exclusions: 

(a) The Section 4022A(a) exclusion of certain forfeitable benefits; 

(b) The Section 4022A(b)(l)(A) exclusion of certain benefits and benefit increases in effect 

for less than 60 months; 

(c) The limitations contained in the section 4022A(c)(2) definition of the accrual rate used 

for calculating the monthly guaranteed benefit in order that the accrual rate is based on a benefit 

that is no greater than the monthly benefit payable under the Plan at normal retirement age in the 

form of a single life annuity and is calculated without regard to any reduction under 

9 

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§41 l(a)(3)(E) ofthe Code, divided by the participant's years of credited service through the date 

that future benefit accruals were suspended (limited to 1 year for any one year of participation); 

(d) The Section 4022A( d) limitation that the guaranteed benefit will not exceed the benefit 

calculated under the Plan as reduced under §41 l(a)(3)(E) of the Code; and 

(e) The Section 4022A(e) exclusion, pursuant to §4022(b)(6) of benefits that would not be 

guaranteed if paid under a single employer plan. 

(2) Disability. 

The proposed suspension does not affect any participant or beneficiary under the Plan 

that was awarded a disability pension. The Plan currently does not offer a disability benefit to 

current active participants. Effective September 1, 2013, the Plan's disability benefit was 

eliminated as part of the Rehabilitation Plan adopted under the Pension Protection Act of 2006. 

For participants that earned at least 10 years of service and became qualified for a Social 

Security disability benefit* before September 1, 2013, the Plan paid a temporary disability 

benefit payable until age 55. The amount of the benefit was 80% of the participant's accrued 

benefit (100% of accrued benefit for participants that became disabled before May 1, 1995) 

payable as a single life annuity. 

*The Social Security disability award requirement was effective only for those that 

became disabled on or after August 1, 2009 (but before September 1, 2013) as part of the 

Rehabilitation Plan. 

4.02 Demonstration that the proposed suspension is reasonably estimated to enable the plan to 

avoid insolvency. 

(1) Deterministic Illustrations 

Exhibit 4 is the Plan actuary's Report of Required Actuarial Information - Application 

for Proposed Benefit Suspension as ofMay I, 2020. This certification (dated March 29, 2019) 

includes a demonstration pursuant to Code §432(e)(9)(D)(iv) that the proposed suspension is 

reasonably estimated to enable the Plan to avoid insolvency. The Plan is not a plan which, 

pursuant to Code §432(e)(9)(B)(v)(I), must use stochastic projections in its illustrations 

demonstrating that it will avoid insolvency. 

The Report contains a year-by-year projection demonstrating that the Plan is projected to 

avoid insolvency within the meaning of Code §418E for th~ extended period with the proposed 

suspensions going into effect on May 1, 2020. It also contains illustrations as to the Plan's 

solvency ratio and available resources for each year of the extended period. 

(2) Illustration that the proposed suspension is reasonably estimated to achieve the 

level necessary to avoid insolvency for the extended period utilizing stochastic 

projections. 

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The Plan is not required to appoint a retiree representative under Code 

§432(e)(9)(B)(v)(I). The application therefore does not include an illustration using stochastic 

projections. 

(3) Information on the actuarial assumptions used for the illustrations. 

See, Exhibit 4. 

4.03 Demonstration that the proposed suspension is reasonably estimated to not materially 

exceed the leyel necessary to avoid insolvency 

Exhibit 4 is the Plan actuary's Report of Required Actuarial Information - Application 

for Proposed Benefit Suspension as ofMay I, 2020. This certification (dated March 29, 2019) 

includes a demonstration pursuant to Code §432(e)(9)(D)(iv) that the proposed benefit 

suspension is reasonably estimated to not materially exceed the level necessary to avoid 

insolvency. The Report summarizes this demonstration under the heading "Limitation on 

Aggregate Size of Suspension". The Plan's actuary certifies that the Plan would fail deterministic 

tests relating to the solvency ratio and/or the projected funded ratio at the end of the extended 

period if the dollar amount of the proposed benefit suspension for each participant and 

beneficiary were reduced (but not below zero) by the greater of 5% of the individual's monthly 

amount proposed to be suspended and 2% of the individual's monthly amount without regard to 

the proposed suspension. 

Part E of the Report is captioned Deterministic Projection Demonstrating Proposed 

Suspension Does Not Materially Exceed the Level That is Necessary to Avoid Insolvency. Part E 

demonstrates that if the suspension is reduced by the amounts described in the preceding 

paragraph the suspension will no longer be sufficient to enable the Plan to satisfy the 

requirement to avoid insolvency under §1.432(e)(9)-l(d)(5)(i)(A) of the Regulations. Part E 

includes calculations, on a year-by-year basis for the relevant period, of available resources, 

solvency ratio, the market value of assets, contributions, investment earnings, plan benefit 

payments, and expenses. 

4.04 Demonstration that the proposed benefit suspension is distributed equitably. 

The proposed benefit suspension provides for different treatment of participants and 

beneficiaries and is distributed in an equitable manner across the Plan's participant and 

beneficiary population as required pursuant to Code §432(e)(9)(D)(vi). 

See, Exhibit 7 for the actuary's calculations that demonstrate the equitable distribution of 

the proposed suspension and for information on the effect of the suspension on the Plan's 

participants in the aggregate as required per Section 4.04(1)(a) and (b) of Revenue Procedure 

2017-43. In addition, the information includes the effect on the suspension for the four groups of 

participants shown in application Section 2.02, above. 

In deciding whether the proposed reduction is equitably distributed the Board of Trustees 

took into account the following factors listed in§ 432(e)(9)(D)(vi): 

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(III) The amount of benefits. In general, participants who retired prior to the adoption 

of the Rehabilitation Plan have accrued the greatest benefits under the plan due to the higher 

historical accrual rates, as well as the subsidized early retirement and optional form of benefit 

subsidies. 

(V) The extent to which a participant or beneficiary is receiving a subsidized benefit. 

As noted above, participants who retired prior to the adoption of the Rehabilitation Plan had 

early retirement and optional form of benefit subsidies available to them. 

(VII) The Plan's history of benefit increases or reductions. There was a series of Plan 

accrual rate increases from the inception of the Plan until May 1, 1994, at which time that benefit 

accrual rate remained in place until May 1, 2003. At that point, the Plan's accrual rate was 

reduced from 3.65% to 2.2%. Several years later, the Plan's accrual rate was reduced by over 

80%, from 2.2% to 0.36%, effective May 1, 2006. Finally, future benefit accruals were 

suspended indefinitely effective August 1, 2013. 

(IX) Any discrepancies between active and retiree benefits. See, discussion above 

regarding the impact of the Rehabilitation Plan and the decreases in the accrual rate after April 

30, 2003. 

(X) The extent to which active participants are reasonably likely to withdraw support for 

the plan, accelerating employer withdrawals from the plan and increasing the risk of additional 

benefit reductions for participants in and out of pay status. Active members since 2003 have 

experienced multiple reductions in the accrual rate while the contribution rate paid by their 

employers has increased. Effective August 1, 2013, benefit accruals were suspended indefinitely. 

While necessary as part of the effort to forestall insolvency these developments could have a 

chilling effect in the active participants' support for the plan which raises the specter of 

accelerating employer withdrawals. It is therefore prudent to take steps to ameliorate the impact 

of the proposed suspension on the active participants to the extent possible, and the suspension 

design reflects this goal. 

In general, the proposed suspension is structured such that Active Participants potentially 

experience a smaller benefit reduction than Non-Active Participants in order to mitigate the risk 

oflosing support for the plan and accelerating employer withdrawals. 

4.05 Notice. 

The Trustees have satisfied the notice requirements of Code §432(e)(9)(F) as follows: 

(1) Individual notices. 

Appendix A to the application contains each type of notice that will be given to each 

participant and beneficiary under the Plan, as well as to each employer that has an obligation to 

contribute to Plan and to each employee organization representing participants in the Plan. 

(2) Efforts made to contact participants, beneficiaries and alternate payees. 

The Board of Trustees for the Pension Fund has complete and up to date records of the 

Plan's participants and beneficiaries. If an address were found to be invalid the matter would be 

12 

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referred to the Plan's third party administrator (Benesys, Inc.) which would refer the matter to 

PBI, the entity used by Benesys to monitor participant death records and locate missing 

participants. Benesys also conducts searches using on-line search tools. 

(3) Notices will not be delivered electronically. 

(4) Listsof: 

(a) Each employer that has an obligation to contribute to the Plan within the 

meaning of section 4212(a) ofERISA. 

A list of the contributing employers that have an obligation to contribute to the Plan 

within the meaning of§ 4212(a) of ERISA is attached as Exhibit 8. 

(b) Employee organization representing participants under the plan. 

The employee organization representing participants under the Plan is the International 

Association of Sheet Metal, Air, Rail and Transportation Workers Local Union No. 33. 

SECTION 5. PLAN SPONSOR DETERMINATION RELATING TO REASONABLE 

MEASURES TAKEN TO A VOID INSOLVENCY 

5.01 Measures taken to avoid insolvency. 

See, discussion in Section 3.03, above, and the Narrative Statement (Exhibit 10). 

5.02 Plan factors. 

See, discussion in Section 3.03, above, and the Narrative Statement (Exhibit 10). 

5.03 How plan factors were taken into account. 

See, discussion in Section 3.03, above, and the Narrative Statement (Exhibit 10). 

5.04 Other factors considered. 

See, discussion in Section 3.03, above, and the Narrative Statement (Exhibit 10). 

SECTION 6. OTHER REQUIRED INFORMATION 

6.01 Ballot. 

See, Appendix A for a proposed ballot package intended to satisfy the requirements of 

Code §432(e)(9)(H)(iii). In keeping with the Revenue Procedure, the ballot package does not 

include the information described in Regulation §1.432(e)(9)-l(h)(3)(i)(E), (L) or (M)(the 

statement in opposition to the proposed benefit suspension, the individual estimate that will be 

provided as part of the notice, and the voting procedures, including the deadline for voting). 

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6.02 Partition. 

The Plan is not requesting approval for a partition. 

6.03 Description of assumptions used in projections. 

The application is supplemented with attachments intended to fulfill the requirements of 

Section 6.03 of the Revenue Procedure and its Appendix B. Exhibit 4 is the Plan actuary's 

Report ofRequired Actuarial Iriformation - Application for Proposed Benefit Suspension as of 

May I, 2020. The information required under this section is found in Part K of that report. 

6.04 Ten-year experience for certain critical assumptions. 

See, Exhibit 4 which is the Plan actuary's Report ofRequired Actuarial Information -

Application for Proposed Benefit Suspension as ofMay I, 2020. This certification (dated March 

29, 2019) includes, under the heading Part K 2 - Supporting Documentation For Selection of 

Certain Actuarial Assumptions, a subsection under the heading Contribution Base Units and 

Employer Withdrawals. This section presents a table showing the IO-year experience for certain 

critical assumptions including the total employer contributions, pension hours, average hourly 

contribution rate, withdrawal liability payments, and the market value return on assets for the last 

10 plan years. This section fulfills the requirements of Section 6.04 of the Revenue Procedure. 

6.05 Demonstration of sensitivity projections. 

See, Exhibit 4 which is the Plan actuary's Report ofRequired Actuarial Information -

Application for Proposed Benefit Suspension as ofMay I, 2020. This certification (dated March 

29, 2019) includes 

• Part F. Deterministic projection of proposed suspension assuming annual rate of return is 

reduced by 1.00% 

• Part G. Deterministic projection of proposed suspension assuming annual rate of return is 

reduced by 2.00% 

• Part H. Deterministic projection of proposed suspension assuming the industry activity 

assumption continues under the same trend as the Plan experienced over the last 10 years 

(1.1 % per year) 

• Part I. Deterministic projection of the proposed suspension assuming the industry activity 

assumption continues under the same trend as the Plan experienced over the last 10 years, 

reduced by 1.00% (0.1 % per year) 

This exhibit satisfies the requirements of Section 6.05 of the Revenue Procedure. 

6.06 Projection of funded percentage. 

See, Exhibit 4 which is the Plan actuary's Report of Required Actuarial Information -

Application for Proposed Benefit Suspension as ofMay I, 2020. This certification (dated March 

14 

0015
29, 2019) includes Part J which projects the Plan's market value of assets, unit credit accrued 

liability, and funded percentage for each year of the extended period. 

This exhibit satisfies the requirements of Section 6.06 ofthe Revenue Procedure. 

6.07 Plan sponsor certifications relating to plan amendments. 

See, Exhibit 9 for the Trustees' certification that if they receive final authorization to 

implement the suspension of benefits as described in Code §432(e)(9)(H)(vi), and choose to 

implement the authorized suspensions then they will adopt in a timely manner the following plan 

amendments which shall not be modified at any time thereafter before the suspension of benefits 

expires: 

(1) in accordance with Code §432(e)(9)(C)(ii) a plan amendment providing that the 

benefit suspension will cease as of the first day of the first Plan Year following the Plan Year in 

which the Trustees fail to determine that both: (a) all reasonable measures to avoid insolvency 

continue to be taken during the period of benefit suspension; and (b) the Plan is projected to 

become insolvent unless benefits continue to be suspended; and 

(2) a plan amendment providing that any future benefit improvements must satisfy the 

requirements of Code §432(e)(9)(E). 

6.08 Whether the plan is a plan described in §432(e)(9)(D)(vii). 

The Plan is not a plan described in Code §432(e)(9)(D)(vii). 

6.09 Narrative statement. 

See, Exhibit 10. 

SECTION7. IDENTIFICATION AND BACKGROUND INFORMATION ON THE 

PLAN 

7.01 Plan sponsor. 

The Plan Sponsor is the Board of Trustees of the Sheet Metal Workers Local Pension 

Plan. The address ofthe Board is P.O. Box 368, Troy, MI 48099-0368. The Telephone number is 

(248) 641-4902. The Board does not have a separate Employment Identification Number (EIN). 

7.02 Plan identification. 

The name of the Plan is the Sheet Metal Workers Local Pension Plan. The Plan has been 

assigned Plan Number 001. Its Employment Identification Number (EIN) is 34-6666753. The 

Plan is a multiemployer plan within the meaning of Code §414(f) and ERISA §3(37). 

7.03 Retiree representative. 

15 

0016
The Plan is not required to appoint a Retiree Representative under the Regulations 

because it is not a plan with 10,000 or more participants. 

7.04 Plan's enrolled actuary. 

The Plan's enrolled actuary is Kevin M. Campe, EA, MAAA (EA #17-05356) of 

Milliman, Inc., located at 71 South Wacker Drive, 31st Floor, Chicago, IL 60606. The telephone 

number is (312) 726-0677. 

7.05 Power of attorney. 

See, Appendix C. The Plan's representatives as attorney-in-fact are Paul M. Newcomer 

and Michael A. Novara ofNovara, Tesija & Catenacci, PLLC. 

7.06 Plan documents. 

See, Exhibit 11 for the Plan's most recently restated Plan Document, including all 

amendments, the most recent summary plan description as defined under §102 of ERISA and 

any subsequent summaries of material modifications, and the Plan's most recent determination 

letter. 

7.07 Collective bargaining and side agreements. 

See, Exhibit 12, for excerpts from the collective bargaining agreements and side 

agreements pursuant to which the Plan is maintained, including language from any portions of a 

collective bargaining agreement or side agreement that are relevant to the Plan or proposed 

suspension. 

7.08 Annual return. 

See, Exhibit 13 for the following sections ofthe Plan's most recently filed form 5500: (1) 

pages 1 and 2 of Form 5500, (2) Schedule MB, including attachments, (3) Schedule R, with 

attachments, and (4) accountant's report under section 103(a)(3) of ERISA. 

7.09 Rehabilitation plan. 

See, Exhibit 14, for a copy of the Plan's most recently updated Rehabilitation Plan. 

7.10 Valuation reports. 

See, Exhibit 15 for the May 1, 2016 actuarial valuation report for the Plan. The May 1, 

2017 actuarial valuation is provided as Exhibit 16. 

7.11 Completed checklist. 

See, Appendix D for the completed checklist of information required to be included in 

the Plan's application. 

16 

0017
Signed: March_, 25 2019 

0018
SHEET METAL WORKERS LOCAL PENSION FUND 

APPLICATION ON RESUBMISSION FOR APPROVAL OF SUSPENSION OF 

BENEFITS UNDER THE MULTIEMPLOYER PENSION 

REFORM ACT OF 2014 

EXHIBITS AND APPENDICES 

EXHIBIT 1 0066 Trustees' Certifications as to Penalties of Perjury 

and Public Disclosure of Application 

EXHIBIT2 0067 Actuary's Certification of Plan's Critical and 

Declining Status 

EXHIBIT3 0073 Actuary's Supplemental Information to Actuarial 

Certification 

EXHIBIT4 0080 Actuary's Report of Required Information 

EXHIBIT 5 0128 Sheet Metal Workers Employment and Wages 

Data (2017) 

EXHIBIT6 0115 Demonstration that Limitations on Individual 

Suspensions are Satisfied 

EXHIBIT7 0137 Demonstration of Equitable Distribution of 

Suspension of Benefits 

EXHIBIT 8 0142 List of Contributing Employers 

EXHIBIT9 0152 Plan Sponsor Certifications Relating to Plan 

Amendments 

EXHIBIT 10 0153 Narrative Statement 

EXHIBIT 11 0159 Plan Documents and IRS Determination Letter 

EXHIBIT 12 0312 Excerpts From Collective Bargaining Agreements 

and Side Agreements 

EXHIBIT 13 0343 Excerpts From Form 5500 

EXHIBIT 14 0423 Rehabilitation Plan 

EXHIBIT 15 0427 Actuarial Valuation Report as of May 1, 2017 

EXHIBIT 16 0462 Actuarial Valuation Report as of May 1, 2016 

APPENDIX A 0020 Notices and Ballot 

APPENDIXB 0044 Information on Actuarial Assumptions and 

Methods 

APPENDIXC 0056 Power of Attorney and Declaration of 

Representative before the Department of the 

Treasury 

APPENDIXD 0057 Checklist 

0019
NOTICE OF RESUBMISSION APPLICATION BY THE SHEET METAL WORKERS LOCAL 

PENSION FUND FOR APPROVAL OF 

A PROPOSED REDUCTION OF BENEFITS 

NOTICE OF A REVISED PROPOSED REDUCTION OF YOUR LOCAL PENSION FUND BENEFITS 

On March 31, 2018, the Board of Trustees of the Sheet Metal Workers Local 

Pension Fund ("the Fund") submitted an application to the U.S. Treasury Department for 

approval to reduce benefits under the Pension Fund's pension plan. All of the Fund's 

participants, beneficiaries and contributing employers received written notice of the 

application, and paiiicipants and beneficiaries received a notice that described 

specifically what the impact of the proposed reduction would be, individually. On 

October 2, 2018, the Fund advised the Treasury that it was withdrawing the application, 

but would resubmit a revised application at a future date. 

On March 31, 2019, the Fund submitted a revised application, again asking the 

Treasury to approve a proposed reduction in benefits under the Fund's pension plan. This 

type of benefit reduction is allowed by Federal law under the Multiemployer Pension 

Reform Act of 2014 (MPRA). You are getting this notice because you are a Plan 

participant and/or have a pension benefit under the Plan. The end of this notice 

describes the proposed reduction (if any) of YOUR monthly payments.' 

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 Fund 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 Fund's actuary estimates that, unless benefits are reduced, the Fund will not have 

enough money to pay benefits in the plan year beginning May 1, 2033. This estimate is 

based on how much money the actuary expects the Fund to receive and pay out each 

year. The Fund's actuary has estimated that, with the reduction of benefits that the Board 

of Trustees has proposed, the Fund should not nm out of money. 

1 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. 

0020
What will happen if the Fund runs out of money? 

If the Fund 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 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 Fund 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 benefits based on disability. The 

Fund as amended docs not currently provide for disability retirement, 

but those participants who obtained a disability retirement when the Fund 

still allowed it cannot have their benefit reduced; 

 The benefits of people who are at least 80 years old on May 31, 2020 and 

their beneficiaries cannot have their benefit reduced; 

 The benefits of people who are at least 75 years old on May 31, 2020 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 Fund. 

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

into account the following: 

 The amount of benefits;

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

benefit;

 The Fund's history of benefit increases or reductions; 

 Any differences between the benefits accrued by active and retired 

participants; 

2 

0021
 Accelerating employer withdrawals from the plan and increasing the risk 

of additional benefit reductions; and 

 The extent to which active participants are reasonably likely to withdraw 

support for the plan. 

What are the proposed reductions in benefits? 

After considering the above factors, the Trustees ultimately decided to divide the Fund 

population into four groups, and to reduce the benefits of the participants and 

beneficiaries within those groups effective May 1, 2020, as follows: 

Prop~~e~ 

Non-Active Particioants Retirement Date2 Reduction 

Group 1 Before August 1, 20093 and 

all Terminated Vested 

Participants 

35% 

Group 2 On or after August 1, 2009 30% 

Active Participants Hire Date 

Group 3 Before May 1, 20064 25% 1--~------------t--

GroL!P__4___________~_O_n_01_·_af_t_er_M_a~y_l~'2_0_0_6 _____L____N__o_1_·e_d_u_c_ti_o_n___, 

Active Participants are Plan Participants who worked at least 435 hours in covered 

service during the plan year ended April 30, 2017 or April 30, 2018 and who have not 

retired as of April 30, 2018. Non-Active Participants include Terminated Vested 

Pmiicipants, Retired Participants, Disabled Participants, Beneficiaries of Participants, and 

Alternate Payees. 

Your Group for purposes of the proposed reduction of benefits is determined as of April 

30, 2018. For example if you are an Active Participant who separated from covered 

employment after April 30, 2018, you will remain in Group 3 or Group 4 depending on 

your hire date. Similarly, if you are a Terminated Vested Participant who commences 

after April 30, 2018, you will remain in Group 1. 

To estimate the effect of the proposed reduction, first multiply the applicable reduction 

percentage and the pre-reduction benefit. The resulting the amount is then subtracted 

from the pre-reduction benefit to determine the post-reduction benefit. As noted, the 

2 Member's Retirement Date for Beneficiaries of Retired Participants and for Alternate Payees ofsharedpayment QDROs. 

· Effective date of the Plan's Rehabilitation Plan. 

'

1 Effective date of the Plan's amendment reducing the rate of accrual from 2.2% to 0.36% of contributions. 

3 

0022
amount of the reduction could be impacted by the federal limitations on the amount of 

individual reductions. 

The following are example calculations for Groups 1, 2 and 3. There is no example for 

Group 4 as there is no proposed reduction for that group. 

Group 1 Example: A retiree who retired before August 1, 2009 currently receiving a 

monthly benefit of $2,000. The retiree will be age 78 as of May 31, 2020. 

(a) Pre-reduction benefit $2,000 

(b) Reduction percentage 35% 

(c) Reduction amount, before adjustment= (a) x (b) $700 

( d) Reduction amount, after age 75-79 adjustment $280 

(e) Post-reduction benefit= (a)- (d) $1,720 

Group 2 Example: A retiree who retired after July 31, 2009, currently receiving a 

monthly benefit of $1,000. The retiree will be under age 75 as of May 31, 2020. 

(a) Pre-reduction benefit 1,500 

(b) Reduction percentage 30% 

(c) Reduction amount, before adjustment= (a) x (b) $450 

(d) Post-reduction benefit= (a)- (c) $1,050 

Group 3 Example: An active participant hired before May 1, 2006 with a monthly 

accrued benefit of $500. 

(a) Pre-reduction benefit $500 

(b) Reduction percentage 25% 

(c) Reduction amount, before adjustment= (a) x (b) $125 

(d) Post-reduction benefit= (a)- (c) $375 

The above examples are for illustrative purposes only and do not reflect all potential 

scenarios (for example, different limitations on the amount the benefit may be reduced 

could affect your reduction depending on which factors apply to you). 

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 Fund 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. 

4 

0023
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, 2019, 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 thi1iy (30) days after the Treasury 

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

reduction, including details regarding: 

 the Fund actuary's certification that the Fund will run out of money (that 

is, that the Fund is in a "critical and declining status"); 

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

enough so that the Fund 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 

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

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

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 Fund. 

The Treasury Department website will also provide updated information on the 

application, such as whether the application has been withdrawn. 

For fmiher 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 A venue, 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 

5 

0024
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 Fund 

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 Fund 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 sec plan documents of the Fund. 

You may want to review the plan documents of the Pension Fund to help you understand 

your rights and the proposed reduction to your benefits. The Fund Administrator must 

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

 The plan document of the Pension Fund (including any amendments 

adopted to reflect an authorized reduction of benefits), trust agreement, 

and other documents governing the Fund (such as collective bargaining 

agreements); 

 The Fund's most recent Summary Plan Description (SPD or plan 

brochure) and any Summary of Material Modifications (SMM); 

 The Fund'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 Fund during the last six years; 

 Actuarial reports, including reports prepared in anticipation of the benefit 

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

 The Fund'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 Fund would run out of money if there 

were no benefit reductions; and 

6 

0025
 Any quarterly, semi-annual, or annual financial reports prepared for the 

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

to the Fund within the last six years. 

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

way of copying documents, but cannot charge more than 25 cents per page. The Fund's 

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

charge at ,vww.dol.i::wv/ebsa/5500main.html. Some of the documents may also be 

available for examination, without charge, at the Fund administrator's office, your 

worksite, or union hall. 

Your right to challenge incorrect calculations. 

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

submit a claim to the Fund to have the calculation corrected. The Fund's Summary Fund 

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

to have a comi review the Fund'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 Fund office at: 

Sheet Metal Workers Local Pension Fund 

c/o BeneSys, Inc. 

Attn: Mary Weir, Plan Administrator 

PO Box 368 

Troy, MI 48099-0368 

(248) 641-4902 

pensionannuitvdept(ii)benesvsinc.com 

7 

0026
Template 1-Not impacted participants and beneficiaries (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your monthly benefit would not change under the proposed reduction. 

Your monthly benefit will not be reduced because you meet one or more of the following: 

[I] Your monthly benefit is less than the MPRA guaranteed amount 

D Your entire monthly benefit is based on disability 

D You will be 80 years of age or older as of May 31, 2020 

D You are in Group 4 (Active Participant who was hired on or after May 1, 2006) 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 

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

• You have earned 14.50 years of service under the Plan through July 31, 2013. 

• You will be 68 years and 3 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $81.52. However, there is concern about the health of the PBGC. If 

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

0027
Template 2-lmpacted Group 1 in pay (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your current monthly benefit is $110.35. Under the proposed reduction your monthly benefit 

will be reduced to $109.19 beginning on May 1, 2020. 

Plan records indicate that you are in Group 11 and therefore subject to a 35% reduction in your 

current benefit. However, your final monthly benefit may be reduced by less than 35% due to 

federal limitations on individual reductions for the following reasons: 

[I] The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. Ifthe 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 6.00 years of service under the Plan through July 31, 2013. 

• You will be 50 years and 4 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

PBGC Guaranteed Benefits 

Ifthe 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 $99.26. However, there is concern about the health of the PBGC. If 

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

1 See description of the proposed reductions of benefits in the General Notice that you have received for an 

explanation ofthe categories of participants. 

0028
Template 3 -Impacted Group 1 not in pay under normal retirement age (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

If you start receiving your benefit on 2/1/2045 in the form of a life annuity, your monthly benefit 

without the proposed reduction would be $191.89. Under the proposed reduction your monthly 

benefit in the same form would be reduced to $188.561. 

Plan records indicate that you are in Group 12 and therefore subject to a 35% reduction in your 

monthly benefit. However, your final monthly benefit may be reduced by less than 35% due to 

federal limitations on individual reductions for the following reasons: 

[]] The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 10.00 years of service under the Plan through July 31, 2013. 

• You will be 36 years and 4 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $171.42. However, there is concern about the health of the PBGC. If 

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

1 These numbers are just estimates. The actual amount you receive will depend on things like how long you 

work and when you begin receiving payments. For more infonnation, see the Summary Plan Description 

available at www.ourbenefitoffice.com/SheetMetalWorkers33. 2 See description of the proposed reductions of benefits in the General Notice that you have also received 

for an explanation of the categories of participants. 

0029
Template 4-lmpacted Group 1 not in pay over normal retirement age (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your benefit without the proposed reduction as of March, 2019 in the form of a life annuity is 

$397.22. Under the proposed reduction your monthly benefit in the same form would be 

reduced to $258.191. 

Plan records indicate that you are in Group 12 and therefore subject to a 35% reduction in your 

monthly benefit. However, your final monthly benefit may be reduced by less than 35% due to 

federal limitations on individual reductions for the following reasons: 

D The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 12.00 years of service under the Plan through July 31, 2013. 

• You will be 69 years and 8 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $207.22. However, there is concern about the health of the PBGC. If 

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

1 These amounts will be different ifyou take your benefit in a different form. For example, if you elect a 

five-year certain and life annuity, your reduced monthly benefit will be $248.87. 

2 See description of the proposed reductions of benefits in the General Notice that you have also received 

for an explanation of the categories of participants. 

0030
Template 5 -Impacted Group 2 in pay (excluding QDROs} 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your current monthly benefit is $423.28. Under the proposed reduction your monthly benefit 

will be reduced to $379.46 beginning on May 1, 2020. 

Plan records indicate that you are in Group 21 and therefore subject to a 30% reduction in your 

current benefit. However, your final monthly benefit may be reduced by less than 30% due to 

federal limitations on individual reductions for the following reasons: 

[I] The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 10.00 years of service under the Plan through July 31, 2013. 

• You will be 70 years and 7 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $344.96. However, there is concern about the health of the PBGC. If 

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

1 See description of the proposed reductions of benefits in the General Notice that you have also received 

for an explanation ofthe categories of participants. 

0031
Template 6-lmpacted Group 3 not in pay under normal retirement age (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

If you start receiving your benefit on 9/1/2028 in the form of a life annuity, your monthly benefit 

without the proposed reduction would be $306.73. Under the proposed reduction your monthly 

benefit in the same form would be reduced to $287.091. 

Plan records indicate that you are in Group 32 and therefore subject to a 25% reduction in your 

monthly benefit. However, your final monthly benefit may be reduced by less than 25% due to 

federal limitations on individual reductions for the following reasons: 

CK] The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 11.25 years of service under the Plan through July 31, 2013. 

• You will be 52 years and 9 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $260.99. However, there is concern about the health of the PBGC. If 

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

1 These numbers are just estimates. The actual amount you receive will depend on things like how long you 

work and when you begin receiving payments. For more infonnation, see the Summary Plan Description 

available at www.ourbenefitoffice.com/SheetMeta1Workers33. 2 See description of the proposed reductions of benefits in the General Notice that you have also received 

for an explanation ofthe categories of participants. 

0032
Template 7 -Impacted Group 3 not in pay over normal retirement age (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your benefit without the proposed reduction as of March, 2019 in the form of a life annuity is 

$851.02. Under the proposed reduction your monthly benefit in the same form would be 

reduced to $638.261. 

Plan records indicate that you are in Group 32 and therefore subject to a 25% reduction in your 

monthly benefit. However, your final monthly benefit may be reduced by less than 25% due to 

federal limitations on individual reductions for the following reasons: 

D The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 14.25 years of service under the Plan through July 31, 2013. 

• You will be 62 years and 4 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $509.44. However, there is concern about the health of the PBGC. If 

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

1 These amounts will be different if you take your benefit in a different form. For example, ifyou elect a 

five-year certain and life annuity, your reduced monthly benefit will be $627.67. 2 See description ofthe proposed reductions of benefits in the General Notice that you have also received 

for an explanation of the categories of participants. 

0033
Template 8-lmpacted Group 3 in pay (excluding QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED 

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

<REDACTED> 

Your current monthly benefit is $902.64. Under the proposed reduction your monthly benefit 

will be reduced to $676.98 beginning on May 1, 2020. 

Plan records indicate that you are in Group 31 and therefore subject to a 25% reduction in your 

current benefit. However, your final monthly benefit may be reduced by less than 25% due to 

federal limitations on individual reductions for the following reasons: 

D The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 13.25 years of service under the Plan through July 31, 2013. 

• You will be 61 years and 1 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $473.69. However, there is concern about the health of the PBGC. If 

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

(,1 

1 See description ofthe proposed reductions of benefits in the General Notice that you have also received 

for an explanation ofthe categories of participants. 

0034
Template 9- Not impacted members/alternate payees (QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED* 

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

<REDACTED> 

Your monthly benefit would not change under the proposed reduction. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 

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

• You have 24.00 years of service* under the Plan through July 31, 2013. 

• You will be 88 years and 4 months** as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $387 .00*. However, there is concern about the health of the PBGC. 

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

*Estimated based on the terms of an applicable Qualified Domestic Relations Order (QDRO). 

**Based on the participant's date of birth for shared-payment QDROs. 

0035
Template 10 -Impacted Group 1 in pay (QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED* 

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

<REDACTED> 

Your current monthly benefit is $ 987 .09. Under the proposed reduction your monthly benefit 

will be reduced to$ 968.65 beginning on May 1, 2020. 

Plan records indicate that you are in Group 11 and therefore subject to a 35% reduction in your 

current benefit. However, your final monthly benefit may be reduced by less than 35% due to 

federal limitations on individual reductions for the following reasons: 

IT] The MPRA guaranteed amount limits the amount of reduction 

IT] You will be between the ages of 75 and 79 as of May 31, 2020** 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 36.00 years of service* under the Plan through July 31, 2013. 

• You will be 78 years and 11 months** as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

PBGC Guaranteed Benefits 

Ifthe 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 $819.99*. However, there is concern about the health of the PBGC. 

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

*Estimated based on the terms of an applicable Qualified Domestic Relations Order (QDRO). 

**Based on the participant's date of birth for shared-payment QDROs. 

1 See description of the proposed reductions of benefits in the General Notice that you have received for an 

explanation of the categories of participants. 

0036
Template 11-Impacted Group 2 in pay (QDROs) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED* 

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

<REDACTED> 

Your current monthly benefit is $740.27. Under the proposed reduction your monthly benefit 

will be reduced to $616.27 beginning on May 1, 2020. 

Plan records indicate that you are in Group 21 and therefore subject to a 30% reduction in your 

current benefit. However, your final monthly benefit may be reduced by less than 30% due to 

federal limitations on individual reductions for the following reasons: 

[TI The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020** 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 27.00 years of service* under the Plan through July 31, 2013. 

• You will be 61 years and 5 months** as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $520.70*. However, there is concern about the health of the PBGC. 

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

*Estimated based on the terms of an applicable Qualified Domestic Relations Order (QDRO). 

**Based on the participant's date of birth for shared-payment QDROs. 

1 See description ofthe proposed reductions of benefits in the General Notice that you have also received 

for an explanation of the categories of participants. 

0037
Template 12 -Impacted Group 1 not in pay under normal retirement age (QDRO) 

HOW YOUR MONTHLY PAYMENTS WILL BE AFFECTED* 

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

<REDACTED> 

If you start receiving your benefit on 10/1/2022 in the form of a life annuity, your monthly 

benefit without the proposed reduction would be $1185.54. Under the proposed reduction your 

monthly benefit in the same form would be reduced to $770.61. 

Plan records indicate that you are in Group 12 and therefore subject to a 35% reduction in your 

monthly benefit. However, your final monthly benefit may be reduced by less than 35% due to 

federal limitations on individual reductions for the following reasons: 

D The MPRA guaranteed amount limits the amount of reduction 

D You will be between the ages of 75 and 79 as of May 31, 2020 

D A portion of your monthly benefit is based on disability 

The proposed reduction is permanent. 

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

not a final benefit calculation. This estimate was prepared assuming that the proposed benefit 

reduction starts on May 1, 2020. 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 13.40 years of service* under the Plan through July 31, 2013. 

• You will be 58 years and 8 months as of May 31, 2020. 

• The portion of your benefit that is based on disability is $0.00. 

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 $479.05*. However, there is concern about the health ofthe PBGC. 

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

*Estimated based on the terms of an applicable Qualified Domestic Relations Order (QDRO). 

1 These numbers are just estimates. The actual amount you receive will depend on things like how long you 

work and when you begin receiving payments. For more infonnation, see the Summary Plan Description 

available at www.ourbenefitoffice.com/SheetMeta1Workers33. 2 See description ofthe proposed reductions of benefits in the General Notice that you have also received 

for an explanation of the categories of participants. 

0038
SHEET METAL WORKERS LOCAL PENSION FUND 

VOTER'S GUIDE 

Vote by ______, 2019 

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

Phone: Call X-XXX-XXXX to vote by phone. 

Or 

Online: Go to www.XXXXXXX.com to vote online. 

The proposed benefit reduction will go into effect May 1, 2020, 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, 2020 monthly benefits for some members 

will be lowered 

There will be no reduction on May 1, 2020 but the 

Plan may be on the path to running out ofmoney in 

about 14 years (2033) 

Members with disability based benefits and those who 

are age 80 or older on May 31, 2020 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 ifthe members vote "YES" on the proposed 

reduction 

Some members who are between age 7 5 and 80 on 

May 31, 2020 will have their benefits lowered 

When the plan runs out ofmoney 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 

0039
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 determined based upon the following groups: 

Proposed Suspension 

Non-Active Particinants Retirement Date Reduction 

Group I Before August I, 2009 and 

all Terminated Vested 

Participants 

35% 

Group 2 On or after August I, 2009 30% 

Active Particinants Hire Date 

Group 3 Before May I, 2006 25% 

Group 4 On or after May I, 2006 No reduction 

This change is intended to prevent the Pension Fund from running out of money. 

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 I, 2020, there will be a reduction of benefits 

earned through April 30, 2020 for active participants, retirees, beneficiaries, and inactive 

participants with a vested benefit as described in the chart above. 

See the enclosed benefit estimate for your actual reduced benefit amount.· 

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

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

• Participants or beneficiaries who are at least age 80 on May 31, 2020 will have no 

reduction. 

• Participants or beneficiaries who are at least age 75 but under age 80 on May 31, 

0040
2020 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 ofTreasury, 

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. 

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 2033. 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 2033. 

Ifthe 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. 

Ifthe 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 I, 2020 and would apply to benefits 

earned through April 30, 2020. 

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 

ofTrustees has proposed, the plan should not run out ofmoney. This expectation is based 

on a number of assumptions; if reality differs significantly from these assumptions, the 

0041
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. Ifwe 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 ofmoney. 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 out ofmoney and to keep paying 

benefits from the Plan - even if that means 

paying them at a lower level. 

Ifwe let the Plan run out ofmoney 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 is designed to be 

fair, to reduce benefits in a manner that 

reflects the history of benefit accruals and 

subsidized benefits. 

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 out 

of money. 

Ifwe keep the Plan going, we have a better 

chance ofmaintaining a strong contribution 

base - increasing the likelihood of being 

able to pay benefits over a longer period of 

time. 

Ifthe Plan runs out ofmoney 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 $40 million 

of assets. Ifwe 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. 

0042
Under this proposal, the reduction applies Ifthe plan runs out of money, perhaps the 

to benefits earned through April 30, 2020. 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 ofmoney it is 

likely benefits would be even smaller. 

For all participants, benefits under the Ifthe Plan goes to the PBGC, not only 

proposed reduction are higher than what would benefits be lower than under the 

you would receive from the PBGC. See the proposed reduction, but the decrease would 

enclosed benefit estimate for a comparison. be permanent. 

Under the proposed reduction, the people Ifthe Plan runs out of money, benefits will 

who are least able to recover from a be cut across the board. No population of 

reduced retirement income, including participants will be protected from 

disabled participants and those more than reductions. 

80 years old are protected from any 

reduction. 

Statement Against the Reduction: 

[to be completed] 

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, 2020: Reduction takes effect, unless rejected 

0043
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

K. Response to Revenue Procedure 2017-43 Sections 6.03, 6.04 and Appendix B 

The following is a response to Sections 6.03, 6.04 and Appendix B of Revenue Procedure 2017-43. In many 

cases, we have referenced other materials that are included in this application. Between this response, the May 1, 

2017 Actuarial Valuation, the May 1, 2018 PPA Actuarial Certification, and our report titled "Supplemental 

Information to Actuarial Certification for the Plan Year Beginning May 1, 2018", all assumptions used in the 

projections required under Section 3.01, 3.02, 4.02(1), 4.03, 6.05 and 6.06 of Revenue Procedure 2017-43 have 

been described. This section responds to the items in Revenue Procedure 2017-43 Appendix B in the same order 

laid out in Appendix B. 

Part 1 - Actuarial Assumptions and Methods Used for Projections 

Investment Returns 

Plan Year j 

Beginning May 1 1 Return

2017* 7.04% 

i _ 2018** _ , _-0.98% .: 

i 2019 - 2027 , 6.62% i 

•- --:=::~-- ------~028+ _____________~~5~ _ _I 

* Based on the April 30, 2017 and April 30, 2018 audited financial statements. 

** Estimated return based on the December 31, 2018 unaudited financial statements and assuming 2.16% return for 

January 1, 2019 through April 30, 2019. 2.16% is 4 months of 6.62%, which is the amount derived for the entire year. 

Mortality Assumptions 

• Active and Terminated Vested Participants: f3P-2014 Blue Collar Employee Mortality Table adjusted to 

reflect Mortality Improvement Scale MP-2018 from the 2006 base year, and projected forward using MP2018 on a generational basis. 

• Current and Future Retirees, Disabled Participants and Beneficiaries: RP-2014 Blue Collar Healthy 

Annuitant Mortality Table adjusted to reflect Mortality Improvement Scale MP-2018 from the 2006 base 

year, and projected forward using MP-2018 on a generational basis. 

Other Demographic Assumptions 

I 

Retirement Rates 

Active I Terminated Vested 

Age 'Retirement Rates Retirement Rates* ; 

55 10% 5% .... -- ··-·-· ..J.. i·' -- l 56 1 10% 5% 

57 10% 5% . ·•···-··---·---·---- ----- - -·- --·-------· . ---- ---------------1 

58 10% : 5% · 

59 10% ' - . ·so/o -- - ·-

60 10% 5% ----· ·---- - - - - . ---- - 61 -20°/4 -- ---- ··--, 203/o ----·- -- -------· - - --··- -· - . -- 1 62 50% ' 20% 

63 I - - - 50% - i - 10% ---·•·-----. - . --- ----- ___ __., ___ - ·- ·- --··--·----- -•-- . ----- - --·- ----

64 50% 10% 100°/o - · --10_0_%_o ----····•··-··- ·--· ' 65 & older '--------·--·--- -- -·--· --- -·•·-- . -·---------- ···--------~---------- -----··----------·-----' 

* Applies to both current and future assumed terminated vested participants. 

-

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

19 

0044
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Termination 

4 or More 

Years of Service: 

· Less than 2 Ultimate Rates 

Years of Service (Sarason T~S) 

20 & under 7.88% ! , 21 30.00% 15.00% l 7.83% i 

r·~=~.-: .....~~--·.... ;··-·-··-··--~-°--~~-°-~·· -·--·___,.. __.._---- ·15.00% ___ _ ....... :_ ----··-·· _.?:79%..- ··--·- .-~; r 23 · 30.00°/o : 15.00% . 7.74°/o ; I••··---- ··•-··-··•-- -·-··-·i----····., ..__ ·····---·- - -·········--· ---- ·--l----•---··-·-----····-·- ··· ·-.. ·•-··· ...... ·r- -----·· ·· ·-·· ·-·····---·-· ··• ---·--·--··1 

I 24 i 30.00% ! 15.00% · 7.69% '. 

,..·--··.~: ·- ....r··--···· ~~:~~~ -- ...-... -.. !.. {~:~~~ ·--· ··--- r .... ... -- ;:::~ - -.-1 

t· ··· 21 ...... T... --..---·30.00% ·---r 15.00% ..------·--i· -·-·---· 1.50% ------ ·---: ,.-........ ............ ................. 1 ··-··--·-- ---·-............_ .. ___ ,.__.... _ ,..... ,_._ _ . ..__.,_ ..._... , · . ..--- --··- .. - ·-1 

; 28 , 30.00% i 15.00% , 7.39% I

i 29 ! · 30.00o/o · ! ···· 15.00% · i · 7:26% ··· i 

1- --3 0 -·-····t · · 30.00% · ·:··---- ..... 15.00% --- --· --..r ........... ·--·:y:1..1%- -- ..-·····.. ··1 J. __ -- ------------ -· ·-----·- ··------------ ------, ·------ ----·---------- _________ _! ---·•-- - --c--,,........,-,---- ' 

!·-•......~~ .. ·--- .;........._. ~~ ~~~ ---..··-..·t- ~~:~~~....... .. : ~~~ ·--1 

i-·---.. 33--l··--- 30.00% ·-..·-- --.., _..__. ..~5:°.g.010 ·--i---·· 6.56°/4- -·------·-! 

34 ! 30.00% 15.00% ---- 6.35% ·-.. -·- ··· 

1 35 30.00% 15.00% 6.13% 1·--.. -36 .... .....!.... 30.00% . .. ·--+-·- 15.0.0°/4_ ..._ i 5.-90- 0,..... 1/o___

i 37 i 30.00% ·-- --~----··... 15.00% ....... ........... : ............__,_, 5.66% 

;--.. ~: -.. ·: ~~:~~~ __..,.... -~..-· ·~}~~·t ··---:1~--·:~~~~-·-·~·-1 ! _ __ _ ____ ___ -- - ____ , ----- --·-··-+-···-- ------ - - -·--···-·--··-·-·' --···----·..--··- t

I 40 j 30.00% ! 15.00% 1 4.93% l__.__ 41.... _f .... _ 30.00% -----.. ·1-·---.. -rs-:-00%-·· ······--.. ·T · --·--·-·-4.68% 

! 42 i 30.00% 15.00% --·~· ..·---- ---- 4.42% ---·.. - -

;-· ..--.43........_,_..___ 30.00% .. ·-----r-- 15.00% ! 4.16% 

f-----·---·•--....---.. --.-1 ............_ -·-·- · 0 ..._ ........_ ............,. .......--·----,-,·-·---·-.... ...... .......... .... ... .. . -·-·---

i 44 , 30.001/o ; 15.00% I 3.89% '-·--· T------- ................ ,...... 

, 45 I 30.00% ; 15.00% . _.._. __ t ---·· --- ·---,3_.8c--9,-,%_o___j, 46 I 30.00% . 15.00% : 3.63% I -- ---··-- -·-·-·--··--·-···-·--····..· 

: 47 ' 30.00% ____ _ :___.... ......._15.00% .... .... --·---t ........ .... _3.35% __....... .. .. _i 1

48 ! 30.00% i 15.00% ! 3.06% ·------ ------- ··-·- -·! ·-·-·-····- -- --··--·--- --···-·-· 1 

49 ! 30.00% l 15.00% · 2.75% --···--- i-·-- ·········-·· ·------- ---· - --·--·-···- - ·--·--- · -- ··- -·-- ------·--·--·-·-- · 

I 15,00% 2.41% :.......... ~~ .. ........ ..1-... -..... ~~ ~~~ -------.---•··-··-..---------~ 15.00% 2.06% --~l I I

_.._.. 52 · 30.00% ._........ 1.........- ..........15.00% _ .........-~- _........1.10% ....... ... - ... ) 

53 , 30.00% : 15.00% · 1.34% , 

:=55_::ver~·~==·-:··=- ~~:~~~~~-~~.. :~~:-~..=-~~:~ ~~ ~~~ ~~ -=~·~ :-~... ~.~:-~~~ -:~:.~.·=: i 

Disability 

None. 

Exclusion of Terminated Vested Participants 

None. All terminated vested participants are included. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

20 

0045
Report of Required Actuarial Information -Application for Proposed Benefit Suspensions 

Assumptions Regarding Form and Commencement of Benefits 

• Future retirees are assumed to elect the following forms of payment: 45% elect the single life annuity, 

10% elect the ten year certain and life annuity, 20% elect the joint and 50% survivor annuity with pop-up, 

and 25% elect the joint and 75% survivor with pop-up. 

• Terminated vested participants are assumed commence benefits immediately upon retiring. The 

retirement rates for current and future terminated vested participants are described above. 

• We assume no future disabilities because the disability benefit was eliminated effective 

September 1, 2013. 

Assumptions Regarding Missing or Incomplete Data 

• Active, terminated vested, retiree and disabled records where gender is not reported are assumed to be 

male. 

• Beneficiary, deferred beneficiary, and alternate payee records where gender is not reported are assumed 

to be female. 

• Spouses are assumed to be opposite gender of the member if gender is not reported. 

• Female spouses are assumed to be 3 years younger than male spouses. 

• 100% of active and terminated vested participants are assumed to be married. 

• For missing pop-up amounts, it was assumed that the pop-up benefit is 112% and 119% of the current 

benefit for the 50% joint and survivor and 75% joint and survivor options, respectively. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

21 

0046
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

New Entrant Profile 

• No assumption was made with respect to the demographic characteristics of new entrants because 

benefit accruals were suspended effective August 1, 2013. There is no impact on projected plan liabilities 

and benefit payments from new entrants to the Plan during the projection period. However, we have 

assumed that there will be replacement of current participants by new entrants based on Trustee input 

related to projected contribution base units (see below). 

Contribution Base Units and Rates 

The table below shows the assumed contribution base units (hours) and average contribution rate used for 

projections shown in this report. 

- ~- - Plan-Year -· ---- -- Total-Contribution______ Average Contrihution -· 

: · Beginning May 1 Base Units (Hours) Rate (Hourly) 

2018 1,178,226 $3.40 

2019 1,000,000 $3.45 

2020 1,000,000 $3.45 

2021 1,000,000 $3.45 

2022 950,000 $3.50 

2023 950,000 $3.50 

2024 950,000 $3.50 

2025 950,000 $3.50 

2026 950,000 $3.50 

2027 950,000 $3.50 

2028 950,000 $3.50 

2029 950,000 $3.50 

2030 950,000 $3.50 

2031 950,000 $3.50 

2032 950,000 $3.50 

2033 950,000 $3.50 

2034 950,000 $3.50 

2035 950,000 $3.50 

2036 950,000 $3.50 

2037 950,000 $3.50 

2038 950,000 $3.50 

2039 950,000 $3.50 

2040 950,000 $3.50 

2041 950,000 $3.50 

2042 $3.50 

2043 

950,000 

950,000 $3.50 

2044 950,000 $3.50 

2045 950,000 $3.50 

2046 950,000 $3.50 

2047 950,000 $3.50 

2048 950,000 $3.50 

2049 950,000 $3.50 

Total estimated hours for the plan year May 2018 through April 2019 are 811,559 + 366,667 = 1,178,226. The 811,559 

hours for May 2018 through December 2018 was provided by the Fund Office. We are estimating 366,667 hours for 

January 2019 through April 2019 based on 4/12ths of the 1.1 million hours assumption for the 2018/2019 plan year. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0047
•MWnM,• Report of Required Actuarial Information Application for Proposed Benefit Suspensions 

Withdrawal Liability Payments 

• No withdrawal liability payments are currently being made and no future withdrawal liability payments are 

assumed. 

Administrative Expenses (Other than Investment-Related Expenses) 

• The annual administrative expense assumption is $570,000 for the year beginning May 1, 2018. This is 

based on the expenses incurred from May 1, 2018 through December 31, 2018 and the anticipated 

increase in expenses for the remainder of the year due to work related to the resubmission of the 

application for the proposed suspension of benefits. The administrative expenses are assumed to 

decrease to $400,000 for the year beginning May 1, 2019 and further decrease to $320,000 for the year 

beginning May 1, 2020. After May 1, 2020, administrative expenses are assumed to increase by 2.0% per 

year thereafter for inflation. 

Projection Methodology 

• No data grouping techniques were used to produce projections. 

• No changes or adjustments were made to cash flow projections produced by our valuation software. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0048
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Part 2 - Supporting Documentation for Selection of Certain Actuarial Assumptions 

Investment Returns 

The components of the target portfolio used in the projections, expressed in terms of the asset classes used for 

setting the Plan's investment policy are as follows: 

! US Equity - Large Cap i-US Equity - Value ---------- -· --····-··---·---·-·- -·· ·- ··--- r·-· 7.5% 

'~-- ---------- -·- ·-•-·--··-·-·------ -·---- -------- ------- --·_L____ - -- -i 

I US Equity-_Mid_Cap Value -----------·--·· ··L ··· ··- 7.5%____ __1 

~ S Equity - Small Cap Value __ ____ _ __________I 5.~_% -·-----! , Global Equity _ ____ ___ i 3.0% i 

\~ _on-US EquTty .::.~~ve~?P=~ -:=·-~~-=-~--=~~==-- -- -- -~ ===-~--~r-=---1~~°(~ ___:_~'. 

i:.:~~~~~!dEl~~i:m~ ~~:!~i-~Jl ... .. ~~-~=~---···----· -· .---·-·-···--i-·-· -··1{-~ ·--~-~=-=: 

I Global Bonds __________ ____ _____·-···-··-·--·-- --+ ···-·-0.6% ___J

!_~~rea~uries (Cash -~-q~~~~~-t~L ______ ______ __ __ - -~ -~ - - -· _I 

1 Real Estate 20.0% ! ' ----- -.------- -··-- -·--·-··-- ---· . ·---1 I Hedge Funds ______ 15.9% I 1 Private Equity 15.0% !__________ ·-- -·-·--·- ·-· ------ ----- ···- ---- - ----- --·· 

The components of the target portfolio were allocated as follows among the asset classes provided in Appendix B 

of Revenue Procedure 2017-43: 

I US Equity- Large Cap 

! US Equity- Small/Mid Cap ___ 13.3% 

i Non-US Equity- Developed _ _ ___ 11.7% 

!.Non-US Equity- Emerging____ __ ····-·-·-··-------- _ _,____1.0_% ·-·-··· 

: US Corporate Bonds-Core ___ -------+ 11 .9% 

: ~~n~~e~~u~~~s~~vae~~P::u,val~·::)--------·-·---- ·-- ·-··-l·-· ~:!~----J 

I Real Estate -----·---- ---··---- - ···-r ··· 20.0% 

! Hedge Funds (includes 100% ofAbsolute Return Assets) I 15.9% --

: Private Equity ··-···- ______ ________ ___ -- - ---------------·-···--J___ __15.0% ___.... · 

The 10 and 20-year expected returns (arithmetic returns) shown on Exhibit 15 of the 2018 edition of the Horizon 

Survey of Capital Market Assumptions were used. The associated standard deviations and correlation coefficients 

from Exhibit 15 were also used. 

This process produced a median geometric return of 6.62% using the 10-year capital market assumptions and a 

median geometric return of 7.85% using the 20-year capital market assumptions, which were then used to project 

future investment returns. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0049
-

Plan Year 

Ending April 30 

Demographic and 

Administrative Expense 

. (Gain)/Loss 

--

Asset 

(Gain)/Loss 

. ... 

Total 

(Gain)/Loss 

2017 $(686,979) $2,537,985 $1,851 ,006 

2016 (205,159) 3,903,376 3,698,217 

2015 263,280 2,936,285 3,199,565 

2014 30,444 (802,801) (772,357) 

2013 494,878 (647,011) (152,133) 

2012 (1,007,671) 7,955,392 6,947,721 

2011 15,363 (2,382,945) (2,367,582) 

2010 170,143 (6,229,620) (6,059,477) 

2009 (237,956) 16,572,030 16,334,074 

2008 700,026 1,344,216 2,044,242 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Demographic Experience 

• An experience study was completed by the prior actuarial firm for the period May 1, 2010 to April 30, 

2015. The retirement rates from active status and termination rates were updated as of May 1, 2015 as a 

result of the experience study. The results of the experience analysis as provided by the prior actuarial 

firm are shown below. Our understanding is that the prior actuarial firm did not prepare a formal 

• The historical actuarial gains and losses over the last ten years are shown below. The May 1, 2018 

actuarial valuation has not been completed at the time of this filing ; as such, the actuarial gains and 

losses for the plan year beginning May 1, 2017 are unavailable. 

--- - -· - - - - --- -- - -- .. --~ - - -

• The detailed demographic (gain)/loss for the 2016-2017 plan year by changes in status is provided below. 

Note the sum of the amounts shown in the table do not match the total shown above due to the 

experience study report. 

l:.Xp .etmnts 

For Would 

PYE Ha~~ Been 

4i?..l'2D 5 10_,;io 

4i?.Ol:.ul4 fJAO 

41?-:l/:.-O 3 10.30 

~1::"l.l/:.-0 ,2 9. 10 

-'li'..'f.ll20 i i 7.50 

ctud 

Rctmnts 

'Were 

-!

,, 

1CI 

fi 

9 

.ctual 

Rc.irnnt.s. 

NiotElig 

2 

4 

xpecte 

i:,t,r 

Valuatic,n 

. a ,.j .: _.; '.)

·: :J 

·2 ::i 0

19 .;.:i 

ctw 

pE,r 

Valuation ., ~ 

El::: 

·o : 

~ :n 

)0 

Total 47.20 :lt, 7 82.:lO :16 

Expwld's P,ctu:,I Exp~te<! Actual 

For Would wld's pe. r per 

PYE Haw, 8 -,en Were Valuation Va.luati,on 

4/30)20 15 44.84 ;-0 ;~.C 5C 

4i3Cl/20H 4 3.91 -l.:l ?,5 3 --i ec 

41301:201:i 44.4?. 4 :...; .f 4 1. C 

4/3CV20 12 4 1,gc, 20 3:,i _: 2C.D 

4/30!2011 5 .eA 70 -!D.D 7C.O 

To ta l 22£.61 229 ffi'.30(! 229 

(gain)/loss on administrative expenses and benefit payments. 

May .1, 2016 

Status Active 'Deferred 

Active $8,336 $46,288 

Deferred (5,491) 

In Pay 0 

Not in Data 92 0 

Total 2,938 (57,367) 

* Due to deaths, benefit expirations, and data corrections. 

· In Pay .. 

$(73,078) 

288 

380,621 

111,317 

419,148 

·Participating* 

$(705) 

(250,746) 

(775,403) 

0 

(1 ,026,855) 

Total 

$(19, 159) 

(325,219) 

(429,168) 

111,409 

(662,137) 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

25 

0050
- - - -

Report of Required Actuarial Information -Application for Proposed Benefit Suspensions 

• The demographic (gain)/loss for the 2015-2016 plan year by changes in status is provided below. Note 

the sum of the amounts shown in the table do not match the total shown above due to the (gain)/loss on 

administrative expenses and benefit payments, and the difference between our replication of the May 1, 

2015 actuarial valuation results and the prior actuarial firm's May 1, 2015 actuarial valuation results. 

r . - - - . - . 

, May 1, 2015 

Status Active 

, Active $9,191 

, Deferred (1,405) 

• In Pay 0 

Not in Data 0 

Total 7,785 

Deferred 

$13,062 

14,930 

0 

0 

27,992 

. May 1, 2016 Status - - . --

-- Non · · 

.In Pay . Participating* Total 

$(4,732) $(88,091) $(70,570) 

(62,982) (3,054) (52,511) 

337,507 (842,005) (504,498) 

27,372 0 27,372 

297,165 (933,150) (600,206) 

* Due to deaths, benefit expirations, and data corrections. 

• The details of the demographic (gain)/loss for years prior to 2015-2016 are unavailable. 

• Regarding the assumption that 100% of the active and terminated vested participants are married, we do 

not receive data on the marital status of the active or terminated vested population. This assumption 

determines the projected survivor benefits payable to assumed surviving spouses for projected preretirement deaths from active and terminated vested status. Given the limitations of the available data 

and the relatively small impact of the assumption, we believe that the current assumption remains 

reasonable. 

• The distribution of benefit form elections as provided by the Plan Administrator for the last five years (plan 

years ending April 30, 2013 -April 30, 2017) is shown below. The analysis includes retirements from both 

active and terminated vested status. 

Benefit Form I Percentage Electing 

I Single Life 42.7% 

i-------·--··---- ------ --1-------- 4.-5-%-----i ! Five Year Certain and Life 

i Ten Year Certain anci"°Life________ ___ 9.0% . 1 

1--- --------------------·-····---·---· . 1 Joint and 50% Survivor : 7.9% i 

I - .. -· . . - . .- ' 

i Joint and 50% Survivor with Pop-up : 12.3% · f---.----· - -----·--·-----· . ·--·-----·---·-- ...- ·---: ·---·-----·-- ...·-· ·- ---· -·-····--·---- --- : Joint and 75% Survivor ' __ _ 3.4% : 

I-:Tciint and 75o;;;-survivorwft°hP-op-up 26.2%----·-----·-1 !••-•-•••-•-•••----••-- •---•-•·•- --- ••- • - -·•· ·• • • ••••••n••• •• •••- •- - --• •• •--••••• • - --- --••••••-••--

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0051
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

• The retirement rates by age for active participants for the last two years (plan years ending April 30, 2016 

and April 30, 2017) are shown below. We did not prepare a retirement experience analysis covering years 

prior to May 1, 2015 as the prior actuarial firm completed an experience analysis that covered those 

years . 

·•· 

55 

•#=M·Hliiti•si!i,,Maa@M••®i@M§ili;mf-illl

40 : 4 ' 10% 4 

1 r-- 5-6--~~~-. ~~ i ----~ : -· -··--- ~~-- --· --1 

-1-----·-;y;" . ·- . ---- -··- 2 ====~.~~----- 7% -·· 1 

19 2 11% l ··-- ------------1--------· ---- --- ·-··-------- ·--·------- 1 

--~i --i- . -·- -~·- ·-f .. -ii~ : --··· 53····· -·;------· 1 : ---------a·_____ --··1------ 0%_____---~ 

[

1 

~~rl~v~~]~~-:.::=~_]______ l___ · ---------~- · · .t=:=~--~-~-=~~~:~~=-~j 

--

-

f- :~ --l 

• The retirement rates by age for terminated participants for the last five years (plan years ending April 30, 

2013 through April 30, 2017) are shown below. 

Age i Exposures I Number Retired Retirement Rate 

55 ! 85 ! 5 6% --5-6---·--i-· · ·· ···:y5--·· !· -•-· ··- --·--2··-·-· ·-··· ___________3_%_o_ _ 

, ·- - 57 ·---·T 72 : 2 . .. . 3% 

:·::·---=~~:-~~-- 69 _____!__________ 2________ ___:1······ ·-·-· - -- .... 3%__ _ .-

59 58 I 2 ___ 3% 

~-6- o- 45 1 4 . . I ___ 9% 

:~:~~~-:-~]~-- 38 - -·- _ . 8 -· ____[_________21%__ ·- _J 

:~--:·_, ~~ ·--J~------ ___};______:__ -·- .-- ----- ~ !.-· ---·-·· -__1;;_. -·__ j 

I 64 1 12 , 3 I 25 1/o j 

: 65 & over ! 31 · 2 ! 6% ···-·-·-·--· -···--·-·---·--·-· ------------ · --- ·-·- -------·-' - -·--·--·--·-··--- ----- __I 

Mortality Assumptions 

• The Plan is not large enough to develop a credible mortality table based exclusively on Plan experience. We 

have relied on the most recent mortality tables (RP-2014) published by the Society of Actuaries in which 

credible mortality experience was analyzed. The Plan's participants consist primarily of blue-collar 

participants; as such, the blue-collar variations of the RP-2014 tables were used. 

• With respect to future mortality improvement, the MP-2018 mortality improvement scale was used to project 

future improvement in mortality from 2006 on a generational basis. 

New Entrant Profile 

No assumption was made with respect to the demographic characteristics of new entrants because benefit 

accruals were suspended effective August 1, 2013. There is no impact on projected plan liabilities and benefit 

payments from new entrants to the Plan during the projection period. However, we have assumed that there will 

be replacement of current participants by new entrants based on Trustee input related to projected contribution 

base units (see below). 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0052
Report of Required Actuarial Information -Application for Proposed Benefit Suspensions 

Contribution Base Units and Employer Withdrawals 

• The table below shows the 10-year history of the employers that contributed 5% or more of annual 

contributions to the Plan as provided on Schedule R (Form 5500). 

- - -- ---- -- -----~- PlanYea·r-- ---- - -· -- -----. - ~ - - --Estimated· - - - Hourly 

Beginning Contribution Contribution 

May 1 Employer Name · Base Units* 

2017 EAST COAST METAL SYSTEMS, INC. 124,750 

2017 THE K COMPANY, INC. 83,898 

2017 R G SMITH CO., INC. 65,308 

2017 METAL MASTERS, INC. 55,088 

2016 EAST COAST METAL SYSTEMS, INC. 109,408 

2016 THE K COMPANY, INC. 81,901 

2016 R G SMITH CO., INC. 69,216 

2016 METAL MASTERS, INC. 46,713 

2015 THE K COMPANY, INC. 82,637 

2015 EAST COAST METAL SYSTEMS, INC. 90,329 

2015 R G SMITH CO., INC. 59,532 

2015 METAL MASTERS, INC. 45,617 

2015 SHEET METAL GRAFTERS 42,298 

2015 OHIO FABRICATORS, INC. 38,941 

2014 EAST COAST METAL SYSTEMS, INC. 95,260 

2014 THE K COMPANY, INC. 66,050 

2014 R G SMITH CO., INC. 54,007 

2014 METAL MASTERS, INC. 52,584 

2014 OHIO FABRICATORS, INC. 39,168 

2014 SHEET METAL GRAFTERS 86,325 

2013 EAST COAST METAL SYSTEMS, INC. 90,020 

2013 THE K COMPANY, INC. 59,621 

2013 R G SMITH CO., INC. 57,535 

2013 OHIO FABRICATORS, INC. 43,266 

2013 METAL MASTERS, INC. 37,050 

2012 EAST COAST METAL SYSTEMS, INC. 83,266 

2012 THE K COMPANY, INC. 62 ,053 

2012 R G SMITH CO., INC. 45,724 

2012 OHIO FABRICATORS, INC. 41,575 

2012 SHEET METAL GRAFTERS 40,172 

2012 METAL MASTERS, INC. 35,231 

2011 EAST COAST METAL SYSTEMS, INC. 96,036 

2011 THE K COMPANY, INC. 61 ,132 

2011 R G SMITH CO., INC. 46,070 

2011 OHIO FABRICATORS, INC. 45,656 

2011 METAL MASTERS, INC. 40,331 

2011 SHEET METAL GRAFTERS 36,881 

2010 EAST COAST METAL SYSTEMS, INC. 60,372 

2010 R G SMITH CO., INC. 50,135 

2010 METAL MASTERS INC. 40,811 

2010 THE K COMPANY, INC. 37,006 

2009 GLOBAL INSULATION, INC. 82,434 

2009 EAST COAST METAL SYSTEMS, INC. 64,256 

2009 THE K COMPANY, INC. 50,141 

2009 OHIO FABRICATORS, INC. 43,467 

Rate ... 

$4.60 

5.18 

5.18 

5.18 

4.60 

5.18 

5.18 

5.18 

5.18 

4.60 

5.18 

5.18 

5.18 

5.18 

4.60 

5.18 

5.18 

5.18 

5.18 

2.18 

4.60 

5.18 

5.18 

5.18 

5.18 

4.60 

5.18 

5.18 

5.18 

5.18 

5.18 

4.03 

4.54 

4.54 

4.54 

4.54 

4.54 

4.03 

4.54 

4.54 

4.54 

3.75 

3.33 

3.75 

3.75 

Total 

Contributions 

$573,852 

434,593 

338,298 

285,354 

503,277 

424,248 

358,537 

241,975 

428,058 

415,514 

308,377 

236,295 

219,103 

201 ,712 

438,198 

342,139 

279,758 

272,386 

202,890 

188,189 

414,091 

308,837 

298,031 

224,120 

191 ,921 

383,024 

321 ,435 

236,851 

215,361 

208,093 

182,494 

387,027 

277,540 

209,160 

207,279 

183,101 

167,439 

243,298 

227,612 

185,281 

168,007 

309,129 

213,972 

188,029 

163,003 

* Calculated as Total Contributions divided by Hourly Contribution Rate. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

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0053
-- - - - - - --- - -· - - - --- - ·---

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

The table below shows the 10-year experience for certain critical assumptions as required under regulation 

1.432(e)(9)-1(d)(5)(vi)(A) and Revenue Procedure 2017-43, Section 6.04. 

- ~. --· Total 

Plan Year Contribution 

Beginning Total Employer Base Units 

May 1 Contributions (Hours) 

. -

Annual 

Change in 

Hours 

Average · 

Hourly 

Contribution 

Rate 

Withdrawal 

Liability 

Payments 

.. -· 

Market Value 

Return on 

Assets 

2017 $3,973,912 1,180,488 4.8% $3.37 $0 7.0% 

2016 3,896,375 1,126,133 3.5% 3.46 0 9.1% 

2015 3,815,488 1,087,575 4.1% 3.51 0 0.1% 

2014 3,696,518 1,044,941 2.9% 3.54 0 7.4% 

2013 3,620,036 1,015,775 1.7% 3.56 0 10.6% 

2012 3,476,411 998,372 -3.5% 3.48 0 10.3% 

2011 3,262,884 1,034,107 12.1% 3.16 0 -7.9% 

2010 2,517,134 922,328 -9.9% 2.73 0 14.6% 

2009 2,732,416 1,023,122 -4.1% 2.67 0 25.9% 

2008 2,619,413 1,066,839 N/A 2.46 0 -30.3% 

Compound Annual Growth Rate, 2008 to 2017 1.1% 

• Explanation for the historical trends experienced by the Plan with respect to contribution base units and 

contribution rates is documented in several sections within the application, including Section 5.01, 5.02(1)(a), 

5.02(1)(e), 5.02(3), 5.02(4) and 5.03. 

• Contribution rates have increased by over 50% since the implementation of the Rehabilitation Plan effective 

August 1, 2009. For example, the contribution rate for Building Trades Journeymen -Akron increased from 

$3.41 per hour before the Rehabilitation Plan to the current $5.18 per hour rate. The original Rehabilitation 

Plan required annual contribution increases of 10% from 2009 to 2016; however, it was later determined that 

further increases would harm the funding of Plan. The last required rate increase was a 14% increase in 

2012. 

• At their November 30, 2017 meeting and reaffirmed at the March 7, 2019 meeting, the Trustees discussed the 

assumptions for contribution base units for the coming years, ultimately determining that 950,000 for future 

years will be used. While the Trustees had observed actual hours on average 15% higher than 950,000 

during the past five years, the forecasted lesser hours is based on the Trustees' understanding that there had 

been a short-term upswing in projects that was not predictably sustainable and that several specific projects 

would be winding down and terminating the near term. This was the basis for the projection and supports the 

lesser hours forecast. 

• The contribution rate projection is based on the expectation that the reduction in contribution base units will 

disproportionately affect the non-journeymen who are at lower contribution rates to the journeymen. 

• No employers have withdrawn from the Plan and been assessed a withdrawal liability during the last five 

years. In addition, there are no future withdrawal liability payments due to the Plan from previous years' 

withdrawals. 

Take-up rate with respect to selection of benefit/contribution schedule 

• All bargaining parties elected the Preferred Schedule of the Rehabilitation Plan. 

Projection Methodology 

• No approximation techniques were used to produce the projections. 

• No changes were made to cash flow projections produced by our valuation software. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

29 

0054
Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Part 3 - Additional Disclosures Relating to Use of Different Assumptions 

The following assumptions differed between the projections produced under Section 3.01 and Sections 3.02, 

4.02(1 ), 4.03, 6.05 and 6.06. An explanation for the difference is included. 

• Investment returns - For the purpose of the projections included in Section 3.01, we used 6.64% for plan 

years ending April 30, 2019 through April 30, 2027, and 7.40% for plan years after April 30, 2027. This 

assumption was set based on the Fund's target asset allocations and the median returns shown in Exhibits 17 

and 18 of the 2017 edition of the Horizon Survey of Capital Market Assumptions. The investment return 

assumption used to develop the projections described in Sections 3.02, 4.02(1), 4.03, 6.05 and 6.06 were 

developed using updated target asset allocations and the expected returns (arithmetic) shown in Exhibit 15 of 

the 2018 edition of the Horizon Survey of Capital Market Assumptions. 

• Administrative expenses - For the purposes of the projections included in Section 3.01, we assumed that 

administrative expenses would be $385,000 for the plan year ending April 30, 2019, $287,000 for the plan 

year ending April 30, 2020, and then increase by 2% per year thereafter. The administrative expense 

assumption was refined for the projections described in Sections 3.02, 4.02(1), 4.03, 6.05 and 6.06 to reflect 

the increase in expenses related to the re-submission of the application for the proposed benefit suspension. 

We have maintained the 2% per year inflationary adjustment beginning with the 2021-2022 plan year. 

• Mortality improvement scale - For purposes of the projections included in Section 3.01, we used the MP-2016 

mortality improvement scale. For purposes of the projections described in Sections 3.02, 4.02(1), 4.03, 6.05 

and 6.06 we used the MP-2018 mortality improvement scale. 

• Retirement rates from terminated vested status - For purposes of the projections included in Section 3.01 , we 

assumed that terminated vested participants would commence benefits at age 60 or 62, depending on their 

date of termination. For purposes of the projections described in Sections 3.02, 4.02(1), 4.03, 6.05 and 6.06 

we developed retirement rates by age based on actual experience over the past five years as shown in Part 2 

of this exhibit. 

• Form of payment - For purposes of the projections included in Section 3.01, we assumed that participants 

would elect the single life annuity form of payment. For purposes of the projections described in Sections 

3.02, 4.02(1) 4.03, 6.05 and 6.06, we added optional forms of payment based on actual experience over the 

past five years as shown in Part 2 of this exhibit. 

• Exclusion of terminated vested participants - For purposes of the projections included in Section 3.01, we 

assumed that terminated vested participants over age 70 at the valuation date are deceased with no benefit 

payable. For purposes of the projections described in Sections 3.02, 4.02(1 ), 4.03, 6.05 and 6.06, we included 

all terminated vested participants. 

• Load for pop-up - For purposes of the projections included in Section 3.01, we assumed a 1.4% load on 

liabilities for retirees who elected the pop-up option on their joint and survivor benefit. For purposes of the 

projections described in described in Sections 3.02, 4.02(1), 4.03, 6.05 and 6.06, we valued the actual 

individual pop-up amount as provided by the Plan Administrator. 

• Contribution rate - For purposes of the projections included in Section 3.01, we assumed an average 

contribution rate of $3.50 per hour each year into the future. For purposes of the projections described in 

Sections 3.02, 4.02(1 ), 4. 03, 6.05 and 6.06, we used a select and ultimate contribution rate to reflect the 

temporary increase in non-journeyman who are at lower contribution rates. 

Report of Required Actuarial Information - Application for Proposed Benefit Suspensions 

Sheet Metal Workers Local Pension Plan 

30 

0055
Applicant Information: Board of Trustees, Sheet Metal Local Pension Plan 

P.O. Box 368 

Troy, MI 48099-0368 

EIN: 34-666666753 

Plan Number: 001 

Tom Wiant, Chairman 

Phone: (248) 641-4902 

Fax: (248) 813-9898 

The Board of Trustees of the Sheet Metal Workers Local Pension Plan hereby appoints the following representatives as attorney-in-fact to represent the taxpayer before the Department of Treasury and perform acts related to the attached application dated March 31, 2019 for suspension of benefits under Internal Revenue Code Section 

432(e)(9). 

Representative Information: Paul M. Newcomer pmn@ntclaw.com 

Michael A Novara man@ntclaw.com 

Novara Tesija & Catenacci PLLC 

888 Big Beaver Road, Suite 600 

Troy, MI 48084 

EIN: 38-3763096 

Phone: (248) 354-0380 

Fax: (248) 354-0393 

Send copies of notices and communications to representative: Yes 

With the exception of the facts described below, I authorize my representative to receive and inspect information, including confidential tax information, and to perform acts that I can perform with respect to the application dated March 31, 2019 for suspension of benefits under Section 432(e)(9) of the Internal Revenue Code. For 

example, my representative shall have the authority to sign any agreements, consents, or similar documents. 

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Tom Wiant, Chairman 

Signed: March_, 2019 

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