Central States, Southeast and Southwest Areas Pension Plan

Item #38 

Does the application include the required excerpts from the most recently filed Form 5500. 

See section 7.08. 

The required excerpts from the most recently filed Form 5500 is attached as document number 

38.1. 

38.0
38.1

Redacted by the US Department 

of Treasury

Redacted by the US Department of Treasury
38.2
Redacted by the US Department 

of Treasury



Redacted by the US Department of 

Treasury
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

March 29, 2013 

Illustration Supporting Actuarial Certification of Status (Schedule MB, line 4a) 

ACTUARIAL STATUS CERTIFICATION AS OF JANUARY 1, 2013 UNDER IRC SECTI

This is to certify that The Segal Company (“Segal”) has prepared an actuarial status certification under Internal Revenufor the Central States, Southeast and Southwest Areas Pension Plan as of January 1, 2013 in accordance with generally 

principles and practices. It has been prepared at the request of the Board of Trustees to assist in administering the Fund and compliance requirements under federal law. This certification may not otherwise be copied or reproduced in any foconsent of the Board of Trustees and may only be provided to other parties in its entirety. The measurements shown in this actuarial certification may not be applicable for other purposes. Future actuarial meas

differ significantly from the current measurements presented in this report due to such factors as the following: plan ex

from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptionsdecreases expected as part of the natural operation of the methodology used for these measurements (such as the end of period or additional cost or contribution requirements based on the plan's funded status); differences in statutory interp

changes in plan provisions or applicable law. This certification is based on the January 1, 2012 actuarial valuation, dated September 5, 2012. Additional assumptions 

projections and sources of financial information used are summarized in Exhibit V. The Segal Company does not practice law and, therefore, cannot and does not provide legal advice. Any statutory inter

this certification is based reflect Segal’s understanding as an actuarial firm. This certification was based on the assumption that the Plan was qualified as a multiemployer plan for the year. I am a member of the American Academy of Actuaries and I meet the Qualification Standards of the American Academrender the actuarial opinion herein. To the best of my knowledge, the information supplied in this actuarial certification accurate. As required by IRC Section 432(b)(3)(B)(iii), the projected industry activity is based on information provided sponsor. In my opinion, the projections are based on reasonable actuarial estimates, assumptions and methods that (othindustry activity) offer my best estimate of anticipated experience under the Plan. 

Daniel V. Ciner, MAAA, EA Senior Vice President and Actuary Enrolled Actuary No. 11-05773 

38.8 Redacted by the US Department of Treasury
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

 Certificate Contents 

EXHIBIT I Status Determination as of January 1, 2013 EXHIBIT II Summary of Actuarial Valuation Projections EXHIBIT III Funding Standard Account Projections EXHIBIT IV Funding Standard Account – Projected Bases Assumed Established After 

January 1, 2012 

EXHIBIT V Actuarial Assumptions and Methodology 

38.9
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT I Status Determination as of January 1, 2013 

Status Condition 

Test Compo

Result 

Critical Status  1. Funding deficiency projected in four years (ignoring any amortization extensions)? 

 2. Funding deficiency projected in five years (ignoring any amortization extensions) Yes  AND present value of vested benefits for non-actives more than present value of vested benefits for actives Yes 

AND normal cost plus interest on unfunded actuarial accrued liability (unit credit basis) greater than contributions 

for current year? 

Yes 

 3. Funding deficiency projected in five years (ignoring any amortization extensions) Yes 

 AND funded percentage less than 65%? Yes  4. Funded percentage less than 65% Yes  AND assets plus contributions less than benefit payments and administrative expenses over seven years? No 

 5. Assets plus contributions less than benefit payments and administrative expenses over five years?  6. In critical status for immediately preceding plan year and funding deficiency projected within ten years? 

 In Critical Status? Endangered Status 

 1. Funded percentage less than 80% N/A  AND not in Critical Status? N/A  2. Funding deficiency projected in seven years N/A  AND not in Critical Status? N/A 

In Endangered Status? In Seriously Endangered Status? 

Neither Critical Status Nor Endangered Status 

Neither Critical nor Endangered Status? 

38.10
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

This certification also notifies the IRS that the Plan is making the scheduled progress in meeting the requirements of its based on the annual standards of the rehabilitation plan. The annual standard for meeting the requirements of the rehabilitation plan is that actuarial projections updated for eacon reasonable assumptions, that under the rehabilitation plan and its schedules (as amended and updated from time to t

forestall its possible insolvency prior to 2021. The updated actuarial projection shows that the Fund is projected to rem

2024. The actuarial assumptions and methods used for the above projection are as described in Exhibit V, except the followin

 Unless noted otherwise in the data used for the 2012 actuarial valuation, Classes 15 and above (other than YRC

remain under the Primary Schedule, and make all future required contribution rate increases, and Classes 14 an

YRCW) are assumed to elect the Default Schedule, and make all future required contribution rate increases. YRremain on the Distressed Employer Schedule and make Primary Schedule contribution rate increases beginning 

 15% of the attrition for Classes 15 and above is attributable to voluntary employer withdrawals (Rehabilitation 

Projected Assets ($ Millions) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1. Market value as of January 1 $17,765 $16,768 $15,695 $14,629 $13,384 $12,004 $10,505 $8,894 $7,163 $5,296 2. Income statement (market value basis)

(a) Contributions 575 577 658 573 572 570 563 555 550 543 

(b) Withdrawal liability payments 80 80 80 80 80 80 80 86 94 103 (c) Investment income 1,248 1,173 1,093 1,013 918 814 701 580 450 310 (d) Benefit payments 2,865 2,868 2,861 2,873 2,913 2,924 2,916 2,912 2,920 2,938 (e) Administrative expenses 35 36 37 37 38 39 40 40 41 42 (f) Net change (997) (1,073) (1,066) (1,244) (1,381) (1,499) (1,611) (1,731) (1,867) (2,024

3. Market value as of December 31 16,768 15,695 14,629 13,384 12,004 10,505 8,894 7,163 5,296 3,272 

38.11
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT II Summary of Actuarial Valuation ProjectionsThe actuarial factors as of January 1, 2013 (based on projections from the January 1, 2012 valuation certificate): I. Asset and Contribution Information 

1. Market value of assets 2. Actuarial value of assets 3. Reasonably anticipated contributions 

a. Upcoming year b. Present value for the next five years c. Present value for the next seven years 

II. Liabilities 

1. Present value of vested benefits for active participants 2. Present value of vested benefits for non-active participants 

3. Total unit credit accrued liability 4. Present value of payments Benefit Payments Administrative Expenses 

a. Next five years $12,104,362,592 $152,383,777 b. Next seven years 15,912,984,705 202,980,487 

5. Unit credit normal cost plus expenses 

III. Funded Percentage (I.2)/(II.3) 

IV. Funding Standard Account 

1. Credit Balance/(Funding Deficiency) as of the end of prior year 2. Years to projected funding deficiency, if within ten years 

38.12
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT III Funding Standard Account Projections The table below presents the Funding Standard Account Projections for the Plan Years beginning January 1, 2012 throu

Year Beginning January 1, 

2012 2013 2014 2015 2016 2017 201

1. Credit balance/(funding 

deficiency) at beginning of year -$1,782,815,789 -$3,199,887,650 -$4,992,663,426 -$6,806,814,637 -$8,740,448,887 -$10,850,636,636 -$13,023

2. Interest on (1) -133,711,184 -239,991,574 -374,449,757 -510,511,098 -655,533,667 -813,797,748 -9763. Normal cost 240,359,404 232,025,394 226,700,975 221,631,696 211,260,719 196,060,328 1834. Administrative expenses 33,662,713 33,758,892 34,434,070 35,122,751 35,825,206 36,541,710 375. Net amortization charges 1,657,191,701 1,801,295,121 1,687,763,174 1,732,549,343 1,671,218,240 1,576,805,048 1,2496. Interest on (3), (4) and (5) 144,841,037 155,030,955 146,167,366 149,197,783 143,872,812 135,705,532 1107. Expected contributions 764,042,581 645,133,648 631,676,271 689,521,370 585,564,236 565,125,996 5458. Interest on (7) 28,651,597 24,192,512 23,687,860 25,857,051 21,958,659 21,192,225 209. Credit balance/(funding 

deficiency) at end of year: (1) + (2) – (3) – (4) – (5) – (6) + (7) + (8) -$3,199,887,650 -$4,992,663,426 -$6,806,814,637 -$8,740,448,887 -$10,850,636,636 -$13,023,228,781 -$15,015

The above reflects that the Section 412(e) amortization extension conditions were not met as of January 1, 2009 due to investment losses in 2008. On February 12, 2009, the Plan filed an application with the IRS to change the conditions. Santicipated condition relief has not yet been obtained, the projections in this certification were completed without reco

amortization extension.

38.13
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT IV Funding Standard Account – Projected Bases Assumed Established After January 1, 2012 Schedule of Funding Standard Account Bases 

Type of Base Date Established 

Base 

Established 

Amortization

Period 

A

Actuarial Loss 01/01/2013 $1,272,950,687 15 Actuarial Gain 01/01/2014 -816,844,105 15 Actuarial Gain 01/01/2015 -148,581,546 15 Actuarial Loss 01/01/2016 89,120,520 15 

Actuarial Gain 01/01/2017 -210,061,170 15 

38.14
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT V Actuarial Assumptions and Methodology The actuarial assumptions and plan of benefits are as used in the January 1, 2012 actuarial valuation certificate, dated Sexcept as specifically described below. We also assumed that experience would emerge as projected, except as describecalculations are based on a current understanding of the requirements of ERISA Section 305 and IRC Section 432.

Contribution Rates: The changes to contribution rates on and after January 1, 2012 were based on 

commitments by the collective bargaining parties settled before January 1, 20information provided for the January 1, 2013 actuarial valuation. 

Asset Information: The financial information as of December 31, 2012 was based on an unaudited 

statement provided by the Fund’s Financial Accounting Division Manager. Em

contributions were adjusted for changes in YRCW Contribution Deferral Agre

based on information received from the plan sponsor. For projections after that date, the assumed administrative expenses were projprojected amount in the unaudited financial statement for 2013 and were increyear after 2013 and the benefit payments were projected based on the January 

valuation. The projected net investment return was assumed to be 7.5% of the value of assets for the 2013-2019 Plan Years. Any resulting investment gains operation of the asset valuation method are amortized over 15 years in the FunAccount. 

Projected Industry Activity: As required by Internal Revenue Code Section 432, assumptions with respect 

industry activity are based on information provided by the plan sponsor. Based information, starting with the number of participants included in the January 1valuation, the number of active participants is assumed to decline by 4% per y2% per year thereafter and the number of employment units (weeks, days, and assumed to be in accordance with the assumptions used in the January 1, 2012 decline is increased by 16% per year for the first 5 years and 6% per year for t

participants under the Default Schedule. 

38.15
Actuarial Status Certification as of January 1, 2013 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

In addition to projections of industry activity directly linked to the level of ongthe Trustees also anticipate that 25% of the reduction in projected employer cothe decline in the number of active participants will continue in the form of wi

payments for 20 years, with a minimum of $80 million per year. Based on information from the plan sponsor, it is assumed that, as a result of a

YRCW (Contribution Deferral Agreement), the Fund will receive $2.0 million sale income during the calendar years 2013-2014 and the December 31, 2012 $84,369,096 will grow with 7.5% per year interest, paid monthly, reduced by income, and will be paid on March 16, 2015. 

Future Normal Costs: Based on the assumed industry activity, normal cost and liabilities were determ

open group forecast with the number of active participants assumed to change and the new entrants to have a demographic mix consistent with recent entran

This certification reflects that the Section 412(e) amortization extension conditions were not met as of January 1, 2009 investment losses in 2008. On February 12, 2009, the Plan filed an application with the IRS to change the conditions. Scondition relief has not yet been obtained, the projections in this certification were completed without recognition of thextension. However, even if the conditions are changed so that the Plan meets any new revised conditions, the Plan wilstatus (Red Zone) as of January 1, 2013. The Segal Company (“Segal”) does not practice law and, therefore, cannot and does not provide legal advice. Any statuon which the certification is based reflects Segal’s understanding as an actuarial firm. Due to the complexity of the stat

significance of its ramifications, Segal recommends that the Board of Trustees consult with legal counsel when making 

regarding compliance with ERISA and the Internal Revenue Code. 

5330441v1/10346.001 

38.16
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

March 31, 2014 

Documentation Regarding Progress Under Rehabilitation Plan (Schedule MB, line 4c

ACTUARIAL STATUS CERTIFICATION AS OF JANUARY 1, 2014 UNDER IRC SECTI

This is to certify that Segal Consulting, a Member of The Segal Group, Inc. (“Segal”), has prepared an actuarial status 

Internal Revenue Code Section 432 for the Central States, Southeast and Southwest Areas Pension Plan as of January 1

accordance with generally accepted actuarial principles and practices. It has been prepared at the request of the Board o

in administering the Fund and meeting filing and compliance requirements under federal law. This certification may nocopied or reproduced in any form without the consent of the Board of Trustees and may only be provided to other parti

The measurements shown in this actuarial certification may not be applicable for other purposes. Future actuarial meas

differ significantly from the current measurements presented in this report due to such factors as the following: plan ex

from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptionsdecreases expected as part of the natural operation of the methodology used for these measurements (such as the end of period or additional cost or contribution requirements based on the plan's funded status); differences in statutory interp

changes in plan provisions or applicable law. This certification is based on the January 1, 2013 actuarial valuation, dated August 7, 2013. Additional assumptions req

projections and sources of financial information used are summarized in Exhibit V. Segal Consulting does not practice law and, therefore, cannot and does not provide legal advice. Any statutory interprethis certification is based reflect Segal’s understanding as an actuarial firm. This certification was based on the assumption that the Plan was qualified as a multiemployer plan for the year. I am a member of the American Academy of Actuaries and I meet the Qualification Standards of the American Academrender the actuarial opinion herein. To the best of my knowledge, the information supplied in this actuarial certification accurate. As required by IRC Section 432(b)(3)(B)(iii), the projected industry activity is based on information provided 

sponsor. In my opinion, the projections are based on reasonable actuarial estimates, assumptions and methods that (othindustry activity) offer my best estimate of anticipated experience under the Plan. 

Daniel V. Ciner, MAAA, EA Senior Vice President and Actuary Enrolled Actuary No. 11-05773 

38.17 Redacted by the US Department of Treasury
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

 Certificate Contents 

EXHIBIT I Status Determination as of January 1, 2014 EXHIBIT II Summary of Actuarial Valuation Projections EXHIBIT III Funding Standard Account Projections EXHIBIT IV Funding Standard Account – Projected Bases Assumed Established After 

January 1, 2013 

EXHIBIT V Actuarial Assumptions and Methodology 

38.18
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT I Status Determination as of January 1, 2014 

Status Condition 

Test Compo

Result 

Critical Status  1. Funding deficiency projected in four years (ignoring any amortization extensions)? 

 2. Funding deficiency projected in five years (ignoring any amortization extensions) Yes  AND present value of vested benefits for non-actives more than present value of vested benefits for actives Yes 

AND normal cost plus interest on unfunded actuarial accrued liability (unit credit basis) greater than contributions 

for current year? 

Yes 

 3. Funding deficiency projected in five years (ignoring any amortization extensions) Yes 

 AND funded percentage less than 65%? Yes  4. Funded percentage less than 65% Yes  AND assets plus contributions less than benefit payments and administrative expenses over seven years? No 

 5. Assets plus contributions less than benefit payments and administrative expenses over five years?  6. In critical status for immediately preceding plan year and funding deficiency projected within ten years? 

 In Critical Status? Endangered Status 

 1. Funded percentage less than 80% N/A  AND not in Critical Status? N/A  2. Funding deficiency projected in seven years N/A  AND not in Critical Status? N/A 

In Endangered Status? In Seriously Endangered Status? 

Neither Critical Status Nor Endangered Status 

Neither Critical nor Endangered Status? 

38.19
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

This certification also notifies the IRS that the Plan is making the scheduled progress in meeting the requirements of its based on the annual standards of the rehabilitation plan. The annual standard for meeting the requirements of the rehabilitation plan is that actuarial projections updated for eacon reasonable assumptions, that under the rehabilitation plan and its schedules (as amended and updated from time to t

forestall its possible insolvency prior to 2023. The updated actuarial projection shows that the Fund is projected to rem

2026. The actuarial assumptions and methods used for the above projection are as described in Exhibit V, except the followin

 Unless noted otherwise in the data used for the 2013 actuarial valuation, Classes 15 and above (other than YRC

remain under the Primary Schedule, and make all future required contribution rate increases, and Classes 14 an

YRCW) are assumed to elect the Default Schedule, and make all future required contribution rate increases. YRremain on the Distressed Employer Schedule with no contribution rate increases. 

 15% of the attrition for Classes 15 and above is attributable to voluntary employer withdrawal (Rehabilitation P

Projected Assets ($ Millions) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2021. Market value as of January 1 $18,741 $17,809 $16,816 $15,737 $14,561 $13,265 $11,927 $10,409 $8,765 $6,987 $5

2. Income statement (market value basis)

(a) Contributions 586 589 587 583 575 643 556 547 543 550 

(b) Withdrawal liability payments 80 80 80 80 80 80 80 80 88 92 (c) Investment income 1,321 1,252 1,177 1,095 1,006 908 807 693 569 436 (d) Benefit payments 2,882 2,875 2,885 2,895 2,917 2,927 2,920 2,921 2,934 2,943 2(e) Administrative expenses 37 38 39 39 40 41 42 43 43 44 (f) Net change (932) (993) (1,080) (1,175) (1,296) (1,337) (1,518) (1,644) (1,777) (1,909) (2

3. Market value as of December 31 17,809 16,816 15,737 14,561 13,265 11,927 10,409 8,765 6,987 5,078 3

38.20
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT II Summary of Actuarial Valuation ProjectionsThe actuarial factors as of January 1, 2014 (based on projections from the January 1, 2013 valuation certificate): I. Asset and Contribution Information 

1. Market value of assets 2. Actuarial value of assets 3. Reasonably anticipated contributions 

a. Upcoming year b. Present value for the next five years c. Present value for the next seven years 

II. Liabilities 

1. Present value of vested benefits for active participants 2. Present value of vested benefits for non-active participants 

3. Total unit credit accrued liability 4. Present value of payments Benefit Payments Administrative Expenses 

a. Next five years $12,165,582,696 $161,066,614 b. Next seven years 15,978,842,925 214,546,330 

5. Unit credit normal cost plus expenses 

III. Funded Percentage (I.2)/(II.3) 

IV. Funding Standard Account 

1. Credit Balance/(Funding Deficiency) as of the end of prior year 2. Years to projected funding deficiency, if within ten years 

38.21
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT III Funding Standard Account Projections The table below presents the Funding Standard Account Projections for the Plan Years beginning January 1, 2013 throu

Year Beginning January 1, 

2013 2014 2015 2016 2017 2018 201

1. Credit balance/(funding 

deficiency) at beginning of year -$3,199,887,650 -$4,983,597,170 -$6,793,420,523 -$8,745,678,004 -$10,738,883,422 -$12,743,206,007 -$14,509,8

2. Interest on (1) -239,991,574 -373,769,788 -509,506,539 -655,925,850 -805,416,257 -955,740,451 -1,088,23. Normal cost 248,497,288 235,398,993 234,837,402 229,585,920 221,282,533 208,905,477 198,64. Administrative expenses 34,047,429 35,682,475 36,396,125 37,124,048 37,866,529 38,623,860 39,35. Net amortization charges 1,848,714,019 1,695,824,017 1,689,712,628 1,580,419,980 1,440,981,260 1,072,052,200 1,116,76. Interest on (3), (4) and (5) 159,844,405 147,517,910 147,070,962 138,534,746 127,509,774 98,968,614 101,67. Expected contributions 720,371,272 653,850,439 641,220,410 624,949,519 606,008,451 585,728,519 636,98. Interest on (7) 27,013,923 24,519,391 24,045,765 23,435,607 22,725,317 21,964,819 21,29. Credit balance/(funding 

deficiency) at end of year: (1) + (2) – (3) – (4) – (5) – (6) + (7) + (8) -$4,983,597,170 -$6,793,420,523 -$8,745,678,004 -$10,738,883,422 -$12,743,206,007 -$14,509,803,271 -$16,396,2

The above reflects that the Section 412(e) amortization extension conditions were not met as of January 1, 2009 due to investment losses in 2008. On February 12, 2009, the Plan filed an application with the IRS to change the conditions. Santicipated condition relief has not yet been obtained, the projections in this certification were completed without reco

amortization extension.

38.22
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT IV Funding Standard Account – Projected Bases Assumed Established After January 1, 2013 Schedule of Funding Standard Account Bases 

Type of Base Date Established 

Base 

Established 

Amortization

Period 

A

Actuarial Gain 01/01/2014 -$1,190,318,727 15 -Actuarial Gain 01/01/2015 -631,556,307 15 Actuarial Gain 01/01/2016 -365,993,947 15 Actuarial Gain 01/01/2017 -637,315,366 15 Actuarial Gain 01/01/2018 -400,764,258 15 

38.23
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

EXHIBIT V Actuarial Assumptions and Methodology The actuarial assumptions and plan of benefits are as used in the January 1, 2013 actuarial valuation certificate, dated Aexcept as specifically described below. We also assumed that experience would emerge as projected, except as describecalculations are based on a current understanding of the requirements of ERISA Section 305 and IRC Section 432.

Contribution Rates: The changes to contribution rates on and after January 1, 2013 were based on 

commitments by the collective bargaining parties settled before January 1, 20information provided for the January 1, 2014 actuarial valuation. 

Asset Information: The financial information as of December 31, 2013 was based on an unaudited 

statement provided by the Fund’s Financial Accounting Division Manager. Em

contributions were adjusted for changes in YRCW Contribution Deferral Agre

based on information received from the plan sponsor. 

 For projections after that date, the assumed administrative expenses were proj

projected amount in the unaudited financial statement for 2014 and were increyear after 2014 and the benefit payments were projected based on the January 

valuation. The projected net investment return was assumed to be 7.5% of the value of assets for the 2014-2020 Plan Years. Any resulting investment gains operation of the asset valuation method are amortized over 15 years in the FunAccount. 

Projected Industry Activity: As required by Internal Revenue Code Section 432, assumptions with respect 

industry activity are based on information provided by the plan sponsor. Based information, starting with the number of participants included in the January 1valuation, the number of active participants is assumed to decline by 4% per y2% per year thereafter and the number of employment units (weeks, days, and assumed to be in accordance with the assumptions used in the January 1, 2013 decline is increased by 16% per year for the first 5 years and 6% per year for t

participants under the Default Schedule. 

38.24
Actuarial Status Certification as of January 1, 2014 under IRC Section 432 for the Central States, Southeast an

Pension Plan 

EIN 3

In addition to projections of industry activity directly linked to the level of ongthe Trustees also anticipate that 25% of the reduction in projected employer cothe decline in the number of active participants will continue in the form of wi

payments for 20 years, with a minimum of $80 million per year. Based on information from the plan sponsor, it is assumed that, as a result of a

YRCW (Contribution Deferral Agreement), the Fund will receive $8.0 million sale and interest income during the Calendar years 2014-2019 and the Decembbalance of $84,150,155 will grow with 7.5% per year interest, paid monthly, rproperty sale income, and will be paid on December 31, 2019. 

Future Normal Costs: Based on the assumed industry activity, normal cost and liabilities were determ

open group forecast with the number of active participants assumed to change and the new entrants to have a demographic mix consistent with recent entran

This certification reflects that the Section 412(e) amortization extension conditions were not met as of January 1, 2009 investment losses in 2008. On February 12, 2009, the Plan filed an application with the IRS to change the conditions. Scondition relief has not yet been obtained, the projections in this certification were completed without recognition of thextension. However, even if the conditions are changed so that the Plan meets any new revised conditions, the Plan wilstatus (Red Zone) as of January 1, 2014. Segal Consulting (“Segal”) does not practice law and, therefore, cannot and does not provide legal advice. Any statutorwhich the certification is based reflects Segal’s understanding as an actuarial firm. Due to the complexity of the statute significance of its ramifications, Segal recommends that the Board of Trustees consult with legal counsel when making regarding compliance with ERISA and the Internal Revenue Code.

5417257v3/10346.001

38.25
EXHIBIT VIII 

Summary of Plan Provisions (Schedule MB, line 6) This exhibit summarizes the major provisions of the Plan included in the valuation. It is not intended to be, nor should 

a complete statement of all plan provisions. Plan Year: January 1 through December 31 

Pension Credit Year: January 1 through December 31 Plan Status: Ongoing plan Participation: Employee is eligible to participate when at least 20 weeks of contributions hav

or her behalf in the first year of employment, or in any calendar year thereafteClasses 15A through 18+, need 20 weeks or 75 days of contributions). 

Contributions: Employers make daily or weekly contributions on behalf of their employees, a

collective bargaining agreement. These contribution rates are a factor in deterClass. Minimum contribution rates vary by several factors, including Benefit last contract. 

 The average annual contribution per participant, based on the assumptions reg

$8,302. 

Service Credit: Sum of Contributory Credit and Non-Contributory Credit.

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

EI

38.26
Contributory Credit: Credit is based on contributions made by employer on employee’s behalf. Co

earned on a calendar year basis according to the following schedule: 

Benefit Classes 1 – 14 

 0 – 19 weeks contributed No Credit  20 – 39 weeks contributed Number of weeks divided by  40 or more weeks contributed 1 year credit 

Benefit Classes 15A – 18+ 

 0 – 19 weeks contributed No Credit  20 – 39 weeks contributed Number of weeks divided by  40 or more weeks contributed 1 year credit 

 or  74 days contributed No Credit 

 75 – 179 days contributed Number of days divided by 1 180 or more days contributed 1 year credit 

Non-Contributory Credit: Employee can earn Non-Contributory Credit if he or she became a Participant 

1985, and if he or she worked for a Teamster type organization prior to becomthis plan. Up to one year of Non-Contributory Credit can be given for each ye

Credit. 

Reemployment: If a pensioner or disabled Participant returns to work, benefit payments may b

pursuant to the terms of the Plan. Benefit may have to be re-calculated if he or additional credit. 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

EI

38.27
Vesting Service: A Participant earns one year of Vesting Service for each calendar year during 

makes at least 20 weeks of contribution on his or her behalf (20 weeks or 75 dClasses 15A through 18+). A Participant becomes vested upon earning five yservice. 

Break in Service: A one-year break is a calendar year with less than 10 weeks of Contributory C

Contributory Credit, or Vesting Service. 

 A Break in Service occurs when a non-vested Participant has the greater of a) 

one-year breaks, or b) a number of consecutive one-year breaks equal to the nVesting Service prior to the one-year breaks. 

Retirement Benefits: A Participant receives the best of the following benefit types at retirement: 

 Twenty-Year Service Pension  Contribution-Based Pension  Contributory Credit Pension 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.28
Twenty-Year Service Pension: This benefit is earned by combining Contributory Credit and Non-Contributor

least one-half of the total Credit must be Contributory. 

 This benefit is based on Benefit Class and age at retirement as follows: 

Monthly Pension Benefit 

Benefit Class Age 57 Age 58 Age 59 60-64 Age 65 

1 $ 60 $ 60 $ 60 $ 60 $ 60 2 90 90 90 90 90 

2A 125 125 125 125 125 

3 140 140 140 170 170 

3A 170 170 170 210 210 

4 225 225 225 275 275 5 260 260 260 315 315 6 285 285 285 350 350 7 330 330 330 400 400 8 365 365 365 445 445 9 400 400 400 485 485 

10 435 435 435 530 530 11 490 490 490 595 595 12 575 575 575 675 675 13 600 600 600 725 725 14 625 625 625 775 775 15 700 750 800 900 900 16 700 750 800 900 1,100 

17A&B 700 750 800 900 1,100 

18&18+ 700 750 800 900 1,100 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.29
Eligibility: Attain age 50 while an active plan participant with 20 years of Credit 

or 30 years of Credit, regardless of age. 

Amount: Monthly pension benefit is based on chart above using age on the earlier of 1) 

2) date of termination. Benefit must be reduced .5% for each month retiremen57. 

Deferred Pension (Special Provision): 

Eligibility: Attain age 57 while an active plan participant with 20 years of Credit 

or 20 years of Contributory Credit, regardless of age, with at least 20 weeks undBenefit Class Rate Chart or Attain age 50 while an active plan participant with 20 years of Contributory C

Amount: Monthly pension benefit is based on previous chart using age at retir

termination). This special Deferred Pension allows a participant to terminadelay retirement to a later date to receive a greater benefit. This benefit must be reduced .5% for each month retirement age precedes age not payable prior to age 50. 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.30
Contribution-Based Pension: 

Eligibility: Five years of Vesting Service. Amount: This monthly pension benefit is payable, unreduced, at the earlier of age 65 

years of Credit, and is equal to (a) + (b) + (c): (a) 1% of all employer contributions paid on the Participant’s behalf on or aft(b) 2% of all employer contributions paid on the Participant’s behalf on or aft

through December 31, 2003; 

(c) Pre-1986 credit is determined using a formula as defined in the January 1, 

 This benefit can be taken early, with a reduction of .5% for each month retire

age 65, or age 62 with 20 years Credit if earlier. 

Contributory Pension:

Eligibility (must meet any of the following): 

 30 years of Contributory Credit, with at least 1⁄2 year of Contributory Credi

 January 1, 2004 and Contribution being made under Schedule B of the Ben Chart; 

 at least age 57 with at least 20 years of Contributory Credit and Benefit Cla

 at least age 57 with at least 25 years of Contributory Credit and Benefit Cla at least age 60 with at least 25 years of Contributory Credit and Benefit Cla 25 years of Contributory Credit and Benefit Class 17A, 18, or 18+;  at least age 55 with at least 25 years of Contributory Credit and Benefit Cla at least age 50 with at least 20 years of Contributory Credit and Benefit Cla

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.31
Amount: Sum of (a) and (b), where: 

a) 1% of Contributions paid on participant’s behalf on or after January 1, 200

monthly and reduced .5% per month for retirement prior to 62); 

b) a percentage (determined by taking years of Contributory Credit as of Dec

divided by total Contributory Credit at retirement) of the amount, payable from the following charts (age used in chart should be age at date of termi

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.32
For Benefit Classes 1 – 14: 

Use age 60 amount from Twenty-Year Service Pension chart. 

For Benefit Class 15A: 

Age 25 Years 30 Years 

Any 0 1,000 

60-61 950 1,050 

62-64 1,050 1,125 

65+ 1,125 1,250 

For Benefit Class 15B: 

Age 25 Years 30 Years Any 0 1,000 

60-61 1,000 1,100 

62-64 1,100 1,250 

65+ 1,250 1,500 

For Benefit Class 15C (Phase I): 

Age 25 Years 30 Years Any 0 1,000 

57-59 900 1,125 

60-61 1,125 1,350 

62-64 1,225 1,500 

65+ 1,375 1,750 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.33
For Benefit Class 15C (Phase II):

Age 25 Years 30 Years Any 0 1,000 

57-59 1,000 1,250 60-61 1,250 1,600 62-64 1,350 1,750 65+ 1,500 2,000 

For Benefit Class 16: 

Age 20 Years 25 Years 30 Years 

Any 0 0 2,000 

57 900 1,200 2,000 

58 950 1,300 2,000 

59 1,000 1,400 2,000 

60 1,050 1,500 2,000 61 1,100 1,600 2,100 62 1,200 1,700 2,200 63 1,300 1,800 2,300 64 1,400 1,900 2,400 65+ 1,500 2,000 2,500 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.34
Contributory Credit Pensions Under Benefit Class 17A 

Years of Contributory Service

Age 20-24 25 26 27 28 29 30 31 32 33 34 35 

Any Age - 1,500 1,500 1,500 1,500 1,500 2,000 2,100 2,200 2,300 2,400 2

56 

- 1,500 1,600 1,600 1,600 1,600 2,000 2,100 2,200 2,300 2,400 2

57 900 1,500 1,600 1,700 1,700 1,700 2,000 2,100 2,200 2,300 2,400 258 950 1,500 1,600 1,700 1,800 1,800 2,000 2,100 2,200 2,300 2,400 259 1,000 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 260 1,050 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 261 1,100 1,600 1,600 1,700 1,800 1,900 2,100 2,100 2,200 2,300 2,400 262 1,200 1,700 1,700 1,700 1,800 1,900 2,200 2,200 2,200 2,300 2,400 263 1,300 1,800 1,800 1,800 1,800 1,900 2,300 2,300 2,300 2,300 2,400 264 1,400 1,900 1,900 1,900 1,900 1,900 2,400 2,400 2,400 2,400 2,400 2

65 & Up 1,500 2,000 2,000 2,000 2,000 2,000 2,500 2,500 2,500 2,500 2,500 2

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.35
Contributory Credit Pensions Under Benefit Class 17B 

Years of Contributory Service 

Age 20-24 25 26 27 28 29 30 31 32 33 34 35 & 

Any Age - - - - - - 2,500 2,600 2,700 2,800 2,900 3,0

55 - 1,500 1,500 1,500 1,500 1,500 2,500 2,600 2,700 2,800 2,900 3,056 - 1,500 1,600 1,600 1,600 1,600 2,500 2,600 2,700 2,800 2,900 3,057 900 1,500 1,600 1,700 1,700 1,700 2,500 2,600 2,700 2,800 2,900 3,058 950 1,500 1,600 1,700 1,800 1,800 2,500 2,600 2,700 2,800 2,900 3,059 1,000 1,500 1,600 1,700 1,800 1,900 2,500 2,600 2,700 2,800 2,900 3,060 1,050 1,500 1,600 1,700 1,800 1,900 2,500 2,600 2,700 2,800 2,900 3,061 1,100 1,600 1,600 1,700 1,800 1,900 2,500 2,600 2,700 2,800 2,900 3,062 1,200 1,700 1,700 1,700 1,800 1,900 2,500 2,600 2,700 2,800 2,900 3,063 1,300 1,800 1,800 1,800 1,800 1,900 2,500 2,600 2,700 2,800 2,900 3,064 1,400 1,900 1,900 1,900 1,900 1,900 2,500 2,600 2,700 2,800 2,900 3,0

65 & Up 1,500 2,000 2,000 2,000 2,000 2,000 2,500 2,600 2,700 2,800 2,900 3,0

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.36
Contributory Credit Pensions Under Benefit Class 18 

Years of Contributory Service 

Age 20-24 25 26 27 28 29 30 31 32 33 34 35 

Any Age - 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 3

50 650 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 351 700 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 352 750 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 353 800 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 354 850 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 355 900 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 356 950 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 357 1,000 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 358 1,050 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 359 1,100 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 360 1,150 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 361 1,200 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 362 1,300 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 363 1,400 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 364 1,500 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 3

65 & Up 2,000 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 3

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.37
Contributory Credit Pensions Under Benefit Class 18 Plus 

Years of Contributory Service 

Age 20-24 25 26 27 28 29 30 31 32 33 34 35 

Any Age - 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 

50 650 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 51 700 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 52 750 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 53 800 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 54 850 2,000 2,100 2,200 2,300 2,400 3,000 3,100 3,200 3,300 3,400 55 900 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 56 950 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 57 1,000 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 58 1,050 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 59 1,100 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 60 1,150 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 61 1,200 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 62 1,300 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 63 1,400 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 64 1,500 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 

65 & Up 2,000 2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 3,300 3,400 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.38
Disability Pension: 

Eligibility: Under age 62 with 10 years of credited service and Benefit Class 4 or higher Amount: For Benefit Class 18: $650 per month plus $50 for each year that the age 

exceeded age 50 with a maximum benefit of $1,000. For other Benefit Classuntil death or recovery from disability. At age 65, a disabled participant manormal retirement benefit instead. 

Vesting: 

Eligibility: 5 years of vesting service Amount: Vested participants retiring after January 1, 1987 will get a Contribution-Base

Vested Pension is only for those retiring on or before January 1, 1987. 

Pre-Retirement Death Benefits: 

Survivors may only receive one non-disability death benefit. 

50% Surviving Spouse BenefitEligibility: Married and either a vested participant or eligible for an immediate pension. 

Amount: 50% of the pension that would have been payable under the Joint and 50% Su

option. 

60-Month Survivor BenefitEligibility: Active participant with 20 years of credited service, married or with dependen

Benefit Class 4 or higher. 

Amount: 60 months’ pension equal to the greater of $160 per month or the pension the 

could have received under the lifetime with limited surviving spouse payment 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.39
Lump-Sum Death Benefit

Eligibility: Active participant with 10 years of credited service. Amount: Amount $4,000 under Schedule B, $2,000 under Schedule A, or $10,000 unde

but not more than 50% of the contributions made for the participant. Survivor than one death benefit must elect which one to receive if not covered under Be

Disability Death BenefitEligibility: Receiving a disability pension Amount: $1,000 or 50% of spouse’s benefit Lump-Sum Disability BenefitEligibility: Age 45 with 10 years of credited service and not eligible for the disability penAmount: Amount $3,000 under Schedule B or $2,000 under Schedule A, but not more t

contributions made for the participant. 

Optional Forms of Payment: For single participants: 

 Single Life Annuity for members of Benefit Classes 4 and higher, with a $ Single Life Annuity for members of Benefit Classes below 4 and a benefit 

of Credit, with a $1,000 death benefit 

For married participants:  50% Joint and Survivor Pension (QJSA) with pop-up provision, reduced f

annuity 

 75% Joint and Survivor Pension (QOSA) with pop-up provision, reduced 

annuity 

 Single Life Annuity for members of Benefit Classes 4 and higher, with 60 

payments guaranteed or, if the spouse does not survive to the pensioner’s death benefit 

 Single Life Annuity for members of Benefit Classes below 4 and a benefit 

of Credit, with a $1,000 death benefit upon the pensioner’s death and a $5upon the spouse’s death 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.40
Benefit Transfer: Effective January 1, 2008, the responsibility to pay all benefits to non-retired U

of January 1, 2008 other than the Contribution-Based Pension Accrued Benefiwas transferred to the UPS/IBT Full-Time Pension Plan. 

Summary of Plan Changes Under Rehabilitation Plan: 

 Primary Schedule Except for plan withdrawals, preserves all current benefit provisions. Annuall

contribution increases are required effective immediately after the expiration o

Bargaining Agreement. For 2008 agreements, the increases are 8% for the firsthe next three years, and 4% per year thereafter. Effective for retirements on oparticipants will not be granted a retirement date prior to age 57, and effective required contributions will be limited to $348 per week for each participant coNational Automobile Transporter Agreement and $342 per week for all other 

employer that qualifies as a New Employer under Section 2.2(b) of Appendix required to make additional contribution rate increases otherwise required by tPlan as of the date it qualifies as a New Employer.

 Default Schedule Adjustable Benefits are eliminated or reduced to the maximum extent permitte

employees of contributing employers subject to the Default Schedule. Adjusta

the Twenty-Year Service Pension, the Contributory Credit Pension, all disabilin pay status, and before retirement death benefits other than the 50% survivinEffective for retirements on or after July 1, 2011, the early retirement reductioSchedule are based on actuarially equivalent factors rather than 6% per year fr

commence prior to age 57. Annually compounded contribution increases of 4% effective immediately after the expiration of the Collective Bargaining Agreemthat qualifies as a New Employer under Section 2.2(b) of Appendix E of the P

to make additional contribution rate increases otherwise required by the Rehabthe date it qualifies as a New Employer.

 Rehabilitation Plan Withdrawals When a contributing employer is no longer required to make employer contrib

Pension Fund under one or more of its Collective Bargaining Agreements as a members of a Bargaining Unit, its representatives, or the contributing employeof that employer that have not yet commenced benefits shall be subject to the 

reductions of the Default Schedule. 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.41
 Distressed Employer Schedule Adjustable Benefits are eliminated or reduced to the maximum extent permitte

employees of contributing employers subject to the Distressed Employer Scheparticipant that has achieved a minimum age of 55 and accrued a minimum of Contributory Credit as of the date of the Distressed Employer’s termination of Fund provided that the retirement is not prior to age 62. Adjustable Benefits inYear Service Pension, the Contributory Credit Pension, all disability benefits nstatus, and before retirement death benefits other than the 50% surviving spouretirement reductions are based on actuarially equivalent factors effective for rafter July 1, 2011. 

Changes in Plan Provisions The following plan provisions were changed and are reflected in this valuation

 During the plan year ended December 31, 2012, 2,136 active participants 

vested participants were reported to have become covered under the DefauDistressed Employer Schedule, or were subject to the Adjustable Benefit rresult of a Rehabilitation Plan Withdrawal. As participants become subjectheir changes in benefits are treated as a plan change. 

 Any employer that qualifies as a New Employer under the Plan is no long

contribution rate increases otherwise required by the Rehabilitation Plan. 

Schedule MB, Line 6 - Summary of Plan Provisions Central States, Southeast and Southwest Areas Pension Plan

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38.42
EXHIBIT VII 

Statement of Actuarial Assumptions/Methods (Schedule MB, line 6) Decrements: Rates of Retirement: Table A, except effective July 1, 2011, benefits commen

age 57 

 Rates of Withdrawal Prior to Retirement: Table B  Rates of Disability: Table C  Rates of Mortality for Healthy Lives: RP-2000 Combined Healthy Blue Colla

(sex distinct), projected on a generational basis using Scale AA for 13 years anthereafter as described in Table D 

 Rates of Mortality for Disabled Lives: According to the RP-2000 Disability R

Table (sex distinct) 

 Note: The rates described above are rates of decrement, not probability rates. 

a given age are calculated by considering all applicable rates of decrement at tThe RP-2000 Combined Healthy Blue Collar Mortality Table, projected on a gusing Scale AA for 13 years, reasonably reflects the projected mortality experof the measurement date. The resulting mortality table was then adjusted to fugenerational projection under Scale BB to reflect future mortality improvemen

Schedule MB, Line 6 - Statement of Actuarial Assumptions and Methods Central States, Southeast and Southwest Areas Pension Plan

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38.43





Description of Weighted Average 

Retirement Age: Age 61, determined as follows: The weighted average retirement age for each 

calculated as the sum of the product of each potential past or future retirement probability of surviving from entry age to that age and then retiring at that agedecrements. The overall weighted retirement age is the average of the individubased on all the active participants included in the January 1, 2013 actuarial va

Future Benefit Accruals: One year of service per year Frequency of Employer Contributions: 

Benefit Assumed Weeks Assumed Days A

Class Worked Worked 

1 through 14 47 210 

15 & 16 51 210 

17A & 17B 51 240 

18 & 18 Plus 51 240 

Unknown Data for Participants: Same as those exhibited by participants with similar known characteristics. If 

participants are assumed to be male. The Fund Office adjusted for missing birassuming that they were 30 years prior to the participation date. 

Definition of Active Participants: Active participants are defined as those reported as Active by Central States e

have retired as of the valuation date. All actives have earned one year of vestinmost recent plan year. 

Exclusion of Inactive Vested  Participants: Inactive participants over age 70 are excluded from the valuation except for th

participants that became inactive vested participants as a result of UPS’s withd

Percent Married: 80% Age of Spouse: Females are three years younger than male spouses. Benefit Election: Married participants are assumed to elect the Joint and Survivor Annuity. Sing

assumed to elect the Single Life Annuity with 60 months of payments guarantguarantee for participants on the Default Schedule). 

Schedule MB, Line 6 - Statement of Actuarial Assumptions and Methods Central States, Southeast and Southwest Areas Pension Plan

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38.49
Net Investment Return: 7.50% 

Annual Administrative Expenses: $35,400,000, payable monthly for the year beginning January 1, 2013 (equiva

payable at the beginning of the year) 

Actuarial Value of Assets: The market value of assets less unrecognized returns in each of the last five ye

return is equal to the difference between the actual market return and the projeand is recognized over a five-year period. The actuarial value is further adjustbe within 20% of the market value. 

Actuarial Cost Method: Unit Credit Actuarial Cost Method. Normal Cost and Actuarial Accrued Liabi

on an individual basis and are allocated by service. 

Benefit Class: Plan participants are assumed to remain in their current Benefit Class until ter

retirement. 

Benefits Valued: Unless otherwise indicated, includes all benefits summarized in Exhibit VIII. 

Current Liability Assumptions: 

Interest 3.78%, within the permissible range prescribed under IRC Section 431(c)(6)(E

Mortality Mortality prescribed under IRS Regulations 1.431(c)(6)-1 and 1.430(h)(3)-1: R

projected forward to the valuation year plus seven years for annuitants and 15 nonannuitants 

Schedule MB, Line 6 - Statement of Actuarial Assumptions and Methods Central States, Southeast and Southwest Areas Pension Plan

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38.50
Estimated Rate of Investment Return: 

On actuarial value of assets  (Schedule MB, line 6g): 0.4%, for the Plan Year ended December 31, 2012 On current (market) value of assets  (Schedule MB, line 6h): 13.4%, for the Plan Year ended December 31, 2012 

Funding Standard Account 

Contribution Timing (Schedule MB, line 3(a)): Unless otherwise noted, contributions are paid periodically throughout the yea

collective bargaining agreements. The interest credited in the Funding Standartherefore assumed to be equivalent to a July 1 contribution date. 

Schedule MB, Line 6 - Statement of Actuarial Assumptions and Methods Central States, Southeast and Southwest Areas Pension Plan

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38.51
EXHIBIT III 

Schedule of Active Participant Data (Schedule MB, line 8b)The participant data is for the year ended December 31, 2012. 

Pension Credits 

Age Total Under 5 5-9 10-14 15-19 20-24 25-29 30-34 

20 - 24 1,285 1,234 51 - - - - - - - - - - 25 - 29 2,949 2,061 858 30 - - - - - - - - 30 - 34 4,509 2,333 1,411 733 32 - - - - - - 35 - 39 5,432 1,878 1,552 1,434 560 8 - - - - 40 - 44 7,886 1,997 1,789 2,059 1,454 561 26 - - 45 - 49 11,035 1,835 1,814 2,468 2,117 1,971 803 27 50 - 54 13,926 1,678 1,729 2,405 2,273 2,666 2,172 915 55 - 59 13,146 1,071 1,163 1,807 1,824 2,365 2,258 1,856 

60 - 64 6,446 415 601 870 837 1,071 986 864 65 - 69 1,061 79 134 173 135 146 116 95 70 & over 132 27 17 17 17 7 13 13 Unknown 737 721 16 - - - - - - - - - - 

Total 68,544 15,329 11,135 11,996 9,249 8,795 6,374 3,770 

Schedule MB, Line 8b - Schedule of Active Participant Data Central States, Southeast and Southwest Areas Pension Plan

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38.52
EXHIBIT IV (continued) 

Funding Standard Account Schedule of Funding Standard Account Bases: Amortization Charges as of January 1, 2013 (without amortizat(Schedule MB, line 9c) 

Type of Base Date Established 

Amortization 

Amount 

Years 

Remaining 

O

Plan Amendment 01/01/1993 $38,762,593 10 Plan Amendment 01/01/1994 31,006,197 11 

Change in Assumptions 01/01/1995 17,021,297 12 

Plan Amendment 01/01/1995 73,323,009 12 

Plan Amendment 01/01/1996 25,039,818 13 

Plan Amendment 01/01/1997 28,387,073 14 

Plan Amendment 01/01/1998 78,124,643 15 

Experience Loss 01/01/1999 27,450,077 1 

Plan Amendment 01/01/1999 77,674,687 16 

Plan Amendment 01/01/2000 39,147,195 17 

Experience Loss 01/01/2001 70,722,930 3 

Plan Amendment 01/01/2001 21,660,667 18 

Plan Amendment 01/01/2002 17,972,771 19 

Experience Loss 01/01/2002 72,276,217 4 

Plan Amendment 01/01/2003 8,357,478 20 Change in Assumptions 01/01/2003 123,927,774 20 1

Experience Loss 01/01/2003 326,695,127 5 1Experience Loss 01/01/2005 185,462,547 7 1Experience Loss 01/01/2006 69,704,770 8 

Change in Assumptions 01/01/2006 148,231,625 23 1

Change in Assumptions 01/01/2007 237,812,085 24 2

Plan Amendment 01/01/2009 167,530 11 

Schedule MB, Lines 9c and 9h - Schedule of Funding Standard Account Bases Central States, Southeast and Southwest Areas Pension Plan

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38.53
EXHIBIT IV (continued) 

Funding Standard Account Schedule of Funding Standard Account Bases: Amortization Charges as of January 1, 2013 (without amortizat(Schedule MB, line 9c) 

Type of Base Date Established 

Amortization 

Amount 

Years 

Remaining 

O

Experience Loss 01/01/2009 561,524,191 11 4Experience Loss 01/01/2011 123,801,820 13 1Experience Loss 01/01/2012 162,390,815 14 1Change in Assumptions 01/01/2013 42,965,078 15 

Experience Loss 01/01/2013 141,744,622 15 1

Total $2,751,354,636 $22

Schedule MB, Lines 9c and 9h - Schedule of Funding Standard Account Bases Central States, Southeast and Southwest Areas Pension Plan

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38.54
EXHIBIT IV (continued) 

Funding Standard Account Schedule of Funding Standard Account Bases (Credits) (Schedule MB, line 9h) 

Type of Base Date Established 

Amortization 

Amount 

Years 

Remaining 

O

Experience Gain 01/01/2000 $60,444,208 2 Experience Gain 01/01/2004 44,825,571 6 Plan Amendment 01/01/2004 20,969,650 21 

Change in Assumptions 01/01/2004 40,431,538 21 

Experience Gain 01/01/2007 62,145,950 9 Plan Amendment 01/01/2008 88,507,361 10 

Experience Gain 01/01/2008 176,591,670 10 1Plan Amendment 01/01/2010 1,422,139 12 Experience Gain 01/01/2010 301,688,293 12 2Plan Amendment 01/01/2011 1,283,692 13 Change in Assumptions 01/01/2011 25,645,809 13 

Plan Amendment 07/01/2011 57,365,342 13.5 Plan Amendment 01/01/2012 18,176,560 14 

Plan Amendment 01/01/2013 3,142,834 15 

Total $902,640,617 $6

Schedule MB, Lines 9c and 9h - Schedule of Funding Standard Account Bases Central States, Southeast and Southwest Areas Pension Plan

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38.55
EXHIBIT IV (continued) 

Funding Standard Account Schedule of Funding Standard Account Bases: Amortization Charges as of January 1, 2013 (with amortization (Schedule MB, line 9c) 

Type of Base Date Established 

Amortization 

Amount 

Years 

Remaining 

O

Combined and offset charge 01/01/1992 $244,872,868 8.48 $2Experience Loss 01/01/1993 5,708,926 5 

Plan Amendment 01/01/1993 15,393,357 20 

Experience Loss 01/01/1994 8,021,839 6 

Plan Amendment 01/01/1994 12,167,722 21 

Experience Loss 01/01/1995 13,932,561 7 

Change in Assumptions 01/01/1995 6,595,242 22 

Plan Amendment 01/01/1995 28,409,944 22 

Experience Loss 01/01/1996 2,806,665 8 

Plan Amendment 01/01/1996 9,572,574 23 Plan Amendment 01/01/1997 10,700,968 24 

Plan Amendment 01/01/1998 29,025,961 25 

Experience Loss 01/01/1999 11,209,234 11 

Plan Amendment 01/01/1999 28,430,936 26 

Plan Amendment 01/01/2000 14,111,678 27 

Experience Loss 01/01/2001 29,269,584 13 

Plan Amendment 01/01/2001 7,687,553 28 Plan Amendment 01/01/2002 6,278,856 29 Experience Loss 01/01/2002 29,937,743 14 

Plan Amendment 01/01/2003 2,873,440 30 Change in Assumptions 01/01/2003 42,608,828 30 1

Experience Loss 01/01/2003 135,034,044 15 2

Schedule MB, Lines 9c and 9h - Schedule of Funding Standard Account Bases Central States, Southeast and Southwest Areas Pension Plan

EI

38.56
EXHIBIT IV (continued) 

Funding Standard Account Schedule of Funding Standard Account Bases: Amortization Charges as of January 1, 2013 (with amortization (Schedule MB, line 9c) 

Type of Base Date Established 

Amortization 

Amount 

Years 

Remaining 

O

Experience Loss 01/01/2005 185,462,547 7 1Experience Loss 01/01/2006 69,704,770 8 

Change in Assumptions 01/01/2006 148,231,625 23 1

Change in Assumptions 01/01/2007 237,812,085 24 2

Plan Amendment 01/01/2009 167,530 11 

Experience Loss 01/01/2009 561,524,191 11 4Experience Loss 01/01/2011 123,801,820 13 1Experience Loss 01/01/2012 162,390,815 14 1Change in Assumptions 01/01/2013 42,965,078 15 

Experience Loss 01/01/2013 141,744,622 15 1

Total $2,368,455,606 $25* Bases established through January 1, 2003 are amortized at 0% interest as of January 1, 2013 with the 412(e) amortization extension, which is valuation. On February 12, 2009, the Plan filed an application with the IRS to change the conditions of the amortization extension. Since any conbeen obtained, this valuation was completed without recognition of the amortization extension.

Schedule MB, Lines 9c and 9h - Schedule of Funding Standard Account Bases Central States, Southeast and Southwest Areas Pension Plan

EI

38.57
Justification for Change in 

Actuarial Assumptions (Schedule MB, line 11): Based on past experience and future expectations, the following actuarial assu

changed as of January 1, 2013 for funding purposes (December 31, 2012 for wpurposes as applicable):  Rates of mortality for healthy lives, previously RP-2000 Combined Health

Mortality Table (sex distinct), projected using Scale AA on a generational 

 Administrative expenses, previously $35,000,000, payable monthly. 

Schedule MB, Line 11 - Justification for Change in Actuarial Assumptions Central States, Southeast and Southwest Areas Pension Plan

EI

38.58
Line 8c 

The 2013 Schedule MB does not reflect the 412(e) amortization extension that was reflected prior to the 2009 Schedule MBamortization extension conditions were not met as of January 1, 2009 due to significant investment losses in 2008. On Febfiled an application with the IRS to change the conditions. Since the anticipated condition relief has not yet been obtained, 

completed without recognition of the amortization extension.

5448594v1/10346.006 Schedule MB - Other Attachment Central States, Southeast and Southwest Areas Pension Plan

EI

38.59



CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND 

EIN: 36-6044243 PN: 001 

SCHEDULE R – UPDATE OF REHABILITATION PLAN 

DECEMBER 31, 2013 

The following 81 pages contain a summary of the updated Rehabilitation Plan and related exhibits.

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APPENDIX M-1. REHABILITATION PLAN 

 

Section 1. PREAMBLE AND DEFINITIONS. 

This Appendix M-1 is added to the Pension Plan effective on and after March 26, 2008 in 

order to comply with the requirements of the Pension Protection Act of 2006 (“PPA”). 

The Central States, Southeast and Southwest Areas Pension Fund (the “Fund”) was 

certified on March 24, 2008 by its actuary to be in “critical status” (sometimes referred to 

as the “red zone”) under the PPA. The Fund’s Board of Trustees, as the plan sponsor of 

a “critical status” pension plan, is charged under the PPA with developing a 

“rehabilitation plan” designed to improve the financial condition of the Fund in 

accordance with the standards set forth in the PPA. That is the purpose of this 

Rehabilitation Plan. 

Under the PPA, a rehabilitation plan must include one or more schedules showing 

revised benefit structures, revised contributions, or both, which, if adopted by the parties 

obligated under agreements participating in the pension plan, may reasonably be 

expected to enable the Fund to emerge from critical status in accordance with the 

rehabilitation plan. The PPA also provides that one of the rehabilitation plan schedules of 

benefits and contributions shall be designated the “default” schedule. The default 

schedule must assume that there are no increases in contributions under the plan other 

than the increases necessary to emerge from critical status after future benefit accruals 

and other benefits have been reduced to the maximum extent permitted by law. The 

PPA also creates certain categories of “adjustable benefits” which may be reduced or 

eliminated dependent upon the outcome of bargaining over the rehabilitation plan 

schedules and dependent on the exercise of certain flexibility and discretion conferred 

upon the Board of Trustees by the PPA. Adjustable benefits that may be affected in this 

manner include post-retirement death benefits, early retirement benefits or retirementtype subsidies, and generally any benefit that would be payable prior to normal 

retirement age (age 65 benefits under the Fund’s Plan Document – or, as discussed 

below, a Contribution Based Benefit actuarially reduced to be equivalent to an age 65 

benefit). 

Unless otherwise indicated, all capitalized terms herein shall have the definitions and 

meanings assigned to them in the Fund’s Pension Plan Document. 

Section 2. SCHEDULES OF CONTRIBUTIONS AND BENEFITS. 

With the PPA requirements outlined above in mind, the Fund’s Board of Trustees hereby 

provides the following PPA Schedules to the parties charged with bargaining over 

agreements requiring contributions to the Fund. 

 A. PRIMARY SCHEDULE (PRESERVES ALL CURRENT BENEFITS). 

 1. Benefits 

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers are in 

compliance with this Primary Schedule, there will be no change in benefit 

formulas, levels or payment options in effect on January 1, 2008. 

However, subject to the notice requirements of the PPA and other 

applicable law, any Bargaining Units (and any non-Bargaining Unit 

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employee groups participating in the Fund) whose Contributing 

Employers incur a Rehabilitation Plan Withdrawal on or after March 26, 

2008 shall have their Adjustable Benefits listed in Section 2(F) below 

eliminated or reduced to the extent indicated in Subsection B(1) below. 

 2. Contributions 

Compliance with the Primary Schedule requires annually compounded 

contribution rate increases effective immediately after the expiration of the 

Collective Bargaining Agreement (or other agreement requiring 

contributions to the Fund) and each agreement anniversary date (or 

reallocation anniversary, where applicable) during the term of the new 

bargaining agreement to the extent indicated below, depending on the 

year that the new agreement is effective (as shown below). Note that all 

contribution rate increases are annually compounded on the total 

contribution rate (including any reallocations of employee benefit 

contributions or agreed mid-contract contribution increases) immediately 

prior to the increase. 

 Pre-2006 agreements: 7% per year 

(beginning with 2006 agreement 

 anniversary or reallocation dates) 

 2006 agreements: 7% per year 

 2007 agreements: 8% per year 

 2008 agreements: 8% per year 

 2009 agreements: 8% per year 

The required annual rate increase may be provided through annual 

allocations to pension contributions of general and aggregate employee 

benefit contribution increases that were negotiated at the outset of an 

agreement, but were not specifically allocated to pension contributions 

until subsequent contract years. The Primary Schedule requires 8% per 

year contribution rate increases for the first 5 years, 6% per year 

contribution rate increases for the next 3 years and 4% per year 

contribution rate increases each year thereafter for 2008 agreements 

under the Primary Schedule and comparable rate increases over time for 

all other agreements under the Primary Schedule (see Exhibit A). 

 B. DEFAULT SCHEDULE. 

 1. Benefits 

With regard to Bargaining Units (and any non- Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers agree to 

comply with this Default Schedule [or who become subject to the Default 

Schedule due to a failure to achieve an agreement to accept one of the 

Rehabilitation Plan Schedules within the time frame specified under 

ERISA § 305(e)(3)(C)], the benefit formulas, levels, and payment options 

in effect on January 1, 2008 will remain in effect except for the following, 

upon the effective date that the Default Schedule applies to the 

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Bargaining Unit (or to any non-Bargaining Unit employee groups 

participating in the Fund): 

 Adjustable Benefits listed in Section 2(F) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of 

contributions (the Contribution-Based Pension) remains in 

effect, with the modification that the Contribution Based 

Pension monthly benefit payable at age 65 is reduced by 

1⁄2% per month for each month prior to age 65 at the time 

of retirement, with a minimum retirement age of 57. 

 2. Contributions 

Compliance with the Default Schedule consists of annually compounded 

contribution rate increases of 4% effective immediately after the 

expiration of the Collective Bargaining Agreement (or other agreement 

requiring contributions to the Fund) and each anniversary thereof during 

the term of the agreement. 

3. Effect of agreement to or imposition of Default Schedule. 

(i) If a Contributing Employer agrees to the Default Schedule with 

respect to a particular Bargaining Unit, the Fund will not accept 

any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, 

except as determined by the Board of Trustees in their sole 

discretion.

(ii) If a Contributing Employer becomes subject to the Default 

Schedule by operation of ERISA Section 305(e)(3)(C), because 

the bargaining parties have failed to adopt either of the Schedules 

compliant with this Rehabilitation Plan within 180 days of the 

expiration of their prior Collective Bargaining Agreement, the Fund 

will then accept a Collective Bargaining Agreement that is 

compliant with the Primary Schedule described in this 

Rehabilitation Plan, provided that such new Collective Bargaining 

Agreement provides for Primary Schedule contribution rates that 

are retroactive to the expiration date of the last Collective 

Bargaining Agreement that covered the affected Bargaining Unit.

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C. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER 

 INCURRING A REHABILITATION PLAN WITHDRAWAL. 

Subject to the provisos indicated in the final clauses of this Subsection C, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(F)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to Participants whose benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] with the Fund is on or after April 8, 2008, 

and: 

(1) whose last Hour of Service prior to January 1, 2008 was earned while 

employed by United Parcel Service, Inc. (“UPS”), or with any trades or 

businesses at any time under common control with UPS, within the 

meaning of ERISA § 4001(b)(1); or

(2) who (i) has earned or earns an Hour of Service while employed with a 

Contributing Employer (or any predecessor or successor entity) that at 

any time on or after March 26, 2008 incurs a Rehabilitation Plan 

Withdrawal (see Section 2(G) below), and (ii) whose last year of 

Contributory Service Credit prior to the Rehabilitation Plan Withdrawal 

was earned while a member of a Bargaining Unit (or any predecessor or 

successor Bargaining Unit) ultimately incurring such Withdrawal. 

Provided, however, that any Pensioner otherwise subject to the elimination of 

Adjustable Benefits, due to a Rehabilitation Plan Withdrawal pursuant Subsection 

C(2) above, who has a benefit commencement date [within the meaning of 

ERISA § 305(i)(10)] one year or more prior to the earlier of: (i) the date of such 

Rehabilitation Plan Withdrawal or (ii) the date of the expiration of the last 

Collective Bargaining Agreement requiring Employer Contributions under the 

Primary Schedule prior to such Withdrawal, shall not be subject to the elimination 

of Adjustable Benefits provided that the Pensioner does not engage in Restricted 

Reemployment at any time subsequent to the benefit commencement date. 

And provided further that the spouse of any Participant otherwise subject to the 

elimination of Adjustable Benefits, due to a Rehabilitation Plan Withdrawal 

pursuant to Subsection C(2) above, shall not incur a loss of Adjustable Benefits 

with respect to any Surviving Spouse Benefits for which such spouse has a 

benefit commencement date [within the meaning of ERISA Section 305(i)(10)] 

prior to the date of the Rehabilitation Plan Withdrawal. 

D. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO BECOMES 

SUBJECT TO THE DEFAULT SCHEDULE. 

Subject to the provisos indicated in the final clauses of this Subsection D, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(F)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and: 

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Default Schedule 

described herein; and 

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(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Default Schedule was earned while a member of 

a Bargaining Unit (or any predecessor or successor Bargaining Unit) that 

ultimately became subject to the Default Schedule. 

Provided, however, that any Pensioner otherwise subject to the elimination of 

Adjustable Benefits, due to his Contributing Employer becoming subject to the 

Default Schedule pursuant to this Subsection D, who has a benefit 

commencement date [within the meaning of ERISA § 305(i)(10)] one year or 

more prior to the Contributing Employer becoming subject to the Default 

Schedule, shall not be subject to the elimination of Adjustable Benefits provided 

that the Pensioner does not engage in Restricted Reemployment at any time 

subsequent to the benefit commencement date. 

And provided further that the spouse of any Participant otherwise subject to the 

elimination of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Default Schedule pursuant this Subsection D, shall not incur a loss 

of Adjustable Benefits with respect to any Surviving Spouse Benefits for which 

such spouse has a benefit commencement date [within the meaning of ERISA 

Section 305(i)(10)] prior to the date on which the Contributing Employer became 

subject to the Default Schedule. 

E. RESTORATION OF ADJUSTED BENEFITS. 

Any Participant who incurs a benefit adjustment or elimination under the terms of 

Sections 2(A), 2(B), 2(C) or 2(D) above may have those affected benefits 

restored if, subsequent to the event causing the benefit adjustment, the 

Participant: 

(1) in the case of benefit adjustment caused by a Rehabilitation Plan 

Withdrawal (see Section 2(G) below), permanently ceases all 

employment with, and performance of services in any capacity for, the 

Contributing Employer (and any successors or trades or businesses 

under common control with such Employer within the meaning of ERISA 

§ 4001(b)(1)) within 60 days of the occurrence of such Rehabilitation Plan 

Withdrawal; and 

(2) in any case, subsequently earns one year of Contributory Service Credit 

with a Contributing Employer while that Employer is in compliance with 

the Primary Schedule described herein. 

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 F. ADJUSTABLE BENEFITS.

As used herein, Adjustable Benefits shall mean and include: 

(1) Any right to receive a Retirement Pension Benefit (Pension Plan, Article 

IV) prior to age 65 [including without limitation any pre-age 65 benefits 

that would otherwise be payable as (i) a Twenty Year Service Pension 

(Pension Plan § 4.01); (ii) a Contributory Credit Pension (Pension Plan § 

4.04); (iii) a Vested Pension (Pension Plan § 4.07); (iv) a Deferred 

Pension (Pension Plan § 4.08); or (v) a Twenty-Year Deferred Pension 

(Pension Plan § 4.09)]. 

(2) Early retirement benefit or retirement-type subsidies [including without 

limitation (i) an Early Retirement Pension (Pension Plan Section 4.02); (ii) 

a 25-And-Out Pension (Pension Plan Section 4.05); or a 30-And-Out 

Pension (Pension Plan Section 4.06)]. 

(3) All Disability Benefits not yet in pay status (Pension Plan, Article V). 

(4) Before Retirement Death Benefits (Pension Plan, Article VI) other than 

the 50% surviving spouse benefit. 

(5) Post-retirement death benefits that are not part of the annuity form of 

payment. 

(6) All Partial Pensions (Pension Plan, Appendix D), to the extent any such 

pension is tied to one or more of the Adjustable Benefits listed above. 

(7) All Contribution-Based Pensions (Pension Plan § 4.03) except that, 

assuming the Participant meets all other requirements for receiving a 

Contribution-Based Pension, the Contribution-Based Pension is payable 

at age 65 reduced by 1⁄2% per month for each month prior to age 65 at the 

time of retirement with a minimum retirement age of 57. Such minimum 

retirement age shall not apply if the Participant retired prior to age 57 

before the Participant’s Adjustable Benefits were eliminated or reduced. 

In such circumstance, the Participant shall be entitled to receive the 

Contribution-Based Pension reduced by 1⁄2% per month for each month 

prior to age 65 at the time of retirement. 

(8) To the extent not already included in paragraphs (1) – (7) above, the 

following categories of benefits listed and defined as “adjustable benefits” 

under ERISA § 305(e)(8)(iv): 

(i) benefits, rights, and features under the plan, including postretirement death benefits, 60-month guarantees, disability benefits 

not yet in pay status, and similar benefits, 

(ii) any early retirement benefit or retirement-type subsidy (within the 

meaning of ERISA section 204(g)(2)(A)) and any benefit payment 

option (other than the qualified joint and survivor annuity), and 

(iii) benefit increases that would not be eligible for a guarantee under 

ERISA Section 4022A on the first day of the Fund’s initial critical 

year under the PPA because the increases were adopted (or, if 

later, took effect) less than 60 months before such first day. 

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Provided, however, that except as provided in subparagraph (8)(iii) above, nothing in this 

paragraph shall be construed to reduce the level of a Participant’s accrued benefit 

payable at normal retirement. 

G. REHABILITATION PLAN WITHDRAWAL. 

Subject to the discretionary authority of the Board of Trustees indicated in the 

final clause of this Section 2(G), a “Rehabilitation Plan Withdrawal” occurs on the 

date a Contributing Employer is no longer required to make Employer 

Contributions to the Pension Fund under one or more of its Collective Bargaining 

Agreements as a result of actions by members of a Bargaining Unit (or its 

representatives) or the Contributing Employer, which actions include, but are not 

limited to the following: 

(1) decertification or other removal of the Union as a bargaining agent; 

(2) ratification or other acceptance of a Collective Bargaining Agreement 

which permits withdrawal of the Bargaining Unit, in whole or in part, from 

the Pension Plan; 

(3) administrative termination of the Contributing Employer with respect to 

any or all of its Collective Bargaining Agreements due to: (i) a violation of 

the Fund’s rules with respect to the terms of a Collective Bargaining 

Agreement [including, without limitation, a provision providing for a split 

bargaining unit]; or (ii) a violation of any other Fund rule or policy 

[including, without limitation, practices or arrangements that result in 

adverse selection]; 

(4) any transaction or other event [including without limitation, a merger, 

consolidation, division, asset sale (other than an asset sale complying 

with ERISA § 4204), liquidation, dissolution, joint venture, outsourcing, 

subcontracting] whereby all or a portion of the operations for which the 

Contributing Employer has an obligation to contribute are continued 

(whether by the Contributing Employer or by another party) in whole or in 

part without maintaining the obligation to contribute to the Fund under the 

same or better terms (including, for example, as to number of participants 

and contribution rate) as existed before the transaction. 

Provided, however, that with respect to the circumstances described in 

Subparas. (3)(ii) or (4) above, the Board of Trustees shall have full discretionary 

authority to consider, weigh and balance the following factors in determining 

whether a Rehabilitation Plan Withdrawal has occurred: 

(i) the extent to which the affected Bargaining Unit or its bargaining 

representative participated in or controlled, or could have controlled or 

prevented, through bargaining, grievance procedures, NLRB 

proceedings, litigation or other means, the cessation of Employer 

Contributions; 

(ii) the extent to which the affected Bargaining Unit benefited, directly or 

indirectly, from the cessation of Employer Contributions; 

(iii) the extent to which the affected Bargaining Unit, or its bargaining 

representative, resisted or attempted to resist, or acquiesced in, the 

cessation of Employer Contributions; 

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(iv) the extent to which the affected Bargaining Unit, or any of its members, 

become engaged as employees or independent contractors in the service 

of operations that were or are in whole or in part a successor of the 

operations of the Contributing Employer who incurred the cessation of 

Employer Contributions; and 

(v) the extent of the hardship that might be incurred by members of the 

affected Bargaining Unit by the elimination of Adjustable Benefits. 

Section 3. REHABILITATION PLAN STANDARDS AND OBJECTIVES. 

The Schedules of Contributions and Benefits discussed above have been formulated by 

the Fund’s Board of Trustees as reasonable measures which, under reasonable 

actuarial assumptions, are designed and projected to -- 

 Meet the increasingly stringent requirements of the amortization extension 

granted to the Fund by the Internal Revenue Service (IRS) in July 2005. The 

requirements include a funded ratio and a required minimum credit balance 

requirement (see attached Exhibit B) (pertinent portions of IRS amortization 

extension). 

 Enable the Fund to emerge from critical status in approximately the year 2028. 

The annual standards for meeting the requirements of the Rehabilitation Plan are as 

follows: 

 The annual actuarial valuation for the Fund shows that, as of the valuation date, 

the Fund satisfies the annual funding ratio and required credit balance conditions 

contained in the IRS amortization extension approval letter. 

 Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (as amended 

and updated from time to time) the Fund will continue to satisfy the increasingly 

more stringent IRS amortization extension requirements. 

 Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (or as 

amended from time to time) the Fund is expected to emerge from Critical Status. 

The Board of Trustees recognize that actual experience may differ from their 

reasonable assumptions, and therefore the exact year of emergence may be 

difficult to predict. 

Section 4. ALTERNATIVES CONSIDERED BY THE TRUSTEES. 

The Board of Trustees considered numerous alternatives (including combinations of 

contribution rate increases and benefit adjustments) that would satisfy the amortization 

extension conditions and might enable the Fund to emerge from Critical Status either by 

the end of ten year PPA Rehabilitation Period (which begins on January 1, 2011 and 

ends on December 31, 2020). Some of the alternatives considered were determined to 

be unreasonable measures. The various default and alternative schedules considered 

included the following: 

Schedules considered by the Board of Trustees to emerge by the end of the 

Rehabilitation Period on December 31, 2020 

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Schedule Benefit Reductions Contribution Rate Increases 

Default Immediate maximum Critical Status benefit cuts 

for all participants to the extent permitted by law 15% per year until emergence in 

2021 (plus an additional 1.6% 

annual increase for Benefit 

Classes 14 and below) 

Alternative 1 Maintain current benefits 17% per year until emergence in 

2021 

Alternative 2 On the second anniversary of the new bargaining 

agreement, reduce the future benefit accrual rate 

from 1% of contributions payable at age 62 to 1% 

of contributions at payable at age 65 

16% per year until emergence in 

2021 

The Board of Trustees concluded that utilizing any and all possible measures to emerge 

from Critical Status by the end of the 10-year presumptive Rehabilitation Period 

described in ERISA section 305(e)(4) would be unreasonable and would involve 

considerable risk to the Fund and Fund participants. In particular, the Board of Trustees 

concluded that the continued existence of the Fund and the Trustees’ ability to maintain 

and improve the Fund’s funded status in accordance with the terms of the IRS approved 

amortization extension would be jeopardized by any attempt to emerge from critical 

status by the end of the presumptive 10-year Rehabilitation Period. 

As shown above, emergence by the end of the presumptive 10 year Rehabilitation 

Period could require double-digit annual contribution rate increases. For example, the 

daily contribution rate would generally have to grow from $52 to over $300. Therefore, 

the Trustees concluded that annual contribution rate increases above the 8%/6%/4% 

level in the Primary Schedule were not reasonable and could trigger mass withdrawals 

and significant losses to the Fund and the participants. 

In the last several years, the Trustees have implemented numerous measures to 

improve the Fund’s funding. These have included: 

 Reducing the benefit accrual rate from 2% of contributions to 1% of contributions; 

 Protecting the “and-out” and early retirement benefits while freezing them at their 

year-end 2003 levels; 

 Obtaining agreements from the major bargaining parties to reallocate about $400 

million per year of benefit contributions to the Pension Fund; 

 Obtaining the amortization extension with its IRS-imposed conditions; and 

 Requiring as a condition of continued participation in the Fund that new bargaining 

agreements in the last several years include significant annual contribution rate 

increases. 

The Board of Trustees determined that mandating additional significant benefit cuts, or 

mandating contribution rate increases at levels beyond those required in recent years, 

would substantially accelerate the rate at which employers would withdraw from the 

Fund, in large part because the Union could conclude that it would be in its members’ 

best interest to agree to withdrawals. 

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EXHIBIT A 

Primary Schedule: Contribution Rate Increases By Bargaining Agreement Year 

(all rate increases are to be compounded annually) 

Calendar Year of 

Contribution 

Rate Increase 

Year of New Bargaining Agreement 

2006 2007 2008 2009 

2006 7% 

2007 7% 8% 

2008 7% 8% 8% 

2009 7% 8% 8% 8% 

2010 7% 8% 8% 8% 

2011 6% 8% 8% 8% 

2012 5% 6% 8% 8% 

2013 4% 4% 6% 8% 

2014 4% 4% 6% 8% 

2015 4% 4% 6% 8% 

2016 4% 4% 4% 6% 

2017 4% 4% 4% 4% 

2018 4% 4% 4% 4% 

2019 4% 4% 4% 4% 

2020 4% 4% 4% 4% 

2021 4% 4% 4% 4% 

2022 4% 4% 4% 4% 

2023 4% 4% 4% 4% 

2024 4% 4% 4% 4% 

2025 4% 4% 4% 4% 

2026 4% 4% 4% 4% 

2027 4% 4% 4% 4% 

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EXHIBIT B 

Significant Index No. 0412.00-00 

 200620024

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE 

WASHINGTON, D.C. 20224 

 TAX EXEMPT AND 

GOVERNMENT ENTITIES 

 DIVISION 

FEB 22 2006 

 SE:T:EP:RA:T:A2

In re: 

 Fund = 

 Industry = 

This letter constitutes notice that your request for a 10-year extension for amortizing the unfunded 

liabilities described in section 412(b)(2)(B) of the Internal Revenue Code (“Code”) and section 

302(b)(2)(B) of the Employee Retirement Income Security Act of 1974 (“ERISA”), has been approved 

subject to the following conditions: 

(1) A credit balance is maintained such that the credit balance is at least as large as the 

accumulation (at the plan’s valuation rate) of the amortized (at the Plan’s valuation rate over 

a period of 15 years) differences between the amortization payments of the extended bases 

(amortized at the section 6621(b) rate) and the amortization payments of such bases had 

such bases been extended and amortized at the Plan’s valuation rate; 

(2) The Plan’s funded ratio, calculated by dividing the market value of Plan assets as of the 

Plan’s valuation date by the Plan’s actuarial accrued liability (computed using the unit credit 

method and the Plan assumptions as of January 1, 2004), is: 

(a) no less than 59% for each valuation date from January 1, 2005, through January 1, 

2011, inclusive; 

(b) no less than 60% as of January 1, 2012 and as of January 1, 2013; 

(c) no less than 61% as of January 1, 2014, and as of January 1, 2015; 

(d) no less than 62% as of January 1, 2016; 

 200620024

2 

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(e) for each valuation date subsequent to January 1, 2016, no less than 1% greater than 

the floor funded ratio as of the previous valuation date. (For example, because the 

floor funded ratio as of January 1, 2016, is 62%, the funded ratio must be at least 

63% as of January 1, 2017, and 64% as of January 1, 2018); and 

(3) For each plan year that the extension remains in effect, starting with the plan year beginning 

January 1, 2004, a copy of the actuarial valuation report for each plan year will be provided 

to this office by September 15 of the following calendar year at the address below: 

Your authorized representative agreed to these conditions in a letter dated July 13, 2005. If any one of 

these conditions is not satisfied, the approval to extend the amortization periods for amortizing the 

unfunded liabilities would be retroactively null and void. However, the Service will consider 

modifications of these conditions especially in the event that unforeseen circumstances beyond the 

control of the Fund cause the actual experience of the Plan to fail the funded ratio condition. An 

example of such an unforeseen circumstance would include a market fluctuation affecting the value of 

the Plan’s assets. Of course, any request for a modification is considered another ruling request and 

would be subject to an additional user fee. 

The extensions of the amortization periods of the unfunded liabilities of the Plan have been granted in 

accordance with section 412(e) of the Code and section 304(a) of ERISA. Section 412(e) of the Code 

and section 304(a) of ERISA authorize the Secretary to extend the period of time required to amortize 

any unfunded liability (described in section 412(b)(2)(B) of the Code and section 302(b)(2)(B) of ERISA) 

of a plan for a period of time (not in excess of 10 years) if the Secretary determines that such extension 

would carry out the purposes of ERISA and would provide adequate protection for participants under 

the plan and their beneficiaries and if the Secretary determines that the failure to permit such extension 

would (1) result in (A) a substantial risk to the voluntary continuation of the plan, or (B) a substantial 

curtailment of pension benefit levels or employee compensation, and (2) be adverse to the interests of 

plan participants in the aggregate. 

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APPENDIX M-2. REHABILITATION PLAN (INCLUDING 2010 UPDATE) 

 

 

Section 1. PREAMBLE AND DEFINITIONS. 

An amended Appendix M was added to the Pension Plan effective on and after 

December 31, 2010 in order to update the Rehabilitation Plan in compliance with the 

requirements of the Pension Protection Act of 2006 (“PPA”). This Appendix M-2 is added 

to the Pension Plan in order to incorporate effective as of May 17, 2011, the Distressed 

Employer Schedule provisions (Section 2(C) and 2(F) below) into the Rehabilitation 

Plan. 

The Central States, Southeast and Southwest Areas Pension Fund (the “Fund”) was 

initially certified on March 24, 2008 by its actuary to be in “critical status” (sometimes 

referred to as the “red zone”) under the PPA; the Fund’s actuary has also certified the 

Fund to be in critical status for the 2009 and 2010 plan years. The Fund’s Board of 

Trustees, as the plan sponsor of a “critical status” pension plan, is charged under the 

PPA with developing a “rehabilitation plan” designed to improve the financial condition of 

the Fund in accordance with the standards set forth in the PPA, and with annually 

updating the rehabilitation plan. Although for plan year 2009 the Fund was exempt from 

the update requirement, pursuant to an election under the Worker Retiree and Employer 

Recovery Act of 2008, for plan year 2010 the PPA provisions concerning the 

rehabilitation plan update process are applicable to the Fund. The purpose of this 

updated Rehabilitation Plan is to comply with those PPA provisions. 

Under the PPA, a rehabilitation plan, including annual updates to the plan, must include 

one or more schedules showing revised benefit structures, revised contributions, or both, 

which, if adopted by the parties obligated under agreements participating in the pension 

plan, may reasonably be expected to enable the Fund to emerge from critical status in 

accordance with the rehabilitation plan. The PPA also provides that one of the 

rehabilitation plan schedules of benefits and contributions shall be designated the 

“default” schedule. The default schedule must assume that there are no increases in 

contributions under the plan other than the increases necessary to emerge from critical 

status after future benefit accruals and other benefits have been reduced to the 

maximum extent permitted by law. The PPA also creates certain categories of 

“adjustable benefits” which may be reduced or eliminated dependent upon the outcome 

of bargaining over the rehabilitation plan schedules and dependent on the exercise of 

certain flexibility and discretion conferred upon the Board of Trustees by the PPA. 

Adjustable benefits that may be affected in this manner include post-retirement death 

benefits, early retirement benefits or retirement-type subsidies, and generally any benefit 

that would be payable prior to normal retirement age (age 65 benefits under the Fund’s 

Plan Document – or, as discussed below, a Contribution Based Benefit actuarially 

reduced to be equivalent to an age 65 benefit). As noted, the PPA also requires annual 

updates of the rehabilitation plan. 

Unless otherwise indicated, all capitalized terms herein shall have the definitions and 

meanings assigned to them in the Fund’s Pension Plan Document. 

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Section 2. SCHEDULES OF CONTRIBUTIONS AND BENEFITS. 

With the PPA requirements outlined above in mind, the Fund’s Board of Trustees hereby 

provides the following PPA Schedules to the parties charged with bargaining over 

agreements requiring contributions to the Fund. 

A. PRIMARY SCHEDULE (EXCEPT AS NOTED, PRESERVES ALL CURRENT 

BENEFITS). 

1. Benefits 

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers are in 

compliance with this Primary Schedule, there will be no change in benefit 

formulas, levels or payment options in effect on January 1, 2008, except 

that as provided in Section 2(J) below, Participants who (i) have not 

submitted a retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date [within the meaning of ERISA § 

305(i)(10)] on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57. 

Further, subject to the notice requirements of the PPA and other 

applicable law, any Bargaining Units (and any non-Bargaining Unit 

employee groups participating in the Fund) whose Contributing 

Employers incur a Rehabilitation Plan Withdrawal on or after March 26, 

2008 shall have their Adjustable Benefits listed in Section H below 

eliminated or reduced to the extent indicated in Subsection B(1) below. 

2. Contributions 

Compliance with the Primary Schedule requires annually compounded 

contribution rate increases in accordance with Exhibit A effective 

immediately after the expiration of the Collective Bargaining Agreement 

(or other agreement requiring contributions to the Fund) and each 

agreement anniversary date (or reallocation anniversary, where 

applicable) during the term of the new bargaining agreement to the extent 

indicated in Exhibit A, depending on the year that the new agreement is 

effective. Note that all contribution rate increases are annually 

compounded on the total contribution rate (including any reallocations of 

employee benefit contributions or agreed mid-contract contribution 

increases) immediately prior to the increase. 

The required annual rate increase may be provided through annual 

allocations to pension contributions of general and aggregate employee 

benefit contribution increases that were negotiated at the outset of an 

agreement, but were not specifically allocated to pension contributions 

until subsequent contract years. The Primary Schedule requires 8% per 

year contribution rate increases for the first 5 years, 6% per year 

contribution rate increases for the next 3 years and 4% per year 

contribution rate increases each year thereafter for 2008 agreements 

under the Primary Schedule and comparable rate increases over time for 

all other agreements under the Primary Schedule (see Exhibit A). 

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Provided, however, that absent further amendment to this rehabilitation 

plan, as of June 1, 2011, any Collective Bargaining Agreement requiring 

contributions of (1) $348 per week for each full-time employee with 

respect to Participants covered by the National Master Automobile 

Transporter Agreement, and (2) $342 per week for each full-time 

employee with respect to all other Participants, will be deemed to be in 

compliance with the Primary Schedule without the need for additional 

annual rate increases. 

 B. DEFAULT SCHEDULE. 

1. Benefits 

With regard to Bargaining Units (and any non- Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers agree to 

comply with this Default Schedule [or who become subject to the Default 

Schedule due to a failure to achieve an agreement to accept one of the 

Rehabilitation Plan Schedules within the time frame specified under 

ERISA § 305(e)(3)(C)], the benefit formulas, levels, and payment options 

in effect on January 1, 2008 will remain in effect except for the following, 

upon the effective date that the Default Schedule applies to the 

Bargaining Unit (or to any non-Bargaining Unit employee groups 

participating in the Fund): 

 Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of 

contributions (the Contribution-Based Pension) remains in 

effect, with the modification that the Contribution Based 

Pension monthly benefit payable at age 65 is reduced by 

1⁄2% per month for each month prior to age 65 with a 

minimum retirement age of 57, except that, for Participants 

who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit 

commencement date [within the meaning of ERISA § 

305(i)(10)] on or before July 1, 2011, the Contribution 

Based Pension monthly benefit payable at age 65 shall be 

reduced to an actuarially equivalent benefit in accordance 

with the Schedule attached as Exhibit B with a minimum 

retirement age of 57.

2. Contributions 

Compliance with the Default Schedule consists of annually compounded 

contribution rate increases of 4% effective immediately after the 

expiration of the Collective Bargaining Agreement (or other agreement 

requiring contributions to the Fund) and each anniversary thereof during 

the term of the agreement. 

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3. Effect of agreement to or imposition of Default Schedule. 

(i) If a Contributing Employer agrees to the Default Schedule with 

respect to a particular Bargaining Unit, the Fund will not accept 

any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, 

except as determined by the Board of Trustees in their sole 

discretion.

(ii) If a Contributing Employer becomes subject to the Default 

Schedule by operation of ERISA Section 305(e)(3)(C), because 

the bargaining parties have failed to adopt either of the Schedules 

compliant with this Rehabilitation Plan within 180 days of the 

expiration of their prior Collective Bargaining Agreement, the Fund 

will then accept a Collective Bargaining Agreement that is 

compliant with the Primary Schedule described in this 

Rehabilitation Plan, provided that such new Collective Bargaining 

Agreement provides for Primary Schedule contribution rates that 

are retroactive to the expiration date of the last Collective 

Bargaining Agreement that covered the affected Bargaining Unit. 

C. DISTRESSED EMPLOYER SCHEDULE. 

 1. Benefits 

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers and 

contribution rates have been specifically accepted and approved by the 

Board of Trustees as satisfying the Qualifications for the Distressed 

Employer Schedule (as set forth in Section 2(C)(2) below), the benefit 

formulas, levels, and payment options in effect on January 1, 2008 will 

remain in effect except for the following, upon the effective date that the 

Distressed Employer Schedule applies to the Bargaining Unit (or to any 

non-Bargaining Unit employee group participating in the Fund) that is 

accepted by the Board of Trustees as qualifying under the Distressed 

Employer Schedule: 

 Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of 

contributions (the Contribution-Based Pension) remains in 

effect, with the modification that the Contribution Based 

Pension monthly benefit payable at age 65 is reduced by 

1⁄2% per month for each month prior to age 65 with a 

minimum retirement age of 57, except that, for Participants 

who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) have not achieved a 

Retirement Date on or before July 1, 2011, the 

Contribution Based Pension monthly benefit payable at 

age 65 shall be reduced to an actuarially equivalent benefit 

in accordance with the Schedule attached as Exhibit B with 

a minimum retirement age of 57, and except that any 

Participant who (i) has achieved a minimum age of 55 as 

of the date of the Distressed Employer’s termination of 

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participation in the Fund (see Section 2(C)(2) below) and 

(ii) has accrued a minimum of 25 years credit towards a 

Contributory Credit Pension or an And-Out Pension as of 

that date (see Pension Plan §§ 4.04, 4.05 and 4.06), shall 

be entitled to retain his eligibility for (but not gain further 

credit towards) any such Pension, provided that any such 

Participant has a minimum retirement age of 62.

 2. Contributions and Qualifications for the Distressed Employer 

 Schedule. 

The Board of Trustees may deem a Collective Bargaining Agreement with 

contribution rates not in compliance with either the Primary Schedule or 

the Default Schedule to be in compliance with and subject to the 

Distressed Employer Schedule, if in the Board of Trustees’ sole 

discretion, the Board determines that the Contributing Employer meets 

each of the following qualifications: 

(i) the common stock of the Employer or its parent corporation (or 

other affiliate under 80% or more common control with the 

Employer) is publicly traded and registered pursuant to the 

securities laws of the United States; 

(ii) the Employer has previously incurred a termination of its 

participation in the Fund due to an inability to remain current in its 

Contribution obligations, and the Employer was in terminated 

status immediately prior to executing the Agreement sought to be 

qualified under the Distressed Employer Schedule; 

(iii) during the last ten years in which the Employer participated in the 

Fund prior to its termination, it had paid contributions to the Fund 

on behalf of at least 1,000 full-time employees per month (or had, 

including part-time employees, paid contributions on behalf of the 

equivalent of at least 1,000 full-time employees per month for the 

specified ten year period); 

(iv) the Employer submits to a review of its financial condition and 

operations by the Fund’s Staff and outside expert and consultants, 

and agrees to reimburse the Fund for all fees and expenses 

incurred by the Fund in this review (including, but not limited to, 

reimbursement to the Fund for the time devoted by the Fund’s 

Staff to any such review, with this reimbursement to be made at 

market rates for comparable services performed by Fund’s Staff); 

(v) on the basis of this financial and operational review, it appears 

that the Employer is not able to contribute to the Fund at a higher 

rate than is indicated in the Collective Bargaining Agreement 

proposed for acceptance under the Distressed Employer 

Schedule, and that acceptance of the proposed Agreement is in 

the best interest of the Fund under all the circumstances and 

advances the goals of this Rehabilitation Plan; and 

(vi) the Employer provides the Fund with first lien collateral in any and 

all unencumbered assets to the fullest extent it is able in order to 

fully secure (i) any delinquent or deferred Contribution obligations 

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owed to the Fund, (ii) the Employer’s obligation to make current 

and future pension contributions to the Fund, and (iii) any future 

withdrawal liability potentially incurred by the Employer (with the 

amount of such potential withdrawal liability to be determined 

based on estimates to be provided by the Fund). 

3. Effect of agreement to or imposition of the Distressed Employer 

 Schedule. 

If a Contributing Employer becomes subject to the Distressed Employer 

Schedule with respect to a particular Bargaining Unit, the Fund will not 

accept any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, except as 

determined by the Board of Trustees in their sole discretion.

D. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER 

 INCURRING A REHABILITATION PLAN WITHDRAWAL. 

Subject to the provisos indicated in the final clauses of this Subsection D, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to Participants whose benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] with the Fund is on or after April 8, 2008, 

and: 

(1) whose last Hour of Service prior to January 1, 2008 was earned while 

employed by United Parcel Service, Inc. (“UPS”), or with any trades or 

businesses at any time under common control with UPS, within the 

meaning of ERISA § 4001(b)(1); or

 (2) who (i) has earned or earns an Hour of Service while employed with a 

Contributing Employer (or any predecessor or successor entity) that at 

any time on or after March 26, 2008 incurs a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), and (ii) whose last year of 

Contributory Service Credit prior to the Rehabilitation Plan Withdrawal 

was earned while a member of a Bargaining Unit (or any predecessor or 

successor Bargaining Unit) ultimately incurring such Withdrawal. 

Provided, however, that any Pensioner otherwise subject to the elimination of 

Adjustable Benefits, due to a Rehabilitation Plan Withdrawal pursuant Subsection 

D(2) above, who has a benefit commencement date [within the meaning of 

ERISA § 305(i)(10)] one year or more prior to the earlier of: (i) the date of such 

Rehabilitation Plan Withdrawal or (ii) the date of the expiration of the last 

Collective Bargaining Agreement requiring Employer Contributions under the 

Primary Schedule prior to such Withdrawal, shall not be subject to the elimination 

of Adjustable Benefits provided that the Pensioner does not engage in Restricted 

Reemployment at any time subsequent to the benefit commencement date. 

And provided further that the spouse of any Participant otherwise subject to the 

elimination of Adjustable Benefits, due to a Rehabilitation Plan Withdrawal 

pursuant to Subsection D(2) above, shall not incur a loss of Adjustable Benefits 

with respect to any Surviving Spouse Benefits for which such spouse has a 

benefit commencement date [within the meaning of ERISA Section 305(i)(10)] 

prior to the date of the Rehabilitation Plan Withdrawal. 

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E. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO BECOMES 

SUBJECT TO THE DEFAULT SCHEDULE. 

Subject to the provisos indicated in the final clauses of this Subsection E, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and: 

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Default Schedule 

described herein; and 

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Default Schedule was earned while a member of 

a Bargaining Unit (or any predecessor or successor Bargaining Unit) that 

ultimately became subject to the Default Schedule. 

Provided, however, that any Pensioner otherwise subject to the elimination of 

Adjustable Benefits, due to his Contributing Employer becoming subject to the 

Default Schedule pursuant to this Subsection E, who has a benefit 

commencement date [within the meaning of ERISA § 305(i)(10)] one year or 

more prior to the Contributing Employer becoming subject to the Default 

Schedule, shall not be subject to the elimination of Adjustable Benefits provided 

that the Pensioner does not engage in Restricted Reemployment at any time 

subsequent to the benefit commencement date. 

And provided further that the spouse of any Participant otherwise subject to the 

elimination of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Default Schedule pursuant this Subsection E, shall not incur a loss 

of Adjustable Benefits with respect to any Surviving Spouse Benefits for which 

such spouse has a benefit commencement date [within the meaning of ERISA 

Section 305(i)(10)] prior to the date on which the Contributing Employer became 

subject to the Default Schedule. 

F. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO BECOMES 

SUBJECT TO THE DISTRESSED EMPLOYER SCHEDULE. 

Subject to the provisos indicated in the final clauses of this Subsection F, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (with the exception indicated in Subsection C(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and: 

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Distressed Employer 

Schedule described herein; and 

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Distressed Employer Schedule was earned while 

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a member of a Bargaining Unit (or any predecessor or successor 

Bargaining Unit) that ultimately became subject to the Distressed 

Employer Schedule. 

Provided, however, that any Pensioner otherwise subject to the reduction in 

Adjustable Benefits indicated in the Distressed Employer Schedule, due to his 

Contributing Employer becoming subject to that Schedule pursuant to this 

Subsection F, who has a benefit commencement date [within the meaning of 

ERISA Section 305(i)(10)] one year or more prior to the Contributing Employer 

becoming subject to the Distressed Employer Schedule, shall not be subject to 

the reduction of Adjustable Benefits otherwise mandated by the Distressed 

Employer Schedule provided that the Pensioner does not engage in Restricted 

Reemployment at any time subsequent to the benefit commencement date, and 

provided further that with respect to Bargaining Units that become subject to the 

Distressed Employer Schedule on or prior to June 1, 2011, no Pensioners with 

Retirement Dates prior to September 24, 2010 shall be subject to such 

Distressed Employer Schedule benefit reduction. 

And provided further that the spouse of any Participant otherwise subject to the 

reduction of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Distressed Employer Schedule pursuant to this Subsection F, shall 

not incur a loss of Adjustable Benefits with respect to any Surviving Spouse 

Benefits for which such surviving spouse has a benefit commencement date 

[within the meaning of ERISA Section 305(i)(10)] prior to the date on which the 

Contributing Employer became subject to the Distressed Employer Schedule, 

and provided further in any event that with respect to Bargaining Units that 

become subject to the Distressed Employer Schedule on or prior to June 1, 

2011, no spouse shall be subject to such Distressed Employer Schedule benefit 

reduction if the Participant’s death occurred prior to September 24, 2010. 

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G. RESTORATION OF ADJUSTED BENEFITS. 

Any Participant who incurs a benefit adjustment or elimination under the terms of 

Sections 2(A), 2(B), 2(C), 2(D), 2(E) or 2(F) above may have those affected 

benefits restored if, subsequent to the event causing the benefit adjustment, the 

Participant: 

(1) in the case of benefit adjustment caused by a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), permanently ceases all employment 

with, and performance of services in any capacity for, the Contributing 

Employer (and any successors or trades or businesses under common 

control with such Employer within the meaning of ERISA § 4001(b)(1)) 

within 60 days of the occurrence of such Rehabilitation Plan Withdrawal; 

and 

(2) in any case, subsequently earns one year of Contributory Service Credit 

with a Contributing Employer while that Employer is in compliance with 

the Primary Schedule described herein. 

 H. ADJUSTABLE BENEFITS.

As used herein, Adjustable Benefits shall mean and include: 

(1) Any right to receive a Retirement Pension Benefit (Pension Plan, Article 

IV) prior to age 65 [including without limitation any pre-age 65 benefits 

that would otherwise be payable as (i) a Twenty Year Service Pension 

(Pension Plan § 4.01); (ii) a Contributory Credit Pension (Pension Plan § 

4.04); (iii) a Vested Pension (Pension Plan § 4.07); (iv) a Deferred 

Pension (Pension Plan § 4.08); or (v) a Twenty-Year Deferred Pension 

(Pension Plan § 4.09)]. 

(2) Early retirement benefit or retirement-type subsidies [including without 

limitation (i) an Early Retirement Pension (Pension Plan Section 4.02); (ii)

a 25-And-Out Pension (Pension Plan Section 4.05); or a 30-And-Out 

Pension (Pension Plan Section 4.06)]. 

(3) All Disability Benefits not yet in pay status (Pension Plan, Article V). 

(4) Before Retirement Death Benefits (Pension Plan, Article VI) other than 

the 50% surviving spouse benefit. 

(5) Post-retirement death benefits that are not part of the annuity form of 

payment. 

(6) All Partial Pensions (Pension Plan, Appendix D), to the extent any such 

pension is tied to one or more of the Adjustable Benefits listed above. 

(7) All Contribution-Based Pensions (Pension Plan § 4.03) except that, 

assuming the Participant meets all other requirements for receiving a 

Contribution-Based Pension, the Contribution-Based Pension is payable 

at age 65 reduced by 1⁄2% per month for each month prior to age 65 at the 

time of retirement with a minimum retirement age of 57. Such minimum 

retirement age shall not apply if the Participant retired prior to age 57 

before the Participant’s Adjustable Benefits were eliminated or reduced. 

In such circumstance, the Participant shall be entitled to receive the 

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Contribution-Based Pension reduced by 1⁄2% per month for each month 

prior to age 65 at the time of retirement. Provided, however, for 

Participants who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011, the 

reductions in the Contribution-Based Pensions payable at age 65 

referenced in this subparagraph (7) shall be based on actuarial 

equivalence in accordance with the Schedule attached as Exhibit B 

hereto. 

(8) To the extent not already included in paragraphs (1) – (7) above, the 

following categories of benefits listed and defined as “adjustable benefits” 

under ERISA § 305(e)(8)(iv): 

(i) benefits, rights, and features under the plan, including postretirement death benefits, 60-month guarantees, disability benefits 

not yet in pay status, and similar benefits, 

(ii) any early retirement benefit or retirement-type subsidy (within the 

meaning of ERISA section 204(g)(2)(A)) and any benefit payment 

option (other than the qualified joint and survivor annuity), and 

(iii) benefit increases that would not be eligible for a guarantee under 

ERISA Section 4022A on the first day of the Fund’s initial critical 

year under the PPA because the increases were adopted (or, if 

later, took effect) less than 60 months before such first day. 

Provided, however, that except as provided in subparagraph (8)(iii) above, nothing in this 

paragraph shall be construed to reduce the level of a Participant’s accrued benefit 

payable at normal retirement. 

I. REHABILITATION PLAN WITHDRAWAL. 

Subject to the discretionary authority of the Board of Trustees indicated in the 

final clause of this Section 2(I), a “Rehabilitation Plan Withdrawal” occurs on the 

date a Contributing Employer (a) is no longer required to make Employer 

Contributions to the Pension Fund under one or more of its Collective Bargaining 

Agreements, or (b) undergoes a significant reduction in its obligation to make 

Employer Contributions resulting from outsourcing or subcontracting work 

covered by the applicable Collective Bargaining Agreement(s), as a result of 

actions by members of a Bargaining Unit (or its representatives) or the 

Contributing Employer, which actions include, but are not limited to the following: 

(1) decertification or other removal of the Union as a bargaining agent; 

(2) ratification or other acceptance of a Collective Bargaining Agreement 

which permits withdrawal of the Bargaining Unit, in whole or in part, from 

the Pension Plan; 

(3) administrative termination of the Contributing Employer with respect to 

any or all of its Collective Bargaining Agreements due to: (i) a violation of 

the Fund’s rules with respect to the terms of a Collective Bargaining 

Agreement [including, without limitation, a provision providing for a split 

bargaining unit]; or (ii) a violation of any other Fund rule or policy 

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[including, without limitation, practices or arrangements that result in 

adverse selection]; 

(4) any transaction or other event [including without limitation, a merger, 

consolidation, division, asset sale (other than an asset sale complying 

with ERISA § 4204), liquidation, dissolution, joint venture, outsourcing, 

subcontracting] whereby all or a portion of the operations for which the 

Contributing Employer has an obligation to contribute are continued 

(whether by the Contributing Employer or by another party) in whole or in 

part without maintaining the obligation to contribute to the Fund under the 

same or better terms (including, for example, as to number of participants 

and contribution rate) as existed before the transaction; 

Provided, however, that with respect to the circumstances described in 

Subparas. (3)(ii) or (4) above, the Board of Trustees shall have full discretionary 

authority to consider, weigh and balance the following factors in determining 

whether a Rehabilitation Plan Withdrawal has occurred: 

(i) the extent to which the affected Bargaining Unit or its bargaining 

representative participated in or controlled, or could have controlled or 

prevented, through bargaining, grievance procedures, NLRB 

proceedings, litigation or other means, the cessation of Employer 

Contributions; 

(ii) the extent to which the affected Bargaining Unit benefited, directly or 

indirectly, from the cessation of Employer Contributions; 

(iii) the extent to which the affected Bargaining Unit, or its bargaining 

representative, resisted or attempted to resist, or acquiesced in, the 

cessation of Employer Contributions; 

(iv) the extent to which the affected Bargaining Unit, or any of its members, 

become engaged as employees or independent contractors in the service 

of operations that were or are in whole or in part a successor of the 

operations of the Contributing Employer who incurred the cessation of 

Employer Contributions; and 

(v) the extent of the hardship that might be incurred by members of the 

affected Bargaining Unit by the elimination of Adjustable Benefits. 

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J. BENEFIT ADJUSTMENTS APPLICABLE TO ALL PARTICIPANTS 

(INCLUDING INACTIVE VESTED PARTICIPANTS) WHO HAVE NOT 

SUBMITTED A RETIREMENT APPLICATION ON OR BEFORE JULY 1, 2011 

AND DO NOT HAVE A BENEFIT COMMENCEMENT ON OR BEFORE THAT 

DATE. 

Minimum Retirement Age 57. 

Participants who (i) have not submitted a retirement application on or before July 

1, 2011 and (ii) do not have a benefit commencement date [within the meaning of 

ERISA § 305(i)(10)] on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive retirement 

benefit payments of any type until after achieving age 57. 

Section 3. REHABILITATION PLAN STANDARDS AND OBJECTIVES. 

The Schedules of Contributions and Benefits discussed above have been formulated by 

the Fund’s Board of Trustees as reasonable measures which, under reasonable 

actuarial assumptions, are designed and projected to forestall the possible insolvency of 

the Fund prior to 2023. Projections of insolvency may vary from year to year as actual 

experience may differ from assumptions. 

The Trustees recognize the possibility that actual experience could be less favorable 

than the reasonable assumptions used for the Rehabilitation Plan on an annual basis. 

Consequently, the annual standards for meeting the requirements of the Rehabilitation 

Plan are as follows: 

 Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (as amended 

and updated from time to time) the Fund will forestall its possible insolvency prior

to 2021. 

Section 4. ALTERNATIVES CONSIDERED BY THE TRUSTEES. 

The Board of Trustees considered numerous alternatives [including combinations of 

contribution rate increases (and other updates to the schedules of contribution rates in 

light of the experience of the Fund) and benefit adjustments] that might enable the Fund 

to emerge from Critical Status either by the end of ten year PPA Rehabilitation Period 

(which begins on January 1, 2011 and ends on December 31, 2020), or to forestall 

possible insolvency indefinitely (beyond the date referenced above under the “Standards 

and Objectives” heading). Some of the alternatives considered were determined to be 

unreasonable measures. The various default and alternative schedules considered 

included the following: 

Schedules considered by the Board of Trustees in formulating an initial 2008 

rehabilitation plan that might permit the Fund to emerge by the end of the Rehabilitation 

Period on December 31, 2020: 

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Schedule Benefit Reductions Contribution Rate Increases 

Default Immediate maximum Critical Status benefit cuts 

for all participants to the extent permitted by law 

15% per year until emergence in 

2021 (plus an additional 1.6% 

annual increase for Benefit 

Classes 14 and below) 

Alternative 1 Maintain current benefits 17% per year until emergence in 

2021 

Alternative 2 

On the second anniversary of the new bargaining 

agreement, reduce the future benefit accrual rate 

from 1% of contributions payable at age 62 to 1% 

of contributions at payable at age 65 

16% per year until emergence in 

2021 

In formulating the Fund’s initial rehabilitation plan in 2008, the Board of Trustees 

concluded that utilizing any and all possible measures to emerge from Critical Status by 

the end of the 10-year presumptive Rehabilitation Period described in ERISA section 

305(e)(4), would be unreasonable and would involve considerable risk to the Fund and 

Fund participants. In particular, the Board of Trustees concluded that the continued 

existence of the Fund and the Trustees’ ability to maintain and improve the Fund’s 

funded status in accordance with the terms of the IRS approved amortization extension 

would be jeopardized by any attempt to emerge from critical status by the end of the 

presumptive 10-year Rehabilitation Period. 

As shown above, based on January 1, 2008 valuation data, the emergence by the end of 

the presumptive 10 year Rehabilitation Period would require double-digit annual 

contribution rate increases. For example, the daily contribution rate would generally have 

to grow from $52 to over $300. Therefore, the Trustees concluded in 2008 that annual 

contribution rate increases above the 8%/6%/4% level in the Primary Schedule were not 

reasonable and could trigger mass withdrawals and significant losses to the Fund and 

the participants. 

During the process of updating the rehabilitation plan in 2010, the Trustees concluded 

that in light of current valuation data, the experience of the Fund and projections, the 

option available to the Fund under ERISA Section 305(e)(3)(ii) was to pursue reasonable 

measures to forestall a possible insolvency. The Trustees also concluded during the 

2010 update process that requiring annual contribution increases above the level 

described in the Primary Schedule would not be reasonable and would likely accelerate 

a possible insolvency of the Fund rather than forestall it. 

In recent years, the Trustees have implemented numerous measures to improve the 

Fund’s funding. These have included: 

 Reducing the benefit accrual rate from 2% of contributions to 1% of contributions; 

 Protecting the “and-out” and early retirement benefits while freezing them at their 

year-end 2003 levels; 

 Obtaining agreements from the major bargaining parties to reallocate about $400 

million per year of benefit contributions to the Pension Fund; 

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 Obtaining an amortization extension from the Internal Revenue Service in 2005, and 

seeking a waiver of the conditions of that extension in 2009 in light of anticipated 

investment losses resulting from the 2008 collapse of the financial markets; 

 Requiring as a condition of continued participation in the Fund that new bargaining 

agreements in the last several years include significant annual contribution rate 

increases; and 

 Providing information to Congress and federal agencies with respect to legislative or 

regulatory proposals that appear to assist in addressing the funding challenges 

confronting the Fund. 

The Board of Trustees determined that mandating additional significant benefit cuts 

(beyond those provided in this updated rehabilitation plan), or mandating contribution 

rate increases at levels beyond those required in recent years, would substantially 

accelerate the rate at which employers would withdraw from the Fund, in large part 

because the Union could conclude that it would be in its members’ best interest to agree 

to withdrawals. The Board of Trustees also determined that this acceleration of employer 

withdrawals would, in turn, accelerate the Fund’s insolvency and would be 

counterproductive to the Trustees’ effort to forestall insolvency. 

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EXHIBIT A 

Primary Schedule: Contribution Rate Increases By Bargaining Agreement Year 

(all rate increases are to be compounded annually) 

Calendar Year of 

Contribution 

Rate Increase 

Year of Initial Bargaining Agreement Conforming to Primary Schedule 

2006 & Earlier 2007 2008 2009 & Later 

2006 7% 

2007 7% 8% 

2008 7% 8% 8% 

2009 7% 8% 8% 8% 

2010 7% 8% 8% 8% 

2011 6% 8% 8% 8% 

2012 5% 6% 8% 8% 

2013 4% 4% 6% 8% 

2014 4% 4% 6% 8% 

2015 4% 4% 6% 8% 

2016 4% 4% 4% 6% 

2017 4% 4% 4% 4% 

2018 4% 4% 4% 4% 

2019 4% 4% 4% 4% 

2020 4% 4% 4% 4% 

2021 4% 4% 4% 4% 

2022 4% 4% 4% 4% 

2023 4% 4% 4% 4% 

2024 4% 4% 4% 4% 

2025 4% 4% 4% 4% 

2026 4% 4% 4% 4% 

2027 4% 4% 4% 4% 

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EXHIBIT B 

Schedule for Actuarial Reduction of Age 65 Benefits 

(applicable to Default Schedule and Rehabilitation Plan 

Withdrawal benefit adjustments for Participants who 

(i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement 

date [within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011) 

 Percent of Age 65 Benefit Based on 

 Age Actuarial Equivalence 

 65 100% 

 64 90% 

 63 81% 

 62 74% 

 61 67% 

 60 61% 

 59 55% 

 58 50% 

 57 46% 

 

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APPENDIX M-3. REHABILITATION PLAN (INCLUDING 2011 UPDATE) 

 

 

Section 1. PREAMBLE AND DEFINITIONS. 

An amended Appendix M was added to the Pension Plan effective on and after 

December 31, 2010 in order to update the Rehabilitation Plan in compliance with the 

requirements of the Pension Protection Act of 2006 (“PPA”). Appendix M-2 was added to 

the Pension Plan in order to incorporate effective as of May 17, 2011, the Distressed 

Employer Schedule provisions (Section 2(C) and 2(F) below) into the Rehabilitation 

Plan. 

This Appendix M-3 is added to the Pension Plan effective on and after December 31, 

2011 in order to update the Rehabilitation Plan in compliance with the requirements of 

the PPA. 

The Central States, Southeast and Southwest Areas Pension Fund (the “Fund”) was 

initially certified on March 24, 2008 by its actuary to be in “critical status” (sometimes 

referred to as the “red zone”) under the PPA; the Fund’s actuary has also certified the 

Fund to be in critical status for the 2009 and 2010 plan years. The Fund’s Board of 

Trustees, as the plan sponsor of a “critical status” pension plan, is charged under the 

PPA with developing a “rehabilitation plan” designed to improve the financial condition of 

the Fund in accordance with the standards set forth in the PPA, and with annually 

updating the rehabilitation plan. Although for plan year 2009 the Fund was exempt from 

the update requirement, pursuant to an election under the Worker Retiree and Employer 

Recovery Act of 2008, for subsequent plan years the PPA provisions concerning the 

rehabilitation plan update process are applicable to the Fund. The purpose of this 

updated Rehabilitation Plan is to comply with those PPA provisions. 

Under the PPA, a rehabilitation plan, including annual updates to the plan, must include 

one or more schedules showing revised benefit structures, revised contributions, or both, 

which, if adopted by the parties obligated under agreements participating in the pension 

plan, may reasonably be expected to enable the Fund to emerge from critical status in 

accordance with the rehabilitation plan. The PPA also provides that one of the 

rehabilitation plan schedules of benefits and contributions shall be designated the 

“default” schedule. The default schedule must assume that there are no increases in 

contributions under the plan other than the increases necessary to emerge from critical 

status after future benefit accruals and other benefits have been reduced to the 

maximum extent permitted by law. The PPA also creates certain categories of 

“adjustable benefits” which may be reduced or eliminated dependent upon the outcome 

of bargaining over the rehabilitation plan schedules and dependent on the exercise of 

certain flexibility and discretion conferred upon the Board of Trustees by the PPA. 

Adjustable benefits that may be affected in this manner include post-retirement death 

benefits, early retirement benefits or retirement-type subsidies, and generally any benefit 

that would be payable prior to normal retirement age (age 65 benefits under the Fund’s 

Plan Document – or, as discussed below, a Contribution Based Benefit actuarially 

reduced to be equivalent to an age 65 benefit). As noted, the PPA also requires annual 

updates of the rehabilitation plan. 

Unless otherwise indicated, all capitalized terms herein shall have the definitions and 

meanings assigned to them in the Fund’s Pension Plan Document. 

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Section 2. SCHEDULES OF CONTRIBUTIONS AND BENEFITS. 

With the PPA requirements outlined above in mind, the Fund’s Board of Trustees hereby 

provides the following PPA Schedules to the parties charged with bargaining over 

agreements requiring contributions to the Fund. 

A. PRIMARY SCHEDULE (EXCEPT AS NOTED, PRESERVES ALL CURRENT 

BENEFITS). 

1. Benefits 

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers are in 

compliance with this Primary Schedule, there will be no change in benefit 

formulas, levels or payment options in effect on January 1, 2008, except 

that as provided in Section 2(J) below, Participants who (i) have not 

submitted a retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date [within the meaning of ERISA § 

305(i)(10)] on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57. 

Further, subject to the notice requirements of the PPA and other 

applicable law, any Bargaining Units (and any non-Bargaining Unit 

employee groups participating in the Fund) whose Contributing 

Employers incur a Rehabilitation Plan Withdrawal on or after March 26, 

2008 shall have their Adjustable Benefits listed in Section 2(H) below 

eliminated or reduced to the extent indicated in Section 2(B)(1) below. 

2. Contributions 

Compliance with the Primary Schedule requires annually compounded 

contribution rate increases in accordance with Exhibit A effective 

immediately after the expiration of the Collective Bargaining Agreement 

(or other agreement requiring contributions to the Fund) and each 

agreement anniversary date (or reallocation anniversary, where 

applicable) during the term of the new bargaining agreement to the extent 

indicated in Exhibit A, depending on the year that the new agreement is 

effective. Note that all contribution rate increases are annually 

compounded on the total contribution rate (including any reallocations of 

employee benefit contributions or agreed mid-contract contribution 

increases) immediately prior to the increase. 

The required annual rate increase may be provided through annual 

allocations to pension contributions of general and aggregate employee 

benefit contribution increases that were negotiated at the outset of an 

agreement, but were not specifically allocated to pension contributions 

until subsequent contract years. The Primary Schedule requires 8% per 

year contribution rate increases for the first 5 years, 6% per year 

contribution rate increases for the next 3 years and 4% per year 

contribution rate increases each year thereafter for 2008 agreements 

under the Primary Schedule and comparable rate increases over time for 

all other agreements under the Primary Schedule (see Exhibit A). 

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Provided, however, that absent further amendment to this rehabilitation 

plan, as of June 1, 2011, any Collective Bargaining Agreement requiring 

contributions of (1) $348 per week for each full-time employee with 

respect to Participants covered by the National Master Automobile 

Transporter Agreement, and (2) $342 per week for each full-time 

employee with respect to all other Participants, will be deemed to be in 

compliance with the Primary Schedule without the need for additional 

annual rate increases. 

 B. DEFAULT SCHEDULE. 

1. Benefits 

With regard to Bargaining Units (and any non- Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers agree to 

comply with this Default Schedule [or who become subject to the Default 

Schedule due to a failure to achieve an agreement to accept one of the 

Rehabilitation Plan Schedules within the time frame specified under 

ERISA § 305(e)(3)(C)], the benefit formulas, levels, and payment options 

in effect on January 1, 2008 will remain in effect except for the following, 

upon the effective date that the Default Schedule applies to the 

Bargaining Unit (or to any non-Bargaining Unit employee groups 

participating in the Fund): 

 Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of 

contributions (the Contribution-Based Pension) remains in 

effect, with the modification that the Contribution Based 

Pension monthly benefit payable at age 65 is reduced by 

1⁄2% per month for each month prior to age 65 with a 

minimum retirement age of 57, except that, for Participants 

who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit 

commencement date [within the meaning of ERISA § 

305(i)(10)] on or before July 1, 2011, the Contribution 

Based Pension monthly benefit payable at age 65 shall be 

reduced to an actuarially equivalent benefit in accordance 

with the Schedule attached as Exhibit B with a minimum 

retirement age of 57.

2. Contributions 

Compliance with the Default Schedule consists of annually compounded 

contribution rate increases of 4% effective immediately after the 

expiration of the Collective Bargaining Agreement (or other agreement 

requiring contributions to the Fund) and each anniversary thereof during 

the term of the agreement. 

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3. Effect of agreement to or imposition of Default Schedule. 

(i) If a Contributing Employer agrees to the Default Schedule with 

respect to a particular Bargaining Unit, the Fund will not accept 

any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, 

except as determined by the Board of Trustees in their sole 

discretion.

(ii) If a Contributing Employer becomes subject to the Default 

Schedule by operation of ERISA Section 305(e)(3)(C), because 

the bargaining parties have failed to adopt either of the Schedules 

compliant with this Rehabilitation Plan within 180 days of the 

expiration of their prior Collective Bargaining Agreement, the Fund 

will then accept a Collective Bargaining Agreement that is 

compliant with the Primary Schedule described in this 

Rehabilitation Plan, provided that such new Collective Bargaining 

Agreement provides for Primary Schedule contribution rates that 

are retroactive to the expiration date of the last Collective 

Bargaining Agreement that covered the affected Bargaining Unit. 

C. DISTRESSED EMPLOYER SCHEDULE. 

 1. Benefits 

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers and 

contribution rates have been specifically accepted and approved by the 

Board of Trustees as satisfying the Qualifications for the Distressed 

Employer Schedule (as set forth in Section 2(C)(2) below), the benefit 

formulas, levels, and payment options in effect on January 1, 2008 will 

remain in effect except for the following, upon the effective date that the 

Distressed Employer Schedule applies to the Bargaining Unit (or to any 

non-Bargaining Unit employee group participating in the Fund) that is 

accepted by the Board of Trustees as qualifying under the Distressed 

Employer Schedule: 

 Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of 

contributions (the Contribution-Based Pension) remains in 

effect, with the modification that the Contribution Based 

Pension monthly benefit payable at age 65 is reduced by 

1⁄2% per month for each month prior to age 65 with a 

minimum retirement age of 57, except that, for Participants 

who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) have not achieved a 

Retirement Date on or before July 1, 2011, the 

Contribution Based Pension monthly benefit payable at 

age 65 shall be reduced to an actuarially equivalent benefit 

in accordance with the Schedule attached as Exhibit B with 

a minimum retirement age of 57, and except that any 

Participant who (i) has achieved a minimum age of 55 as 

of the date of the Distressed Employer’s termination of 

participation in the Fund (see Section 2(C)(2) below) and 

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(ii) has accrued a minimum of 25 years credit towards a 

Contributory Credit Pension or an And-Out Pension as of 

that date (see Pension Plan §§ 4.04, 4.05 and 4.06), shall 

be entitled to retain his eligibility for (but not gain further 

credit towards) any such Pension, provided that any such 

Participant has a minimum retirement age of 62.

 2. Contributions and Qualifications for the Distressed Employer 

 Schedule. 

The Board of Trustees may deem a Collective Bargaining Agreement with 

contribution rates not in compliance with either the Primary Schedule or 

the Default Schedule to be in compliance with and subject to the 

Distressed Employer Schedule, if in the Board of Trustees’ sole 

discretion, the Board determines that the Contributing Employer meets 

each of the following qualifications: 

(i) the common stock of the Employer or its parent corporation (or 

other affiliate under 80% or more common control with the 

Employer) is publicly traded and registered pursuant to the 

securities laws of the United States; 

(ii) the Employer has previously incurred a termination of its 

participation in the Fund due to an inability to remain current in its 

Contribution obligations, and the Employer was in terminated 

status immediately prior to executing the Agreement sought to be 

qualified under the Distressed Employer Schedule; 

(iii) during the last ten years in which the Employer participated in the 

Fund prior to its termination, it had paid contributions to the Fund 

on behalf of at least 1,000 full-time employees per month (or had, 

including part-time employees, paid contributions on behalf of the 

equivalent of at least 1,000 full-time employees per month for the 

specified ten year period); 

(iv) the Employer submits to a review of its financial condition and 

operations by the Fund’s Staff and outside expert and consultants, 

and agrees to reimburse the Fund for all fees and expenses 

incurred by the Fund in this review (including, but not limited to, 

reimbursement to the Fund for the time devoted by the Fund’s 

Staff to any such review, with this reimbursement to be made at 

market rates for comparable services performed by Fund’s Staff); 

(v) on the basis of this financial and operational review, it appears 

that the Employer is not able to contribute to the Fund at a higher 

rate than is indicated in the Collective Bargaining Agreement 

proposed for acceptance under the Distressed Employer 

Schedule, and that acceptance of the proposed Agreement is in 

the best interest of the Fund under all the circumstances and 

advances the goals of this Rehabilitation Plan; and 

(vi) the Employer provides the Fund with first lien collateral in any and 

all unencumbered assets to the fullest extent it is able in order to 

fully secure (i) any delinquent or deferred Contribution obligations 

owed to the Fund, (ii) the Employer’s obligation to make current 

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and future pension contributions to the Fund, and (iii) any future 

withdrawal liability potentially incurred by the Employer (with the 

amount of such potential withdrawal liability to be determined 

based on estimates to be provided by the Fund). 

3. Effect of agreement to or imposition of the Distressed Employer 

Schedule. 

If a Contributing Employer becomes subject to the Distressed Employer 

Schedule with respect to a particular Bargaining Unit, the Fund will not 

accept any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, except as 

determined by the Board of Trustees in their sole discretion.

D. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER 

 INCURRING A REHABILITATION PLAN WITHDRAWAL. 

Subject to the provisos indicated in the final clauses of this Subsection D, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to Participants whose benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] with the Fund is on or after April 8, 2008, 

and: 

(1) whose last Hour of Service prior to January 1, 2008 was earned while 

employed by United Parcel Service, Inc. (“UPS”), or with any trades or 

businesses at any time under common control with UPS, within the 

meaning of ERISA § 4001(b)(1); or

(2) who (i) has earned or earns an Hour of Service while employed with a 

Contributing Employer (or any predecessor or successor entity) that at 

any time on or after March 26, 2008 incurs a Rehabilitation Plan 

Withdrawal (see Section 2.I below), and (ii) whose last year of 

Contributory Service Credit prior to the Rehabilitation Plan Withdrawal 

was earned while a member of a Bargaining Unit (or any predecessor or 

successor Bargaining Unit) ultimately incurring such Withdrawal. 

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to a Rehabilitation Plan Withdrawal 

pursuant Section 2(D)(2) above, who has a benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] one year or more prior to the earlier of: (i) the 

date of such Rehabilitation Plan Withdrawal or (ii) the date of the expiration of the 

last Collective Bargaining Agreement requiring Employer Contributions under the 

Primary Schedule prior to such Withdrawal, shall not be subject to the elimination 

of Adjustable Benefits provided that the Pensioner does not engage in Restricted 

Reemployment at any time subsequent to the benefit commencement date. 

Proviso 2: And provided further that in the event of a Rehabilitation Plan 

Withdrawal resulting from an administrative termination of a Contributing 

Employer as referenced in Section 2(I)(3)(ii) below, the Board of Trustees shall 

have full discretionary authority (A) to decline to apply the elimination of 

Adjustable Benefits to Participants otherwise affected by a Rehabilitation Plan 

Withdrawal of this type who have submitted a pension application naming a 

Retirement Date to the Fund on or before the date selected by the Trustees as 

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the effective date of the administrative termination which ended the Employer’s 

obligation to contribute to the Pension Fund, and (B) to decline to apply the 

requirement of Section 2(G) below that a Participant incurring a benefit 

adjustment due to Rehabilitation Plan Withdrawal must cease employment with 

and the performance of services for the withdrawn Employer within 60 days of 

the Rehabilitation Plan Withdrawal in order to eventually qualify for a restoration 

of benefits; in exercising their discretionary authority under this Proviso 2, the 

Board of Trustees shall consider, weigh and balance the following factors: 

(i) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination were aware of, participated in or 

controlled, or could have controlled or prevented, through 

bargaining, grievance procedures, NLRB proceedings, litigation or 

other means, the circumstances that led to the administrative 

termination of the Employer; 

(ii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination benefited, directly or indirectly from the 

cessation of Employer Contributions or from the circumstances 

that led to the administrative termination of the Employer; 

(iii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination resisted or attempted to alter, or 

acquiesced in, the circumstances that led to the administrative 

termination of the Employer; 

(iv) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination have become engaged as employees 

or independent contractors in the service of operations that were 

or are in whole or in part a successor of the operations of the 

Employer that has undergone the administrative termination; and 

(v) the extent of the hardship that might be incurred by any actively 

employed members of the affected Bargaining Unit or by any 

members who submitted a retirement application prior to the 

effective date of the administrative termination due to the 

elimination of Adjustable Benefits. 

Proviso 3: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to a Rehabilitation Plan 

Withdrawal pursuant to Subsection D(2) above, shall not incur a loss of 

Adjustable Benefits with respect to any Surviving Spouse Benefits for which such 

spouse has a benefit commencement date [within the meaning of ERISA Section 

305(i)(10)] prior to the date of the Rehabilitation Plan Withdrawal. 

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E. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO BECOMES 

SUBJECT TO THE DEFAULT SCHEDULE. 

Subject to the provisos indicated in the final clauses of this Subsection E, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Section B(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and: 

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Default Schedule 

described herein; and 

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Default Schedule was earned while a member of 

a Bargaining Unit (or any predecessor or successor Bargaining Unit) that 

ultimately became subject to the Default Schedule. 

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Default Schedule pursuant to this Subsection E, who has a benefit 

commencement date [within the meaning of ERISA § 305(i)(10)] one year or 

more prior to the Contributing Employer becoming subject to the Default 

Schedule, shall not be subject to the elimination of Adjustable Benefits provided 

that the Pensioner does not engage in Restricted Reemployment at any time 

subsequent to the benefit commencement date. 

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to his Contributing 

Employer becoming subject to the Default Schedule pursuant this Subsection E, 

shall not incur a loss of Adjustable Benefits with respect to any Surviving Spouse 

Benefits for which such spouse has a benefit commencement date [within the 

meaning of ERISA Section 305(i)(10)] prior to the date on which the Contributing 

Employer became subject to the Default Schedule. 

F. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO BECOMES 

SUBJECT TO THE DISTRESSED EMPLOYER SCHEDULE. 

Subject to the provisos indicated in the final clauses of this Subsection F, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (with the exception indicated in Section 2(C)(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and: 

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Distressed Employer 

Schedule described herein; and 

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Distressed Employer Schedule was earned while 

a member of a Bargaining Unit (or any predecessor or successor 

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Bargaining Unit) that ultimately became subject to the Distressed 

Employer Schedule. 

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

reduction in Adjustable Benefits indicated in the Distressed Employer Schedule, 

due to his Contributing Employer becoming subject to that Schedule pursuant to 

this Subsection F, who has a benefit commencement date [within the meaning of 

ERISA Section 305(i)(10)] one year or more prior to the Contributing Employer 

becoming subject to the Distressed Employer Schedule, shall not be subject to 

the reduction of Adjustable Benefits otherwise mandated by the Distressed 

Employer Schedule provided that the Pensioner does not engage in Restricted 

Reemployment at any time subsequent to the benefit commencement date, and 

provided further that with respect to Bargaining Units that become subject to the 

Distressed Employer Schedule on or prior to June 1, 2011, no Pensioners with 

Retirement Dates prior to September 24, 2010 shall be subject to such 

Distressed Employer Schedule benefit reduction. 

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the reduction of Adjustable Benefits, due to his Contributing Employer 

becoming subject to the Distressed Employer Schedule pursuant to this 

Subsection F, shall not incur a loss of Adjustable Benefits with respect to any 

Surviving Spouse Benefits for which such surviving spouse has a benefit 

commencement date [within the meaning of ERISA Section 305(i)(10)] prior to 

the date on which the Contributing Employer became subject to the Distressed 

Employer Schedule, and provided further in any event that with respect to 

Bargaining Units that become subject to the Distressed Employer Schedule on or 

prior to June 1, 2011, no spouse shall be subject to such Distressed Employer 

Schedule benefit reduction if the Participant’s death occurred prior to September 

24, 2010. 

G. RESTORATION OF ADJUSTED BENEFITS. 

Any Participant who incurs a benefit adjustment or elimination under the terms of 

Sections 2(A), 2(B), 2(C), 2(D), 2(E) or 2(F) above may have those affected 

benefits restored if, subsequent to the event causing the benefit adjustment, the 

Participant: 

(1) in the case of benefit adjustment caused by a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), permanently ceases all employment 

with, and performance of services in any capacity for, the Contributing 

Employer (and any successors or trades or businesses under common 

control with such Employer within the meaning of ERISA § 4001(b)(1)) 

within 60 days of the occurrence of such Rehabilitation Plan Withdrawal; 

and 

(2) in any case, subsequently earns one year of Contributory Service Credit 

with a Contributing Employer while that Employer is in compliance with 

the Primary Schedule described herein. 

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 H. ADJUSTABLE BENEFITS.

As used herein, Adjustable Benefits shall mean and include: 

(1) Any right to receive a Retirement Pension Benefit (Pension Plan, Article 

IV) prior to age 65 [including without limitation any pre-age 65 benefits 

that would otherwise be payable as (i) a Twenty Year Service Pension 

(Pension Plan § 4.01); (ii) a Contributory Credit Pension (Pension Plan § 

4.04); (iii) a Vested Pension (Pension Plan § 4.07); (iv) a Deferred 

Pension (Pension Plan § 4.08); or (v) a Twenty-Year Deferred Pension 

(Pension Plan § 4.09)]. 

(2) Early retirement benefit or retirement-type subsidies [including without 

limitation (i) an Early Retirement Pension (Pension Plan Section 4.02); (ii)

a 25-And-Out Pension (Pension Plan Section 4.05); or a 30-And-Out 

Pension (Pension Plan Section 4.06)]. 

(3) All Disability Benefits not yet in pay status (Pension Plan, Article V). 

(4) Before Retirement Death Benefits (Pension Plan, Article VI) other than 

the 50% surviving spouse benefit. 

(5) Post-retirement death benefits that are not part of the annuity form of 

payment. 

(6) All Partial Pensions (Pension Plan, Appendix D), to the extent any such 

pension is tied to one or more of the Adjustable Benefits listed above. 

(7) All Contribution-Based Pensions (Pension Plan § 4.03) except that, 

assuming the Participant meets all other requirements for receiving a 

Contribution-Based Pension, the Contribution-Based Pension is payable 

at age 65 reduced by 1⁄2% per month for each month prior to age 65 at the 

time of retirement with a minimum retirement age of 57. Such minimum 

retirement age shall not apply if the Participant retired prior to age 57 

before the Participant’s Adjustable Benefits were eliminated or reduced. 

In such circumstance, the Participant shall be entitled to receive the 

Contribution-Based Pension reduced by 1⁄2% per month for each month 

prior to age 65 at the time of retirement. Provided, however, for 

Participants who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011, the 

reductions in the Contribution-Based Pensions payable at age 65 

referenced in this subparagraph (7) shall be based on actuarial 

equivalence in accordance with the Schedule attached as Exhibit B 

hereto. 

(8) To the extent not already included in paragraphs (1) – (7) above, the 

following categories of benefits listed and defined as “adjustable benefits” 

under ERISA § 305(e)(8)(iv): 

(i) benefits, rights, and features under the plan, including postretirement death benefits, 60-month guarantees, disability benefits 

not yet in pay status, and similar benefits, 

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(ii) any early retirement benefit or retirement-type subsidy (within the 

meaning of ERISA Section 204(g)(2)(A)) and any benefit payment 

option (other than the qualified joint and survivor annuity), and 

(iii) benefit increases that would not be eligible for a guarantee under 

ERISA Section 4022A on the first day of the Fund’s initial critical 

year under the PPA because the increases were adopted (or, if 

later, took effect) less than 60 months before such first day. 

Provided, however, that except as provided in subparagraph (8)(iii) above, nothing in this 

paragraph shall be construed to reduce the level of a Participant’s accrued benefit 

payable at normal retirement. 

I. REHABILITATION PLAN WITHDRAWAL. 

Subject to the discretionary authority of the Board of Trustees indicated in the 

final clause of this Subsection I, a “Rehabilitation Plan Withdrawal” occurs on the 

date a Contributing Employer (a) is no longer required to make Employer 

Contributions to the Pension Fund under one or more of its Collective Bargaining 

Agreements, or (b) undergoes a significant reduction in its obligation to make 

Employer Contributions resulting from outsourcing or subcontracting work 

covered by the applicable Collective Bargaining Agreement(s), as a result of 

actions by members of a Bargaining Unit (or its representatives) or the 

Contributing Employer, which actions include, but are not limited to the following: 

(1) decertification or other removal of the Union as a bargaining agent; 

(2) ratification or other acceptance of a Collective Bargaining Agreement 

which permits withdrawal of the Bargaining Unit, in whole or in part, from 

the Pension Plan; 

(3) administrative termination of the Contributing Employer with respect to 

any or all of its Collective Bargaining Agreements due to: (i) a violation of 

the Fund’s rules with respect to the terms of a Collective Bargaining 

Agreement [including, without limitation, a provision providing for a split 

bargaining unit]; or (ii) a violation of any other Fund rule or policy 

[including, without limitation, practices or arrangements that result in 

adverse selection]; 

(4) any transaction or other event [including without limitation, a merger, 

consolidation, division, asset sale (other than an asset sale complying 

with ERISA § 4204), liquidation, dissolution, joint venture, outsourcing, 

subcontracting] whereby all or a portion of the operations for which the 

Contributing Employer has an obligation to contribute are continued 

(whether by the Contributing Employer or by another party) in whole or in 

part without maintaining the obligation to contribute to the Fund under the 

same or better terms (including, for example, as to number of participants 

and contribution rate) as existed before the transaction; 

Provided, however, that with respect to the circumstances described in 

Subparagraphs. (3)(ii) or (4) above, the Board of Trustees shall have full 

discretionary authority to consider, weigh and balance the following factors in 

determining whether a Rehabilitation Plan Withdrawal has occurred: 

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(i) the extent to which the affected Bargaining Unit or its bargaining 

representative participated in or controlled, or could have controlled or 

prevented, through bargaining, grievance procedures, NLRB 

proceedings, litigation or other means, the cessation of Employer 

Contributions; 

(ii) the extent to which the affected Bargaining Unit benefited, directly or 

indirectly, from the cessation of Employer Contributions; 

(iii) the extent to which the affected Bargaining Unit, or its bargaining 

representative, resisted or attempted to resist, or acquiesced in, the 

cessation of Employer Contributions; 

(iv) the extent to which the affected Bargaining Unit, or any of its members, 

become engaged as employees or independent contractors in the service 

of operations that were or are in whole or in part a successor of the 

operations of the Contributing Employer who incurred the cessation of 

Employer Contributions; and 

(v) the extent of the hardship that might be incurred by members of the 

affected Bargaining Unit by the elimination of Adjustable Benefits. 

J. BENEFIT ADJUSTMENTS APPLICABLE TO ALL 

PARTICIPANTS (INCLUDING INACTIVE VESTED 

 PARTICIPANTS) WHO HAVE NOT SUBMITTED A 

RETIREMENT APPLICATION ON OR BEFORE JULY 1, 2011 

AND DO NOT HAVE A BENEFIT COMMENCEMENT ON OR 

BEFORE THAT DATE. 

Minimum Retirement Age 57. 

Participants who (i) have not submitted a retirement application on or before July 

1, 2011 and (ii) do not have a benefit commencement date [within the meaning of 

ERISA § 305(i)(10)] on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive retirement 

benefit payments of any type until after achieving age 57. 

Section 3. REHABILITATION PLAN STANDARDS AND OBJECTIVES. 

The Schedules of Contributions and Benefits discussed above have been formulated by 

the Fund’s Board of Trustees as reasonable measures which, under reasonable 

actuarial assumptions, are designed and projected to forestall the possible insolvency of 

the Fund prior to 2023. Projections of insolvency may vary from year to year as actual 

experience may differ from assumptions. 

The Trustees recognize the possibility that actual experience could be less favorable 

than the reasonable assumptions used for the Rehabilitation Plan on an annual basis. 

Consequently, the annual standards for meeting the requirements of the Rehabilitation 

Plan are as follows: 

 Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (as amended 

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and updated from time to time) the Fund will forestall its possible insolvency prior

to 2021. 

Section 4. ALTERNATIVES CONSIDERED BY THE TRUSTEES. 

The Board of Trustees considered numerous alternatives [including combinations of 

contribution rate increases (and other updates to the schedules of contribution rates in 

light of the experience of the Fund) and benefit adjustments] that might enable the Fund 

to emerge from Critical Status either by the end of ten year PPA Rehabilitation Period 

(which began on January 1, 2011 and ends on December 31, 2020), or to forestall 

possible insolvency indefinitely (beyond the date referenced above under the “Standards 

and Objectives” heading). Some of the alternatives considered were determined to be 

unreasonable measures. The various default and alternative schedules considered 

included the following: 

Schedules considered by the Board of Trustees in formulating an initial 2008 

rehabilitation plan that might permit the Fund to emerge by the end of the Rehabilitation 

Period on December 31, 2020: 

Schedule Benefit Reductions Contribution Rate Increases 

Default Immediate maximum Critical Status benefit cuts 

for all participants to the extent permitted by law 15% per year until emergence 

in 2021 (plus an additional 1.6% 

annual increase for Benefit 

Classes 14 and below) 

Alternative 1 Maintain current benefits 17% per year until emergence in 

2021 

Alternative 2 On the second anniversary of the new bargaining 

agreement, reduce the future benefit accrual rate 

from 1% of contributions payable at age 62 to 1% 

of contributions at payable at age 65 

16% per year until emergence in 

2021 

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In formulating the Fund’s initial rehabilitation plan in 2008, the Board of Trustees 

concluded that utilizing any and all possible measures to emerge from Critical Status by 

the end of the 10-year presumptive Rehabilitation Period described in ERISA Section 

305(e)(4), would be unreasonable and would involve considerable risk to the Fund and 

Fund participants. In particular, the Board of Trustees concluded that the continued 

existence of the Fund and the Trustees’ ability to maintain and improve the Fund’s 

funded status in accordance with the terms of the IRS approved amortization extension 

would be jeopardized by any attempt to emerge from critical status by the end of the 

presumptive 10-year Rehabilitation Period. 

As shown above, based on January 1, 2008 valuation data, the emergence by the end of 

the presumptive 10 year Rehabilitation Period would require double-digit annual 

contribution rate increases. For example, the daily contribution rate would generally have 

to grow from $52 to over $300. Therefore, the Trustees concluded in 2008 that annual 

contribution rate increases above the 8%/6%/4% level in the Primary Schedule were not 

reasonable and could trigger mass withdrawals and significant losses to the Fund and 

the participants. 

During the process of updating the rehabilitation plan in 2010, and again in 2011, the 

Trustees concluded that in light of current valuation data, the experience of the Fund and 

projections, the option available to the Fund under ERISA Section 305(e)(3)(ii) was to 

pursue reasonable measures to forestall a possible insolvency. The Trustees also 

concluded during the 2010 and 2011 update process that requiring annual contribution 

increases above the level described in the Primary Schedule would not be reasonable 

and would likely accelerate a possible insolvency of the Fund rather than forestall it. 

In recent years, prior to Plan/calendar year 2011, the Trustees have implemented 

numerous measures to improve the Fund’s funding. These have included: 

 Reducing the benefit accrual rate from 2% of contributions to 1% of contributions; 

 Protecting the “and-out” and early retirement benefits while freezing them at their 

year-end 2003 levels; 

 Obtaining agreements from the major bargaining parties to reallocate about $400 

million per year of benefit contributions to the Pension Fund; 

 Obtaining an amortization extension from the Internal Revenue Service in 2005, and 

seeking a waiver of the conditions of that extension in 2009 in light of anticipated 

investment losses resulting from the 2008 collapse of the financial markets; 

 Requiring as a condition of continued participation in the Fund that new bargaining 

agreements in the last several years include significant annual contribution rate 

increases; and 

 Providing information to Congress and federal agencies with respect to legislative or 

regulatory proposals that appear to assist in addressing the funding challenges 

confronting the Fund. 

And specifically during the Plan/calendar year 2011, the Trustees have, in addition to 

continuing with the implementation of the measures listed above, implemented the 

following measures to improve the Fund’s funding: 

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 Approved a Distressed Employer Schedule as part of the Fund’s Rehabilitation 

Plan. Pursuant to this Schedule, YRC, Inc. and its affiliate USF Holland, Inc., two 

distressed (but historically significant) Contributing Employers whose 

participation in the Fund the Trustees had been terminated by the Board of 

Trustees in July 2009 due to chronic contribution delinquencies, were permitted 

to resume Contributions at a rate lower than would have been permitted under 

the pre-2011 Rehabilitation Plan Schedules. The Trustees determined that this 

Contribution rate was the highest these Employers could pay without unduly 

risking their insolvency and dissolution. Therefore, the Trustees permitted these 

Employers to resume contributions in June 2011 at these lower rates under a 

newly approved Distressed Employer Schedule; this Schedule significantly 

adjusted the benefits of the affected Bargaining Unit members, and helped 

assure that despite the lower Contribution rates, the continued participation of 

these Employers would improve the Fund’s funding. 

 Adopted a new withdrawal liability method, and obtained approval of that method 

by the Pension Benefit Guaranty Corporation, under which new Contributing 

Employers, and existing Contributing Employers who satisfy their withdrawal 

liability under the Fund’s historic (pre-2011) withdrawal liability method (i.e., the 

“modified presumptive method”), will have any future withdrawal liability 

determined under the “direct attribution” method. Under direct attribution method, 

the Trustees believe that a Contributing Employer’s potential exposure to future 

withdrawal is virtually eliminated. The Trustees believe that this new “hybrid” 

method will be attractive to some Contributing Employers who wish to continue to 

participate in the Fund, but may be concerned about the potential for future 

growth of their estimated withdrawal liability as calculated under the Fund’s prior 

(pre-2011) withdrawal liability method. This, in turn, will tend to improve the 

Fund’s funding position as Employers who might otherwise withdraw from the 

Fund are encouraged to continue to participate. 

The Board of Trustees determined that mandating additional significant benefit cuts 

(beyond those provided in this updated rehabilitation plan), or mandating contribution 

rate increases at levels beyond those required in recent years, would substantially 

accelerate the rate at which employers would withdraw from the Fund, in large part 

because the Union could conclude that it would be in its members’ best interest to agree 

to withdrawals. The Board of Trustees also determined that this acceleration of employer 

withdrawals would, in turn, accelerate the Fund’s insolvency and would be 

counterproductive to the Trustees’ effort to forestall insolvency. 

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EXHIBIT A 

Primary Schedule: Contribution Rate Increases By Bargaining Agreement Year 

(all rate increases are to be compounded annually) 

Calendar Year of 

Contribution 

Rate Increase 

Year of Initial Bargaining Agreement Conforming to Primary Schedule 

2006 & 

Earlier 2007 2008 2009 2010 2011 2012 

2006 7% 

2007 7% 8% 

2008 7% 8% 8% 

2009 7% 8% 8% 8% 

2010 7% 8% 8% 8% 8% 

2011 6% 8% 8% 8% 8% 8% 

2012 5% 6% 8% 8% 8% 8% 8% 

2013 4% 4% 6% 8% 8% 8% 8% 

2014 4% 4% 6% 8% 8% 8% 8% 

2015 4% 4% 6% 8% 8% 8% 8% 

2016 4% 4% 4% 6% 8% 8% 8% 

2017 4% 4% 4% 4% 6% 8% 8% 

2018 4% 4% 4% 4% 4% 6% 8% 

2019 4% 4% 4% 4% 4% 4% 6% 

2020 4% 4% 4% 4% 4% 4% 4% 

2021 4% 4% 4% 4% 4% 4% 4% 

2022 4% 4% 4% 4% 4% 4% 4% 

2023 4% 4% 4% 4% 4% 4% 4% 

2024 4% 4% 4% 4% 4% 4% 4% 

2025 4% 4% 4% 4% 4% 4% 4% 

2026 4% 4% 4% 4% 4% 4% 4% 

2027 4% 4% 4% 4% 4% 4% 4% 

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EXHIBIT B 

Schedule for Actuarial Reduction of Age 65 Benefits 

(applicable to Default Schedule and Rehabilitation Plan 

Withdrawal benefit adjustments for Participants who 

(i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement 

date [within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011) 

 Percent of Age 65 Benefit Based on 

 Age Actuarial Equivalence 

 65 100% 

 64 90% 

 63 81% 

 62 74% 

 61 67% 

 60 61% 

 59 55% 

 58 50% 

 57 46% 

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APPENDIX M-4. REHABILITATION PLAN (INCLUDING 2012 UPDATE) 

Section 1. PREAMBLE AND DEFINITIONS. 

 Appendix M comprising the Rehabilitation Plan was added to the Pension Plan effective 

on and after March 26, 2008, and has been amended from time to time since then. 

 This Appendix M-4 is added to the Pension Plan effective on and after December 31, 

2012 in order to update the Rehabilitation Plan in compliance with the requirements of 

the Pension Protection Act of 2006 (“PPA”). 

 The Central States, Southeast and Southwest Areas Pension Fund (the “Fund”) was 

initially certified on March 24, 2008 by its actuary to be in “critical status” (sometimes 

referred to as the “red zone”) under the PPA: the Fund’s actuary has also certified the 

Fund to be in critical status in March of each subsequent year through March 2012. The 

Fund’s Board of Trustees, as the plan sponsor of a “critical status” pension plan, is 

charged under the PPA with developing a “rehabilitation plan” designed to improve the 

financial condition of the Fund in accordance with the standards set forth in the PPA, 

and with annually updating the rehabilitation plan. Although for plan year 2009 the Fund 

was exempt from the update requirement, pursuant to an election under the Worker 

Retiree and Employer Recovery Act of 2008, for subsequent plan years the PPA 

provisions concerning the rehabilitation plan update process are applicable to the Fund. 

The purpose of this updated Rehabilitation Plan is to comply with those PPA provisions. 

 Under the PPA, a rehabilitation plan, including annual updates to the plan, must include 

one or more schedules showing revised benefit structures, revised contributions, or both, 

which, if adopted by the parties obligated under agreements participating in the pension 

plan, may reasonably be expected to enable the Fund to emerge from critical status in 

accordance with the rehabilitation plan. The PPA also provides that one of the 

rehabilitation plan schedules of benefits and contributions shall be designated the 

“default” schedule. The default schedule must assume that there are no increases in 

contributions under the plan other than the increases necessary to emerge from critical 

status after future benefit accruals and other benefits have been reduced to the 

maximum extent permitted by law. The PPA also creates certain categories of 

“adjustable benefits” which may be reduced or eliminated dependent upon the outcome 

of bargaining over the rehabilitation plan schedules and dependent on the exercise of 

certain flexibility and discretion conferred upon the Board of Trustees by the PPA 

Adjustable benefits that may be affected in this manner include post-retirement death 

benefits, early retirement benefits or retirement-type subsidies, and generally any benefit 

that would be payable prior to normal retirement age (age 65 benefits under the Fund’s 

Plan Document - or, as discussed below, a Contribution Based Benefit actuarially 

reduced to be equivalent to an age 65 benefit). As noted, the PPA also requires annual 

updates of the rehabilitation plan. 

 Unless otherwise indicated, all capitalized terms herein shall have the definitions and 

meanings assigned to them in the Fund’s Pension Plan Document. 

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Section 2. SCHEDULES OF CONTRIBUTIONS AND BENEFITS. 

 With the PPA requirements outlined above in mind, the Fund’s Board of Trustees 

hereby provides the following PPA Schedules to the parties charged with bargaining 

over agreements requiring contributions to the Fund.

A. PRIMARY SCHEDULE (EXCEPT AS NOTED, PRESERVES 

ALL CURRENT BENEFITS).

1. Benefits

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers are in 

compliance with this Primary Schedule, there will be no change in benefit 

formulas, levels or payment options in effect on January 1, 2008, except 

that as provided in Section 2(J) below, Participants who (i) have not 

submitted a retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date (within the meaning of ERISA § 

305(i)(10)) on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57.

Further, subject to the notice requirements of the PPA and other 

applicable law, any Bargaining Units (and any non-Bargaining Unit 

employee groups participating in the Fund) whose Contributing 

Employers incur a Rehabilitation Plan Withdrawal on or after March 26, 

2008 shall have their Adjustable Benefits listed in Section 2(H) below 

eliminated or reduced to the extent indicated in Section 2(B)(1) below.

2. Contributions

Compliance with the Primary Schedule requires annually compounded 

contribution rate increases in accordance with Exhibit A effective 

immediately after the expiration of the Collective Bargaining Agreement 

(or other agreement requiring contributions to the Fund) and each 

agreement anniversary date (or reallocation anniversary, where 

applicable) during the term of the new bargaining agreement to the 

extent indicated in Exhibit A, depending on the year that the new 

agreement is effective. Note that all contribution rate increases are 

annually compounded on the total contribution rate (including any 

reallocations of employee benefit contributions or agreed mid-contract 

contribution increases) immediately prior to the increase.

The required annual rate increase may be provided through annual 

allocations to pension contributions of general and aggregate employee 

benefit contribution increases that were negotiated at the outset of an 

agreement, but were not specifically allocated to pension contributions 

until subsequent contract years. The Primary Schedule requires 8% per 

year contribution rate increases for the first 5 years, 6% per year 

contribution rate increases for the next 3 years and 4% per year 

contribution rate increases each year thereafter for 2008 agreements 

under the Primary Schedule and comparable rate increases over time for 

all other agreements under the Primary Schedule (see Exhibit A).

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Provided, however, that absent further amendment to this rehabilitation 

plan, as of June 1, 2011, any Collective Bargaining Agreement requiring 

contributions of (1) $348 per week for each full-time employee with 

respect to Participants covered by the National Master Automobile 

Transporter Agreement, and (2) $342 per week for each full-time 

employee with respect to all other Participants, will be deemed to be in 

compliance with the Primary Schedule without the need for additional 

annual rate increases. 

Provided further that any Employer that qualifies as a New Employer 

under § 2.2(b) of Appendix E of the Pension Plan will be deemed, as of 

the date it qualifies as a New Employer, to be in compliance with the 

Primary Schedule without the need for additional contribution rate 

increases. 

B. DEFAULT SCHEDULE.

1. Benefits

With regard to Bargaining Units (and any non- Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers agree to 

comply with this Default Schedule [or who become subject to the Default 

Schedule due to a failure to achieve an agreement to accept one of the 

Rehabilitation Plan Schedules within the time frame specified under 

ERISA § 305(e)(3)(C)], the benefit formulas, levels, and payment options 

in effect on January 1, 2008 will remain in effect except for the following, 

upon the effective date that the Default Schedule applies to the 

Bargaining Unit (or to any non-Bargaining Unit employee groups 

participating in the Fund):

• Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of contributions 

(the Contribution-Based Pension) remains in effect, with the 

modification that the Contribution Based Pension monthly 

benefit payable at age 65 is reduced by 1/2% per month for 

each month prior to age 65 with a minimum retirement age of 

57, except that, for Participants who (i) have not submitted a 

retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date [within the meaning 

of ERISA § 305(i)(10)] on or before July 1, 2011, the 

Contribution Based Pension monthly benefit payable at age 

65 shall be reduced to an actuarially equivalent benefit in 

accordance with the Schedule attached as Exhibit B with a 

minimum retirement age of 57.

2. Contributions

 Compliance with the Default Schedule consists of annually compounded 

contribution rate increases of 4% effective immediately after the 

expiration of the Collective Bargaining Agreement (or other agreement 

requiring contributions to the Fund) and each anniversary thereof during 

the term of the agreement. 

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3. Effect of agreement to or imposition of Default Schedule.

(i) If a Contributing Employer agrees to the Default Schedule with 

respect to a particular Bargaining Unit, the Fund will not accept 

any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, 

except as determined by the Board of Trustees in their sole 

discretion.

(ii) If a Contributing Employer becomes subject to the Default 

Schedule by operation of ERISA Section 305(e)(3)(C), because 

the bargaining parties have failed to adopt either of the 

Schedules compliant with this Rehabilitation Plan within 180 days 

of the expiration of their prior Collective Bargaining Agreement, 

the Fund will then accept a Collective Bargaining Agreement that 

is compliant with the Primary Schedule described in this 

Rehabilitation Plan, provided that such new Collective Bargaining 

Agreement provides for Primary Schedule contribution rates that 

are retroactive to the expiration date of the last Collective 

Bargaining Agreement that covered the affected Bargaining Unit.

C. DISTRESSED EMPLOYER SCHEDULE.

1. Benefits

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers and 

contribution rates have been specifically accepted and approved by the 

Board of Trustees as satisfying the Qualifications for the Distressed 

Employer Schedule (as set forth in Section 2(C)(2) below), the benefit 

formulas, levels, and payment options in effect on January 1, 2008 will 

remain in effect except for the following, upon the effective date that the 

Distressed Employer Schedule applies to the Bargaining Unit (or to any 

non-Bargaining Unit employee group participating in the Fund) that is 

accepted by the Board of Trustees as qualifying under the Distressed 

Employer Schedule:

• Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of contributions 

(the Contribution-Based Pension) remains in effect, with the 

modification that the Contribution Based Pension monthly 

benefit payable at age 65 is reduced by 1⁄2% per month for 

each month prior to age 65 with a minimum retirement age of 

57, except that, for Participants who (i) have not submitted a 

retirement application on or before July 1, 2011 and (ii) have 

not achieved a Retirement Date on or before July 1, 2011, 

the Contribution Based Pension monthly benefit payable at 

age 65 shall be reduced to an actuarially equivalent benefit in 

accordance with the Schedule attached as Exhibit B with a 

minimum retirement age of 57, and except that any 

Participant who (i) has achieved a minimum age of 55 as of 

the date of the Distressed Employer’s termination of 

participation in the Fund (see Section 2(C)(2) below) and (ii) 

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has accrued a minimum of 25 years credit towards a 

Contributory Credit Pension or an And-Out Pension as of that 

date (see Pension Plan §§ 4.04, 4.05 and 4.06), shall be 

entitled to retain his eligibility for (but not gain further credit 

towards) any such Pension, provided that any such 

Participant has a minimum retirement age of 62.

2. Contributions and Qualifications for the Distressed 

Employer Schedule.

The Board of Trustees may deem a Collective Bargaining Agreement 

with contribution rates not in compliance with either the Primary 

Schedule or the Default Schedule to be in compliance with and subject 

to the Distressed Employer Schedule, if in the Board of Trustees’ sole 

discretion, the Board determines that the Contributing Employer meets 

each of the following qualifications:

(i) the common stock of the Employer or its parent corporation (or 

other affiliate under 80% or more common control with the 

Employer) is publicly traded and registered pursuant to the 

securities laws of the United States; 

(ii) the Employer has previously incurred a termination of its 

participation in the Fund due to an inability to remain current in 

its Contribution obligations, and the Employer was in terminated 

status immediately prior to executing the Agreement sought to 

be qualified under the Distressed Employer Schedule; 

(iii) during the last ten years in which the Employer participated in 

the Fund prior to its termination, it had paid contributions to the 

Fund on behalf of at least 1,000 full-time employees per month 

(or had, including part-time employees, paid contributions on 

behalf of the equivalent of at least 1,000 full-time employees 

per month for the specified ten year period); 

(iv) the Employer submits to a review of its financial condition and 

operations by the Fund’s Staff and outside expert and 

consultants, and agrees to reimburse the Fund for all fees and 

expenses incurred by the Fund in this review (including, but not 

limited to, reimbursement to the Fund for the time devoted by the 

Fund’s Staff to any such review, with this reimbursement to be 

made at market rates for comparable services performed by 

Fund’s Staff);

(v) on the basis of this financial and operational review, it appears 

that the Employer is not able to contribute to the Fund at a higher 

rate than is indicated in the Collective Bargaining Agreement 

proposed for acceptance under the Distressed Employer 

Schedule, and that acceptance of the proposed Agreement is in 

the best interest of the Fund under all the circumstances and 

advances the goals of this Rehabilitation Plan; and

(vi) the Employer provides the Fund with first lien collateral in any 

and all unencumbered assets to the fullest extent it is able in 

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order to fully secure (i) any delinquent or deferred Contribution 

obligations owed to the Fund, (ii) the Employer’s obligation to 

make current and future pension contributions to the Fund, and 

(iii) any future withdrawal liability potentially incurred by the 

Employer (with the amount of such potential withdrawal liability to 

be determined based on estimates to be provided by the Fund).

3. Effect of agreement to or imposition of the Distressed 

Employer Schedule.

If a Contributing Employer becomes subject to the Distressed Employer 

Schedule with respect to a particular Bargaining Unit, the Fund will not 

accept any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, except 

as determined by the Board of Trustees in their sole discretion.

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D. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO 

HAVE EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER 

INCURRING A REHABILITATION PLAN WITHDRAWAL.

Subject to the provisos indicated in the final clauses of this Subsection D, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to Participants whose benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] with the Fund is on or after April 8, 2008, 

and:

(1) whose last Hour of Service prior to January 1, 2008 was earned while 

employed by United Parcel Service, Inc. (“UPS”), or with any trades or 

businesses at any time under common control with UPS, within the 

meaning of ERISA § 4001(b)(1); or

(2) who (i) has earned or earns an Hour of Service while employed with a 

Contributing Employer (or any predecessor or successor entity) that at 

any time on or after March 26, 2008 incurs a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), and (ii) whose last year of 

Contributory Service Credit prior to the Rehabilitation Plan Withdrawal 

was earned while a member of a Bargaining Unit (or any predecessor or 

successor Bargaining Unit) ultimately incurring such Withdrawal.

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to a Rehabilitation Plan Withdrawal 

pursuant Section 2(D)(2) above, who has a benefit commencement date [within 

the meaning of ERISA § 305(i)(10)) one year or more prior to the earlier of: (i) 

the date of such Rehabilitation Plan Withdrawal or (ii) the date of the expiration 

of the last Collective Bargaining Agreement requiring Employer Contributions 

under the Primary Schedule prior to such Withdrawal, shall not be subject to the 

elimination of Adjustable Benefits provided that the Pensioner does not engage 

in Restricted Reemployment at any time subsequent to the benefit 

commencement date.

Proviso 2: And provided further that in the event of a Rehabilitation Plan 

Withdrawal resulting from an administrative termination of a Contributing 

Employer as referenced in Section 2(I)(3)(ii) below, the Board of Trustees shall 

have full discretionary authority (A) to decline to apply the elimination of 

Adjustable Benefits to Participants otherwise affected by a Rehabilitation Plan 

Withdrawal of this type who have submitted a pension application naming a 

Retirement Date to the Fund on or before the date selected by the Trustees as 

the effective date of the administrative termination which ended the Employer’s 

obligation to contribute to the Pension Fund, and (B) to decline to apply the 

requirement of Section 2(G) below that a Participant incurring a benefit 

adjustment due to Rehabilitation Plan Withdrawal must cease employment with 

and the performance of services for the withdrawn Employer within 60 days of 

the Rehabilitation Plan Withdrawal in order to eventually qualify for a restoration 

of benefits; in exercising their discretionary authority under this Proviso 2, the 

Board of Trustees shall consider, weigh and balance the following factors:

(i) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

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administrative termination were aware of, participated in or 

controlled, or could have controlled or prevented, through 

bargaining, grievance procedures, NLRB proceedings, litigation 

or other means, the circumstances that led to the administrative 

termination of the Employer;

(ii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination benefited, directly or indirectly from the 

cessation of Employer Contributions or from the circumstances 

that led to the administrative termination of the Employer;

(iii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination resisted or attempted to alter, or 

acquiesced in, the circumstances that led to the administrative 

termination of the Employer;

(iv) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination have become engaged as employees 

or independent contractors in the service of operations that were 

or are in whole or in part a successor of the operations of the 

Employer that has undergone the administrative termination; and

(v) the extent of the hardship that might be incurred by any actively 

employed members of the affected Bargaining Unit or by any 

members who submitted a retirement application prior to the 

effective date of the administrative termination due to the 

elimination of Adjustable Benefits.

Proviso 3: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to a Rehabilitation Plan 

Withdrawal pursuant to Subsection D(2) above, shall not incur a loss of 

Adjustable Benefits with respect to any Surviving Spouse Benefits for which 

such spouse has a benefit commencement date [within the meaning of ERISA 

Section 305(i)(10)] prior to the date of the Rehabilitation Plan Withdrawal.

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E. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO 

BECOMES SUBJECT TO THE DEFAULT SCHEDULE.

Subject to the provisos indicated in the final clauses of this Subsection E, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Section 8(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and:

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Default Schedule 

described herein; and

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Default Schedule was earned while a member of 

a Bargaining Unit (or any predecessor or successor Bargaining Unit) that 

ultimately became subject to the Default Schedule.

Proviso 1: Provided, however. that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Default Schedule pursuant to this Subsection E, who has a benefit 

commencement date [within the meaning of ERISA § 305(i)(10)] one year or 

more prior to the Contributing Employer becoming subject to the Default 

Schedule, shall not be subject to the elimination of Adjustable Benefits provided 

that the Pensioner does not engage in Restricted Reemployment at any time 

subsequent to the benefit commencement date.

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to his Contributing 

Employer becoming subject to the Default Schedule pursuant this Subsection E. 

shall not incur a loss of Adjustable Benefits with respect to any Surviving Spouse 

Benefits for which such spouse has a benefit commencement date [within the 

meaning of ERISA Section 305(i)(10)) prior to the date on which the Contributing 

Employer became subject to the Default Schedule.

F. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO 

BECOMES SUBJECT TO THE DISTRESSED EMPLOYER SCHEDULE.

Subject to the provisos indicated in the final clauses of this Subsection F. 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (with the exception indicated in Section 2(C)(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and:

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Distressed 

Employer Schedule described herein; and

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Distressed Employer Schedule was earned 

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while a member of a Bargaining Unit (or any predecessor or successor 

Bargaining Unit) that ultimately became subject to the Distressed 

Employer Schedule.

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

reduction in Adjustable Benefits indicated in the Distressed Employer Schedule, 

due to his Contributing Employer becoming subject to that Schedule pursuant to 

this Subsection F, who has a benefit commencement date [within the meaning 

of ERISA Section 305(i)(10)) one year or more prior to the Contributing 

Employer becoming subject to the Distressed Employer Schedule, shall not be 

subject to the reduction of Adjustable Benefits otherwise mandated by the 

Distressed Employer Schedule provided that the Pensioner does not engage in 

Restricted Reemployment at any time subsequent to the benefit 

commencement date, and provided further that with respect to Bargaining Units 

that become subject to the Distressed Employer Schedule on or prior to June 1, 

2011, no Pensioners with Retirement Dates prior to September 24, 2010 shall 

be subject to such Distressed Employer Schedule benefit reduction.

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the reduction of Adjustable Benefits. due to his Contributing Employer 

becoming subject to the Distressed Employer Schedule pursuant to this 

Subsection F, shall not incur a loss of Adjustable Benefits with respect to any 

Surviving Spouse Benefits for which such surviving spouse has a benefit 

commencement date [within the meaning of ERISA Section 305(i)(10)] prior to 

the date on which the Contributing Employer became subject to the Distressed 

Employer Schedule, and provided further in any event that with respect to 

Bargaining Units that become subject to the Distressed Employer Schedule on 

or prior to June 1, 2011, no spouse shall be subject to such Distressed 

Employer Schedule benefit reduction if the Participant’s death occurred prior to 

September 24, 2010.

G. RESTORATION OF ADJUSTED BENEFITS.

Any Participant who incurs a benefit adjustment or elimination under the terms 

of Sections 2(A), 2(B), 2(C), 2(D), 2(E) or 2(F) above may have those affected 

benefits restored if, subsequent to the event causing the benefit adjustment, the 

Participant:

(1) in the case of benefit adjustment caused by a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), permanently ceases all employment 

with, and performance of services in any capacity for, the Contributing 

Employer (and any successors or trades or businesses under common 

control with such Employer within the meaning of ERISA § 4001(b)(1)) 

within 60 days of the occurrence of such Rehabilitation Plan Withdrawal; 

and

(2) in any case, subsequently earns one year of Contributory Service Credit 

with a Contributing Employer while that Employer is in compliance with 

the Primary Schedule described herein.

H. ADJUSTABLE BENEFITS.

As used herein, Adjustable Benefits shall mean and include:

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(1) Any right to receive a Retirement Pension Benefit (Pension Plan, Article 

IV) prior to age 65 [including without limitation any pre-age 65 benefits 

that would otherwise be payable as (i) a Twenty Year Service Pension 

(Pension Plan § 4.01); (ii) a Contributory Credit Pension (Pension Plan § 

4.04); (iii) a Vested Pension (Pension Plan§ 4.07); (iv) a Deferred 

Pension (Pension Plan§ 4.08); or (v) a Twenty-Year Deferred Pension 

(Pension Plan § 4.09)].

(2) Early retirement benefit or retirement-type subsidies [including without 

limitation (i) an Early Retirement Pension (Pension Plan Section 4.02); 

(ii) a 25-And-Out Pension (Pension Plan Section 4.05); or a 30-And-Out 

Pension (Pension Plan Section 4.06)].

(3) All Disability Benefits not yet in pay status (Pension Plan, Article V).

(4) Before Retirement Death Benefits (Pension Plan, Article VI) other than 

the 50% surviving spouse benefit.

(5) Post-retirement death benefits that are not part of the annuity form of 

payment.

(6) All Partial Pensions (Pension Plan, Appendix D), to the extent any such 

pension is tied to one or more of the Adjustable Benefits listed above.

(7) All Contribution-Based Pensions (Pension Plan § 4.03) except that, 

assuming the Participant meets all other requirements for receiving a 

Contribution-Based Pension, the Contribution-Based Pension is payable 

at age 65 reduced by 1/2% per month for each month prior to age 65 at 

the time of retirement with a minimum retirement age of 57. Such 

minimum retirement age shall not apply if the Participant retired prior to 

age 57 before the Participant’s Adjustable Benefits were eliminated or 

reduced. In such circumstance, the Participant shall be entitled to receive 

the Contribution-Based Pension reduced by 1/2% per month for each 

month prior to age 65 at the time of retirement. Provided, however, for 

Participants who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011, the 

reductions in the Contribution-Based Pensions payable at age 65 

referenced in this subparagraph (7) shall be based on actuarial 

equivalence in accordance with the Schedule attached as Exhibit B 

hereto.

(8) To the extent not already included in paragraphs (1) - (7) above, the 

following categories of benefits listed and defined as “adjustable 

benefits” under ERISA§ 305(e)(8)(iv): 

(i) benefits, rights, and features under the plan, including postretirement death benefits, 60-month guarantees, disability 

benefits not yet in pay status, and similar benefits, 

(ii) any early retirement benefit or retirement-type subsidy (within the 

meaning of ERISA Section 204(g)(2)(A)) and any benefit payment 

option (other than the qualified joint and survivor annuity), and

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(iii) benefit increases that would not be eligible for a guarantee under 

ERISA Section 4022A on the first day of the Fund’s initial critical 

year under the PPA because the increases were adopted (or, if 

later, took effect) less than 60 months before such first day.

Provided, however, that except as provided in subparagraph (8)(iii) above, nothing in 

this paragraph shall be construed to reduce the level of a Participant’s accrued benefit 

payable at normal retirement.

I. REHABILITATION PLAN WITHDRAWAL

Subject to the discretionary authority of the Board of Trustees indicated in the 

final clause of this Subsection I, a “Rehabilitation Plan Withdrawal” occurs on 

the date a Contributing Employer (a) is no longer required to make Employer 

Contributions to the Pension Fund under one or more of its Collective 

Bargaining Agreements, or (b) undergoes a significant reduction in its obligation 

to make Employer Contributions resulting from outsourcing or subcontracting 

work covered by the applicable Collective Bargaining Agreement(s), as a result 

of actions by members of a Bargaining Unit (or its representatives) or the 

Contributing Employer, which actions include, but are not limited to the 

following:

(1) decertification or other removal of the Union as a bargaining agent;

(2) ratification or other acceptance of a Collective Bargaining Agreement 

which permits withdrawal of the Bargaining Unit, in whole or in part, from 

the Pension Plan;

(3) administrative termination of the Contributing Employer with respect to 

any or all of its Collective Bargaining Agreements due to: (i) a violation of 

the Fund’s rules with respect to the terms of a Collective Bargaining 

Agreement (including, without limitation, a provision providing for a split 

bargaining unit]; or (ii) a violation of any other Fund rule or policy 

[including, without limitation, practices or arrangements that result in 

adverse selection];

(4) any transaction or other event (including without limitation, a merger, 

consolidation, division, asset sale (other than an asset sale complying 

with ERISA § 4204), liquidation, dissolution, joint venture, outsourcing, 

subcontracting] whereby all or a portion of the operations for which the 

Contributing Employer has an obligation to contribute are continued 

(whether by the Contributing Employer or by another party) in whole or in 

part without maintaining the obligation to contribute to the Fund under 

the same or better terms (including, for example, as to number of 

participants and contribution rate) as existed before the transaction;

Provided, however, that with respect to the circumstances described in 

Subparagraphs. (3)(ii) or (4) above, the Board of Trustees shall have full 

discretionary authority to consider, weigh and balance the following factors in 

determining whether a Rehabilitation Plan Withdrawal has occurred:

(i) the extent to which the affected Bargaining Unit or its bargaining 

representative participated in or controlled, or could have 

controlled or prevented, through bargaining, grievance 

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procedures, NLRB proceedings, litigation or other means, the 

cessation of Employer Contributions;

(ii) the extent to which the affected Bargaining Unit benefited, 

directly or indirectly, from the cessation of Employer 

Contributions;

(iii) the extent to which the affected Bargaining Unit, or its bargaining 

representative, resisted or attempted to resist, or acquiesced in, 

the cessation of Employer Contributions;

(iv) the extent to which the affected Bargaining Unit, or any of its 

members, become engaged as employees or independent 

contractors in the service of operations that were or are in whole 

or in part a successor of the operations of the Contributing 

Employer who incurred the cessation of Employer Contributions; 

and

(v) the extent of the hardship that might be incurred by members of 

the affected Bargaining Unit by the elimination of Adjustable 

Benefits.

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J. BENEFIT ADJUSTMENTS APPLICABLE TO ALL PARTICIPANTS 

(INCLUDING INACTIVE VESTED PARTICIPANTS) WHO HAVE NOT 

SUBMITTED A RETIREMENT APPLICATION ON OR BEFORE JULY 1, 

2011 AND DO NOT HAVE A BENEFIT COMMENCEMENT ON OR 

BEFORE THAT DATE.

Minimum Retirement Age 57.

Participants who (i) have not submitted a retirement application on or before 

July 1, 2011 and (ii) do not have a benefit commencement date [within the 

meaning of ERISA § 305(i)(10)] on or before July 1, 2011, will not be granted a 

Retirement Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57. 

Section 3. REHABILITATION PLAN STANDARDS AND OBJECTIVES.

The Schedules of Contributions and Benefits discussed above have been 

formulated by the Fund’s Board of Trustees as reasonable measures which, under 

reasonable actuarial assumptions, are designed and projected to forestall the 

possible insolvency of the Fund prior to 2023. Projections of insolvency may vary 

from year to year as actual experience may differ from assumptions.

The Trustees recognize the possibility that actual experience could be less 

favorable than the reasonable assumptions used for the Rehabilitation Plan on an 

annual basis. Consequently, the annual standards for meeting the requirements of 

the Rehabilitation Plan are as follows:

• Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (as 

amended and updated from time to time) the Fund will forestall its possible 

insolvency prior to 2021.

Section 4. ALTERNATIVES CONSIDERED BY THE TRUSTEES.

The Board of Trustees considered numerous alternatives [including combinations 

of contribution rate increases (and other updates to the schedules of contribution 

rates in light of the experience of the Fund) and benefit adjustments] that might 

enable the Fund to emerge from Critical Status either by the end of ten year PPA 

Rehabilitation Period (which began on January 1, 2011 and ends on December 31, 

2020), or to forestall possible insolvency indefinitely (beyond the date referenced 

above under the “Standards and Objectives” heading). Some of the alternatives 

considered were determined to be unreasonable measures. The various default 

and alternative schedules considered included the following:

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Schedules considered by the Board of Trustees in formulating an initial 2008 

rehabilitation plan that might permit the Fund to emerge by the end of the 

Rehabilitation Period on December 31. 2020:

Schedule Benefit Reductions Contribution Rate Increases

Default Immediate maximum Critical Status benefit cuts 

for all participants to the extent permitted by law

15% per year until emergence 

in 2021 (plus an additional 

1.6% annual increase for 

Benefit Classes 14 and below) 

Alternative 1 Maintain current benefits 17% per year until emergence 

in 2021

Alternative 2 On the second anniversary of the new bargaining 

agreement, reduce the future benefit accrual rate 

from 1% of contributions payable at age 62 to 1% 

of contributions at payable at age 65

16% per year until emergence in 

2021

In formulating the Fund’s initial rehabilitation plan in 2008, the Board of Trustees 

concluded that utilizing any and all possible measures to emerge from Critical Status by 

the end of the 10-year presumptive Rehabilitation Period described in ERISA Section 

305(e)(4), would be unreasonable and would involve considerable risk to the Fund and 

Fund participants. In particular, the Board of Trustees concluded that the continued 

existence of the Fund and the Trustees’ ability to maintain and improve the Fund’s 

funded status in accordance with the terms of the IRS approved amortization extension 

would be jeopardized by any attempt to emerge from critical status by the end of the 

presumptive 10-year Rehabilitation Period.

As shown above, based on January 1, 2008 valuation data, the emergence by the end 

of the presumptive 10 year Rehabilitation Period would require double-digit annual 

contribution rate increases. For example, the daily contribution rate would generally 

have to grow from $52 to over $300. Therefore, the Trustees concluded in 2008 that 

annual contribution rate increases above the 8%/6%/4% level in the Primary Schedule 

were not reasonable and could trigger mass withdrawals and significant losses to the 

Fund and the participants.

During the process of updating the Rehabilitation Plan in 2010, 2011 and 2012, the 

Trustees concluded that in light of current valuation data, the experience of the Fund 

and projections, the option available to the Fund under ERISA Section 305(e)(3)(ii) was 

to pursue reasonable measures to forestall a possible insolvency. The Trustees also 

concluded during the 2010, 2011 and 2012 update process that requiring annual 

contribution increases above the level described in the Primary Schedule would not be 

reasonable and would likely accelerate a possible insolvency of the Fund rather than 

forestall it. 

In recent years, prior to Plan/calendar year 2012, the Trustees have implemented 

numerous measures to improve the Fund’s funding. These have included:

• Reducing the benefit accrual rate from 2% of contributions to 1% of 

contributions;

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• Protecting the “and-out” and early retirement benefits while freezing them at 

their year-end 2003 levels;

• Obtaining agreements from the major bargaining parties to reallocate significant 

amounts of annual benefit contributions to the Pension Fund;

• Obtaining an amortization extension from the Internal Revenue Service in 2005, 

and seeking a waiver of the conditions of that extension in 2009 in light of 

investment losses resulting from the weakness in financial in recent years;

• Requiring as a condition of continued participation in the Fund that new 

bargaining agreements in the last several years include significant annual 

contribution rate increases; 

• Providing information to Congress and federal agencies with respect to 

legislative or regulatory proposals that appear to assist in addressing the funding 

challenges confronting the Fund;

• Approving a Distressed Employer Schedule as part of the Fund’s Rehabilitation 

Plan under which YRC, Inc. and its affiliate USF Holland, Inc., two distressed 

(but historically significant) Contributing Employers, resumed Contributions in 

June 2011 at rates lower than would have been permitted under previous (pre2011) Rehabilitation Plan Schedules; this Distressed Employer Schedule 

significantly adjusted the benefits of the affected Bargaining Unit members, and 

helped assure that despite the lower Contribution rates, the continued 

participation of these Employers would tend to improve overall pension funding; 

and

• Adopting a new withdrawal liability method, and obtaining approval of that 

method by the Pension Benefit Guaranty Corporation, under which new 

Contributing Employers, and existing Contributing Employers who satisfy their 

withdrawal liability under the Fund’s historic (pre-2011) withdrawal liability 

method (i.e., the “modified presumptive method”), will have any future 

withdrawal liability determined under the “direct attribution” method; the Trustees 

believe that this “hybrid” method will be attractive to some Contributing 

Employers who wish to continue to participate in the Fund, but may be 

concerned about the potential for future growth of their estimated withdrawal 

liability as calculated under the Fund’s prior (pre-2011) withdrawal liability 

method, and that this, in turn, will encourage continued participation in the Fund 

and tend to improve overall pension funding.

And specifically during 2012, the Trustees continued to implement the funding 

improvement measures listed above, and also amended the Primary Schedule of the 

Rehabilitation Plan to permit Contributing Employers, who satisfy their existing 

withdrawal liability and qualify as New Employers eligible for the direct attribution 

method under the hybrid method, to comply with the Primary Schedule without the need 

for the contribution rate increases otherwise required under the Primary Schedule. The 

Trustees determined that this amendment to the Rehabilitation Plan will encourage 

existing Contributing Employers to satisfy their existing withdrawal liability and to 

continue their participation in the Fund as New Employers under the hybrid method; the 

Trustees determined that the New Employers’ participation on these terms would tend 

to improve overall pension funding. 

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As part of their responsibility to consider updates to the Rehabilitation Plan for Plan 

Year 2012, the Board of Trustees also determined that mandating additional significant 

benefit cuts (beyond those provided in this updated Rehabilitation Plan), or (as noted) 

mandating contribution rate increases at levels beyond those required in recent years, 

would substantially accelerate the rate at which employers would withdraw from the 

Fund, in large part because the Union could conclude that it would be in its members’ 

best interest to agree to withdrawals. The Board of Trustees also determined that this 

acceleration of employer withdrawals would, in turn, be counterproductive to the 

Trustees’ effort to forestall possible insolvency.

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Exhibit A 

Primary Schedule: Contribution Rate Increases By Bargaining Agreement Year 

(all rate increases are to be compounded annually) 

Calendar Year 

of Contribution 

Rate Increase

Year of Initial Bargaining Agreement Conforming to Primary Schedule

2006 & 

Earlier 2007 2008 2009 2010 2011 2012 2013

2006 7% 

2007 7% 8% 

2008 7% 8% 8% 

2009 7% 8% 8% 8% 

2010 7% 8% 8% 8% 8% 

2011 6% 8% 8% 8% 8% 8% 

2012 5% 6% 8% 8% 8% 8% 8%

2013 4% 4% 6% 8% 8% 8% 8% 8%

2014 4% 4% 6% 8% 8% 8% 8% 8%

2015 4% 4% 6% 8% 8% 8% 8% 8%

2016 4% 4% 4% 6% 8% 8% 8% 8%

2017 4% 4% 4% 4% 6% 8% 8% 8%

2018 4% 4% 4% 4% 4% 6% 8% 8%

2019 4% 4% 4% 4% 4% 4% 6% 8%

2020 4% 4% 4% 4% 4% 4% 4% 6%

2021 4% 4% 4% 4% 4% 4% 4% 4%

2022 4% 4% 4% 4% 4% 4% 4% 4%

2023 4% 4% 4% 4% 4% 4% 4% 4%

2024 4% 4% 4% 4% 4% 4% 4% 4%

2025 4% 4% 4% 4% 4% 4% 4% 4%

2026 4% 4% 4% 4% 4% 4% 4% 4%

2027 4% 4% 4% 4% 4% 4% 4% 4%

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EXHIBIT B

Schedule for Actuarial Reduction of Age 65 Benefits

(applicable to Default Schedule and Rehabilitation Plan 

Withdrawal benefit adjustments for Participants who 

(i) have not submitted a retirement application on or

before July 1, 2011 and (ii) do not have a benefit commencement 

 date [within the meaning of ERISA§ 305(i)(10)] on or before July 1, 2011)

 Percent of Age 65 Benefit Based on

 Age Actuarial Equivalence

65 100%

64 90%

63 81%

62 74%

61 67%

60 61%

59 55%

58 50%

57 46%

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APPENDIX M-5. REHABILITATION PLAN (INCLUDING 2013 UPDATE) 

Section 1. PREAMBLE AND DEFINITIONS. 

 Appendix M comprising the Rehabilitation Plan was added to the Pension Plan effective 

on and after March 26, 2008, and has been amended from time to time since then. 

 This Appendix M-5 is added to the Pension Plan effective on and after December 31, 

2013 in order to update the Rehabilitation Plan in compliance with the requirements of 

the Pension Protection Act of 2006 (“PPA”). 

 The Central States, Southeast and Southwest Areas Pension Fund (the “Fund”) was 

initially certified on March 24, 2008 by its actuary to be in “critical status” (sometimes 

referred to as the “red zone”) under the PPA: the Fund’s actuary has also certified the 

Fund to be in critical status in March of each subsequent year through March 2013. The 

Fund’s Board of Trustees, as the plan sponsor of a “critical status” pension plan, is 

charged under the PPA with developing a “rehabilitation plan” designed to improve the 

financial condition of the Fund in accordance with the standards set forth in the PPA, 

and with annually updating the rehabilitation plan. Although for plan year 2009 the Fund 

was exempt from the update requirement, pursuant to an election under the Worker 

Retiree and Employer Recovery Act of 2008, for subsequent plan years the PPA 

provisions concerning the rehabilitation plan update process are applicable to the Fund. 

The purpose of this updated Rehabilitation Plan is to comply with those PPA provisions. 

 Under the PPA, a rehabilitation plan, including annual updates to the plan, must include 

one or more schedules showing revised benefit structures, revised contributions, or both, 

which, if adopted by the parties obligated under agreements participating in the pension 

plan, may reasonably be expected to enable the Fund to emerge from critical status in 

accordance with the rehabilitation plan. The PPA also provides that one of the 

rehabilitation plan schedules of benefits and contributions shall be designated the 

“default” schedule. The default schedule must assume that there are no increases in 

contributions under the plan other than the increases necessary to emerge from critical 

status after future benefit accruals and other benefits have been reduced to the 

maximum extent permitted by law. The PPA also creates certain categories of 

“adjustable benefits” which may be reduced or eliminated dependent upon the outcome 

of bargaining over the rehabilitation plan schedules and dependent on the exercise of 

certain flexibility and discretion conferred upon the Board of Trustees by the PPA. 

Adjustable benefits that may be affected in this manner include post-retirement death 

benefits, early retirement benefits or retirement-type subsidies, and generally any benefit 

that would be payable prior to normal retirement age (age 65 benefits under the Fund’s 

Plan Document - or, as discussed below, a Contribution Based Benefit actuarially 

reduced to be equivalent to an age 65 benefit). As noted, the PPA also requires annual 

updates of the rehabilitation plan. 

 Unless otherwise indicated, all capitalized terms herein shall have the definitions and 

meanings assigned to them in the Fund’s Pension Plan Document. 

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Section 2. SCHEDULES OF CONTRIBUTIONS AND BENEFITS. 

 With the PPA requirements outlined above in mind, the Fund’s Board of Trustees 

hereby provides the following PPA Schedules to the parties charged with bargaining 

over agreements requiring contributions to the Fund.

A. PRIMARY SCHEDULE (EXCEPT AS NOTED, PRESERVES 

ALL CURRENT BENEFITS).

1. Benefits

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers are in 

compliance with this Primary Schedule, there will be no change in benefit 

formulas, levels or payment options in effect on January 1, 2008, except 

that as provided in Section 2(J) below, Participants who (i) have not 

submitted a retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date (within the meaning of ERISA § 

305(i)(10)) on or before July 1, 2011, will not be granted a Retirement 

Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57.

Further, subject to the notice requirements of the PPA and other 

applicable law, any Bargaining Units (and any non-Bargaining Unit 

employee groups participating in the Fund) whose Contributing 

Employers incur a Rehabilitation Plan Withdrawal on or after March 26, 

2008 shall have their Adjustable Benefits listed in Section 2(H) below 

eliminated or reduced to the extent indicated in Section 2(B)(1) below.

2. Contributions

Compliance with the Primary Schedule requires annually compounded 

contribution rate increases in accordance with Exhibit A effective 

immediately after the expiration of the Collective Bargaining Agreement 

(or other agreement requiring contributions to the Fund) and each 

agreement anniversary date (or reallocation anniversary, where 

applicable) during the term of the new bargaining agreement to the 

extent indicated in Exhibit A, depending on the year that the new 

agreement is effective. Note that all contribution rate increases are 

annually compounded on the total contribution rate (including any 

reallocations of employee benefit contributions or agreed mid-contract 

contribution increases) immediately prior to the increase.

The required annual rate increase may be provided through annual 

allocations to pension contributions of general and aggregate employee 

benefit contribution increases that were negotiated at the outset of an 

agreement, but were not specifically allocated to pension contributions 

until subsequent contract years. The Primary Schedule requires 8% per 

year contribution rate increases for the first 5 years, 6% per year 

contribution rate increases for the next 3 years and 4% per year 

contribution rate increases each year thereafter for 2008 agreements 

under the Primary Schedule and comparable rate increases over time for 

all other agreements under the Primary Schedule (see Exhibit A).

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Provided, however, that absent further amendment to this rehabilitation 

plan, as of June 1, 2011, any Collective Bargaining Agreement requiring 

contributions of (1) $348 per week for each full-time employee with 

respect to Participants covered by the National Master Automobile 

Transporter Agreement, and (2) $342 per week for each full-time 

employee with respect to all other Participants, will be deemed to be in 

compliance with the Primary Schedule without the need for additional 

annual rate increases. 

Provided further that any Employer that qualifies as a New Employer 

under § 2.2(b) of Appendix E of the Pension Plan will be deemed, as of 

the date it qualifies as a New Employer, to be in compliance with the 

Primary Schedule without the need for additional contribution rate 

increases. 

B. DEFAULT SCHEDULE.

1. Benefits

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers agree to 

comply with this Default Schedule [or who become subject to the Default 

Schedule due to a failure to achieve an agreement to accept one of the 

Rehabilitation Plan Schedules within the time frame specified under 

ERISA § 305(e)(3)(C)], the benefit formulas, levels, and payment options 

in effect on January 1, 2008 will remain in effect except for the following, 

upon the effective date that the Default Schedule applies to the 

Bargaining Unit (or to any non-Bargaining Unit employee groups 

participating in the Fund):

• Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of contributions 

(the Contribution-Based Pension) remains in effect, with the 

modification that the Contribution Based Pension monthly 

benefit payable at age 65 is reduced by 1/2% per month for 

each month prior to age 65 with a minimum retirement age of 

57, except that, for Participants who (i) have not submitted a 

retirement application on or before July 1, 2011 and (ii) do 

not have a benefit commencement date [within the meaning 

of ERISA § 305(i)(10)] on or before July 1, 2011, the 

Contribution Based Pension monthly benefit payable at age 

65 shall be reduced to an actuarially equivalent benefit in 

accordance with the Schedule attached as Exhibit B with a 

minimum retirement age of 57.

2. Contributions

 Compliance with the Default Schedule consists of annually compounded 

contribution rate increases of 4% effective immediately after the 

expiration of the Collective Bargaining Agreement (or other agreement 

requiring contributions to the Fund) and each anniversary thereof during 

the term of the agreement. 

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3. Effect of agreement to or imposition of Default Schedule.

(i) If a Contributing Employer agrees to the Default Schedule with 

respect to a particular Bargaining Unit, the Fund will not accept 

any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, 

except as determined by the Board of Trustees in their sole 

discretion.

(ii) If a Contributing Employer becomes subject to the Default 

Schedule by operation of ERISA Section 305(e)(3)(C), because 

the bargaining parties have failed to adopt either of the 

Schedules compliant with this Rehabilitation Plan within 180 days 

of the expiration of their prior Collective Bargaining Agreement, 

the Fund will then accept a Collective Bargaining Agreement that 

is compliant with the Primary Schedule described in this 

Rehabilitation Plan, provided that such new Collective Bargaining 

Agreement provides for Primary Schedule contribution rates that 

are retroactive to the expiration date of the last Collective 

Bargaining Agreement that covered the affected Bargaining Unit.

C. DISTRESSED EMPLOYER SCHEDULE.

1. Benefits

With regard to Bargaining Units (and any non-Bargaining Unit employee 

groups participating in the Fund) whose Contributing Employers and 

contribution rates have been specifically accepted and approved by the 

Board of Trustees as satisfying the Qualifications for the Distressed 

Employer Schedule (as set forth in Section 2(C)(2) below), the benefit 

formulas, levels, and payment options in effect on January 1, 2008 will 

remain in effect except for the following, upon the effective date that the 

Distressed Employer Schedule applies to the Bargaining Unit (or to any 

non-Bargaining Unit employee group participating in the Fund) that is 

accepted by the Board of Trustees as qualifying under the Distressed 

Employer Schedule:

• Adjustable Benefits listed in Section 2(H) below are 

eliminated or reduced to the maximum extent permitted by 

law, but the future benefit accrual rate of 1% of contributions 

(the Contribution-Based Pension) remains in effect, with the 

modification that the Contribution Based Pension monthly 

benefit payable at age 65 is reduced by 1⁄2% per month for 

each month prior to age 65 with a minimum retirement age of 

57, except that, for Participants who (i) have not submitted a 

retirement application on or before July 1, 2011 and (ii) have 

not achieved a Retirement Date on or before July 1, 2011, 

the Contribution Based Pension monthly benefit payable at 

age 65 shall be reduced to an actuarially equivalent benefit in 

accordance with the Schedule attached as Exhibit B with a 

minimum retirement age of 57, and except that any 

Participant who (i) has achieved a minimum age of 55 as of 

the date of the Distressed Employer’s termination of 

participation in the Fund (see Section 2(C)(2) below) and (ii) 

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has accrued a minimum of 25 years credit towards a 

Contributory Credit Pension or an And-Out Pension as of that 

date (see Pension Plan §§ 4.04, 4.05 and 4.06), shall be 

entitled to retain his eligibility for (but not gain further credit 

towards) any such Pension, provided that any such 

Participant has a minimum retirement age of 62.

2. Contributions and Qualifications for the Distressed 

Employer Schedule.

The Board of Trustees may deem a Collective Bargaining Agreement 

with contribution rates not in compliance with either the Primary 

Schedule or the Default Schedule to be in compliance with and subject 

to the Distressed Employer Schedule, if in the Board of Trustees’ sole 

discretion, the Board determines that the Contributing Employer meets 

each of the following qualifications:

(i) the common stock of the Employer or its parent corporation (or 

other affiliate under 80% or more common control with the 

Employer) is publicly traded and registered pursuant to the 

securities laws of the United States; 

(ii) the Employer has previously incurred a termination of its 

participation in the Fund due to an inability to remain current in 

its Contribution obligations, and the Employer was in terminated 

status immediately prior to executing the Agreement sought to 

be qualified under the Distressed Employer Schedule; 

(iii) during the last ten years in which the Employer participated in 

the Fund prior to its termination, it had paid contributions to the 

Fund on behalf of at least 1,000 full-time employees per month 

(or had, including part-time employees, paid contributions on 

behalf of the equivalent of at least 1,000 full-time employees 

per month for the specified ten year period); 

(iv) the Employer submits to a review of its financial condition and 

operations by the Fund’s Staff and outside expert and 

consultants, and agrees to reimburse the Fund for all fees and 

expenses incurred by the Fund in this review (including, but not 

limited to, reimbursement to the Fund for the time devoted by the 

Fund’s Staff to any such review, with this reimbursement to be 

made at market rates for comparable services performed by 

Fund’s Staff);

(v) on the basis of this financial and operational review, it appears 

that the Employer is not able to contribute to the Fund at a higher 

rate than is indicated in the Collective Bargaining Agreement 

proposed for acceptance under the Distressed Employer 

Schedule, and that acceptance of the proposed Agreement is in 

the best interest of the Fund under all the circumstances and 

advances the goals of this Rehabilitation Plan; and

(vi) the Employer provides the Fund with first lien collateral in any 

and all unencumbered assets to the fullest extent it is able in 

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order to fully secure (i) any delinquent or deferred Contribution 

obligations owed to the Fund, (ii) the Employer’s obligation to 

make current and future pension contributions to the Fund, and 

(iii) any future withdrawal liability potentially incurred by the 

Employer (with the amount of such potential withdrawal liability to 

be determined based on estimates to be provided by the Fund).

3. Effect of agreement to or imposition of the Distressed 

Employer Schedule.

If a Contributing Employer becomes subject to the Distressed Employer 

Schedule with respect to a particular Bargaining Unit, the Fund will not 

accept any subsequent Collective Bargaining Agreements covering that 

Bargaining Unit which are compliant with the Primary Schedule, except 

as determined by the Board of Trustees in their sole discretion.

D. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO 

HAVE EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER 

INCURRING A REHABILITATION PLAN WITHDRAWAL.

Subject to the provisos indicated in the final clauses of this Subsection D, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Subsection B(1) 

above) with respect to Participants whose benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] with the Fund is on or after April 8, 2008, 

and:

(1) whose last Hour of Service prior to January 1, 2008 was earned while 

employed by United Parcel Service, Inc. (“UPS”), or with any trades or 

businesses at any time under common control with UPS, within the 

meaning of ERISA § 4001(b)(1); or

(2) who (i) has earned or earns an Hour of Service while employed with a 

Contributing Employer (or any predecessor or successor entity) that at 

any time on or after March 26, 2008 incurs a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), and (ii) whose last year of 

Contributory Service Credit prior to the Rehabilitation Plan Withdrawal 

was earned while a member of a Bargaining Unit (or any predecessor or 

successor Bargaining Unit) ultimately incurring such Withdrawal.

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to a Rehabilitation Plan Withdrawal 

pursuant Section 2(D)(2) above, who has a benefit commencement date [within 

the meaning of ERISA § 305(i)(10)] one year or more prior to the earlier of: (i) 

the date of such Rehabilitation Plan Withdrawal or (ii) the date of the expiration 

of the last Collective Bargaining Agreement requiring Employer Contributions 

under the Primary Schedule prior to such Withdrawal, shall not be subject to the 

elimination of Adjustable Benefits provided that the Pensioner does not engage 

in Restricted Reemployment at any time subsequent to the benefit 

commencement date.

Proviso 2: And provided further that in the event of a Rehabilitation Plan 

Withdrawal resulting from an administrative termination of a Contributing 

Employer as referenced in Section 2(I)(3)(ii) below, the Board of Trustees shall 

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have full discretionary authority (A) to decline to apply the elimination of 

Adjustable Benefits to Participants otherwise affected by a Rehabilitation Plan 

Withdrawal of this type who have submitted a pension application naming a 

Retirement Date to the Fund on or before the date selected by the Trustees as 

the effective date of the administrative termination which ended the Employer’s 

obligation to contribute to the Pension Fund, and (B) to decline to apply the 

requirement of Section 2(G) below that a Participant incurring a benefit 

adjustment due to Rehabilitation Plan Withdrawal must cease employment with 

and the performance of services for the withdrawn Employer within 60 days of 

the Rehabilitation Plan Withdrawal in order to eventually qualify for a restoration 

of benefits; in exercising their discretionary authority under this Proviso 2, the 

Board of Trustees shall consider, weigh and balance the following factors:

(i) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination were aware of, participated in or 

controlled, or could have controlled or prevented, through 

bargaining, grievance procedures, NLRB proceedings, litigation 

or other means, the circumstances that led to the administrative 

termination of the Employer;

(ii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination benefited, directly or indirectly from the 

cessation of Employer Contributions or from the circumstances 

that led to the administrative termination of the Employer;

(iii) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination resisted or attempted to alter, or 

acquiesced in, the circumstances that led to the administrative 

termination of the Employer;

(iv) the extent to which any actively employed members of the 

affected Bargaining Unit or any members who submitted a 

retirement application prior to the effective date of the 

administrative termination have become engaged as employees 

or independent contractors in the service of operations that were 

or are in whole or in part a successor of the operations of the 

Employer that has undergone the administrative termination; and

(v) the extent of the hardship that might be incurred by any actively 

employed members of the affected Bargaining Unit or by any 

members who submitted a retirement application prior to the 

effective date of the administrative termination due to the 

elimination of Adjustable Benefits.

Proviso 3: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to a Rehabilitation Plan 

Withdrawal pursuant to Subsection D(2) above, shall not incur a loss of 

Adjustable Benefits with respect to any Surviving Spouse Benefits for which 

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such spouse has a benefit commencement date [within the meaning of ERISA 

Section 305(i)(10)] prior to the date of the Rehabilitation Plan Withdrawal.

E. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO 

BECOMES SUBJECT TO THE DEFAULT SCHEDULE.

Subject to the provisos indicated in the final clauses of this Subsection E, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (to the same extent indicated in Section B(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and:

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Default Schedule 

described herein; and

(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Default Schedule was earned while a member of 

a Bargaining Unit (or any predecessor or successor Bargaining Unit) that 

ultimately became subject to the Default Schedule.

Proviso 1: Provided, however. that any Pensioner otherwise subject to the 

elimination of Adjustable Benefits, due to his Contributing Employer becoming 

subject to the Default Schedule pursuant to this Subsection E, who has a benefit 

commencement date [within the meaning of ERISA § 305(i)(10)] one year or 

more prior to the Contributing Employer becoming subject to the Default 

Schedule, shall not be subject to the elimination of Adjustable Benefits provided 

that the Pensioner does not engage in Restricted Reemployment at any time 

subsequent to the benefit commencement date.

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the elimination of Adjustable Benefits, due to his Contributing 

Employer becoming subject to the Default Schedule pursuant this Subsection E. 

shall not incur a loss of Adjustable Benefits with respect to any Surviving Spouse 

Benefits for which such spouse has a benefit commencement date [within the 

meaning of ERISA Section 305(i)(10)] prior to the date on which the Contributing 

Employer became subject to the Default Schedule.

F. ADJUSTMENT OF BENEFITS OF CERTAIN PARTICIPANTS WHO HAVE 

EARNED CONTRIBUTORY SERVICE WITH AN EMPLOYER WHO 

BECOMES SUBJECT TO THE DISTRESSED EMPLOYER SCHEDULE.

Subject to the provisos indicated in the final clauses of this Subsection F, 

effective March 26, 2008, all Adjustable Benefits (listed below in Section 2(H)) 

shall be eliminated or reduced (with the exception indicated in Section 2(C)(1) 

above) with respect to any Participants whose benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] is on or after April 8, 2008, and:

(1) who have earned any Contributory Service Credit with a Contributing 

Employer (or any predecessor or successor entity) that at any time 

becomes subject (by agreement or otherwise) to the Distressed 

Employer Schedule described herein; and

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(2) whose last year of Contributory Service Credit prior to the Employer’s 

becoming subject to the Distressed Employer Schedule was earned 

while a member of a Bargaining Unit (or any predecessor or successor 

Bargaining Unit) that ultimately became subject to the Distressed 

Employer Schedule.

Proviso 1: Provided, however, that any Pensioner otherwise subject to the 

reduction in Adjustable Benefits indicated in the Distressed Employer Schedule, 

due to his Contributing Employer becoming subject to that Schedule pursuant to 

this Subsection F, who has a benefit commencement date [within the meaning 

of ERISA Section 305(i)(10)] one year or more prior to the Contributing 

Employer becoming subject to the Distressed Employer Schedule, shall not be 

subject to the reduction of Adjustable Benefits otherwise mandated by the 

Distressed Employer Schedule provided that the Pensioner does not engage in 

Restricted Reemployment at any time subsequent to the benefit 

commencement date, and provided further that with respect to Bargaining Units 

that become subject to the Distressed Employer Schedule on or prior to June 1, 

2011, no Pensioners with Retirement Dates prior to September 24, 2010 shall 

be subject to such Distressed Employer Schedule benefit reduction.

Proviso 2: And provided further that the spouse of any Participant otherwise 

subject to the reduction of Adjustable Benefits. due to his Contributing Employer 

becoming subject to the Distressed Employer Schedule pursuant to this 

Subsection F, shall not incur a loss of Adjustable Benefits with respect to any 

Surviving Spouse Benefits for which such surviving spouse has a benefit 

commencement date [within the meaning of ERISA Section 305(i)(10)] prior to 

the date on which the Contributing Employer became subject to the Distressed 

Employer Schedule, and provided further in any event that with respect to 

Bargaining Units that become subject to the Distressed Employer Schedule on 

or prior to June 1, 2011, no spouse shall be subject to such Distressed 

Employer Schedule benefit reduction if the Participant’s death occurred prior to 

September 24, 2010.

G. RESTORATION OF ADJUSTED BENEFITS.

Any Participant who incurs a benefit adjustment or elimination under the terms 

of Sections 2(A), 2(B), 2(C), 2(D), 2(E) or 2(F) above may have those affected 

benefits restored if, subsequent to the event causing the benefit adjustment, the 

Participant:

(1) in the case of benefit adjustment caused by a Rehabilitation Plan 

Withdrawal (see Section 2(I) below), permanently ceases all employment 

with, and performance of services in any capacity for, the Contributing 

Employer (and any successors or trades or businesses under common 

control with such Employer within the meaning of ERISA § 4001(b)(1)) 

within 60 days of the occurrence of such Rehabilitation Plan Withdrawal; 

and

(2) in any case, subsequently earns one year of Contributory Service Credit 

with a Contributing Employer while that Employer is in compliance with 

the Primary Schedule described herein.

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H. ADJUSTABLE BENEFITS.

As used herein, Adjustable Benefits shall mean and include:

(1) Any right to receive a Retirement Pension Benefit (Pension Plan, Article 

IV) prior to age 65 [including without limitation any pre-age 65 benefits 

that would otherwise be payable as (i) a Twenty Year Service Pension 

(Pension Plan § 4.01); (ii) a Contributory Credit Pension (Pension Plan § 

4.04); (iii) a Vested Pension (Pension Plan § 4.07); (iv) a Deferred 

Pension (Pension Plan § 4.08); or (v) a Twenty-Year Deferred Pension 

(Pension Plan § 4.09)].

(2) Early retirement benefit or retirement-type subsidies [including without 

limitation (i) an Early Retirement Pension (Pension Plan § 4.02); (ii) a 25-

And-Out Pension (Pension Plan § 4.05); or a 30-And-Out Pension 

(Pension Plan § 4.06)].

(3) All Disability Benefits not yet in pay status (Pension Plan, Article V).

(4) Before Retirement Death Benefits (Pension Plan, Article VI) other than 

the 50% surviving spouse benefit.

(5) Post-retirement death benefits that are not part of the annuity form of 

payment.

(6) All Partial Pensions (Pension Plan, Appendix D), to the extent any such 

pension is tied to one or more of the Adjustable Benefits listed above.

(7) All Contribution-Based Pensions (Pension Plan § 4.03) except that, 

assuming the Participant meets all other requirements for receiving a 

Contribution-Based Pension, the Contribution-Based Pension is payable 

at age 65 reduced by 1/2% per month for each month prior to age 65 at 

the time of retirement with a minimum retirement age of 57. Such 

minimum retirement age shall not apply if the Participant retired prior to 

age 57 before the Participant’s Adjustable Benefits were eliminated or 

reduced. In such circumstance, the Participant shall be entitled to receive 

the Contribution-Based Pension reduced by 1/2% per month for each 

month prior to age 65 at the time of retirement. Provided, however, for 

Participants who (i) have not submitted a retirement application on or 

before July 1, 2011 and (ii) do not have a benefit commencement date 

[within the meaning of ERISA § 305(i)(10)] on or before July 1, 2011, the 

reductions in the Contribution-Based Pensions payable at age 65 

referenced in this subparagraph (7) shall be based on actuarial 

equivalence in accordance with the Schedule attached as Exhibit B 

hereto.

(8) To the extent not already included in paragraphs (1) - (7) above, the 

following categories of benefits listed and defined as “adjustable 

benefits” under ERISA§ 305(e)(8)(iv): 

(i) benefits, rights, and features under the plan, including postretirement death benefits, 60-month guarantees, disability 

benefits not yet in pay status, and similar benefits, 

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(ii) any early retirement benefit or retirement-type subsidy (within the 

meaning of ERISA Section 204(g)(2)(A)) and any benefit payment 

option (other than the qualified joint and survivor annuity), and

(iii) benefit increases that would not be eligible for a guarantee under 

ERISA Section 4022A on the first day of the Fund’s initial critical 

year under the PPA because the increases were adopted (or, if 

later, took effect) less than 60 months before such first day.

Provided, however, that except as provided in subparagraph (8)(iii) above, nothing in 

this paragraph shall be construed to reduce the level of a Participant’s accrued benefit 

payable at normal retirement.

I. REHABILITATION PLAN WITHDRAWAL

Subject to the discretionary authority of the Board of Trustees indicated in the 

final clause of this Subsection I, a “Rehabilitation Plan Withdrawal” occurs on 

the date a Contributing Employer (a) is no longer required to make Employer 

Contributions to the Pension Fund under one or more of its Collective 

Bargaining Agreements, or (b) undergoes a significant reduction in its obligation 

to make Employer Contributions resulting from outsourcing or subcontracting 

work covered by the applicable Collective Bargaining Agreement(s), as a result 

of actions by members of a Bargaining Unit (or its representatives) or the 

Contributing Employer, which actions include, but are not limited to the 

following:

(1) decertification or other removal of the Union as a bargaining agent;

(2) ratification or other acceptance of a Collective Bargaining Agreement 

which permits withdrawal of the Bargaining Unit, in whole or in part, from 

the Pension Plan;

(3) administrative termination of the Contributing Employer with respect to 

any or all of its Collective Bargaining Agreements due to: (i) a violation of 

the Fund’s rules with respect to the terms of a Collective Bargaining 

Agreement (including, without limitation, a provision providing for a split 

bargaining unit); or (ii) a violation of any other Fund rule or policy 

(including, without limitation, practices or arrangements that result in 

adverse selection);

(4) any transaction or other event (including, without limitation, a merger, 

consolidation, division, asset sale (other than an asset sale complying 

with ERISA § 4204), liquidation, dissolution, joint venture, outsourcing, 

subcontracting) whereby all or a portion of the operations for which the 

Contributing Employer has an obligation to contribute are continued 

(whether by the Contributing Employer or by another party) in whole or in 

part without maintaining the obligation to contribute to the Fund under 

the same or better terms (including, for example, as to number of 

participants and contribution rate) as existed before the transaction;

Provided, however, that with respect to the circumstances described in 

Subparagraphs. (3)(ii) or (4) above, the Board of Trustees shall have full 

discretionary authority to consider, weigh and balance the following factors in 

determining whether a Rehabilitation Plan Withdrawal has occurred:

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(i) the extent to which the affected Bargaining Unit or its bargaining 

representative participated in or controlled, or could have 

controlled or prevented, through bargaining, grievance 

procedures, NLRB proceedings, litigation or other means, the 

cessation of Employer Contributions;

(ii) the extent to which the affected Bargaining Unit benefited, 

directly or indirectly, from the cessation of Employer 

Contributions;

(iii) the extent to which the affected Bargaining Unit, or its bargaining 

representative, resisted or attempted to resist, or acquiesced in, 

the cessation of Employer Contributions;

(iv) the extent to which the affected Bargaining Unit, or any of its 

members, become engaged as employees or independent 

contractors in the service of operations that were or are in whole 

or in part a successor of the operations of the Contributing 

Employer who incurred the cessation of Employer Contributions; 

and

(v) the extent of the hardship that might be incurred by members of 

the affected Bargaining Unit by the elimination of Adjustable 

Benefits.

J. BENEFIT ADJUSTMENTS APPLICABLE TO ALL PARTICIPANTS 

(INCLUDING INACTIVE VESTED PARTICIPANTS) WHO HAVE NOT 

SUBMITTED A RETIREMENT APPLICATION ON OR BEFORE JULY 1, 

2011 AND DO NOT HAVE A BENEFIT COMMENCEMENT ON OR 

BEFORE THAT DATE.

Minimum Retirement Age 57.

Participants who (i) have not submitted a retirement application on or before 

July 1, 2011 and (ii) do not have a benefit commencement date [within the 

meaning of ERISA § 305(i)(10)] on or before July 1, 2011, will not be granted a 

Retirement Date prior to their 57th birthday and will not be eligible to receive 

retirement benefit payments of any type until after achieving age 57. 

Section 3. REHABILITATION PLAN STANDARDS AND OBJECTIVES.

The Schedules of Contributions and Benefits discussed above have been 

formulated by the Fund’s Board of Trustees as reasonable measures which, under 

reasonable actuarial assumptions, are designed and projected to forestall the 

possible insolvency of the Fund prior to 2026. Projections of insolvency may vary 

from year to year as actual experience may differ from assumptions.

The Trustees recognize the possibility that actual experience could be less 

favorable than the reasonable assumptions used for the Rehabilitation Plan on an 

annual basis. Consequently, the annual standards for meeting the requirements of 

the Rehabilitation Plan are as follows:

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TM:522388 / 01096280 / 01/01/2014 Appendix M-5 (Page 13 of 17)

• Actuarial projections updated for each year show, based on reasonable 

assumptions, that under the Rehabilitation Plan and its schedules (as 

amended and updated from time to time) the Fund will forestall its possible 

insolvency prior to 2023.

Section 4. ALTERNATIVES CONSIDERED BY THE TRUSTEES.

The Board of Trustees considered numerous alternatives [including combinations 

of contribution rate increases (and other updates to the schedules of contribution 

rates in light of the experience of the Fund) and benefit adjustments] that might 

enable the Fund to emerge from Critical Status either by the end of ten year PPA 

Rehabilitation Period (which began on January 1, 2011 and ends on December 31, 

2020), or to forestall possible insolvency indefinitely (beyond the date referenced 

above under the “Standards and Objectives” heading). Some of the alternatives 

considered were determined to be unreasonable measures. The various default 

and alternative schedules considered included the following:

Schedules considered by the Board of Trustees in formulating an initial 2008 

rehabilitation plan that might permit the Fund to emerge by the end of the 

Rehabilitation Period on December 31. 2020:

Schedule Benefit Reductions Contribution Rate Increases

Default Immediate maximum Critical Status benefit cuts 

for all participants to the extent permitted by law

15% per year until emergence 

in 2021 (plus an additional 

1.6% annual increase for 

Benefit Classes 14 and below) 

Alternative 1 Maintain current benefits 17% per year until emergence 

in 2021

Alternative 2 On the second anniversary of the new bargaining 

agreement, reduce the future benefit accrual rate 

from 1% of contributions payable at age 62 to 1% 

of contributions at payable at age 65

16% per year until emergence in

2021

In formulating the Fund’s initial rehabilitation plan in 2008, the Board of Trustees 

concluded that utilizing any and all possible measures to emerge from Critical Status by 

the end of the 10-year presumptive Rehabilitation Period described in ERISA Section 

305(e)(4), would be unreasonable and would involve considerable risk to the Fund and 

Fund participants. In particular, the Board of Trustees concluded that the continued 

existence of the Fund and the Trustees’ ability to maintain and improve the Fund’s 

funded status in accordance with the terms of the IRS approved amortization extension 

would be jeopardized by any attempt to emerge from critical status by the end of the 

presumptive 10-year Rehabilitation Period.

As shown above, based on January 1, 2008 valuation data, the emergence by the end 

of the presumptive 10 year Rehabilitation Period would require double-digit annual 

contribution rate increases. For example, the daily contribution rate would generally 

have to grow from $52 to over $300. Therefore, the Trustees concluded in 2008 that 

annual contribution rate increases above the 8%/6%/4% level in the Primary Schedule 

were not reasonable and could trigger mass withdrawals and significant losses to the 

Fund and the participants.

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TM:522388 / 01096280 / 01/01/2014 Appendix M-5 (Page 14 of 17)

During the process of updating the Rehabilitation Plan in 2010, 2011, 2012 and 2013 

the Trustees concluded that in light of current valuation data available in each of those 

years, the experience of the Fund and projections, the option available to the Fund 

under ERISA Section 305(e)(3)(ii) was to pursue reasonable measures to forestall a 

possible insolvency. The Trustees also concluded during the 2010, 2011, 2012 and 

2013 update process that requiring annual contribution increases above the level 

described in the Primary Schedule would not be reasonable and would likely accelerate 

a possible insolvency of the Fund rather than forestall it. 

In recent years, prior to Plan/calendar year 2013, the Trustees have implemented (and, 

where applicable, have continued to implement) numerous measures to improve the 

Fund’s funding. These have included:

• Reducing the benefit accrual rate from 2% of contributions to 1% of 

contributions;

• Protecting the “and-out” and early retirement benefits while freezing them at 

their year-end 2003 levels;

• Obtaining agreements from the major bargaining parties to reallocate significant 

amounts of annual benefit contributions to the Pension Fund;

• Obtaining an amortization extension from the Internal Revenue Service in 2005, 

and seeking a waiver of the conditions of that extension in 2009 in light of 

investment losses resulting from the weakness in financial markets in recent 

years;

• Requiring as a condition of continued participation in the Fund that new 

bargaining agreements in the last several years include significant annual 

contribution rate increases; 

• Providing information to Congress and federal agencies with respect to 

legislative or regulatory proposals that appear to assist in addressing the funding 

challenges confronting the Fund;

• Approving a Distressed Employer Schedule as part of the Fund’s Rehabilitation 

Plan under which YRC, Inc. and its affiliate USF Holland, Inc., two distressed 

(but historically significant) Contributing Employers, resumed Contributions in 

June 2011 at rates lower than would have been permitted under previous (pre2011) Rehabilitation Plan Schedules; this Distressed Employer Schedule 

significantly adjusted the benefits of the affected Bargaining Unit members, and 

helped assure that despite the lower Contribution rates, the continued 

participation of these Employers would tend to improve overall pension funding; 

and

• Adopting a new withdrawal liability method, and obtaining approval of that 

method by the Pension Benefit Guaranty Corporation, under which new 

Contributing Employers, and existing Contributing Employers who satisfy their 

withdrawal liability under the Fund’s historic (pre-2011) withdrawal liability 

method (i.e., the “modified presumptive method”), will have any future 

withdrawal liability determined under the “direct attribution” method; the Trustees 

believe that this “hybrid” method will be attractive to some Contributing 

Employers who wish to continue to participate in the Fund, but may be 

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TM:522388 / 01096280 / 01/01/2014 Appendix M-5 (Page 15 of 17)

concerned about the potential for future growth of their estimated withdrawal 

liability as calculated under the Fund’s prior (pre-2011) withdrawal liability 

method, and that this, in turn, will encourage continued participation in the Fund 

and tend to improve overall pension funding.

• Amending the Primary Schedule of the Rehabilitation Plan to permit Contributing 

Employers, who satisfy their existing withdrawal liability and qualify as New 

Employers eligible for the direct attribution method under the hybrid method, to 

comply with the Primary Schedule without the need for the contribution rate 

increases otherwise required under the Primary Schedule. The Trustees 

determined that this amendment to the Rehabilitation Plan will encourage 

existing Contributing Employers to satisfy their existing withdrawal liability and to 

continue their participation in the Fund as New Employers under the hybrid 

method; the Trustees determined that the New Employers’ participation on these 

terms would tend to improve overall pension funding.

As part of their responsibility to consider updates to the Rehabilitation Plan for Plan 

Year 2013, the Board of Trustees also determined that mandating additional significant 

benefit cuts (beyond those provided in this updated Rehabilitation Plan), or (as noted) 

mandating contribution rate increases at levels beyond those required in recent years, 

would substantially accelerate the rate at which employers would withdraw from the 

Fund, in large part because the Union could conclude that it would be in its members’ 

best interest to agree to withdrawals. The Board of Trustees also determined that this 

acceleration of employer withdrawals would, in turn, be counterproductive to the 

Trustees’ effort to forestall possible insolvency.

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TM:522388 / 01096280 / 01/01/2014 Appendix M-5 (Page 16 of 17)

Exhibit A 

Primary Schedule: Contribution Rate Increases By Bargaining Agreement Year 

(all rate increases are to be compounded annually) 

Calendar Year 

of Contribution 

Rate Increase

 

Year of initial Bargaining Agreement Conforming to Primary Schedule 

2006 & 

Earlier 2007 2008 2009 2010 2011 2012 2013 2014 

2006 7% 

2007 7% 8% 

2008 7% 8% 8% 

2009 7% 8% 8% 8% 

2010 7% 8% 8% 8% 8% 

2011 6% 8% 8% 8% 8% 8% 

2012 5% 6% 8% 8% 8% 8% 8% 

2013 4% 4% 6% 8% 8% 8% 8% 8% 

2014 4% 4% 6% 8% 8% 8% 8% 8% 8% 

2015 4% 4% 6% 8% 8% 8% 8% 8% 8% 

2016 4% 4% 4% 6% 8% 8% 8% 8% 8% 

2017 4% 4% 4% 4% 6% 8% 8% 8% 8% 

2018 4% 4% 4% 4% 4% 6% 8% 8% 8% 

2019 4% 4% 4% 4% 4% 4% 6% 8% 8% 

2020 4% 4% 4% 4% 4% 4% 4% 6% 8% 

2021 4% 4% 4% 4% 4% 4% 4% 4% 6% 

2022 4% 4% 4% 4% 4% 4% 4% 4% 4% 

2023 4% 4% 4% 4% 4% 4% 4% 4% 4% 

2024 4% 4% 4% 4% 4% 4% 4% 4% 4% 

2025 4% 4% 4% 4% 4% 4% 4% 4% 4% 

2026 4% 4% 4% 4% 4% 4% 4% 4% 4% 

2027 4% 4% 4% 4% 4% 4% 4% 4% 4% 

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TM:522388 / 01096280 / 01/01/2014 Appendix M-5 (Page 17 of 17)

EXHIBIT B

Schedule for Actuarial Reduction of Age 65 Benefits

(Applicable to Default Schedule and Rehabilitation Plan 

Withdrawal benefit adjustments for Participants who 

(i) have not submitted a retirement application on or

before July 1, 2011 and (ii) do not have a benefit commencement 

date [within the meaning of ERISA§ 305(i)(10)] on or before July 1, 2011)

 Percent of Age 65 Benefit Based on

 Age Actuarial Equivalence

65 100%

64 90%

63 81%

62 74%

61 67%

60 61%

59 55%

58 50%

57 46%

38.144
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND

EIN: 36-6044243 AND PN: 001

SCHEDULE R, LINE 13D - COLLECTIVE BARGAINING AGREEMENT EXPIRATION DATE

DECEMBER 31, 2013

NAME OF EMPLOYER EIN COLLECTIVE BARGAINING AGREEMENT (CBA) EXPIRATION

ABF Freight System Inc. 71-0249444 105 accounts with CBA's expiring 03/31/18

1 account with CBA expiring 6/30/182 accounts with CBA's expiring 3/31/18

38.145
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND

EIN: 36-6044243 AND PN: 001

SCHEDULE R, LINE 13E - INFORMATION ON CONTRIBUTION RATES AND BASE UNITS

DECEMBER 31, 2013

NAME OF EMPLOYER EIN CONTRIBUTION RATE

YRC Inc. 34-0492670 253 total pension accounts with $69 weekly pension rate, $14 

daily pension rate and $1.75 hourly rate, resulting in a rate per contribution base unit of $69.00 and $70.00 for weekly and daily/hourly, respectively.

38.146