Copyright © 2015 by The Segal Group, Inc. All rights reserved. 

Benefit Suspension Scenarios and Examp

Iron Workers Local 17 Pension FundMarch 12, 2015Presented by: Megan K. Kelly, CEBS, Vice President and Benefits Consultant

Harold S. Cooper, FSA, MAAA, EA, Vice President and Actuary

5495481 / 01031

This document has been prepared by Segal Consulting and is not complete without the 

presentation provided at the March 12, 2015 conference call with the Board of Trustees of the Iron Workers Local 17 Pension Fund. This document should not be shared, copied, or quoted, in whole or in part, without the consent of Segal Consulting, except to the extent otherwise required by law. As with all issues involving the interpretation or application of new laws, Trustees should rely on the advice of Fund Counsel in interpreting and applying the Multiemployer Pension Reform Act of 2014. The actuarial calculations were completed under the supervision of Henry Wong, ASA, MAAA, FCA, EA.

IW17PF_106
1. Adjust benefits downward so that all average accrual rates a

than $x

2. Adjust early retirement benefits so that all benefits are calcu

the current early retirement factors (with further reduction pr

A. Adjust early retirement benefits so that all benefits are calculat

an average of actual early retirement factor used and current efactors

3. Adjust credited service to not more than one year earned pe4. Adjust credited service so that those with < 1,900 hours, but 

1,200 hours, get full service

Note: We found very few instances of partial credit among the sample retirees. Howesufficient data to determine the impact on non-retired participants. Due to this and admcomplexity, we did not use this adjustment

5. For each possible adjustment (1-4) above, reflect the fact th

benefit was already paid as a lump sum

Potential Benefit Adjustments

IW17PF_107
A. Item 1, reducing average accrual rate to $69, and item 5B. No reduction in accrual rate, item 2 (current early retiremen

and item 5

C. Item 1, reducing average accrual rate to $81, item 2A (aver

and current early retirement reduction), and item 5

D. Item 1, reducing average accrual rate to $78, item 3, and iteNote: The reductions to the average accrual rates shown are intendeindicative of the level of reductions required for the Plan to remain solintended to approximate the level of reductions shown as the “24% reFebruary 17th presentation. However, as these reductions have a gre

retirees and a relatively small impact on inactive vesteds and actives, reduction for retirees is greater than 24%.

Potential Benefit Adjustments—Combinations R

IW17PF_108
Data for Sample Participants

Age 

5/1/16

Total

Credited

Service 

(CS)

CS 

at 

$50

Rate

Ave.

Acc.

Rate

CS

More 

than

1/year

Early 

Ret.

Factor 

(ERF)

(pre/

post-2004)

Lump 

Sum 

Retiree 1 73.7 45.00 0.00 $100.00 6.00 Unreduced $450 Retiree 2 66.6 21.25 0.00 $85.50 0.00 64% $110 Retiree 3 67.4 15.00 2.50 $91.67 0.00 86%/80% $110 Retiree 4 69.2 46.50 0.50 $99.46 9.00 Unreduced $460 Retiree 5 67.2 35.50 10.00 $85.92 4.75 Unreduced N/A 

IV* 62.0 15.75 1.75 $94.44 Unknown** Unreduced N/A 

Active* 63.0 17.25 11.00 $68.12 Unknown** Unreduced N/A 

*Assumed to retire at age 65 with a single life annuity**Assumed to be 0.00 for the illustration

IW17PF_109
 Current Benefit:

– $100 x 45 (CS) x 1.00 (ERF) - $450 (Lump Sum) = $4,050

– $4,050 x 86.0% (JSF) = $3,483

 Scenario A ($69 accrual rate) :

– $69 x 45 x 1.00 - $450 = $2,655

– $2,655 x 86.0% = $2,283

 Scenario B (no change in accrual rate, current ERF):

– $100 x 45 x 60.6% (ERFcurrent) - $450 = $2,277

– $2,277 x 86.0% = $1,958

 Scenario C ($81 accrual rate, average of actual and current ERF):

– $81 x 45 x 80.3% (ERFaverage) - $450 = $2,477

– $2,477 x 86.0% = $2,130

 Scenario D ($78 accrual rate, CS limited to 1 per year):

– $78 x 39 (CSrevised) x 1.00 - $450 = $2,592

– $2,592 x 86.0% = $2,229

 110% PBGC Guaranteed Benefit

– Average accrual rate = $3,483 / 39 (CSrevised) = $89.31

– PBGC guaranteed accrual rate = $11 + 0.75 x min($33, $89.31 - $1– 110% x $35.75 x 39 = $1,534

Potential Benefit Adjustments – Examples for Re

IW17PF_110
Current 

Benefit

Scenario A 

($69 acc. rate)

Scenario B 

(current ERF)

Scenario C 

($81 acc. rate, 

avg. ERF)

Scenari

($78 acc. 

CS 1/ye

Amount Amount % Amount % Amount % Amount 

Retiree 1 $3,483 $2,283 66% $1,958 56% $2,130 61% $2,229 Retiree 2 $1,053 $836 79% $836 79% $836 79% $951 Retiree 3 $937 $677 72% $645 69% $685 73% $778 Retiree 4 $3,665 $2,419 66% $1,915 52% $2,197 60% $2,169 Retiree 5 $3,050 $2,450 80% $3,050 100% $2,876 94% $2,399 

IV $1,488 $1,087 73% $1,488 100% $1,276 86% $1,229 

Active $1,175 $1,175 100% $1,175 100% $1,175 100% $1,175 

Min. %* 66% 40% 56% 

Max. %* 100% 100% 100% 

Benefits for Sample Participants

*Based on all 31 sample participants.Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applic

Benefits cannot be reduced below 110% of PBGC Guarantee

IW17PF_111
Appendix: Benefits for Sample Participants

Current 

Benefit

Scenario A

($69 acc. rate)

Scenario B

(current ERF)

Scenario C

($81 acc. rate, 

avg. ERF)

Scenari

($78 acc. 

CS 1/ye

Amount Amount % Amount % Amount % Amount 

Retiree 1 $3,483 $2,283 66% $1,958 56% $2,130 61% $2,229 Retiree 2 $1,053 $836 79% $836 79% $836 79% $951 Retiree 3 $937 $677 72% $645 69% $685 73% $778 Retiree 4 $3,665 $2,419 66% $1,915 52% $2,197 60% $2,169 Retiree 5 $3,050 $2,450 80% $3,050 100% $2,876 94% $2,399 Retiree 6 $623 $623 100% $562 90% $562 90% $562 Retiree 7 $3,655 $2,950 81% $1,465 40% $2,424 66% $2,906 Retiree 8 $4,025 $2,777 69% $1,674 42% $2,308 57% $2,730 Retiree 9 $546 $546 100% $504 92% $504 92% $546 

Retiree 10 $4,813 $3,588 75% $4,813 100% $4,212 88% $3,354 Retiree 11 $993 $728 73% $728 73% $728 73% $728 Retiree 12 $968 $750 77% $737 76% $737 76% $836 Retiree 13 $929 $610 66% $780 84% $673 72% $703 Retiree 14 $1,048 $758 72% $708 68% $729 70% $781 Retiree 15 $2,126 $1,462 69% $1,936 91% $1,587 75% $1,587 Retiree 16 $858 $858 100% $780 91% $780 91% $858 Retiree 17 $3,456 $2,385 69% $1,949 56% $2,189 63% $2,477 Retiree 18 $1,343 $971 72% $1,220 91% $1,057 79% $1,061 Retiree 19 $3,420 $2,760 81% $1,395 41% $2,281 67% $2,672 Retiree 20 $3,341 $2,258 68% $1,376 41% $1,865 56% $1,934 Retiree 21 $652 $652 100% $596 91% $596 91% $642 Retiree 22 $1,302 $1,051 81% $1,302 100% $1,233 95% $1,001 Retiree 23 $843 $843 100% $737 87% $737 87% $743 Retiree 24 $326 $326 100% $326 100% $326 100% $326 Retiree 25 $878 $673 77% $878 100% $790 90% $761 Retiree 26 $696 $486 70% $433 62% $462 66% $549 Retiree 27 $4,712 $3,372 72% $4,700 100% $3,949 84% $3,284 Retiree 28 $553 $553 100% $499 90% $518 94% $553 Retiree 29 $3,494 $2,545 73% $3,494 100% $2,988 86% $2,691 

IV $1,488 $1,087 73% $1,488 100% $1,276 86% $1,229 

Active $1,175 $1,175 100% $1,175 100% $1,175 100% $1,175 

Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applicable. Benefits were calculated before 

any QDRO adjustment. Final benefits payable to the participant and alternate payee will be adjusted proportionally. 

IW17PF_112
Appendix: Data on Pay Status Participants

Participants in Pay Status as of April 30, 2014 Counts

Total Current 

Monthly Benefit

Average Current

Monthly Benefit

Non-Disabled Pensioners

Under age 751 304 $687,317 $2,261 

Age 75 – 791 83 157,313 1,895 

Age 80 and over1 138 198,139 1,436 

Total 525 $1,042,769 $1,986 

Disabled Pensioners

3 351 $446,390 $1,272 

Beneficiaries 202 $118,848 $588 

Total Pay Status 1,078 $1,608,007 $1,4921As of May 1, 20162Benefit reduction must be prorated based on number of months between the month following the effecti

suspension and participant’s 80th birthday 3223 will be over Normal Retirement Age (65) as of May 1, 2016 4Amount of benefit reduction will most likely be small since the benefit amount for majority of beneficiarie

of the PBGC guaranteed amount

IW17PF_113
Copyright © 2015 by The Segal Group, Inc. All rights reserved. 

Additional Benefit Suspension Scenarios aExamples

Iron Workers Local 17 Pension FundApril 20, 2015Presented by: Megan K. Kelly, CEBS, Vice President and Benefits Consultant

Harold S. Cooper, FSA, MAAA, EA, Vice President and Actuary

55026251 / 01031

This document has been prepared by Segal Consulting for the benefit of the Board of 

Trustees of the Iron Workers Local 17 Pension Fund. This document should not be shared, copied, or quoted, in whole or in part, without the consent of Segal Consulting, except to the extent otherwise required by law. As with all issues involving the interpretation or application of new laws, Trustees should rely on the advice of Fund Counsel in interpreting 

and applying the Multiemployer Pension Reform Act of 2014. The actuarial calculations were completed under the supervision of Henry Wong, ASA, MAAA, FCA, EA.

IW17PF_114
1. Adjust benefits downward so that all average accrual rates a

than $x

2. Adjust early retirement benefits so that all benefits are calcu

the current early retirement factors (with further reduction pr

A. Adjust early retirement benefits so that all benefits are calculat

an average of actual early retirement factor used and current efactors

B. Adjust early retirement benefits for current pensioners who ret

age 62 on an unreduced pension 

3. Adjust credited service to not more than one year earned pe4. Adjust credited service so that those with < 1,900 hours, but 

1,200 hours, get full service

Note: We found very few instances of partial credit among the sample retirees. Howesufficient data to determine the impact on non-retired participants. Due to this and admcomplexity, we did not use this adjustment

5. For each possible adjustment (1-4) above, reflect the fact th

benefit was already paid as a lump sum

Potential Benefit Adjustments

IW17PF_115
C. Reduce average accrual rate to $81 (item 1), recalculate ben

current pensioners using the average of actual and current eretirement reduction factors (item 2A), and reflect lump sum paid (item 5)

D. Reduce average accrual rate to $78 (item 1), adjust credited 

not more than one credited service per year (item 3), and refsum previously paid (item 5)

E. Reduce average accrual rate to $83 (item 1), reduce benefit

year from age 62 for current pensioners who retired on Servprior to age 62 (item 2B), adjust credited service to not more credited service per year (item 3), and reflect lump sum prev(item 5)

F. Reduce average accrual rate to $81 (item 1), reduce benefit

year from age 62 for current pensioners who retired on Servprior to age 62 (item 2B), adjust credited service to not more credited service per year (item 3), and reflect lump sum prev(item 5)

Note: Combinations C and D were shown in the March 13, 2015 presentation. In addition, w

calculation of benefits under Combination D and the PBGC guaranteed benefit to exclcredits that were awarded at retirement when no hours worked in the year of retiremen

one). Combinations E and F also reflect this credited service adjustment.

Potential Benefit Adjustments— New CombinatioReviewed

IW17PF_116
Benefits for Sample Participants

Current 

Benefit

Scenario C

($81 acc. rate, 

avg. ERF)

Scenario D

($78 acc. rate, 

CS 1/year)

Scenario E

($83 acc. rate, 

3% from 62, 

CS 1/year)

Scenar

($81 acc. 

2% from 

CS 1/ye

Amount Amount % Amount % Amount % Amount 

Retiree 1 $3,483 $2,130 61% $2,229 64% $2,111 61% $2,144 Retiree 2 $1,053 $836 79% $951 90% $1,019 97% $992 Retiree 3 $937 $685 73% $778 83% $834 89% $812 

Retiree 4 $3,665 $2,197 60% $2,101 57% $1,948 53% $1,993 Retiree 5 $3,050 $2,876 94% $2,379 78% $2,532 83% $2,471 Retiree 6 $623 $562 90% $623 100% $623 100% $623 

Retiree 7 $3,655 $2,424 66% $2,847 78% $2,401 66% $2,548 Retiree 8 $4,025 $2,308 57% $2,652 66% $2,265 56% $2,391 Retiree 9 $546 $504 92% $546 100% $546 100% $546 

Retiree 10 $4,813 $4,212 88% $3,276 68% $3,486 72% $3,402 Retiree 11 $993 $698 70% $698 70% $709 71% $698 

Retiree 12 $968 $737 76% $836 86% $896 93% $872 

Retiree 13 $929 $673 72% $703 76% $754 81% $733 

Retiree 14 $1,048 $729 70% $781 74% $831 79% $811 

Retiree 15 $2,126 $1,587 75% $1,587 75% $1,699 80% $1,654 Retiree 16 $858 $780 91% $858 100% $858 100% $858 

Retiree 17 $3,456 $2,189 63% $2,409 70% $2,256 65% $2,302 Retiree 18 $1,343 $1,057 79% $1,061 79% $1,139 85% $1,108 Retiree 19 $3,420 $2,281 67% $2,652 78% $2,251 66% $2,382 Retiree 20 $3,341 $1,865 56% $1,902 57% $2,047 61% $1,989 Retiree 21 $652 $595 91% $652 100% $652 100% $652 

Retiree 22 $1,302 $1,233 95% $979 75% $1,042 80% $1,016 

Retiree 23 $843 $708 84% $843 100% $843 100% $843 

Retiree 24 $326 $326 100% $326 100% $326 100% $326 

Retiree 25 $878 $790 90% $761 87% $809 92% $790 

Retiree 26 $696 $462 66% $549 79% $584 84% $570 

Retiree 27 $4,712 $3,949 84% $3,206 68% $3,412 72% $3,329 Retiree 28 $553 $518 94% $553 100% $553 100% $553 

Retiree 29 $3,494 $2,988 86% $2,640 76% $2,810 80% $2,742 

IV $1,488 $1,276 86% $1,229 83% $1,307 88% $1,276 

Active $1,175 $1,175 100% $1,175 100% $1,175 100% $1,175 

Min. % 56% 57% 53% 

Max. % 100% 100% 100% 

Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applicable. Benefits were calculated before any QDRO adjustment. 

Final benefits payable to the participant and alternate payee will be adjusted proportionally. 

IW17PF_117
Projection of Assets

0

102030405060708090

100

$ Millions

Scenario D: $78 Avg. Accrual Rate; No Change in ERF Scenario E: $83 Avg. Accrual Rate; 3% from 62 ERF Scenario F: $81 Avg. A

Note: Projections shown are based on preliminary estimates of the impact of the suspewill be revised when additional data from the Fund Office is available.

IW17PF_118
 The projections shown are based on the May 1, 2014 actuarial valuation and t

additional assumptions:

 7.5% future market returns 607 actives for all future years, with each active working an average of 1,70

(1.03 million hours)

 Any suspension in benefits occurs on May 1, 2016 Benefits will be suspended based on the designs described in slide 3 or 110

guaranteed amount, whichever is greater, taking into consideration the follo

– No suspension for pensioners over age 80 and pensioners receiving a dis

– Pensioners between ages 75 and 80 get a pro-rated reduction

– No suspension for current beneficiaries since service is unknown– Participants with unknown service, except for current beneficiaries, were 

consideration of their PBGC guaranteed amount as it cannot be determin

– Impact of limiting credited service to 1 per year was estimated to be a 10% 

participants’ benefits

 Service pension will be eliminated effective May 1, 2016  Future benefit accrual rate remains at $50 per benefit credit Contribution rate remains at $10.00 per hour

Assumptions Used in Projections

IW17PF_119
 Mortality assumptions change to RP-2014 Blue Collar Mortality Tables with 

projection using Scale MP-2014 for non-disabled participants, RP-2014 Disa

Mortality Tables with generational projection using Scale MP-2014 for particon and after May 1, 1997, and a 50/50 blend of the two preceding mortality participants disabled prior to May 1, 1997

 Effective May 1, 2016, the following assumptions will change:

– Retirement rates for service pension are eliminated – Inactive vested participants will retire at age 60 if eligible 

– 40% of future retirees will elect the 50% joint and survivor form of paymen

elect the single life annuity; this is based on the Plan’s experience during 

 Stevens Painton pays its withdrawal liability as assessed Administrative expenses increases by 10% for the May 1, 2015 Plan year a

year for all future years (additional increase in 2015 is due to the doubling opremiums under MEPRA)

Caveat regarding projections: Projections, by their nature, are not a guarantee of future results. The are intended to serve as estimates of future financial outcomes that are based on the information availamodeling is undertaken and completed, and the agreed-upon assumptions and methodologies describeresults may differ significantly if the actual experience proves to be different from these assumptions or methodologies are used. Actual experience may differ due to such variables as demographic experiencmarket performance and the regulatory environment.Caveat regarding legal interpretations: Segal does not practice law and, therefore, cannot and does 

advice. Any statutory interpretations of PPA 2006 , PRA 2010 , and MEPRA 2014, including related IRS guidance presented or reflected in the presentations are subject to the review and opinion of Fund Counsuspension is solely the responsibility of the Trustees. Any sample designs contained in this presentatioassist the Trustees and do not imply any recommendation by Segal.

Assumptions Used in Projections continued

IW17PF_120
Copyright © 2015 by The Segal Group, Inc. All rights reserved. 

Additional Benefit Suspension Scenarios aExamples – Updated May 15, 2015

Iron Workers Local 17 Pension FundMay 15, 2015Presented by: Megan K. Kelly, CEBS, Vice President and Benefits Consultant

Harold S. Cooper, FSA, MAAA, EA, Vice President and Actuary

5510654v1 / 01031

This document has been prepared by Segal Consulting for the benefit of the Board of 

Trustees of the Iron Workers Local 17 Pension Fund. This document should not be shared, copied, or quoted, in whole or in part, without the consent of Segal Consulting, except to the extent otherwise required by law. As with all issues involving the interpretation or application of laws, Trustees should rely on the advice of Fund Counsel in interpreting and applying the Multiemployer Pension Reform Act of 2014. The actuarial calculations were completed under the supervision of Henry Wong, ASA, MAAA, FCA, EA.

IW17PF_121
 Additional benefit suspension scenarios, which were a combination o

were discussed:

 Reduce the average accrual rate, Reduce benefits from age 62 for current pensioners who retired on Service 

 Adjust credited service to not more than one credit per year, and

 Reflect lump sums previously paid

 Segal has been instructed to refine projections based on the pension

provided by the Fund Office 

 Segal has also provided the Fund Office with a listing of active and inactive 

participants for the Fund Office to provide detailed service information

 The Trustees proposed two new suspension scenarios (G and H) as 

 Reduce the average accrual rate to $75, Reduce benefits by 1% per year from age 62 for current pensioners who ret

Pension,

 Adjust credited service to not more than one credit per year (Scenario G),

 No adjustment to credited service (Scenario H), Reflect lump sums previously paid, and Maintain the Service Pension for participants retiring after April 30, 2016 

Recap of May 5, 2015 Call

IW17PF_122
1. Adjust benefits downward so that all average accrual rates a

than $x

2. Adjust early retirement benefits so that all benefits are calcu

the current early retirement factors (with further reduction pr

A. Adjust early retirement benefits so that all benefits are calculat

an average of actual early retirement factor used and current efactors

B. Adjust the unreduced portion of the early retirement benefits fo

pensioners who retired prior to age 62 (Service Pension)

3. Adjust credited service to not more than one year earned pe4. Adjust credited service so that those with < 1,900 hours, but 

1,200 hours, get full service

Note: We found very few instances of partial credit among the sample retirees. Howesufficient data to determine the impact on non-retired participants. Due to this and admcomplexity, we did not use this adjustment

5. For each possible adjustment (1-4) above, reflect the fact th

benefit was already paid as a lump sum

Potential Benefit Adjustments

IW17PF_123
Prior Scenarios (A-C) were considered before focus shifted to the followD. Reduce average accrual rate to $78 (item 1), adjust credited servic

than one credited service per year (item 3), and reflect lump sum p(item 5)

E. Reduce average accrual rate to $83 (item 1), reduce benefits by 3% 

from age 62 for current pensioners who retired on Service Pension (item 2B), adjust credited service to not more than one credited ser(item 3), and reflect lump sum previously paid (item 5)

F. Reduce average accrual rate to $81 (item 1), reduce benefits by 2% 

from age 62 for current pensioners who retired on Service Pension (item 2B), adjust credited service to not more than one credited ser(item 3), and reflect lump sum previously paid (item 5)

G. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% 

from age 62 for current pensioners who retired on Service Pension (item 2B), adjust credited service to not more than one credited ser(item 3), and reflect lump sum previously paid (item 5)

H. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% 

from age 62 for current pensioners who retired on Service Pension (item 2B), no adjustment to credited service, and reflect lump sum (item 5)

Potential Benefit Adjustments— New CombinatioReviewed

IW17PF_124
Potential Benefit Adjustments— Summary of Scenarios D-H

Scenario

(Item 1)

Average

Accrual 

Rate

(Item 2B)

ERF

for Service Pension 

Under 62 

(% per year)

(Item 3)

Reduce

Credited 

Service to 1/year?

(Item 5)

Reflect 

Partial 

Lump

Sum?

Scenario D $78 0% Yes Yes 

Scenario E $83 3% Yes Yes 

Scenario F $81 2% Yes Yes 

Scenario G $75 1% Yes Yes 

Scenario H $75 1% No Yes 

*Only to those retiring after age 62 with 30 years of vesting serviceScenarios D – F were previously modeled. The following page shows the effects of updaof these (Scenario E) to show the overall magnitude on the projections. The chart based scenarios (G – H) reflect only the new data.

IW17PF_125
Projection of Assets Based on New Pensioner D

After adjusting for updated pensioner data provided by the Fund Office, the market value of assets increases from $38 million to $59 million.

Note: The above projection is based on Scenario E. Effect to new data to Scenarios D 

approximately the same as the illustration

IW17PF_126
Projection of Assets Based on New Pensioner DScenario G ($75 Avg. Accrual Rate; 1% ERF from 62; Reduce Credited Se

IW17PF_127
Projection of Assets Based on New Pensioner DScenario H ($75 Avg. Accrual Rate; 1% ERF from 62; No Reduction to Cr

Reducing the average accrual rate to $65 would increase projected asselevels projected under Scenario G.

IW17PF_128
Benefits for Sample Participants

Current 

Benefit

Scenario D

($78 acc. rate, 

CS 1/year)

Scenario E

($83 acc. rate, 

3% from 62, 

CS 1/year)

Scenario F

($81 acc. rate, 

2% from 62, 

CS 1/year)

Scenari

($75 acc. 

1% from 

CS 1/ye

Amount Amount % Amount % Amount % Amount 

Retiree 1 $4,050 $2,534 63% $2,399 59% $2,437 60% $2,321 Retiree 2 $1,163 $1,036 89% $1,102 95% $1,076 92% $996 

Retiree 3 $938 $778 83% $834 89% $812 87% $745 

Retiree 4 $4,165 $2,387 57% $2,214 53% $2,265 54% $2,170 Retiree 5 $3,050 $2,379 78% $2,532 83% $2,471 81% $2,288 Retiree 6 $624 $560 90% $560 90% $560 90% $560 

Retiree 7 $3,665 $2,847 78% $2,401 66% $2,548 70% $2,548 Retiree 8 $4,025 $2,633 65% $2,248 56% $2,374 59% $2,365 Retiree 9 $546 $546 100% $546 100% $546 100% $546 

Retiree 10 $4,813 $3,276 68% $3,486 72% $3,402 71% $3,150 Retiree 11 $993 $698 70% $709 71% $698 70% $698 

Retiree 12 $1,105 $954 86% $1,023 93% $995 90% $913 Retiree 13 $929 $703 76% $754 81% $733 79% $672 

Retiree 14 $1,048 $781 74% $831 79% $811 77% $751 

Retiree 15 $2,126 $1,442 68% $1,545 73% $1,504 71% $1,380 Retiree 16 $858 $777 91% $777 91% $777 91% $777 

Retiree 17 $3,456 $2,409 70% $2,256 65% $2,302 67% $2,224 Retiree 18 $1,343 $961 72% $1,033 77% $1,004 75% $919 Retiree 19 $3,430 $2,652 77% $2,251 66% $2,382 69% $2,378 Retiree 20 $3,815 $2,171 57% $1,847 48% $1,952 51% $1,924 Retiree 21 $751 $726 97% $726 97% $726 97% $726 

Retiree 22 $1,302 $979 75% $1,042 80% $1,016 78% $941 Retiree 23 $843 $718 85% $718 85% $718 85% $718 

Retiree 24 $337 $326 97% $326 97% $326 97% $326 

Retiree 25 $878 $761 87% $809 92% $790 90% $731 

Retiree 26 $696 $524 75% $558 80% $544 78% $504 

Retiree 27 $4,242 $2,728 64% $2,933 69% $2,851 67% $2,605 Retiree 28 $553 $536 97% $536 97% $536 97% $536 

Retiree 29 $3,494 $2,640 76% $2,810 80% $2,742 78% $2,539 

IV $1,488 $1,229 83% $1,307 88% $1,276 86% $1,181 

Active $1,175 $1,175 100% $1,175 100% $1,175 100% $1,175 

Min. % 57% 48% 51% 

Max. % 100% 100% 100% 

Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applicable. Benefits were calculated before any QDRO adjustment. 

Final benefits payable to the participant and alternate payee will be adjusted proportionally. 

IW17PF_129
 Contribution Income

 Fund Office provided preliminary employer contribution income of $12.25 m

to $10.32 million expected

 Additional $1.93 million in assets

 Investment Income

 Investment Consultant provided preliminary rate of return of 7.3%, compare

expected

 0.2% shortfall represents approximately $170,000 

 Preliminary experience, not yet recognized, will improve projections 

Preliminary Experience for 2014-2015 Plan Year

IW17PF_130
Investment Return Sensitivity –Scenario G ($75 Avg. Accrual Rate; 1% ERF from 62; Reduce Credited Se

IW17PF_131
 The projections shown are based on the May 1, 2014 actuarial valuation and t

additional assumptions:

 7.5% future market returns, unless stated otherwise  607 actives for all future years, with each active working an average of 1,70

(1.03 million hours)

 Any suspension in benefits occurs on May 1, 2016 and no suspenions are a

beneficiaries and disabled retirees, in pay status as of the effective date

 Benefits will be suspended based on the designs described in presentation 

PBGC guaranteed amount, whichever is greater, taking into consideration th

– No suspension for pensioners over age 80 and pensioners receiving a dis

– Pensioners between ages 75 and 80 get a pro-rated reduction

– No suspension for current beneficiaries since service is unknown– Participants with unknown service, except for current beneficiaries, were 

consideration of their PBGC guaranteed amount as it cannot be determin

– For those without a detailed breakdown of credited service, the impact of 

service to 1 per year was estimated to be a 10% reduction to participants

(Scenarios D, E, F, and G)

 For Scenarios D, E, and F, the Service Pension will be eliminated for future 

May 1, 2016 

 Future benefit accrual rate remains at $50 per benefit credit Contribution rate remains at $10.00 per hour

Assumptions Used in Projections

IW17PF_132
 Mortality assumptions change to RP-2014 Blue Collar Mortality Tables with 

projection using Scale MP-2014 for non-disabled participants, RP-2014 Disa

Mortality Tables with generational projection using Scale MP-2014 for particon and after May 1, 1997, and a 50/50 blend of the two preceding mortality participants disabled prior to May 1, 1997

 Effective May 1, 2016, the following assumptions will change:

– For Scenarios D, E, and F, the retirement rates for Service Pension are e

– Inactive vested participants will retire at age 60 if eligible– 40% of future retirees will elect the 50% joint and survivor form of paymen

elect the single life annuity; this is based on the Plan’s experience during 

 Stevens Painton pays its withdrawal liability as assessed Administrative expenses increases by 10% for the May 1, 2015 Plan year a

year for all future years (additional increase in 2015 is due to the doubling opremiums under MEPRA)

Caveat regarding projections: Projections, by their nature, are not a guarantee of future results. The are intended to serve as estimates of future financial outcomes that are based on the information availamodeling is undertaken and completed, and the agreed-upon assumptions and methodologies describeresults may differ significantly if the actual experience proves to be different from these assumptions or methodologies are used. Actual experience may differ due to such variables as demographic experiencmarket performance and the regulatory environment.Caveat regarding legal interpretations: Segal does not practice law and, therefore, cannot and does 

advice. Any statutory interpretations of PPA 2006, PRA 2010, and MEPRA 2014, including related IRS rguidance presented or reflected in the presentations are subject to the review and opinion of Fund Counsuspension is solely the responsibility of the Trustees. Any sample designs contained in this presentatioassist the Trustees and do not imply any recommendation by Segal.

Assumptions Used in Projections continued

IW17PF_133
Copyright © 2015 by The Segal Group, Inc. All rights reserved. 

Analysis of Benefit Suspension Designs

Iron Workers Local 17 Pension Fund

June 9, 2015

Presented by: Megan K. Kelly, CEBS, Vice President and Benefits Consultant 

Harold S. Cooper, FSA, MAAA, EA, Vice President and Actuary 

5514370v1/01031

This document has been prepared by Segal Consulting for the benefit of the Board of 

Trustees of the Iron Workers Local 17 Pension Fund. This document should not be shared, 

copied, or quoted, in whole or in part, without the consent of Segal Consulting, except to 

the extent otherwise required by law. As with all issues involving the interpretation or 

application of laws, Trustees should rely on the advice of Fund Counsel in interpreting and 

applying the Multiemployer Pension Reform Act of 2014. The actuarial calculations were 

completed under the supervision of Henry Wong, ASA, MAAA, FCA, EA.

IW17PF_134
2 

 Discussed impact of updated pensioner data provided by Fund Office

• Updated pensioner data improved projections

• Updated non-pensioner data not yet available

Showed projections of Scenarios G and H

• G and H comprised of:

– Reducing the average accrual rate to $75,

– Reducing benefits by 1% per year from age 62 for current pensioners who retired on 

Service Pension,

– Adjusting credited service to not more than one credit per year (Scenario G),

– Not adjusting credited service (Scenario H),

– Reflecting lump sums previously paid, and 

– Maintaining the Service Pension for participants retiring after April 30, 2016 

• Scenario G was projected to maintain solvency, while the reductions under 

Scenario H were not enough to maintain solvency

 Developed new Scenario I 

• Same as Scenario G, except no reduction for current pensioners who retired on 

Service Pension

Recap of May 15, 2015 Call

IW17PF_135
3 

 Deterministic projections of Plan assets under Scenarios E, G, and I 

reflecting preliminary investment return (7.3%) and contribution income 

($12.25 million) for the year ended April 30, 2015 and assuming either 7.5% 

or 7.0% future market returns

Stochastic projections of Plan assets under Scenarios G and I based on the 

Plan’s investment allocations and Segal Rogerscasey’s capital market 

assumptions

Contents of Today’s Presentation

IW17PF_136
4 

1. Adjust benefits downward so that all average accrual rates are not more

than $x

2. Adjust early retirement benefits so that all benefits are calculated using

the current early retirement factors (with further reduction prior to age 58)

A. Adjust early retirement benefits so that all benefits are calculated based on

an average of actual early retirement factor used and current early retirement

factors

B. Adjust the unreduced portion of the early retirement benefits for current

pensioners who retired prior to age 62 (Service Pension)

3. Adjust credited service to not more than one year earned per year

4. Adjust credited service so that those with < 1,900 hours, but at least

1,200 hours, get full service

Note: We found very few instances of partial credit among the sample retirees. However, we do not have 

sufficient data to determine the impact on non-retired participants. Due to this and administrative 

complexity, we did not use this adjustment.

5. For each possible adjustment (1-4) above, reflect the fact that 10% of the

benefit was already paid as a lump sum to certain pensioners

Potential Benefit Adjustments

IW17PF_137
5 

Prior Scenarios (A-C) were considered before focus shifted to the following:

D. Reduce average accrual rate to $78 (item 1), adjust credited service to not more than

one credited service per year (item 3), and reflect lump sum previously paid (item 5)

E. Reduce average accrual rate to $83 (item 1), reduce benefits by 3% per year from age

62 for current pensioners who retired on Service Pension prior to age 62 (item 2B),

adjust credited service to not more than one credited service per year (item 3), and

reflect lump sum previously paid (item 5)

F. Reduce average accrual rate to $81 (item 1), reduce benefits by 2% per year from age

62 for current pensioners who retired on Service Pension prior to age 62 (item 2B),

adjust credited service to not more than one credited service per year (item 3), and

reflect lump sum previously paid (item 5)

G. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% per year from age

62 for current pensioners who retired on Service Pension prior to age 62 (item 2B),

adjust credited service to not more than one credited service per year (item 3), and

reflect lump sum previously paid (item 5)

H. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% per year from age

62 for current pensioners who retired on Service Pension prior to age 62 (item 2B), no

adjustment to credited service, and reflect lump sum previously paid (item 5)

I. Reduce average accrual rate to $75 (item 1), no reduction for current pensioners who

retired on Service Pension, adjust credited service to not more than one credited

service per year (item 3), and reflect lump sum previously paid (item 5)

Potential Benefit Adjustments — New Combinations 

Reviewed

IW17PF_138
6 

Potential Benefit Adjustments — Summary of 

Scenarios D - I 

Scenario

(Item 1)

Average 

Accrual 

Rate

(Item 2B)

ERF 

for Service Pension 

Under 62 

(% per year)

(Item 3)

Reduce 

Credited 

Service to 1/year?

(Item 5)

Reflect 

Partial 

Lump

Sum? 

Service 

Pension for 

Future 

Retirees?

Scenario D $78 0% Yes Yes No

Scenario E $83 3% Yes Yes No

Scenario F $81 2% Yes Yes No

Scenario G $75 1% Yes Yes Yes*

Scenario H $75 1% No Yes Yes*

Scenario I $75 0% Yes Yes Yes*

*Only to those retiring after age 62 with 30 years of vesting service

IW17PF_139
7 

Benefits for Sample Participants

Current 

Benefit

Scenario E

($83 acc. rate, 

3% from 62, 

CS 1/year)

Scenario F 

($81 acc. rate, 

2% from 62, 

CS 1/year)

Scenario G 

($75 acc. rate, 

1% from 62, 

CS 1/year)

Scenario H 

($75 acc. rate, 

1% from 62)

Scenario I 

($75 acc. rate, 

CS 1/year)

Amount Amount % Amount % Amount % Amount % Amount % 

Retiree 1 $4,050 $2,399 59% $2,437 60% $2,321 57% $2,810 69% $2,419 60%

Retiree 2 $1,163 $1,102 95% $1,076 92% $996 86% $1,020 88% $996 86%

Retiree 3 $938 $834 89% $812 87% $745 79% $745 79% $745 79%

Retiree 4 $4,165 $2,214 53% $2,265 54% $2,170 52% $2,891 69% $2,278 55%

Retiree 5 $3,050 $2,532 83% $2,471 81% $2,288 75% $2,663 87% $2,288 75%

Retiree 6 $624 $560 90% $560 90% $560 90% $623 100% $560 90%

Retiree 7 $3,665 $2,401 66% $2,548 70% $2,548 70% $2,984 81% $2,738 75%

Retiree 8 $4,025 $2,248 56% $2,374 59% $2,365 59% $2,820 70% $2,531 63%

Retiree 9 $546 $546 100% $546 100% $546 100% $546 100% $546 100%

Retiree 10 $4,813 $3,486 72% $3,402 71% $3,150 65% $3,900 81% $3,150 65%

Retiree 11 $993 $709 71% $698 70% $698 70% $785 79% $698 70%

Retiree 12 $1,105 $1,023 93% $995 90% $913 83% $941 85% $913 83%

Retiree 13 $929 $754 81% $733 79% $672 72% $672 72% $672 72%

Retiree 14 $1,048 $831 79% $811 77% $751 72% $824 79% $751 72%

Retiree 15 $2,126 $1,545 73% $1,504 71% $1,380 65% $1,457 69% $1,380 65%

Retiree 16 $858 $777 91% $777 91% $777 91% $780 91% $777 91%

Retiree 17 $3,456 $2,256 65% $2,302 67% $2,224 64% $2,488 72% $2,317 67%

Retiree 18 $1,343 $1,033 77% $1,004 75% $919 68% $968 72% $919 68%

Retiree 19 $3,430 $2,251 66% $2,382 69% $2,378 69% $2,798 82% $2,550 74%

Retiree 20 $3,815 $1,847 48% $1,952 51% $1,924 50% $2,644 69% $2,071 54%

Retiree 21 $751 $726 97% $726 97% $726 97% $740 99% $726 97%

Retiree 22 $1,302 $1,042 80% $1,016 78% $941 72% $1,142 88% $941 72%

Retiree 23 $843 $718 85% $718 85% $718 85% $843 100% $718 85%

Retiree 24 $337 $326 97% $326 97% $326 97% $326 97% $326 97%

Retiree 25 $878 $809 92% $790 90% $731 83% $731 83% $731 83%

Retiree 26 $696 $558 80% $544 78% $504 72% $528 76% $504 72%

Retiree 27 $4,242 $2,933 69% $2,851 67% $2,605 61% $3,186 75% $2,605 61%

Retiree 28 $553 $536 97% $536 97% $536 97% $536 97% $536 97%

Retiree 29 $3,494 $2,810 80% $2,742 78% $2,539 73% $2,767 79% $2,539 73%

IV $1,488 $1,307 88% $1,276 86% $1,181 79% $1,181 79% $1,181 79%

Active $1,175 $1,175 100% $1,175 100% $1,175 100% $1,175 100% $1,175 100%

Min. % 48% 51% 50% 69% 54%

Max. % 100% 100% 100% 100% 100%

Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applicable. Benefits were calculated before any QDRO adjustment. 

Final benefits payable to the participant and alternate payee will be adjusted proportionally. 

IW17PF_140
8 

Deterministic Projections — Plan Assets 

Scenario E ($83 Avg. Accrual Rate; 3% ERF from 62 for Service Pension; Reduce Credited Service)

0

20

40

60

80

100

120

$ Millions

7.5% Future Returns 7.0% Future Returns

IW17PF_141
9 

Deterministic Projections — Plan Assets

Scenario G ($75 Avg. Accrual Rate; 1% ERF from 62 for Service Pension; Reduce Credited Service)

0

20

40

60

80

100

120

$ Millions

7.5% Future Returns 7.0% Future Returns

IW17PF_142
10

Deterministic Projections — Plan Assets

Scenario I ($75 Avg. Accrual Rate; ERF Unchanged; Reduce Credited Service)

0

20

40

60

80

100

120

$ Millions

7.5% Future Returns 7.0% Future Returns

IW17PF_143
11

 Deterministic modeling assumes a fixed asset return (7.5% and 7.0%

used in this analysis) each year and does not reflect the impact of asset

volatility

Stochastic modeling looks at a range of possible asset return scenarios

over time and is based on capital market assumptions of expected

returns/standard deviations for various asset classes and correlations

between asset classes

• Creates thousands of scenarios (10,000 simulations in this analysis) for rates of

return (based on current asset mix) over projection period

• Shows how the plan would perform in each of these scenarios

• Determines distribution of outcomes for Plan assets

• Provides both the best estimate value (50th percentile or median) and a range of

other possible values, including probabilities of outcomes

Stochastic Analysis Overview

IW17PF_144
12

Stochastic Analysis Overview

50%

 75%

 100%

 120%

 150%

 170%

 200%

Sample

Funded Ratio

90% of the 

simulations 

fall within the 

5th and 95th

percentiles 

95th Percentile (only 5% simulations are greater) 

5th Percentile

(only 5% of simulations are less)

Summarize results as 

a range:

• Best Case—Better cases would 

occur only 5% of the time (above 

95th percentile in this example)

• Worst Case—Worse cases would 

occur only 5% of the time (below 

5th percentile in this example)

• Most Likely—Cases better or 

worse (50th percentile) are equally 

likely

The data is grouped into percentiles and summarized as a range

5th - 95th 25th - 75th 95th 50th 5th

50th Percentile

(half of the 

simulations are 

above/below) 

75th Percentile

25th Percentile

50% of the 

simulations

fall within the 

25th and 75th

percentiles 

IW17PF_145
13

Stochastic Projections

Expected Investment Return Based on Current Allocations and Segal Rogercasey’s Capital Market 

Assumptions

95th 7.3% 16.5% 16.0% 15.1% 14.5% 14.0% 13.5% 13.0% 12.8% 12.5% 12.2% 12.0% 11.7% 11.5% 11.4% 11.2% 11.0% 10.9% 10.8% 10.7% 10.6% 10.6% 10.5% 10.4% 10.3% 10.2% 10.2% 10.1% 10.0% 9.9%

75th 7.3% 11.1% 10.7% 10.3% 10.0% 9.8% 9.6% 9.3% 9.2% 9.0% 8.9% 8.8% 8.7% 8.6% 8.6% 8.5% 8.4% 8.3% 8.3% 8.3% 8.2% 8.2% 8.1% 8.1% 8.1% 8.0% 8.0% 8.0% 8.0% 7.9%

50th 7.3% 7.2% 7.0% 6.9% 6.8% 6.7% 6.7% 6.7% 6.6% 6.6% 6.6% 6.6% 6.5% 6.6% 6.5% 6.5% 6.5% 6.6% 6.6% 6.6% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%

25th 7.3% 3.2% 3.2% 3.4% 3.6% 3.7% 3.9% 4.0% 4.1% 4.2% 4.3% 4.4% 4.4% 4.5% 4.5% 4.6% 4.7% 4.7% 4.8% 4.8% 4.8% 4.9% 4.9% 4.9% 5.0% 5.0% 5.0% 5.1% 5.1% 5.1%

5th 7.3% -3.1% -2.4% -1.8% -1.0% -0.7% -0.3% 0.2% 0.5% 0.9% 1.0% 1.2% 1.5% 1.6% 1.7% 1.9% 1.9% 2.2% 2.2% 2.3% 2.4% 2.5% 2.6% 2.6% 2.6% 2.7% 2.8% 2.9% 3.0% 3.0%

7.5% 7.3% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%

7.0% 7.3% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

-5%

0%

5%

10%

15%

20%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044

Projected Cumulative Investment Return for Plan Years Ending April 30

90th Percentile Confidence Interval 50th Percentile Confidence Interval 95th Percentile 5th Percentile Median Deterministic (7.5%) Deterministic (7.0%)

IW17PF_146
14

Stochastic Projections 

Scenario G ($75 Avg. Accrual Rate; 1% ERF from 62 for Service Pension; Reduce Credited Service)

95th 86 98 106 112 118 124 129 134 139 144 151 158 164 171 176 185 192 202 214 227 240 255 270 287 304 326 349 370 397 417

75th 86 89 91 93 93 94 95 95 95 95 95 95 95 95 96 96 97 99 100 102 103 106 108 113 116 120 125 131 138 146

50th 86 82 81 80 79 77 75 73 70 67 65 62 59 57 54 52 50 47 45 43 41 39 37 35 34 34 33 33 33 34

25th 86 76 72 69 66 62 58 54 50 45 41 37 33 29 24 20 16 12 7 3 -- -- -- -- -- -- -- -- -- --

5th 86 67 60 55 49 44 38 33 28 22 17 11 5 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

7.5% 86 83 83 82 82 81 80 79 78 77 76 75 74 73 73 73 73 73 73 74 74 75 77 79 82 85 89 93 98 104

7.0% 86 82 82 81 80 79 77 76 74 72 70 69 67 66 64 63 62 61 60 60 59 59 59 59 60 61 63 65 67 70

0

20

40

60

80

100

120

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044

Projected Value of Assets ($ millions) as of April 30

90th Percentile Confidence Interval 50th Percentile Confidence Interval 95th Percentile 5th Percentile Median Deterministic (7.5%) Deterministic (7.0%)

The Stochastic projections show that there is a 39% probability that the Plan will become insolvent over the next 30 years under this scenario.

IW17PF_147
15

Stochastic Projections 

Scenario I ($75 Avg. Accrual Rate; ERF Unchanged; Reduce Credited Service)

95th 86 98 106 111 117 123 127 131 136 141 147 153 159 165 170 179 184 194 204 217 228 243 256 272 287 307 328 347 375 392

75th 86 89 91 92 93 93 93 93 93 92 91 91 91 91 91 91 90 92 92 93 94 95 98 101 104 107 111 116 123 128

50th 86 82 81 80 78 76 73 71 68 65 62 59 56 53 50 47 44 41 39 36 33 30 28 26 24 23 22 20 20 19

25th 86 76 72 68 65 61 57 52 48 43 39 34 30 25 20 16 11 6 2 -- -- -- -- -- -- -- -- -- -- --

5th 86 67 60 54 49 43 37 31 26 20 14 8 2 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --

7.5% 86 83 82 82 81 80 79 77 76 74 73 71 70 69 68 67 66 66 66 66 66 66 67 68 70 72 74 78 81 86

7.0% 86 82 82 81 79 78 76 74 72 70 68 65 63 61 60 58 56 55 53 52 51 50 49 48 48 49 49 51 52 54

The Stochastic projections show that there is a 44% probability that the Plan will become insolvent over the next 30 years under this scenario.

0

20

40

60

80

100

120

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044

Projected Value of Assets ($ millions) as of April 30

90th Percentile Confidence Interval 50th Percentile Confidence Interval 95th Percentile 5th Percentile Median Deterministic (7.5%) Deterministic (7.0%)

IW17PF_148
16

 The projections shown are based on the May 1, 2014 actuarial valuation and the following additional 

assumptions: 

• 7.3% market return for Plan year ended April 30, 2015

• Deterministic projections used 7.5% or 7.0% for market returns after April 30, 2015

• Stochastic projections of market returns are based on the Plan’s investment allocations as provided by the 

Plan’s Investment Manager (45% U.S. Equities, 15% International Equities, 27% Fixed Income, and 13% 

Equity Oriented Real State) and Segal Rogercasey’s capital market assumptions over a 15-year time 

horizon (described in slide 18)

• Regular employer contributions of $12.25 million for the Plan year ended April 30, 2015

• 607 actives for all years after April 30, 2015, with each active working an average of 1,700 hours per year 

(1.03 million hours)

• Benefits will be suspended based on the designs described in presentation or 110% of the PBGC 

guaranteed amount, whichever is greater, taking into consideration the following:

– Any suspension in benefits occurs on May 1, 2016

– No suspension for pensioners over age 80 as of the effective date and disabled retirees 

– Pro-rated suspension for pensioners between ages 75 and 80 as of the effective date 

– No suspension for current beneficiaries since service is unknown

– Participants with unknown service were reduced without consideration of their PBGC guaranteed 

amount as it cannot be determined

– For those without a detailed breakdown of credited service, the impact of limiting credited service to 1 

per year was estimated to be a 10% reduction to participants’ benefits (Scenarios D, E, F, G, and I)

• For Scenarios D, E, and F, the Service Pension will be eliminated for future retirees effective May 1, 2016 

• Future benefit accrual rate remains at $50 per benefit credit

• Contribution rate remains at $10.00 per hour

Appendix

Assumptions Used in Projections 

IW17PF_149
17

• Mortality assumptions change to RP-2014 Blue Collar Mortality Tables with generational projection using 

Scale MP-2014 for non-disabled participants, RP-2014 Disabled Retire Mortality Tables with generational 

projection using Scale MP-2014 for participants disabled on and after May 1, 1997, and a 50/50 blend of 

the two preceding mortality assumptions for participants disabled prior to May 1, 1997

• Effective May 1, 2016, the following assumptions will change:

– Inactive vested participants will retire at age 60 if eligible 

– 40% of future retirees will elect the 50% joint and survivor form of payment and 60% will elect the single 

life annuity; this is based on the Plan’s experience during 2004–2014

– For Scenarios D, E, and F, the retirement rates for Service Pension are eliminated 

• Stevens Painton pays its withdrawal liability as assessed

• Administrative expenses increases by 10% for the May 1, 2015 Plan year and by 3% per year for all future 

years (additional increase in 2015 is due to the doubling of PBGC premiums under MPRA)

Caveat regarding projections: Projections, by their nature, are not a guarantee of future results. The modeling projections are intended to serve as 

estimates of future financial outcomes that are based on the information available to us at the time the modeling is undertaken and completed, and the 

agreed-upon assumptions and methodologies described herein. Emerging results may differ significantly if the actual experience proves to be different 

from these assumptions or if alternative methodologies are used. Actual experience may differ due to such variables as demographic experience, the 

economy, stock market performance and the regulatory environment.

Caveat regarding legal interpretations: Segal does not practice law and, therefore, cannot and does not provide legal advice. Any statutory 

interpretations of PPA 2006, PRA 2010, and MPRA 2014, including related IRS regulations and guidance presented or reflected in the presentations are 

subject to the review and opinion of Fund Counsel. Design of benefit suspension is solely the responsibility of the Trustees. Any sample designs 

contained in this presentation are intended to assist the Trustees and do not imply any recommendation by Segal.

Appendix

Assumptions Used in Projections continued 

IW17PF_150
18

Appendix

Segal Rogercasey’s Capital Market Assumptions – Expected Return, Volatility, and Correlation 

Between Investment Categories

Investment Category Allocation Expected Return 

(15-Year Time Horizon)

Volatility 

(Standard Deviation)

U.S. Equities 45% 8.7% 18.5%

International Equities (Developed) 15% 9.4% 21.0%

Fixed Income 27% 3.6% 5.0%

Equity Oriented Real Estate 13% 6.5% 12.0%

Correlation Between Investment Categories

Investment 

Category U.S. Equities

International 

Equities

(Developed)

Fixed Income Equity Oriented 

Real Estate

U.S. Equities 1.00

International 

Equities 

(Developed)

0.88 1.00

Fixed Income 0.06 0.14 1.00

Equity Oriented 

Real Estate 0.26 0.19 -0.25 1.00

IW17PF_151
Copyright © 2015 by The Segal Group, Inc. All rights reserved. 

Analysis of Benefit Suspension Designs con

Iron Workers Local 17 Pension FundAugust 7, 2015Presented by: Megan K. Kelly, CEBS, Vice President and Benefits Consultant

Harold S. Cooper, FSA, MAAA, EA, Vice President and Actuary

5526476v1/01031

This document has been prepared by Segal Consulting for the benefit of the Board of 

Trustees of the Iron Workers Local 17 Pension Fund. This document should not be shared, copied, or quoted, in whole or in part, without the consent of Segal Consulting, except to the extent otherwise required by law. As with all issues involving the interpretation or application of laws, Trustees should rely on the advice of Fund Counsel in interpreting and applying the Multiemployer Pension Reform Act of 2014. The actuarial calculations were completed under the supervision of Henry Wong, ASA, MAAA, FCA, EA.

IW17PF_152
Showed deterministic and stochastic projections of suspension Focused on Scenarios G and I, where average accrual rate is 

less than $75, current Service Pension recipients’ benefit is re

early retirement factor (Scenario G) or not reduced (Scenario Iservice is limited to not more than one per year, lump sums pareflected, and Service Pension is maintained for future retirees

Recap of July 7, 2015 Presentation

IW17PF_153
 Discuss proposed regulations with respect to benefit suspensi Review updated deterministic projections reflecting:

 Financial data used for the May 1, 2015 Actuarial Status (Zone) Ce Trustees’ industry activity provided for the 2015 Zone Certification November 1, 2016 effective date for benefit suspension (previously 

May 1, 2016 effective date)

 6.5% future investment returns to match median expected return ba

Plan’s investment allocations and the investment consultant’s capitaassumptions over an average 15-year horizon (previously assumed 7.0% for deterministic projections)

 With and without future withdrawal liability income from Stevens Pa

(previously only showed projections including future withdrawal liab

 Proposed benefit suspension regulations, specifically the 5% “mate

excess” rule

 Review Stochastic projection for updated suspension design

Contents of Today’s Presentation

IW17PF_154
Proposed Regulations 

Projected solvency ratio must be at least 1.0 by the end of the 

period on a deterministic basis

 Solvency ratio is plan’s available resources (assets) as of beginning 

benefit payments for the plan year

 Extended period is defined as at least 30 plan years

For plans with over 10,000 participants, stochastic projections 

that the probability of remaining solvent throughout the extendover 50%

 This requirement does not apply to the Iron Workers Local 17 Pens

If the projected funded percentage is less than 100% by the en

extended period, then deterministic projection must not show a the solvency ratio or available resources during the last five yeextended period

If the dollar amount of benefit suspended for each participant a

beneficiary is reduced by 5% and the plan is still projected to rsolvent, the level of suspension is deemed to be materially in elevel necessary to avoid insolvency (i.e., suspension must be rfor smaller suspension in benefits)

IW17PF_155
Proposed Regulations continued

Implication on current suspension designs

 Each suspension design must meet the 5% rule and show increasin

last five years of the “extended period”

– Updated projections in this presentation show 50-year projections 

assets to ensure that both requirements are met

 Assuming that Stevens Painton continue making its withdrawal liab

Scenarios G and I would be considered “materially in excess” undewhich means that the amount of suspension needs to be reduced (eaverage accrual rate)

 Cash flow projections included in application must reflect asse

the end of the most recent calendar quarter 

 Applications between 10/1/2015 – 12/31/2015 must use 9/30/2015 

IW17PF_156
1. Adjust benefits downward so that all average accrual rates a

than $x

2. Adjust early retirement benefits so that all benefits are calcu

the current early retirement factors (with further reduction pr

A. Adjust early retirement benefits so that all benefits are calculat

an average of actual early retirement factor used and current efactors (not actively being considered)

B. Adjust the unreduced portion of the early retirement benefits fo

pensioners who retired prior to age 62 (Service Pension)

3. Adjust credited service to not more than one year earned pe4. Adjust credited service so that those with < 1,900 hours, but 

1,200 hours, get full service (not actively being considered)

5. For each possible adjustment (1-4) above, reflect the fact th

benefit was already paid as a lump sum to certain pensioner

Potential Benefit Adjustments

IW17PF_157
Prior Scenarios (A-F) were considered before focus shifted to the following:G. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% per year fro

current pensioners who retired on Service Pension prior to age 62 (item 2B), adj

service to not more than one credited service per year (item 3), and reflect lump paid (item 5)

H. Reduce average accrual rate to $75 (item 1), reduce benefits by 1% per year fro

current pensioners who retired on Service Pension prior to age 62 (item 2B), no credited service, and reflect lump sum previously paid (item 5)

I. Reduce average accrual rate to $75 (item 1), no early retirement reduction for c

who retired on Service Pension, adjust credited service to not more than one creyear (item 3), and reflect lump sum previously paid (item 5)

J. Reduce average accrual rate to $77 (item 1), no early retirement reduction for c

who retired on Service Pension, adjust credited service to not more than one creyear (item 3), and reflect lump sum previously paid (item 5)

K. Reduce average accrual rate to $80 (item 1), reduce benefits by 1.5% per year f

current pensioners who retired on Service Pension prior to age 62 (item 2B), adjservice to not more than one credited service per year (item 3), and reflect lump paid (item 5)

L. Reduce average accrual rate to $75 (item 1), reduce benefits by 0.5% per year f

current pensioners who retired on Service Pension prior to age 62 (item 2B), adjservice to not more than one credited service per year (item 3), and reflect lump paid (item 5)

Scenario H was previously shown to not be enough of a suspension for the Plan to reScenarios G and I would not meet the 5% rule under the proposed regulations with fuliability payments. As such, Scenarios J, K, and L were developed. Scenario L was de

no future withdrawal liability payments. 

Potential Benefit Adjustments — Combinations 

IW17PF_158
Potential Benefit Adjustments — Summary of Scenarios G - L

Scenario

(Item 1)

Average

Accrual 

Rate

(Item 2B)

ERF

for Service Pension 

Under 62 

(% per year)

(Item 3)

Reduce

Credited 

Service to 1/year?

(Item 5)

Reflect 

Partial 

Lump

Sum?

Scenario G $75 1.0% Yes Yes 

Scenario H $75 1.0% No Yes 

Scenario I $75 0.0% Yes Yes 

Scenario J $77 0.0% Yes Yes 

Scenario K $80 1.5% Yes Yes 

Scenario L $75 0.5% Yes Yes 

*Only to those retiring after age 62 with 30 years of vesting service

IW17PF_159
Deterministic Projections

— Plan Assets incl. Fut

Withdrawal Liability Pmts.

Scenario J ($77 Average Accrual Rate; ERF Unchanged; Reduce Credited Service

0

102030405060708090

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

2054

$ Millions

$77 Average Accrual Rate and No ERF for Service Pensioners 5% Test for this Design

Projected Value of Assets ($ million) as of April 30

IW17PF_160
Deterministic Projections 

— Plan Assets incl. Fu

Withdrawal Liability Pmts.

Scenario K ($80 Average Accrual Rate; 1.5% ERF; Reduce Credited Service)

0

102030405060708090

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

2054

$ Millions

$80 Average Accrual Rate and 1.5% ERF for Service Pensioners 5% Test for this Design

Projected Value of Assets ($ million) as of April 30

IW17PF_161
Deterministic Projections 

— Plan Assets excl. Fu

Withdrawal Liability Pmts.

Scenario L ($75 Average Accrual Rate; 0.5% ERF; Reduce Credited Service)

0

102030405060708090

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

2054

$ Millions

$75 Average Accrual Rate and 0.5% ERF for Service Pensioners 5% Test for this Design

Projected Value of Assets ($ million) as of April 30

IW17PF_162
Benefits for Sample Participants

Current 

Benefit

Scenario J 

($77 avg. accrual rate, CS 1/year)

Scenario K 

($80 avg. accrual rate, 1.5% from 

62, CS 1/year)

($75 av

Amount Amount % of current Amount % of current Am

Retiree 1 $4,050 $2,495 62% $2,453 61% $2,Retiree 2 $1,163 $1,023 88% $1,062 91% $

Retiree 3 $938 $767 82% $801 85% $

Retiree 4 $4,165 $2,351 56% $2,288 55% $2,

Retiree 5 $3,050 $2,349 77% $2,440 80% $2,Retiree 6 $624 $560 90% $560 90% $

Retiree 7 $3,665 $2,811 77% $2,617 71% $2,

Retiree 8 $4,025 $2,599 65% $2,433 60% $2,Retiree 9 $546 $546 100% $546 100% $

Retiree 10 $4,813 $3,234 67% $3,360 70% $3,

Retiree 11 $993 $698 70% $698 70% $

Retiree 12 $1,105 $940 85% $982 89% $

Retiree 13 $929 $692 75% $723 78% $Retiree 14 $1,048 $771 74% $801 76% $

Retiree 15 $2,126 $1,421 67% $1,483 70% $1,

Retiree 16 $858 $777 91% $777 91% $

Retiree 17 $3,456 $2,378 69% $2,323 67% $2,

Retiree 18 $1,343 $947 71% $990 74% $

Retiree 19 $3,430 $2,618 76% $2,445 71% $2,

Retiree 20 $3,815 $2,138 56% $2,001 52% $1,

Retiree 21 $751 $726 97% $726 97% $

Retiree 22 $1,302 $966 74% $1,004 77% $

Retiree 23 $843 $718 85% $718 85% $Retiree 24 $337 $326 97% $326 97% $Retiree 25 $878 $751 86% $780 89% $Retiree 26 $696 $517 74% $538 77% $Retiree 27 $4,242 $2,687 63% $2,810 66% $2,

Retiree 28 $553 $536 97% $536 97% $

Retiree 29 $3,494 $2,607 75% $2,708 78% $2,

IV $1,488 $1,213 82% $1,260 85% $1,

Active $1,175 $1,175 100% $1,175 100% $1,

Min. % 56% 52% 

Max. % 100% 100% 

Note: Under all scenarios, the benefit has been reduced by the partial lump sum if applicable. Benefits were calculated before any QDRO adjustment. 

Final benefits payable to the participant and alternate payee will be adjusted proportionally. 

IW17PF_163
 Deterministic modeling assumes a fixed asset return (6.5% u

presentation) each year and does not reflect the impact of ass

Stochastic modeling looks at a range of possible asset return 

over time and is based on capital market assumptions of expereturns/standard deviations for various asset classes and correbetween asset classes

 Creates thousands of scenarios (10,000 simulations in this analysis

return (based on current asset mix) over projection period

 Shows how the plan would perform in each of these scenarios Determines distribution of outcomes for Plan assets Provides both the best estimate value (50th percentile or median) an

other possible values, including probabilities of outcomes

Stochastic Analysis Overview

IW17PF_164
Stochastic Analysis Overview

$0

$20

$40$60$80

$100

$120

Sample

Projected Assets

90% of the 

simulations 

fall within the 

5th and 95th

percentiles 

95th Percentile (only 5% simulations are greater) 

5th Percentile

(only 5% of simulations are less)

Summari

a range:

 Best Case—

occur only 5% 95th percenti

 Worst Case

occur only 5% 5th percentile 

 Most Likely—

worse (50th plikely

The data is grouped into percentiles and summarized as a ran

5th - 95th 25th - 75th 95th 50th 5th

50th Percentile

(half of the 

simulations are 

above/below) 

75th Percentile

25th Percentile

50% of the 

simulations

fall within the 

25th and 75th

percentiles 

IW17PF_165
Stochastic ProjectionsExpected Investment Return Based on Current Allocations and Rogercasey’s Capital Market Assumptions

0%5%

10%15%

2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 

Projected Cumulative Investment Return for Plan Years Ending April 30

90th Percentile Confidence Interval 50th Percentile Confidence Interval 95th Percentile 5th Percentile Med

95th 7.0% 15.2% 13.4% 12.4% 11.7% 11.2% 10.9% 10.6% 10.4% 10.2% 9.9% 9.8% 9.7% 9.

75th 7.0% 10.2% 9.4% 9.0% 8.7% 8.5% 8.3% 8.2% 8.1% 8.0% 7.9% 7.9% 7.8% 7.50th 7.0% 6.8% 6.6% 6.6% 6.5% 6.6% 6.6% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.25th 7.0% 3.2% 3.9% 4.2% 4.4% 4.6% 4.7% 4.8% 4.9% 5.0% 5.1% 5.2% 5.2% 5.

5th 7.0% -1.9% -0.3% 0.6% 1.3% 1.7% 2.2% 2.5% 2.7% 2.9% 3.1% 3.2% 3.4% 3.

Det. 7.0% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.

IW17PF_166
Stochastic Projections Scenario J ($77 Average Accrual Rate; ERF Unchanged, RedService)

The Stochastic projections show that there is a 50.4% probability that the Plan will become insolvent over the next 50 

95th 86 112 126 138 154 175 201 235 278 335 400 500 610 76

75th 86 92 92 90 87 86 86 87 92 101 114 137 164 2050th 86 80 72 63 53 42 32 22 12 5 0 -- -- 25th 86 68 55 41 26 11 -- -- -- -- -- -- -- 

5th 86 54 36 18 -- -- -- -- -- -- -- -- -- 

Det. 86 79 72 63 54 44 35 26 18 12 9 9 12 1

0

20406080

100120

2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 

Projected Value of Assets ($ millions) as of April 30

90th Percentile Confidence Interval 50th Percentile Confidence Interval 95th Percentile 5th Percentile M

IW17PF_167
 The projections shown are based on the May 1, 2014 actuarial valuation and the following 

assumptions:

 Value of Plan assets as of April 30, 2015 was $85.6 million (excluding withdrawal liabil

reported in the unaudited financial statement provided by the Fund Administrator for puZone Certification

– Contribution income, benefit payments, and administrative expenses for the Plan ye

2015 used for the projections also match the amounts reported in that statement

 Deterministic projections are based on 6.5% for market returns after April 30, 2015

 Stochastic projections of market returns are based on the Plan’s investment allocations 

Plan’s Investment Manager (45% U.S. Equities, 15% International Equities, 27% Fixed Equity Oriented Real State) and Segal Rogercasey’s capital market assumptions over horizon (described in slide 19)

 Number of active participants in future years is based on 1.20 million hours (706 active

beginning May 1, 2015, 1.06 million hours (624 actives) for the Plan year beginning Ma

607 actives each year thereafter. Each active is assumed to work an average of 1,700 

 Benefits will be suspended based on the designs described in presentation or 110% of 

guaranteed amount, whichever is greater, taking into consideration the following:

– Any suspension in benefits occurs on November 1, 2016– No suspension for pensioners over age 80 as of the effective date and disabled retir

– Pro-rated suspension for pensioners between ages 75 and 80 as of the effective dat

– No suspension for current beneficiaries since service is unknown– Participants with unknown service were reduced without consideration of their PBGC 

amount as it cannot be determined

– For those without a detailed breakdown of credited service, the impact of limiting cre

per year was estimated to be a 10% reduction to participants’ benefits (all scenarios presentation, except for Scenario H)

AppendixAssumptions Used in Projections

IW17PF_168
 Future benefit accrual rate remains at $50 per benefit credit Contribution rate remains at $10.00 per hour

 Mortality assumptions change to RP-2014 Blue Collar Mortality Tables with generation

Scale MP-2014 for non-disabled participants, RP-2014 Disabled Retire Mortality Tableprojection using Scale MP-2014 for participants disabled on and after May 1, 1997, and the two preceding mortality assumptions for participants disabled prior to May 1, 1997

 Effective May 1, 2016, the following assumptions will change:

– Inactive vested participants will retire at age 60 if eligible – 40% of future retirees will elect the 50% joint and survivor form of payment and 60% 

life annuity; this is based on the Plan’s experience during 2004–2014

 Stevens Painton pays its withdrawal liability as assessed, unless noted otherwise

 Administrative expenses are assumed to be $575,000 for the Plan year beginning May 

for the Plan year beginning May 1, 2016, and increased by 3% per year thereafter

Caveat regarding projections: Projections, by their nature, are not a guarantee of future results. The modeling projections 

estimates of future financial outcomes that are based on the information available to us at the time the modeling is undertake

agreed-upon assumptions and methodologies described herein. Emerging results may differ significantly if the actual experie

from these assumptions or if alternative methodologies are used. Actual experience may differ due to such variables as dem

economy, stock market performance and the regulatory environment.Caveat regarding legal interpretations: Segal does not practice law and, therefore, cannot and does not provide legal advinterpretations of PPA 2006, PRA 2010, and MPRA 2014, including related IRS regulations and guidance presented or reflec

subject to the review and opinion of Fund Counsel. Design of benefit suspension is solely the responsibility of the Trustees. A

contained in this presentation are intended to assist the Trustees and do not imply any recommendation by Segal.

AppendixAssumptions Used in Projections continued

IW17PF_169
AppendixSegal Rogercasey’s Capital Market Assumptions – Expected RVolatility, and Correlation Between Investment Categories

Investment Category Allocation Expected Return (15-Year Time Horizon) 

(Stand

U.S. Equities 45% 8.7% 

International Equities (Developed) 15% 9.4% 

Fixed Income 27% 3.6% 

Equity Oriented Real Estate 13% 6.5% 

Correlation Between Investment CategoriesInvestment Category U.S. Equities

International 

Equities

(Developed)

Fixed Income Equity Oriented Real Estate

U.S. Equities 1.00International Equities(Developed)

0.88 1.00

Fixed Income 0.06 0.14 1.00Equity Oriented Real Estate 0.26 0.19 -0.25 1.00

IW17PF_170