Page 6.0

Automotive Industries Pension Plan

Checklist Item #6

Does the application describe the assumptions used, including the new entrant profile, the 

total contribution base units, and the average contribution rates?

See section 3.01.

The application filed on behalf of the Automotive Industries Pension Plan includes a 

Supplemental Report to the Actuarial Status Certification as of January 1, 2016 under IRC 

Section 432 for Checklist Item #5. The Supplemental Report, attached as Document No. 5.2, sets 

forth the Actuarial Assumptions and Methodology used by the Fund Actuary in the 

determination that the Pension Plan is in critical and declining status. Exhibits II and III of the 

supplemental report includes the total contribution base units, average contribution rate and new 

entrant profile.

Unless otherwise noted, the above certification and supplemental report are based on the 

actuarial assumptions and plan of benefits from the actuarial valuation certificate from the 

Actuarial Valuation and Review as of January 1, 2015. The actuarial valuation is attached as 

Document No. 6.1.
Automotive Industries 

Pension Plan 

Actuarial Valuation and Review 

as of January 1, 2015

This report has been prepared at the request of the Board of Trustees to assist in administering the Fund and 

meeting filing requirements of federal government agencies. This valuation report may not otherwise be copied or 

reproduced in any form without the consent of the Board of Trustees and may only be provided to other parties in its 

entirety. The measurements shown in this actuarial valuation may not be applicable for other purposes.

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

Page 6.1.1
Page 6.1.2

* Segal Consulting 

100 Montgomery Street, SUITE soo San Francisco, CA 94104 

T 415.263.8200 www.segalco.com 

May29, 2015 

Board of Trustees 

Automotive Industries Pension Plan Alameda, California 

Dear Trustees: 

We are pleased to submit the Actuarial Valuation and Review as of January 1, 2015. It establishes th

for the current year and analyzes the preceding year's experience. It also summarizes the actuarial d

actuarial information that is required to be filed with Form 5500 to federal government agencies. 

The census information upon which our calculations were based was prepared by the Fund Office, u

Michael Schumacher. That assistance is gratefully acknowledged. The actuarial calculations were c

supervision of Paul C. Poon, ASA, MAAA, Enrolled Actuary. 

We look forward to reviewing this report with you at your next meeting and to answering any questi

Sincerely, 

Segal Consulting, a Member of the Segal Group 

By: 

JB/hy 

cc: Bill Boyle 

Kara Dantono 

William Craig Dobbs 

John 0 'Donnell 

Kimberly Hancock, Esq. 

Philip M Miller, Esq. 

Jessica Roster, CPA 

Michael Schumacher 

Redacted by the U.S. Department of the Treasury
SECTION 1 SECTION 2 SECTION 3 SECTION 4

ACTUARIAL VALUATION 

SUMMARY

ACTUARIAL VALUATION 

RESULTS

SUPPLEMENTARY 

INFORMATION

CERTIFICATE OF

ACTUARIAL VALUATION

Introduction ..................................4

Important Information About 

Actuarial Valuations ...............5

A. Changes Since Last 

Valuation.................................7

B. 2015 Actuarial Status (Zone) 

Certification ............................8

C. Funded Percentage and 

Funding Standard Account .....8

D. Solvency Projections...............9

Summary of Key Valuation 

Results...................................10

Comparison of Funded 

Percentages ...........................11

A. Participant Data.....................12

B. Financial Information............18

C. Employment Experience .......21

D. Actuarial Experience.............22

E. Summary of Contribution 

Requirements........................27

F. Pension Protection Act of 

2006 (PPA’06)......................28

G. Solvency Projection ..............29

H. Disclosure Requirements......31

EXHIBIT A

Table of Plan Coverage ......... 33

EXHIBIT B

Participant Population: 2005 – 

2014....................................... 34

EXHIBIT C

Summary Statement of Income 

and Expenses on an Actuarial 

Basis ...................................... 35

EXHIBIT D

Financial Information Table .. 36

EXHIBIT E

Annual Funding Notice ......... 37

EXHIBIT F

Minimum Required 

Contribution........................... 38

EXHIBIT G

Maximum Deductible 

Contribution........................... 39

EXHIBIT H

Pension Protection Act of 2006 

(PPA ’06)............................... 40

EXHIBIT I

Section 415 Limitations......... 42

EXHIBIT J

General Background .............. 43

EXHIBIT I

Summary of Actuarial 

Valuation Results................... 48

EXHIBIT II

Information on Plan Status as 

of January 1, 2015 ................. 49

EXHIBIT III

Schedule of Active Participant 

Data ....................................... 50

EXHIBIT IV

Funding Standard Account .... 51

EXHIBIT V

Current Liability .................... 55

EXHIBIT VI

Actuarial Present Value of 

Accumulated Plan Benefits.... 56

EXHIBIT VII

Statement of Actuarial 

Assumptions/Methods........... 57

EXHIBIT VIII

Summary of Plan Provisions . 63

Page 6.1.3
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

4 

INTRODUCTION

There are several ways of evaluating funding adequacy for 

a pension plan. In monitoring the Plan’s financial position, 

the Trustees should keep in mind all of these concepts.

 Funding Standard Account

The ERISA Funding Standard Account is charged with 

the normal cost and amortization of changes in the 

unfunded actuarial accrued liability measured as of 

each valuation date. The accumulation of actual 

contributions made in excess of the minimum required 

contributions is called the credit balance. If actual 

contributions fall short of the minimum required 

contribution on a cumulative basis, a funding 

deficiency has occurred.

 PPA’06

The Pension Protection Act of 2006 (PPA’06) calls on 

plan sponsors to actively monitor the projected 

Funding Standard Account credit balance, the funded 

percentage (the ratio of the actuarial value of assets to 

the present value of benefits earned to date) and cash 

flow sufficiency. Based on these measures, plans are 

then categorized as critical (Red Zone), endangered 

(Yellow Zone), or neither (Green Zone).

The Multiemployer Pension Reform Act of 2014 

(MEPRA), among other things, makes permanent these 

provisions of PPA’06.

 Solvency Projections

Pension plan funding anticipates that, over the long 

term, both contributions and investment earnings will 

be needed to cover benefit payments and expenses. To 

the extent that contributions are less than benefit 

payments, investment earnings and fund assets will be 

needed to cover the shortfall. In some situations, a plan 

may be faced with insufficient assets to cover its 

current obligations and will need assistance from the 

Pension Benefit Guaranty Corporation (PBGC). 

MEPRA provides additional options for plans facing 

insolvency.

The current year’s actuarial valuation results follow.

Page 6.1.4
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

5 

IMPORTANT INFORMATION ABOUT ACTUARIAL VALUATIONS

An actuarial valuation is a budgeting tool with respect to the financing of future uncertain obligations of a pension plan. As such, it will 

never forecast the precise future contribution requirements or the precise future stream of benefit payments. In any event, it is an estimated 

forecast – the actual cost of the plan will be determined by the benefits and expenses paid, not by the actuarial valuation.

In order to prepare a valuation, Segal Consulting (“Segal”) relies on a number of input items. These include:

 Plan of benefits Plan provisions define the rules that will be used to determine benefit payments, and those rules, or the interpretation 

of them, may change over time. Even where they appear precise, outside factors may change how they operate. For example, a plan 

may require the award of a Social Security disability pension as a condition for receiving a disability pension from the plan. If so, 

changes in the Social Security law or administration may change the plan’s costs without any change in the terms of the plan itself. It is 

important for the Trustees to keep Segal informed with respect to plan provisions and administrative procedures, and to review the plan 

summary included in our report to confirm that Segal has correctly interpreted the plan of benefits.

 Participant data An actuarial valuation for a plan is based on data provided to the actuary by the plan. Segal does not audit such data 

for completeness or accuracy, other than reviewing it for obvious inconsistencies compared to prior data and other information that 

appears unreasonable. For most plans, it is not possible or desirable to take a snapshot of the actual work force on the valuation date. In 

any event, the actuarial valuation is based on a future work force that is presumed to be the same as the active population included in 

the valuation, but in fact, employment varies from year to year, sometimes quite considerably. It is not necessary to have perfect data 

for an actuarial valuation: the valuation is an estimated forecast, not a prediction. The uncertainties in other factors are such that even 

perfect data does not produce a “perfect” result. Notwithstanding the above, it is important for Segal to receive the best possible data 

and to be informed about any known incomplete or inaccurate data.

 Assets Part of the cost of a plan will be paid from existing assets – the balance will need to come from future contributions and 

investment income. The valuation is based on the asset values as of the valuation date, typically reported by the auditor. Some plans 

include assets, such as private equity holdings, real estate, or hedge funds, that are not subject to valuation by reference to transactions 

in the marketplace. A snapshot as of a single date may not be an appropriate value for determining a single year’s contribution 

requirement, especially in volatile markets. Plan sponsors often use an “actuarial value of assets” that differs from market value to 

gradually reflect year-to-year changes in the market value of assets in determining the contribution requirements.

 Actuarial assumptions In preparing an actuarial valuation, Segal starts by developing a forecast of the benefits to be paid to existing 

plan participants for the rest of their lives and the lives of their beneficiaries. This requires actuarial assumptions as to the probability of 

death, disability, withdrawal, and retirement of each participant for each year, as well as forecasts of the plan’s benefits for each of 

those events. The forecasted benefits are then discounted to a present value, typically based on an estimate of the rate of return that will 

be achieved on the plan’s assets. All of these factors are uncertain and unknowable. Thus, there will be a range of reasonable 

assumptions, and the results may vary materially based on which assumptions the actuary selects within that range. That is, there is no 

right answer (except with hindsight). It is important for any user of an actuarial valuation to understand and accept this constraint. The 

actuarial model may use approximations and estimates that will have an immaterial impact on our results and will have no impact on 

the actual cost of the plan. In addition, the actuarial assumptions may change over time, and while this can have a significant impact on 

the reported results, it does not mean that the previous assumptions or results were unreasonable or wrong.

Page 6.1.5
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

6 

Given the above, the user of Segal’s actuarial valuation (or other actuarial calculations) needs to keep the following in mind:

 The actuarial valuation is prepared for use by the Trustees. It includes information for compliance with federal filing requirements and 

for the plan’s auditor. Segal is not responsible for the use or misuse of its report, particularly by any other party.

 An actuarial snapshot is a measurement at a specific date – it is not a prediction of a plan’s future financial condition. We have not 

been retained to perform and did not perform an analysis of the potential range of financial measurements, except where otherwise 

noted. 

 Critical events for a plan include, but are not limited to, decisions about changes in benefits and contributions. The basis for such 

decisions needs to consider many factors such as the risk of changes in employment levels and investment losses, not just the current 

valuation results.

 ERISA requires a plan’s enrolled actuary to provide a statement for inclusion in the plan’s annual report disclosing any event or trend 

that the actuary has not taken into account, if, to the best of the actuary’s knowledge, such an event or trend may require a material 

increase in plan costs or required contribution rates. If the Trustees are currently aware of any event that was not considered in this 

valuation and that may materially increase the cost of the Plan, they must advise Segal, so that we can evaluate it and take it into 

account.

 A certification of “zone” status under PPA’06 is a separate document from the actuarial valuation.

 Segal does not provide investment, legal, accounting, or tax advice. Segal’s valuation is based on our understanding of applicable 

guidance in these areas and of the plan’s provisions, but they may be subject to alternative interpretations. The Trustees should look to 

their other advisors for expertise in these areas.

 While Segal maintains extensive quality assurance procedures, an actuarial valuation involves complex computer models and 

numerous inputs. In the event that an inaccuracy is discovered after presentation of Segal’s valuation, Segal may revise that valuation 

or make an appropriate adjustment in the next valuation.

 Segal’s report shall be deemed to be final and accepted by the Trustees upon delivery and review. Trustees should notify Segal 

immediately of any questions or concerns about the final content.

As Segal Consulting has no discretionary authority with respect to the management or assets of the Plan, it is not a fiduciary in its capacity 

as actuaries and consultants with respect to the Plan.

Page 6.1.6
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

7 

The actuarial valuation report as of January 1, 2015 is based on financial and demographic information as of that date. Changes 

subsequent to that date are not reflected and could affect future actuarial costs of the Plan. We are prepared to work with the 

Trustees to analyze the effects of any subsequent developments. 

A. CHANGES SINCE LAST VALUATION

1. On December 16, 2014, the Multiemployer 

Pension Reform Act of 2014 (MEPRA) was 

enacted. MEPRA expanded and clarified various 

zone status rules, made changes to withdrawal 

liability rules for plans in the red or yellow zones, 

enabled suspension of benefits for deeply troubled 

(critical and declining) plans, and granted PBGC 

flexibility in facilitating plan mergers and 

approving partitions. This report does not discuss 

the implications of MEPRA for this plan. 

2. The rate of return on the market value of plan 

assets was 6.2% for the 2014 plan year. The rate of 

return on the actuarial value of assets was 10.7% as 

a result of the asset valuation method. The current 

assumed long-term rate of return on investments is

7.25%. Given the low fixed income interest rate 

environments, target asset allocation and 

expectations of future investment returns for 

various asset classes, we will continue to monitor 

the Plan’s actual and anticipated investment 

returns.

3. This plan was initially classified as critical (Red 

Zone) for 2008 and the Trustees have adopted a 

Rehabilitation Plan. Under the Rehabilitation Plan, 

new collective bargaining agreements negotiated 

after April 27, 2008 will include the maximum 

benefit reductions allowed by law. These 

reductions include the removal of all early 

retirement subsidies, joint and survivor subsidies, 

disability pensions, the 36-payment pre-retirement 

death benefit and all benefit options besides the 

single life annuity, QJSA and QOSA. The 

Rehabilitation Plan also includes supplemental offbenefit contributions to the plan beginning 

January 1, 2013. Benefit reductions are recognized 

in this valuation for all active participants. As 

detailed in Subsection 1B, the plan was certified to 

be in critical and declining status under MEPRA 

for 2015. 

Page 6.1.7
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

8 

B. 2015 ACTUARIAL STATUS (ZONE) 

CERTIFICATION

1. The 2015 certification, previously issued, was 

based on the liabilities calculated in the 2014 

actuarial valuation, projected to December 31, 

2014, and estimated asset information as of 

December 31, 2014. This Plan was classified as 

critical (Red Zone) and declining because the 

funded percentage was 61.1%, there was a 

projected deficiency in the Funding Standard 

Account within one year, and there was a projected 

insolvency within 20 years. 

C. FUNDED PERCENTAGE AND FUNDING 

STANDARD ACCOUNT

1. Based on this January 1, 2015 actuarial valuation, 

the funded percentage as of that date is 61.1%. 

This will be reported on the 2015 Annual Funding 

Notice to be provided within 120 days after the end 

of this plan year. 

2. The funding deficiency in the Funding Standard 

Account as of December 31, 2014 was 

$332,583,760, an increase of $108,841,411 from 

the prior year. PPA’06 requires plan sponsors to 

monitor the projected credit balance/funding 

deficiency. 

3. We are available to work with the Trustees to 

develop credit balance projections.

Page 6.1.8
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

9 

D. SOLVENCY PROJECTIONS

1. Based on this valuation, the current value of assets 

plus projected investment earnings and future 

contribution income will exceed projected benefit 

payments and administrative expenses for at least 

15 years (through December 31, 2029), assuming 

experience is consistent with the January 1, 2015 

assumptions. This is the same as projected in the 

January 1, 2014 actuarial valuation. Chart 20 

shows the projected market value of assets until the 

expected insolvency year. The plan of benefits and 

assumptions used for this projection are those used 

for the 2015 zone certification with some 

exceptions, as shown in Section 2G. If requested 

by the Trustees, we can perform additional 

projections of the financial status of the Plan.

Page 6.1.9
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

10

SUMMARY OF KEY VALUATION RESULTS

2015 2014

Certified Zone Status Critical and Declining Critical

Demographic Data:

Number of active participants 4,026 3,979

Number of inactive participants with vested rights 10,470 10,602

Number of retired participants and beneficiaries 11,300 11,377

Assets:

Market value of assets (MVA) $1,297,668,067 $1,327,287,980

Actuarial value of assets (AVA) 1,199,472,038 1,185,912,766

AVA as a percent of MVA 92.4% 89.3%

Cash Flow:

Projected employer contributions 

(excluding withdrawal liability payments)

$21,140,860 $20,126,527

Actual contributions -- 28,305,650(1)

Projected benefit payments and expenses 141.923,742 140,892,673

Insolvency projected in Plan Year beginning(2) 2030 2030

Statutory Funding Information:

Minimum required contribution $473,831,388 $361,681,320

Maximum deductible contribution 3,221,905,003 3,173,300,382

Annual Funding Notice percentage 61.1% 60.7%

Funding Standard Account deficiency projected in Plan Year Yes Yes

Cost Elements on a Funding Standard Account Basis:

Normal cost, including administrative expenses $6,195,281 $6,126,874

Actuarial accrued liability 1,989,735,216 1,982,679,153

Unfunded actuarial accrued liability (based on AVA) 790,263,178 796,766,387

(1) Includes $6,788,280 in withdrawal liability payments and $33,666 in liquidated damages.

(2) Includes 5% annual contribution rate increases through 2019 under the Rehabilitation Plan. Does not reflect any future withdrawal liability 

payments.

Page 6.1.10
SECTION 1: Actuarial Valuation Summary as of January 1, 2015 for the Automotive Industries Pension Plan 

11

COMPARISON OF FUNDED PERCENTAGES

2015

Funded Percentages

as of January 1*

Liability Assets 2015 2014

1. Present Value of Future Benefits $2,007,936,237 $1,199,472,038 59.7% 59.3%

2. Actuarial Accrued Liability 1,989,735,216 1,199,472,038 60.3% 59.8%

3. PPA’06 Liability and Annual Funding Notice 1,962,292,229 1,199,472,038 61.1% 60.7%

4. Accumulated Benefits Liability 1,962,292,229 1,297,668,067 66.1% 67.9%

5. Current Liability 3,133,469,524 1,297,668,067 41.4% 43.0%

Notes:

1. Includes the value of benefits earned through the valuation date (accrued benefits) plus the value of benefits projected to be earned 

in the future for current participants. Used to develop the actuarial accrued liability, based on long-term funding investment return 

assumption of 7.25% and the actuarial value of assets. The funded percentage using market value of assets is 64.6% for 2015 and 

66.3% for 2014. 

2. Represents the portion of present value of future benefits allocated by the actuarial cost method to years prior to the valuation date. 

Used in determining Scheduled Cost, based on long-term funding investment return assumption of 7.25% and the actuarial value 

of assets. The funded percentage using market value of assets is 65.2% for 2015 and 66.9% for 2014. 

3. Measures present value of accrued benefits using the current participant census and financial data. As defined by the Pension

Protection Act of 2006, based on long-term funding investment return assumption of 7.25% and the actuarial value of assets.

4. Provides present value of accrued benefits for disclosure in the audited financial statements, based on long-term funding 

investment return assumption of 7.25%, and the market value of assets.

5. Used to determine maximum tax-deductible contributions and is reported on Schedule MB to Form 5500. Based on the present 

value of accrued benefits, using a prescribed mortality table and investment return assumption of 3.51% for 2015 and 3.64% for 

2014, and the market value of assets. The funded percentage is also shown on the Schedule MB if it is less than 70%.

*Disclosure: These measurements are not necessarily appropriate for assessing the sufficiency of Plan assets to cover the estimated 

cost of settling the Plan’s benefit obligation or the need for or the amount of future contributions.

Page 6.1.11
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

12

0

2,000

4,000

6,000

8,000

10,000

12,000

Active

Inactive Vested

In Pay Status 0.00

1.00

2.00

3.00

4.00

5.00

6.00

The Actuarial Valuation and Review considers the number 

and demographic characteristics of covered participants, 

including 4,026 active participants, 10,470 inactive vested 

participants, and 11,300 pensioners, beneficiaries and 

suspensions, as of December 31, 2014. 

This section presents a summary of significant statistical data 

on these participant groups. More detailed information for 

this valuation year and the preceding year can be found in 

Section 3, Exhibits A and B.

Chart 2 shows the number of non-active participants relative 

to the number of active participants, one indication of the 

Plan’s maturity. A higher ratio shows a more mature plan.

A. PARTICIPANT DATA

A historical perspective 

of how the participant 

population has changed 

over the past several 

years can be seen in these

charts.

CHART 1 

Participant Population as of December 31, 2005 – 2014

CHART 2 

Ratio of Non-Actives to Actives as of

December 31, 2005 – 2014

Page 6.1.12
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

13

0

100

200

300

400

500

600

700

800

0

200

400

600

800

1,000

1,200

Active Participants

Pension plan costs are affected by the age and years of 

Credited Service of active participants. In this year’s 

valuation, there were 4,026 active participants with an 

average age of 45.1 and average years of Credited Service of 

12.4. This compares to 45.3 and 12.5, respectively, for the 

3,979 active participants in the prior year.

Among active participants, there were 17 with unknown age. 

The actuarial calculations were adjusted for missing 

information by assuming that it was the same as information 

provided for other active participants with similar known

characteristics.

These charts show a 

distribution of active 

participants by age and 

by years of Credited 

Service.

CHART 3 

Distribution of Active Participants by Age as of 

December 31, 2014

CHART 4 

Distribution of Active Participants by Years of Credited 

Service as of December 31, 2014

Page 6.1.13
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

14

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

500

1,000

1,500

2,000

2,500

Inactive Vested Participants

Participants who leave the coverage of the Plan after 

satisfying the requirements for a deferred pension or an 

immediate pension but elect to defer commencement are 

considered to be “inactive vested” and are included in the 

pension plan cost. In this year’s valuation, there were 10,470 

inactive vested participants with an average age of 54.4 and 

average monthly benefit of $874. This compares to 53.9 and 

$864, respectively, for the 10,602 inactive vested participants 

in the prior year. 

No cost is included for other inactive participants, even 

though some may return to active employment before 

incurring a permanent break in service.

These charts show a 

distribution of inactive 

vested participants by 

age and by monthly 

amount.

CHART 5 

Distribution of Inactive Vested Participants by Age

as of December 31, 2014

CHART 6 

Distribution of Inactive Vested Participants by Monthly 

Amount as of December 31, 2014

Page 6.1.14
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

15

Pensioners and Beneficiaries

During the fiscal year ended December 31, 2014, there were 

247 pensions awarded, as detailed in this chart. The average 

monthly pension awarded, after adjustment for optional forms 

of payment, was $872. The chart below presents both the 

number and average monthly amount of pensions awarded in 

each of the years shown, by type and in total.

CHART 7 

Pension Awards: 2005 – 2014

Total Normal Early Disability Unreduced Early Rule of 85

Year Ended 

December 31 Number

Average 

Amount Number

Average 

Amount Number

Average 

Amount Number

Average 

Amount Number

Average 

Amount Number

Average 

Amount

2005 555 $1,331 116 $786 194 $989 21 $2,184 145 $987 79 $3,377

2006 511 1,255 120 690 177 920 27 2,445 124 957 63 3,346

2007 541 1,177 131 544 177 991 21 1,852 148 952 64 3,283

2008 678 1,360 134 687 276 1,102 29 1,882 133 1,015 106 3,172

2009 577 1,287 197 594 221 967 26 2,044 57 1,130 76 3,871

2010 463 1,105 169 518 181 727 17 1,736 35 1,801 61 3,281

2011 462 1,105 146 547 224 625 16 2,397 19 2,056 57 3,611

2012 311 1,157 212 534 42 1,627 6 2,822 17 2,012 34 3,742

2013 288 875 230 510 21 1,410 9 1,422 6 1,936 22 3,663

2014 247 872 203 672 33 1,268 4 1,593 1 1,101 6 4,940

Page 6.1.15
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

16

0

500

1,000

1,500

2,000

2,500

Rule of 85

Unreduced Early

Disability

Early

Normal

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

As of this year’s valuation date, 8,837 pensioners and 2,410 

beneficiaries were receiving total monthly benefits of 

$11,029,028. For comparison, in the previous year, there 

were 8,922 pensioners and 2,385 beneficiaries receiving 

monthly benefits of $10,998,330. There were 53 suspended 

pensioners in this valuation compared with 70 in the prior 

year.

These charts show the 

distribution of the 

current pensioners 

based on their age and 

monthly amount, by 

type of pension.

CHART 8 

Distribution of Pensioners by Type and by Age

as of December 31, 2014

CHART 9 

Distribution of Pensioners by Type and by Monthly 

Amount as of December 31, 2014

Page 6.1.16
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

17

In Chart 10, additions to the pension rolls include new 

pensions awarded and suspended pensioners who have been 

reinstated. Terminations include pensioners who died or were 

suspended during the prior plan year. The change in average 

age and average amounts of pensioners in payment status is 

shown as the Fund matures over time.

This chart shows a 

year-by-year history of 

changes in the 

pensioner group.

CHART 10

Progress of Pension Rolls: 2005 – 2014

Year Ended In Payment Status at Year End

December 31 Additions Terminations Number Average Age Average Amount

2005 565 328 7,801 70.9 $931

2006 519 317 8,003 70.9 968

2007 544 352 8,195 71.0 997

2008 720 347 8,568 70.8 1,039

2009 589 361 8,796 71.0 1,070

2010 478 346 8,928 71.2 1,086

2011 473 370 9,031 71.4 1,101

2012 323 361 8,993 71.9 1,118

2013 307 378 8,922 72.4 1,123

2014 269 354 8,837 72.9 1,131

Page 6.1.17
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

18

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Millions 

Benefits Paid

Net Contributions

Pension plan funding anticipates that, over the long term, 

both contributions (less administrative expenses) and 

investment earnings (less investment fees) will be needed to 

cover benefit payments. Pension plan assets change as a 

result of the net impact of these income and expense 

components. A summary of these transactions for the 

valuation year is presented in Section 3, Exhibit C. 

Contributions net of administrative expenses were 

$25,886,020 for the year. Benefit payments during the year 

totaled $133,798,195 and are projected to increase to 

approximately $168 million ten years from now. To the 

extent that future contributions are projected to be less than 

benefit payments, investment earnings or fund assets will be 

needed to cover the shortfall.

B. FINANCIAL INFORMATION

This chart depicts the 

net employer 

contributions and 

benefits paid over the 

last ten years.

CHART 11

Comparison of Net Employer Contributions and Benefits Paid

for Years Ended December 31, 2005 – 2014

Page 6.1.18
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

19

Because the Plan is funded by negotiated contribution rates, it 

is desirable to have a level and predictable pension plan cost 

from one year to the next. The Trustees have approved an 

asset valuation method that gradually adjusts to market value. 

Under this valuation method, the full effect of market 

fluctuations is not recognized in a single year. 

The amount of the adjustment to recognize market value is 

treated as income, which may be positive or negative. 

Realized gains and losses and unrealized gains and losses are 

treated equally and, therefore, the sale of assets has no 

immediate effect on the actuarial value. 

Because the Plan is projected to become insolvent and the 

insolvency is based on the market value of assets, we 

recommend that the market value of assets be used for 

valuation purposes beginning with the January 1, 2016 

actuarial valuation.

This chart shows the 

determination of the 

actuarial value of assets 

as of December 31, 

2014.

CHART 12

Determination of Actuarial Value of Assets as of December 31, 2014

1 Market value of assets, December 31, 2014 $1,297,668,067

Original Unrecognized

2 Calculation of unrecognized return Amount* Return** 

(a) Year ended December 31, 2014 -$3,774,597 -$3,019,677 

(b) Year ended December 31, 2013 151,803,947 91,082,368

(c) Year ended December 31, 2012 65,755,166 26,302,066

(d) Year ended December 31, 2011 -80,843,640 -16,168,728

(e) Year ended December 31, 2010 64,082,062 0 

(f) Total unrecognized return 98,196,029

3 Preliminary actuarial value: (1) - (2f) 1,199,472,038

4 Adjustment to be within 20% corridor 0 

5 Final actuarial value of assets as of December 31, 2014: (3) + (4) $1,199,472,038

6 Actuarial value as a percentage of market value: (5) ÷ (1) 92.4%

7 Amount deferred for future recognition: (1) - (5) $98,196,029

* Total return on market value basis minus expected return on actuarial basis using the net investment return assumption

** Recognition at 20% per year over 5 years

Page 6.1.19
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

20

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ Billions 

Actuarial Value

Market Value

Both the actuarial value and the market value of assets are 

representations of the Fund’s financial status. As investment 

gains and losses are gradually taken into account, the 

actuarial value of assets tracks the market value of assets. The 

actuarial value is significant because it is subtracted from the 

Plan’s total actuarial accrued liability to determine the portion 

that is not funded and is used to determine the PPA’06 funded 

percentage. Amortization of the unfunded portion is an 

important element in the contribution requirements of the 

Plan as detailed in Subsection E. 

This chart shows how 

the actuarial value of 

assets and the market 

value of assets have 

changed from 2005 to 

2014.

CHART 13

Actuarial Value of Assets vs. Market Value of Assets as of December 31, 2005 - 2014

Page 6.1.20
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

21

The Trustees are in the best position to select the appropriate 

employment level assumption to use for funding the Plan. 

Total months of contributions, number of actives and their 

average months of contributions are shown in Chart 14. 

Certifications under PPA’06 and MEPRA include a 

projection of future contributions. Any projection of industry 

activity, including future employment and contribution levels, 

must be based on reasonable information for the projection 

period provided by the Trustees. The industry activity 

assumption used for the 2015 actuarial certification was that 

the total number of contributory months would decline by 2% 

per year for the next five years, and remain level thereafter.

The employment level assumption is 11.5 months for each 

active participant. The experience in recent years has shown a 

trend of per capita months at about this level. We look to the 

Trustees for guidance as to whether this continues to be 

reasonable for the long term.

C. EMPLOYMENT EXPERIENCE

This chart provides a 

history of the various 

measures of 

employment.

CHART 14

Employment History: 2005 - 2014

Total Months of 

Contributions Active Participants

Average Months

of Contributions

Year Ended

December 31 Number

Percent

Change Number

Percent

Change Number

Percent

Change

2005 79,452 -8.2% 6,946 -6.9% 11.4 -1.7%

2006 75,015 -5.6% 6,426 -7.5% 11.7 2.6%

2007 71,943 -4.1% 6,211 -3.3% 11.6 -0.9%

2008 65,874 -8.4% 5,661 -8.9% 11.6 0.0%

2009 55,385 -15.9% 4,687 -17.2% 11.8 1.7%

2010 52,392 -5.4% 4,484 -4.3% 11.7 -0.8%

2011 48,940 -6.6% 4,180 -6.8% 11.7 0.0%

2012 46,993 -4.0% 4,031 -3.6% 11.7 0.0%

2013 46,296 -1.5% 3,979 -1.3% 11.6 -0.9%

2014 46,771 1.0% 4,026 1.2% 11.6 0.0%

Most recent five-year average months: 11.7

Ten-year average months: 11.6

Page 6.1.21
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

22

To calculate the cost requirements and solvency projections 

of the Plan, assumptions are made about future events that 

affect the amount and timing of benefits to be paid and assets 

to be accumulated. Each year actual experience is measured 

against the assumptions and, to the extent that there are 

differences in that year, the contribution requirement is 

adjusted. If assumptions are changed, the contribution 

requirement is adjusted to take into account a change in 

experience anticipated for all future years.

Taking account of experience gains or losses in one year 

without making a change in assumptions reflects the belief 

that the single year's experience was a short-term 

development and that, over the long run, experience will 

return to that originally assumed. For contribution 

requirements to remain stable, assumptions should 

approximate experience.

When compared to the projected actuarial accrued liability of 

$1,987,142,180 as of December 31, 2014, the net experience 

variation other than investment experience was not 

significant. On the following pages is a discussion of the 

major components of the actuarial experience.

D. ACTUARIAL EXPERIENCE

This chart provides a 

summary of the prior 

year’s actuarial 

experience.

CHART 15

Actuarial Experience for the Year Ended December 31, 2014

1 Net gain from investments* $39,404,588

2 Net gain from administrative expenses 599,412

3 Net gain from other experience 1,738,284

4 Net experience gain: (1) + (2) + (3) $41,742,284

* Details in Chart 16.

Page 6.1.22
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

23

Investment Rate of Return

Because earnings on investments significantly affect the cost 

of the Plan, an assumption is made about the rate of return on 

plan assets. The rate of return is investment income net of 

investment expenses, expressed as a percentage of the 

average actuarial value of assets during the year. 

Investment income for the purposes of the actuarial valuation 

consists of projected investment income at the actuarially 

assumed rate (net of investment expenses), and the 

adjustment for market value changes.

This chart shows the 

portion of the gain due 

to investment 

experience.

CHART 16

Actuarial Value Investment Experience for the Year Ended December 31, 2014

1 Net investment income $121,471,447

2 Average actuarial value of assets 1,131,956,679

3 Rate of return: (1) ÷ (2) 10.73%

4 Assumed rate of return 7.25%

5 Expected net investment income: (2) x (4) $82,066,859

6 Actuarial gain: (1) – (5) $39,404,588

Page 6.1.23
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

24

For your information, the following chart shows the rate of 

return on an actuarial basis compared to the market value 

investment return for the last 20 years, including five-year, 

ten-year and 20-year averages. 

As indicated below, the experience in the past few years has 

shown both higher and lower rates of return than the 

assumption. Overall, interest rates have declined 

substantially in the current economic environment. Based 

upon this experience, the current asset allocation, and future 

expectations, we have maintained the assumed rate of return 

of 7.25%. However, we will continue to monitor the plan’s 

actual and anticipated investment returns and may revise our 

assumed rate of return in a future actuarial valuation, if 

warranted.

CHART 17

Investment Return – Actuarial Value vs. Market Value: 1995 - 2014

Actuarial Value 

Investment Return

Market Value 

Investment Return

Actuarial Value 

Investment Return

Market Value 

Investment Return

Year Ended

December 31 Amount Percent* Amount Percent

Year Ended

December 31 Amount Percent* Amount Percent

1995 $135,029,500 21.08% $190,537,929 28.60% 2005 $53,952,656 3.74% $74,528,689 5.39%

1996 112,854,729 14.95% 121,975,932 14.60% 2006 92,832,022 6.49% 195,157,758 14.03%

1997 187,327,378 22.24% 205,092,727 21.88% 2007 131,895,915 9.08% 114,762,992 7.58%

1998 195,373,452 19.54% 213,521,275 19.19% 2008 -175,242,416 -11.64% -435,550,927 -28.08%

1999 81,780,749 7.05% 74,274,648 5.75% 2009 60,972,513 4.91% 239,476,303 23.35%

2000 177,747,357 14.75% 54,220,234 4.08% 2010 77,802,636 6.47% 151,288,010 12.97%

2001 79,973,253 5.87% -9,069,183 -0.67% 2011 42,140,746 3.58% 4,437,230 0.37%

2002 45,393,706 3.19% -89,236,183 -6.68% 2012 48,750,735 4.38% 146,396,089 13.17%

2003 61,192,070 4.28% 184,138,629 15.25% 2013 183,962,564 17.42% 228,350,850 19.81%

2004 60,565,457 4.20% 100,886,814 7.52% 2014 121,471,447 10.73% 78,292,262 6.15%

Total $1,775,776,469 $1,843,482,078

Most recent five-year average return: 8.35% 10.29%

Most recent ten-year average return: 5.01% 6.24%

20-year average return: 7.39% 7.62%

Note: Each year’s yield is weighted by the average asset value in that year.

*The investment return for 2000 includes the effect of a change in the method for determining the Actuarial Value of Assets.

Page 6.1.24
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

25

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Actuarial Value

Market Value

Subsection B described the actuarial asset valuation method 

that gradually recognizes fluctuations in the market value rate 

of return. The goal of this is to stabilize the actuarial rate of 

return and to produce more level pension plan costs. 

This chart illustrates 

how this method has 

actually worked over 

the past twenty years. 

The actuarial return for 

year 2000 reflects a 

change in asset method.

CHART 18

Market Value and Actuarial Rates of Return for Years Ended December 31, 1995 - 2014

Page 6.1.25
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

26

Administrative Expenses

Administrative expenses declined from $2,939,650 in 2013 to 

$2,419,630 in 2014, which resulted in a gain of $599,412. We 

have maintained the assumption of $3,000,000 for the current 

year. However, we will continue to monitor the plan’s 

expenses and will lower the assumption for future valuations, 

if expenses continue at the current level.

Mortality Experience

Mortality experience (more or fewer than expected deaths) 

yields actuarial gains or losses. The average number of deaths 

for nondisabled pensioners over the past seven years was 311 

per year compared to 299 projected deaths per year. The 

assumed mortality rates for disabled pensioners were updated 

effective January 1, 2014. The number of deaths for disabled 

pensioners over the past year was 25 compared to 26 

projected deaths. We will continue to monitor the mortality 

experience and the margin for future mortality improvement. 

Other Experience

There are other differences between projected and actual 

experience that appear when a new valuation is compared 

with projections from the previous valuation. These include:

 the extent of turnover among the participants, and 

 retirement experience (earlier or later than projected). 

The net gain from mortality and other experience amounted 

to $1,738,284 for the last plan year, which is 0.1% of the 

projected actuarial accrued liability. 

Page 6.1.26
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

27

Changes Since Last Valuation

The actuarial assumptions and plan of benefits are unchanged 

from the prior valuation. 

The average contribution rate for benefit accruals decreased 

slightly from $398.95 per month in 2014 to $398.43 per 

month in 2015. After reflecting the three years of 5% 

increases effective January 1, 2015 under the Default 

Schedule, the projected total contribution rate for 2015 is 

$461.23 per month. The 5% increases do not count for benefit 

accruals. 

Contributions

ERISA imposes a minimum funding standard that requires 

the Plan to maintain a Funding Standard Account. 

Contributions meet the legal requirement on a cumulative 

basis if that account shows no deficiency. The Funding 

Standard Account for the prior Plan Year is shown in 

Section 3, Exhibit F. 

Employers who contribute to defined benefit pension plans 

are also subject to maximum deductible contribution 

limitations prescribed by the IRS. For the development of the 

maximum deductible contribution amount, see Section 3, 

Exhibit G. 

The employment level assumptions from the 2015 zone 

certification estimates 45,836 contributory months for 2015. 

Based on the average total contribution rate of $461.23, the 

contributions projected for the year beginning January 1, 

2015 are $21,140,860 as shown in Chart 19. Contributions for 

the year beginning January 1, 2015 are projected to be less

than the maximum allowable deduction level including the 

current funding deficiency. (See Section 4, Exhibit IV for the 

development of the minimum required contribution.) 

Funding Standard Account

On December 31, 2014, the Funding Standard Account had a 

funding deficiency of $332,583,760, as shown on the 2014 

Schedule MB. For a plan that is in critical status under PPA 

’06, employers will generally not be penalized if a funding 

deficiency develops, provided the parties fulfill their 

obligations in accordance with the Rehabilitation Plan 

developed by the Trustees and the negotiated bargaining 

agreements reflect that Rehabilitation Plan.

We are available to work with the Trustees to develop credit 

balance projections.

E. SUMMARY OF CONTRIBUTION REQUIREMENTS

CHART 19

Contribution Requirements vs. Contributions Projected for Year Beginning January 1, 2015

ERISA minimum required contribution $473,831,388

Projected contributions(1) 21,140,860

Maximum deductible contribution 3,221,905,003

(1)Does not include any withdrawal liability payments.

This chart summarizes 

the contribution 

information for the 

valuation year.

Page 6.1.27
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

28

PPA’06 calls on trustees to actively monitor their plans’ 

financial prospects to identify emerging funding challenges 

so they can be addressed effectively. Trustees are required to 

review formal projections of the financial status of their plans 

at least annually 

2015 Actuarial Status Certification

The actuarial certification of plan status under PPA’06 is 

required not later than the 90th day of the plan year. 

The 2015 certification was based on the liabilities calculated 

in the 2014 actuarial valuation, adjusted for subsequent 

events and projected to December 31, 2014, and estimated 

asset information as of December 31, 2014. In addition, the 

Trustees provided an industry activity assumption that the 

total number of contributory months would decline by 2% per 

year for five years, and remain level thereafter. This Plan was 

classified as critical and declining because the funded 

percentage was 61.1%, there was a projected deficiency in the 

Funding Standard Account within one year, and there was a 

projected insolvency within 20 years. 

Rehabilitation Plan

This plan was first categorized as in critical status in 2008. 

The Trustees adopted a Rehabilitation Plan to enable the plan 

to cease being in critical status by the end of the 

Rehabilitation Period. Under the Rehabilitation Plan, new 

collective bargaining agreements negotiated on or after April 

28, 2008 will include the maximum benefit reductions 

allowed by law. These reductions include the removal of all 

early retirement subsidies, joint and survivor subsidies, 

disability pensions, the 36-payment pre-retirement death 

benefit and all benefit options besides the single life annuity, 

QJSA or QOSA. The Rehabilitation Plan also includes 

supplemental off-benefit contributions to the plan beginning 

January 1, 2013. 

The Trustees elected under the Worker, Retiree and Employer 

Recovery Act of 2008 (WRERA) to freeze the Zone Status 

for 2009 at the level it was assigned for 2008, (i.e., critical). 

As a result, an update to the Rehabilitation Plan was not 

required in the 2009 Plan Year. The Trustees also elected 

under WRERA to extend the Rehabilitation Period by three 

additional years.

Due to the adverse experience, the Trustees have determined 

that they could not make any reasonable updates to the 

original Rehabilitation Plan to enable expected emergence 

from critical status. As a result, the Rehabilitation Plan was 

restated in 2012 for the Trustees’ decision to forestall plan 

insolvency. Working toward that goal, the Trustees have 

eliminated early retirement benefits for inactive participants 

and have reduced the supplemental off-benefit contributions 

to encourage continued plan participation. 

2016 Actuarial Status Certification

Based on the assumptions and methods employed for this 

2015 valuation, this plan will likely be categorized as in 

critical and declining status for 2016. The actual status for the 

2016 Plan Year will involve the following:

 Trustee elections under MEPRA, 

 Updated asset information,

 Trustee input on industry activity, and 

 Projections of benefit liabilities that recognize adopted 

plan changes, changes in collectively bargained 

contribution rates and other significant events. 

F. PENSION PROTECTION ACT OF 2006 (PPA’06)

Page 6.1.28
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

29

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

$ Billions 

The Plan is operating under a Rehabilitation Plan that was 

amended on March 8, 2011 with an intent to forestall 

insolvency. Once the fund’s assets are exhausted, PBGC 

financial assistance will be needed to continue payment of 

Plan benefits at the reduced PBGC guaranteed benefit level. 

Accordingly, this report does not contain a long-term 

“scheduled cost” measure that the Trustees could use to 

evaluate whether benefit levels are sustainable given 

negotiated contributions. Instead, this section provides 

information about the Plan’s projected insolvency based on 

the Rehabilitation Plan. 

Based on this valuation, Chart 20 illustrates that assets are 

projected to be exhausted in 2030, the same as in the prior 

year’s valuation. 

These projections are based on the plan of benefits and 

assumptions used for the 2015 PPA certification, adjusted for 

and including the following:

 assumes all non-retired members are covered under the 

Rehabilitation Plan Default Schedule,

 reflects the Trustees’ decision to increase contribution 

rates by 5% per year over 7 years, beginning January 1, 

2013 (the additional contributions do not count toward 

benefit accruals), 

 assumes no future withdrawal liability payments, and

 the total contributory months will decline by 2% per year 

for the next five years, then remain level thereafter.

G. SOLVENCY PROJECTION

CHART 20

Projected Market Value of Assets for Years Ending December 31

This chart shows the 

projected market value

of assets until projected 

insolvency. It does not 

reflect any reduction in 

benefits or PBGC 

assistance that may 

occur as a result of 

insolvency.

Page 6.1.29
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

30

Under MEPRA, if a plan is projected to be unable to pay 

benefits within 15 years (or within 20 years, if the PPA’06 

funded percentage is less than 80% or if the ratio of inactives 

to actives is at least 2 to 1), the plan will be categorized in 

“critical and declining” status. Plans in critical and declining 

status may be able to suspend certain accrued benefits (but 

not below 110% of the PBGC guaranteed benefit), including 

those in pay status, if specified conditions are met. 

Section 432(e)(3)(B) requires that the Trustees annually 

update the Rehabilitation Plan and Schedules. We will work 

with the Trustees to provide annual cash flow projections to 

assist the Trustees with those updates and to prepare our 

required assessment of scheduled progress in meeting the 

requirements of that Plan.

Page 6.1.30
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

31

0.00

0.50

1.00

1.50

2.00

2.50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$ Billions 

PVAB

Actuarial Value

of Assets

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Present Value of Accumulated Plan Benefits (PVAB)

Financial reporting, in accordance with the Financial 

Accounting Standards Board Accounting Standards 

Codification (FASB ASC) 960, requires determination of the 

present value of accumulated plan benefits. It is the singlesum value of the benefits, vested or not, earned by 

participants as of the valuation date. These present values are 

determined based on the plan of benefits reflected for 

Funding Standard Account purposes and are based upon the 

actuarial assumptions used to determine the ERISA funding 

costs of the ongoing Plan. These are not appropriate liability 

measurements for other purposes such as if the Plan were to 

terminate.

The funded percentages based on the actuarial value of assets

are 61.1% and 60.7% for the 2015 and 2014 valuations, 

respectively. If the market value of assets were used to 

determine the funded percentage, the 61.1% figure for 2015 

would become 66.1%. The PVAB funded percentage for 

2015 is not the same as that used to determine the annual 

certification required under PPA’06. The 2015 values shown 

in Charts 21 and 22 reflect current participant and financial 

information, whereas the annual certification was based on 

prior participant data and estimated financial results. Chart 21 

below compares the present value of accumulated plan 

benefits with the actuarial value of assets over the past ten

years. Chart 22 shows the relationship of these measures as a 

percentage.

H. DISCLOSURE REQUIREMENTS

CHART 21

Present Value of Accumulated Plan Benefits vs. 

Actuarial Value of Assets as of January 1, 2006 - 2015

CHART 22

Actuarial Value of Assets as a Percentage of Present 

Value of Accumulated Plan Benefits as of 

January 1, 2006 - 2015

A historical comparison 

over the past ten years 

is shown in these charts.

Page 6.1.31
SECTION 2: Actuarial Valuation Results as of January 1, 2015 for the Automotive Industries Pension Plan 

32

For a detailed breakdown of this information and 

reconciliation from last year to this year, see Section 4, 

Exhibit VI.

Annual Funding Notice

PPA’06 requires the annual funding notice to be provided to 

participants, employers, unions and government agencies. 

The notice must be sent by 120 days after the end of the plan 

year. The actuary’s “best estimate” assumptions are the basis 

for the measurement of the funding notice percentage. 

The value of plan benefits earned to date as of January 1, 

2015 is $1,962,292,229 using the long-term funding interest 

rate of 7.25%. As the actuarial value of assets is

$1,199,472,038, the Plan’s funded percentage is 61.1%, 

compared to 60.7% in the prior year. The funded percentage 

is one measure of a plan’s funded status. It is not indicative of 

how well funded a plan may be in the future, especially in the 

event of plan termination. 

The actuarial information to be provided in the annual 

funding notice is shown in Section 3, Exhibit E. 

Current Liability

ERISA also requires the disclosure by the actuary of the 

funding percentage based on "current liability" assumptions 

and the market value of assets, if it is less than 70%. As 

shown in Section 4, Exhibit V, the Plan's current liability as 

of January 1, 2015 is $3,133,469,524 using an interest rate of 

3.51%. As the market value of assets is $1,297,668,067, this 

funded current liability percentage is 41.4%. This will be 

disclosed on the 2015 Schedule MB of IRS Form 5500. 

Page 6.1.32
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

33

EXHIBIT A

Table of Plan Coverage

Year Ended December 31 Change From

Category 2014 2013 Prior Year

Active participants in valuation:

Number 4,026 3,979 1.2%

Average age 45.1 45.3 N/A

Average years of Credited Service 12.4 12.5 N/A

Average credited contribution rate for coming year for benefit accruals $398.43 $398.95 -0.1%

Number with unknown age 17 24 N/A

Total active vested participants 3,000 3,108 -3.5%

Inactive participants with rights to a pension: 

Number 10,470 10,602 -1.2%

Average age 54.4 53.9 N/A

Average monthly benefit $874 $864 1.2%

Pensioners (including disableds): 

Number in pay status 8,837 8,922 -1.0%

Average age 72.9 72.4 N/A

Average monthly benefit $1,131 $1,123 0.7%

Number in suspended status 53 70 -24.3%

Beneficiaries:

Number in pay status 2,410 2,385 1.0%

Average age 75.2 75.0 N/A

Average monthly benefit $431 $412 4.6%

Page 6.1.33
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

34

EXHIBIT B

Participant Population: 2005 – 2014 

Year Ended

December 31

Active

Participants

Inactive Vested

Participants

Pensioners and

Beneficiaries

Ratio of Non-Actives

to Actives

2005 6,946 11,047 9,714 2.99

2006 6,426 11,231 9,979 3.30

2007 6,211 11,156 10,293 3.45

2008 5,661 10,856 10,698 3.81

2009 4,687 11,011 11,044 4.71

2010 4,484 10,882 11,243 4.93

2011 4,180 10,749 11,402 5.30

2012 4,031 10,709 11,419 5.49

2013 3,979 10,602 11,377 5.52

2014 4,026 10,470 11,300 5.41

Page 6.1.34
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

35

EXHIBIT C

Summary Statement of Income and Expenses on an Actuarial Basis

Year Ended

December 31, 2014

Year Ended

December 31, 2013

Contribution income:

Employer contributions $21,483,704 $19,987,191

Withdrawal liability payments 6,788,280 8,566,118

Liquidated damages 33,666 7,608

Less administrative expenses -2,419,630 -2,939,650

Net contribution income $25,886,020 $25,621,267

Investment income:

Expected investment income $82,066,859 $76,546,903

Adjustment toward market value 39,404,588(1) 107,415,661

Net investment income 121,471,447 183,962,564

Total income available for benefits $147,357,467 $209,583,831

Less benefit payments -$133,798,195 -$133,359,572

Change in reserve for future benefits $13,559,272 $76,224,259

(1) Recognizes the $5,747,487 difference in market value on December 31, 2013 between the draft audit report used for the prior year’s valuation 

and the final audit report.

Page 6.1.35
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

36

EXHIBIT D

Financial Information Table

Year Ended

December 31, 2014

Year Ended

December 31, 2013

Cash equivalents $13,894,118 $12,275,829

Accounts receivable:

Employer contributions $1,500,916 $1,450,000

Accrued investment income 5,157,569 7,327,726

Total accounts receivable 6,658,485 8,777,726

Investments:

Common stock $633,908,820 $672,596,203

Corporate obligations 188,110,956 198,752,423

Collective trusts 136,023,143 125,810,664

Limited partnerships 87,348,619 84,535,525

Limited liability companies and other private equity 42,329,503 0

U.S. Government and Government Agency obligations 25,682,181 78,541,565

Real estate investment fund 64,798,679 59,259,838

U.S. Treasury notes 66,773,205 52,183,868

Cash equivalents 33,893,127 35,065,683

Real estate investment trusts 2,047,131 2,849,549

Real estate 0 940,000

Mutual funds 816,199 560,534

Total investments at market value 1,281,731,563 1,311,095,852

Total assets $1,302,284,166 $1,332,149,407

Less accounts payable -$4,616,099 -$4,861,427

Net assets at market value $1,297,668,067 $1,327,287,980*

Net assets at actuarial value $1,199,472,038 $1,185,912,766

*Based on a draft audit report used for the prior year’s valuation. The market value in the final audit report was revised by $5,747,487 to $1,333,035.47.

Page 6.1.36
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

37

EXHIBIT E

Annual Funding Notice for Plan Year Beginning January 1, 2015 and Ending December 31, 2015

2015

Plan Year

2014

Plan Year

2013

Plan Year

Actuarial valuation date January 1 January 1 January 1

Funded percentage 61.1% 60.7% 56.7%

Value of assets $1,199,472,038 $1,185,912,766 $1,109,688,507

Value of liabilities 1,962,292,229 1,954,700,784 1,957,159,781

Fair value of assets as of December 31, 2015 Not available

Fair value of assets as of December 31, 2014 $1,297,668,067

Fair value of assets as of December 31, 2013 1,327,287,980

Critical or Endangered Status

The Plan was in critical status in the plan year for the following five reasons:

1. The plan had a projected Funding Standard Account funding deficiency within 4 years; and

2. The plan had a funded percentage less than 65% and a projected funding deficiency within 5 years; and 

3. The plan’s inactive vested liability exceeded that for actives and the plan had a projected funding deficiency within 

5 years and the plan’s projected contributions fall short of the plan’s normal cost plus interest on unfunded liability; and

4. The plan was in critical status last year and had a projected funding deficiency within 10 years; and

5. The plan was in critical status last year and had a projected insolvency within 30 years. 

The plan was also in critical and declining status because:

1. The plan had a ratio of inactives to actives of at least 2 to 1 and had a projected insolvency within 20 years; and

2. The plan had a funded percentage less than 80% and had a projected insolvency within 20 years.

Page 6.1.37
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

38

Funding Standard Account

ERISA imposes a minimum funding standard that requires 

the Plan to maintain a Funding Standard Account. 

Contributions meet the legal requirement on a cumulative 

basis if that account shows no deficiency. The 

accumulation of the actual contributions in excess of the 

minimum required contributions under ERISA is called the 

credit balance. If actual contributions fall short of the 

minimum required contributions on a cumulative basis, a 

funding deficiency has occurred. 

The Funding Standard Account is charged with a normal 

cost and the amortization of increases in the unfunded 

actuarial accrued liability due to 1) plan amendments, 

2) experience losses and 3) changes in actuarial 

assumptions and funding methods. The account is credited 

with employer contributions, withdrawal liability 

payments, and the amortization of decreases in the 

unfunded actuarial accrued liability due to 1) plan 

amendments, 2) experience gains and 3) changes in 

actuarial assumptions and funding methods. 

Increases or decreases in the actuarial accrued liability due 

to assumption changes and plan amendments are amortized 

over 15 years and short-term benefits, such as 13th checks, 

are amortized over the scheduled payout period. The 

Preservation of Access to Care for Medicare Beneficiaries 

and Pension Relief Act of 2010 (PRA 2010) allowed 

eligible plans to amortize certain losses over periods up to 

29 years.

EXHIBIT F 

Minimum Required Contribution

Funding Standard Account for the Year Ended December 31, 2014

Charges Credits

1 Prior year funding deficiency $223,742,349 6 Prior year credit balance $0

2 Normal cost, including administrative expenses 6,345,213 7 Employer contributions 28,305,650

3 Total amortization charges 122,965,605 8 Total amortization credits 15,602,828

4 Interest to end of the year 25,596,355 9 Interest to end of the year 2,157,284

5 Total charges $378,649,522 10 Full-funding limitation credit 0 

11 Total credits $46,065,762

12 Credit balance/(Funding deficiency): 

(11) – (5) -$332,583,760

Page 6.1.38
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

39

Employers that contribute to defined benefit pension plans 

are allowed a current deduction for payments to such plans. 

There are various measures of a plan’s funded level that are 

considered in the development of the maximum deductible 

contribution amount. 

One of the limits is the excess of 140% of “current 

liability” over assets. “Current liability” is one measure of 

the actuarial present value of all benefits earned by the 

participants as of the valuation date. This is the limit that 

applies to your Plan as shown below. 

Contributions received by the Plan in excess of the 

maximum deductible amount are not prohibited; only the 

deductibility of these contributions is subject to challenge 

and may have to be deferred to a later year. In addition, if 

contributions are not fully deductible, an excise tax in an 

amount equal to 10% of the non-deductible contributions 

may be imposed. However, the plan sponsor may elect to 

exempt the non-deductible amount up to the ERISA fullfunding limitation from the excise tax.

You should review with Fund Counsel the interpretation 

and applicability of all laws and regulations concerning any 

issues as to the deductibility of contribution amounts. 

EXHIBIT G 

Maximum Deductible Contribution

This chart presents the 

calculation of the 

maximum deductible 

contribution for the 

January 1, 2015 - 

December 31, 2015

year.

Maximum Deductible Contribution

1. Normal cost, including administrative expenses $6,195,281

2. Amortization of unfunded actuarial accrued liability (fresh start as of January 1, 2015) 106,125,377

3. Preliminary maximum deductible contribution: (1) + (2), with interest to the end of the plan year 120,463,905

4. Full-funding limitation (FFL) 1,664,304,786

5. Preliminary maximum deductible contribution, adjusted for FFL: lesser of (3) and (4) 120,463,905

6. Current liability, projected to the end of the plan year 3,115,200,434

7. Actuarial value of assets, projected to the end of the plan year 1,139,375,605

8. Excess of 140% of current liability over projected assets at end of plan year: [140% of (6)] - (7), not less than zero 3,221,905,003

9. End of year minimum required contribution 473,831,388

10. Maximum deductible contribution: greatest of (5), (8), and (9) $3,221,905,003

Page 6.1.39
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

40

This section summarizes key provisions of PPA’06 as 

expanded and clarified by the Multiemployer Pension 

Reform Act of 2014 (MEPRA).

PPA’06 Zone Status 

Based on projections of the credit balance in the Funding 

Standard Account, the funded percentage, and cash flow 

sufficiency tests, plans are categorized in one of three 

“zones,” critical status, endangered status, or neither.

A plan is classified as being in critical status (the Red 

Zone) if:

 The PPA’06 funded percentage is less than 65%, 

and either there is a projected Funding Standard 

Account deficiency within five years or the plan is 

projected to be unable to pay benefits within seven 

years, or

 There is a projected Funding Standard Account 

deficiency within four years, or 

 There is an inability to pay benefits within five 

years, or

 The present value of vested benefits for inactive 

participants exceeds that for actives, contributions 

are less than the value of the current year’s benefit 

accruals plus interest on existing unfunded accrued 

benefit liabilities, and there is a projected Funding 

Standard Account deficiency within five years, or

 The plan was in critical status the prior year and 

had a projected Funding Standard Account 

deficiency within 10 years or a projected 

insolvency within 30 years, or 

 As permitted by MEPRA, the plan is projected to 

be in the Red Zone within the next five years and 

the plan sponsor elects to be in critical status. 

A plan is further classified as being in “critical and 

declining” status if:

 There is an inability to pay benefits projected 

within 15 years, or 

 The ratio of inactives to actives is at least 2 to 1, 

and there is an inability to pay benefits projected

within 20 years, or 

 The PPA’06 funded percentage is less than 80%, 

and there is an inability to pay benefits projected 

within 20 years. 

Amortization extensions cannot be used for testing Red 

Zone criteria.

The corrective action for a critical plan is the adoption of a 

formal Rehabilitation Plan, designed to allow the plan to 

emerge from critical status by the end of the rehabilitation 

period. If the Trustees determine that such emergence is

EXHIBIT H

Pension Protection Act of 2006 (PPA ’06)

Page 6.1.40
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

41

not reasonable, the rehabilitation plan is designed to 

emerge as of a later date or to forestall insolvency.

Red Zone plans have tools, such as the ability to reduce or 

eliminate early retirement subsidies, to remedy the 

situation. Plans in the Red Zone may not pay lump sums. 

Other than critical and declining plans, they may not 

reduce benefits of participants who retired before being 

notified of the plan’s critical status (other than rolling back 

recent benefit increases) or alter core retirement benefits

payable at normal retirement age. 

A plan is classified as being in endangered status (the 

Yellow Zone) if:

 The PPA’06 funded percentage is less than 80%, 

or 

 There is a projected Funding Standard Account 

deficiency within seven years, and

 The plan is not in critical status (Red Zone).

A plan that was in the Green Zone in the prior year will not 

enter the Yellow Zone in the current year (although 

otherwise requires to do so) if the plan’s current provisions 

are certified by the actuary to be sufficient (with no further 

action) to allow the plan to emerge from the Yellow Zone 

at the end of the 11 years. 

The corrective actions for an endangered plan are based on 

the adoption of a formal Funding Improvement Plan, 

designed to improve gradually the current funded 

percentage, to forestall a funding deficiency and to keep 

the plan out of critical status.

A plan that has both of the endangered conditions present 

is classified as seriously endangered. Trustees of those 

plans must take interim measures to delay the projected 

funding deficiency by one year and improve the plan’s 

funded percentage.

A plan is classified as being in the Green Zone if it is 

neither in critical status (the Red Zone) nor in endangered 

status (the Yellow Zone).

Funded Percentage

For purposes of PPA’06, the funded percentage is 

determined using the actuarial value of assets and the “Unit 

Credit accrued liability.” This liability is generally 

equivalent to the present value of benefits earned to date, 

as discussed in Subsection H of Section 2, and is based on 

the actuary’s best estimate assumptions.

Page 6.1.41
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

42

Section 415 of the Internal Revenue Code specifies the 

maximum benefits that may be paid to an individual from a 

defined benefit plan and the maximum amounts that may 

be allocated each year to an individual’s account in a 

defined contribution plan. If an individual is covered solely 

by multiemployer plans, the plans do not have to be 

combined for any of the limits. If the individual is covered 

by a single-employer plan, all plans maintained by the 

same employer are combined in applying these tests. 

Multiemployer plan benefits do not need to be combined 

with single-employer plan benefits in testing against the 

pay-based limit. 

A qualified pension plan may not pay benefits in excess of 

the Section 415 limits. The ultimate penalty for noncompliance is disqualification; the plan could lose its tax 

exemption, employers could lose their deductions and 

active participants could be taxed on their vested benefits.

In particular, Section 415(b) of the IRC as amended by the 

Economic Growth and Tax Relief Reconciliation Act of 

2001 (EGTRRA) limits the maximum annual benefit 

payable to a dollar limit of $160,000 indexed for inflation. 

The dollar limit indexed for inflation has remained 

unchanged at $210,000 for 2014 and 2015. These are the 

limits in simplified terms. They must be adjusted based on 

each participant’s circumstances for such things as age at 

retirement and form of benefits chosen. 

While the actual determination of the exact limits 

applicable to each participant’s benefit can only be done 

when the individual retires and applies for benefits, the 

overall impact of the Section 415 dollar limits has been 

reflected in this valuation for plan funding purposes, based 

on our understanding of the requirements of IRC Sections 

404, 412, 415, and 431 and the data available to us.

Fund Counsel’s review and interpretation of the law and 

regulations must be sought in this area as well.

EXHIBIT I 

Section 415 Limitations

Page 6.1.42
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

43

An outline of the major developments in connection with the Plan’s background and position is given below: 

Changes in Benefit Amounts and Average Contribution Rate since January 1, 1976: 

Effective Date Average Monthly 

Credited

Contribution Rate

Monthly Pension Amount Improvement 

to Existing 

Year Month Retirees

Per Year of 

Past Service

Future Service (per 

$100 of Contributions)

1976

1980

1981

1984

1986

1989

1990

1991

1992

1993

1994

1995

1996

1997

January

January

November

September

January

January

January

December

January

January

January

January

January

January

$ 87.58

103.49

126.33

139.13

153.00

163.60

180.00

183.00

187.00

191.25

200.67

220.37

195.75

$ 5.00

5.50

6.05

6.96

7.27

7.71

7.71

$2.75

3.03

3.33

3.83

4.00

4.24

$4.45/$4.24(2)

$4.50/$4.24(3)

$4.50/$4.24(4)

$4.50/$4.24(5)

$4.73/$4.24(5)

10%

(1) 

10%

15%

4.5%

6%

(1)

4.25%

1%

4%(1)

2%(1)

EXHIBIT J 

General Background

Page 6.1.43
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

44

Changes in Benefit Amounts and Average Contribution Rate since January 1, 1976 (continued): 

Effective Date Average Monthly

Credited

Contribution Rate

Monthly Pension Amount Improvement 

to Existing 

Year Month Retirees

Per Year of 

Past Service

Future Service (per 

$100 of Contributions)

1998 January $205.64 $4.90/$4.73(4)/$4.24(5) 1%(1)

1999 January 208.60 10.00 $5.00/$4.24(5) 2%(1)

2000 January 222.52

2001 January 235.22

2002 January 324.40

2003 January 352.56

2003 July $5.00/$3.00(6)

2004 January 365.78

2005 January 390.04 $0.50/$1.00/$2.00(7)

2006 January 393.84

2007 January 404.09

2008 January 395.33

2008 July $1.00(8)

2009 January 381.89

2010 January 394.93

2011 January 393.62

2012 January 399.53

2013 January 405.25

2014 January 398.95

2015 January 398.43

(1) Additional, one-time only, pension payment was granted.

(2) The lower factor applies to service after January 1, 1992.

(3) The lower factor applies to service after January 1, 1994.

(4) The lower factor applies to service after January 1, 2000.

(5) The lower factor applies to service after January 1, 2005.

(6) The lower factor applies to service after July 1, 2003.

(7) The first factor applies to the first $250 of monthly contributions, the second factor applies to the second $250 of monthly 

contributions, and the last factor applies to monthly contributions in excess of $500. All three factors apply to service after 

January 1, 2005.

(8) This factor applies to service after July 1, 2008.

Page 6.1.44
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

45

Other Developments:

Date Event

September 1, 1955: Board of Trustees executed Trust Agreement.

Pension Plan was adopted.

July 12, 1956: Favorable determination letter from the Internal Revenue Service was received.

January 1, 1976: Plan revised to satisfy ERISA.

Funding Standard Account was established.

January 1, 1985: Early Retirement reduction factor was lowered to 1/3 of 1% per month.

January 1, 1986: Plan amended to satisfy REA.

Partial vested-rights adopted for participants with at least 5 years of service.

Early Retirement reduction was dropped for participants retiring at age 62 or later and lowered to 1/4 of 

1% per month for ages between 55 and 62.

Eligibility requirements for Early Retirement and Disability pensions were lowered to 5 years of 

service.

Pre-retirement death benefits are payable on the basis of vested percentage.

January 1, 1997: Full vesting adopted for participants with at least 5 years of service.

October 1, 1997: Plan amended to provide Unreduced Rule of 85 Retirement.

October 1, 1999: Joint and Survivor factors were increased and now reflect a simplified formula

January 1, 2002: One-time IAP rollover allowed for all non-retired participants. Future rollovers at retirement will no 

longer be allowed.

January 1, 2003: Eligibility requirements for Disability Pension amended to require receipt of a Social Security 

Disability award.

January 15, 2008: Board adopts the Segal interest rate method and the market value of assets for determining withdrawal 

liability.

March 4, 2008: For collective bargaining agreements effective on or after March 4, 2008, the $700 per month cap on 

contribution rates was eliminated.

Page 6.1.45
SECTION 3: Supplementary Information as of January 1, 2015 for the Automotive Industries Pension Plan 

46

Other Developments (continued):

Date Event

March 28, 2008: Plan certified as being in “Critical” status under PPA ‘06. A Rehabilitation Plan was adopted that 

include supplemental off-benefit contributions beginning January 1, 2013 and the following benefit 

reductions:

1. Early retirement and joint and survivor adjustment factors will be based on the plan’s actuarial 

equivalence basis.

2. The “Rule of 85” unreduced early retirement benefit will no longer be available.

3. The Plan’s disability benefit will no longer be available to new applicants.

4. The 36-payment pre-retirement death benefit is eliminated.

5. Payment forms, except for a life annuity or automatic joint and 50% survivor annuity, will no 

longer be available to new retirees.

March 5, 2009: Board elects under WRERA to freeze 2009 plan status under PPA’06 and to extend Rehabilitation 

Period by three years.

February 1, 2011: The commencement of the Vested Benefit (for inactive vested participants) prior to Normal Retirement 

Age was eliminated.

March 8, 2011: Board adopts resolution to forestall plan insolvency under the Rehabilitation Plan.

Board adopts simplified method under PBGC Technical Update 10-3 for determining withdrawal 

liability.

March 8, 2012: Board elects to reduce annual supplemental off-benefit contribution under Rehabilitation Plan Default 

Schedule from 12.5% to 5.0%.

October 19, 2012: Date of most recent favorable determination letter from the IRS.

March 31, 2015: Plan certified as being in “Critical and Declining” under PPA’06 and MEPRA.

Page 6.1.46
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

47

May 29, 2015 

CERTIFICATE OF ACTUARIAL VALUATION

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

Automotive Industries Pension Plan as of January 1, 2015 in accordance with generally accepted actuarial principles and practices. It has 

been prepared at the request of the Board of Trustees to assist in administering the Fund and meeting filing requirements of federal 

government agencies. This valuation report may not otherwise be copied or reproduced in any form without the consent of the Board of 

Trustees and may only be provided to other parties in its entirety. 

The measurements shown in this actuarial valuation may not be applicable for other purposes. Future actuarial measurements may differ 

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

that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases 

expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or 

additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. 

The valuation is based on the assumption that the Plan is qualified as a multiemployer plan for the year and on draft information supplied 

by the auditor with respect to contributions and assets and reliance on the Plan Administrator with respect to the participant data. Segal 

Consulting does not audit the data provided. The accuracy and comprehensiveness of the data is the responsibility of those supplying the 

data. To the extent we can, however, Segal does review the data for reasonableness and consistency. Based on our review of the data, we 

have no reason to doubt the substantial accuracy of the information on which we have based this report and we have no reason to believe 

there are facts or circumstances that would affect the validity of these results. Adjustments for incomplete or apparently inconsistent data 

were made as described in the attached Exhibit VII.

I am a member of the American Academy of Actuaries and I meet the Qualification Standards of the American Academy of Actuaries to 

render the actuarial opinion herein. To the best of my knowledge, the information supplied in this actuarial valuation is complete and 

accurate, except as noted in Exhibit I. Each prescribed assumption for the determination of Current Liability was applied in accordance 

with applicable law and regulations. In my opinion, each other assumption is reasonable (taking into account the experience of the plan 

and reasonable expectations) and such other assumptions, in combination, offer my best estimate of anticipated experience under the plan. 

Paul C. Poon, ASA, MAAA

Associate Actuary

Enrolled Actuary No. 14-06069 

Page 6.1.47

Redacted by the U.S. Department of the Treasury
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

48

EXHIBIT I

Summary of Actuarial Valuation Results

The valuation was made with respect to the following data supplied to us by the Plan Administrator: 

1 Pensioners as of the valuation date (including 2,410 beneficiaries in pay status and 53 pensioners in suspended status) 11,300

2 Participants inactive during year ended December 31, 2014 with vested rights (including 2 participants with unknown age) 10,470

3 Participants active during the year ended December 31, 2014 (including 17 participants with unknown age) 4,026

Fully vested 3,000

Not vested 1,026

4 Total participants 25,796

The actuarial factors as of the valuation date are as follows:

1 Normal cost, including administrative expenses(1) $6,195,281

2 Actuarial present value of projected benefits 2,007,936,237

3 Present value of future normal costs 18,201,021

4 Actuarial accrued liability 1,989,735,216

Pensioners and beneficiaries $1,217,466,920

Inactive participants with vested rights 529,848,023

Active participants 242,420,273

5 Actuarial value of assets ($1,297,668,067 at market value as reported by Lindquist LLP) 1,199,472,038

6 Unfunded actuarial accrued liability $790,263,178

(1)Estimated based on expected contributions. Actual normal cost will be based on actual contributions.

Page 6.1.48
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

49

EXHIBIT II

Information on Plan Status as of January 1, 2015

1 Plan status (as certified on March 31, 2015, for the 2015 zone certification) Critical and Declining

2 Scheduled progress (as certified on March 31, 2015, for 2015 zone certification) Yes

3 Actuarial value of assets for Funding Standard Account $1,199,472,038

4 Accrued liability under unit credit cost method 1,962,292,229

5 Funded percentage for monitoring plan's status 61.1%

6 Plan year in which insolvency is expected 2030

7 Reduction in unit credit accrued liability resulting from the reduction in adjustable benefits since the prior valuation date $0

Page 6.1.49
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

50

EXHIBIT III

Schedule of Active Participant Data

(Schedule MB, line 8b)

The participant data is for the year ended December 31, 2014. 

Years of Credited Service

Age Total 1-4 5-9 10-14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 & over

Under 25 147 144 3 - - - - - - - - - - - - - - 

25 - 29 347 233 108 6 - - - - - - - - - - - - 

30 - 34 436 210 136 85 5 - - - - - - - - - - 

35 - 39 445 126 121 135 60 3 - - - - - - - - 

40 - 44 473 113 91 144 91 31 3 - - - - - - 

45 - 49 557 78 110 138 112 69 49 1 - - - - 

50 - 54 687 65 78 153 119 128 95 47 2 - - 

55 - 59 548 34 62 100 91 95 85 55 26 - - 

60 - 64 281 4 22 43 65 50 53 22 18 4 

65 - 69 80 4 6 20 11 8 17 3 4 7 

70 & over 8 - - - - 2 2 1 - - 2 - - 1 

Unknown 17 15 2 - - - - - - - - - - - - - - 

Total 4,026 1,026 739 826 556 385 302 130 50 12

Page 6.1.50
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

51

EXHIBIT IV 

Funding Standard Account 

The table below presents the Funding Standard Account for the Plan Year ending December 31, 2015. 

Charges Credits

1 Prior year funding deficiency $332,583,760 6 Prior year credit balance $0

2 Normal cost, including administrative expenses 6,195,281 7 Amortization credits 19,943,817

3 Amortization charges 122,965,604 8 Interest on (6) and (7) 1,445,927

4 Interest on (1), (2) and (3) 33,476,487 9 Full-funding limitation credit 0 

5 Total charges $495,221,132 10 Total credits $21,389,744

Minimum contribution with interest required to avoid a funding deficiency: (5) – (10), not less than zero $473,831,388

Full funding limitations (FFL) and credits:

1 ERISA FFL (accrued liability FFL) $854,201,697

2 RPA’94 override (90% current liability FFL) 1,664,304,786

3 FFL credit 0 

Page 6.1.51
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

52

EXHIBIT IV (continued)

Funding Standard Account

Schedule of Funding Standard Account Bases (Charges) 

(Schedule MB, line 9c)

Type of Base Date Established

Amortization

Amount

Years 

Remaining

Outstanding

Balance

Combined Base 01/01/2012 $114,042,943 5.82 $564,473,916

Plan Amendment 01/01/2012 $71,720 12 $602,894

Experience Loss 01/01/2012 3,929,674 12 33,033,552

Experience Loss 01/01/2013 4,468,373 13 39,491,166

Change in Assumptions 01/01/2014 452,894 14 4,184,960

Total $122,965,604 $641,786,488

Page 6.1.52
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

53

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

Outstanding

Balance

Plan Amendment 07/01/2012 $2,549,656 12.5 $21,992,906

Plan Amendment 01/01/2013 4,388 13 38,784

Plan Amendment 07/01/2013 1,234,444 13.5 11,162,749

Plan Amendment 01/01/2014 810,548 14 7,489,866

Experience Gain 01/01/2014 11,003,792 14 101,680,481

Experience Gain 01/01/2015 4,340,989 15 41,742,284

Total $19,943,817 $184,107,070

Page 6.1.53
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

54

EXHIBIT IV (continued)

Funding Standard Account

Equation of Balance

1 Net outstanding balance of bases $457,679,418

2 Credit balance/(Funding deficiency) -332,583,760

3 Unfunded actuarial accrued liability: (1) - (2) $790,263,178

Page 6.1.54
SECTION 4: Certificate of Actuarial Valuation as of January 1, 2015 for the Automotive Industries Pension Plan 

EIN 94-1133245/ PN 001 

55

EXHIBIT V 

Current Liability 

The table below presents the current liability for the Plan Year beginning January 1, 2015. 

Item Amount

1. Retired participants and beneficiaries receiving payments $1,691,351,507

2. Inactive vested participants 1,026,865,805

3. Active participants

a. Non-vested benefits $10,913,180

b. Vested benefits 404,339,032

c. Total active 415,252,212

4. Total $3,133,469,524

Expected increase in current liability due to benefits accruing during the plan year $12,663,495

Expected release from current liability for the plan year 138,923,742

Expected plan disbursements for the plan year, including administrative expenses of $3,000,000 141,923,742

Current value of assets 1,297,668,067

Percentage funded for Schedule MB 41.41%

Note: The actuarial assumptions used to calculate these values are shown in Exhibit VII. 

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EXHIBIT VI 

Actuarial Present Value of Accumulated Plan Benefits

The actuarial present value of accumulated plan benefits calculated in accordance with FAS ASC 960 is shown below as of January 1, 

2015 and as of January 1, 2014. In addition, the factors that affected the change between the two dates follow. 

Benefit Information Date

January 1, 2015 January 1, 2014

Actuarial present value of vested accumulated plan benefits:

Participants currently receiving payments $1,217,466,920 $1,235,098,846

Other vested benefits 743,708,297 718,680,242

Total vested benefits $1,961,175,217 $1,953,779,088

Actuarial present value of non-vested accumulated plan benefits 1,117,012 921,696

Total actuarial present value of accumulated plan benefits $1,962,292,229 $1,954,700,784

Factors

Change in Actuarial 

Present Value of 

Accumulated Plan 

Benefits

Benefits accumulated, net experience gain or loss, changes in data $4,524,018

Benefits paid -133,798,195

Interest 136,865,622

Total $7,591,445

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EXHIBIT VII 

Statement of Actuarial Assumptions/Methods

(Schedule MB, line 6)

Rationale for Assumptions: The information and analysis used in selecting each demographic assumption that has a 

significant effect on this actuarial valuation is shown in this exhibit. Current data is reviewed in 

conjunction with each annual valuation. Based on professional judgment, no assumption changes 

are warranted at this time. 

Mortality Rates: Healthy: RP-2000 Combined Healthy Mortality Tables, set back 1 year 

Disabled: RP-2000 Combined Healthy Mortality Tables, set forward 3 years. 

The above RP-2000 mortality tables (set forward 2 years for disabled lives) reasonably 

anticipates the projected mortality experience of the Plan as of the measurement date. The 

additional 1-year setback is a provision made for future mortality improvement.

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Termination Rates before Retirement: Rate (%)

Mortality

Age Male Female Disability Withdrawal*

20 0.03 0.02 0.05 21.20

25 0.04 0.02 0.06 15.80

30 0.04 0.02 0.08 11.60

35 0.07 0.04 0.11 8.40

40 0.10 0.06 0.17 6.20

45 0.14 0.10 0.27 4.20

50 0.20 0.16 0.45 2.60

55 0.32 0.24 0.76 1.00

60 0.59 0.44 1.22 0.00

* Withdrawal rates under age 55 are increased by 6 percentage points for the first 5 years of service. Withdrawal 

rates do not apply at retirement eligibility.

The termination rates and disability rates were based on historical and current demographic 

data, adjusted to reflect estimated future experience and professional judgment. As part of the 

analysis, a comparison was made between the actual number of terminations and disability 

retirements and the projected number based on the prior year’s assumption over the most 

recent 7 years.

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Retirement Rates:

Age Retirement Rates

55 – 60 5%

61 15

62 35

63 25

64 25

65 50

66 30

67 100

The retirement rates were based on historical and current demographic data, adjusted to reflect 

estimated future experience and professional judgment. As part of the analysis, a comparison was 

made between the actual number of retirements and the projected number based on the prior 

year’s assumption over the most recent 7 years.

Description of Weighted Average 

Retirement Age: Age 62.2, determined as follows: The weighted average retirement age for each participant is 

calculated as the sum of the product of each potential current or future retirement age times the 

probability of surviving from current age to that age and then retiring at that age, assuming no 

other decrements. The overall weighted retirement age is the average of the individual retirement 

ages based on all the active participants included in this actuarial valuation.

Retirement Age for Inactive 

Vested Participants: Age 65 

The retirement age for inactive vested participants was based on historical and current 

demographic data, adjusted to reflect the plan design, estimated future experience and 

professional judgment. As part of the analysis, the ages of new retirees from inactive vested 

status were reviewed.

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Future Benefit Accruals: Work-year of 11.2 months of contributions per active participant.

The future benefit accruals were based on historical and current demographic data, adjusted to 

reflect estimated future experience and professional judgment. As part of the analysis, a 

comparison was made between the assumed and the actual benefit accruals over the most recent 

10 years.

Unknown Data for Participants: Same as those exhibited by participants with similar known characteristics. If not specified, 

participants are assumed to be male.

Definition of Active Participants: Active participants are defined as those with at least five months in the most recent Plan Year, 

excluding those who have retired as of the valuation date. 

Exclusion of Inactive Vesteds: Inactive participants over age 70 excluded from the valuation. 

The exclusion of inactive vested participants over age 70 was based on historical and current 

demographic data, adjusted to reflect estimated future experience and professional judgment. As 

part of the analysis, the ages of new retirees from inactive vested status were reviewed. 

Percent Married: 85% 

Age of Spouse: Females 4 years younger than males.

Benefit Election: All future pensioners are assumed to elect the Life Option at retirement. 

The benefit elections were based on historical and current demographic data, adjusted to reflect 

the plan design, estimated future experience and professional judgment. As part of the analysis, a 

comparison was made between the assumed and the actual option election patterns over the most 

recent 7 years.

Net Investment Return: 7.25% 

The net investment return assumption is a long-term estimate derived from historical data, current 

and recent market expectations, and professional judgment. As part of the analysis, a building 

block approach was used that reflects inflation expectations and anticipated risk premiums for 

each of the portfolio’s asset classes as provided by SegalRogerscasey, as well as the Plan’s target 

asset allocation.

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Annual Administrative Expenses: $3,000,000, payable monthly (equivalent to $2,888,977 payable at the beginning of the year).

The annual administrative expenses were based on historical and current data, adjusted to reflect 

estimated future experience and professional judgment.

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

return is equal to the difference between the actual market return and the expected return on the 

actuarial value, and is recognized over a five-year period. The actuarial value is further adjusted, 

if necessary, to be within 20% of the market value.

Actuarial Cost Method: Entry Age Normal Actuarial Cost Method. Entry Age is the current age minus Credited Service. 

Normal Cost and Actuarial Accrued Liability are calculated on an individual basis and are 

allocated by service, with Normal Cost determined as if the current benefit accrual rates have 

always been in place. Normal Cost is adjusted by the ratio of the actual contributions credited for 

benefit accruals received during the plan year to the expected contribution. For 2015, the 

expected contributions are $21,140,860. 

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

Current Liability Assumptions:

Interest 3.51%, 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: RP-2000 tables 

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

nonannuitants

Justification for Change in 

Actuarial Assumptions

(Schedule MB, line 11): For purposes of determining current liability, the current liability interest rate was changed due to 

a change in the permissible range and recognizing that any rate within the permissible range 

satisfies the requirements of IRC Section 431(c)(6)(E) and the mortality tables were changed in 

accordance with IRS Regulations 1.431(c)(6)-1 and 1.430(h)(3)-1. 

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Estimated Rate of Investment Return:

On actuarial value of assets 

 (Schedule MB, line 6g): 10.7%, for the Plan Year ending December 31, 2014 

On current (market) value of assets

 (Schedule MB, line 6h): 6.2%, for the Plan Year ending December 31, 2014 

Funding Standard Account

Contribution Timing

(Schedule MB, line 3(a)): Unless otherwise noted, contributions are paid periodically throughout the year pursuant to 

collective bargaining agreements. The interest credited in the Funding Standard Account is 

therefore assumed to be equivalent to a July 1st contribution date.

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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 it be interpreted as, 

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 

Normal Pension:

Age and Service requirements 65 and 5 years of Credited Service (including 24 months of Future Service).

Amount The monthly amount is the sum of (a), (b), (c), (d) and (e).

a. $10.00 for each year of Past Service.

b. $5.00 for each $100 of the contributions made on the participant's behalf from his

Contribution Date through June 30, 2003.

c. $3.00 for each $100 of the contributions made on the participant's behalf from July 1, 2003

through December 31, 2004.

d. 0.5% for the first $250 of monthly contributions, 1.0% for the next $250 of monthly

contributions, and 2.0% of monthly contributions in excess of $500 made on the participant’s

behalf on or after January 1, 2005.

e. 1.0% of monthly contributions made on the participant’s behalf on or after July 1, 2008.

Contribution increases under the Rehabilitation Plan do not count for benefit accruals.

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Early Retirement Pension:

Age and Service requirements 55 and 60 months of Credited Future Service. 

Amount Accrued Normal Pension amount to which the participant would be entitled, reduced by 3 for 

each year that the retiring employee is younger than 62 (no reduction is applied between ages 62 

and 65 for the Unreduced Early Pension, or if participants age and service total at least 85 for the 

Unreduced Rule of 85 Pension). For participants subject to the Rehabilitation Plan benefit 

reductions, all Early Retirement Pensions are reduced from age 65, using the plan’s actuarial 

equivalence basis. This benefit is not available to those who retire from inactive status.

Disability Pension:

Age and Service requirements Any age and 5 years of Credited Service (including 24 months of Future Service). 

Other requirements Eligible for a Social Security disability benefit.

Amount Accrued Normal Pension amount to which the participant would be entitled (on his date of 

disability) without any reduction. For participants subject to the Rehabilitation Plan benefit 

reductions, the Disability Pension is not available and those who become disabled are eligible 

only for the Vested Benefit described below.

Vested Benefit:

Age and Service requirements Any age and 5 years of Credited Service (including 24 months of Future Service). 

Amount Accrued Normal Pension, payable commencing at Normal Retirement Age, or, if available (on a 

reduced basis), as early as age 55.

Normal Retirement Age The later of age 65 and the fifth anniversary of participation.

Spouse's Benefit:

Age and Service requirements Any age and 5 years of Credited Service (including 24 months of Future Service). 

Amount 50% of the benefit that the participant would have received had he or she retired the day before 

death on a Joint and Survivor Annuity. If the participant is not eligible to retire at the time of 

death, payments will be deferred until the participant’s earliest retirement age.

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Pre-Retirement Death Benefit:

Age and Service requirements Any age and 5 years of Credited Service (including 24 months of Future Service). 

Amount Return of the total contributions made on account of the participant’s employment or, if greater, 

the participant’s unreduced pension at time of death payable for 36 months. 

This benefit is not payable if benefits are due under the Spouse's Benefit or for participants 

subject to the Rehabilitation Plan benefit reductions.

Joint and Survivor Annuity: All retirements are paid in the form of a 50% joint and survivor annuity unless this form is 

rejected by the participant and spouse. The benefit amount otherwise payable is reduced to reflect 

the joint and survivor coverage. If the spouse predeceases the participant, the benefit "pops-up" to 

the amount is payable before the reduction. If this type of pension is rejected, benefits are payable 

for the life of the participant without reduction (with a minimum guarantee of 36 monthly 

payments) or in any other available optional form elected by the participant. For participants 

subject to the Rehabilitation Plan benefit reductions, the “pop-up” feature and the 36-month 

guarantee are not available, and the joint and survivor reduction factors are based on the plan’s 

actuarial equivalence basis.

Optional Forms of Benefit Payment:  50% Joint and Survivor Option (“QJSA”) 

 75% Joint and Survivor Option (“QOSA”)

 Life with 36-Month Guarantee Option

 Life with 120-Month Guarantee Option

 Full 100% Joint and Survivor Option

Aside from a life only annuity, QJSA and QOSA, these options are not available for participants 

subject to the Rehabilitation Plan benefit reductions.

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Credited Service Schedule: Commencing January 1, 1976 a year of Future Service is credited during any Plan Year in which 

the participant completes at least 5 months of covered service. (No fractional credit is granted.) 

Prior to January 1, 1976, Future Service was granted at the rate of one-twelfth of a year for each 

month of contribution payments. 

Past Service is credited for service prior to the Contribution Date up to a maximum of 20 years 

for members who became participants prior to January 1, 1975 and 10 years for members who 

entered the Plan after January 1, 1975. For participants who joined the Plan after 1978, the 

amount of Credited Past Service can not exceed the Credited Future Service earned under the 

Plan.

Break-in-Service Rules:

One-Year Break A participant incurs a One-Year Break in Service if he or she fails to complete five months of 

service or 501 hours of service in a Plan Year.

Permanent Break A non-vested participant incurs a Permanent Break in Service if the number of consecutive OneYear Breaks in Service is at least 5 and it equals or exceeds the number of years of Credited 

Service which the employee had previously accumulated. At this time, the non-vested portion of 

the participant’s service and benefits accrued are canceled.

Participation Rule: An employee becomes a "Participant" the first day of the first month for which an employer 

contribution was made. 

Contribution Rate: The average benefit contribution rate on January 1, 2015 was $398.43 per month. 

Plan Amendments: There were no changes in plan provisions reflected in this actuarial valuation.

5373480v2/01149.001

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