Central States, Southeast and Southwest Areas Pension Plan

Item #23 

Does the application include a copy of the proposed ballot. 

See section 6.01. 

A copy of the proposed ballot is attached as document number 23.1. A copy of the Retiree 

Representative’s Statement is attached as document number 23.2. A copy of the Retiree 

Representative’s Actuarial Report is attached as document number 23.3. 

23.0
Section 6.01. Proposed Ballot. 

Ballot for Ratification of Benefit Reductions

Central States, Southeast and Southwest Areas Pension Plan

ATTENTION PARTICIPANTS AND BENEFICIARIES IN PAY STATUS OF THE 

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION PLAN: 

As described in the Notice of Application for Approval of a Proposed Reduction in 

Benefits under the Central States, Southeast and Southwest Areas Pension Plan 

(“Notice”), which was mailed to you on or about [DATE], the joint board of trustees 

(“Board of Trustees”) of the Central States, Southeast and Southwest Areas Pension 

Plan (“Plan”) submitted an application to the U.S. Department of the Treasury to reduce 

benefits pursuant to the Multiemployer Pension Reform Act of 2014 (“MPRA”). The 

Notice explained that if the Plan’s application to reduce benefits is approved by the 

Secretary of the Treasury, participants and beneficiaries in pay status of the Plan will be 

given the opportunity to vote on whether the benefit reductions should go into effect. 

On [DATE], the Secretary of the Treasury approved the Plan’s proposed plan of benefit 

reductions. 

This ballot is designed to assist you in deciding whether to vote to approve 

the proposed plan of benefit reductions. Your actual vote must be cast by 

telephone or electronically using a secure website, as described at the end of this 

ballot. Do not attempt to cast your vote by mailing this ballot to the Plan. Please 

carefully read all information and instructions contained below before casting 

your vote.

 

* * * * * 

The Plan’s Statement in Support

The Plan is committed to providing benefits to you and our more than 400,000

other participants, including active workers, terminated participants (those who are not 

retired and not working for a contributing employer), retirees, and beneficiaries. You’ve 

worked hard. You deserve a secure retirement. We want that for you, too. 

Economic and regulatory shifts in the trucking industry, coupled with financial 

market declines that have occurred in recent decades, have caused the Plan to become 

severely underfunded. For example, trucking industry deregulation has resulted in 

10,000 Teamster employers going out of business, including a significant number who 

failed to meet their obligation to contribute what they owed on behalf of their employees 

to the Plan. The Board of Trustees responded to this challenge in 2004 and 

subsequent years by, among other things, significantly reducing benefit accruals earned 

23.1.1
by active participants, rapidly increasing contribution rates from employers, increasing 

the minimum retirement age, and freezing subsidized early retirement benefits. These 

steps represented all reasonable measures that were available to the Board of Trustees 

at the time, but they have proven insufficient to prevent the financial failure of the Plan. 

Without the pension rescue plan presented in this ballot, the Plan will run 

out of money and be unable to pay benefits in approximately ten years. The 

consequences of ignoring this problem could be catastrophic. If the Plan runs out of 

money, a federal agency called the Pension Benefit Guaranty Corporation (“PBGC”) 

would step in to pay a portion of the benefits, but the resulting impact would be more 

severe than the reductions in this pension rescue plan. Moreover, the PBGC has 

projected that its own Multiemployer Program will run out of money—potentially before 

the Plan. This means that without this pension rescue plan, if the Plan fails, your 

benefits could be reduced almost to zero. 

The passage of the Multiemployer Pension Reform Act of 2014 (MPRA) provided 

multiemployer pension funds in “critical and declining status” with the option of 

submitting an application to the U.S. Department of the Treasury to prevent the failure 

of their plan by reducing participant benefits, including benefits of retirees. The Board of 

Trustees submitted such an application on September 25, 2015, and the Secretary of 

the Treasury approved it on [DATE]. 

The Board of Trustees, which includes both employee and employer 

representatives, has developed a fair pension rescue plan that will restore the Plan to 

sound financial health and allow us to pay pension benefits—although reduced—far into 

the future. It is designed to ensure that our participants will receive retirement benefits 

based primarily on the amount of contributions made on their behalf by their employers. 

Further, our rescue plan ensures that active employees will be able to continue to 

participate in the Plan and earn future pension benefits, though at a reduced rate. It is 

essential that active participants continue to participate in the Plan because roughly 

$0.50 of every dollar in employer contributions to the Plan generated by their work pays 

for the pensions of retired and terminated participants. In short, ensuring that active 

participants remain in the Plan, where they will generate contribution revenue, will help 

preserve the benefits payable to all participants to the greatest extent possible.

While the underlying formula that determines the amount of benefit reductions is 

the same for both retired and active participants, our pension rescue plan includes a 

variety of safeguards to ensure that participants who are especially vulnerable to the 

effects of benefit reductions will receive additional protection. For an estimate of how 

your individual pension benefit would be affected by this pension rescue plan, see 

[internal cross-reference to individualized benefit estimates]. Full details about the 

pension rescue plan are included below. For more information about how to cast your 

vote, see [internal cross-reference to voting procedures]. For more information on what 

caused the Fund to be designated in “critical and declining status,” see [cite “past 

reasonable measures” section of application].

23.1.2
This pension rescue plan is the only option to save the Plan. We simply 

can’t stay afloat if we continue to pay out $3.46 in pension benefits for every $1 paid in 

from contributing employers. Currently, we are paying out $2 billion more in retirement 

benefits than we are taking in every year in employer contributions. This can’t be 

ignored. And, even though the economy is recovering and the Plan’s investment returns 

have been comparable with those of other multiemployer pension funds of the same 

size, there is simply no way to make up for all the lost employer contributions. That’s 

why your support of this pension rescue plan, though painful, is vital!

Please know that this pension rescue plan imposes the least amount of 

reductions necessary to enable our Fund to continue to pay benefits in the future. For 

the sake of preserving retirement security for all Central States Pension Fund 

participants, we urge you to vote to approve this pension rescue plan.

Retiree Representative’s Statement

[Insert copy of Retiree Representative’s Statement]

Statement in Opposition

[To be drafted by United States Department of Labor and added later. See 

Section 6.01 of Rev. Proc. 2015-34.]

Individualized Benefit Estimate

A copy of the individualized estimate of how the proposed reduction applies to 

you is included below at _____ [insert copy before voting instructions]. 

What Would Happen if the Proposed Rescue Plan is Rejected?

The Plan Will Become Insolvent Unless Reductions Are Implemented

The Board of Trustees, in consultation with the Plan’s actuarial advisors, has 

determined that if the proposed benefit reductions are not implemented, the Plan is 

projected to become insolvent by 2026. This means that, beginning in 2026, the Plan 

will not have enough assets to pay benefits as they become due. 

Projecting the year in which the Plan is likely to become insolvent requires the 

use of certain assumptions, and the determination is therefore subject to some 

uncertainty. For example, if the Plan’s investments were to perform significantly better 

or significantly worse than expected, such performance could change the projected date 

of the Plan’s insolvency.

23.1.3
Benefits if the Plan Becomes Insolvent 

Insolvency of the Plan could result in benefits that are lower than benefits 

paid under the proposed benefit reduction. In the event that the Plan becomes 

insolvent, the PBGC will step in to pay some, but not all, benefit payments to 

participants and beneficiaries in pay status. For example, a participant with 30 years of 

service and a monthly benefit of $3,000 would receive less than $1,100 per month from 

the PBGC. 

A personalized estimate of the amount of your benefit under the Plan that would 

be covered by the PBGC guarantee is included below, along with a personalized 

estimate of the amount of your benefit under the Plan if the proposed benefit reductions

are approved. 

Benefits if the PBGC Becomes Insolvent – 

The ability of the PBGC to provide assistance in the event that the Plan becomes 

insolvent depends on its own financial resources. PBGC recently projected that its 

Multiemployer Program would fully exhaust its own assets within ten years. 

In the event that the Plan and the PBGC Multiemployer Program both become 

insolvent, participants and beneficiaries in pay status would be at risk of receiving 

benefits that would be dramatically lower than benefits otherwise paid in the case of the 

Plan’s insolvency. If both the Plan and the PBGC multiemployer program become 

insolvent, your benefits could be reduced almost to zero.

Plan is Projected to Remain Solvent if Benefit Reductions are Implemented

The Plan’s actuary has certified that the Plan is projected to avoid insolvency if 

the proposed benefit reductions are taken into account. This projection requires the use 

of certain assumptions, and the determination is therefore subject to some uncertainty. 

For example, if the Plan’s investments were to perform significantly worse than 

expected, this could change the results of the projection.

Secretary’s Approval of Proposed Rescue Plan

 

This proposed plan of benefit reductions has been reviewed and approved by the 

Secretary of the Treasury, in consultation with the Pension Benefit Guaranty 

Corporation (“PBGC”) and the Secretary of Labor.

Term of Reductions

If approved, the reductions of benefits described below will commence on July 1, 

2016 and will remain in effect indefinitely. 

23.1.4
Factors Taken Into Account In Designing Benefit Reductions

In designing the proposed plan of benefit suspensions, the Board of Trustees 

considered the following factors:

• Age and life expectancy

• Length of time in pay status

• The amount of benefit

• Type of benefit: survivor, normal retirement, early retirement

• Extent to which participant or beneficiary is receiving a subsidized benefit

• History of benefit increases and reductions

• Years to retirement for active employees and terminated participants

• Any discrepancies between active and retiree benefits

• Extent to which active participants are reasonably likely to withdraw support for 

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

of additional benefit reductions for participants in and out of pay status

• Extent to which benefits are attributed to service with an employer that failed to 

pay its full withdrawal liability

Description of Proposed Benefit Reductions

Overview of Benefit Reductions

The Board of Trustees proposes the following reduction of benefits, which will 

remain in effect indefinitely. Without these reductions, the Plan is projected to become 

insolvent (run out of funds and be unable to pay benefits) in 2026. If the reductions are 

adopted, the Plan is projected to remain solvent indefinitely.

Generally, the amount of a participant’s reduction is based upon three main 

factors, subject to certain protections described below. First, the “tier” (or tiers) to which 

a participant’s benefits are attributable. Second, the amount of contributions made to 

the Plan on a participant’s behalf. Third, whether the participant is an active participant, 

a terminated participant, or a retiree as of July 1, 2016.

Additionally, as described below, participants with at least 20 years of 

Contributory Service Credit (and their beneficiaries in pay status) as of July 1, 2016 will 

receive smaller reductions than other participants. Also, the reductions are affected by 

both the age of the participant upon retirement and whether the participant elected a 

joint and survivor form of benefit upon retirement.

Contribution Tiers

Federal law establishes three “tiers” of benefits under the Plan, and sets out

different conditions for the reductions that are applied to the benefits attributable to each 

tier. The tiers are defined as follows:

23.1.5
• Tier 1 consists of benefits attributable to contributions made by an employer that 

withdrew from the Plan on or before July 1, 2016, but failed to pay (or is 

delinquent with respect to paying) the full amount of its withdrawal liability under 

law or an agreement with the Plan. 

• Tier 2 consists of all benefits attributable to contributions not assigned to Tier 1 

or Tier 3. 

• Tier 3 consists of benefits attributable to contributions made by an employer that 

(a) has withdrawn from the Plan in a complete withdrawal in which the employer 

paid the full amount of the employer’s withdrawal liability under law or an 

agreement with the Plan, and also (b) pursuant to a collective bargaining 

agreement, has agreed to provide benefits to participants and beneficiaries of the 

Plan under a separate, single-employer-sponsored plan, in an amount equal to 

any reduction in the amount of benefits for such participants and beneficiaries as 

a result of the financial status of the Plan. 

The only benefits assigned to Tier 3 are those attributable to contributions made 

by United Parcel Service, Inc. and its controlled group (“UPS”) for participants that are 

part of the Transfer Group under an agreement between UPS and the Plan dated 

September 29, 2007 (generally those participants who were active participants with 

UPS or whose last employer prior to becoming terminated vested was UPS as of that 

date). Benefits that are assigned to Tier 3 are guaranteed by UPS against reduction “as 

a result of the financial status of the plan.” Participants with such benefits will receive 

an offset against any benefits they lose as part of the benefit reductions in the Plan 

under a separate retirement plan sponsored by UPS. Please note that participants who 

retired prior to that date are not part of Tier 3, even if they worked for UPS because the 

pension benefits of those participants are not protected by UPS. 

Federal law requires that benefits attributable to Tier 1 be reduced to the 

maximum extent permissible. In general, the amount of Tier 1 benefits after the 

reduction will be determined by multiplying the 110% of the PBGC guarantee amount 

(described below) by the participant’s percentage of total contributions in Tier 1. In 

addition, reductions to Tier 1 benefits will be limited by the disability and age-based 

protections described below. 

Benefits that are attributable to Tier 2 or Tier 3 contributions (determined based 

on the participant’s percentage of total contributions from Tier 2 or Tier 3, respectively) 

generally will be reduced in accordance with the structure outlined below under General 

Benefit Reduction Provisions, subject to the Federal Law Limitations on Benefit 

Reductions below.

For benefits attributable to Tier 2 contributions, the benefit reduction to 

participants with at least 20 years of Contributory Service Credit as of July 1, 2016 will 

not be greater than 50% of the amount that would otherwise have been payable with 

23.1.6
respect to such contributions before the reduction (prior to application of the age-based

protections described below).

For benefits attributable to Tier 3 contributions, the benefit reduction to 

participants with at least 20 years of Contributory Service Credit as of July 1, 2016 will 

not be greater than 40% of the amount that would otherwise have been payable with 

respect to such contributions before this reduction (prior to application of the age-based

protections described below).

Federal Law Limitations on Benefit Reductions

110% PBGC Guarantee Protection

Under MPRA, a participant’s pension cannot be reduced below 110% of the 

amount that the PBGC would guarantee if the Plan were to become insolvent. The 

calculation of the PBGC guarantee is complicated, as it considers both the years of 

service that have been worked and rate of benefit accrual that the Plan has credited. 

The maximum monthly benefit that the PBGC will guarantee is $35.75 for each 

year of service that has been earned. Thus, for a participant with 30 years of service, 

the maximum PBGC guarantee is $1,072.50 per month. 110% of this amount is 

$1,179.75.

The PBGC formula generally does not guarantee all benefits that have been 

earned. For example, in order for a participant with 30 years of service to receive the 

maximum monthly PBGC benefit of $1,072.50, the benefit payable from the Plan would 

have to be higher than this amount. Also, participants whose benefits under the Plan

are less than the PBGC maximum guarantee would generally receive less than their full 

benefits under the PBGC guarantee formula.

To calculate the PBGC guarantee amount, it is first necessary to calculate the 

rate of monthly benefit accrual that the Plan has provided. This is equal to the monthly 

benefit payable from the Plan, divided by the years of credited service that have been 

earned. The amount of the guarantee is then equal to 100% of the first $11 of the 

monthly benefit accrual rate, plus 75% of the next $33 of the monthly benefit accrual 

rate, times the years of credited service. There is no limit to the total years of service 

that are credited for calculating the guaranteed benefit.

The guaranteed monthly benefit, therefore, is limited to $35.75 per month (($11 x 

100%) + ($33 x 75%) = $35.75) times a participant's year of credited service. For 

example, if a participant has 30 years of service, the maximum benefit guaranteed by 

the PBGC is $35.75 x 30 = $1,072.50. 

If the application of the General Benefit Reduction Provisions outlined below for 

benefits attributable to Tier 2 and Tier 3 contributions would result in a benefit that is 

below 110% of the PBGC guarantee for a particular participant, then that participant’s 

23.1.7
benefit would not be reduced below 110% of the PBGC guarantee. The years of service 

used in the PBGC guarantee amount (which is the number of years listed in the 

individualized estimate section of this ballot) may differ from the number of years of 

Contributory Service Credit and/or Service Credit due to different definitions for those 

terms under the Plan.

Disability Protection

Disability benefits under the Plan cannot be reduced under MPRA. Additionally, if 

a participant receiving a disability benefit under the terms of the Plan converts to a 

retirement pension under the Plan, that participant’s benefit cannot be reduced below 

the amount of the disability benefit received prior to the conversion.

Age Protection

MPRA provides that if a participant is 80 or older as of the end of the month 

containing the effective date of the benefit reduction (in this case July 2016), the 

participant will not be subject to any reduction. All benefits payable to participants who 

meet this condition are fully protected from benefit reductions.

Pension benefit reductions for participants who are at least 75 but less than 80 

as of July 31, 2016 are determined by the number of months remaining until the 

participant reaches 80 divided by 60 months. For example, if a participant is exactly 78 

years old as of July 31, 2016, there are still 24 months remaining until the participant 

reaches 80 years of age. Dividing 24 months by 60 months results in a fraction equal to 

0.4.

So if, for example, the maximum amount of benefit reduction that could apply to a 

78-year old participant (after taking into account the General Reduction Provisions 

described below, the 110% PBGC Guarantee Protection and the Disability Protection) is 

$500 per month, then the age-based protection would limit this maximum reduction to 

$200 per month (0.4 x $500). If the general reduction provisions described below would 

otherwise result in a greater benefit reduction, that amount would be overridden so that 

the actual reduction amount applied to this participant would be $200 per month.

In the case of the surviving spouse of a participant who is deceased as of July 1, 

2016, the surviving spouse’s age as of July 31, 2016 is used to determine whether the 

age-based protection applies to the benefit. However, if a participant is not deceased as 

of July 1, 2016, the participant’s age as of July 31, 2016 will be used to determine the 

age-based protection for a joint and survivor benefit. As has always been the case

under the Plan, regardless of the effect of the reduction, neither the participant nor 

spouse may change a Joint and Survivor Option (JSO) election that has already been 

made.

If a benefit has been split in a divorce in accordance with a Qualified Domestic 

Relations Order (“QDRO”), the application of the age-based protections to the alternate 

23.1.8
payee’s benefit depends on the type of QDRO. For a shared interest QDRO in which 

the alternate payee receives a portion of each benefit payment, but the participant 

retains the right to choose the time and form of the payments, it is the participant’s age 

as of July 31, 2016 that will determine the age-based protections. However, for a 

separate interest QDRO where the alternate payee has a right to receive benefits at a 

different time and in a different form from the participant, the alternate payee’s age as of 

July 31, 2016 will determine the age-based protections.

General Benefit Reduction Provisions (Tier 2 and Tier 3 Contributions Only)

The following general benefit reduction provisions apply only to benefits 

attributable to Tier 2 or Tier 3 contributions. 

• Except as provided below, under the benefit reductions that the Trustees have 

proposed, a plan amendment will take effect on July 1, 2016 that will reduce 

participants’ monthly pension benefits to 1% of the Tier 2 and Tier 3 contributions 

that have been made on their behalf as of that date, adjusted for any early 

retirement and JSO benefit adjustments as described below.

o For example, if a participant has a plan benefit of $1,000 per month on 

July 1, 2016, and 1% of the total contributions made on that participant’s 

behalf is $800, then the $1,000 benefit will be reduced by $200 to $800 

effective July 1, 2016.

• For terminated participants with less than 20 years of Contributory Service Credit 

who do not have a Benefit Commencement Date on or before October 1, 2015, 

benefits as of July 1, 2016 will be 0.5% of the total Tier 2 and Tier 3 contributions 

made on their behalf and adjusted for any early retirement and JSO as described 

below.

o A participant will be in “terminated” status for purposes of the reduction

plan if, as of July 1, 2016, and any of the following is true:

 The participant (a) has a Year of Employment under the Plan 

during any year ending on or before December 31, 2014, and (b) 

earned no Contributory Service Credit during 2014;

 The participant (a) has a Year of Employment under the Plan 

during any year ending on or before December 31, 2015, and (b) 

earned no Contributory Service Credit during 2015; or

 The participant (a) has earned or earns an Hour of Service while 

employed with a Contributing Employer (or any predecessor or 

successor entity) that at any time on or after October 1, 2015 incurs 

a Rehabilitation Plan Withdrawal, and (b) has either (i) earned the 

last year of Contributory Service Credit on or before October 1, 

2015 while a member of a Bargaining Unit (or any predecessor or 

23.1.9
successor Bargaining Unit) ultimately incurring such Rehabilitation 

Plan Withdrawal or (ii) earned the last year of Contributory Service 

Credit on or before July 1, 2016 while a member of a Bargaining 

Unit (or any predecessor or successor Bargaining Unit) ultimately 

incurring such Rehabilitation Plan Withdrawal. This provision shall 

not apply to Rehabilitation Plan Withdrawals occurring after July 1, 

2016 unless the Bargaining Unit, on or before July 1, 2016, ratifies 

or otherwise agrees to a Collective Bargaining Agreement (or other 

agreement) which permits the withdrawal of the Bargaining Unit in 

whole or in part from the Plan (regardless of when the withdrawal in 

fact occurs).

• As already provided under the Plan, benefits are reduced for each month that the 

age of retirement precedes age 65. As applied here, in the event that a 

participant retired with less than 20 years of Service Credit at retirement, the 1% 

(or 0.5% as the case may be) of total contribution monthly benefit will be reduced 

by 0.5% for each month that the age of the participant at retirement precedes 

age 65. This reduction applies down to age 57, with participants who retired prior 

to age 57 treated as having retired at age 57 for this purpose.

o For example, a participant who retired at exactly age 57 or earlier would 

have the 1% of contributions benefit reduced by 48% (0.5% x 96 months). 

If 1% of the contributions made on that participant’s behalf is $1,000, the 

monthly benefit will be reduced to $520 (reducing $1,000 by 48%).

• As already provided under the Plan, benefits are reduced for each month that the 

age of retirement precedes age 62 if the participant had at least 20 years of 

Service Credit at retirement. As applied here, if a participant had at least 20 

years of Service Credit at retirement, the 0.5% per month reduction applies to the 

1% of total contribution monthly benefit for each month that the age at retirement 

precedes age 62 instead of age 65.

o For example, a participant with 20 or more years of Service Credit who 

retired at exactly age 57 or earlier would have the 1% of contributions 

benefit reduced by 30% (0.5% x 60 months). If 1% of the contributions 

made on that participant’s behalf is $1,000 per month, the monthly benefit 

will be reduced to $700 (reducing $1,000 by 30%).

• Under the terms of the Plan’s Rehabilitation Plan, a participant subject to an 

adjustable benefit reduction will have the 1% (or 0.5% as the case may be) of 

contributions benefit reduced by the percentage listed in the Rehabilitation Plan.

• In addition to any reduction for early retirement, the 1% or 0.5% of contribution 

monthly benefit will also be adjusted to reflect any adjustment factors for election 

of a JSO in accordance with the terms of the Plan in effect on October 1, 2015.

23.1.10
Restricted Reemployment Changes

The following changes are effective July 1, 2016, apply only to those participants 

whose benefits are, in fact, reduced under this application (not including reductions to 

future benefit accruals), and are contingent upon approval of the application as provided 

under MPRA. In all other circumstances, the existing (pre-MPRA reduction) restricted 

reemployment rules in the Plan continue to apply.

For a participant with a Benefit Commencement Date on or before October 1, 

2015, the participant shall not be subject to any restricted reemployment rules effective 

July 1, 2016 provided that prior to October 1, 2015 the participant has surrendered and 

severed any and all aspects of the employment relationship, including any seniority 

rights, with any Contributing Employers.

For a participant whose Benefit Commencement Date is after October 1, 2015 

and who is at least 62 but less than 65 on the Benefit Commencement Date, and is 

performing Covered Service immediately prior to the Benefit Commencement Date, the 

participant must avoid reemployment in a Core Teamster Industry (as defined in the 

Plan), and with any Contributing Employer for whom the participant worked during the 

one year period immediately prior to his retirement and, prior to retirement, must have 

surrendered and severed all aspects of the employment relationship, including any 

seniority rights, with any such Contributing Employer(s). Once such participant turns 

65, the rules in the next paragraph apply.

For a participant whose Benefit Commencement Date is after October 1, 2015 

who has reached age 65 (regardless of age at time of retirement), the participant shall 

not be subject to any restricted reemployment rules as long as the participant has 

previously surrendered and severed all aspects of the employment relationship, 

including any seniority rights, with any Contributing Employers. The only exception is 

that a participant whose last year of Contributory Service Credit was earned while 

employed by a labor organization, or other Contributing Employer with whom the 

participant did not have seniority rights under a collective bargaining agreement, will not 

be eligible for this “No Restrictions” rule unless the participant has first spent one 

continuous post-retirement year without any restricted reemployment under the existing 

(pre-MPRA reduction) restricted reemployment rules.

Reduction of Early Retirement Subsidies for Contribution-Based Pension

Currently, the Contribution-Based Pension (section 4.02 of the Plan) is reduced 

by 0.5% for each month the age of the participant on his retirement date is less than 62 

if the participant has at least 20 years of Service Credit (the reduction occurs from age 

65 if the participant has less than 20 years of Service Credit). However, if the participant 

is subject to the Default Schedule, Rehabilitation Plan Withdrawal, or Distressed 

Employer Schedule, the Contribution-Based Pension payable at age 65 is reduced to an 

actuarially equivalent benefit in accordance with the terms of the Plan.

23.1.11
Effective July 1, 2021 (five years from the effective date of the reductions), the 

Contribution-Based Pension (section 4.02 of the Plan) will be reduced by 0.5% for each 

month the age of the participant on his retirement date is less than 63 if the participant 

has at least 20 years of Service Credit (the reduction occurs from age 65 if the 

participant has less than 20 years of Service Credit).

Effective July 1, 2023, the Contribution-Based Pension (section 4.02 of the Plan) 

will be reduced by 0.5% for each month the age of the participant on his retirement date 

is less than 64 if the participant has at least 20 years of Service Credit (the reduction 

occurs from age 65 if the participant has less than 20 years of Service Credit).

Effective July 1, 2025, the Contribution-Based Pension (section 4.02 of the Plan) 

will be reduced by 0.5% for each month the age of the participant on his retirement date 

is less than 65 for all participants regardless of whether the participant has at least 20 

years of Service Credit.

Thus, for example, if a participant who has at least 20 years of Service Credit 

retires on or after July 1, 2021 (and before July 1, 2023) at age 62, the participant’s 

benefit would be reduced by 6% (12 months x 0.5% per month) as compared to 

currently when there would be no reduction. If a participant retires on or after July 1, 

2023 (and before July 1, 2025) at age 62, the participant’s benefit would be reduced by 

12% (24 months x 0.5% per month) as compared to currently when there would be no 

reduction. If a participant retires on or after July 1, 2025 at age 62, the participant’s 

benefit would be reduced by 18% (36 months x 0.5% per month) as compared to 

currently when there would be no reduction.

Regardless of these changes, if a participant is subject to the Default Schedule, 

Rehabilitation Plan Withdrawal, or Distressed Employer Schedule as defined in the 

Rehabilitation Plan, the participant’s benefit will be reduced based on age using the 

actuarial equivalence table in the Rehabilitation Plan.

Reduction of Future Benefit Accrual Rate

At present, the Accrued Benefit of a participant who is eligible for a ContributionBased Pension includes 1% of all contributions made on the participant’s behalf on and 

after January 1, 2004. Effective for contributions attributable to a participant’s service on 

and after July 1, 2016, the Accrued Benefit will be 0.75% of all contributions made on 

the participant’s behalf. 

Thus, for example, if a participant had $10,000 in contributions made on his 

behalf prior to July 1, 2016, the monthly Accrued Benefit increased by $100 ($10,000 x 

1%). If $10,000 in contributions are made on the participant’s behalf on and after July 1, 

2016, the monthly Accrued Benefit would increase by $75 ($10,000 x 0.75%).

23.1.12
Contribution Increases

The reduction plan reflects increases in the maximum contribution rates of $342 

or $348 per week currently required under the Rehabilitation Plan. The increases to the 

maximum required rate begin on August 1, 2018 with a rate increase of 2.5% per year 

becoming 3.0% per year in 2028 and thereafter. Also, the reduction plan reflects an 

increase in the contribution rate for YRC beginning on August 1, 2019 of 2.5% per year 

becoming 3.0% per year in 2028 and thereafter. 

Copy of Individualized Benefit Estimate

[To be added. See Section 6.01 of Rev. Proc. 2015-34.]

How to Cast Your Vote

There are two available methods for casting your vote: (1) by telephone; or 

(2) through the secure website listed below. Only these two methods for casting 

your vote are permitted. Do not attempt to cast your vote by mailing this ballot to 

the Plan or to [3rd party]. Paper ballots will not be accepted.

[description of telephone voting system; must provide a toll-free number, must use 

touch-tone or interactive voice response]

[description of procedures for voting through website]

By law, the period for voting to approve the proposed plan of benefit reductions

described above will end on [DATE]. This means that all votes must be received by 

[DATE] or they will not be counted. Votes cast through 11:59 p.m. Eastern Standard 

Time on [DATE] will be counted as received by [DATE]. 

Effect of Failure to Vote

By law, unless a majority of all eligible voters (i.e., participants and beneficiaries

in pay status) vote to reject the proposed benefit reductions, the reductions will go into 

effect. Therefore, an eligible voter’s failure to cast a vote has the same effect on the 

outcome of the vote as a vote in favor of the reductions.

23.1.13
23.2.1

23.3.1
23.3.2
23.3.3
23.3.4
23.3.5
23.3.6