United Furniture Workers

Pension Fund

Actuarial Valuation Report 

as of March 1, 2016 

Produced by Cheiron

January 2017
TABLE OF CONTENTS

Section Page

Transmittal Letter.................................................................................................................................................................................................. i 

Foreword ............................................................................................................................................................................................................. iii 

Section I Summary .....................................................................................................................................................................................1 

Section II Assets ..........................................................................................................................................................................................7 

Section III Liabilities .....................................................................................................................................................................................9 

Section IV Contributions .............................................................................................................................................................................13 

Section V Unfunded Vested Benefits .........................................................................................................................................................21 

Section VI FASB ASC Topic #960 .............................................................................................................................................................22 

Appendices

Appendix A Membership Information ...........................................................................................................................................................23 

Appendix B Summary of Major Plan Provisions ..........................................................................................................................................27 

Appendix C Actuarial Assumptions and Methods ........................................................................................................................................29 
January 18, 2017 

Board of Trustees

c/o Ms. Dee Anne Walker, Secretary-Treasurer/Director

United Furniture Workers Pension Fund A 

1910 Air Lane Drive 

Nashville, Tennessee 37210 

Dear Trustees:

At your request, we have performed the March 1, 2016 Actuarial Valuation of the United Furniture Workers Pension Fund A (the 

“Plan”). The purpose of this report is to present information on the Plan’s assets and liabilities and also discloses contribution levels, 

including the minimum required amount as mandated by Federal law. This report is for the use of the Plan and its auditors in preparing 

financial reports in accordance with applicable law and accounting requirements. 

In the Foreword we refer to the general approach employed in the preparation of this report. The Summary section discusses the longterm funded status and emerging issues facing the Trustees. We also comment on the sources and reliability of both the data and the 

actuarial assumptions. The results of this report are only applicable to the 2016 Plan Year and rely on future Plan experience 

conforming to the underlying assumptions. Future valuation results may differ significantly from the results presented in this report 

due to such factors as the following: Plan experience differing from that anticipated by the assumptions; changes in assumptions; and 

changes in Plan provisions or applicable law. 

To the best of our knowledge, this report and its contents have been prepared in accordance with generally recognized and accepted 

actuarial principles and practices which are consistent with the Code of Professional Conduct and applicable Actuarial Standards of 

Practice set out by the Actuarial Standards Board. Furthermore, as credentialed actuaries, we meet the Qualification Standards of the 

American Academy of Actuaries to render the opinion contained in this report. This report does not address any contractual or legal 

issues. We are not attorneys and our firm does not provide any legal services or advice. 

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

FOREWORD

iii

Cheiron has performed the Actuarial Valuation of the United 

Furniture Workers Pension Fund A as of March 1, 2016. The 

purpose of this report is to: 

1) Measure and disclose, as of the valuation date, the 

financial condition of the Plan; 

2) Provide specific information and documentation 

required by the Federal Government and the auditors of 

the Plan; and

3) Review past and expected trends in the financial 

condition of the Plan. 

An actuarial valuation establishes and analyzes Plan assets, 

liabilities and contributions on a consistent basis, and traces 

their progress from one year to the next. It includes 

measurement of the Plan’s investment performance as well as 

an analysis of Actuarial Liability gains and losses. This 

valuation report is organized as follows: 

Section I – Summary presents a summary of the key 

valuation results, general comments about the results, and a 

review of historical trends and projection scenarios. 

Section II – Assets contains exhibits relating to the 

valuation of assets. 

Section III – Liabilities shows the various measures of 

liabilities.

Section IV – Contributions shows the development of the 

minimum and maximum contributions. 

Section V – Unfunded Vested Benefits (UVB) shows 

the development of the UVB as of March 1, 2016 that 

would be allocated to employers that withdraw before 

February 28, 2017. 

Section VI – FASB ASC Topic #960 Disclosure provides 

information required by the Plan’s auditor. 

Finally, the appendices at the end of this report contain a 

summary of the Plan’s membership at the valuation date, a 

summary of the major provisions of the Plan, and the actuarial 

methods and assumptions used in the valuation. 

In preparing our report, we relied on information (some oral 

and some written) supplied by the Fund Office and Joseph 

Warren & Co, a division of Rogoff & Company P.C. This 

information includes, but is not limited to, the Plan provisions, 

employee data, and financial information. We performed an 

informal examination of the obvious characteristics of the data 

for reasonableness and consistency in accordance with 

Actuarial Standard of Practice #23.

The actuarial assumptions, taken individually, reflect our 

understanding and best estimate of the likely future experience 

of the Plan. The results in this report are dependent upon future 

experience conforming to these assumptions. To the extent that 

future experience deviates from the actuarial assumptions, the 

true cost of the Plan could vary from our results. 

Finally, in preparing this report, we have conformed to 

generally accepted actuarial principles and practices which are 

consistent with the Code of Professional Conduct, and 

applicable Actuarial Standards of Practice set out by the 

Actuarial Standards Board.

This valuation was prepared using census data and financial 

information as of March 1, 2016. Events following that date are 

not, and should not be, reflected in this report. The next 

valuation will reflect all membership and investment 

experience changes through February 28, 2017. 
 

 

 

 

 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION I –SUMMARY

2 

Following is an analysis of the Plan’s results for the prior year 

followed by historical results for the last ten years. After that, a 

projection of future results is shown. 

Prior Year Results

Investment and liability experience and their effect on future 

costs traditionally have been the focus of year to year analyses.

o The Market Value of Assets returned -3.77% for the Plan 

Year ending February 29, 2016. For long-term planning 

the Plan applies a smoothing method to develop an 

Actuarial Value of Assets which phases in actuarial 

investment gains and losses over five years. On this basis

the Actuarial Value of Assets returned 4.11%. Comparing 

this return to the prior year’s long-term investment 

assumption of 6.75% results in an actuarial asset loss of 

$1.60 million.

o The Plan experienced a liability gain totaling $0.38 

million. Combined with the actuarial investment loss of 

$1.60 million, the Plan had a net actuarial experience loss 

of $1.22 million.

o The funded ratio (Actuarial Value of Assets as a 

percentage of Actuarial Liability) decreased from 38.5% 

to 33.0%. Based on Market Value of Assets, the funded 

ratio decreased from 39.0% to 30.6%. The decline in the 

funded ratios is mainly due to the investment loss and 

significant negative cash flow. 

The Pension Protection Act of 2006 (PPA) added a significant 

layer of new considerations for the Plan. 

o The Plan was certified as “Critical and Declining” status 

under the Pension Protection Act (PPA) as amended by 

the Multiemployer Pension Reform Act of 2014 (MPRA)

for the 2016 Plan Year because of the current Funding 

Deficiency and is projected insolvent within the next 19 

years. The PPA status is re-determined annually.

o A Rehabilitation Plan was prepared in December 2008 

modifying adjustable benefits and requiring annual 

contribution increases of 5.5% beginning March 1, 2009. 

This Rehabilitation Plan is based on the reasonable 

measures (exhaustion) method and is annually monitored. 

o The funded ratio is an important measure that is used in 

determining the PPA zone, which as noted, has declined 

over the past year.

o The period of time until a Funding Deficiency occurs is 

usually an important measure that is used for PPA testing. 

The Plan already has a Funding Deficiency which 

increased from $29.9 million as of March 1, 2015 to 

$48.3 million as of March 1, 2016 and is projected to 

grow. However, under PPA there is no excise tax due as 

long as the Plan has a valid Rehabilitation Plan.

o Effective with this valuation only current year 

contributions are being applied for Minimum Funding. 

As a result, the contributions shown in this report reflect a 

partial year (actual contributions for the year ending 

2/29/2016 less the amount already reflected on the 2015 

Form 5500). 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION I –SUMMARY

3 

In addition, please note that: 

o Active membership increased by 4.6% over last year

reversing a trend of active membership declines. In fact, 

this is only the second time in the last 15 years when the 

active membership increased. 

o The Plan received $4.28 million in contributions 

(including Withdrawal Liability payments of $0.49 

million) and paid $14.98 million in benefits and expenses 

for the year ending February 29, 2016. Comparing these

two amounts shows a negative net cash flow of $10.70 

million, which means the Plan is currently using invested 

assets to pay for benefits and expenses not covered by 

contributions. 

o The Plan assesses Withdrawal Liability based on a 6.25% 

interest rate assumption which is 0.5% less than the 

discount rate assumption used for funding. The Unfunded 

Vested Benefits increased from $121.5 million as of 

March 1, 2015 to $133.3 million as of March 1, 2016. 

Historical Review: 

We think it is important to take a step back from the current 

year’s results and view them in the context of the Plan’s 

recent history. On the next few pages, we present a series 

of graphs which display key valuation results for the last

ten years.



UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION II –ASSETS

7 

Assets at Market Value: 

Market values represent “snap-shot” or “cash-out” values 

which provide the principal basis for measuring financial 

performance from one year to the next. 

Table II - 1

Statement of Assets at Market Value, March 1

Assets 2015 2016

Short Term Obligations $ 264,333 $ 242,895

Common Stocks 5,234,786 3,199,259

Intech Institutional Large Cap Growth Fund 5,772,886 0

Fidelity Growth International Fund 5,083,707 0

Fidelity Emerging Markets Fund 582,499 0

Rothchild SMID Fund 4,564,317 3,218,540

Pimco Bond Fund 6,421,005 4,133,425

BPIF Non-Taxable LP 8,231,939 8,202,128

State Street Global - MSCI 3,032,140 4,282,529

Wellington Global Total Return Fund 3,272,743 2,157,366

JPMCB Strategic Property Fund 8,828,137 8,369,863

State Street Global - Daily 3,235,289 4,941,275

Robeco BP - All Cap Value Fund 5,215,651 3,616,237

Loomis Sayles Credit Long/Short 5,901,800 6,390,235

Investment in UFW Building Corporation 1,260,000 1,350,000

Vanguard Growth Index Fund Admiral 0 3,837,697

Cash 1,292,443 1,089,377

Property & equipment 28,701 23,336

Receivables

Employer Contributions $ 2,827,951 $ 324,000

Accrued Interest & Dividends 13,475 10,004

Liabilities

Accrued Expenses and payroll taxes $ (176,334) $ (124,974)

Total Market Value $ 70,887,468 $ 55,263,192

Assets at Actuarial Value: 

For long-term planning, actuaries commonly use smoothing 

techniques to mitigate the short-term volatility exhibited by the 

capital markets. The Plan currently phases in investment gains 

and losses over five years. The Actuarial Value of Assets is 

also constrained so that it cannot exceed 120% of the Market 

Value and cannot be less than 80% of the Market Value. The 

table below shows the development of the Actuarial Value of 

Assets. 

Table II - 2

Development of Actuarial Value of Assets as of March 1, 2016

Market Value of Assets as of March 1, 2016 $ 55,263,192

Plan Investment Percent Percent Amount

Year Gains / (Losses) Recognized Deferred Deferred

2011 (3,803,566) $ 100% 0% $ 0

2012 (4,321) 80% 20% (864)

2013 3,791,415 60% 40% 1,516,566 

2014 (738,241) 40% 60% (442,945) 

2015 (6,726,401) 20% 80% (5,381,121) 

Total $ (4,308,364)

Preliminary Actuarial value as of March 1, 2016 $ 59,571,556

Corridor for Actuarial Value

80% of Market Value $ 44,210,554

120% of Market Value $ 66,315,830

Actuarial Value of Assets as of March 1, 2016 $ 59,571,556

 - as a percent of Market Value of Assets 107.8%
 

 

 

 

 

 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION III – LIABILITIES

9 

Disclosure: 

Several types of liabilities are calculated and presented in this 

report. Each type is distinguished by the purpose for which 

they are being used. Note that these liabilities are not 

appropriate for settlement purposes, including the purchase of 

annuities and the payment of lump sums. 

• Present Value of Future Benefits: Used for analyzing 

the financial outlook of the Plan, this represents the 

amount of money needed today to fully pay off all 

future benefits assuming participants continue to accrue 

benefits.

• Actuarial Liabilities: Used in determining Minimum 

Funding Requirements, maximum tax deductible 

contributions, and long-term funding targets. These 

liabilities represent the total amount of money needed 

to fully pay off all obligations of the Plan using funding 

assumptions and assuming no further accrual of 

benefits. For this Plan, the Trustee’s chose the Unit 

Credit Cost Method to determine this liability.

• Accrued Liabilities: These liabilities are also required 

for determining PPA funded status and for accounting 

disclosures (ASC Topic No. 960). For that purpose, 

they are referred to as the Present Value of 

Accumulated Benefits. They can also be used to 

establish comparative benchmarks with other plans.

These liabilities are determined using the Unit Credit 

Cost Method, and therefore for this Plan will equal the 

Actuarial Liabilities.

• Vested Liabilities: Required for accounting purposes, 

this liability represents the portion of the Accrued 

Liabilities which are vested. 

• Current Liabilities: Used for Federal Government 

compliance purposes, the calculation of this liability is 

defined by the Internal Revenue Code and regulations

and is used to determine maximum allowable tax 

deductible contributions. 

The table on the following page discloses most of these 

liabilities for the current and prior valuation. With respect 

to each disclosure, a subtraction of the appropriate value of 

Plan assets yields an unfunded liability for each respective 

type. 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION III – LIABILITIES

10 

Table III - 1

Liabilities/Net Surplus (Unfunded)

3/1/2015 3/1/2016

FUNDING DISCOUNT RATE ASSUMPTION 6.75% 6.75%

ACTUARIAL / PPA LIABILITY 

 Actuarial / PPA Liability $ 181,564,343 $ 180,326,943

Actuarial Value of Assets 69,965,653 59,571,556

 Net Surplus (Unfunded) $ (111,598,690) $ (120,755,387)

VESTED LIABILITY

Actuarial / PPA Liability $ 181,564,343 $ 180,326,943

Less Present Value of Non-Vested Benefits 505,890 466,640

 Vested Liability $ 181,058,453 $ 179,860,303

Market Value of Assets 70,887,468 55,263,192

 Net Surplus (Unfunded) $ (110,170,985) $ (124,597,111)

RPA DISCOUNT RATE 3.44% 3.25%

CURRENT LIABILITY (RPA 1994) $ 290,549,936 $ 293,946,648

Market Value of Assets 70,887,468 55,263,192

 Net Surplus (Unfunded) $ (219,662,468) $ (238,683,456)
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION III – LIABILITIES

11 

Allocation of Liabilities by Type:

The Plan participants may qualify for a benefit upon death, termination, and disability as well as upon retirement. The value of the 

liabilities arising from each of these sources is shown in the following table: 

 Table III - 2

Allocation of Liabilities by Type

March 1, 2016

Benefit Type Retirement Termination Death Disability Total

Unit Credit Normal Cost $ 781,472 $ 126,755 $ 19,917 $ 30,789 $ 958,933

Actuarial / PPA Liability

Actives $ 24,036,360 $ 2,260,244 $ 561,787 $ 657,421 $ 27,515,812

Terminated Vesteds 43,715,200 0 0 43,715,200 0 

Retirees and Beneficiaries 89,548,197 0 7,409,961 12,137,773 109,095,931

Total $ 113,584,557 $ 45,975,444 $ 7,971,748 $ 12,795,194 $ 180,326,943

RPA Current Liability Normal Cost $ 1,516,951 $ 424,719 $ 15,409 $ 62,466 $ 2,019,545

RPA Current Liability 

Actives $ 43,749,962 $ 6,657,801 $ 400,379 $ 1,261,392 $ 52,069,534

Terminated Vesteds 87,964,284 0 0 87,964,284 0 

Retirees and Beneficiaries 124,106,685 0 10,069,791 19,736,354 153,912,830

Total $ 167,856,647 $ 94,622,085 $ 10,470,170 $ 20,997,746 $ 293,946,648

Vested RPA Current Liability 

Actives $ 33,092,110 $ 16,900,667 $ 396,156 $ 1,233,370 $ 51,622,303

Terminated Vesteds 87,964,284 0 0 87,964,284 0 

Retirees and Beneficiaries 124,106,685 0 10,069,791 19,736,354 153,912,830

Total $ 157,198,795 $ 104,864,951 $ 10,465,947 $ 20,969,724 $ 293,499,417
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION III – LIABILITIES

12 

Changes in Liabilities: 

The Actuarial Liability shown in the preceding table changes at 

successive valuations based on the experience of the Plan. The 

liability may change for any of several reasons, including:

• New hires since the last valuation

• Benefits accrued since the last valuation

• Plan amendments 

• Interest on Actuarial Liability 

• Benefits paid to retirees and beneficiaries

• Participants leaving employment at rates different than 

expected

• Changes in actuarial assumptions

• Changes in actuarial methods

The following table shows the change in the Actuarial Liability 

measure since the last valuation. There were no changes to 

assumptions, methods, or Plan provisions since last year. 

Table III - 3

Actuarial (PPA) Liability

Liabilities 3/1/2015 $ 181,564,343

Liabilities 3/1/2016 180,326,943

Liability Increase (Decrease) (1,237,400)

Change due to:

 Plan Amendment $ 0

 Assumption Change 0

 Accrual of Benefits 889,551

 Actual Benefits (13,603,642)

 Passage of Time 11,856,515

 Other Sources 0

 Actuarial (Gain)/Loss (379,824)
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

13 

In this section, we present detailed information on the Plan’s

contributions from two perspectives:

• Minimum Required Contributions, based on the Unit 

Credit Cost Method; and 

• Government Limitations which could affect the 

above. 

Minimum Required Contributions: 

For the Plan, the funding method used is the Unit Credit Cost 

Method. The Minimum Required Contribution is determined in 

two parts. 

The first part is the Unit Credit Normal Cost. This is the cost 

for the benefits expected to be earned in the current year for 

each active participant. The Normal Cost includes a provision 

for Plan administrative expenses.

The second part is an amortization payment to pay off the 

Unfunded Actuarial Liability. The Unfunded Actuarial 

Liability is the difference between the Actuarial Value of 

Assets at the valuation date and the Actuarial Liability 

determined by the actuarial cost method. The amortization 

payment is determined using the amortization schedule 

required by the minimum funding rules in the Internal Revenue 

Code. 

Government Limitations:

ERISA and the Internal Revenue Code place various limits on 

the contributions made to qualified pension plans. The limits 

impact the minimum that must be paid, the maximum that can 

be deducted, and the timing of contributions. 

To ensure that Minimum Required Contributions are met, 

pension plans are required to retain an Enrolled Actuary to 

complete Schedule MB to Form 5500 on an annual basis. In the 

past, bargained contributions exceeded the Minimum Required 

Contribution and the Plan built up a Credit Balance. The Credit 

Balance can be used in the future to make up the difference 

between the Minimum Required Contribution and the 

bargained contribution. However, for the past several years the 

Plan has exhausted the Credit Balance and has a Funding 

Deficiency (i.e. a negative Credit Balance) for the current Plan 

Year. 

The Minimum Required Contribution for 2016 is shown below 

compared to the Government Limitations and the estimated 

employer contributions. The table also shows the per capita 

Minimum Required Contribution and contribution. 

Table IV - 1

Contributions for 2016

Minimum Required Contribution

Unit Credit Normal Cost (with Expenses) $ 2,243,933

Amortization Payment 13,843,412

Interest to End of Year 1,085,896

Total $ 17,173,241

Government Limitations

Maximum Deductible Contribution $ 360,093,849

Minimum Contribution (before Funding Deficiency) 17,173,241

Funding Deficiency with Interest 51,550,208

Estimated Employer Contributions with Interest $ 4,339,435

Count of Active Participants 1,076

Per Capita Minimum Required Contribution $ 15,960

Per Capita Contribution $ 4,033
 

 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

15 

Table IV - 3

Calculation of the Maximum Deductible Contribution

For the Plan Year Beginning March 1, 2016

1. "Fresh Start" Method

a. Unit Credit Normal Cost with Expenses $ 2,243,933

b. Net Charge to Amortize Unfunded Actuarial Liability Over 10 Years 15,920,098

c. Interest on a. and b. to Year End 1,226,072

d. Total 19,390,103

e. Minimum Required Contribution at Year End 68,723,449

f. Larger of d. and e. 68,723,449

g. Full Funding Limit 214,483,580

h. Preliminary Maximum Deductible Contribution [lesser of f. and g.] $ 68,723,449

2. 140% of Current Liability Calculation

a. RPA 1994 Current Liability at Start of Year $ 293,946,648

b. Present Value of Benefits Estimated to Accrue during Year 2,019,545

c. Expected Benefit Payments 14,136,672

d. Net Interest on a., b. and c. at Current Liability Interest Rate (3.25%) 9,391,017

e. Expected Current Liability at End of Year [a. + b. – c. + d.] 291,220,538

f. 140% of e. 407,708,753

g. Actuarial Value of Assets 59,571,556

h. Expected Expenses 1,285,000

i. Net Interest on c., g., and h. at Valuation Interest Rate (6.75%) 3,465,020

j. Estimated Value of Assets [g. – c. – h. + i.] 47,614,904

k. Unfunded Current Liability at Year End [f. – j.], not less than $0 $ 360,093,849

3. Maximum Deductible Contribution at Year End, greater of 1.h. and 2.k. $ 360,093,849
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

16 

Table IV - 4

Development of Actuarial Gain / (Loss)

For the Year Ended February 29, 2016

1. Unfunded Actuarial Liability at Start of Year (not less than zero) $ 111,598,690

2. Normal Cost and Expenses at Start of Year 2,064,551

3. Interest on 1. and 2. to End of Year 7,672,267

4. Contributions for Prior Year 1,776,788

5. Interest on 4. to End of Year 19,989

6. Change in Unfunded Actuarial Liability Due to Changes in Methods 0

7. Change in Unfunded Actuarial Liability Due to Changes in Assumptions 0

8. Change in Unfunded Actuarial Liability Due to Changes in Plan Design 0

9. Expected Unfunded Actuarial Liability at End of Year

[1. + 2. + 3. – 4. – 5. + 6. + 7. + 8.] $ 119,538,731

10. Actual Unfunded Actuarial Liability at End of Year (not less than zero) 120,755,387

11. Actuarial Gain / (Loss) [9. – 10.] $ (1,216,656)

12. Amortization Factor for Actuarial Gain / (Loss) 9.8781 

13. Amortization Credit / (Charge) for Actuarial Gain / (Loss) $ (123,167)
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

17 

Table IV - 5

Schedule of Amortizations Required for Minimum Required Contribution

as of March 1, 2016

Initial 3/1/2016 Remaining Beg of Yr

Date Initial Amortization Outstanding Amortization Amortization

Type of Base Established Amount Years Balance Years Amount

CHARGES

1. Initial Unfunded 3/1/1978 16,575,006 $ 40 $ 2,283,728 2 1,179,144 $ 

2. Plan Amendment 3/1/1989 63,848 30 13,711 3 4,872

3. Method Change 3/1/1989 15,842,844 30 3,402,580 3 1,209,031

4. Plan Amendment 3/1/1993 5,282,693 30 2,326,287 7 400,839

5. Actuarial Loss 3/1/2000 7,511,951 30 5,348,203 14 564,313

6. Actuarial Loss 3/1/2002 13,842,899 15 1,442,045 1 1,442,045

7. Actuarial Loss 3/1/2003 22,582,575 15 4,656,058 2 2,404,035

8. Actuarial Loss 3/1/2005 3,018,172 15 1,138,102 4 312,980

9. Actuarial Loss 3/1/2006 2,642,095 15 1,205,401 5 273,556

10. Assumption Change 3/1/2007 8,194,633 30 7,211,734 21 611,008

11. Actuarial Loss 3/1/2007 2,180,614 15 1,156,093 6 225,456

12. Actuarial Loss 3/1/2008 15,092,752 15 9,029,954 7 1,555,936

13. Actuarial Loss 3/1/2009 28,127,155 15 18,611,327 8 2,891,493

14. Actuarial Loss 3/1/2011 7,919,489 15 6,141,864 10 809,729

15. Assumption Change 3/1/2012 2,075,229 15 1,715,374 11 211,632

16. Actuarial Loss 3/1/2012 6,035,275 15 4,988,732 11 615,477

17. Actuarial Loss 3/1/2013 3,242,769 15 2,834,511 12 329,865

18. Assumption Change 3/1/2015 12,570,893 15 12,060,926 14 1,272,602

19. Actuarial Loss 3/1/2016 1,216,656 15 1,216,656 15 123,167

TOTAL CHARGES $ 86,783,286 $ 16,437,180

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

19 

Table IV - 7

Accumulated Reconciliation Account and Balance Test

as of March 1, 2016

1. Amount due to Additional Interest Charges in prior years $ 0

2. Amount due to Additional Funding Charges in prior years NA

3. Reconciliation Account at Start of Year [1. + 2.] $ 0

4. Net Outstanding Amortization Bases $ 72,464,794

5. Funding Deficiency at Start of Year $ 48,290,593

6. Unfunded Actuarial Liability at Start of Year from Funding Equation [4. - 3. + 5.] $ 120,755,387

7. Actuarial Liability at Start of Year $ 180,326,943

8. Actuarial Value of Assets at Start of Year $ 59,571,556

9. Unfunded Actuarial Liability at Start of Year from Liability Calculation [7. - 8.] $ 120,755,387

The Plan passes the Balance Test because line 6. equals line 9.
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION IV – CONTRIBUTIONS

20 

Table IV - 8

Development of Full Funding Limitation

for the Year Beginning March 1, 2016

Minimum Maximum

1. Actuarial / PPA Liability Full Funding Limit Calculation

a. Actuarial / PPA Liability $ 180,326,943 $ 180,326,943

b. Normal Cost with Expenses 2,243,933 2,243,933

c. Lesser of Market Value and Actuarial Value of Assets 55,263,192 55,263,192

d. Credit Balance at Start of Year, not less than zero 0 N/A

e. Net Interest on a., b., c., and d. at Funding Interest Rate (6.75%) 8,593,269 8,593,269

f. Actuarial / PPA Liability Full Funding Limit [a. + b. – c. + d. + e.], limited to zero 135,900,953 $ $ 135,900,953

2. Full Funding Limit Override (RPA 1994)

a. RPA 1994 Current Liability at Start of Year $ 293,946,648 $ 293,946,648

b. Present Value of Benefits Estimated to Accrue during Year 2,019,545 2,019,545

c. Expected Benefit Payments 14,136,672 14,136,672

d. Net Interest on a., b. and c. at Current Liability Interest Rate (3.25%) 9,391,017 9,391,017

e. Expected Current Liability at End of Year [a. + b. – c. + d.] 291,220,538 291,220,538

f. 90% of e. 262,098,484 262,098,484

g. Actuarial Value of Assets 59,571,556 59,571,556

h. Expected Expenses 1,285,000 1,285,000

i. Net Interest on c., g., and h. at Valuation Interest Rate (6.75%) 3,465,020 3,465,020

j. Estimated Value of Assets [g. – c. – h. + i.] 47,614,904 47,614,904

k. RPA 1994 Full Funding Limit Override [f. – j.], limited to zero $ 214,483,580 $ 214,483,580

3. Full Funding Limitation at End of Plan Year, greater of 1.f. and 2.k. $ 214,483,580 $ 214,483,580
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION V – UNFUNDED VESTED BENEFITS

21 

The allocation of the Unfunded Vested Benefits (UVB) is determined under the Presumptive method as defined in the Multiemployer 

Pension Plan Amendments Act of 1980 (MEPPA). If an employer withdraws between March 1, 2016 and February 28, 2017, they will 

be assessed Withdrawal Liability based on their share of the UVB. The Present Value of Vested Benefits (PVVB) is valued using a 

6.25% interest rate assumption, and the same provisions as disclosed in Appendix B with the exception that disability benefits are

excluded.

Under the Presumptive method, “pools” are created each year based on the change in the Plan’s UVB. The UVB is calculated as the 

difference between the PVVB and the Market Value of Assets (MVA). In addition, the pools may include an adjustment for 

uncollectible Withdrawal Liability for prior withdrawn employers and statutory limits. Each pool is then written down over 20 years 

and allocated among the employers based on their proportional share of contributions. 

Table V - 1

Unfunded Vested Benefits

2/28/2015 2/29/2016

1. Present Value of Vested Benefits

a. Retirees and Beneficiaries $ 113,139,696 $ 112,785,487

b. Terminated Vested Participants 49,471,348 47,197,262

c. Active Participants 27,316,651 28,544,321

d. Total $ 189,927,695 $ 188,527,070

2. Interest Rate 6.25% 6.25%

3. Market Value of Assets on Financial Statement (without the

Withdrawal Liability Payments Receivable) $ 68,387,517 $ 55,263,192

4. Unfunded Vested Benefits [1.d - 3.] $ 121,540,178 $ 133,263,878

5. Funded Ratio [3. ÷ 1.d] 36.0% 29.3%
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

SECTION VI – FASB ASC TOPIC #960

22 

Table VI - 1

Present Value of Accumulated Benefits as of March 1, 2016

in Accordance with ASC Topic No. 960

1. Actuarial Present Value of Vested Benefits Amounts Counts

For Retirees and Beneficiaries $ 109,095,931 5,497

Terminated Vesteds 43,715,200 3,323

Active Participants 27,049,172 693

Total Vested Benefits $ 179,860,303 9,513

2. Non-Vested Benefits $ 466,640 383

3. Accumulated Benefits $ 180,326,943 9,896

4. Market Value of Assets on Financial Statement (without the

Withdrawal Liability Payments Receivable) $ 55,263,192

5. Funded Ratios

Vested Benefits 30.7%

Accumulated Benefits 30.6%

Reconciliation of Present Value of Accumulated Benefits

1. Actuarial Present Value at Start of Prior Plan Year $ 181,564,343

2. Increase (Decrease) over Prior Year due to:

Benefit Accruals $ 889,551

Benefit Payments (13,603,642)

Increase for Interest 11,856,515

Experience (Gains)/Losses (379,824)

Changes in Assumptions 0

Plan Amendments 0

Total $ (1,237,400)

3. Actuarial Present Value at End of Prior Year $ 180,326,943
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX A – MEMBERSHIP INFORMATION

23 

The data for this valuation was provided by the Fund Office as of March 1, 2016. Cheiron did not audit any of the data. However, we 

did perform an informal examination of the obvious characteristics of the data for reasonableness and consistency in accordance with 

Actuarial Standard of Practice No. 23. 

The following is a list of data charts contained in this section: 

 Summary of Participant Data

 Changes in Plan Membership 

 Age/Service Distribution for Active Participants

 Counts and Average Benefit Amount by Age for Retirees, Beneficiaries, and Disabled Participants 

 Counts and Average Benefit Amount by Age for Terminated Vested Participants

Summary of Participant Data

Active Participants March 1, 2015 March 1, 2016

Count 1,029 1,076

Average Age 47.1 46.9

Average Benefit Service 13.1 12.8

Retirees and Beneficiaries Receiving Payments

Count 5,563 5,497

Annual Benefits $ 13,462,349 $ 13,466,391

Average Annual Benefit 2,420 2,450

Terminated Vested Participants

Count 3,471 3,323

Annual Benefits $ 9,913,931 $ 9,274,054

Average Annual Benefit 2,856 2,791
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX A – MEMBERSHIP INFORMATION

24 

Participant Reconciliation from March 1, 2015 to March 1, 2016

Terminated

Actives Vested Retired Disabled Beneficiaries Total

1. March 1, 2015 Valuation 1,029 3,471 4,464 332 767 10,063

2. Additions

a. New entrants 145 0 0 0 0 145

b. Inactive but not in prior year's data 0 1 11 0 8 20

c. New QDRO 0 0 0 0 0 0

d. Total 145 1 11 0 8 165

3. Reductions

a. Terminated Nonvested (62) 0 0 0 0 (62)

b. Benefits expired 0 (2) 0 0 0 (2)

c. Died without beneficiary (1) (8) (178) (15) (64) (266)

d. Assumed deceased 0 (3) 0 0 0 (3)

e. Total (63) (13) (178) (15) (64) (333)

4. Changes in Status

a. Terminated Vested (28) 28 0 0 0 0

b. Returned to work 8 (8) 0 0 0 0

c. Retired (14) (144) 158 0 0 0

d. Disabled (1) (4) (1) 6 0 0

e. Beneficiary commencing 0 (2) 0 0 2 0

f. Died with beneficiary 0 (7) (39) (7) 53 0

g. Data Correction 0 1 (7) (2) 9 1

h. Total (35) (136) 111 (3) 64 1

5. March 1, 2016 Valuation 1,076 3,323 4,408 314 775 9,896
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX A – MEMBERSHIP INFORMATION

25 

Age / Service Distribution of Active Participants

as of March 1, 2016

Service

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

Under 25 29 34 0 0 0 0 0 0 0 0 63

25 to 29 21 44 7 1 0 0 0 0 0 0 73

30 to 34 20 37 13 6 1 0 0 0 0 0 77

35 to 39 14 31 15 28 25 1 0 0 0 0 114

40 to 44 15 32 9 22 26 7 1 0 0 0 112

45 to 49 12 33 22 19 41 11 8 1 0 0 147

50 to 54 11 16 17 22 32 23 25 8 1 0 155

55 to 59 3 16 9 21 40 23 30 19 7 1 169

60 to 64 4 7 7 17 24 15 14 15 12 5 120

65 to 69 0 4 0 3 9 5 4 7 3 5 40

70 & up 0 0 0 2 0 0 0 2 2 0 6

Total 129 254 99 141 198 85 82 52 25 11 1,076

Average Age = 46.9 Average Service = 12.8
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX A – MEMBERSHIP INFORMATION

26 

Age Distribution of Inactive Participants

Pensioners and Beneficiaries Receiving Benefits as of March 1, 2016

Normal, Early Surviving Spouses,

Disability Deferred Vested Beneficiaries, and Alternate

Retirements Retirements Payees Receiving Benefits Total

Age Number

Monthly 

Benefit Number

Monthly 

Benefit Number

Monthly 

Benefit Number

Monthly 

Benefit

Under 55 36 $ 15,194 0 $ 0 29 $ 3,409 65 $ 18,603

55-59 47 18,750 203 48,712 28 2,841 278 70,303

60-64 61 25,623 517 112,279 63 9,012 641 146,914

65-69 49 24,696 838 195,350 88 9,126 975 229,172

70-74 47 13,377 834 188,057 118 12,945 999 214,379

75-79 30 6,939 730 151,342 145 13,926 905 172,207

80 & Over 44 8,886 1,286 232,793 304 28,942 1,634 270,621

Total 314 $ 113,465 4,408 $ 928,533 775 $ 80,201 5,497 $ 1,122,199

Deferred Vested Participants

and Surviving Spouses Entitled to Future Benefits as of March 1, 2016

Monthly Benefit Payable at

Age Number Normal Retirement Date

Under 45 610 $ 143,564 

45-49 423 103,848 

50-54 680 204,380 

55-59 697 166,248 

60-64 559 110,125 

65 & Over 354 44,672 

Total 3,323 $ 772,837 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX B – SUMMARY OF MAJOR PLAN PROVISIONS

27 

The following is a summary of the major provisions. Please refer to the Plan document for a more complete description.

1. Effective Date

The Plan was established on March 1, 1962. The most 

recent amendment was effective March 1, 2009. 

2. Participation 

Employees become Participants as of the date their 

employer is obligated to begin contributions to the Plan on 

their behalf.

3. Past Service

Participants shall, after 36 months of contributions have 

been made, be credited with a year of Past Service during 

any calendar year prior to the employer’s applicable 

effective date in which they were employed for at least six 

months. 

4. Effective Service

Participants on July 1, 1974 shall be credited with Effective 

Service for each month for which contributions were made 

on their behalf through January 1, 1971.

5. Future Eligibility Service

A Participant shall be credited with a year of Future 

Eligibility Service for each calendar year beginning 

January 1, 1971 during which contributions were made on 

their behalf and they worked at least 1,000 hours. 

6. Normal Retirement

Eligibility: The later of age 65 and 5th anniversary of Plan 

participation. 

Benefit: The monthly benefit is equal to the sum of the 

following, but not less than $50: 

(A) Multiply the average annual contribution made on 

the Participant’s behalf after January 1, 1971 by the 

number of years of Past Service by the applicable 

percentage. The percentage ranges from 1.8% to 

2.2% depending on when participation began and 

how many months employer contributions were 

made.

(B) Multiply the average annual contribution made on 

the Participant’s behalf after January 1, 1971 by the 

Effective Service Credit by 3.0%. 

(C) Multiply the total amount contributed on behalf 

of the participant from January 1, 1971 to 

August 31, 2003 by 3%. 

(D) Multiply the total amount contributed on behalf 

of the participant from September 1, 2003 to 

August 31, 2006 by 2%. 

(E) Multiply the total amount contributed on behalf of 

the participant after August 31, 2006 by 1%. 

Effective March 1, 2009, the monthly benefit for 

participants not yet retired will have no 36-month guarantee 

feature. 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX B – SUMMARY OF MAJOR PLAN PROVISIONS

28 

7. Early Retirement

Eligibility: Age 55 and five years of service (ten years of 

service if the participant did not have at least one hour of 

service after March 1, 1998).

Benefit: The normal retirement benefit described above 

reduced by 5/9 of 1% for each month the Participant is less 

than 65 and by 5/12 of 1% for each month the Participant is 

less than 62. 

Effective March 1, 2009, the subsidized reduction 

described above is only applied to Participants retiring 

directly from active status. All other retirements will be 

actuarially reduced to reflect early commencement of 

benefits.

8. Disability Retirement

Eligibility: Five years of service (ten years of service if the 

participant did not have at least one hour of service after 

March 1, 1998) and awarded a Social Security Disability 

Award.

Benefit: The normal retirement benefit earned to date will 

be payable without reduction for age. 

9. Deferred Vested Pension 

Eligibility: Five years of service (ten years of service if the 

participant did not have at least one hour of service after 

March 1, 1998). 

Benefit: Accrued benefit payable at normal retirement.

10. Joint & Survivor Annuity Benefit

Eligibility: Participant must be eligible for early, normal or 

disability pension on their date of death. 

Benefit: The actuarial equivalence of 50% or 75% of the 

accrued benefit with reduction for early retirement if 

applicable.

11. Normal Form

If Single: Straight Life Annuity

If Married: 50% Joint & Survivor, actuarial equivalence 

12. Changes to Plan Provisions Since Last Valuation 

None

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX C – ACTUARIAL ASSUMPTIONS AND METHONDS

30 

8. Marriage Assumption

We assume 70% of participants are married and wives 

are three years younger than husbands. 

9. Justification for Assumptions

In accordance with Actuarial Standard of Practice 

No. 27, the rationale for our 6.75% discount rate is 

based on the Trustees risk preference, the Fund’s 

current asset allocation, and the investment managers 

capital market outlook. Based on the current asset 

allocation, the investment manager’s projected longterm return exceeds the discount rate.

For the demographic assumptions, rates of retirement 

and termination are based on Plan experience. The 

mortality table remains appropriate based on recent 

experience.

10. Changes in Assumptions Since the Last Valuation

The RPA ’94 current liability interest rate was changed 

from 3.44% to 3.25% to comply with appropriate 

guidance.

The RPA ’94 current liability mortality table changed 

from the 2015 static mortality table to the 2016 static 

mortality table to comply with appropriate guidance. 

The expense assumption remains the average expenses 

from the most recent two years rounded to the nearest 

$5,000. However, the resulting amount increased from 

$1,175,000 to 1,285,000. 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2016

APPENDIX C – ACTUARIAL ASSUMPTIONS AND METHONDS

31 

B. Actuarial Methods

1. Actuarial Cost Method 

The cost method for determining liabilities for this 

valuation is the Unit Credit Cost method. This is one of 

a family of valuation methods known as accrued benefit 

methods. The chief characteristic of accrued benefit 

methods is that the funding pattern follows the pattern 

of benefit accrual. The normal cost is determined as that 

portion of each participant’s benefit attributable to 

service expected to be earned in the upcoming plan 

year. The Actuarial Liability, which is determined for 

each participant as of each valuation date, represents 

the actuarial present value of the portion of each 

participant’s benefit attributable to service earned prior 

to the valuation date.

2. Asset Valuation Method

The actuarial value of assets is determined 

in accordance with Section 3.16 of Revenue 

Procedure 2000-40 using a five-year smoothing 

period. Specifically, the actuarial value of assets as of 

March 1, 2007 is set equal to the market value of assets. 

For each subsequent plan year, the actuarial value shall 

be the market value minus a decreasing fraction (4/5, 

3/5, 2/5, 1/5) of each gain or loss for each of the 

preceding four plan years. Gains or losses prior to 

March 1, 2007 are ignored. The resulting actuarial 

value of assets is then limited to be no greater than 

120% and no less than 80% of the market value of 

assets on the valuation date. 

3. Withdrawal Liability Method

The Plan uses the Presumptive method with the 

Unfunded Vested Benefits calculated as the difference 

between the Market Value of Assets and the present 

value of nonforfeitable benefits valued at 6.25%.

4. Changes in Actuarial Methods Since the Last 

Valuation 

None. 
United Furniture Workers 

Pension Fund

Actuarial Valuation Report 

as of March 1, 2015

Produced by Cheiron

April 2016
TABLE OF CONTENTS

Section Page

Transmittal Letter i 

Foreword iii 

Section I Summary .....................................................................................................................................................................................1 

Section II Assets ..........................................................................................................................................................................................7 

Section III Liabilities .....................................................................................................................................................................................9 

Section IV Contributions .............................................................................................................................................................................13 

Section V Unfunded Vested Benefits .........................................................................................................................................................21 

Section VI FASB ASC Topic #960 .............................................................................................................................................................22 

Appendices

Appendix A Membership Information ...........................................................................................................................................................23 

Appendix B Summary of Major Plan Provisions ..........................................................................................................................................27 

Appendix C Actuarial Assumptions and Methods ........................................................................................................................................29 
i 

April 20, 2016 

Board of Trustees

c/o Ms. Dee Anne Walker, Secretary-Treasurer/Director

United Furniture Workers Pension Fund A 

1910 Air Lane Drive 

Nashville, Tennessee 37210 

Dear Trustees:

At your request, we have performed the March 1, 2015 Actuarial Valuation of the United Furniture Workers Pension Fund A (the 

“Plan”). The purpose of this report is to present information on the Plan’s assets and liabilities and to disclose contribution levels, 

including the minimum required amount as mandated by Federal law to the Trustees. This report is for the use of the Plan and its 

auditors in preparing financial reports in accordance with applicable law and accounting requirements. 

In the Foreword we refer to the general approach employed in the preparation of this report. The Summary section discusses the longterm funded status and emerging issues facing the Trustees. We also comment on the sources and reliability of both the data and the 

actuarial assumptions. The results of this report are only applicable to the 2015 Plan Year and rely on future Plan experience 

conforming to the underlying assumptions. Future valuation reports may differ significantly from the current results presented in this 

report due to such factors as the following: Plan experience differing from that anticipated by the assumptions, changes in 

assumptions, and changes in Plan provisions or applicable law. 

To the best of our knowledge, this report and its contents have been prepared in accordance with generally recognized and accepted 

actuarial principles and practices which are consistent with the Code of Professional Conduct and applicable Actuarial Standards of 

Practice set out by the Actuarial Standards Board. Furthermore, as credentialed actuaries, we meet the Qualification Standards of the 

American Academy of Actuaries to render the opinion contained in this report. This report does not address any contractual or legal 

issues. We are not attorneys and our firm does not provide any legal services or advice. 

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

FOREWORD

iii

Cheiron has performed the Actuarial Valuation of the United 

Furniture Workers Pension Fund A as of March 1, 2015. The 

purpose of this report is to: 

1) Measure and disclose, as of the valuation date, the financial 

condition of the Plan; 

2) Provide specific information and documentation required 

by the Federal Government and the auditors of the Plan; and

3) Review past and expected trends in the financial conditions 

of the Plan. 

An actuarial valuation establishes and analyzes Plan assets, 

liabilities and contributions on a consistent basis, and traces the 

progress of each from one year to the next. It includes 

measurement of the Plan’s investment performance as well as an 

analysis of actuarial liability gains and losses. This valuation report 

is organized as follows: 

Section I – Summary presents key valuation results and 

compares this year’s results to last year’s results. It also 

provides the historical summary and future outlook of the Plan. 

Section II – Assets contains exhibits relating to the valuation of 

assets.

Section III – Liabilities shows the various measures of 

liabilities.

Section IV – Contributions shows the development of the 

minimum and maximum contributions. 

Section V – Unfunded Vested Benefits (UVB) shows the 

development of the UVB as of March 1, 2015 that would be 

allocated to employers that withdraw before February 29, 2016. 

Section VI – FASB ASC Topic #960 Disclosure provides 

information required by the Plan’s auditor. 

Finally, at the end of this report we present appendices that contain 

a summary of the Plan’s membership at the valuation date, a 

summary of the major provisions of the Plan, and the actuarial 

methods and assumptions used in the valuation. 

In preparing our report, we relied on information (some oral and 

some written) supplied by the Fund Office and Joseph Warren & 

Co, A Division of Rogoff and Company PC. This information 

includes, but is not limited to, the Plan provisions, employee data, 

and financial information. We performed an informal examination 

of the obvious characteristics of the data for reasonableness and 

consistency in accordance with Actuarial Standard of Practice #23. 

The actuarial assumptions, taken individually, reflect our 

understanding and best estimate of the likely future experience of 

the Plan. The results of this report are dependent upon future 

experience conforming to these assumptions. To the extent that 

future experience deviates from the actuarial assumptions, the true 

cost of the Plan could vary from our results. 

Finally, in preparing this report, we have conformed to generally 

accepted actuarial principles and practices which are consistent 

with the Code of Professional Conduct, and applicable Actuarial 

Standards of Practice set out by the Actuarial Standards Board.
 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION I –SUMMARY

2 

General Comments Following is an analysis of the Plan’s results for the prior year 

followed by historical results for the last ten years. After that, a 

projection of future results is shown. Please note this valuation was 

prepared using census data and financial information as of the 

valuation date, March 1, 2015. Therefore, events following that 

date are not, and should not be, reflected in this report. The next 

valuation will reflect all membership and investment experience 

changes through February 29, 2016. 

Prior Year Results:

Investment and liability experience and their effect on future costs 

traditionally have been the focus of year to year analyses.

o The Market Value of Assets returned 6.28% for the Plan 

Year ending February 28, 2015. For long-term planning the 

Plan develops an Actuarial Value of Assets using a 

smoothing method which phases in investment gains and 

losses over five years. On this basis the Actuarial Value of 

Assets returned 9.21%. Comparing this return to the prior 

year’s long-term investment assumption of 7.50% results in 

an actuarial asset gain of $1.36 million.

o The Plan experienced a liability loss totaling $1.13 million. 

Combined with the actuarial investment gain of $1.36 

million, the Plan had a net actuarial experience gain of $0.23 

million.

o Effective with this valuation, we made an assumption change 

to reduce the discount rate from 7.50% to 6.75%. This 

change resulted in a $12.6 million increase in the liability as 

well as an increase in the Minimum Required Contribution. 

Please refer to Appendix C for more details on the actuarial 

assumptions. 

o The funding ratio (Actuarial Value of Assets as a percentage 

of Actuarial Liability) decreased from 44.1% to 38.5%. 

Based on Market Value of Assets, the funding ratio 

decreased from 45.8% to 39.0%. 

The Pension Protection Act of 2006 (PPA) added a significant 

layer of new considerations related to the Plan’s PPA Funded 

status.

o The Plan was certified as “Critical and Declining” status 

under the Pension Protection Act (PPA) as amended by the 

Multiemployer Pension Reform Act of 2014 (MPRA) for the 

2015 Plan Year because of the current Funding Deficiency

and is projected insolvent within the next 19 years. The PPA 

status is re-determined annually.

o A Rehabilitation Plan was prepared in December 2008 

modifying adjustable benefits and requiring annual 

contribution increases of 5.5% beginning March 1, 2009. 

This Rehabilitation Plan is based on the reasonable measures 

(exhaustion) method and is annually monitored. 

o The funding ratio is an important measure that is used in 

determining the PPA zone, which as noted, has declined over 

the past year.

o The period of time until a Funding Deficiency occurs is 

usually an important measure that is used for PPA testing. 

The Plan already has a Funding Deficiency which increased 

from $20.4 million as of March 1, 2014 to $29.9 million as of 

March 1, 2015 and is projected to grow. However, under 

PPA there is no excise tax due as long as the Plan has a valid 

Rehabilitation Plan.
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION I –SUMMARY

3 

In addition, please note that: 

o Active membership declined by 6.9% over last year, mainly 

due to the withdrawal of Sealy Components. 

o The Plan received $3.96 million in contributions (including 

Withdrawal Liability payments of $0.30 million) and paid 

$14.80 million in benefits and expenses for the year ending 

February 28, 2015. Comparing these two amounts shows a 

negative net cash flow of $10.84 million, which means the 

Plan is currently using investment returns to pay for benefits 

and expenses not covered by contributions. 

o The increase in the Minimum Required Contribution was 

partially due to (1) a large credit base being completely 

recognized last year and no longer available for the current 

Plan Year, and (2) the decrease in the investment return 

assumption. 

o The Plan assesses Withdrawal Liability based on a 6.25% 

interest rate assumption (7.00% last year) which is 0.5% less 

than the discount rate assumption used for funding. The 

Unfunded Vested Benefits increased from $100.3 million as 

of March 1, 2014 to $121.5 million as of March 1, 2015. 

Historical Review: 

It is important to take a step back from the results and view 

them in the context of the Plan’s recent history. On the next 

few pages, we present a series of charts which display key 

results in the valuations of the last ten years.



UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION II – ASSETS

7 

Assets at Market Value: 

Market values represent “snap-shot” or “cash-out” values which 

provide the principal basis for measuring financial performance 

from one year to the next. 

Table II - 1

Statement of Assets at Market Value, March 1

Assets 2014 2015

Short Term Obligations $ 521,691 $ 264,333

Common Stocks 5,479,771 5,234,786

Intech Institutional Large Cap Growth Fund 6,344,495 5,772,886

Fidelity Growth International Fund 6,175,892 5,083,707

Fidelity Emerging Markets Fund 696,793 582,499

Rothchild SMID Fund 6,063,210 4,564,317

Pimco Bond Fund 14,597,028 6,421,005

BPIF Non-Taxable LP 7,847,418 8,231,939

State Street Global - MSCI 3,078,000 3,032,140

Wellington Global Total Return Fund 4,369,390 3,272,743

JPMCB Strategic Property Fund 8,339,847 8,828,137

State Street Global - Daily 2,922,000 3,235,289

Robeco BP - All Cap Value Fund 5,736,405 5,215,651

Loomis Sayles Credit Long/Short 0 5,901,800

Mortgage Receivable 1,260,000 1,260,000

Cash 1,136,951 1,292,443

Fixed Assets less accumulated depreciation 34,066 28,701

Receivables

Employer Contributions $ 2,592,801 $ 2,827,951

Accrued Interest & Dividends 15,452 13,475

Liabilities

Accrued Expenses and payroll taxes $ (150,478) $ (176,334)

Total Market Value $ 77,060,732 $ 70,887,468

Assets at Actuarial Value: 

For long-term planning, actuaries commonly use smoothing 

techniques to mitigate the short-term volatility exhibited by the 

capital markets. The Plan currently phases in investment gains and 

losses over five years. The Actuarial Value of Assets is also 

constrained so that it cannot exceed 120% of the Market Value and 

cannot be less than 80% of the Market Value. The table below 

shows the development of the Actuarial Asset Value. 

Table II - 2

Development of Actuarial Value of Assets as of March 1, 2015

Market Value of Assets as of March 1, 2015 $ 70,887,468

Plan Investment Percent Percent Amount

Year Gains / (Losses) Recognized Deferred Deferred

2010 $ 6,511,385 100% 0% $ 0

2011 (3,803,566) 80% 20% (760,713) 

2012 (4,321) 60% 40% (1,728) 

2013 3,791,415 40% 60% 2,274,849 

2014 (738,241) 20% 80% (590,593) 

Total $ 921,815

Preliminary Actuarial value as of March 1, 2015 $ 69,965,653

Corridor for Actuarial Value

80% of Market Value $ 56,709,975

120% of Market Value $ 85,064,961

Actuarial Value of Assets as of March 1, 2015 $ 69,965,653

 - as a percent of Market Value of Assets 98.7%

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION III – LIABILITIES

9 

In this section, we present detailed information on Plan liabilities 

including:

• Disclosure of Plan liabilities at March 1, 2014 and March 

1, 2015; 

• Statement of changes in these liabilities during the year; 

and

• Development of the actuarial liability gain/loss during the 

year.

Disclosure: 

Several types of liabilities are calculated and presented in this 

report. Each type is distinguished by the people ultimately using 

the figures and the purpose for which they are using them. 

• Present Value of Future Benefits: Used for analyzing the 

financial outlook of the Plan, this represents the amount of 

money needed today to fully pay off all future benefits 

assuming participants continue to accrue benefits. 

• Actuarial Liabilities: Used in determining Minimum 

Funding Requirements, maximum tax deductible 

contributions, and long-term funding targets. These 

liabilities represent the total amount of money needed to 

fully pay off all obligations of the Plan using funding 

assumptions and assuming no further accrual of benefits. 

For this Plan, the Trustee’s chose the Unit Credit Cost 

Method to determine the liability.

• Accrued Liabilities: These liabilities are required for 

determining PPA funded status and for accounting 

disclosure purposes (FASB ASC 960). For that purpose 

they are referred to as the present value of accumulated 

benefits. These liabilities are determined using the Unit 

Credit Cost Method, and so, for the Plan will equal the 

Actuarial Liabilities.

• Vested Liabilities: Required for accounting purposes, this

liability represents the portion of the Accrued Liabilities 

which are vested. 

• Current Liabilities: Used for Federal Government 

compliance purposes, the calculation of this liability is 

defined by the Internal Revenue Code and regulations to 

determine maximum allowable tax deductible 

contributions. 

The table on the following page discloses most of these 

liabilities for the current valuation and the prior one. With 

respect to each disclosure, a subtraction of the appropriate 

value of Plan assets yields an unfunded liability for each 

respective type. 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION III – LIABILITIES

10 

Table III - 1

Liabilities/Net Surplus (Unfunded)

3/1/2014 3/1/2015

FUNDING DISCOUNT RATE ASSUMPTION 7.50% 6.75%

ACTUARIAL / PPA LIABILITY 

 Actuarial / PPA Liability $ 168,388,149 $ 181,564,343

Actuarial Value of Assets 74,249,342 69,965,653

 Net Surplus (Unfunded) $ (94,138,807) $ (111,598,690)

VESTED LIABILITY

Actuarial / PPA Liability $ 168,388,149 $ 181,564,343

Less Present Value of Non-Vested Benefits 487,736 505,890

 Vested Liability $ 167,900,413 $ 181,058,453

Market Value of Assets 77,060,732 70,887,468

 Net Surplus (Unfunded) $ (90,839,681) $ (110,170,985)

RPA DISCOUNT RATE 3.63% 3.44%

CURRENT LIABILITY (RPA 1994) $ 283,826,417 $ 290,549,936

Market Value of Assets 77,060,732 70,887,468

 Net Surplus (Unfunded) $ (206,765,685) $ (219,662,468)
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION III – LIABILITIES

11 

Allocation of Liabilities by Type:

The Plan participants may qualify for a benefit upon death, termination, and disability as well as upon retirement. The value of the liabilities 

arising from each of these sources is shown in the following table: 

 Table III - 2

ALLOCATION OF LIABILITIES BY TYPE

March 1, 2015

Benefit Type Retirement Termination Death Disability Total

Unit Credit Normal Cost $ 728,023 $ 114,240 $ 18,650 $ 28,638 $ 889,551

Actuarial / PPA Liability

Actives $ 22,737,823 $ 2,392,125 $ 553,878 $ 689,013 $ 26,372,839

Terminated Vesteds 45,764,390 0 0 45,764,390 0 

Retirees and Beneficiaries 89,542,664 0 7,348,683 12,535,767 109,427,114

Total $ 112,280,487 $ 48,156,515 $ 7,902,561 $ 13,224,780 $ 181,564,343

RPA Current Liability Normal Cost $ 1,355,813 $ 344,027 $ 13,963 $ 55,077 $ 1,768,880

RPA Current Liability 

Actives $ 40,570,196 $ 6,684,322 $ 390,461 $ 1,279,745 $ 48,924,724

Terminated Vesteds 89,993,573 0 0 89,993,573 0 

Retirees and Beneficiaries 121,890,937 0 9,799,733 19,940,969 151,631,639

Total $ 162,461,133 $ 96,677,895 $ 10,190,194 $ 21,220,714 $ 290,549,936

Vested RPA Current Liability 

Actives $ 30,107,072 $ 16,634,292 $ 385,454 $ 1,247,852 $ 48,374,670

Terminated Vesteds 89,993,573 0 0 89,993,573 0 

Retirees and Beneficiaries 121,890,937 0 9,799,733 19,940,969 151,631,639

Total $ 151,998,009 $ 106,627,865 $ 10,185,187 $ 21,188,821 $ 289,999,882
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION III – LIABILITIES

12 

Changes in Liabilities: 

The Actuarial Liability shown in the preceding table changes at 

successive valuations based on as the experience of the Plan. The 

liability may change for any of several reasons, including:

• New hires since the last valuation

• Benefits accrued since the last valuation

• Plan amendments

• Interest on Actuarial Liability 

• Benefits paid to retirees and beneficiaries

• Participants leaving employment at rates different than 

expected

• Changes in actuarial assumptions 

• Changes in actuarial methods

The following table shows the change in the Actuarial Liability 

measure since the last valuation. There were no changes to 

methods or Plan provisions since last year. However, we made an 

assumption change to reduce the discount rate from 7.50% to 

6.75% per annum resulting in a $12.6 million increase in the 

liability. Please refer to Appendix C for more details on the 

actuarial assumptions.

Table III - 3

Actuarial (PPA) Liability

Liabilities 3/1/2014 $ 168,388,149

Liabilities 3/1/2015 181,564,343

Liability Increase (Decrease) 13,176,194

Change due to:

 Plan Amendment $ 0

 Assumption Change 12,570,893

 Accrual of Benefits 897,388

 Actual Benefits (13,604,248)

 Passage of Time 12,186,256

 Other Sources 0

 Actuarial (Gain)/Loss 1,125,905
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

13 

In this section, we present detailed information on Plan 

contributions from two perspectives:

• Minimum Required Contributions, based on the Unit 

Credit Cost Method; and 

• Government Limitations which could affect the above. 

Minimum Required Contributions: 

For this Plan, the funding method used is the Unit Credit Cost 

Method. The Minimum Required Contribution is determined in 

two parts. 

The first part is the Unit Credit Normal Cost. This is the cost for 

the benefits expected to be earned in the current year for each 

active participant. The Normal Cost includes a provision for 

administrative expenses.

The second part is an amortization payment to pay off the 

Unfunded Actuarial Liability (UAL). The UAL is the difference 

between the Actuarial Value of Assets at the valuation date and the 

Actuarial Liability determined by the actuarial cost method. The 

amortization payment is determined using the amortization 

schedule required by the minimum funding rules in the Internal 

Revenue Code. 

Government Limitations:

ERISA and the Internal Revenue Code place various limits on the 

contributions made to qualified pension plans. The limits impact 

the minimum that must be paid, the maximum that can be 

deducted, and the timing of contributions. 

To ensure that Minimum Required Contributions are met, pension 

plans are required to retain an Enrolled Actuary to complete 

Schedule MB to Form 5500 on an annual basis. In the past, 

bargained contributions exceeded the Minimum Required 

Contribution and the Plan built up a Credit Balance. The Credit 

Balance can be used to make up the difference between the 

Minimum Required Contribution and the bargained contribution. 

However, for the past several years the Plan has exhausted the 

Credit Balance and has a Funding Deficiency (i.e. a negative 

Credit Balance) for the current Plan Year. 

The Minimum Required Contribution for 2015 is shown below 

compared to the Government Limitations and the estimated 

employer contributions. The table also shows the per capita cost 

and contribution. 

Table IV - 1

Contributions for 2015

Minimum Required Contribution

Unit Credit Normal Cost (with Expenses) $ 2,064,551

Amortization Payment 14,968,731

Interest to End of Year 1,149,747

Total $ 18,183,029

Government Limits

Maximum Deductible Contribution $ 344,395,488

Minimum Contribution (before Funding Deficiency) 18,183,029

Funding Deficiency with Interest 31,904,342

Estimated Employer Contributions with Interest $ 3,977,816

Count of Active Participants 1,029

Per Capita Minimum Required Contribution $ 17,671

Per Capita Contribution $ 3,866
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

14 

The tables on the following pages show the IRS Funding Standard Account, as well as the development of the minimum and maximum 

contributions for the 2015 Plan Year. 

Table IV - 2

FUNDING STANDARD ACCOUNT FOR PLAN YEARS ENDING

2/28/2015 2/29/2016

1. Charges for Plan Year

a. Prior Year Funding Deficiency $ 20,415,717 $ 29,886,971

b. Normal Cost with Expenses 2,047,388 2,064,551

c. Amortization Charges 16,762,867 17,562,499

d. Interest on a., b., and c. to Year End 2,941,948 3,342,196

e. Additional Funding Charge N/A N/A

f. Interest Charge due to Late Quarterly Contributions N/A N/A

g. Total Charges $ 42,167,920 $ 52,856,217

2. Credits for Plan Year

a. Prior Year Credit Balance $ 0 $ 0

b. Contributions for Minimum Funding (actual / expected ) 4,120,469 3,850,000

c. Amortization Credits 7,572,301 2,593,768

d. Interest on a., b., and c. to Year End 588,179 190,267

e. Full Funding Limit Credit 0 0

f. Total Credits $ 12,280,949 $ 6,634,035

3. Credit Balance / (Funding Deficiency) at End of Year [2. - 1.] (29,886,971) $ $ (46,222,182)
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

15 

Table IV - 3

CALCULATION OF THE MAXIMUM DEDUCTIBLE CONTRIBUTION

FOR THE PLAN YEAR STARTING MARCH 1, 2015

1. "Fresh Start" Method

a. Unit Credit Normal Cost with Expenses $ 2,064,551

b. Net Charge to Amortize Unfunded Actuarial Liability Over 10 Years 14,712,901

c. Interest on a. and b. to Year End 1,132,478

d. Total 17,909,930

e. Minimum Required Contribution at Year End 50,087,371

f. Larger of d. and e. 50,087,371

g. Full Funding Limit 200,360,669

h. Preliminary Maximum Deductible Contribution [lesser of f. and g.] $ 50,087,371

2. 140% of Current Liability Calculation

a. RPA 1994 Current Liability at Start of Year $ 290,549,936

b. Present Value of Benefits Estimated to Accrue during Year 1,768,880

c. Expected Benefit Payments 14,065,072

d. Net Interest on a., b. and c. at Current Liability Interest Rate (3.44%) 9,815,894

e. Expected Current Liability at End of Year [a. + b. – c. + d.] 288,069,638

f. 140% of e. 403,297,493

g. Actuarial Value of Assets 69,965,653

h. Expected Expenses 1,175,000

i. Net Interest on c., g., and h. at Valuation Interest Rate (6.75%) 4,176,424

j. Estimated Value of Assets [g. – c. – h. + i.] 58,902,005

k. Unfunded Current Liability at Year End [f. – j.], not less than $0 $ 344,395,488

3. Maximum Deductible Contribution at Year End, greater of 1.h. and 2.k. $ 344,395,488
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

16 

Table IV - 4

DEVELOPMENT OF ACTUARIAL GAIN / (LOSS)

FOR THE YEAR ENDED FEBRUARY 28, 2015

1. Unfunded Actuarial Liability at Start of Year (not less than zero) $ 94,138,807

2. Normal Cost and Expenses at Start of Year 2,047,388

3. Interest on 1. and 2. to End of Year 7,213,964

4. Contributions for Prior Year 4,120,469

5. Interest on 4. to End of Year 20,256

6. Change in Unfunded Actuarial Liability Due to Changes in Methods 0

7. Change in Unfunded Actuarial Liability Due to Changes in Assumptions 12,570,893

8. Change in Unfunded Actuarial Liability Due to Changes in Plan Design 0

9. Expected Unfunded Actuarial Liability at End of Year

[1. + 2. + 3. – 4. – 5. + 6. + 7. + 8.] $ 111,830,327

10. Actual Unfunded Actuarial Liability at End of Year (not less than zero) 111,598,690

11. Actuarial Gain / (Loss) [9. – 10.] $ 231,637

12. Amortization Factor for Actuarial Gain / (Loss) 9.8781 

13. Amortization Credit / (Charge) for Actuarial Gain / (Loss) $ 23,450
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

17 

Table IV - 5

SCHEDULE OF AMORTIZATIONS REQUIRED FOR MINIMUM REQUIRED CONTRIBUTION

AS OF MARCH 1, 2015

Initial 3/1/2015 Remaining Beg of Yr

Date Initial Amortization Outstanding Amortization Amortization

Type of Base Established Amount Years Balance Years Amount

CHARGES

1. Initial Unfunded 3/1/1978 16,575,006 $ 40 $ 3,318,468 3 1,179,144 $ 

2. Plan Amendment 3/1/1989 63,848 30 17,716 4 4,872

3. Method Change 3/1/1989 15,842,844 30 4,396,460 4 1,209,031

4. Plan Amendment 3/1/1993 5,282,693 30 2,580,031 8 400,839

5. Actuarial Loss 3/1/2000 7,511,951 30 5,574,339 15 564,313

6. Actuarial Loss 3/1/2001 11,966,014 15 1,248,486 1 1,248,486

7. Actuarial Loss 3/1/2002 13,842,899 15 2,792,907 2 1,442,045

8. Actuarial Loss 3/1/2003 22,582,575 15 6,765,682 3 2,404,035

9. Actuarial Loss 3/1/2005 3,018,172 15 1,379,118 5 312,980

10. Actuarial Loss 3/1/2006 2,642,095 15 1,402,737 6 273,556

11. Assumption Change 3/1/2007 8,194,633 30 7,366,731 22 611,008

12. Actuarial Loss 3/1/2007 2,180,614 15 1,308,447 7 225,456

13. Actuarial Loss 3/1/2008 15,092,752 15 10,014,909 8 1,555,936

14. Actuarial Loss 3/1/2009 28,127,155 15 20,325,991 9 2,891,493

15. Actuarial Loss 3/1/2011 7,919,489 15 6,563,232 11 809,729

16. Assumption Change 3/1/2012 2,075,229 15 1,818,540 12 211,632

17. Actuarial Loss 3/1/2012 6,035,275 15 5,288,762 12 615,477

18. Actuarial Loss 3/1/2013 3,242,769 15 2,985,145 13 329,865

19. Assumption Change 3/1/2015 12,570,893 15 12,570,893 15 1,272,602 

TOTAL CHARGES $ 97,718,594 $ 17,562,499
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

18 

Table IV - 6

SCHEDULE OF AMORTIZATIONS REQUIRED FOR MINIMUM REQUIRED CONTRIBUTION

AS OF MARCH 1, 2015

Initial 3/1/2015 Remaining Beg of Yr

Date Initial Amortization Outstanding Amortization Amortization

Type of Base Established Amount Years Balance Years Amount

CREDITS

1. Funding Method Change 3/1/2008 6,945,571 $ 10 $ 2,631,401 3 $ 935,010

2. Plan Amendment 3/1/2009 590,517 15 426,733 9 60,705

3. Actuarial Gain 3/1/2010 11,371,471 15 8,842,602 10 1,165,787

4. Actuarial Gain 3/1/2014 4,028,752 15 3,874,502 14 408,816

5. Actuarial Gain 3/1/2015 231,637 15 231,637 15 23,450

TOTAL CREDITS $ 16,006,875 $ 2,593,768

NET CHARGE $ 81,711,719 $ 14,968,731
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

19 

Table IV - 7

ACCUMULATED RECONCILIATION ACCOUNT AND BALANCE TEST

AS OF MARCH 1, 2015

1. Amount due to Additional Interest Charges in prior years $ 0

2. Amount due to Additional Funding Charges in prior years NA

3. Reconciliation Account at Start of Year [1. + 2.] $ 0

4. Net Outstanding Amortization Bases $ 81,711,719

5. Funding Deficiency at Start of Year $ 29,886,971

6. Unfunded Actuarial Liability at Start of Year from Funding Equation [4. - 3. - 5.] $ 111,598,690

7. Actuarial Liability at Start of Year $ 181,564,343

8. Actuarial Value of Assets at Start of Year $ 69,965,653

9. Unfunded Actuarial Liability at Start of Year from Liability Calculation [7. - 8.] $ 111,598,690

The Plan passes the Balance Test because line 6. equals line 9.
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION IV – CONTRIBUTIONS

20 

Table IV - 8

DEVELOPMENT OF FULL FUNDING LIMITATION

FOR THE YEAR BEGINNING MARCH 1, 2015

Minimum Maximum

1. Actuarial / PPA Liability Full Funding Limit Calculation

a. Actuarial / PPA Liability $ 181,564,343 $ 181,564,343

b. Normal Cost with Expenses 2,064,551 2,064,551

c. Lesser of Market Value and Actuarial Value of Assets 69,965,653 69,965,653

d. Credit Balance at Start of Year, not less than zero 0 N/A

e. Net Interest on a., b., c., and d. at Funding Interest Rate (6.75%) 7,672,269 7,672,269

f. Actuarial / PPA Liability Full Funding Limit [a. + b. – c. + d. + e.], limited to zero 121,335,510 $ $ 121,335,510

2. Full Funding Limit Override (RPA 1994)

a. RPA 1994 Current Liability at Start of Year $ 290,549,936 $ 290,549,936

b. Present Value of Benefits Estimated to Accrue during Year 1,768,880 1,768,880

c. Expected Benefit Payments 14,065,072 14,065,072

d. Net Interest on a., b. and c. at Current Liability Interest Rate (3.44%) 9,815,894 9,815,894

e. Expected Current Liability at End of Year [a. + b. – c. + d.] 288,069,638 288,069,638

f. 90% of e. 259,262,674 259,262,674

g. Actuarial Value of Assets 69,965,653 69,965,653

h. Expected Expenses 1,175,000 1,175,000

i. Net Interest on c., g., and h. at Valuation Interest Rate (6.75%) 4,176,424 4,176,424

j. Estimated Value of Assets [g. – c. – h. + i.] 58,902,005 58,902,005

k. RPA 1994 Full Funding Limit Override [f. – j.], limited to zero $ 200,360,669 $ 200,360,669

3. Full Funding Limitation at End of Plan Year, greater of 1.f. and 2.k. $ 200,360,669 $ 200,360,669
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION V – UNFUNDED VESTED BENEFITS

21 

The allocation of the Unfunded Vested Benefits (UVB) is determined under the Presumptive method as defined in the Multiemployer Pension 

Plan Amendments Act of 1980 (MEPPA). If an employer withdraws between March 1, 2015 and February 29, 2016, they will be assessed 

Withdrawal Liability based on their share of the UVB. The Present Value of Vested Benefits (PVVB) is valued using a 6.25% interest rate 

assumption (7.00% for Plan Year ending 2/28/2014), and the same provisions as disclosed in Appendix B with the exception that disability 

benefits are excluded.

Under the Presumptive method, “pools” are created each year based on the change in the Plan’s Unfunded Vested Benefits (UVB). The UVB 

is calculated as the difference between the PVVB and the Market Value of Assets (MVA). In addition, the pools may include an adjustment 

for uncollectible Withdrawal Liability for prior withdrawn employers and statutory limits. Each pool is then written down over 20 years and 

allocated among the employers based on their proportional share of contributions. 

Table V - 1

UNFUNDED VESTED BENEFITS

2/28/2014 2/28/2015

1. Present Value of Vested Benefits

a. Retirees and Beneficiaries $ 105,541,627 $ 113,139,696

b. Terminated Vested Participants 41,569,783 49,471,348

c. Active Participants 27,901,834 27,316,651

d. Total $ 175,013,244 $ 189,927,695

2. Interest Rate 7.00% 6.25%

3. Market Value of Assets on Financial Statement (without the

Withdrawal Liability Payments Receivable) $ 74,722,931 $ 68,387,517

4. Unfunded Vested Benefits [1.d - 3.] $ 100,290,313 $ 121,540,178

5. Funded Ratio [3. ÷ 1.d] 42.7% 36.0%
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

SECTION VI – FASB ASC TOPIC #960

22 

Table VI - 1

PRESENT VALUE OF ACCUMULATED BENEFITS AS OF MARCH 1, 2015

IN ACCORDANCE WITH ASC TOPIC NO. 960

1. Actuarial Present Value of Vested Benefits Amounts Vested Counts

For Retirees and Beneficiaries $ 109,427,114 5,563

Terminated Vesteds 45,764,390 3,471

Active Participants 25,866,949 713

Total Vested Benefits $ 181,058,453 9,747

2. Non-Vested Benefits $ 505,890 316

3. Accumulated Benefits $ 181,564,343 10,063

4. Market Value of Assets on Financial Statement (without the

Withdrawal Liability Payments Receivable) $ 68,387,517

5. Funded Ratios

Vested Benefits 37.8%

Accumulated Benefits 37.7%

RECONCILIATION OF PRESENT VALUE OF ACCUMULATED BENEFITS

1. Actuarial Present Value at Start of Prior Plan Year $ 168,388,149

2. Increase (Decrease) over Prior Year due to:

Benefit Accruals $ 897,388

Benefit Payments (13,604,248)

Increase for Interest 12,186,256

Experience (Gains)/Losses 1,125,905

Changes in Assumptions 12,570,893

Plan Amendments 0

Total $ 13,176,194

3. Actuarial Present Value at End of Prior Year $ 181,564,343 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX A – MEMBERSHIP INFORMATION

23 

The data for this valuation was provided by the Fund Office as of March 1, 2015. Cheiron did not audit any of the data. However, we did 

perform an informal examination of the obvious characteristics of the data for reasonableness and consistency in accordance with Actuarial 

Standard of Practice No. 23. 

The following is a list of data charts contained in this section: 

 Summary of Participant Data

 Changes in Plan Membership 

 Age/Service Distribution for Active Participants

 Counts and Average Benefit Amount by Age for Retirees, Beneficiaries, and Disabled Participants

 Counts and Average Benefit Amount by Age for Terminated Vested Participants 

SUMMARY OF PARTICIPANT DATA

Active Participants March 1, 2014 March 1, 2015

Count 1,105 1,029

Average Age 47.7 47.1

Average Benefit Service 14.9 13.1

Retirees and Beneficiaries Receiving Payments

Count 5,596 5,563

Annual Benefits $ 13,206,363 $ 13,462,349

Average Annual Benefit 2,360 2,420

Terminated Vested Participants

Count 3,487 3,471

Annual Benefits $ 9,441,383 $ 9,913,931

Average Annual Benefit 2,708 2,856
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX A – MEMBERSHIP INFORMATION

24 

PARTICIPANT RECONCILIATION FROM MARCH 1, 2014 TO MARCH 1, 2015

Terminated

Actives Vested Retired Disabled Beneficiaries Total

1. March 1, 2014 valuation 1,105 3,487 4,491 337 768 10,188

2. Additions

a. New entrants 152 0 0 0 0 152

b. Inactive but not in prior year's data 0 6 17 0 2 25

c. New QDRO 0 0 0 0 1 1

d. Total 152 6 17 0 3 178

3. Reductions

a. Terminated Nonvested (41) 0 0 0 0 (41)

b. Benefits expired 0 0 0 0 0 0

c. Died without beneficiary 0 (13) (179) (8) (51) (251)

d. Assumed deceased 0 (6) 0 0 0 (6)

e. Total (41) (19) (179) (8) (51) (298)

4. Changes in Status

a. Terminated Vested (168) 168 0 0 0 0

b. Returned to work 5 (3) 0 0 0 2

c. Retired (21) (155) 176 0 0 0

d. Disabled (3) (4) 0 7 0 0

e. Beneficiary commencing 0 (2) 0 0 2 0

f. Died with beneficiary 0 (5) (41) (3) 49 0

g. Data Correction 0 (2) 0 (1) (4) (7)

h. Total (187) (3) 135 3 47 (5)

5. March 1, 2015 Valuation 1,029 3,471 4,464 332 767 10,063
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX A – MEMBERSHIP INFORMATION

25 

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

 Under 25 32 19 0 0 0 0 0 0 0 0 51

 25 to 29 31 31 8 0 0 0 0 0 0 0 70

 30 to 34 11 28 16 12 0 0 0 0 0 0 67

 35 to 39 12 22 17 36 22 3 0 0 0 0 112

 40 to 44 16 27 13 18 28 7 2 0 0 0 111

 45 to 49 13 19 20 24 33 11 14 1 0 0 135

 50 to 54 10 18 15 26 32 17 29 7 2 0 156

 55 to 59 8 11 7 25 45 23 29 21 6 1 176

 60 to 64 2 4 11 17 24 15 11 18 7 5 114

 65 to 69 0 2 1 6 6 3 4 3 5 6 36

 70 & up 0 0 0 1 0 0 0 0 0 0 1

Total 135 181 108 165 190 79 89 50 20 12 1,029

Average Age = 47.1 Average Service = 13.1

AGE / SERVICE DISTRIBUTION OF ACTIVE PARTICIPANTS

AS OF MARCH 1, 2015

Service
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX A – MEMBERSHIP INFORMATION

26 

AGE DISTRIBUTION OF INACTIVE PARTICIPANTS

PENSIONERS AND BENEFICIARIES RECEIVING BENEFITS AS OF MARCH 1, 2015

Normal, Early Surviving Spouses

Disability Deferred Vested and Beneficiaries

Retirements Retirements Receiving Benefits Total

Age Number

Monthly 

Benefit Number

Monthly 

Benefit Number

Monthly 

Benefit Number

Monthly 

Benefit

Under 55 45 $ 19,171 0 $ 0 23 $ 2,641 68 $ 21,812

55-59 53 21,592 220 48,472 24 2,552 297 72,616

60-64 57 24,209 527 119,143 69 9,297 653 152,649

65-69 47 19,640 822 185,687 91 9,733 960 215,060

70-74 56 15,398 849 188,377 110 11,910 1,015 215,685

75-79 31 7,284 760 157,237 144 15,894 935 180,415

80 & Over 43 8,440 1,286 227,224 306 27,961 1,635 263,625

Total 332 $ 115,734 4,464 $ 926,140 767 $ 79,988 5,563 $ 1,121,862

Monthly Benefit Payable at

Age Number Normal Retirement Date

Under 45 691 $ 165,774 

45-49 441 107,567 

50-54 735 230,569 

55-59 734 165,332 

60-64 553 112,170 

65 & Over 317 44,749 

Total 3,471 $ 826,161 

DEFERRED VESTED PARTICIPANTS AND SURVIVING SPOUSES ENTITLED TO FUTURE BENEFITS

 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX B – SUMMARY OF MAJOR PLAN PROVISIONS

27 

The following is a summary of the major provisions. Please refer to the Plan document for a more complete description. 

1. Effective Date

The Plan was established on March 1, 1962. The most recent

amendment was effective March 1, 2009. 

2. Participation 

Employees become Participants as of the date their employer is 

obligated to begin contributions to the Plan on their behalf. 

3. Past Service

Participants shall, after 36 months of contributions have been 

made, be credited with a year of Past Service during any 

calendar year prior to the employer’s applicable effective date 

in which they were employed for at least six months. 

4. Effective Service

Participants on July 1, 1974 shall be credited with Effective 

Service for each month for which contributions were made on 

their behalf through January 1, 1971.

5. Future Eligibility Service

A Participant shall be credited with a year of Future Eligibility 

Service for each calendar year beginning January 1, 1971 

during which contributions were made on their behalf and they 

worked at least 1,000 hours. 

6. Normal Retirement

Eligibility: The later of age 65 and 5th anniversary of Plan 

participation. 

Benefit: The monthly benefit is equal to the sum of the 

following, but not less than $50: 

(A) Multiply the average annual contribution made on the 

Participant’s behalf after January 1, 1971 by the 

number of years of Past Service by the applicable 

percentage. The percentage ranges from 1.8% to 2.2% 

depending on when participation began and how many 

months employer contributions were made. 

(B) Multiply the average annual contribution made on the 

Participant’s behalf after January 1, 1971 by the 

Effective Service Credit by 3.0%.

(C) Multiply the total amount contributed on behalf of the 

participant from January 1, 1971 to August 31, 2003 by 

3%.

(D) Multiply the total amount contributed on behalf of the 

participant from September 1, 2003 to August 31, 2006 

by 2%.

(E) Multiply the total amount contributed on behalf of the 

participant after August 31, 2006 by 1%. 

Effective March 1, 2009, the monthly benefit for participants 

not yet retired will have no 36-month guarantee feature. 
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX B – SUMMARY OF MAJOR PLAN PROVISIONS

28 

7. Early Retirement

Eligibility: Age 55 and five years of service (ten years of 

service if the participant did not have at least one hour of 

service after March 1, 1998).

Benefit: The normal retirement benefit described above 

reduced by 5/9 of 1% for each month the Participant is less 

than 65 and by 5/12 of 1% for each month the Participant is 

less than 62. 

Effective March 1, 2009, the subsidized reduction described 

above is only applied to Participants retiring directly from 

active status. All other retirements will be actuarially reduced 

to reflect early commencement of benefits.

8. Disability Retirement

Eligibility: Five years of service (ten years of service if the 

participant did not have at least one hour of service after 

March 1, 1998) and awarded a Social Security Disability 

Award.

Benefit: The normal retirement benefit earned to date will be 

payable without reduction for age. 

9. Deferred Vested Pension 

Eligibility: Five years of service (ten years of service if the 

participant did not have at least one hour of service after 

March 1, 1998). 

Benefit: Accrued benefit payable at normal retirement.

10. Joint & Survivor Annuity Benefit

Eligibility: Participant must be eligible for early, normal or 

disability pension on their date of death. 

Benefit: The actuarial equivalence of 50% or 75% of the 

accrued benefit with reduction for early retirement if 

applicable.

11. Normal Form

If Single: Straight Life Annuity

If Married: 50% Joint & Survivor, actuarial equivalence 

12. Changes to Plan Provisions Since Last Valuation 

None.

UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX C – ACTUARIAL ASSUMPTIONS AND METHODS

30 

8. Justification for Economic Assumptions

In accordance with Actuarial Standard of Practice No. 27, 

the rationale for our 6.75% discount rate is based on the 

Trustees risk preference, the Fund’s current asset 

allocation, and the investment managers capital market 

outlook. 

Based on the current asset allocation, the investment 

manager’s 10-year projected real return is 3.46%. Using 

Cheiron’s long term price inflation of 3.25% increases the 

expected return to 6.71%. Furthermore, it is expected that 

a 30-year forecast may provide for higher returns. 

9. Changes in Assumptions Since the Last Valuation

The RPA ’94 current liability interest rate was changed 

from 3.63% to 3.44% to comply with appropriate guidance. 

The RPA ’94 current liability mortality table changed from 

the 2014 static mortality table to the 2015 static mortality 

table to comply with appropriate guidance. 

The investment return assumption was reduced from 7.50% 

to 6.75% to better reflect future investment expectation 

given the current risk tolerance. 

The investment return assumption for withdrawal liability 

purposes was reduced from 7.00% to 6.25%.
UNITED FURNITURE WORKERS PENSION PLAN A

ACTUARIAL VALUATION REPORT AS OF MARCH 1, 2015

APPENDIX C – ACTUARIAL ASSUMPTIONS AND METHODS

31 

B. Actuarial Methods

1. Actuarial Cost Method 

The cost method for determining liabilities for this 

valuation is the Unit Credit Cost method. This is one of a 

family of valuation methods known as accrued benefit 

methods. The chief characteristic of accrued benefit 

methods is that the funding pattern follows the pattern of 

benefit accrual. The normal cost is determined as that 

portion of each participant’s benefit attributable to service 

expected to be earned in the upcoming plan year. The 

Actuarial Liability, which is determined for each 

participant as of each valuation date, represents the 

actuarial present value of the portion of each participant’s 

benefit attributable to service earned prior to the valuation 

date.

2. Asset Valuation Method

The actuarial value of assets is determined in accordance 

with Section 3.16 of Revenue Procedure 2000-40 using a 

five-year smoothing period. Specifically, the actuarial value 

of assets as of March 1, 2007 is set equal to the market 

value of assets. For each subsequent plan year, the actuarial 

value shall be the market value minus a decreasing fraction 

(4/5, 3/5, 2/5, 1/5) of each gain or loss for each of the 

preceding four plan years. Gains or losses prior to March 1, 

2007 are ignored. The resulting actuarial value of assets is 

then limited to be no greater than 120% and no less than 

80% of the market value of assets on the valuation date. 

3. Withdrawal Liability Method

The Plan uses the Presumptive method with the Unfunded 

Vested Benefits calculated as the difference between the 

market value of assets and the present value of 

nonforfeitable benefits valued at 6.25%.

4. Changes in Actuarial Methods Since the Last Valuation

None.