WESTERN PENNSYLVANIA TEAMSTERS AND EMPLOYERS 

PENSION FUND 

SUSPENSION APPLICATION 

Exhibit 10 

Proposed Ballot 

File 10, Ex 10, Proposed Ballot 0001
WESTERN PENNSYLVANIA TEAMSTERS AND EMPLOYERS PENSION FUND 

Proposed Ballot for Ratification of Benefit Reductions 

On or about September 28, 2018, the Western Pennsylvania Teamsters and Employers Pension 

Fund (the “Plan”) notified you that the Board of Trustees had submitted an application to the 

U.S. Department of the Treasury (“Treasury Department”) proposing to reduce benefits pursuant 

to the Multiemployer Pension Reform Act of 2014 (“MPRA”) on August 1, 2019. 

The Notice explained that if the application to reduce benefits were approved by the Secretary of 

Treasury, all participants and beneficiaries of the Plan would be given the opportunity to vote on 

whether the benefit reductions should go into effect. The Plan’s application has now been 

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

Corporation (the “PBGC”) and the Secretary of Labor. This ballot is designed to assist you in 

deciding whether to vote to approve the proposed benefit reductions. Your actual vote must be 

cast by telephone or electronically using a secure website. Do not attempt to cast your vote by 

mailing the ballot to the Plan. 

This ballot package includes: 

• A description of the proposed permanent benefit reduction and its effect on each 

category or group of individuals; 

• The factors considered by the Trustees of the Plan in developing the benefit reduction 

proposal; 

• A statement about why the Plan needs to permanently reduce benefits accrued through 

December 31, 2017 to avoid running out of money to pay benefits by 2029; 

• Your individualized calculation showing how the proposed reduction impacts your 

benefits; and, 

• The factors you need to consider in the event the proposed benefit reduction is not 

implemented and the Plan runs out of money. 

Description of Proposed Benefit Reductions 

The Trustees of the Plan propose for all participants a 30% reduction in benefits accrued through 

December 31, 2017, subject to the individual limitations required by MPRA and the limitation 

proposed by the Trustees affecting Top Tier contribution rate participants as described below. 

1. As required by MPRA, there will be no reduction for individuals who are age 80 

or older by August 31, 2019 (and only partial reductions would be made for individuals 

between ages 75 and 80 on August 31, 2019). 

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2. As required by MPRA, individuals who are receiving disability benefits under the 

terms of the Plan will not have any reduction applied to that portion of their disability 

benefit which was awarded under the disability benefit provisions of the Plan. 

3. As required by MPRA, if your benefit is already less than 110% of the PBGCguaranteed benefit level, your benefit will not be reduced below that amount. 

4. The Trustees have included an additional limitation which is not required under 

MPRA. If you were employed in covered service with an employer who, as of January 1, 

2018 contributed on your behalf at a weekly contribution rate of $380 or more (the “Top 

Tier contribution rate”), your benefit will not be reduced below the level accrued through 

December 31, 2017 under the accrual determined under the age 55 and 30 year $3,500 

monthly Special Benefit level. 

Factors Considered by the Board of Trustees 

Federal law requires that any reduction of benefits be distributed fairly among the various 

categories or groups of participants and beneficiaries under the Plan. In deciding whether the 

proposed benefit reductions would be distributed fairly, the Board of Trustees initially took into 

account the following factors: 

• The type of benefit (for instance all participants earn benefits under the greater of a 

contribution based unit multiplier accrued benefit or, if applicable for Top Tier groups, a 

greater amount determined under a Special Benefit Level); 

• Age; 

• Length of service combined with amount of benefit; 

• Status of Participant (whether or not active at Top Tier contribution level); 

• History of benefit increases and reductions; 

• The extent to which active participants are likely to withdraw support for the Plan, for 

example; 

o The Plan receives approximately two thirds of its annual contributions from 

approximately one third of the participants whose employers contribute at the Top 

Tier contribution level (as identified for preservation of Special Benefit Level 

accruals under the Funding Improvement Plan by having attained a weekly 

contribution rate of at least $225 as of December 31, 2008, and increased as 

required under the Rehabilitation Plan); 

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o The future solvency of the Plan depends substantially on the continued 

participation of Top Tier contribution level participants and their employers, 

whose negative reaction to benefit reductions would likely result in a withdrawal 

of support for the Plan and prompt future withdrawals; and, 

o The expressed interest of the Top Tier groups to maintain the $3,500 Monthly 30-

And-Out Benefit level without reduction. 

Duration of the Benefit Reductions 

If approved, the reduction of benefits described above will start on August 1, 2019 and will 

remain in effect indefinitely. However, if you work in covered service after December 31, 2017, 

benefits accrued after December 31, 2017 will not be suspended. 

Board of Trustees’ Statement in Support of the Proposed Benefit Reductions 

The Board of Trustees supports the proposed reduction of benefits because it is the only realistic 

measure which prevents the Plan from running out of money in 2029. The Trustees support the 

proposed suspension, because if the proposed reduction is implemented you will receive a larger 

benefit than you would if the Plan becomes insolvent. 

The Board of Trustees has done everything in its power to avoid these benefit reductions, 

including reducing active participants’ benefits and future accruals in 2006, 2008 and 2011 from 

over 2.0% of contributions to 0.5% of contributions. In addition, early retirement and joint 

survivor subsidies were eliminated or limited to the portion earned prior to August, 2008. 

Contributing employers have been required to substantially increase contributions to the Plan. 

However, the reduction of future benefit accruals, mandatory employer contribution increases, 

and several good years of investment returns have not been enough to reverse the trend toward 

insolvency. 

The Plan’s assets have not rebounded from the investment losses during two recessions (2000 – 

2002 and 2008). Whenever the Plan experiences poor investment returns, it has to draw down its 

assets – meaning that it has less assets on which to earn necessary returns in the future. The Plan 

relies on substantial investment income to fill the gap between contribution income and benefit 

payments. Assets are drawn down during poor investment cycles because benefit payments have 

been more than what is taken in from contributions. Retirees outnumber the dwindling active 

population 3 to 1. Finally, a number of employers have withdrawn from Plan – sometimes with 

the consent of their covered employees who are concerned that the Plan’s critical and declining 

status means they will outlive the Plan’s assets. All of these factors have contributed to the 

decline in Plan assets. 

The group of contributing employers and active participants deserve knowing that the Plan will 

not run out of money to pay benefits. The forecasts underlying this proposed reduction in 

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benefits rely on conservative assumptions which have met the criteria tested by the federal 

agencies which have reviewed the Plan’s benefit reduction proposal. 

Approval by the Secretary of Treasury 

This Application to reduce benefits has been reviewed and approved by the Secretary of 

Treasury in consultation with the PBGC and the Secretary of Labor. 

Board of Trustees’ Determination of Insolvency 

MPRA required that the Plan’s actuary forecast the Plan’s status using investment, mortality and 

other assumptions which are appropriate for the purpose of forecasting future contributions, 

active populations, and both short and long term investment expectations. In particular the 

negative cash flow resulting from annual benefit obligations being more than double annual 

contribution receipts led the Plan’s actuary to certify that the Plan was in critical and declining 

status. The Board of Trustees, in consultation with the Plan’s actuary, has determined that the 

Plan will become insolvent in 2029 if the proposed benefit reductions are not implemented. 

This projected insolvency date is determined using certain assumptions that are reasonably 

expected to occur in the future but not guaranteed and consequently are subject to some 

uncertainty. 

Impact of Insolvency on Plan Benefits 

If the Plan becomes insolvent, the PBGC is required to provide the Plan with financial assistance 

to enable the Plan to pay you the PBGC guarantee level which is shown on your individual 

statement. The PBGC guarantee is determined under a formula based on years of service and 

your benefit accrual. The maximum monthly PBGC guarantee is $35.75 times years of service. 

For example, if you worked 30 years at the maximum benefit accrual determined under the 

PBGC guarantee formula, your PBGC guarantee would be $1,072.50. If you worked less than 

30 year and had less than PBGC’s maximum guarantee benefit accrual rate, the monthly 

guarantee amount would be less. The PBGC guaranteed benefit is significantly less than the 

amount of the current benefit level or proposed reduced benefit level of most participants. 

Furthermore, there is no assurance that Congress would fund PBGC should its multiemployer 

program become insolvent. (PBGC itself has projected that its multiemployer program will be 

insolvent in 2025 unless Congress acts.) 

Plan Actuary’s Projection of Solvency 

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

benefit reductions under the reduction plan are implemented. This projection requires the use of 

certain assumptions that are reasonably expected to occur in the future but not guaranteed and 

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consequently are subject to some uncertainty. MPRA requires that the Plan demonstrate that the 

reduction in pension benefits is no more than the minimum amount necessary to keep the Plan 

solvent and remain able to pay benefits into the future. 

Effect of Yes Votes, No Votes and the Failure to Cast a Vote 

The benefit reductions will go into effect on August 1, 2019 unless a majority of eligible voters 

vote to reject the reduction plan. Thus, a failure to vote has the same effect on the outcome of 

the vote as a vote in favor of the reduction plan. 

If a majority of eligible voters reject the proposed reduction, MPRA requires that the Treasury 

Department, in consultation with PBGC, determine whether allowing the Plan to go insolvent 

would impose on PBGC more than $1 billion of liability. If so determined, Treasury would be 

able to allow the proposed reduction (or some modified form of the proposed reductions) to be 

implemented at a later time. 

To preserve the retirement security for all Plan participants and beneficiaries, the Board of 

Trustees strongly recommends that you vote to approve this reduction plan. 

Instructions for Casting Your Vote 

The proposed suspension will go into effect unless a majority of eligible voters vote to reject the 

suspension. Therefore, a failure to vote has the same effect on the outcome as a vote in favor of 

the proposed benefit reduction. As part of this ballot, you have received an individual number 

that will keep your vote private. There are two available methods approved by the Department 

of Treasury for casting your vote: 

1. By calling a dedicated telephone number (800) ____-________ set up by the Department 

of Treasury for this purpose; 

2. By logging into a secure website at www._____________.org 

You will need your individual participant number assigned to you in order to register your vote. 

Paper ballots will not be accepted. 

By law, the period for voting to approve the proposed benefit reduction plan described in this 

Ballot will end on <<DATE>>. This means that you must cast your vote by 11:59 EST on 

<<DATE>> either by telephone or online or it will not be counted. 

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