- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

CHECKLIST 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Item Page 

Response Number Description of Item Number 

Yes 1. 2;20 

Does the application include an original signature of the plan 

sponsor or an authorized representative of the plan sponsor? 

See section 2.01. 

Yes 2. Does the application include a description of the proposed 2-3 

benefit suspension - calculated as if no other limitations apply -

that includes: 

411 the suspension's effective date (and its expiration date, if 

applicable), 

411 whether the suspension provides for different treatment 

of participants and beneficiaries, 

411 a description of the different categories or groups of 

individuals affected, and 

411 how the suspension affects these individuals differently? 

See section 2.02. 

Yes 3. Does the application include a penalties-of-perjury statement 3 

signed by an authorized trustee on behalf of the board of 

t:1ustees? 

See Section 2.03. 

Yes 4. Does the application include a statement, signed by an 3 

authorized trustee on behalf of the board of trustees, 

acknowledging that the application and the application's 

supporting material will be publicly disclosed on the Treasury 

Department's website? 

See section 2.04. 

Yes 5. Does the application include the plan actuary's certification of 4 

critical and declining status and the supporting illustrations, 
including: 

• the plan-year-by-plan-year projections demonstrating 

projected insolvency during the relevant period, and 

• separately identifying the available resources (and the 

market value of assets and changes in cash flow) during 

each of those years? 

See section 3.01. 

Yes 6. Does the application describe the assumptions used, including 4 

the new entrant proflle, the total contribution base units, and the 

average contribution rates? 

See section 3.01. 

Yes 7. Does the application include the plan actuary's certification that 4 

the plan is projected to avoid insolvency if the suspension takes 

effect and the supporting illustrations, including: 

• the plan-year-by-plan-year projections demonstrating 

projected solvency during the relevant period, 

• a description of the assumptions used, including the new 

entrant proflle, the total contribution base units, and the 

average contribution rates, and 

• separately identifying the available resources (and the 

market value of assets and changes in cash flow) during 

each of those years? 

See section 3.02. 

Yes 8. Does the application include the plan sponsor's determination of 4-13 

projected insolvency that includes the documentation set forth in 

section 5 of the revenue procedure? 

See section 3.03. 

Yes 9. Does the application include a demonstration that the limitations 13 

on individual suspensions are satisfied, including calculations 

regarding: 

• the guarantee-based limitation, 

• the disability-based limitation, and 

• the age-based limitation? 

See section 4.01. 

Yes 10. Does the application include a demonstration that the proposed 13 

suspension is reasonably estimated to achieve the levelnecessaty 

to avoid insolvency for the extended period, including 

illustrations regarding the plan's solvency ratio and available 

resources? 

See section 4.02(1). 

!935354.2 
Yes 11. Does the application include the required illustration utilizing 13 

stochastic projections? (This illustration is not required if the 

plan is not required to appoint a retiree representative under § 

432(e)(9)(B)(v)(I) and stochastic projections were not used in 

making the required determination.) 

See section 4.02(2). 

N/A 12. Does the application include a demonstration that the proposed 14 

suspension is not projected to materially exceed the level 

necessary to avoid insolvency, including illustrations regarding 

the plan's solvency ratio and available resources? 

See section 4.03. 

Yes 13. Does the application include a demonstration that the proposed 14 

suspension is equitably distributed, including: 

• information on the effect of the suspension on the plan 

in the aggregate, 

• information on the effect of the suspension for different 

categories or groups, 

• a list of the factors taken into account, 

• an explanation of why none of the factors listed in § 

432(e)(9)(D)(vi) were taken into account (if applicable), 

• for each factor taken into account that is not one of the 

factors listed in§ 432(e)(9)(D)(vi), an explanation why 

the factor is relevant, and 

• how any difference in treatment among categories or 

groups of individuals results from a reasonable 

application of the relevant factors? 

See section 4.04. 

Yes 14. Does the application include a copy of the notices (excluding 14 

personally identifiable information) that meet the requirements 

under§ 432(e)(9)(F)? 

See section 4.05(1). 

Yes 15. Does the application include a description of the efforts that are 14-15 

being taken to contact participants, beneficiaries in pay status, 

and alternate payees? 

See section 4.05(2). 

N/A 16. Does the application describe the steps the plan sponsor has 15 

taken to ensure that notices delivered electronically are 

reasonably accessible to the recipients? 

See section 4.05(3) 

1935354.2 
Yes 17. Does the application include a list of each employer who has an 15-16 

obligation to contribute under the Plan and each employee 

organization representing participants under the Plan? 

See section 4.05(4). 

Yes 18. Does the application include information on past and current 4-8; 16 

measures taken to avoid insolvency? 

See section 5.01. 

Yes 19. Does the application include the plan information required by 9-12; 16 

section 5.02? 

See section 5.02 

Yes 20. Does the application describe how the plan sponsor took into 12-13; 

account- or did not take into account the factors listed in 16 

section 5.02 in the determination that all reasonable measures 

were taken to avoid insolvency? 

See section 5.03. 

Yes 21. Does the application describe how the plan sponsor took into 12-13; 

account - or did not take into account - in the determination that 16 

all reasonable measures have been taken to avoid insolvency the 

impact of: 

• benefit and contribution levels on retaining active 

participants and bargaining groups under the plan, and 

• past and anticipated contribution increases under the 

plan on employer attrition and retention levels? 

See section 5.03. 

Yes 22. Does the application include a discussion of any other factors the 16-17 

plan sponsor took into account including how and why those 

factors were taken into account? 

See section 5.04. 

Yes 23. Does the application include a copy of the proposed ballot, 17 

excluding the information regarding the statement in opposition, 

the individualized estimate, and the voting procedures? 

See section 6.01. 

Yes 24. Does the application indicate whether the plan sponsor is 17 

requesting approval from PBGC of a proposed partition under 

section 4233 of ERISA? 

See section 6.02. 

Yes 25. If the answer to item 24 is yes, does the application specify the 17 

effective date of the proposed partition and include a plan-yearby-plan-year projection of the amount of the reduction in benefit 

1935354.2 
payments attributable to the partition? 

See section 6.02. 

Yes 26. Does the application describe the plan's experience with certain 17 

critical assumptions, including a disclosure for each of the 1 0 

plan years immediately preceding the application that separately 

identifies: 

• total contributions, 

• total contribution base units, 

• average contribution rates, 

• withdrawal liability payments, and 

• the rate of return on plan assets? 

See section 6.03. 

Yes 27. Does the application include deterministic projections of the 17 

sensitivity of the plan's solvency ratio throughout the extended 

period by taking into account the more conservative assumptions 

of investment experience and future contribution base units than 

assumed elsewhere in the application? 

See section 6.04. 

Yes 28. Does the plan include deterministic projections for each year in 17-18 

the extended period of: 

• the value of plan assets, 

• the plan's accrued liability, and 

• the plan's funded percentage? 

See section 6.05. 

Yes 29. Does the application include the plan sponsor's representation 18 

that, if it receives the Treasury Department's final authorization 

to suspend and then chooses to implement the suspension, it will 

also amend the plan: 

Ill to indicate that the suspension will cease upon the plan 

sponsor's failure to determine that both all reasonable 

measures continue to be taken to avoid insolvency and 

that the plan would not be projected to avoid insolvency 

without a suspension, 

• to require that any future benefit improvements must 

satisfy§ 432(e)(9)(E), and 

• to specify that the plan sponsor will not modify these 

amendments, notwithstanding any other provision of the 

plan document? 

See section 6.06. 

Yes 30. Does the application indicate whether the plan is a plan 18 

described in§ 432(e)(9)(D)(vii) and, if so, how is that fact 

1935354.2 
reflected in the proposed benefit suspension? 

See section 6.07. 

Yes 31. Does the application include the required plan sponsor 18 

information, including 

• name 

• address; telephone number 

Ill email address; fax number 

Ill employer identification number (EIN) and 

• 3-digit plan number (PN)? 

See section 7.01. 

Yes 32. Does the application include the required plan identification 18 

information? 

See section 7.02. 

N/A 33. Does the application include the required retiree representative 18 

information (if applicable)? 

See section 7.03. 

Yes 34. Does the application include the required enrolled actuary 19 

information? 

See section 7.04. 

Yes 35. Does the application include a designation of power of attorney 19 

for each authorized representative who will represent the plan 

sponsor in connection with the application? 

See section 7.05 and Appendix B. 

Yes 36. Does the application include: 19 

Ill required plan documents and recent amendments, 

• summary plan description (SPD), 

• summary of material modifications, and 

• most recent determination letter? 

See section 7.06. 

Yes 37. Does the application include the required excerpts from the 19 

relevant collective bargaining agreements and side agreements? 

See section 7.07. 

Yes 38. Does the application include the required excerpts from the most 19 

recently flled Form 5500? 

See section 7.08. 

Yes 39. Does the application include the most recently updated 19 

rehabilitation plan? 

See section 7.09. 

I '135354.2 
Yes 40. Does the application include this checklist, completed and placed -

on top of the application? 

See section 7.10. 

N/A 41 If the application is being submitted for resubmission review, --

does the application include: 

• a statement that the application is being submitted for 

resubmission review, and 

• the date on which the Treasury Department gave 

approval to submit an application for resubmission 

review? 

See section 8. 

August 11, 2016 

Harry Chairman 

Board of Tmstees 

United Fu.tn.itute Wo.tk.ers Pension Fund A 

1935354.2 
Application of the 

United Furniture Workers Pension Fund A 

for Approval of 

Suspension of Benefits 

Dated: August 11, 2016 
1920952.6 

Section 1. Background and Purpose 

Pursuant to Internal Revenue Service Revenue Procedure 2016-27 and the 

Department of Treasury's final regulations (§1.432(e)(9)-1) (the "Final Regulations") 

issued under Section 432(e)(9) of the Internal Revenue Code of 1986 (the "Code") 

the Board of Trustees (the "Board") of the United Furniture Workers Pension Fund 

A (the "Pension Fund" or the "Plan") submits this application, and the 

accompanying exhibits, to the Secretary of the Treasury (the "Secretary") for 

approval of suspension of benefits ("Benefit Suspension Application" or the 

"Application"). This Application is made in combination with the Application to 

Partition the United Furniture Workers Pension Fund A ("Partition Application") in 

accordance with Section 4233 of the Employee Retirement Income Security Act of 

1974, as amended ("ERISA"), flied with the Pension Benefit Guaranty Corporation 

("PBGC") on July 1, 2016. 

Section 432(e)(9)(G) of the Code provides that the Secretary shall approve an 

Application for the approval of suspension of benefits upon finding that the plan is a 

"critical and declining" status plan and has satisfied the criteria set forth in 

subparagraphs (C), (D), (E) and (F) of Section 432(e)(9) of the Code. As set forth 

more fully below, the Pension Fund is eligible to suspend benefits and has satisfied 

each of the enumerated criteria under the Final Regulations. Therefore, the Board 

respectfully requests that the Secretary approve the Pension Fund's Benefit 

Suspension Application. 

Section 2. Application Procedures 

2.01 Plan Sponsor Submission 

The Board submits this application for approval of a proposed benefit suspension 

under Section 432(e)(9) of the Code. This Application is signed and dated by the 

Chairman of the Board, who is authorized to sign on behalf of the Board. 

2.02 Terms of Proposed Benefit Suspension 

(1) Effective Date 

The Board proposes an effective date for the benefit suspension to be May 1, 

2017 or such other date as may be set by the Secretary ("Effective Date"). 

For purposes of the actuarial calculations, demonstrations and illustrations 

set forth in this Application, a May 1, 2017 effective date has been assumed. 

As indicated above, this Application is made in combination with the 

Partition Application flied with the PBGC, and, in accordance with Section 

432(e)(9)(D)(v) of the Code, the suspension of benefits may not take effect 

prior to the effective date of the partition. 

2 of20 
1920952.6 

(2) Expiration Date 

The proposed benefit suspension will remain in effect indefinitely and will 

not expire by its own terms. 

(3) The Proposed Benefit Suspension 

All Pension Fund participants who are not subject to the limitations set forth 

in Section 432(e)(9)(D)(ii) or (iii) as of the Effective Date shall have their 

pension benefit reduced to the maximum extent permitted under Section 

432(e)(9)(D)(i), i.e. to 110% of the monthly benefit guaranteed by the PBGC. 

The Pension Fund has not created any different groups or classifications of 

participants for purposes of benefit suspensions, except to the extent 

required by law. 

( 4) Different Treatment of Participants and Beneficiaries 

Not Applicable. 

2.03 Penalty of Perjury 

See Exhibit 1. 

2.04 Public Disclosure Statement 

See Exhibit 1. 

2.05 Submission of Application 

This Benefit Suspension Application has been submitted to the Secretary via 

W\V\v.ttcasury.gov /mpra pursuant to the requirements of Revenue Procedure 

2016- 27. 

2.06 Signature 

The signatures required for this Application have been submitted electronically in 

Portable Document Format. 

2.07 Duty to Correct 

The Pension Fund hereby acknowledges that if, after submission of the Benefit 

Suspension Application, any error is discovered, the Board shall provide prompt 

notice of same to the Treasury Department. 

3 of20 
1920952.6 

Section 3. Demonstration That the Pension Fund Is Eligible for Suspension 

3.01 Plan Actuary's Certification of Critical and Declining Status 

See Exhibit 2 for the certification from the Pension Fund's actuary required under 

Section 432(b)(3)(B)(iv) that the Pension Fund is in critical and declining status for 

the Plan Year commencing March 1, 2016. Included with this certification is 

documentation supporting the actuarial certification of status, including a year-byyear projection of the Pension Fund's available resources and the benefits under the 

Pension Fund, demonstrating that the Pension Fund is projected to become 

insolvent during the Pension Fund's 2021 plan year. The documentation includes a 

description of each of the assumptions used, including the total contribution base 

units and average contribution rates. The year-by-year projection separately 

identifies the market value of assets as of the beginning and end of the 2015 Plan 

Year and the projected market value of assets as of the beginning and end of the 

2021 Insolvency Year, and the following cash-flow items for those years: (1) 

contributions, (2) withdrawal liability payments, (3) benefit payments, ( 4) 

administrative expenses, and (5) investment returns. 

3.02 Plan Actuary's Certification That the Pension Fund is Projected to A void 

Insolvency 

See Exhibit 3 for the certification from the Pension Fund's actuary required under 

Section 432(e)(9)(C)(i) that the Pension Fund is projected to avoid insolvency within 

the meaning of Section 418E, taking into account the proposed benefit suspension 

and the proposed Partition Application, and assuming that the proposed suspension 

and partition continue indefinitely. 

Included within this certification is documentation supporting the certification, 

including a year-by-year projection of the available resources of the Pension Fund 

within the meaning of Section 418E(b)(3) and the benefits under the Pension Fund 

demonstrating the avoidance of insolvency of the Pension Fund through an 

extended period of time. The documentation includes a description of each of the 

assumptions used, including the total contribution base units and average 

contribution rates. Also included with this certification is the Pension Fund's yearby-year projection that separately identifies the market value of assets as of the 

beginning and end of each year in the extended period and the following cash-flow 

items for each of these years: (1) contributions, (2) withdrawal liability payments, (3) 

benefit payments, (4) administrative expenses and (5) investment returns. 

3.03 Plan Sponsor's Determination of Projected Insolvency 

It is the Board's determination under Section 432(e)(9)(C)(ii) that the Pension Fund 

is projected to become insolvent, unless benefits are suspended as proposed in this 

Application (and the Pension Fund is partitioned as proposed in the Partition 

Application), even though all reasonable measures to avoid insolvency have been 

4 of20 
1920952.6 

taken. The Pension Fund has included documentation and exhibits with this 

Application illustrating the Board's determination of projected insolvency. 

(1) All Measures Taken to Avoid Insolvency 

1. In 2003, following three consecutive years of losses in the 

capital markets and with the Pension Fund's funded 

percentage declining to 75%, the Board adopted a plan 

amendment reducing the Pension Fund's benefit accrual rate 

from 3% to 2% for all contributions received on or after 

September 1, 2003. This action was taken by the Board to 

address the Pension Fund's declining financial position. 

11. In 2006, in light of a declining participant base and an 

uncertain future, the Board again adopted another plan 

amendment reducing the Pension Fund's benefit accrual, 

lowering the accrual rate this time from 2% to 1% of all 

contributions received on or after September 1, 2006. Again, 

this action was taken by the Board to avoid further 

deterioration of the Pension Fund's financial condition. 

111. In May 2008, the Pension Fund's actuaries certified to the 

U.S. Department of Treasury that the Pension Fund was in 

"critical" status as that term is defined in the Pension 

Protection Act of 2006 ("PPA"). As a result of that 

certification, the Board created and, in December 2008, 

approved a rehabilitation plan as required by the PPA. In late 

December 2008, the Board adopted and approved the 

Pension Fund's First Amended Rehabilitation Plan. The 

Pension Fund's First Amended Rehabilitation Plan 

("Rehabilitation Plan'') is attached as Exhibit 4. 

1v. In creating the Rehabilitation Plan, the Pension Fund's 

actuaries advised that in order for the Pension Fund to 

emerge from "critical status" within the 13 year period 

prescribed by the PP A, the rehabilitation plan would need to 

require all contributing employers to pay double-digit, 

annually compounding contribution increases to the Pension 

Fund. The Board determined, after careful consideration, 

that such increases in any rehabilitation plan would not be 

sustainable, and would likely result in a significant number of 

employer withdrawals from the Pension Fund, or a mass 

withdrawal, thereby jeopardizing the funding status of the 

Pension Fund and accelerating its insolvency. As a result, the 

Board concluded that forestalling insolvency was in the best 

interests of the Pension Fund's participants and beneficiaries 

and developed the Rehabilitation Plan under the "reasonable 

5 of20 
1920952.6 

measures" standard permitted under ERISA Section 

305(e)(3)(A)(ii). See Exhibit 4. 

v. Under the Rehabilitation Plan, the preferred schedule requires 

all contributing employers to pay annually compounding 

contribution increase of 5.5%. In addition, adjustable 

benefits were eliminated. 

v1. The capital markets collapse of 2008 (which occurred while 

the Rehabilitation Plan was being developed) placed further 

significant stress on the Pension Fund as its funded status 

declined to 45.2% as of the plan year ending February 2009. 

Thereafter, as a result of the ensuing economic recession, 

many contributing employers, including Steinway & Sons. 

Inc. ("Steinway"), Sealy, Inc. ("Sealy") and Hufcor, Inc. 

("Hufcor") were forced to lay off large numbers of 

employees, resulting in a further decline in the Pension 

Fund's active participant base. 

vu. · In 2010, the Pension Fund, in an effort to avoid insolvency, 

filed an application for partitioning with the PBGC under 

former Section 4233 of ERISA ("201 0 Partition 

Application"). In making that application to the PBGC, the 

Pension Fund sought to partition sufficient liabilities to the 

PBGC so as to avoid or forestall insolvency. The Pension 

Fund's 2010 Partition Application is attached as Exhibit 

5. The PBGC, however, took no action on the 2010 Partition 

Application. 

v111. In or about July 2012, when it became apparent that the 

PBGC would not take any action on the 2010 Partition 

Application, the Board directed Pension Fund counsel to 

explore other alternatives that may help to avoid a Pension 

Fund insolvency. 

lX. Plan counsel, with the assistance of the Pension Fund's 

actuaries, developed a series of options for the Board to 

consider as part of an effort to improve the Pension Fund's 

funded position and forestall insolvency. At a Special 

Meeting of the Board held on February 7, 2013, counsel 

explored with the Board five (5) options that the Board could 

consider in order to improve the Pension Fund's funded 

position, noting that these options were not mutually 

exclusive. These options were: (1) Maintain the Status Quo; 

(2) Increase the Annual Contributions Under the 

Rehabilitation Plan; (3) Freeze Benefit Accruals and Increase 

Annual Contribution Increases Under the Rehabilitation Plan; 

(4) Seek to Terminate the Pension Fund by Plan Amendment; 

6 of20 
1920952.6 

or (5) Seek to Terminate the Pension Fund through a 

Negotiated Mass Withdrawal. After the presentation, it was 

decided that the Board would review these options and that 

another Special Meeting of the Board would be convened 

telephonically to discuss the issues further. 

x. A Special Meeting of the Board was subsequendy convened 

telephonically on February 26, 2013 to consider the various 

options presented to the Board earlier that month. No 

decisions were made by the Board at that time. 

x1. At the Board's July 2013 meeting, after reviewing the options 

presented, the Board authorized Plan counsel to work with 

the Pension Fund's actuary to develop a specific funding 

option recommendation to be presented to the Board for 

action at a Special Meeting of the Board to be held in 

September 2013. 

xu. In September 2013, the Board conducted a Special Meeting, 

via conference call, to address, among other things, the 

Pension Fund's funding crisis. At that time, Plan counsel 

noted that the Pension Fund was projected to become 

insolvent in eight (8) years, and that upon insolvency, the 

Pension Fund would require financial assistance from the 

PBGC. It was further noted that upon insolvency, Pension 

Fund retirees would have their pensions reduced to the 

PBGC guarantee. The Board concluded that its focus in 

considering the available options should be to extend the 

insolvency date as long as possible. The Board considered 

the initiation of a negotiated mass withdrawal of all of the 

Pension Fund's contributing employers by trading the 

Pension Fund's rights to receive long-term withdrawal 

liability payments for discounted, upfront cash payments 

from the contributing employers. It was projected that if this 

strategy was successful, the Pension Fund's insolvency date 

could be extended for an additional seven (7) years, 

depending upon how the relevant assumptions play out. 

After extended discussion on the matter, the Board 

authorized counsel to explore with the Pension Fund's two 

largest contributing employers and their affected local unions, 

their interest in a negotiated mass withdrawal from the 

Pension Fund. A Board Resolution dated September 12, 

2013 authorizing Plan counsel to explore with the 

Pension Fund's two largest contributing employers and 

their affected local unions, their interest in a negotiated 

mass withdrawal from the Pension Fund is attached as 

Exhibit 6. 

7 of20 
1920952.6 

x111. Following the September 2013 Special Meeting, Plan counsel 

engaged in discussions with representatives of Steinway and 

Sealy in an effort to explore whether either or both of those 

contributing employers would be interested in negotiating a 

mass withdrawal from the Pension Fund. 

x1v. In November 2013, the Board conducted a Special Meeting, 

via conference call, in order to monitor whether there had 

been any progress with the negotiated mass withdrawal 

initiative authorized at the September 2013 meeting. Citing 

ERISA Section 4224 as authority for the initiative, Plan 

counsel distributed a proposed resolution setting forth rules 

providing for alternative terms and conditions for the 

satisfaction of employers' withdrawal liabilities to the Pension 

Fund ("Alternative Withdrawal Liability Rules"). The 

Pension Fund's Alternative Withdrawal Liability Rules 

adopted by the Board in November 2013 are attached as 

Exhibit 7. 

xv. · Under the "Alternative Withdrawal Liability Rules," the 

Pension Fund may, with Board approval, release a 

withdrawing employer from any and all liabilities that may be 

assessed in connection with its complete withdrawal from the 

Pension Fund, including potential mass withdrawal liabilities 

that could be assessed, in exchange for a discounted upfront 

lump sum payment of the present value of its withdrawal 

liability obligations to the Pension Fund. By letter dated 

November 20, 2013, a copy of the Pension Fund's 

Alternative Withdrawal Liability Rules was sent to the 

PBGC's then Multiemployer Division Manager Bruce Perlin. 

A copy of counsel's November 20, 20131etter to Mr. 

Perlin is attached as Exhibit 8. 

xv1. The purpose and intent of the Alternative Withdrawal 

Liability Rules was for the Pension Fund to avoid or forestall 

insolvency by encouraging contributing employers who may 

have wished to withdraw from the Pension Fund to satisfy 

their long-term withdrawal liability obligations to the Pension 

Fund through the payment of a discounted lump sum 

payment of the present value of their future payment 

obligations. While counsel had met with representatives of 

Steinway and Local81102 on several occasions in an effort to 

reach an agreement, the parties were not successful in 

reaching an agreement on a withdrawal. Counsel never had 

any substantive discussions with Sealy's representatives, who 

had advised that the issue had been referred internally for 

discussion. 

8 of20 
1920952.6 

(2) Consideration of Specific Pension Fund Factors 

1. Contribution Levels 

In creating the Rehabilitation Plan, the Pension Fund's 

actuaries advised that in order for the Pension Fund to 

emerge from critical status by the end of its rehabilitation 

period as defined in the PP A, the Board would need to adopt 

a contribution schedule that required double-digit, annually 

compounding increases from all contributing employers. 

After careful consideration of the available alternatives, the 

Board concluded that adopting a rehabilitation plan that 

would require double-digit, annually compounding increases 

would likely result in a significant number of employer 

withdrawals from the Pension Fund, or a mass withdrawal, 

thereby further jeopardizing the funding status of the Pension 

Fund or resulting in its insolvency. As a result, the Board 

adopted a preferred schedule under the Rehabilitation Plan 

that required 5.5% annual contribution increases. See 

Exhibit 4. 

11. Benefit accrual levels, including any prior reductions in the 

rate of benefit accruals. 

As demonstrated above, the Board twice reduced the Pension 

Fund's accrual rate, with the second reduction bringing the 

accrual rate to the lowest rate permitted under a rehabilitation 

plan. First, in 2003, following three consecutive years of 

losses in the capital markets, the Board adopted a plan 

amendment reducing the Pension Fund's accrual rate from 

3% to 2% of all contributions received on or after September 

1, 2003. Thereafter, in 2006, in light of a declining participant 

base and an uncertain future, the Board again adopted 

another plan amendment reducing the accrual rate from 2% 

to 1% of all contributions received on or after September 1, 

2006. 

111. Prior reductions of adjustable benefits under Section 

432(e)(8). 

In creating the Rehabilitation Plan, the Board eliminated (i) 

any and all death benefits, (ii) any and all withdrawal benefits 

and (iii) the 36-month benefit guarantee. See Exhibit 4. 

1v. No Prior Benefit Suspensions. 

The Board has not implemented prior benefit suspensions for 

the Pension Fund under Section 432(e)(9). 

9 of20 
1920952.6 

v. Measures taken by the plan sponsor to retain contributing 

employers. 

For the reasons described below under the heading 

"Competitive and other economic factors facing contributing 

employers," the Pension Fund experienced substantial 

contraction in its active participant base from the 1980s 

through the present. This declining base, coupled with 

several economic crises since 2001, has created severe 

underfunding in the Pension Fund. Nonetheless, the Board 

implemented several measures designed to retain contributing 

employers. First, in creating the Rehabilitation Plan, the 

Board directed the actuary to project the level of contribution 

increases and benefit reductions that would be necessary to 

allow the Pension Fund to emerge from critical status by the 

end of the rehabilitation period. The actuary concluded that 

in order to allow the Pension Fund to emerge from critical 

status within this period, the Rehabilitation Plan would need 

to require double-digit, annually compounding contribution 

increases. Upon review of that information, the Board 

recognized that requiring double-digit, annually compounding 

contribution increases for contributing employers would 

likely be unsustainable and result in significant employer 

withdrawals. As a result, the Board designed the 

Rehabilitation Plan to require annual contribution increases 

of 5.5%, thereby fostering continued employer participation 

in the Pension Fund. 

In addition, in 2010, the Board flied the 2010 Partition 

Application which, if accepted by the PBGC, would have 

substantially forestalled the Pension Fund's insolvency date, 

and thereby encouraged contributing employers to remain 

with the Pension Fund. The PBGC, however, took no action 

on this 2010 Partition Application. 

v1. Impact on plan solvency of the subsidies and ancillary 

benefits, if any available to active participants. 

The Rehabilitation Plan eliminated any and all death benefits 

and withdrawal benefits and eliminated the 36 -month 

benefit guarantee, all of which were adjustable benefits under 

the law. The adjustable benefits that were presetved under 

the Rehabilitation Plan were: (1) the minimum $50 monthly 

benefit for participants with more than 10 years of Credited 

Service, (2) subsidized early retirement for active participants, 

and (3) unreduced disability benefits. The value of those 

benefits is immaterial in the aggregate and the Board 

concluded that presetving those benefits was necessary to 

10 of 20 
1920952.6 

retain contributing employers in the Pension Fund. Any 

further reductions in the Pension Fund's adjustable benefits 

would have had a de minimis actuarial impact on the Pension 

Fund, but would have jeopardized the continuing 

participation of its contributing employers. 

vu. Compensation levels of active participants relative to 

employees in the participant's same industry. 

The Pension Fund has not conducted a study to analyze the 

relative compensation levels of active participants in the 

Pension Fund as compared to compensation levels for other 

(presumably non-union) employees in the same industry. 

However, the Board, comprised of former and current union 

officials and management representatives, have taken notice 

that annually compounding increases in contributions 

required under the Rehabilitation Plan has led to an overall 

flattening of compensation levels for active Pension Fund 

participants. 

v111. Competitive and other economic factors facing contributing 

employers. 

While there have been a number of competitive and 

economic factors over the past 40 years that have adversely 

affected the Pension Fund's contributing employers and have, 

directly or indirectly, led to a declining active participant base 

over time, there is no question that a rapid increase in United 

States furniture imports has been the primary competitive 

factor facing the contributing employers, and by extension, 

the Pension Fund. 

Furniture imports to the United States from low-wage 

nations has been a significant and recurring competitive issue 

for many of the Pension Fund's contributing employers since 

the early 1970s, leading to numerous plant closings 

throughout the country. Cornfield, Daniel B., "Becoming a 

Mighty Voice, Conflict and Change in the United Furniture 

Workers of America (1989), p. 159. From the 1970s to 1984, 

the value of furniture imports to the United States from lowwage countries put enormous economic pressures on all 

United States furniture manufacturers, particularly unionized 

furniture manufacturers, including many contributing 

employers to the Pension Fund. 

The competitive pressures brought about by increased 

furniture imports from low-wage countries became even 

more acute between 1999 and 2010. In a study conducted by 

11 of 20 
1920952.6 

William G. Luppold and Matthew S. Bumgardner "ThirtyNine Years of U.S. Wood Furniture Importing: Sources and 

Products," the authors concluded that "rapid shifts in 

comparative advantage among international manufacturing 

regions have radically affected trade competitiveness in the 

wood furniture industry. These shifts have had profound 

impacts on the U.S. industty. In 1999, employment in 

furniture and related products industries less kitchen cabinets 

was 53 7 thousand workers, but employment in these 

industries had declined to 251 thousand workers by 2010. By 

far, the greatest decline occurred in the [wood household 

furniture] sector of the overall furniture industry, which 

employed 130 thousand workers in 1999 but only 39 

thousand workers in 2010. While the great recession of 2009 

contributed to this decline, most of it was the result of 

international competition". Luppold & Bumgardener "U.S. 

Furniture Imports," BioResources 6(4), 4895-4098 (2011). 

This phenomenon has directly impacted the Pension Fund as 

its active base shrunk from 4,781 in 2000 to approximately 

1,076 today, a decrease of 77% over that period of time. 

These competitive and economic factors on furniture 

manufacturers in the United States have had an adverse 

impact on the Pension Fund's active participant base over the 

past 35 years. It is notable that from 1981 to 2009, 35 

contributing employers to the Pension Fund filed for 

bankruptcy protection (or effected an assignment for benefit 

of creditors) and withdrew from the Pension Fund. 

L'l:. Impact of benefit and contribution levels on retaining active 

participants and bargaining groups under the Pension Fund. 

The Board took various factors into consideration in 

determining that the Pension Fund would become insolvent 

in the absence of a joint partitioning and benefits suspension. 

First, since the Board had reduced the pension accrual rate to 

1% of contributions in 2006, the Board in developing the 

Rehabilitation Plan in 2008 could not, consistent with the 

PP A, reduce the accrual rate below 1 %; the Board did, 

however, eliminate adjustable benefits under the Pension 

Fund. Any further benefit reductions would have likely led to 

a reduction in employer and participant retention. Second, 

under the Rehabilitation Plan, contributing employers are 

required to increase contributions by 5.5% each year. The 

Board determined that any further augmentation of these 

increases likely would have been unsustainable for the 

Pension Fund's contributing employers. 

12 of 20 
1920952.6 

Section 4. 

4.01 

x. Impact of past and anticipated contribution increases under 

the Pension Fund on employer attrition and retention levels. 

The impact that past contribution increases required under 

the Rehabilitation plan have had on employer attrition and 

retention levels is not clear. When the Rehabilitation Plan 

was adopted, the Pension Fund had 53 contributing 

employers making contributions on behalf of 2,459 active 

participants. Since then, 29 contributing employers have 

withdrawn from the Pension Fund and there are now 1,076 

active participants. Whether these withdrawals were related 

to the past contribution increases, however, cannot be 

objectively determined. With respect to the impact that 

anticipated contribution increases may have an employer 

attrition and retention levels, the Board has concluded that if 

the partitioning and Benefit Suspension Applications are 

approved, employer attrition will likely cease and retention 

will improve as contributing employers will become 

incentivized to continue participation and reduce their 

withdrawal liability exposure. 

Demonstration That the Pension Fund's Proposed Suspension 

Satisfies the Statutory Requirements 

Demonstration That Limitations on Individual Suspensions Are Satisfied. 

See Exhibit 9 for a demonstration of how the proposed suspension of benefits 

satisfies the limitations described in Sections 432(e)(9)(D)(i)-(iii). The attached 

exhibit includes three separate illustrations required under this Section 4.01 of the 

Revenue Procedure including: (1) a sample calculation applying the 110 percent 

limitation under Section 432(e)(9)(D)(i) for the Pension Fund's participants; (2) a 

sample calculation applying the age-based limitations of Section 432(e)(9)(D)(ii); and 

(3) a sample calculation applying the disability limitation under Section 

432( e)(9)(D)(iii). 

4.02 Demonstration that the Proposed Suspension Is Reasonably Estimated to 

Enable the Pension Fund to Avoid Insolvency. 

See Exhibit 10 for a demonstration that, in accordance with Section 

432(e)(9)(D)(iv), the proposed benefit suspension, if coupled with the Pension 

Fund's proposed partition, is reasonably estimated to enable the Pension Fund to 

avoid insolvency. Even though the Pension Fund is not a plan that is described in 

Section 432(e)(9)(B)(v)(I), we have included stochastic projections demonstrating 

that the Pension Fund will likely avoid insolvency. 

13 of20 
1920952.6 

4.03 Demonstration that the Proposed Suspension Is Reasonably Estimated to 

Not Materially Exceed the Level Necessary to Avoid Insolvency. 

This demonstration is not applicable because the Pension Fund is seeking a partition 

under ERISA Section 4233 in combination with a benefits suspension. All benefits 

will be suspended under the Pension Fund to the maximum extent permitted by law. 

4.04 Demonstration that the Proposed Benefit Suspension Is Distributed 

Equitably. 

As of March 1, 2016, the Pension Fund had 9,896 participants, beneficiaries and 

alternate payees, including 9,109 participants, 7 65 beneficiaries and 22 alternate 

payees. Before a suspension of benefits, the average monthly benefit is $237.75. 

After a suspension of benefits, and taking into account the individual limitations 

imposed by law, the average monthly benefit would be $219.90. The aggregate 

present value of the reduction in benefits for all individuals is $12,284,782 (valued as 

of March 1, 2016 based upon the actuary's funding assumptions). See Exhibit 11 for 

a demonstration of the distribution of the benefits suspension, including the number 

of individuals whose benefits will not be reduced, and the number of individuals 

whose benefit reductions will fall within a series of ranges in ten percent increments 

as required pursuant to Section 4.04(1)(b) of Revenue Procedure 2016-27. 

4.05 Notice 

The following describes the Board's methods for satisfying the notice requirements 

of Section 432(e)(9)(F): 

(1) Individual Notices 

See Appendix A for each type of notice that has been provided to the 

participants and beneficiaries of the Pension Fund. 

(2) Efforts to Contact Missing Participants 

The Pension Fund has provided notice of the proposed suspension of 

benefits to (i) active participants, retirees, beneficiaries and alternate payees, 

(ii) each employer that has an obligation to contribute to the Pension Fund 

and (iii) each employee organization that represents the participants 

employed by each contributing employer. Only written notices have been 

sent. The Pension Fund has not provided electronic notices. 

As a national multiemployer pension plan with a significant number of 

terminated vested participants, the Pension Fund experiences, from time to 

time, a number of missing participants, particularly d10se who are no longer 

in active service. In connection with this suspension of benefits application, 

in order to find missing participants, the Fund undertook a number of efforts 

to locate them, including, as appropriate, contacting local unions associated 

with the missing participants, contacting the missing participants' former 

employers to obtain updated contact information and utilizing various 

14 of 20 
internet-based search tools. After exhausting these efforts, the Pension Fund 

contracted with Trans Union LLC, a commercial locator service that has 

access to robust search databases, to help locate missing participants. When 

the Pension Fund contracted with TransUnion, the Fund had 1,244 missing 

participants. Trans Union conducted searches for all of those missing 

participants and found addresses for 1,124 of them, a success rate of 90.35%. 

Set forth below is an excerpt of a recent report received from Trans Union supplying 

addresses for the 1,124 newly located participants. 

'·Up to 5 Full Nr-anes. Best 3 Addre~~es. Best 3 

··Phone~ 

• · Total Records 

, Records Fotmd 

B2:tchiD# ~653~511 

Rettuued: Thu Jul ~3 

. ~1)16 

11~4 

'Record> )JotFmmd 9.65" 0 

Hib Rettuued 

Pnce Per Record 

luYoice Pnce 

1920952.6 

50.90 

51119.60 

To date, the Fund still has 120 missing participants, slightly more than 1% of 

its total participants. The Pension Fund will continue its efforts to locate 

these missing participants. 

(3) Notices will not be delivered electronically. 

(4) List of Contributing Employers 

(a) The following is a list of the contributing employers that have an 

obligation to contribute to the Pension Fund within the meaning of 

ERISA Section 4212(a): 

Employer N arne 

UFW Insurance 

UFWPension 

Local 76B 

Local262 

Local9400 

Bauerschmidt & Sons 

Bielecky Brothers 

Viziflex Seels 

15 of 20 

Steinway & Sons 

Matos Refrigeration 

Eastern Wood Products 

Pennsylvania Bedding 

Klise Manufacturing Company 

Simmons Company 

Architectural Plywood Inc 

Premier Restoration 
1920952.6 

Rollhaus Brothers 

Vito bob 

Sealy Mattress 

Rollhaus Brothers 

Westside Wood Refinishing 

Sealy Mattress 

Sealy Mattress Company 

Office Furn. Svc. 

(b) List of Employee Organizations Representing Participants Under the 

Pension Fund 

#Local 

Local 76B 

Local102 

Local123 

Local262 

Local415 

Local501/628 

Local9400 

International Unit 

Section 5. Plan Sponsor Determination Relating to Reasonable Measures Taken 

to Avoid Insolvency 

5.01 Measures Taken to Avoid Insolvency 

See Discussion in Section 3.03(1)(i)- (xvi), above. 

5.02 Plan Factors 

See Discussion in Section 3.03(2)(i)- (viii), above. 

5.03 How Plan Factors Were Taken Into Account 

See Discussion in Section 3.03(2)(ix)- (x), above. 

5.04 Other Factors Considered 

Steinway is the second largest contributing employer to the Pension Fund. In June 

2015, Steinway, through its counsel, contacted Plan counsel and advised that its labor 

agreement with CWA Local81102, F.W., I.U.E.-C.W.A., AFL-CIO ("Local81102") 

was due to expire on December 31, 2015, and that negotiations for a successor 

agreement would commence in the next few months. Steinway's representatives 

asked Plan counsel if the Pension Fund's board of trustees would be considering a 

joint partition/benefits suspension as contemplated by MPRA. Further, they advised 

that if the Pension Fund is not inclined to flle applications seeking a joint 

partitioning and benefit suspension under MPRA, Steinway would likely negotiate a 

complete withdrawal from the Pension Fund during the 2015 negotiations. 

In July 2015, Plan counsel advised Steinway's representatives that its proposal to 

meet with the Board would be discussed at the Board's August 2015 meeting. 

16 of 20 
1920952.6 

In October 2015, Steinway's representatives met with Plan counsel to discuss 

whether the Pension Fund's board of trustees would be pursuing the benefit 

suspension/partitioning process. During this meeting, Steinway's attorneys advised 

Plan counsel that if the Pension Fund does not seek a joint partition/Benefits 

Suspension Application with the PBGC and the Treasury Department, Steinway will 

lil<:ely exercise its right to withdraw from the Pension Fund when its labor agreement 

with Local 81102 expires in January 2016. 

Steinway is a significant contributing employer to the Pension Fund. The company 

contributed $1,461,891 to the Pension Fund in Plan year ending Febmary 2016, 

which represented approximately 39% of the Fund's total annual contributions. 

Section 6. Other Required Information 

6.01 

See Exhibit 12 for a proposed ballot intended to satisfy the requirements of Section 

432(e)(9)(H)(iii) (without the statement in opposition to the proposed benefit 

suspension described in Section 4329(e)(9)(H)(iii)(II) or the individualized estimate 

that was provided as part of the notice described in Section 432(e)(9)(F)). 

6.02 Partition 

The Board is requesting approval from the PBGC of a proposed partition under 

Section 4233 of ERISA, with a proposed effective date of May 1, 2017. See Exhibit 

13 for a year-by-year projection of the amount of the reduction in benefit payments 

that would be attributable to the partition. 

6.03 Ten-Year Experience for Certain Critical Assumptions 

See Exhibit 14 for a disclosure of the Pension Fund's experience with respect to 

certain critical assumptions for each of the 10 Plan Years immediately preceding the 

Plan Year in which the Application is submitted, separately identifying (1) total 

contributions, (2) total contribution base units, (3) average contribution rates, (4) 

withdrawal liability payments, and (5) rate of return on plan assets. 

6.04 Determination of Sensitivity of Projections 

See Exhibit 15 for the following separate projections: (1) a reduction of 1% in the 

Plan's assumed rate of return of assets; (2) a reduction of 2% in the Plan's assumed 

rate of return on assets; (3) a change in the assumed future contribution base units 

from a 0% change year over year to a 16.9% annual reduction for the next ten years; 

and ( 4) a change in the assumed future contribution base units from a 0% change 

year over year to a 17.9% annual reduction for the next ten years. 

6.05 Projection of funded percentage 

See Exhibit 16 for the Board's illustration, prepared on a deterministic basis, of the 

projected value of Plan assets, the accrued liability of the Plan (calculated using the 

17 of20 
1920952.6 

unit credit funding method) and the funded percentage for each year in the Pension 

Fund's extended period. 

6.06 Plan Sponsor Certification Relating to Plan Amendments 

See Exhibit 17 for the Board's certification that if they receive final authorization to 

implement the suspension of benefits as described in Section 432( e)(9)(H) (vi), and 

choose to implement the authorized suspension, then, in addition to the plan 

amendment implementing the suspension, the following plan amendments will be 

timely adopted and not modified at any time thereafter before the suspension of 

benefits expires: (1) a plan amendment providing that, in accordance with Section 

432(e)(9)(C)(ii), the benefit suspension will cease as of the first day of the first Plan 

year following the Plan year in which the Board fails to determine that both: (a) all 

reasonable measures to avoid insolvency continue to be taken during the period of 

the benefit suspension and (b), the Plan is projected to become insolvent unless 

benefits continue to be suspended, and (2) a plan amendment providing that any 

future benefit improvements must satisfy the requirements of Section 432(e)(9)(C). 

6.07 Whether the Pension Fund Is Described in Section 432(e)(9)(D)(vii) 

The Pension Fund is not a plan described in Section 432(e)(9)(D)(vii). 

6.08 Optional Additional Information 

See Discussion in Section 3.03(2)(viii), above. 

Section 7. Identification and Background Information on the Pension Fund 

7.01 Plan Sponsor 

The Plan Sponsor is the Board of Trustees of the United Furniture Workers Pension 

Fund A. The address of the Pension Fund is 1910 Air Lane Drive Nashville, TN. 

The Pension Fund's telephone number is 615-889-8860. Its email address is 

ufw.pfa(dufwip.com and its fax number is 615-391-0865. The Board of Trustees 

does not have a separate employer identification number. 

7.02 Plan Identification 

The name of the Pension Fund is the United Furniture Workers Pension Fund A. 

The Pension Fund has been assigned the Plan Number 001. Its Employer 

Identification Number (EIN) is 13-5511877. The Plan is a multiemployer pension 

plan within the meaning of Code Section 414(£) and ERISA Section 3(37). 

7.03 Retiree Representative 

The Pension Fund is not required to appoint a Retiree Representative under the 

Regulations as it is not a plan with 10,000 or more participants, based on the Pension 

Fund's most recently flled Form 5500. The Board has not elected to appoint a 

Retiree Representative. 

18 of 20 
1920952.6 

7.04 Pension Fund's Enrolled Actuary 

Christian Benjaminson, FSA, EA (Chieron, Inc.) 

Enrollment#: 14-07015 

703-893-1456 x1002 

eben ja mitts< >1l(u;clwi ron.us 

1000 Atrium Way, Suite 403, Mount Laurel, NJ 08054 

7.05 Power of Attorney 

The Pension Fund's designation of power of attorney is set forth in Appendix B. 

7.06 Plan Documents 

See Exhibit 18 for the Pension Fund's most recently restated Plan document, the 

most recent summaty plan description as deftned under Section 102 of ERISA and 

any subsequent summaries of material modifications, and the Pension Fund's most 

recent IRS determination letter. 

7.07 Excerpts of Collective Bargaining and Side Agreements 

The Pension Fund receives contributions from contributing employers pursuant to 

various collective bargaining agreements. Excerpts of the collective bargaining 

agreements and other side agreements that relate to the Pension Fund are contained 

in Appendix C. 

7.08 Annual Return 

See Exhibit 19 for the following sections of the Pension Fund's most recently filed 

Form 5500: (1) pages 1 and 2 of the Form 5500, (2) Schedule MB, including 

attachments, and (3) the Schedule R with attachments. 

7.09 Rehabilitation Plan 

See Exhibit 4 for a copy of the Pension Fund's most recently updated Rehabilitation 

Plan. 

7.1 0 Completed Checklist 

The Checklist of information required to be included in the Pension Fund's 

Application has been completed and, pursuant to the requirements of Revenue 

Procedure 2016-27, has been placed on the top of the Application. 

7.11 Request for a Meeting 

We respectfully request an in-person meeting to discuss the issues involved if the 

Secretary raises any concerns with this Application. 

19 of 20 
The Board very much appreciates Treasury's willingness to review this important matter and 

Application for the Pension Fund. Should you have any questions or require any additional 

information, please contact d1e Pension Fund's counsel, Kyle Flaherty, at (212) 541-2134. 

Very 

Title: Chairman, United Furniture Workers Pension Fund A 

20 of20 

192W52.6 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X 

Application of the ·u nited Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - • - - - - - - - ••• •• • - • • •• - •• • • • •• - • •• • • - • • •• • ·X 

EXHIBIT 1 

Penalty of Perjury Statement/Public Disclosure Statement 

Pursuant to Sections 2.03 and 2.04 of IRS Revenue Procedure 2016-27, the undersigned Trustee, as 

Chairman of the Board of Trustees of the United Furniture Workers Pension Fund A, makes the 

following two statements: 

Under penalties of perju17, I declare that I have examined this request, including accompanying 

documents, and, to the best of my knowledge and belief, the request contains all relevant facts 

relating to the request, and such facts are true, correct, and complete. 

I acknowledge that, pursuant to Section 432(e)(9)(G)(ii) of the Internal Revenue Code, the 

application for approval of the proposed suspension of benefits, and the application's supporting 

material, will be publicly disclosed through publication on the Treasury Department website. 

Title: Chairman of the Board of Trustees 

1934740.1 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 2 

• Plan Actuary's Certification of Critical and Declining 

Status. 

1934740.1 
---- ---- .• ' ,..- --...--=or--~-- ··..-.. "-~;,; 

I <:++EIRON li ~ - + - ' ~ • - - lt. 

United Furniture Workers Pension Fund A 

EIN: 13-55 11877 I PN: 001 

Revenue Procedure 2016-27, Section 3.01 

Certification of Critical & Declining Status 

As required by Section 3.01 of Revenue Procedure 2016-27, we certify, for the plan year 

beginning March 1, 2016, that the Fund is classified as being in Critical and Declining status as 

this term is described in Section 432(b) of the Code and Section 30S(b) of ERISA as amended by 

the Multiemployer Pension Reform Act of 2014. This certification is supported by the data in 

Appendix I and the analysis and projections are based on the assumptions and methods in 

Appendix II. 

To the best of our knowledge, this certification and its contents have been prepared in 

accordance with the requirements of Revenue Procedure 2016-27 and generally recognized and 

accepted actuarial principles and practices that are consistent with the Code of Professional 

Conduct and applicable Actuarial Standards of Practice set out by the Actuarial Standards Board. 

Fmthermore, as credentialed actuaries, we meet the Qualification Standards of the American 

Academy of Actuaries to render the opinion contained in this certification. This certification does 

not address any contractual or legal issues. We are not attorneys and our firm does not provide 

any legal services or advice. 

Also, the certification was prepared exclusively for the United Furniture Workers Pension Fund 

A for the purpose described herein. Other users of this certification are not intended users as 

defined in the Actuarial Standards of Practice, and Cheiron assumes no duty or liability to such 

other users. 

Finally, in preparing this certification, we have relied on information supplied by the Fund Office 

and the Board of Trustees. This information includes, but is not limited to, plan provisions, 

employee data, financial information, and expectations of future industry activity. We performed 

an informal examination of the obvious characteristics of the data for reasonableness and 

consistency in accordance with Actuarial Standard of Practice #23. Future analysis may differ 

significantly from those presented in this certification 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. 

Redacted by the U.S. Department of 

the Treasury 

Christian Benjaminson, FSA, EA (14-07015) 

Attachments: Appendix I: Detail for Actuarial Certification 

Appendix II: Methodology and Assumptions 

www.cheiron.us 1.877.CHEIRON (243.4766) 
APPENDIX I- DETAIL FOR ACTUARIAL CERTIFICATION 

Below we show support for the certification that the Fund is in Critical and Declining status for 

the plan year beginning March 1, 2016. Pursuant to Section 432(b)(6) the Fund is in Critical 

status as described in subgraph (B) and is projected to become insolvent within the meaning of 

Section 4 18E within the next five plan years. Support for both is shown below based on the 

assumptions in Appendix II. 

Please note, the amounts shown differ from the projections included in the March 1, 2016 PPA 

Certification dated May 27, 2016. The PPA Certification was based on projections using the 

March 1, 2015 Actuarial Valuation whereas this analysis is based on the results of the 

March 1, 2016 valuation. 

CRITICAL STATUS 

The Fund is in Critical status because it is projected to have an accumulated funding deficiency 

for the current plan year in accordance with Section 432(b )(2)(B)(i) of the Code. See projection 

below. 

Date 

3/112016 

3/1/2017 

$ 

Credit 

Bl a ance 

(48,290,593) 

(64,337 290) 

SOLVENCY PROJECTION 

$ 

adjusted with interest to end of year 

Cl targes C re d' Its C ontr1 'b utlons 

19,898 007 $ 2,768,847 $ 4,342,078 

We provide the following projection showing the Fund insolvent during the Plan Year beginning 

March 1, 2021; see below for both graphical and tabular format. Please note, if we assume the 

Fund earns 2.00% for the Plan Year ending Feb 2017, increasing by 1% per year for the next 

four years, followed by 6.75% thereafter, the Fund would be projected insolvent in the Plan Year 

beginning March l, 2020. We provide the tabular results for this alternative scenario on the 

following page. 

GRAPHICAL: 

The graph below shows the projected solvency and cash flows. The shaded area is the Plan's 

Market Value of Assets, the solid red line are the Benefit Payments, the dotted red line are the 

Benefit Payments before cutting to the PBGC Guarantee, and the yellow line are the 

Contributions. 

en $60 

c 

~ $50 

:iE $40 

$30 

$20 

$10 -

$0 

- Assets 

- Benefits Paid 

• • • • • Benefits Before PBGC Guarantee 

• Contributions 

•••••••••••••••••••••••••••••••••••••••••• 

• • • • • • • • • • • • • • 

2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 

<:+tEIRON ~ 
APPENDIX I - DETAIL FOR ACTUARIAL CERTIFICATION 

TABULAR: 

Valuation Assumption: 

Stress Testing Scenario: 

(i) 

• . .. 

7/1/2016 2.00% $54,542,427 

3/1/2017 3.00% $44,853,711 

3/1/2018 4.00% $34,184,847 

3/1/2019 5.00% $23,312,597 

3/1/2020 6.00% $11 ,890,425 

<:-HEIRON~ 

6. 75% per year. Note, the first year begins with the estimated assets as of July I, 2016 based on a 

four month return of 5.17%. In this scenario we assume the Fund would earn 4.45% (based on the 

6. 75% annual assumption) for the final eight months for an annual return of9.85%. 

(iii) (iv) 

Benefit Payments 

Withdrawal 

Liability Payments 

$271,630 •~a~ $196,595 $0 $8,215,534 $419,740 

201,274 667,521 0 11,813,711 853,041 

200,742 990,226 0 11,295,850 1,076,441 

65,506 1 ,268,386 0 10,778,495 1,336,490 

64,158 1,543,740 0 10,268,208 1,630,516 

64,158 1 ,673, 729 0 9,377,963 1,838,820 

(v) (vi) (vii) 

$629,619 $941,081 $1,815,429 $48,756,992 

897,053 1,411,622 2,898,081 39,816,859 

850,047 1,411,622 2,289,186 30,104,086 

803,650 1,411,622 1,624,196 19,443,845 

758,067 1,411,622 898,690 7,879,180 

703,218 1.411,622 133,048 0 

2.00% for the plan year ending Feb 2017, increasing by 1% per year for the next four years, followed 

by 6. 75% thereafter. Note, the first year begins with the estimated assets as of July 1, 2016 based on a 

four month return of 5.17%. However, because in this stress-testing scenarw we assume the Fund 

would earn 2.00% as an annual return, the last eight months would return negative 3%. 

(ii) 

$2,530,075 

3,603,460 

3,421,485 

3,248,700 

3,084,641 

(iii) 

Withdrawal 

Liability Payments 

$271,630 

201,274 

200,742 

$196,595 

667,521 

990,226 

65,506 1,268,386 

64,158 1,537,430 

(iv} 

$0 $8,215,534 

0 11,813,711 

0 11,295,850 

0 10,778,495 

0 10,247,924 

(v) (vi) (vii) 

$419,740 $629,619 $941,081 ·$2,087,852 $44,853,711 

853,041 897,053 1,411,622 1,169,350 34,184,847 

1,076,441 850,047 1,411,622 1,129,708 23,312,597 

1,336,490 803,650 1,411,622 862,265 11,890,425 

1,627,681 757,531 1,411,622 345,857 0 

2 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

A. Actuarial Assumptions 

1. Investment Return (net of investment expenses) 

Valuation Assumption: 6.75% per year 

Stress Testing Scenario: 2.00% for the plan year ending Feb 2017, increasing by 1% 

per year for the next four years, followed by 6. 75% 

thereafter 

The Investment Consultant provided the estimated Market Value of Assets in the 

portfolio as of July 1, 2016; the amount was adjusted to account for cash and receivables. 

They estimated a return of 5.17% over the first four months of the fiscal year. For the 

scenario where the Fund earns 6.75% in all years we assumed the Fund would earn 

4.45% (based on the 6.75% assumption) for the final eight months for an annual return of 

9.85%. However, because we assumed in the stress testing scenario the Fund would earn 

2.00% as an annual return, the last eight months would need to return negative 3%. 

2. Administrative Expenses 

Expenses are assumed to remain level as future inflation is offset by declines in total plan 

participation. These expenses are allocated between the Original Plan and Successor Plan 

based on projected headcounts with PBGC premiums paid by the Original Plan for the 

1 0-year period following the partition effective date (premiums are assumed to increase 

1% per year). For scenarios where the Plan is projected insolvent, we assume expenses 

would be reduced 25% in the plan year following insolvency. Finally, expenses are 

limited to 20% of expected benefit payments in scenarios where the PBGC provides 

financial assistance in either the Successor Plan or after insolvency. 

3. Rates of Mortality 

- Healthy Lives: RP2000 with blue collar adjustment projected five-years with scale 

AA 

-Disabled Lives: same with ages set-forward five years 

Terminated Vested Participants over age 80 are assumed to be deceased. 

In accordance with Actuarial Standard of Practice #35, we have considered the effect of 

mortality improvement prior to and subsequent to the measurement date in developing 

this assumption. Furthermore, historical mortality experience has conformed with the 

RP2000 table with adjustment. 

3 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

4. Rates of Turnover 

Terminations of employment for reasons other than death, disability or retirement are 

assumed to be in accordance with annual rates as shown below for illustrative ages . 

25 

35 

45 

55 

62 

5. Rates of Disability 

20.5% 

16.9 

15.0 

15.0 

15.0 

20.5% 

16.9 

15.0 

15.0 

J 5.0 

19.0% 

16.9 

12.4 

7.0 

7.0 

Illustrative rates of disablement are shown below: 

6. Rates of Retirement 

0.050% 

0.065 

0.244 

0.406 

0.000 

Annual rates as shown below for illustrative ages. 

7. Normal Form 

Life Annuity 

55-59 3.00% 

60 5.00 

61 10.00 

62-64 I 5.00 

65-69 50.00 

70 100.00 

8. Changes in Membership I Contribution Base Units 

. 15.0% 

11.3 

7.8 

7.0 

7.0 

Based on the Trustees' Industry Activity assumption used in the most recent PPA 

Certification assuming membership will decline 10% per year. 

-{:-HEIRON ~ 4 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

9. New Entrant Profile 

New entrants are assumed to annually join the Plan in accordance with the distribution 

below (which is based on the Plan's most recent five-year history of new entrants) and in 

combination with the Changes in Membership assumption. The benefits for new entrants 

(normal cost and projected benefit payments) are adjusted such that the total normal cost 

remains consistent over the baseline projection. 

~~~~----~~----· 23 

28 

33 

37 

43 

47 

53 

22% 

19 

13 

11 

15 

10 

10 

10. Contribution Increases I Average Contribution Rate 

The current Rehabilitation Plan assumes 5.5% per year aruma! increases. However, after 

the effective date of the suspension I partition we assume contributions increase with 

inflation at 1.5% per year. These increases are applied annually to the average weighted 

contribution rate to estimate employer contributions in combination with the Changes in 

Membership assumption. 

11. Justification for Actuarial Assumptions 

The rationale for our 6.75% actuarial valuation assumption is based on the investment 

manager's capital market outlook, Trustees' risk preference, and the Fund's cunent asset 

allocation. The rationale for our stress testing scenario (2.00% for the plan year ending 

Feb 2017, increasing by 1% per year for the next four years, followed by 6. 75% 

thereafter) is based on recognizing current market conditions and future short-te1m 

expectations along with the Plan's cash flow characteristics. Our demographic 

assumptions were initially set after a 2007 Experience Study and are annually reviewed 

based upon actual experience. 

12. Changes in Assumptions Since Last Valuation 

None 

B. Actuarial Funding 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 pattem follows the pattem 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 

eamed prior to the valuation date. 

<:-HEIRON ~ 5 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 3 

• Plan Actuary's Certification that the Pension Fund is 

Projected to Avoid Insolvency. 

1934740.1 
' . ---- .... --.. ------.---- ~ . ..~ - ~-.-.. 

--(-HEIRON j?. · ' . 

United Furniture Workers Pension Fund A 

EIN: 13-5511877 I PN: 001 

PBGC Regulation §4233. 7(a)(6) & Revenue Procedure 2016-27, Section 3.02 

Actuarial Certification under Internal Revenue Code §432(e)(9)(C)(i) 

and Employee Retirement Income Security Act of 1974 §305(e)(9)(C)(i) 

Fund avoids insolvency with Partition & Suspension 

As required by PBGC Regulation §4233.7(a)(6), Section 3.02 of Revenue Procedure 2016-27, 

Section 432(e)(9)(C)(i) of the Internal Revenue Code ("Code"), and Section 305(e)(9)(C)(i) of 

the Employee Retirement Income Security Act of 1974 ("ERISA"), we certify the Fund is 

projected to avoid insolvency taking into account the maximum suspension permitted (in 

accordance with ERISA Section 305( e )(9)(D)(i) and consistent with Section 305( e )(9)(D)(iv) 

and the regulations thereunder) and the proposed pattition with an effective date of May 1, 2017. 

This certification is supported by the data in Appendix I and the analysis and projections are 

based on the assumptions and methods in Appendix II. 

To the best of our knowledge, , this certification and its contents have been prepared in 

accordance with the requirements of PBGC Regulation §4233.7(a)(6), Section 3.02 of Revenue 

Procedure 2016-27, and consistent with Code Section 432(e)(9)(C)(i) and ERISA Section 

305(e)(9)(C)(i) and generally recognized and accepted actuarial principles and practices that 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 

this certification. This certification does not address any contractual or legal issues. We are not 

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

Also, this certification was prepared exclusively for the United Furniture Workers Pension Fund 

A for the purpose described herein. Other users of this certification are not intended users as 

defined in the Actuarial Standards of Practice, and Cheiron assumes no duty or liability to such 

other users. 

Finally, in preparing this certification, we have relied on information supplied by the Fund Office 

and the Board of Trustees.· This information includes, but is not limited to, plan provisions, 

employee data, financial information, and expectations of future industry activity. We performed 

an informal examination of the obvious characteristics of the data for reasonableness and 

consistency in accordance with Actuadal Standard of Practice #23. Future analysis may differ 

significantly from those presented in this certification 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. 

Redacted by the U.S. 

Department of the Treasury 

Gene Kalwarski, FSA, EA (14-02845) 

Redacted by the U.S. Department 

of the Treasury 

, Benjaminson, FSA, EA (14-0 7015) 

Attachments: Appendix 1: Detail for Actuarial Certification 

Appendix II: Methodology and Assumptions 

www.cheiron,us 1.877.CHEIRON (243A766) 
APPENDIX I- DETAIL FOR ACTUARIAL CERTIFICATION 

SOLVENCY PROJECTION 

Based on the assumptions in Appendix II, we provide the following projection showing the Fund 

would remain solvent if the application for partition and the application for suspension of 

benefits are granted. The projections assume that effective May 1, 2017 the Fund implemented 

the maximum suspension permitted (in accordance with ERISA Section 305(e)(9)(D)(i) and 

consistent with Section 305(e)(9)(D)(iv) and the regulations thereunder) and partitioned to the 

Successor Plan 100% of the liability associated with the terminated vested participants and 49% 

of the liability associated with the retirees and beneficiaries. All liability associated with the 

active par6cipants would remain in the Original Plan. 

This determination was made by solving for the minimum amount of liability to partition to the 

Successor Plan that would allow the Original Plan to remain solvent under the stress-testing 

scenario, which assumes the Fund earns 2.00% for the plan year ending Feb 2017, increasing by 

1% per year for the next four years, followed by 6.75% thereafter. Note, the first year begins 

with the estimated assets as of July 1, 2016 based on a four month return of 5.17%. However, 

because we assumed in the stress testing scenario the Fund would earn 2.00% as an annual 

return, the last eight months would need to return negative 3%. Alternatively, if we assume the 

Fund earns 6.75% in all years (including a total return for the current fiscal year of 9.85%), the 

minimum amount to partition to the Successor Plan would be 100% of the liability associated 

with the terminated vested participants and 41% of the liability associated with the retirees and 

beneficiaries. 

As noted in Appendix II, this projection also assumes the PBGC would provide financial 

assistance to the Successor Plan for the annual benefit payments partitioned to the Successor 

Plan as well as an allocation of administrative expenses. Furthermore, under this scenario we 

assume stable membership with contributions increasing 1.5% per year (inflation). This is 

different than other scenarios showing continuation of the 10% per year membership declines 

(which is the Trustees' industry activity assumption if the partition and suspension are not 

implemented) and 5.5% per year annual increases in contributions. 

See below for the projection in both graphical and tabular format. 

GRAPHICAL: 

The graph below compares the Plan's assets and liabilities. The bars represent the Plan's 

liabilities and the colors shown represent the expected PP A zone (e.g. red is critical). The lines 

represent Plan's Market Value of Assets with the funded ratios (assets divided liabilities) shown 

along the top of the graph. 

en $200 

c: 

.2 

= $150 ~ 

$100 

$50 

$0 

31% 48% 42% 

- safe 

- critical 

37% 31% 26% 20% 16% 13% 13% 15% 21% 

Endangered 

~-- MVA 

- Seriously Endg 

2016 2020 2024 2028 2032 2036 2040 2044 2048 

<:++EIRON ~ 1 
APPENDIX I- DETAIL FOR ACTUARIAL CERTIFICATION 

TABULAR: 

• 7/1/2016 

3/1/2017 

3/1/2018 

3/1/2019 

3/1/2020 

3/1/2021 

3/1/2022 

3/1/2023 

3/1/2024 

3/1/2025 

3/1/2026 

3/1/2027 

3/1/2028 

3/1/2029 

3/1/2030 

3/1/2031 

3/1/2032 

3/1/2033 

3/1/2034 

3/1/2035 

3/1/2036 

3/1/2037 

3/1/2038 

3/1/2039 

3/1/2040 

{i) 

2.00% $54,542,427 

3.00% 44,853,71 1 

4.00% 40,709,074 

5.00% 38,198,194 

6.00% 35,905,479 

6. 75% 33,934,953 

6. 75% 32,193,807 

6.75% 30,406,246 

6.75% 28,609,469 

6.75% 26,803,556 

6.75% 25,004,107 

6.75% 23,175,969 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6.75% 

6. 75% 

21,371,851 

19,658,293 

17,997,457 

16,383,928 

14,868,510 

13,438,584 

12,130,471 

10,957,985 

9,901,404 

8,960,637 

8,181,174 

7,555,215 

7,105,277 

<:-HEIRON~ 

{ii) 

$2,530,075 

3,654,366 

3,709,181 

3,764,819 

3,821,291 

3,878,611 

3,936,790 

3,995,842 

4,055,779 

4,116,616 

4,178,365 

4,241,041 

4,304,656 

4,369,226 

4,434,765 

4,501,286 

4,568,805 

4,637,337 

4,706,897 

4,777,501 

4,849,163 

4,921,901 

4,995,729 

5,070,665 

5,146,725 

(iii) 

Withdrawal 

Liability Payments 

$271,630 $196,595 

201,274 600,580 

200,742 864,020 

65,506 1,100,998 

64,158 1 ,333, 727 

64,158 1,567,961 

60,813 1,799,861 

57,456 2,019,421 

57,456 2,219,099 

57,456 2,402,216 

43,216 2,553,541 

26,976 2,690,588 

26,976 2,820,107 

22,546 2,936,799 

16,645 3,041 ,139 

12,232 3,117,794 

6,143 3,167,949 

6,143 3,198,950 

6,143 3,195,245 

6,143 3,210,407 

0 3,213,070 

0 3,180,146 

0 3,132,280 

0 3,066,166 

0 3,005,325 

$0 $8,215,534 

0 

0 

0 

0 

0 

103 

729 

2,432 

5,616 

10,509 

7,131,774 

5,922,088 

5,649,272 

5,380,111 

5,112,776 

4,848,030 

4,586,361 

4,328,164 

4,073,856 

3,823,865 

17.701 3,578,621 

28,722 

44,103 

63,230 

85,828 

112,369 

144,767 

183,323 

227,021 

275,190 

330,487 

398,056 

472,132 

550,064 

3,338,575 

3,104,205 

2,876,008 

2,654,502 

2,440,197 

2,233,672 

2,035,465 

1,846,076 

1,666,008 

1,495,741 

1,335,669 

1,186,114 

1,047,303 

$419,740 

178,094 

43,254 

65,528 

84,464 

91,642 

129,960 

137,361 

162,065 

181 ,634 

246,173 

262,194 

303,358 

307,663 

320,508 

305,669 

322,222 

319,920 

331 ,524 

337,465 

342,857 

335,932 

339,177 

331,533 

317,961 

$629,619 

531,913 

434,869 

411,153 

387,848 

365,041 

342,809 

321 ,217 

300,315 

280,131 

260,711 

242,068 

224,221 

207,171 

190,941 

175,525 

160,916 

147,112 

134,119 

121,911 

110,485 

99,819 

89,895 

80,699 

72,204 

(vii) 

$941,081 -$2,087,852 

-

$44,853,711 

822,981 

704,553 

704,717 

705,713 

707,556 

710,218 

713,726 

718,131 

723,354 

729,724 

1,265,065 40,709,07 4 

1,547,982 38,198,194 

1,808,627 35,905,479 

2,035,887 33,934,953 

2,161,060 32,193,807 

2,045,818 30,406,246 

1,928,739 28,609,469 

1,811 ,060 26,803,556 

1,693,285 25,004,107 

1,574,803 23,175,969 

737,104 1,456,141 21,371,851 

671,393 

683,598 

697,060 

711 ,305 

726,651 

743,098 

760,672 

779,291 

798,961 

819,601 

840,983 

863,094 

885,790 

1,341,186 19,658,293 

1,230,931 17,997,457 

1,123,947 16,383,928 

1,021,686 14,868,510 

925,429 13,438,584 

835,925 12,130,471 

754,822 10,957,985 

681,947 9,901,404 

616,641 

560,362 

514,372 

479,133 

455,307 

8,960,637 

8,181 ,174 

7,555,215 

7,105,277 

6,828,661 

2 
APPENDIX I- DETAIL FOR ACTUARIAL CERTIFICATION 

TABULAR (continued): 

(i) 

3/1/2041 6.75% $6,828,661 

3/1/2042 6.75% 6,719,094 

3/1/2043 6.75% 6,792,238 

311/2044 6.75% 7,064,135 

3/1/2045 6.75% 7,522,902 

3/1/2046 6.75% 8,190,395 

3/1/2047 6.75% 9,080,303 

3/1/2048 6.75% 10,215,188 

3/1/2049 6.75% 11,590,964 

311/2050 6.75% 13,215,066 

<:-HEIRON ~ 

(ii) 

$5,223,926 

5,302,285 

5,381,819 

5,462,547 

5,544,485 

5,627,652 

5,712,067 

5,797,748 

5,884,714 

5,972,985 

(iii) 

Withdrawal 

Liability Payments 

$0 • $2,939,482 

0 2,841,632 

0 2,747,483 

0 2,654,337 

0 2,544,525 

0 2,430,470 

0 2,293,974 

0 2,158,921 

0 2,025,378 

0 1,900,904 

(iv) 

$630,714 $919,361 $313,073 $64,381 

716,497 802,295 319,803 57,208 

812,198 695,957 298,898 50,671 

909,867 600,131 289,351 44,729 

1,008,237 514,439 277,356 39,361 

1,106,874 ·438,391 260,958 34,541 

1,210,854 371,469 246,347 30,232 

1,328,515 313,032 229,163 26,398 

1,445,680 262,400 213,092 22,998 

1,561,212 218,883 196,144 20,004 

(v) (vi) (vii) 

$909,085 

-

$442,603 $6,719,094 

933,022 441,316 6,792,238 

957,195 452,481 7,064,135 

981,614 476,249 7,522,902 

1,006,002 512,927 8,190,395 

1,030,192 563,682 9,080,303 

1,053,998 629,692 10,215,188 

1,077,521 711,576 11,590,964 

1,100,499 809,436 13,215,066 

1,122,917 923,653 15,091,639 

3 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

A. Actuarial Assumptions 

1. Investment Return (net of investment expenses) 

Valuation Assumption: 6.75% per year 

Stress Testing Scenario: 2.00% for the plan year ending Feb 2017, increasing by 1% 

per year for the next four years, followed by 6.75% 

thereafter 

The Investment Consultant provided the estimated Market Value of Assets in the 

portfolio as of July 1, 2016; the amount was adjusted to account for cash and receivables. 

They estimated a return of 5.17% over the first four months of the fiscal year. For the 

scenario where the Fund earns 6.75% in all years we assumed the Fund would earn 

4.45% (based on the 6.75% assumption) for the final eight months for an annual return of 

9.85%. However, because we assumed in the stress testing scenario the Fund would earn 

2.00% as an annual return, the last eight months would need to return negative 3%. 

2. Administrative Expenses 

Expenses are assumed to remain level as future inflation is offset by declines in total plan 

participation. These expenses are allocated between the Original Plan and Successor Plan 

based on projected headcounts with PBGC premiums paid by the Original Plan for the 

10-year period following the partition effective date (premiums are assumed to increase 

1% per year). For scenarios where the Plan is projected insolvent, we assume expenses 

would be reduced 25% in the plan year following insolvency. Finally, expenses are 

limited to 20% of expected benefit payments in scenarios where the PBGC provides 

financial assistance in either the Successor Plan or after insolvency. 

3. Rates of Mortality 

- Healthy Lives: 

- Disabled Lives: 

RP2000 with blue collar adjustment projected five-years with 

scale AA 

same with ages set-forward five years 

Terminated Vested Participants over age 80 are assumed to be deceased. 

In accordance with Actuarial Standard of Practice #35, we have considered the effect of 

mortality improvement prior to and subsequent to the measurement date in developing 

this assumption. Furthermore, historical mortality experience has conformed with the 

RP2000 table with adjustment. 

4 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

4. Rates of Turnover 

Tenninations of employment for reasons other than death, disability or retirement are 

assumed to be in accordance with annual rates as shown below for illustrative ages. 

25 

35 

45 

55 

62 

5. Rates of Disability 

20.5% 

16.9 

15.0 

15.0 

15.0 

20.5% 

16.9 

15.0 

15.0 

15.0 

Illustrative rates of disablement are shown below: 

p 

25 0.050% 

35 0.065 

45 0.244 

55 0.406 

65 0.000 

6. Rates of Retirement 

Annual rates as shown below for illustrative ages. 

19.0% 

16.9 

12.4 

7.0 

7.0 

55-59 3.00% 

7. Normal Form 

Life Annuity 

60 5.00 

61 10.00 

62-64 15.00 

65-69 50.00 

70 100.00 

8. Changes in Membership I Contribution Base Units 

15.0% 

ll.3 

7.8 

7.0 

7.0 

Based on the Trustees' Industry Activity assumption used in the most recent PPA 

Certification assuming membership will decline 10% per year. However, after the 

effective date of the suspension I partition we assume stable membership (see response to 

Section 6.03 of Revenue Procedure 2016-27 in the Benefit Suspension Application). 

<:+fEIRON~ 5 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

9. New Entrant Profile 

New entrants are assumed to annually join the Plan in accordance with the distribution 

below (which is based on the Plan's most recent five-year history of new entrants) and in 

combination with the Changes in Membership assumption. The benefits for new entrants 

(normal cost and projected benefit payments) are adjusted such that the total normal cost 

remains consistent over the baseline projection. 

23 

28 

33 

37 

43 

47 

53 

22% 

19 

13 

11 

15 

10 

10 

10. Contribution Increases I Average Contribution Rate 

The current Rehabilitation 'Plan assumes 5.5% per year annual increases. However, after 

the effective date of the suspension I partition we assume contributions increase with 

inflation at 1.5% per year. These increases are applied annually to the average weighted 

contribution rate to estimate employer contributions in combination with the Changes in 

Membership assumption. 

11. Suspension 

The projection assumes the maximum suspension petmitted in accordance with ERISA 

Section 305(e)(9)(D)(i) effective May 1, 2017. 

12. Partition 

The projection assumes 100% of the liability associated with the terminated vested 

participants and 49% of the liability associated with the retirees and beneficiaries are 

partitioned to the Successor Plan effective May 1, 2017. All liability associated with the 

active participants would remain in the Original Plan. 

13. Justification for Actuarial Assumptions 

The rationale for our 6.75% actuarial valuation assumption is based on the investment 

manager's capital market outlook, Trustees' risk preference, and the Fund's current asset 

allocation. The rationale for our stress testing scenario (2.00% for the plan year ending 

Feb 2017, increasing by 1% per year for the next four years, followed by 6.75% 

thereafter) is based on recognizing current market conditions and future short-term 

expectations along with the Plan's cash flow characteristics. Our demographic 

assumptions were initially set after a 2007 Experience Study and are annua1ly reviewed 

based upon actual experience. 

14. Changes in Assumptions Since Last Valuation 

None 

<:-HEIRON ~ 6 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

B. Actuarial Funding 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. 

7 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 4 

• UFW Pension Fund's First Amended Rehabilitation 

Plan. 

1934740.1 
REHABILITATION PLAN OF THE 

UNI'fED FURNITURE WORKERS PENSION FUND A 

ADOPTED: DECEMBER 3, 2008 

FIRST AMENDMENT: DECEMBER 29, 2008 

The United Furnit.ure Workers Pension Fund A (the "Pension Fund") was certified 

on May 29, 2008 by its actuary as bcing in "critical status" ns defined by the Pension Protection 1\ct 

of 2006 (the "PPA''). The Pension Fund's Board of Trustees, as plan sponsor of the Pension Fund, 

is required under the PPA to develop a "Rehabilitation Plan," which is designed to improve the 

financial condition of the Pension Fund over time in accordance with standards set forth in the 

PPA. In order to comply with this statutory mandate, the Board ofTrustees of the Pension Fund 

has adopted tllis Rchnbilitation Plan, which wiU become effective on March 1, 2009, and will serve 

as an amendment to the Pension Fund's plan document. 

Under this Rehabilitation Plan, Pension Fund retirees and beneficiaries with benefit 

commencement dates before March 1, 2009 and participants and former participants who either file 

for a pension benefit or otherwise become eligible for a benefit from the Pension Fund prior to 

March 1, 2009 shall not be affected by this Rehabilitation Plan to the extent permitted by applicable 

law. All other Pension Fund participants and former partidpnuts, except as otherwise provided 

herein, shall be subject to tlus Rehabilitation Plan. 

As explained in greater detail below, tllis Rehabilitation Plan consists of two 

schedules, the Preferred Schedule and the Default Schedule. These schedules set forth the 

altcrnntivc benefits and contribution requirements under this Rehabilitation Pl<tn. The Contributing 

Employers1 and the CWA/IUE Local Unions (the "Bargaining Parties") will determine, through 

1 For pmposcs of this Rchobilitation Plnn, u "Contril:mci.tg Emplorcr" sh;tll mean nny t'mplo)'cr which is obligated to 

mnke contributions to the Pension rund pursuant to the terms of~ collective bargaining agreement or other wtilt~n 

agreement requiring contributiorts to the Pension Fund. 
collective bargaining, which schedule a Contributing Employer will elect for the benefit of its 

employees who participate in the Pension Fund. In add.ition, all Contributing Employers will be 

required to pay to the Pension Fund the surcharges mandated by ERISA Section 305(e)(7)(,\), and 

as explained in Section 4(A) and (B) below, the increases mandated under both the Preferred 

Schedule and the Default Schedule shall be inclusive of the amount of the surcharges imposed on all 

Contributing Employers hereunder. Effective for bargain.ing unit work performed on or after 

August 1, 2008, the surcharge required by ERISA Section 305(e)(7){A) is 5°o of the contributions 

otherwise required under the applicable collecti,rc bargaining agreement or other written agreement 

requiring contributions to the Pension Fund. Effective March 1, 2009, the surcharge required under 

ERISA Section 305(e)(7)(A) shall increase to 1 0°/o of the contributions required under such 

agreements. 

As required by the PPA, the Board intends to review the terms of this Rehabilitation 

Plan from time to time to dctertnine whether the plan is consistent with the Board's objective of 

in1proving the Pension Fund's funding status over time. 

SECTION 1-RELEVANT STANDARDS UNDER THE :PPA 

Under the PPA, n rehabilitation plan must include one (1) or mute schedules 

showing revised benefit structures, revised contributions, or both, which, if ndoptcd by tbc plan 

sponsor nnd agreed upon by the bat:gn.i.ning parties, may rcasonabl}' be expected to enable a pension 

fund to emerge from critical status by the end of the pension fund's rchnbiliwtion petioli, or where 

that is not reasonable, to emerge from critical stams at a Inter time. 

The PP 1\ also provides that one of the rchnbilirntion plan's schedules of benefits and 

contributions shall be designated as being the "default" schedule. Under the PP.A, the default 

schedule must consist of (i) the reduction of all future benefit accruals to the extent permitted by 

law, (ii) the elimination of all adjustable benefits and, to the extent necessary, (iii) an increase in 
contribution rates, which, taken together, arc projected to allow a pension fund to emerge from 

critical status by the end of the pension fund's rehabilitation period. Adjustable benefits that may be 

eliminated include post-retirement death benefits, early retirement benefit or retirement type 

subsidies, disability benefits or related subsidies or any other benefits that may be described in 

ERISA Section 305(e)(8)(r\). 

SECTION 2- BOARD'S DETERMINATION TO UTILIZE ALTERNATIVE 

MEASURES TO EMERGE FROM CRITICAL STATUS 

Under the PPA, a rehabilitation plan is a plan which is intended, through various 

changes in benefits and contributions and rensonably anticipated experience and reasonable actuarial 

assumptions, to enable a pension fund to emerge from critical status by the end of its rehabilitation 

period. However, under the PPA, if the plan sponsor of a pension fund "determines that, based on 

reasonable actuarial assumptions and upon exhaustion of aU reasonable measures," the pension fund 

is not reasonably expected to emerge from critical starus by the close of the plan's rehabilitation 

period, then the plan sponsor can fashion n rehabilitation plan that includes reasonable measures 

dtat are designed to allow the pension fund to emerge from critical starus ar a later time ot forestall 

possible insolvency under ERISA Section 4245. A plan sponsor may adopt this "exhaustion" 

approach upon its determinacion that "based on reasonable actuarial assumptions :md upon 

exhaustion of all reasonable measures," it would not be reasonable to conclude that the pension 

fund would emerge from critical status by the end of its rchabilita rion period. 

For the reasons set fotth in hrreater detail below, the Board of 'I'mstccs of tlw 

Pension Fund has determined that, on the basis of reasonable actuarial ussumptions and upon the 

exhaustion of all reasonable measures, and upon consideration of vutious alternatives, it would not 

be reasonable to conclude d1nt the Pension Fund would emerge from critical status under the PP,\ 

by the end of its rchnbilitation period. (I1w Pension Fund's rehabilitatiOtl period is the ten (10) year 

period beginning on March 1, 2011 and ending on February 28, 2021). 
A. Alternatives Considered 

"The Board of Trustees considered numerous alternatives (including combinations of 

contribution mtc increases and benefit adjustments) that, together with applicable amortization 

extensions, were projected to enable the Pension Fund to emerge from critical status by the end of 

its rehabilitation period. The Pension Fund's nctuary projected that in order for tbe Pension Fund 

to emerge from critical status by the end of its rehabilitation period, the Board would need to adopt 

one of the following schedules (or a similar schedule): 

: 

B~n~fit Redy~tion~ Contribution Ra~ Incr~iles (All Int;t~:lUi~S Compound :11nnuaJI~)" 

Im.medhte Alternative 1 Altcm!ltivc 2 l\lternative 3 

I 

elimination of all 

Adjustable Benefits Yr. 1 - 6. 7% increase Yrs. t-10 10.4% increases Yr. 1 15 ~/o increase 

' (benefit accruals ate Yr. 2- 7.7°,o increase Yrs. 2-10- 9.6°'o increases i I 

alteady at lowest Yr. 3 - 8. 7~ o increase 

level permitted by Yr. 4- 9.7°1o increase 

law) Yr. 5 - 10.7% increase 

Yr. 6 -11.7% increase 

Yr. 7- 12.7~·<, increase 

Yr. 8- 13.7°/o l11creasc 

Yr. 9- 14.7°/o inc.tcasc 

Y r.l 0 - 15. 7°'o increase - * Depending upon the expiration dates of existing <.:ollcctivc bargnining :tt,Tt'ecmcnts to which 

d1e Bargaining Parties may be bound as of d1e date of the adoption of this Rehabilitation Pl:m, the 

number of years in which a default schedule may be applicable to Contributing Employers who 

become subject to that schedule will generally range from 10 to 12 years, in e:~ch case to the end of 

d1e rehabilitation period, which is Fcbnmy 28, 2021. 

B. Rationale for Rejecting AJtematives 

After careful consideration of all of the foregoing nltcmnrivcs, the Board concluded 

that none of those alternatives is reasonably expected to enable the Pension Fund to emerge from 

critical status by february 28, 2021. Rathc.t, the Board determined that adopting a rehabilitation plan 

which would require the Pension Fund's Contributing Employers to increase their contribution rates 

at the levels set forth above, compounded annuaUy, would likcl)' result in a significant number of 

I 

J 

' 
employer withdrawals from the Pension Fund, or a mass witJtdrawal, thereby further jeopardizing 

the funding status of the Pension Fund or resulting in the Pension Fund's insolvency. 

SECTION 3- ELIMINATION OF ADJUSTABLE BENEFITS 

As requited by law, t1tc Pension Fund ceased paying all lump sum payments in excess 

of$5,000 effective June 28, 2008, and the elimination of all such lump sum payments under the 

Pension Fund shall continue under this Rehabilitation Plan. Moreover, effective for benefit 

commencements occurring on or after March 1, 2009, the Pension Fund shall cease to provide any 

of the following benefits, rights and features: 

111 Any and all death benefits; 

111 .Any and all withdmwal benefits; 

• The 36-month benefit guarantee; 

• Any and all lump sum benefits. 

In addition, effective for I>cnsion Fund participants (A) who arc employed by 

Contributing Employers who become subject to the Default Schedule or (B) on whose behalf 

contributions arc no longer requited to be made to the Fund, such participants shall not be eligible, 

upon their retirement or other employment separation, for the Pension Fund's early retirement or 

disability benefit subsidies, to the extent permitted by applicable law. 

SECTION 4 ~SCHEDULES OF CONTRIBUTI.QNS 

'I11c Board ofTrustccs hcrcb}' establishes the contribution schedules that 

Contributing Employers tnay elect under this Rehabilitation Plan. Section 4(A) sets forth the 

Rehabilitation Plan's Preferred Schedule nnd Section 4(13) sets forth t11e Rchabilitntion Plan's Default 

Schedule. 

If a Contributing Employer and a Local Union do not have a collective bargaining 

agreement (or other written agreement requiring contributions to the Pension Fund) in effect ns of 

March 1, 2009, and if the those Bargaining Parties uo not accept t11e Preferred Schedule herein by 
May 31, 2009, then the Default Schedule will be imposed on that Contributing Employer on the 

earlier of 180 days after March 1, 2009 or the date that the Sccrct:1ry of Labor declares an impasse m 

bargaining. If a Contributing Employer and a Local Union do have a collective bargaining 

agreement (or other written agreement requiring contributions to the Pension Fund) in effect as of 

March 1, 2009, and if, upon expiration of that agreement the Bargaining Parties do not accept the 

Preferred Schedule within the earlier of 180 days after such expiration or the date the Secretary of 

Labor declares an impasse in bargaining, then the Default Schedule will be imposed, as required by 

the PPA on the Contributing Employer. The Pension Fund hereby reserves the right to impose, to 

the greatest extent pcrmltted by applicable law, the Default Schedule upon any Contributing 

Employer whose collective bargaining agreement (or other wrincn agreement requiring 

contributions to the Pension Fund) expires and who fails or refuses to accept the Preferred Schedule 

within 180 days of such expiration. For purposes of thls Rehabilitation Plan, in the event that a 

Contributing Employer is required to contribute to the Pension Fund pursuant to an aJ:,>'tcement to 

contribute for indcfmitc period of time, such Contributing Employer will be required to adopt the 

Rehabilit1tion Plan on or before lvlay 31, 2009, or will be subject to having the Default Schedule 

imposed upon it within 180 days thereafter. 

A. Prcfcn:cd Schcdul<L(_J.:rescrvcs Some Adjustable Benefits; Eliminat!::.s_Qthcrs) 

2009-2035: Increase contributions br 5.5% ench year. 

Effective immediately upon tbe expiration of a collective bargaining agreement (or 

other agreement requiting contributions to the Pension Fund), encb Contributing Employer who 

elects to contribute to the Pension Fund under the Preferred Schedule set forth above shall be 

required to increase its contributions to the Pension Fund each year by nn amount equal to 5.5° o of 

(i) the contributions required under its prior collective bargaining agreement and (ii) the amount of 
any surcbru:ge required putsuant to ERISA Section 305(c)(7).2 (fhc first annual increase shall be 

effective the month following the date upon which the Contributing Employer elects the Preferred 

Schedule. In all subseguent years, the annu:tl increase shall be effective on the earlier of the 

anniversary of the collective bargaining agreement or Mru:ch 1 ). 

By way of illustration, if a Contributing Employer's total contribution obligation 

under its immediately preceding collective bargaining agreement and by application of the surcharges 

required pursuant to ERISA Section 305(e)(7) amounted to SS,OOO per month, then under this 

Preferred Schedule, that Contributing Employer would be required to increase its monthly 

contributions by an additional $275 per month (to $5,275), assuming all other assumptions remained 

constant. In the subsequent year (nnd again assum.ing all other assumptions remain constant), that 

Contributing Employer's contributions to the Pension Fund would increase b)' an additional $290.13 

per month (to $5,565.13 per month). 

Nonvithstnnding the provisions of Section 3, all nctivc Pension Fund participants 

whose Contributing Employers have elected the Preferred Schedule will rcmnin eligible for a 

disability benefit subsidy and t11c early retirement subsidy ro the same extent that such participants 

were eligible for such benefits immediately before the effective date of tlus Rehabilitation Plan. 

The Board of Trustees anticipate reviewing, from time to time, the impact that this 

Preferred Schedule is having on the Pension found's funding status, and anticipate making 

adjustments to this Schedule, as approprinte, over time. 

B. Default Schedule (Eliminates All Adjustable Benefits) 

2009"2021: Increase contributions b)' 1 0.4~/(, each year. 

1 lbe 5.5% annually compounding contnbutton incre;~ses required to he matlc by each Contnbuting Employer 

hereunder nrc intended to improve the funding status of the P.:nsion Fum! and will not generate uny atltluional benefit 

accruals for Pension Fund participants, to the cxtcm pcmuttcd by nppln:ablc law. 
Any Contributing Employer who becomes subject to the Default Schedule shaU be 

required to increase its contributions to the Pension Fund e<~ch year in an amount equal to 10.4°o of 

(i) the contributions required under its expired collective batf,raining agreement !l.!ld (ii) the amount 

of the surcharge required pursuant to ERISA Section 305(c)(7). 1 (l11e first nnnunl increase shall be 

effective the month following the date upon which the Default Schedule becomes subject to the 

Contributing Employer. In all subsequent years, the annual incrc ... 1sc shall be effective on the earlier 

of the anniversary of the collective bargaining agreement, if any, or March 1). 

As required under the PPA, the Default Schedule under this Rehabilitation Plan 

consists of the elimination of all adjustable benefits permitted by applicable law, and an increase in 

contributions, which, taken tog<;ther, are designed to aUow the Pension Fund to emerge from critical 

status by the end of its rehabilit•1tion period. Based upon the actuary's m;sumption that Contributing 

Employers who become subject to the Default Schedule arc less likdy to remain ns Contribming 

Employers in the Pension Fund for an extended period of time, and consistent with the dcsit,rtl of 

the PPA, the Board has dctcrm..incd that the contribution increases required from such Contributing 

Employers should be based upon enabling the Pension Fund to emerge from critical status within its 

rehabilitation period, i.e., by Febmary 28, 2021. 

By way of illustration, if a Contributing Employer's total contribution obligation 

under its expired collective bargaining agreement and by application of the surcharges required 

pUisunnt to ERISA Section 305(e)(7) amounted to 55,000 per month, then undcr this Default 

Schedule, d1at Contributing Employer would be reguired to increase its mond1ly contributions by an 

additional $520 per month (to $5,520), assuming ull otller assumptions remained constant. In d1c 

l Tiu: 10.4% annually compounding contnbution increnses tequlred to be made by each Contributmg Employer 

hereunder lire intended to improve rhc funding status of the Pension Fund and will not gcncr:llc any additional benefit 

accruals for PensiOn Fund participants, to the extent permitted by apphc,lblc L'lw. 
subsequent year (and ag:un assuming all other assumptions remain constant), that Contributing 

Employer's contributions to the Pension Fund would increase by an additional $574.08 per month 

(to $6,094.08 per month). 

SECTION 5- ANNUAL STANDARDS AND PROJECTED EMERGENCE FROM 

CRITICAL STATUS 

Under this Rehabilit:ttion Plan, the Board has established the annual standards set 

forth below for improving the Pension Fund's funding status from 2010 through the date that It IS 

projected to emerge from critical status in 2036. 

The Board has determined, upon consultation with the Pension Fund's actuary, that 

the reasonable measures contemplated under this Rehabilitation Plan, which include substantial, yet 

more attainable, contribution increases and less onerous benefit adjustments, ate less likely to result 

in mass employer withdrawals and are reasonably designed to allow the Pension Fund to emerge 

frotn critical status at a later time. Assuming that all of the Contributing Employers elect the 

Preferred Schedule set forth in Section 4(A) above, and based upon the attainment of all of the 

Pension Fund's other reasonable actuarial assumptions, the Board, in consultation with the Pension 

Fund's actuary, has concluded that the Pension Fund's funding status is projected to impruvc over 

time as follows: 

March 2010-69% funded 

March 2011 -67% funded 

?\larch 2012 -64% funded 

March 2013 ·63% funded 

March 2014 -62% funded 

Ma.rch 2015 -61% funded 

Mnrch 2016-60% funded 

Match 2017 -59% funded 

March 2018 -59% funded 

March 2019 ~58% funded 

March 2020 -58~/o funded 

1viarch 2021 -58% funded 

March 2022 -57% funded 

March 2023 -58% funded 

March 2024 -581Yo funded 

March 2025 -58% funded 

March 2026 59% funded 

Mnrch 2027 61 1% funded 

1\btch 2028 -63% funded 

Ivfnrch 2029 -65~/o funded 

March 2030 -68%• funded 

March 2031 -73% funded 

March 2032 · 781% funded 

March 2033 -84% funded 

March 2034-92% funded 

March 2035 -99% funded 

l'viarch 2036 - Projected to 
be fully funded 

Under this projection, it is anticipated that the Pt!nsion Fund's financial condition 

would improve incrementally over time and the Pension Fund would emerge from critical status by 

February 29, 2036. 

SECTION 6- ENFORCEMENT OF REHABILITATION PLAN 

In addition to all of the rights and remedies that arc avnilablc under applicable law, 

including, without limitation, Title I and Title IV()[ ERISA, the Board of Trustees of the Pension 

Fund hereby expressly reserve the right to find and determine, in their discretion, that any 

Contributing Emp)O)'Cr who fails and/ or refuses, after written notice, to comply with the terms and 

conditions of this Rehabilitation Plan, shall be deemed to have effected a complete or partial 

withdrawal from the Pension Fund within the meaning of ERISA Sections 4203 or 4205, as 

applicable. Upon such a finding and determination, the Board of Trustees hereby expressly reserve 

the right to pursue all of the Pension Fund's remedies against such withdrawing employer as arc 

available under ERISA and other applicable law. 

SECTION 7- CONSTRUCTION AND MODIFICATIONS 

'l11e Board of Trustees of the Pension Fund reserves the cight to construe, interpret 

and/or apply the terms and provisions of this Rehabilitation Plan in a manner that is consistent with 

its intent and design of improving the fi.nancinl condition of the Pension Fund over time, and :lll)' all 

constructions, intcrpret:tt:ions or applications of tllis Rehabilitation Plnn by the Board shnU be f1nnl 

and binding unless ru:bittru:y or capricious. The Board further reserves the right to make any 

prospectiye or retroactive modifications to this Rehabilitation Plan that, in their discretion, may 

become necessary or appropriate or that may be required by npplicablc law. 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 5 

• UFW Pension Fund's 2010 Partition Application. 

1934740.1 
t · . .. 

, ~ ' 

B R . 

JUN 2- 2010 

.Mnr 27, 2010 

TRANSMITTED VIA FEDERAL EXPRESS 

Bmcc Pcrhn, Manager 

l\'lulticmplorcr Progr:tm Dh· ision 

Pension 13cnc{jt Gunmnt)' Corpor:ttion 

1200 K Street, N.W . 

\\'nshington, DC 20005 

}~ ~1.. 1' liJ tH~ 

D1rd t {:! J :•·1f .. ~t q 

I ,., (.!1 !iS II n·,c. 

l p f1 Jh ... ri}({7.h:•.::t\t·H 1 r·, :rn 

Re: Application by rhc United Furniture \Vorkcrs Pension Fund t\ 

fot Pnrtidon Pprwant to EB._JSA Section 42)..:,3~- ----

Dear I\ I r. Perlin: 

Encl<.>~cd plcnsc fmd onc. original and three.: wpic~ of an i\ pplic:uion hy the 

Uni1ed Furniture \Yorkers Pension Fund A f01 p:trtirion pursu;~nt to ERlS:\ 

Section 4233. If you hai'C nny qucsuons ccg:mlrng rhc cndoscJ A pphcauon, 

please calf me :tt }'OUr COIJ\'Cnicncc. 

Redacted~b ..... y""'!'th:~~~u .r 

Department of the Treasury 

KPF a:~ 

Enclosures 

cc: 1-brry Boot, Chairman 

Dec :\nne \'?n!kcr, Director 

Gcn<.: I<:~!warski, Chciron 

Christino Bcnjaminson, Chciron 

fo· oti!Sll l:tA. 

f;p 11} 2J 5-P ·1 ,_: 

H<t,'7Jt'<t•ftJ 

tlcn:_J ~~·~ r 

J··. :1 ~ 

1 l 

1 ! : ' • f_ Ht,•pl' 

~· J) -lU C .l·.(l' ~)t:Jit.yl::\ 

1 :: _.,,.: t " £t;r -:-,;! tr.,, .• ~ ~ ,,, 

,• ·t: t 1 : : { ; ,• .l ; f:.s,< 1,!1: / r 
~~:hi\ I LllH.n:. 

n"'" L"IJ) 11·'111 

F" 5111\11 

l,p!L~w·d}(t];!:rq~'!l :Jt\ cnrn 

!Vfay 27,2010 

TRANSMITTED V1A FEDERAL EXPRESS 

Bruce Perlin, ~·!:wager 

J\fulticmployer Program Di~:ision 

Pension Benefit Guarani:}· Corporation 

1200 K Street, N .W. 

Washington, DC 20005 

Rc: Application by the United Furniture Workers Pension rund t\ 

for Partition Pursuant to ERISA Section 4233 

Dear £-.lt. Perlin: 

We are general counsel to the United Furniture Workers Pension Fund A (the 

"Pension Fund" or the "Fund"). On behalf of the Pension Fund, we hereby submit 

this Application fot Partition of the Fund purswlnt to Section 4233 of the Employee 

Retirement fncome Security 1\ct of 1974, as amended ("ERISA"), in the manner ser 

forth herein. 

As described more fuUy below, an Order issued by the Corporation, effective June I, 

2010, partitioning from the Pension Fund and transferring into a partitioned pbn (the 

"Partition Plan") nil of the pension liabilities as~ociated with the participants and 

retirees of each of the Banktupt Ernplorcrs (a~ defined herein) pursuant to ERISA 

Section 42.33 would be approprintc sine~:: 

• Att~Srcgatc contributions to the Pension fund hnn• been substantinlly 

reduced beginning in October 1981 nnd continuing through the present as 

a result nf b:mkruptcy proceedings im·oh-ing thtrty-four (34) contrilmting 

emplorers who han: withdrawn from tlte Fund within that period of tJmc; 

" The Pcnswn Fund is likclr to become in,;okent in the :~bcncc of an 

Order p:mitioning the Fund; 

• Contributing cmplorcrs will be required to significantly increase thctr 

cnntrtbutions to the Pension Fund in order to a' oid tnsoh'cncy; and 

• .-\n Order partitioning of the Pension Fund will.signific:wtly reduce the 

!tkdihood th:Jt the Fund will become in~oh·cm. 

ll:i• 

1' 

B1pll Cnvr lnteru.H1un1i h 

I 

\ )' .q ' '' 
Bruce !Jcrlin, i\ Ianngcr 

MultJctnployer Progr:1111 Dh·ision 

Pcn~ion Benefit Guaranty Corpornt1on 

1\1:-ty 27! 20 l 0 

Page 2 

Bryan Gave UP 

Rcle\':.tnt Facts 

The Pen~ion rund ,, a collerci,·ely bargained, jointly trw.tecd multicmploycr pension pbn chat was 

establtshed lll March 1962 through toUcctkc b:trt,raining between the United Furniture \Vorkcrs of 

America International Union (now the Communications \Votkcrs of America) and a group of 

furniture manufactutel"s. Contributing employers to the PensiOn Fund include Srcinway, Inc., Scaly, 

Inc., Sinunons, l nc., Hufcm, Inc. and approximately 40 other contribuung emplorers. ·n1e Pension 

Fund Js administered 111 Nashnllc, Tennessee. 

r\$ of the plan year beginning f\larch 1, l9SO, the Pension fund had total :~sscts of $34,377,209. 1\t 

that time, the Pensk>n f-und had approximately 18,324 active participnnts, 572 deferred vested 

participants and 4,566 retirees. from 198 l through the present, each of the th.ircy four (34) 

contributing employers identified in the ,\ppcndix hereto (hereinafter, the "Hank.n.1pt Employers") 

filed for bankruptcy and withdrew from the Pension fund. As of its most recent plan year ending 

Fcbnm11' 28, 2010, the Pension Fund h;1d total ;tsscts of $83,889,232, estimated accmcd linbilitics of 

$163,390,554, wns 51.3" ,, funded and is certified ns being in "critical" status (within the meaning of the 

Pension Protecuon Act). The Pension Fund cuw:.:ntly Jus 1,880 nctiw participants, 3,303 deferred 

vested particip:tnts and 5, 7 32 retirees. 

As identified in the Appcmhx, there arc 617 terminated n:stcd parucipants and ] ,102 retirees who had 

formerly been cmplorcd by the Bankrupt Emplorcrs. The pcnston unbilitics associated w1th the 

partlclpants and retirees of rhe lbnkrupt Employers is npproxima.tcly $34 m.illion. In the absence of 

an Order partitioning the Pension Fund in the manner described herein, the Fund is likd) to become 

insokent in 2019. 

Ar..nlicablc Standards and Requested Relief 

ERfSA Section 4233 authori7cs the Corporiltlon to i~sue an Order p:ntitioning a multiemploycr 

pension plan upon finding that: 

I. Thetc has been substantial reduction m the amount of aggregate contributions to a plan as a 

result of one or more employers' bankrupt<:}' proceedings; 

2. the plnn is likely to become in soh ent; 

3. contributions to the pl:1n will need to be increased significnmly in order to prcvcnc m~uln:nq; 

and 

4. partitioning would signtficant1y reduce the likehhood that the pbn will hccomc insoh ent. 

Since the Pension Fund meets c:tch and en:rr one of these critctt:t, and st.ncc in the nb,cnce of thts 

requc·;tcd relief. ir is likely that the Pcn~ton fund will become insoh ent in fewer th:tn ten 1 cnts nnd 
Bruce Perlin, Manager 

lviult1Cmployer Program Dn·ision 

Pension Benefit Guaranty Corporation 

l\.Iay 27,2010 

Page 3 

Bryan Cave llP 

w1ll become n liability of the Corporation, we rcspcctfullr submit th::l! the Corporatwn should issue an 

Order, effective June 1, 2010, partitioning from rhc Pension fund and unnsferring mto a Partition 

Plan all of the pcn~ion unbililics associated with the Ibnkn1pt Emplorers pursuant to EIUSA Section 

4233. 

1. There Has Been a Substantial Reduction in Aggregate Contributions Resulting from 

Numerous Bankruptcies. 

(a) Aggregate contributions to the Pension Fund have been substantially reduced 

l:!gginning in October 1981 as a result of numerous baokruntc):_JHocccdin~. 

Since October 1981, each of the Bankrupt Emplorcrs idcnuficd in the :\ppend.t': has filcJ for 

lnnkmptcy and has withdrawn from the Pension found. 

,\s n direct result of these 34 Bankrupt Employers' wtrhdrawnls from the Pension r:und, the r:unJ has 

cxpcricnct"d n substnntlal rcduct1on in its aggregate coutriLutiom relating to appro:cirn:ncly 617 

deferred n?stcd pnrticipants and 1,102 retirees over the past years. In manr, if not all, cases, these 

Bankrupt Employer" filed for bankruptcy protection w1rh substantial contribution delinqucnm:s to the 

Pension l·uml, which nblig;ttion~ were discharged through the b:mkruptcy proceedings with firth: or 

no recon:ry for the Fund. Sunilarly, m m:my cases, Bankrupt Employers withdrew fwm the Pension 

Fund in bnnkruptcy with suhsranti3[ wlthdrawalliabihry ohlig:uinns to the Fund, most of which were 

discharged !hrough the bankmptcy proceedings as wdl. 

The most significant impact that these Gankruptci~s han: h;td on the Pension fund, howenr, h:ls 

been the steadily declining reduction in the contributiOn b:tse supporting the f-und. In order to 

illustrate the adverse impact that these bnnkntptcics h:wc.: had nnd continue to have on the Pcnston 

Fund, the Fund's actuary conducted ;I study which compared the Fund's actual ar~rcgatc 

contributions received between !\larch 1, 1980 and Fcbm:tty 28,2010 (Sl4L7 million) to the nggrcgntc 

contributions thnt the Pension Fund would hnre received had each of the 34 B:111krupt Employers 

rt•mained :~s contributing emplorcrs to rhc Fund ($164.3 millwn). This nn:~lpis found that tf all of the 

34 !\:mktupt EtHployers had renMined in the Peoston Fund :tnd were contributing as of i\I arch 1, 

2010, the Fund would ha1·c accumulated nn addniono1l 522.(1 nuHion in aggregate contributions dunng 

that period of time. Sec A tt:tchmcnt ;\ uppcndcd hereto for greater det;ltl of thi~ analysis. The loss of 

$22.6 million m projected aggregate contributions to the Penston Fund due to tlw bnnkrupccit:s of 

those 34 Bankrupt Employers - nearly 27° o of the F unJ's total assets - dearly satisfH.:s the firSt 

criterion of ERISt\ Section 4233. 
Bmce Perlin, i\.lanagcr 

Multicmplorcr Program Didsion 

Pension Benefit Gu.tr:mtr Corporation 

l\lay 27, 2010 

Page 4 

Bryun Cave LlP 

(b) The Pension Fund's Exncctcd Insolvency Is Not Attributable to Losses in the 

Capital Markets. 

Unlike many other multictnploycr pension plans that arc in financial distress, the Pension Fund's 

expected insoh'cncy ts not atuibutablc to losses in the cnpttal markets, but to substantial losses in its 

contrilmt..ion base due to numerous employer bankruptcies. From March 1980 through Febtllary 

2010, the Penston Fund's aYcmgc annual rate of return on its investments has been 8.9°o, which is 

more than the Pension Fund's assumed r:ttc of return.' 1l1esc investment returns tctnpornrily 

supported the Pension fund's annual benefit obligations and its costs while the found experienced a 

significant decline in employer contributions through bankruptcies. To be sure, :~s demonsuatcd b;· 

Attachment B, 1f the Pension Fund's acntll itwestment return beginning in March 1980 haJ simply 

matched its im cstmtn! assumption, then the Pension Fund would have become insolvent in its 1999 

plnn }'Cat. Therefore, it is <n·idem that the Pcnsioll Fund's expcct!!d insoh-ency h:ts not been caused by 

the Fund's inn•stmcnt performance, but hr an cxtr:tordlnary declrne in its contl'ibution base due to 

numerous employer b:mkmptcres. 

2. I1.tG_:e_cJ1sinn Fund is Likely to Become Insolvcm. 

In the absence of :tn Order p:ntJtioning the Pension Funu i11 chc manner descrilx·d herein, it is 

proJected th;ll the Fund will become insohcnt in 2019, as shown in t\ ttachmcnt C. The Pension 

Fund's actunry pro1ccts that the Fund bas a 21% chance of becoming insolvent in 2017, a 42° o chance 

of bccotning imolvcnt in 2018 and a 59"iu chance of becoming insoh·cnt in 2019. The prob:-~bilitics 

dc,·clopcd here arc from the actuar(s stochastic model, which is based on 500 rri:-t!s in which thte 

investment return ,·aries based on a return on 7.50° o \\'ith an 11°o standard dcdation of risk. Since 

the Pension Fund h likely to become insol,·cnt within tlw next 8 or 9 rears in thr absence of 

partitioning, the scconJ criterion of ERISA Section 4233 is satisfied. 

3. Employers Will N~<UQ Significantly Increase Contributiom tv the Pension Pun£}. 

ln the absence of an Otder partitioning the Pension Fund in the mnnn<'r described herem, air of rhe 

contdbuting c111ploycD will be required to ~tgnificantly incrensc their contnbutions to the fund. The 

Pension fund ha~ been in critical stat liS under the Pension Protccdon Act since 2008. r ll COilliUCtion 

with thnt <;tahts, the Fund's Board of Trustees has duly adopted :1 rehnbiiJt:Jtion plan which 

contemplates rmnual contribution increases of u for each contributing cmployc'r to the fund ewer 

the next 2o rears. In order to a\·oid insoh-cncy, Jt is projected that the Pension Fund would instead 

need annual contribution increases of 23° o per year cffecLive 1\farch I, 20 II. St:c t\ ttachmenr D 

appended hereto for this analysis. 

--••o---·~----

1"1l1c l'cns!on hmd's :;:;sum(·d Ll!t' of r<:t!ltn until \!.nch I, ?tlO-:- \1,\S 7.00",, t:fftrlll"(' .\larch 1, :WW, the Js,umnl r:l!e nf 

return w:~s 7 ,50" 
Bruce Perlin, Manager 

i\fulticmployer Program Di\•ision 

Pension Benefit Guaranty Corporation 

May 27,2010 

Page 5 

Bryan Cnve lLP 

Increasing contributions hr this magnitude on an annual basis for :.!1 cont:tibuting employers would, 

quite obviouslr, be unsustainnble, and would likely lead to a mass wttbdrawal of contributing 

employers from the Pension Pund. As it is evident that in the ab,ctlCe of an Order p:utitJOrung the 

PensiOn Fund contributing ctnploycrs will be required to sigruficantly tncrea<,e thcu contnbutions to 

the Fund, the third ctiterion of ERTSA Section 4233 i$ satisfiCLl. 

4. An Order Partitioning the Pension Fund Would Significantly Reduce the Likelihood 

that the Ftwd Would Become Insolvent. 

An Order partitioning the Pension Fund in the manner set forth herein· would stgnificandy teduce the 

likelihood that the Pension Fund would become insolvent. r\ttachmcnt E hereto i'; an actuarhl 

projection demonstrating that an Order partitioning the Pension fund will significantly teducc the 

likelihood that the Pension Fund will become insokcnt. Based upon tim projection, whereas rhcn: is 

a 59% chance that the Pension Fund will become insolvent m 2019 wtlhout partitioning, the fund's 

actuaL)' pwjects only a 9% chance of insokency in 2019 With partitioning cffcctin: J unc I, 20 l 0. 

Moreover, in the e\·cnt that the Corporation issues an Order parutioning the Pension Fllnd in the 

manner described herein, there is a 37% chance that the Fund will :.void insoh-cncy through 2024. 

The probabilities dc\·clopcd here arc from the actu:H) 's stochastic model wluch is based upon 500 

trials in which the inn:stmcnt return ,-aries based upon n return of 7.50° o and an 11 standard 

Je,·iation of risk. _r\ccordmgly, since an Order partitioning the Pension l•und in the m:tnner set forth 

' herein would significantly reduce the l.ihdihood of insolvency, the fourth critctlon of ERlS.\ Section 

4233 is satisfied. 

5. Other Significant Factors Warranting an Qrdcr for Partitionin~ the Pension Fund. 

(a) Demographics oflhc Pension Fund Warrant an Order Partitioning the Fund 

The Pcn:>ion Fund is a 111<\turc multicmploycr pension phm with a rapidly declining actin pDrticip:tnt 

base, almost 4 to 1 benefit payment to contribution ratio and l1mitcd prospects fur attracting ne\\. 

participnnts into the Fund. The a\'cragc age of the ncth-c participants is 45.0. Stncc 2005, the number 

of the Pension Fund's acti\·e pnrticipams hns decreased from 3,646 to 1 ,880, nod the Pens ton hltld 

has paid out $61.3 million in benefits while collecting only $19.3 mil !ton in regular crnplo} r:r 

contributions. Thc'it: factors demonstrate vcrr clearly that the PensiOn Fund IS experiencing ::\ rartcl 

and inedtabk drclinc and has little or no chance of n\·oidtng insohcncy in the absence of an Order 

partttioning the Fund. 

(b) Impact of the PBGC Guarantee 

If the Corpomcion issues an Order partitioning the Pcnston Fund in the manner described heretn, the 

Order will nffect G 17 terminated n~sted p:trticipants nnd I, 102 retirees. The Fund's nctunry has 

pcrf•mned an estimate of the imp:tct of the PBGC guamntec on a snmple set of affected participnnts. 

R:t'icd upon thnt amlysis, for tenninated n:sted participants whose scrYicc \\'aS readily a\·atbblc, the 
Druce Perlin, 1\J:m~gt: r 

1\ f ulticmploycr Ptogr·.tm Di\·ision 

PcrHinn Benefit Gunrnnry Corpora{ion 

r-,.ray 27, 2010 

Page 6 

BryDil Cave llP 

ewm~tcu nn r:tgc redticcion in their month!}' pension bene fit dttc ro the imp:tcr of t.he Pf3GC 

gu;\l':J.fllt:C \\':lS approximate!}' 30%. \Vith respect tO the impact of p~rt tioning on CUrtcnt retirees, the 

actUJ I} estimated that the 3\'cr:tge reduction in n retiree's monthly rension benefit \\'ould r:mgc 

between o a,o and 1 S0

.'o. The plnn adrn.iru$trator is coUccting scr:icc dnta on :1ll aficctcd pnrticipn nts ut 

order to c:llculatc the a<: tua! reduction that would be appltcablc for each :~ffccted p;trticrpan r and 

retiree and will sh:trc th<1t informatjon wi th the Corporation once it becomes :l\'aibhle. 

Conclusion 

r or nil of the foregoing !C:l«()ll$, \\'C n.:spcctfully suhm.it that the Corporation should UC an Order, 

effecf.i,·c June I, 2010, p•lrtitioning from the Pension Fund and sferring to a P:trtitJOn Pbn ;;U of 

chc pcn~10n li:tbilitjcs associated with the tcmlinatcd ,·cstcd p:w.icipancs and retiree ~ or each of the 

Uankrupt Emplorcr; pursuant to ERISJ\ Section 4~3 . 

\'i/ c rccogni7.c th:tt the Cotpor:u.ion may need adclit.ional information from th<.: Pen,ion Fund in order 

to consider tJ1is :\ j1ptication, and thi:! Pension Pund hereby rescrYcs w ; right to :lmtnd, tH<)clif), 

supplemen t or \\'ithdraw this Applicn tion :u any time. Please conmc t me directly 1\'i th anr mfonnnoon 

re t]UCSts that you mar h:n·c nnd 11·c will coordin:llc the Pension f- und's rcspon-c, nnd plc;l ' t: call me 

directly \nth :-~nr <JUCstion5 or concerns tJt:~t you m~y h:wc. Th:111k rou for your considcrHJnn of tlus 

\pplic:~ tion. 

Redacted by'the U.S. 

Department of the Treasury 

KPF/ aa 

Attnchmcnts 

• 

t.c : Terrence Deneen, PBGf. 

l·brry Boot, Ch:11rrnan 

1\ont'd o( Trustees 

Dec Aru~t· \V3lkcr, Dncctvr 

Ccnc Kahv;ICSI\i, Chciron 

Clmstian ncnj:uninson, Chciron 

H:trry \X1hirc, Joseph \X':mrn ant! on ~ 

.J:tmes F. CiiU, l.kpn Cn\·c LLP 
Company Bankruptcy 

filing Date 

,'\.PPENDIX 

Banknmtcr Court and Ci\·il Case 

Number 

Bryan Cave LLP 

No. of 

Deferred 

Vested 

Parcictran ts I 

Retirees 

Yorktownc Lt\'ing Rooms, Inc. October 1981 

d/b/a T.R. Taylor Company 

U.S. Bnnkruptcy Court For the 5/17 

l\liddlc District of Pcnnsyknnw; 

Case. No. 1·81-01047 

Arbor Industries, Inc. October 19!13 U.S. Ihnkmptcy Court 

Jamestown Lounge, Inc. District of New 'York; Case 

Maddox Co. 

t\tbntic Sleep Products 

Monitor Furniture 

St. John's Inc. 

Hotchkiss Brothers 

t\dvancc Computer Supply 

Eisenberg f\Iaurcss Co. 

---··- -----·· 

June 1985 

July 1985 

82-10623 ~.J 

U.S. Bankruptcy Court 

Disuic! of New York; Case. 

83-JO.J-56 l\1 ~-.. ~---~---~-~-----~--1-·-

u.s. Bnnkruptcy Court Southern 0/7 

District of New York; Case No. 

85 !3 1 1549 TLB 

September 1985 U.S. Bankruptcy Courr Western 

District of New York; Case No. 

84-1 05401\1 

September !985 U.S. Bankruptcy Court Western 

District of M1chigan; Case. No. 

September l9R8 

June !989 

N'I' 85- 02Gt17 

1 No Bnnkruptc) Case I nform:H.ion 

in File- Sec 1\ttachcd letter. 

----------' "·-----·-·---·-----+-------·-----------

u.s. Bankruptcy Court For 

DistriCt of New Jrrsry; Cnse No. 

88-05212 

.. -------· 

Stcl'!ing Slt'cp Products, Inc. January 1990 U. S. Bnnkn~ptcy Court Eastern 0/3 

f/k/:~ Greater N.Y. Sleep 

Products 

Puroficd Down 

District of New York; Case No. 

190-14549 353 -------t--~~~-···----------· •· ---·-----

January 1990 u.s. Bankruptcy Court Southern 

District of New York; C:~sc No. 

90-B 12605(fLB) --"·~-----r-------------~---~-~--- H:m·t:y Industries and L&N Jul) 1990 U.S. Bankruptcy Court Eastern 51 

Industries D1stnct of Trxn.•;; Case No. 91 

60225 DRS 
Company Bankmptc}· 

Filing Date 

Bankmptq Court and Civil Case 

Number 

Bryan Cave llP 

No. uf 

Deferred 

Vested 

Kanowskr l\lfg. September 1 Bankruptcy Comr E::~stcm 20/16 

of California; Case No. 2-

-7 --~--------~~~----~·--~+---------~~---~~·----1---~-~-----~~-~~------~------

Somcrs Corp)\\1:1ldron Furn. December 1 Bankruptcy Court NortJJcrn 

Inc. (consolidated with Nm·cmber 1991 

Little Lake lndu:;tries, Inc., U.S. 

Leisure, 1nc. and U.S. Leisure 

International, Inc.) 

Sunarh::~uscunan, Inc. November 1991 

of Ohio Western 

Division; Case No. 2-89-02294 

U.S. Bankruptcy Court Northern 

District of California; Case No. 1-

90-0!331-J\G thru 1·90-01334-

AJ 

Bankruptcr Court Northern 

of Ob10 Fnstern Di,-ision; 

Nos: B 89 4100($) nnd B 89-

410 I (S) ---------~- -- ----·----:·------~--~-- -----t 

Hale Company March 1992 In the US Dtstr1ct Court of 

~Iikcl Co. 

Comfort [ndustries, Inc. December 1992 

r\mcric;m P.lon::~rch, Inc. 1\l arch !994 

Beaver Purniturc, Inc. 

i\d\ancc Bedding 

Automatic Bedding 

Kittinger Co. 

8 

~fiddle Distnct of T enncsscc 

N::~shdllc Division, Cidl Action, 

Cr~sc No. 392 0366 (HIGGINS) 

and 392-0966 

U.S. Bankruptcy Court 

District of Ohio.( :b·el:md; 

No. 93 !5507(S) 

U5. Bankruptcy Court for 

Southern District of New 

c:n~;c No. 90 B 10579 (CB) 

U.S. Bankruptcy Court for 

Eastern District of 1'\cw York; 

Case No 97-13935-60 

'"-~-

55/111 

30/105 

14/39 
Bryan Gave llP 

.. 

No. of 

Bankn.lptc:; Bnnkruptcr Court and Ciril C:~sc Deferred 

Comparw Vested Filing Date Number Participants/ 

Retirees ~~~.~ 

Jm·inciblc Parlor Frame January 1996 U.S. Brmkmptcy Comt District of 2/7 

New Jersey; Cnst: No. 95-21993 

DcsigncJ's \\loodcraft Nm·ember 19% U. S. Bnnkwptcy Court Eilstcrn lO 

District of New York; Case No. 

1-96-15517-dtc 

Dmalab Eqtnpmcnt l\fard1 1997 U.S. Bankruptcy Court E:1stcm 27/62 

District of New York; C:~sc No. 

896-86839-288 

Antit1ue Furniture September 1997 U.S. Bankruptcy Court Southern o/3 

Disu1ct of New '{ ork; Case No. 

97B 4553(AJG) ~------~~- ··-- --- U.S. Bankruptcy Court G tT··---~-

,, _____ .• 

··--·- J en ern ft Cot·p. April 1991) S/C) 

Southcm Disuict of Texas 

l\!cal!cn Division, Case No. 99-21 

306-1\!-7 . ---~~=~~-----~---~· ··"·---

Room Plus, Inc l\ r :nch 2000 U.S. Baukmptq Coun District of 28/21 

New Jer~ey (Newark); Case No. 

99-j'i(i5] -~-----M~----~~-~~ --~ ------~~~' ·- ~ .,._ ~,..,~~-~· ·--- . -

American 1\Ialtt'ess Company .July 200J Superior Co\lrt of Nn\· Jersey, J I I 1(1 

(r\ ssigwm~nt for Chancery Di,·isinn- Probate P:nt 

the Hmcfit of Essex County (filed July 17, 2003) 

Creditors) ----~"-'>' ------· ------~---__,___,_-

American l\!odcrn Mctab ;\pril 2004 U.S. lhnkruptcy Court District of 20/22 

New Jersey; Case No. 03-<16555 

,...._ . ....,._ _____ ~~-

~·----· 

DHS -...... ·-- ..,.._ f- ·-

Tower Automotil'c June :WOG U.S. lhtnkruptcy Court for the nn 163 

Southern District of Nc\\' York; 

Cnsr No. 05~ I 0578 (:\JL) _, .. -- ---·------ -~----

Spring Ai.r Mattn:ss Mar 2009 U.S. Bankruptcy Coort for the 53/25 

District of Del:nv:w~; C:tse No. 

09-1 I 87 5 (BLS) ----- -----•"""""-'•"- .. ___ --~-~--··' -~~---

Dnllek Inc. Scrrctnbcr 2009 U.S. Bankruptcy Court for the 6/1 

Southern District uf New York; 

C:~sc No. 09-15G48 Q0.tP) -~------
~ ~~ ~~ -~- ~ ~ ~---~- ---- ~ --- -~~- -~traelfment!i ___ ·--~----- · ---~-~~~ 

___ -~--- ----~ ___ J?*@~!!!I!-Y*i!IJ!!"J!i~!:Ul!,!~! ~an~F!!Ia!~~~ -~~-- ______ , ______ ~ 

(A) (B) (C):: (A) X (B) 

Average Annual Years out of the 

Bankruptcy Contrlbu!tons In last Fund through Lost 

t1. Employer Date 5 Years In the Fund 3/1/2010 Contributions 

1 T.R. Taylor Oct-1981 s 7,411 28.4 $ 210,560 

2 Jamestown Lounge Oct-1983 21,098 26.4 557,300 

3 Maddox Table Co., Inc. Jun-1985 34,065 24.7 843,034 

4 Atlantic Sfeep Products Jul-1985 21,241 24.7 523,908 

5 Monitor Furniture Sep-1985 23,854 24.5 584,318 

6 St. John's Inc. Sep-1986 29,101 24.5 712,835 

7 Hotchkiss Brothers Apr-1988 26,039 21.9 570,620 

8 Advanced Computer Supply Sep-1988 19,406 21.5 417,135 

9 Eisenberg Mattress Co. Jun-1989 4,546 20.7 94,319 

10 Greater N.Y. Sleep Prod. Jan-1990 4,905 20.2 98,883 

11 Purofied Down Jan-1990 36,473 20.2 735,356 

12 Harvey Industries Juf-1990 64,909 19.7 1,276,493 

13 Kanowsky Mfg. Sep-1990 15,151 19.5 295,396 

14 Somers Corp.!Wafd(on Furn. Dec-1990 33,611 19.2 644,981 

15 Musldn Corp. Nov-1991 183,799 18.3 3,369,011 

16 Sunarhauserman Nov-1991 229,149 18.3 4,200,278 

17 Hale Company Mar-1992 22.462 18.0 404,290 

18 Mikel Co. Mar-1992 6,884 18.0 123,910 

19 Comfort Industries Dec-1992 569 17.2 9,811 

20 American Monarch Mar-1994 10,564 16.0 169,026 

21 Seaver Furniture Jun-1994 19,782 15.7 311,537 

22 Automatic Bedding Sep-1994 42,123 15.5 652,741 

23 Kittinger Co. Apr-1995 55,860 14.9 833,192 

24 Invincible Parlor Frame Jan-1996 14.100 14.2 199,702 

25 Designers Woodcraft, Inc. Nov-1996 7,214 13.3 96,148 

26 Duralab Equipment Corp. Mar-1997 104,443 13.0 1,357,691 

27 AnUque Furniture sep-1997 16,384 12.5 204,723 

28 Jencraft Corp. Apr-1999 6,226 10.9 67,959 

29 Room Plus, Inc. Mar-2000 15,412 10.0 154,Q98 

30 American Mattress Jul-2003 9,576 6.7 63,841 

31 American Modem Metals Apr-2004 10,303 5.9 60,931 

32 Tower Automotive Jun-2006 730,839 3.7 2,739,270 

33 Consolidated Bedding, Inc May-2009 62,391 0.8 51,928 

34 Dallek, Inc Sep-2009 3,674 0.5 1,821 

TOTAL s 22,637,045 
I ~ttacffirnent B 

~ecreating Mavket ~alue o~ ~ssets ~itneut Sains a rna ~!asses , 

Starting Market Value on 3/1/1980: $34.4 million 

Projection is based on the actual contributions, benefits, and expenses, and assumed earnings 

being achieved each year through 2128/2010 . 

.. Market Vafue ·- ............ ~~.~~C!i 

........., Market Value -- Without Gains and Losses Since 1980 

1983 1986 1989 1992 1995 2007 201 
f.Y!! 

2009 

211tfi 

lflH 

2012 

2013 

2014 

2015 

2Gt6 

2017 

21H8 

21H9 

21120 

21121 

2022 

2023 

2024 

1025 

2026 

2027 

2028 

Return 

30.38% 

7.50% 

7.50%· 

7.51)"/ .. 

7.50% 

7.50% 

7.50~'/.. 

7.50% 

7.50°/.1 

7;soo/m 

1~50% 

7.50% 

7.50% 

7..50% 

7.50% 

~7~50% 

7~51lo/o 

7.50% 

·7:50%. 

7.5o% 

. Cli!uigcs 

.Gmifrb. . Bellefits 

5.5% 11.0% 

5 ..<;% 0.11°/c 

5.5% lUI% 

5.:5"/., O.il"/" 

5.5"/., 0.0% 

5.5% o.o•.~a 

5.5% OJ)% 

55% 11.6% 

S_'i% o.o•.ro 

5.5% o.on;., 

5.5% O.ll"J., 

5.5% O.fl"/., 

5.5% 0.(1% 

5.5% 0.0°/a 

5.5% lUI% 

5.5% 0.0% 

5.5% 11.!1% 

5.5% o.n•tn 

5.5% {JJ}% 

Attachment C- Baseline Projection 

SS3.9 $95.2 $68.2 58.3'% $7.7 

S78.4 S84.3 S79.t 51.6"/., $2.7 $14.fl S8.3 

21ll2 $72.5 S73.11 S!63.6 S90.6 44.6% S2.5 $14.0 $9.() 

2013 S65.9 $62.7 SHi3.7 SH~UI 311.3% S2.4 S14.fl $9.4 

21114 S5R.6 S51l.6 Sl63Jl SHI5.2 35,8% S2.3 Sl4.1 $12.3 

21H5 $511.6 S50.6 $163.9 SH3.2 3!1.9% S2.2 S14.2 S17.4 

2016 $41.9 $-fl,, SHi3.9 S122.0 25.6"/ .. 52.1 SI4.2 S1G.Il 

21117 532.3 S32.3 5163.8 $131.5 19.7% S2.0 S14A $14.4 

2018 S21.7 $21.7 $163.5 SH!.8 13,3°/o• S14.5 

2019 SJO.I SUI. I 

(S32.6) {532.6)'' 

(8163.5) (SI63,5,) '~ j " " ~~~jp; ; i!i¥! 

{jiCIRON 
fY!! 

lOll? 

20UI 

2011 

2012 

211:13 

2!114 

21ll5 

2!1S6 

21117 

2018 

liH9 

2020 

24121 

2022 

2023 

2024 

2025 

2026 

21127 

20211 

Return 

30.38% 

?.So% 

7.5fl% 

7.5(1% 

7.5(1<1/o 

7.50% 

7.50% 

1.Sil"'!.i 

7:50% 

7.51.'1% 

7.50% 

7.50% 

7.50% 

7.:50"/ .. 

7.511% 

7.50% 

1.5(1% 

7.soo;,. 

7.50% 

7.50% 

Attachment D- Contributions needed to avoid insolvency begjnning 31112011 

-MVA 

Glit~ngel!l 

Gmlfrb •. Bem!i(if.!l 

s.s•;. 0.11% 

23.1)"/ .. 11.0"/a 

23.1}"/ .. 11.0% 

23.41"/o o.o'Yt. 

23.0°/ .. 11.0% 

23.0% ll.O% 

23.0% 0.0% 

23.0% 0.0% 

23.(1''1.. 0.0"/a 

23Jl% 0.1}%, 

23JJ% O.ll'!t.. 

23.0% 0.11% 

23.11% o.wx. 20111 595.2 SHi3A $68.2 58.3% $2.!1 $14.11 $7.7 

23.11% 0.11% lOll $711.7 $84.6 Slfl3.4 $78.!1 5U~'% $3.1 S14.11 $8.3 

23.1l% 0.0'% 2012 $7.3.4 S74.0 5163.6 Sl!9.6 45.2%. S3.4 $14.0 $9.0 

23.0% 1'1.0% 2(U3 S6S.I 565.0 St63.7 SIJ8.7 39.7"/., $3.8 $14.0 $9.4 

23.11% fi.O% 2014 $62.8 S62.8 lHG3.8 SlOU 38.3"/.. $4.2 51<1.1 $12.3 

23.0% 11.0"/o 2015 $57,4 S57A Stco3.!J SI06A 35.1% $4.7 S!4.2 $17.4 

23.0% 11.0•/., 2016 $52.1 S52.i SI63.'J SitU! 31.11;% $5.2 S14.2 Sl6.0 

21117 $46.8 S46.8 $163.!1 Slli.n 28.6'% 55.7 Sl4A Sl4A 

20!8 S4Ui S~L6 SHi3.5 S121.9 25.4% $6.3 Sl4.5 Sll.6 

IDRON 
IT!! 

2009 

2010 

1011 

21112 

1013 

2014 

2015 

2016 

21U7 

10IIl 

21119 

2020 

2021 

2022 

14123 

2024 

2025 

2026 

2027 

2028 

Attachment E- Projection with June 1, 2010 Partition Date 

Rctnrn .Ghnng&·, 

30.38% Crintrh. · 'Wn~fiili· 

7.50% 5.5% 11.0% 

7.50% 5.5"1<> i !I.O•.fu 

7.51W .. 5.5% 0.0"1., 

7.50"/o 5..5% l).O% 

7.50% 5.5% 11.0"/., 

7~50% 5.5% O.ll% 

7.5{)% 5.5% 0.11"/.o 

7.50% 5.5% OJ)% 

7.5f"/o 5.5o/o OJ!% 

7.50% 5.5% 0.1)% 

7.50% 5.5% 0.0% 

7.50% 5.5% 1).0% 

7.50% S_'i% 11.0% llllO S68.2 58.3%, S2.8 

7.50% 5.5% iiJt"/ .. 20H $81.1.1 SR7.1'1 Sl26A S39A 68.8% $2.7 

7.50% 5.5% 0.0 .. /o 2012 $78.7 S79.2 $127.1 $411.(1 62.3u/,, S2.5 

7.50% 5.5% o.a=; .. 2{}!3 S75.8 S72.7 Sl27.9 S55.2 56.R'Y~ $2.4 

7.50% 5.5% O.ll% 2014 S72.6 S/2.6 St21L5 S55.9 5(,,5"/., S2.3 

7.50% 5.5% 0.{1% 2015 S68.8 Sfi8.8 S12?.1 S61L3 .53.3'V.. S2.2 

7.541"/u. 5.5% O.ll% 20Hi S64 • .5 $6<!.5 $129.5 Sli5.0 49.8'Y., S2.1 

2017 S59.6 S51).6 Sl21J.'' S7ll.J 45.9%. S2.0 

Industry Assumptions 2018 S54.0 s:w.o $1311.0 S7fi.ll 41.6%, 

growtl: ~ 2019 $47.7 S47.7 

!;i]i~ [ ij'~.7o . S23.7 $23.7 

..CHL!flON 

.,.,.,.AVA -MVA 

SU.5 $7.7 

Sl£1.7 S.J..l 

strul $4.8 

SHI.IJ $5.2 

SILl S8.1 

SILl Sl3.2 

SlLl Sli.S 

Sli.5 S10.3 

S7A 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 6 

• Board Resolution dated September 12, 2013 from the 

Trustees of the UFW Pension Fund Authorizing Plan 

Counsel to Explore a Negotiated Mass Withdrawal. 

1934740.1 
UNITED FURNITURE WORKERS 

PENSION FUND~ 

September 12, 2013 

WHEREAS, the Board of Trustees has determined that a negotiated mass withdrawal 

may, depending upon its tenns, be in the best interests of the Pension Fund's participant~ and 

heneticiaries, and 

WHEREAS, the Board of Trustees has determined to authorize Pension Fund counsel to 

explore with the Pension Fund's two largest contributing employers and the affected local 

unions, their interest in a negotiated a mass withdrawal from the Pension fund; 

NOW, TI-JEREFORE, IT IS RESOLVED that Bryan Cave LLP, serving as counsel to 

the Pension Fund, is hereby authori:r..ed to explore ~A-ith representatives of the ScaJy Con!Iolled 

Group ("Sealy") nnd Steinway, Inc. ("Steinway"), and each of the affected local unions 

(collectively, the "Bargaining Parties"), thcit· interest in a negotiated a moss withdrawn! from tl1c 

Pension Fund; and 

IT IS RESOLVED that Bryan Cave LLP, serving as counsel to the Pension Fund, rnny 

negotiate terms and conditions with t11c Bargaining Parties that, if accepted hy tl~e Board of 

Trustees, and if accepted by other contributing employers and affected local unions, would likely 

fore$tall the Pension Ftmd's projected insolvency by at least 6ve (5) years, based upon t1JC 

Pension Fund's current actuarial nsswnptions; and 

IT fS FURTJIER RESOLVED that Bry:tn Cave LLP, serving as counsel to the Pension 

Fund, may take all actions and execute all documents that counsel reasonably detemlincs arc 

necessary or appropriate in exploring a negoti<tted mass withdrawal, nrovidcd !hat, in no event 

shall Bryan Cave LLP, nor any of its members, he authori2ed to bind the Pension Fund to any 

agreement or anangement wilh any of the Bargaining Parties or to exercise any discretionary 

authority with respect to the Pension Fund's assets. 

Dutezl: September I 2, 2013 

Redacted by the U.S. 

Department of the Treasury 

Harry Boot, Chaim1an 

Ulises Verg8ra, Trustee --- - -- --

C06llcBiill67f.1UI74646S I J 

-··. ··------ - - - .Anthony Sestito, Trustee 
UNITED FURNITURE WORKERS 

PENS ION fUND A 

September 12, 20 13 

WHEREAS, the Uoard ofTmstces has determined that a negotiatl!d mass withdrawal 

may, depending upon its terms, be in the best interests of the Pension Fund's participants end 

lx:neficiarics, and 

WHJi:REAS, the Hoard ofTru~tees has determined to nuthorize Pension Fund counsel to 

explore with the Yension Fund's two largest contributing employers and the affected local 

unions, their interest in n negotiated a mn.ss withdrnwnl from the Pension Fund, 

NOW, TUEREFORE, lT IS RESOLVED that Bryan Cave LLP, serving us t:ounscl to 

the Pension Fund, is hereby authorized to explore with repre.<;entatives oft.he Scaly Controlled 

Group ("Sealy'') and Steinway, Inc. ("Steinway"), and each of the affected local unions 

(collectively, the "Bargaining Parties"), their interest in n negotiated n muss withdrawn! fi·om the 

Penllion found; und 

IT IS RESOLVED that Bryan Cave LLP, serving ao; counsel to the Pension Fund, may 

negotiate terms and conditions with the Bargaining Parties thnt, if accepted by the Board of 

Tl'ustccs, and if accepted by other contributing employers and affected local unions, would likely 

forestull the Pc:nsion Fund's projcded insolvency by at least five (5) years, based upon the 

Pension found's current actuarial assumptions; and 

IT IS FURTHER RESOLVED that Bryan Cave LLJ>, serving as counsel to the Pension 

Fond, muy take nil actions and execute nll documents tho! counsel rcosonnuly dctcr in~ ore 

necessary or appropriate ir1 exploring u negotiated mll.'ls withdrawal, proyjdcd i!t.m, in no event 

shall Brylill Cave LLP, nor any of its members, be AUthorized to bind the Pension Fund to any 

agreement or 1\l"rangcment with any of lhe Dargaining Parties or to exercise any discretionary 

authority with respect to the Pension Fund's assets. 

Dntcd: September 12, 20 13 

Harry Buot, Chuirman 

Uliscs Vergnm, Trustee 

C0611681a1676ll/174646$.1 J 

Redacted by the U.S. Department of the 

Treasury 

Anthony Ses!Jto, f stec 

Edmond Dugos, Trustee 
Nov OS 13 Ol;52p Ed Stohr 510 3Sc - S5,.6 

UNITED FURN!WRE WOBJ<ERS 

PENSION FUND~ 

September 12,2013 

WHERF.AS, tb&Boatd ofTnJStw has determined that o. negotiated mass withdrawal 

may, depll!lding upon its teons. be in the bert interest\! of the Penslon Fund's participants and 

beneficiaries, Wld 

WHEI(£AS, the Board ofTrustees has dclennincd to authorize e~Ulon Fund counsel to 

ex-plore with the Pc:nsion F~md's two largest r..ontribucing employe1:1 d the dfoetcd Jooal. 

unions, their lnterest ln a negotiated a mass widtdrawal from the Pension FW\d, 

NOW, TIIE'llEFORE, IT IS RtSOL VEO Uuu Rrysn Cave LLP, ~erving as col111Sel to 

the Pension Fund, is hereby authorized to explore with represcntati\'es of tOO Sellly CootroUee 

Gtoup ("Sealy") and Stcinway, lnc. ("SteinW6yj, and each of the IUfected local uniorts 

(collectiwly, the "Bargaining Parties"), their interest in a negoliatod 11 mus withdnwal from the 

PWlion Fund; and 

IT IS RESOLVED that Bryan Cave I.J.P, ~ng RStounse.llo the Pen9ion Fund, may 

negotiate toons and conditions witb the Blit-gaio.ing Parties that, if a~pted by the Board of 

rust~. and if acteptr..d by otbec wntn'buting employenr and affected local UllioM, would Ukcly 

forestall the Pei1Sion Fund's prqjcctOO nsolv~cy by .2t J~an five (S) years, bast!d upon tho 

lon Fund's current aclllati.al assumptions; e..nd 

IT IS Ft.r.n.THER RESOL VEl> that Bryan Cave U .P, &erVi.tlg RJ eouonl to the Pc:ntioo 

Fund. m.e.y t.alce all actions and ~ all documtn!S that coUMel reasonably detcmnines are 

necessary or appropriate in ~loring a negotiated mass wfthdmwal, mvidcg tllm. in no event 

shall Brynn Cave IJ..l>. oor any of i~ mem~s. be authoriad to blrld the P~cl.on Fuud to ony 

agreement or AmUtgement with any of the Bargaining Psrlies or to exezeise any discretiotl!ll'y 

authodty with respP.d to the Pet1$ionFund's assets. 

Dated: September.l2, 2013 

H.any Boot, Chairman AntbonySestlto, Trustee 

Edmond Dugas. Trus~ 

p. 1 
Sep 12 13 11.17a ad min 562-860-5380 

JJNITED FURNITURE WORKERS 

PENSION FUND A 

September 12, 2013 

p2 

WHERF...<\8, the Board of Trustees has detennined that a negotiated mass withdrawal 

may, depending up<m its terms, be in the best interests of the Pension Fund's participants and 

beneficiaries, and 

WHEREAS, the Board of Trustees has determined to authorize Pension Fund counsel to 

explore with the Pension Fund's two largest contributing employers and the affected local 

unions, their interest in a negotiated a mass withdrawal from the Pension Fund, 

NOW, THEREFORE, IT IS RESOLVED that Bryan Cave LLP, serving as counsel to 

the Pension Fund, is hereby authol'ized to explore with representatives of the Sealy Controlled 

Group C'Sealy>~ and Stein way, lno. (''Stcinway~), and each of the affected local unions 

(colleclively, the "Bargaining Parties"), their interest in a negotiated a trlliss withdmwnl from the 

Pension Fund; and 

IT IS RESOLVED tha:t Bryan Cave LLP, st:rving as counsel to the Pension Fund, may 

negotiate tenns and conditions with the Bargaining Parties thai, if ac.ceptcd by the Board of 

nL~tces, and if accepted by other contributing eroployeys and affected local unions, would likely 

fores1all the Pension Fund's projected insolvency by at least five (5) years, based upon tltc 

Pension FWld's current actuarial assumptions; and 

IT IS FURTHER RESOLVEO that Bryan Cave LLP, setving as counsel to the Pension 

Fund, mny take all actions and execute all documents thot counsel reasonably determines are 

tlecessary or appropriate in exploring a negotiated mass withdrawal, Ptovided !birt. in no event 

shall Bryan Cave LLP, nor any of its members, be authorized to bind the Pension Fund to aoy 

agreement or arrangement with nny of the Bargaining Parties or to exercise any discretionary 

authority with respect to tbe Pension Fund's assets. 

Dated: September 12, 2013 

Harry Boot, Chairman Anthony Sestito, ru~tce 

Ulises Vergara, Tru~tec 
Redacted by the U.S. Department of 

he Treasury 

II o ' 

Jose Villareal, Trusree 

Dan.o. Carstensen, Trustee 

2 
---- ------ Jose Villareal, Trustee 

2 

C062161!l0167622/1?4fA65 I } 
10/30/20 13 22 37 FAX 562 633 9527 CWA lOCAL 9400 Ill 003/003 

Elmo DeSilva, Trustee 

2 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 7 

• UFW Pension Fund's Alternative Withdrawal Liability 

Rules. 

1934740.1 
UNITED FURNITURE WORKERS PENSION 

FUND A ("PENSION FUND") 

ALTERNATIVE WITHDRAWAL LIABILITY RULES 

In accordance with 29 U.S.C. Section 1399(c}(7) and 29 U.S.C. Section 

1404, the Board of Trustees (the "Board") of the Pension Fund hereby adopts the 

following rules concerning alternative withdrawal liability arrangements ("Alternative 

Withdrawal Liability Rules"). 

1. The Pension Fund may, with Board approval, enter into agreements with 

contributing employers to the Pension Fund (each a "Contributing Employer'1 pursuant 

to whtch the Contributing Employer (i) agrees to effect a complete withdrawal from the 

Pension Fund (as defined in 29 U.S.C. Section 1383(a)) and (ii) seeks to obtain a full and 

flnal release from the Pension Fund on any and all liabilities under Title IV ofthe 

Employee Retirement Income Security Act of 1974, as amended (''ERISA"), including 

liabilities arising from a mass withdrawal contemplated by 29 U.S.C. Section 

1399{c)(l)(D), provided that each ofthe requirements of Sections 2(a) through (d) are 

either satisfied or waived by the Board1 and~ provided that these Alternative 

Withdrawal Liability Rules are not determined by the Pension Benefit Guaranty 

Corporation ("PBGC") to be inconsistent with the requirements of ERISA or PBGC 

regulations promulgated thereunder. 

2. Each Contributing Employer's total withdrawal liability obligations to the 

Pension Fund shall be resolved as follows: 

1759513.2\014291!0 
a. An allocable share of the Pension Fund's unfunded vested benefits 

("UVBs") as of the last day of the immediately preceding plan year shall be allocated to 

the Contributing Employer. 

b. The Pension Fund shall calculate the Contributing Employer's 

complete withdrawal liability to the Pension Fund as if the Fund had experienced a mass 

withdrawal within the meaning of29 U.S.C. Section l399(c)(l)(D)(i) and (il) as ofthe 

last day ofthe immediately preceding plan year (a '~ass Withdrawal"), and shall assess 

the Contributing Employer's complete withdrawal liability in annual withdrawal liability 

payments that would be owed to the Pension Fund as if the Fund had experienced a Mass 

Withdrawal (the "Mass Withdrawal Liability''). 

c. The Penslon Fund shall require the Contributing Employer to pay, 

on an upfront or lump sum basis, the present value of its Mass Withdrawal Liability, 

discounted in an amount that the Board, in Its discretion, determines to be appropriate and 

in the best interests of the Pension Fund. 

d. The Board shall have complete discretion to establish the tenns 

and conditions under which the Pension Fund shall accept a Contributing Employer's 

Mass Withdrawal Liability payments. 

3. It shall be the intention ofthe Pension Fund and the Board to apply these 

Alternative Withdrawal Liability Rules In a unifonn, non-discriminatory manner; 

provided, however, that the Board may approve discounts or other tem1s and conditions 

for employers based upon relevant considerations, including the creditworthiness of an 

employer, the likelihood that an employer may avail itself of bankruptcy or analogous 

2 

1759SIJ.2il.)l42980 
state law insolvency laws, the risk and cost of litigation or any other consideration that 

the Board determines appropriate for individualized or specialized relief. 

4. The Board reserves the right to add, delete or amend the Alternative 

Withdrawal Liability rules, in its discretion, in a manner that best serves the interests of 

the Pension Fund's participants and beneficiaries. The Board further reserves the right to 

construe, interpret and/or apply the terms and provisions of the Alternative Withdrawal 

Liability Rules in a manner that is consistent with its interest and design of forestalling 

the Pension Fund's insolvency to the greatest extent possible under he circumstances. 

3 
UNITED FURNITURE WORKERS PENSION FUND A 

WHEREAS, the United Furniture Workers Pension Fund A (the "Pension 

Fund") has experienced a severe funding deficiency, has been contracting for years and is 

projected to be insolvent by April 2021; and 

WHEREAS, the Board ofTrustees (the ''Board") of the Pension Fund has 

consulted with the Fund's counsel, actuaries and other professionals to review the 

Board's options for forestalling insolvency; and 

\VHEREAS, the Board has considered various options proposed by 

Pension Fund's counsel and actuaries that are designed to forestal! insolvency of the 

Fund; and 

WHEREAS, the Board has determined that a negotiated mass withdrawal 

may, depending upon its tenns, be in the best interests of the Pension Fund's participants 

and beneficiaries; and 

WHEREAS, under 29 U.S.C. Section 1399(c)(7) and 29 U.S.C. Section 

1404, the Board is authorized to adopt for the Pension Fund rules providing for 

alternative terms and conditions for the satisfaction of an employer's withdrawal I iabiliry 

(the "Alternative Withdrawal Liability Rules") provided that such rules are consistent 

with Title IV of the Employee Retirement Income Security Act of 1974, as amended 

(''ERISA") and regulations prescribed by the Pension Benefit Guaranty Corporation 

("PBGC"); and 

WHEREAS, the Board has determined that the Alternative Withdrawal 

Liability Rules as set forth on the attachment hereto are in the overall best interests of the 

Pension Fund's participants nnd beneficiaries, and provide the Pension Fund with the best 

opportunity to forestall insolvency for a significant period of time; and 

WHEREAS, it is the intent of the Board that the Alternative Withdrawal 

Liability Rules shall be deemed to be null and void if said rules are determined by the 

PBGC to be inconsistent witl1 Title JV of ERISA or regulations promulgated by the 

PBGC; 

NOW THEREFORE, IT IS RESOLVED that the Alternative 

Withdrawal Liability Rules, a copy of which is attached hereto, are hereby adopted by the 

Board, 

• !a I 

Redacted by the U.S. Department of the 

Treasury 

--------- : .. Redacted by the U.S. Department 

of the Treasury 

••• 

Ulises Vergara 

1759499 l\CO)S.j.jS\01~~980 

Edmond Dugas 

Dann Carstensen 
Nov 16 13 10:44a ad min 562-860-5380 

WHEREAS, the United Furniture Workers Pension Fund A (the "Pension 

Fund1 has experienced a severe funding deficiency, has been conttacting for years and is 

projcct..--d to be insolvent by April 2021; and 

WHEREAS, the Board of'I'rustees (I he "Board") of the Pension Fund has 

consulted with the Fund's CCJunse!, actuaries and other professionals to review t.~e 

Board's options for forestal lint; insolvency; nnd 

WHEREAS, the Board has considered vario~ options proposed by 

Pension Fund's counsel a:nd actuaries that aye designed to forestall insolvency of the 

Fund;nnd 

WR!r.'REAS, the Board has determined that a negotiated mass withdrawal 

may, depwding upon its tenns, be in the best interests ofthe Pension Fund's participants 

Md beneficiaries; and 

WHEREAS. under 29 U.S.C. Section 1399(c)(7) and 29 U.S.C. Section 

1404, the Board Is authori2ed to adopt for the Pension Fund rules providing for 

alternative terms aod conditions for the satisfaction of an employer's withdrawal liability 

(the "Alternative Vlitbdrawnl Liability Rules") provided that such rules are consistent 

with Title IV of the Emp o~ Retirement Income Security Act of 1974, as amended 

(''ERISA j and regulations pr~ ibed by the Pension Benefit Guaranty Corpora! ion 

("PBOC"); and 

WHEREAS, the Board has determined that the Alternative Withdrawal 

Liability R.ules as s~ forth on lhc attachment hereto are In the overall best Interests of the 

Pension Fund's participants and beneficiaries, and provide the Pensioo Fund with the best 

opportunity to forestall insolvency for a significant pedod of time; llitd 

WBERE....o\S, it is the intent of the Board that tlte Alternative Wilhdrawal 

Liability Rules shall be deemed to be nuU and void lf said rules are determined by the 

PBGC to lle loconsistent with Title IV of ERISA or regulations promulgntM by the 

PBGC; 

NOW THEREFORE, IT IS Rl'..SOLVED that the Alternative 

Withdrawal Liability Rules, a copy of which is attached hereto. are hereby adoptl!d by the 

Bourd. 

Dated: November ~2013 

Harry Boot, Chainnan 

ElmoDeSUva 

Uli5es Vergara Oarul Carstensen 

p2 
Nov 22 13 Ol:48p Ed Stoh,. 510 352 - BS-46 

ONITED FQRNlltJRB WORKl:RS PEN~ON fUND A 

WHEREAS, the Uni1ed Furniture Workers Pen$ion Fund A(~ "?enslon 

Fund") has experietJced a severe fundi11g deficiency, has been contracting for years rutd is 

projected to be Insolvent by April2021: eud 

WHEREAS, the Board ofTrostees (the ''Boud'1 of the Pension Fund bas 

consulted with the Fund's counseL 8Ctllaries and l)ther professionals to review 1M 

Board's options fur forestalling insolvency; and 

WHEREAS. the Board has considered various options proposed by 

Pension Fund's counsel and actuaries that are designed to forts1all lnsolvenoy of tht: 

Fund; and 

WHltREAS, the Board has detormined that a negotiated mess withdrawal 

may, d~Ddtng upon its tenns, be in the best intertSts of the .Pension Fund's participants 

and beneficiaries; and 

WHEREAS, under 29 U.S.C. Settloo 1399(o){7) and 29 U.S.C. Section 

1404, the Board is authorized to adopt for !he Pension Fund roles providine for al~vc tullllS u.nd coiu1Jtfoo.s ror the Mti:sraction o£ an employer's wiilidrawalliabitity 

(the "Alternative Withdrawal Liability Rules") provided that sueh rules are consistent 

with Title TV of the Employee Retiremem Income Sectnity Act of 1974. as amended 

{"ERISA') and regulallons prescribed by tho Pco.sioo Benefit GIWanty Corporation 

("PBGCj;aod 

WHEREAS. !he B~ has determined that the Altemative Withdrawa.l 

Liability R.ules as set forth on 1M attachnumt hereto ate ln the o~!all best interests of the 

Pension Fund's particlpsnts and benefteiaries, and provide the Pcn.si<>n Fund with the best 

opportunity !Q forestall insolvency for a significant period of time; and 

WHEREAS, It is the intent or the Board 1t1at the Alternative Withdrawal 

Liability Ru.l~ ~4!1 be dc:e~nt::d to be null and void if said rul~ ate determined by the 

PBGC to be inC®Sistent wilh Title IV of ERISA or regulations promulgated by the 

PBGC: 

NOW TREREPORE, ll' IS RESOLVED that the Alteraative 

Withdrawal Liability Rules, a copy of which is altaebed hereto, arc hereby adop1t'.d by the 

Board. 

l>at~: November~ 2013 

Harry Boot, Chalnnan AnlhOTIY Stnito 

Elmo DeSilva Edmond Dugas 

p. I 
.. .... 

BILL CARSTENSEN 510 5'21-5885 

UNITED FURi'ID1JR-e WORJ(ERS PENSION FUND A 

WHEREAS, th~ United Furniture Wor1cers Pension Fund A (lhc "Peuslo.1 

Fu11d") has experienc.ed a seyere funding deficic:ocy, has bl:en CQntracting for yevs an<! is 

projeo::ted to be insolvent by April 2021; and 

WHEREAS, the Board ofTrustees (the "Board") of the Pension Fund has 

consnlt~d with the Fund's counsel, actuaries and other professionals to review the 

Board's options for forest<~lling insolvency; and 

w:a:EREAS, the '(X)ard has CQD.sidered various options proposed by 

Pens:on Fund's counsel and achlarie.s 1hat are designed to foresiall insolvency of the 

Fund; and 

'WHEREAS, the Board ltas determined that 2. negotiated mass wlt:1drawal 

mey, c!ep~ding upon its terms, be in the best interests oflhe Pension fund's pa.rt.icipe.nts 

and bendle'iuies; and 

WHEREAS, under 29 U.S.C. Section 1399{c)(7) and 29 U.S.C. Section 

1404, the Board is authorized to adopt for the Pension Fund rules pro.,iding for 

alternative terms and conditions for the satisfaction of an emplo}oer'S witJ-.Orewel liability 

(the "'Alternative Wlthdrawnl Linbility Rules'~ provided that such rules are consistent 

with Title IV of the Employee Retirement Income Security Act of 1974, as amended 

("ERJSA") and regulatio!l.S prescribed by the Pension Benefit Cuaranty Corporation 

(''PBGC"); end 

WHEREAS, the Board has d~ined Uult the A.hemative Withdrawal 

Liability Rules as set forth on the attncltment heretD a.re in the overall best interests of the 

Pension Fund's parlleip.ants and beoefic:aries, and provide the Pension Fund with the best 

opportunity to forestall insolvency for a significant period of time; and 

WHEREAS, it is lhe intent oftm: Board !hac the Attemative Withdrawal 

Lk~bi!lty .Rules sbaU be deemed to be null and void if said rules are determined by the 

PBGC to be Inconsistent with Till-e lV of ERJSA or regulations promulgated by the 

PBGC; 

NOW 111.£REFORE, IT IS RESOLVED that the Alternative 

Wilhdrawal Liability Rules, a CQpy of whlch I$ a.tbc:hed hereto, lire hereby adopted by the 

BoardDated: November / '/2013 

Harry Boot, Ch.ainnan Anthony Sestito 

Elmo DeSilva Ed . . . Redacted by the U.S. Department of the Treasury 

U1ises Vergara • 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 8 

• UFW Pension Fund counsel's November 20, 2013 

letter to PBGC Manager Bruce Perlin regarding the 

Pension Fund's Alternative Withdrawal Liability Rules. 

!934740.! 
November 20, 2013 

Via U.S. Mail 

JY.G:. Bruce Perlin 

Manager, Multi Employer Division: 

Pension Benefit Guaranty Corporation 

1200 K Street, N.W. 

Washington, DC 20005 

Re: United Furniture Workers Pension Fund Ns 

Alternative Withdrawal Liability Rules 

Adopted Pursuant to ERlSA §4224 

Dear lvir. Perlin: 

Kyle Flaherty 

Direct 212-541-2134 

fa_y 212-541-1358 

kpfla_herty@bryancave.com 

·- ~ 

We are general counsel to the United Furniture Wo:rkers Pension Fund A (the 

"Pension Fund"). We are writing to req"CLest an opinion from the Corporation with 

respect to whether the Pension Fund's Alternative Withdrawal Liability Rules, 

adopted in accordance with ~4224 of ERISA, are inconsistent with Title N of ERISA 

or the C01poration's regulations promulgated thereunder. 

The Pension Fund is a "critical" status multiemployer pension plan which has 

experienced severe funding deficiencies within the last several xears. The Pension 

Fund;s funded status for the plan year beginning March 1, 2013 has declined to 41%, 

and the Pension Fund is now projected to be insolvent by April2021. In an attempt 

to respond to this projected insolvency, the Board of Trustees (the ''Board") of the 

Pension Flind is in the process of exploring whether the Fund's contributing 

employers may be interested in negotiating a mass ·withdrawal from the Pension 

Fund. Based upon an aruilysis performed by the Pension Fund's professionals, the 

Board_has determined that negotiating a mass withdrawal that provides for up front, 

·lump sum payments of withdrawal liability to the Pension Fund provides the greatest 

opportunity for the Pension Ftmd to forestall insolvency for a meaningful period of 

time. In connection with that effort, the Board recently adopted, pursuant to ERISA 

§4224, :rules concerning alternative withdrawal liability arrangements ("Alternative 

Withdrawal Liability Rules"). A copy of the Pension Fund's Alternative Withdrawal 

Liability Rules is attached. 

The Alternative Withdrawal Liability Rules are designed to permit the .Pension Fund, 

subject to Board approval, to ente:t into agreements with contributing employers who 

NY02DOCS\1763394.1 \C055448\0 142980 

Bryan Cave LLP 

1290 Avenue of the Americ·as 

New York, NY 10104-3300 

Tel (212) 541-2000 

Fax (212) 541-4630 

WV1lVJ. brya nc ave.com 

Bryan Cave Offices· 

Atlanta 

Boulder 

Cha rlotre 

Chicago 

Colorado Springs 

Dallas 

Denver 

Frankfurt 

Hamburg 

Hong Kong 

Irvine 

Jefferson City 

Kansas City 

Lon don 

Los Angeles 

New York 

Paris 

Phoenix 

San Francisco 

Shanghai 

Singapore 

St. Louis 

Washington, DC 

Bryan Cave 

lnteinational Consulting 

A TRADE AND CUSTOMS CONSULTANCY. 

www. brya nc aveconsulting .com 

Bangkok 

Jakarta 

Kuala Lumpur 

Manila 

· Shanghai 

Singapore 

Tokyo 
Mt. Bmce Pe:tlin 

No"Vember 20, 2013 

Page 2 

( 

Bryan Cave lLP 

may be interested in wii:hdtawing from the Pension Fund and satisfying all of their cuttent and future 

withch:a~alliabilities to the Pension Fund in one or more lump sum payments. To that end, the 

Altemative Witbd!awal Liability Rules would permit each contributing employe.t to satisfy, through 

negotiated, discounted-lump sum payments to the Pension Fund, its witbdtawalliability obligations to 

the Pension Fund af if the Pension Fund had experienced a mass withd!awal under -r:ide IV of ERISA 

·in the· year of that contributing employer's withdtawal. 

The Pension Fund's Altemative Witb.d!awal Liability Rules a1:e intended to be consistent with Title IV 

ofERlSA and the regulations promulgated by the Corporation thereunder.· By. tbis letter, the Pension 

Fund's Boa.td .is requesting an opinion. from the Corporation with respect to whe ther the Alternative 

Withd.tawal Liability Rules would be inconsistent with. ERISA Title IV ot with the Cot-potation's 

xegulations. 

I would w elcome an opportunity to meet with. you or your staff in ·person, or to speak with you or 

you.t staff by teleconference, .if additional information is required to respond to tb.is tequest. 

Thank you for·youx cooperation. 

- - •• . _ ........... i 

Redacted by the U.S. 

Department of the Treasury 

/ I<PF:aa 

Attach . 

cc: Board ofTrustees 

Dee Anne Walker, Director · 

Gene Kalwa:rski, Cheiron 

Christian Benjaminson, Ch iro~ 

NY02DOCS\1763394-.l \C055448\0 1429802 

2 

. l 
( 

UNITED FURNITURE WORKERS PENSION 

FUND A ("PENSION FUND") 

ALTERNATIVE VVITHDRA W AL LIABILITY RULES 

In accordance with 29 U.S.C. Section 1399(c)(7) and 29 U.S.C. Section 

1404, the Board of Trustees (the "Board") of the Pension Fund hereby adopts the 

· following rules concerning alternative withdrawal liability arrangements ("Alternative 

Withdrawal Liability Rules"). 

1. The Pension Fund may, with Board approval, enter into agreements with 

contributing employers to the Pension Fund (each a "ContributingEmployer") pursuant 

to which the Contributing Employer (i) agrees to effect a complete withdrawal from the 

Pension Fund (as defined in 29 U.S.C. Section 1383(a)) and (ii) seeks to obtain a full and 

final release from the Pension Fund on any and all liabilities under Title IV of the 

Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including 

liabilities arising from a mass withdrawal contemplated by 29 U.S.C. Section 

1399(c)(l)(D), provided that each of the requirements of Sections 2(a) through (d) are 

either satisfied or waived by the Board, and further provided that these Alternative 

Withdrawal Liability Rules are not determined by the Pension Benefit Guaranty 

Corporation ("PBGC") to be inconsistent with the requirements of ERISA or PBGC 

regulations promulgated thereunder. 

2. Each Contributing Employer's total withdrawal liability obligations to the 

Pension Fund shall be resolved as follows: 

1 

1759513.2\0142980 
( 

a. An allocable share of the Pension Fnnd's unfunded Vested benefits 

("UVBs") as of the last day of the immediately preceding plan year shall be allocated to 

the Contributing Employer. 

b. The Pension Fund shall calculate the Contributing Employer's 

complete withdrawal liability to the Pension Fund as if the Fund had experienced a mass 

withdrawal within the meaning of29 U.S.C. Section 1399(c)(l)(D)(i) and (ii) as of the 

last day of the immediately preceding plan year (a "Mass Withdrawal"), and shall assess 

the Contributing Employer's complete withdrawal liability j_n annual withdrawal liability 

payments that would be owed to the Pension Fund as if the Fund had experienced a Mass 

Withdrawal (the "Mass Withdrawal Liability"). 

c. The Pension Fund shall require the Contributing Employer to pay, 

on an up front or lump sum basis, the present value of its Mass Withdrawal Liability? 

discounted in an amount that the Board, in its discretion, determines to be appropriate and 

in the best interests of the Pension Fund. 

d. · The Board shall have complete discretion to establish the terms 

and conditions nnder which the Pension Fund shall accept a Contributing Employer's 

Mass Withdrawal Liability payments. 

3. It shall be the intention cif the Pension Fund and the Board to apply these 

Alternative Withdrawal Liability Rules in a uniform, non-discriminatory manner; 

provided, however, that the Board may approve discounts or other terms and conditions 

for employers based upon relevant considerations, including the creditworthiness of an 

employer, the likelihood that an employer may avail itself of bankruptcy or analogous 

2 

1759513.2\0142980 
state law insolvency laws, the risk and cost of litigation or any other consideration that 

the Board determines appropriate for individualized or specialized relief 

4. The Board reserves the right to add, delete or amend the Alternative 

Withdrawal Liability rules, in its discretion, in a manner that best serves the interests of 

the Pension Fund's participants and beneficiaries. The Board further reserves the right to 

construe, interpret and/or apply the terms and provisions of the Alternative \Vithdrawal 

Liability Rules in a manner that is consistent with its interest and design of forestalling 

the PensionFund's.insolvency to the greatest extent possible under he circumstances. 

UNITED FURNITURE WORKERS 

PENSION FUND A 

By: Harry Boot, Chairman 

Date: 

1759513.2\0142980 

3 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 9 

• Actuarial Demonstration that Limitations on Individual 

Suspensions are Satisfied. 

1934740.1 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

United Furniture Workers Pension Fund A 

EIN: 13-5511877 /PN: 001 

Revenue Procedure 2016-27, Section 4.01 

Demonstration that Limitations on Individual Suspensions are Satisfied 

Effective Date of Suspension 511/2017 5/112017 5/1/2017 

Birth Date 3/3111949 4/2011939 2/16/1950 

Months Until Age 80 1 142 23 153 

Applicable Percentage 

([3] + 60, not greater than 1 00%) 100.00% 38.33% 100.00% 

Accrued Monthly Benefit $1,259.36 $1,292.76 $228.34 

Credited Service 40.250 35.667 

Accrual Rate ([5] + [6]) $31 .2884 $36.2453 

PBGC Guaranteed Accrual Rate 2 $26.2163 $29.9340 

PBGC Guaranteed Benefit [(6) x (8)] $1 ,055.21 $ 1,067.66 NOT 

11 0% PBGC Guaranteed Benefit APPLICABLE 

(110% x [9], but not more than [5]) $1,160.73 $1,174.43 FOR DISABLED 

Monthly Benefit Reduction PARTICIPANTS 

([5]- [1 0]) $98.63 $1 18.33 

Age-based Limitation ([4] x [11]) $98.63 $45.36 

Benefit After Suspension ([5] - [12]) $1,160.73 $1,247.40 $228.34 

Number of months during the period beginning with the month after the month in which the suspension of benefits is 

effective and ending with the month during which the participant attains age 80, per Regulation § 1.432(e)(9)-1 ( d)(3). 

2 100% of first $11 plus 75% of the next $33 

These examples were prepared solely for the United Furniture Workers Pension Fund A for the 

purpose described. Other users of this information are not intended users as defined in the 

Actuarial Standards of Practice, and Cheiron assumes no duty or liability to such other users. 

wwwcheiron.us 1.877 CHEIAON (243.4766) 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

Application of the United Furniture 

Workers Pension Fund A for Approval 

Of Suspension of Benefits 

EIN: 13-5511877 /PN:001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 

EXHIBIT 10 

• Actuarial Demonstration that the Proposed Suspension 

is Reasonably Estimated to Enable the Pension Fund 

to Avoid Insolvency. 

!934740.! 
-- :C-HEIRON ~ ~---- . -- -- - -.-- ~- - --. ~ -. 

.. 

United Furniture Workers Pension Fund A 

EIN: 13-5511877 I PN: 001 

Revenue Procedure 2016-27, Section 4.02 

Partition & Suspension is Reasonably Estimated to 

Enable the Plan to Avoid Insolvency 

As required by Section 4.02 of Revenue Procedure 2016-27 in accordance with Section 

432(e)(9)(D)(iv) of the Internal Revenue Code, we conclude the proposed partition & suspension 

is reasonably estimated to enable the Plan to avoid insolvency. This determination is supported 

by the data in Appendix I and the analysis and projections are based on the assumptions and 

methods in Appendix II. 

To the best of our knowledge, this analysis is complete and has been prepared in accordance with 

the requirements of Revenue Procedure 2016-27 and consistent with Code Section 

432(e)(9)(D)(iv) and generally recognized and accepted actuarial principles and practices that 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 

herein. This analysis does not address any contractual or legal issues. We are not attorneys and 

our firm does not provide any legal services or advice. 

Also, this analysis was prepared solely for the United Furniture Workers Pension Fund A for the 

purpose described herein. Other users of this analysis are not intended users as defined in the 

Actuarial Standards of Practice, and Cheiron assumes no duty or liability to such other users. 

Finally, in preparing this analysis, we have relied on inf01mation supplied by the Fund Office 

and the Board of Trustees. This information includes, but is not limited to, plan provisions, 

employee data, financial information, and expectations of future industry activity. We performed 

an informal examination of the obvious characteristics of the data for reasonableness and 

consistency in accordance with Actuarial Standard of Practice #23. Future analysis may differ 

significantly from those presented in this analysis 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. 

Redacted by the U.S. 

Department of the 

Treasury 

Redacted by the U.S. Department of 

the Treasury 

, , Christian Benjamin/on, FSA, EA (14-07015) 

Attachments: Appendix I: Projection Details 

Appendix II: Methodology and Assumptions 

www.cheiron.us 1.877.CHF.IRON (243.4766) 
APPENDIX I- PROJECTION DETAILS 

SOLVENCY PROJECTION 

Based on the assumptions in Appendix II we provide the following projection showing the Plan 

is reasonably estimated to avoid insolvency assuming the proposed partition & suspension are 

granted. The projections assume that effective May 1, 2017 the Fund implemented the maximum 

suspension permitted (in accordance with ERISA Section 305(e)(9)(D)(i) and consistent with 

Section 305(e)(9)(D)(iv) and the regulations thereunder) and partitioned to the Successor Plan 

100% of the liability associated with the terminated vested participants and 49% of the liability 

associated with the retirees and beneficiaries. All liability associated with the active participants 

would remain in the Original Plan. 

Please note, the assumptions used in this analysis are the same as provided in the response to 

Section 3.01 of Revenue Procedure 2016-27 with the exception of the membership decline. 

Section 3.01 of Revenue Procedure 2016-27 is based on the Trustees' Industry Activity 

assumption used in the most recent PP A Cet1ification assuming membership will decline 10% 

per year. However, after the effective date of the suspension I partition we assume stable 

membership. Furthermore, the underlying demographic assumptions for the deterministic 

projections are the same as the demographic assumptions underlying the stochastic projections. 

Furthe1more, the analysis provided begins with the estimated assets as of July 1, 2016 based on a 

four month return of 5.17%. However, because we assume in this stress-testing scenario the 

Fund would earn 2.00% as an annual return, the last eight months would need to return negative 

3%. 

See below for the projection in both graphical and tabular format. 

GRAPHICAL: 

The graph below compares the Plan's assets and liabilities. The bars represent the Plan's 

liabilities and the colors shown represent the expected PP A zone (e. g. red is critical). The lines 

represent Plan's Market Value of Assets with the funded ratios (assets divided liabilities) shown 

along the top of the graph. 

f/j $200 

c 

.2 

:: $150 ::2: 

$100 

$50 

$0 

31% 48% 42% 37% 31% 26% 20% 16% 13% 13% 15% 21% 

- sate Endangered Seriously Endg 

- critical - MVA 

nl 

~ ..... -~ -~ ~ ~ 

-- ~ "" -"" .._ .._ • 1c Fi • • "-

2016 2020 2024 2028 2032 2036 2040 2044 2048 

..C+tEIRON~ 1 
APPENDIX I - PROJECTION DETAILS 

TABULAR: PLAN'S SOLVENCY RATIO 

(i) (ii) 

Contributions 

7/1/2016 2 .00% $54,542,427 $2,530,075 

3/1/2017 3.00% 44,853,711 3,654,366 

3/1/2018 4.00% 40,709,074 3,709,181 

3/1/2019 5.00% 38,198,194 3,764,819 

3/1/2020 6.00% 35,905,479 3,821,291 

3/1/2021 6.75% 33,934,953 3,878,611 

3/1/2022 6.75% 32,193,807 3,936,790 

3/1/2023 6.75% 30,406,246 3,995,842 

3/1/2024 6.75% 28,609,469 4,055,779 

3/1/2025 6.75% 26,803,556 4,116,616 

3/1/2026 6.75% 25,004,107 4,178,365 

3/1/2027 6.75% 23,175,969 4,241,041 

3/1/2028 6.75% 21,371,851 4,304,656 

3/1/2029 6.75% 19,658,293 4,369,226 

3/1/2030 6.75% 17,997,457 4,434,765 

3/1/2031 6.75% 16,383,928 4,501,286 

3/1/2032 6.75% 14,868,510 4,568,805 

3/1/2033 6.75% 13,438,584 4,637,337 

3/1/2034 6.75% 12,130,471 4,706,897 

3/1/2035 6.75% 10,957,985 4,777,501 

3/1/2036 6.75% 9,901,404 4,849,163 

3/1/2037 6.75% 8,960,637 4,921,901 

3/1/2038 6.75% 8,181,174 4,995,729 

3/1/2039 6.75% 7,555,215 5,070,665 

3/1/2040 6.75% 7,105,277 5,146,725 

3/1/2041 6.75% 6,828,661 5,223,926 

3/1/2042 6.75% 6,719,094 5,302,285 

3/1/2043 6.75% 6,792,238 5,381 ,819 

3/1/2044 6.75% 7,064,135 5,462,547 

3/1/2045 6.75% 7,522,902 5,544,485 

3/1/2046 6.75% 8,190,395 5,627,652 

3/1/2047 6.75% 9,080,303 5,712,067 

<:-HEIRON~ 

(iii) 

Withdrawal 

Liability Payments 

$271,630 

201,274 

200,742 

65,506 

64,158 

64,158 

60,813 

57,456 

57.456 

57,456 

43,216 

26,976 

26,976 

22,546 

16,645 

12,232 

6,143 

6,143 

6,143 

6,143 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

(iv) 

-$2,025,191 

1,390,765 

1,691,842 

1,987,097 

2,248,331 

2,398,015 

2,282,220 

2,163,292 

2,043,853 

1,923,800 

1,803,703 

1,681,600 

1,564,116 

1,450,042 

1,339,469 

1,232,144 

1,131,384 

1,036,593 

950,021 

872,604 

802,807 

741 ,035 

690,162 

649,664 

621 ,065 

604,183 

598,594 

605,369 

625,591 

658,469 

705,482 

767,563 

(v) 

Administrative 

Expenses 

-$941,081 

-822,981 

-704,553 

-704,717 

-705,713 

-707,556 

-710,218 

-713,726 

-718,131 

-723,354 

-729,724 

-737,104 

-671,393 

-683,598 

-697,060 

-711,305 

-726,651 

-743,098 

-760,672 

·779,291 

-798,961 

-819,601 

-840,983 

-863,094 

-885,790 

-909,085 

·933,022 

-957,195 

-981,614 

-1,006,002 

·1,030,192 

·1,053,998 

(vi) (vii) (viii) 

$54,377,860 $9,461,488 5.75 

49,277,135 8,442,362 5.84 

45,606,286 7,264,232 6.28 

43,310,900 7,226,951 5.99 

41,333,546 7,186,149 5.75 

39,568,181 . 7,137,419 5.54 

37,763,412 7,120,764 5.30 

35,909,110 7,065,088 5.08 

34,048,426 7,012,076 4.86 

32,178,074 6,943,453 4.63 

30,299,667 6,894,799 4.39 

28,388,482 6,791 ,172 4.18 

26,596,206 6,714,983 3.96 

24,816,509 6,599,941 3.76 

23,091,275 6,491,825 3.56 

21,418,285 6,339,317 3.38 

19,848,191 6,203,653 3.20 

18,375,560 6,044,421 3.04 

17,032,860 5,879,676 2.90 

15,834,942 5,742,880 2.76 

14,754,414 5,607,610 2.63 

13,803,972 5,442,125 2.54 

13,026,083 5,295,077 2.46 

12,412,451 5,136,643 2.42 

11,987,277 4,992,858 2 .40 

11,747,686 4,867,012 2.41 

11,686,952 4,737,436 2.47 

11,822,231 4,605,208 2.57 

12,170,659 4,498,415 2.71 

12,719,854 4,383,918 2.90 

13,493,337 4,271,234 3.16 

14,505,935 4,152,875 3.49 

2 
APPENDIX I- PROJECTION DETAILS 

TABULAR: PLAN'S FUNDED PERCENT AGE 

For this chart, both the Market Value of Assets and the Actuarial Liability are shown as of July 

1, 2016. The Investment Consultant provided the estimated Market Value of Assets; the amount 

was adjusted to account for cash and receivables. The Actuarial Liability was based on the 

March 1, 2016 actuarial valuation, projected forward for four months. 

7/1/2016 2.00% 

3/1/2017 3.00% 

3/1/2018 4.00% 

3/1/2019 5.00% 

3/1/2020 6.00% 

3/1/2021 6.75% 

3/1/2022 6.75% 

3/1/2023 6.75% 

3/1/2024 6.75% 

3/1/2025 6.75% 

3/1/2026 6.75% 

3/1/2027 6.75% 

3/1/2028 6.75% 

3/1/2029 6.75% 

3/1/2030 6.75% 

3/1/2031 6.75% 

3/1/2032 6.75% 

3/1/2033 6.75% 

3/1/2034 6.75% 

3/1/2035 6.75% 

3/1/2036 6.75% 

3/1/2037 6.75% 

3/1/2038 6.75% 

3/1/2039 6.75% 

3/1/2040 6.75% 

3/1/2041 6.75% 

3/1/2042 6.75% 

3/1/2043 6.75% 

3/1/2044 6.75% 

3/1/2045 6.75% 

3/1/2046 6.75% 

3/1/2047 6.75% 

<:+tEIRON~ 

(I) 

Beginning 

MVA 

$54,542,427 

44,853,711 

40,709,074 

38,198,194 

35,905,479 

33,934,953 

32,193,807 

30,406,246 

28,609,469 

26,803,556 

25,004,107 

23,175,969 

21,371,851 

19,658,293 

17,997,457 

16,383,928 

14,868,510 

13,438,584 

12,130,471 

10,957,985 

9,901,404 

8,960,637 

8,181,174 

7,555,215 

7,105,277 

6,828,661 

6,719,094 

6,792,238 

7,064,135 

7,522,902 

8,190,395 

9,080,303 

(ii) 

Actuarial 

Liability 

$179,840,439 

83,420,018 

81,291,168 

80,211,712 

79,083,830 

77,907,145 

76,690,514 

75,396,138 

74,063,210 

72,686,643 

71,284,307 

69,833,781 

68,393,075 

66,934,535 

65,497,447 

64,077,906 

62,724,818 

61,427,062 

60,213,055 

59,094,860 

58,049,658 

57,080,087 

56,222,643 

55,464,537 

54,823,385 

54,291,446 

53,857,710 

53,532,535 

53,325,599 

53,218,070 

53,224,712 

53,351,095 

(ii) 

Funded 

Percentage 

30.3% 

53.8% 

50.1% 

47.6% 

45.4% 

43.6% 

42.0% 

40.3% 

38.6% 

36.9% 

35.1% 

33.2% 

31.2% 

29.4% 

27.5% 

25.6% 

23.7% 

21.9% 

20.1% 

18.5% 

17.1% 

15.7% 

14.6% 

13.6% 

13.0% 

12.6% 

12.5% 

12.7% 

13.2% 

14.1% 

15.4% 

17.0% 

3 
APPENDIX I- PROJECTION DETAILS 

TABULAR: STOCHASTIC PROJECTION (500 Trials, 6.56% Return, 9.18% Risk) 

7/1/2016 

3/1/2017 

3/1/2018 

3/1/2019 

3/1/2020 

3/1/2021 

3/1/2022 

3/1/2023 

3/1/2024 

3/1/2025 

3/1/2026 

3/1/2027 

3/1/2028 

3/1/2029 

3/1/2030 

3/1/2031 

3/1/2032 

3/1/2033 

3/1/2034 

3/1/2035 

3/1/2036 

3/1/2037 

3/1/2038 

3/1/2039 

3/1/2040 

3/1/2041 

3/1/2042 

3/1/2043 

3/1/2044 

3/1/2045 

3/1/2046 

Probability 

Solvent 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

100.0% 

99.6% 

98.2% 

94.2% 

92.4% 

89.4% 

86.6% 

84.2% 

81.2% 

78.6% 

76.6% 

74.2% 

72.8% 

72.0% 

70.4% 

70.0% 

72.6% 

76.8% 

78.8% 

80.8% 

82.6% 

84.0% 

4 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

A. Actuarial Assumptions 

1. Investment Return (net of investment expenses) 

Valuation Assumption: 6.75% per year 

Stress Testing Scenario: 2.00% for the plan year ending Feb 2017, increasing by 1% 

per year for the next four years, followed by 6.75% 

thereafter 

The Investment Consultant provided the estimated Market Value of Assets in the portfolio 

as of July 1, 2016; the amount was adjusted to account for cash and receivables. They 

estimated a return of 5.17% over the first four months of the fiscal year. For the scenario 

where the Fund earns 6.75% in all years we assumed the Fund would earn 4.45% (based 

on the 6.75% assumption) for the final eight months for an annual return of 9.85%. 

However, because we assumed in the stress testing scenario the Fund would earn 2.00% as 

an annual return, the last eight months would need to return negative 3%. 

2. Risk/Return for Stochastic Projections 

The following was provided by the Plan's investment consultant, Gallagher Fiduciary 

Advisors: 

• Expected Return: 6.56% (Passive return based on mean variance: 5.96% + Active 

management: 0.60%) 

• Expected Risk: 9.18% 

• Mean Variance Assumptions 

US Equity - All Cap 7.30% 16.70% 30% 

Global Equities 7.50% 17.30% 20% 

Investment Grade Bonds 2.30% 5.00% 30% 

Marketable Alternatives 6.00% 8.50% 10% 

Private Real Estate 6.00% 11.00% 10% 

• Correlation Matrix (from Gallagher's "Asset Allocation Analysis" report) 

A. U.S. Equities 1.00 

B. Global Equities 0.96 1.00 

C. US Investment Grade Bonds -0.07 -0.02 1.00 

D. Marketable Alternatives 0.60 0.67 -0.02 1.00 

E. Private Real Estate 0.12 0.10 -0.09 0.15 1.00 

<:-HEIRON~ 5 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

3. Administrative Expenses 

Expenses are assumed to remain level as future inflation is offset by declines in total plan 

participation. These expenses are allocated between the Original Plan and Successor Plan 

based on projected headcounts with PBGC premiums paid by the Original Plan for the 

I 0-year period following the partition effective date (premiums are assumed to increase 

I% per year). For scenarios where the Plan is projected insolvent, we assume expenses 

would be reduced 25% in the plan year following insolvency. Finally, expenses are 

limited to 20% of expected benefit payments in scenarios where the PBGC provides 

financial assistance in either the Successor Plan or after insolvency. 

4. Rates of Mortality 

- Healthy Lives: 

- Disabled Lives: 

RP2000 with blue collar adjustment projected 5-years with 

scale AA 

same with ages set-forward five years 

Terminated Vested Participants over age 80 are assumed to be deceased. 

In accordance with Actuarial Standard of Practice #35, we have considered the effect of 

mortality improvement prior to and subsequent to the measurement date in developing 

this assumption. Furthermpre, historical mortality experience has conformed with the 

RP2000 table with adjustment. 

5. Rates of Turnover 

Terminations of employment for reasons other than death, disability or retirement are 

assumed to be in accordance with annual rates as shown below for illustrative ages. 

25 

35 

45 

55 

62 

6. Rates of Disability 

20.5% 

16.9 

15.0 

15.0 

15.0 

20.5% 

16.9 

15.0 

15.0 

15.0 

19.0% 

16.9 

12.4 

7.0 

7.0 

Illustrative rates of disablement are shown below: 

<:-HEIRON ~ 

0.050% 

0.065 

0.244 

0.406 

0.000 

15.0% 

11.3 

7.8 

7.0 

7.0 

6 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

7. Rates of Retirement 

Annual rates as shown below for illustrative ages. 

55-59 

60 

61 

62-64 

65-69 

70 

8. Normal Form: Life Annuity 

3.00% 

5.00 

10.00 

15.00 

50.00 

100.00 

9. Changes in Membership I Contribution Base Units 

Based on the Tmstees' Industry Activity assumption used in the most recent PP A 

Certification assuming membership will decline 10% per year. However, after the 

effective date of the suspension I partition we assume stable membership (see response to 

Section 6.03 of Revenue Procedure 2016-27 in the Benefit Suspension Application). 

10. New Entrant Profile 

New entrants are assumed to annually join the Plan in accordance with the distribution 

below (which is based on the Plan's most recent 5-year history of new entrants) and in 

combination with the Changes in Membership assumption. The benefits for new entrants 

(normal cost and projected benefit payments) are adjusted such that the total normal cost 

remains consistent over the baseline projection. 

· i~trilliltioii· ,)1.~ ~ 

A e N~;w Entrants. Jl 

23 

28 

33 

37 

43 

47 

53 

22% 

19 

13 

11 

15 

10 

10 

11. Contribution Increases I Average Contribution Rate: the cun·ent Rehabilitation Plan 

assumes 5.5% per year annual increases. However, after the effective date of the 

suspension I partition we assume contributions increase with inflation at 1.5% per year. 

These increases are applied annually to the average weighted contribution rate to estimate 

employer contributions in combination with the Changes in Membership assumption. 

12. Suspension: the projection assumes the maximum suspension permitted in accordance 

with ERISA Section 305(e)(9)(D)(i) effective May 1, 2017. 

13. Partition: the projection assumes 100% of the liability associated with the tetminated 

vested participants and 49% of the liability associated with the retirees and beneficiaries 

are partitioned to the Successor Plan effective May 1, 2017. All liability associated with 

the active participants would remain in the Original Plan. 

<:-HEIRON~ 7 
APPENDIX II- METHODOLOGY AND ASSUMPTIONS 

14. Justification for Actuarial Assumptions: The rationale for our 6.75% actuarial 

valuation assumption is based on the investment manager's capital market outlook, 

Trustees' risk preference, and the Fund's current asset allocation. The rationale for our 

stress testing scenario (2.00% for the plan year ending Feb 2017, increasing by 1% per 

year for the next four years, followed by 6.75% thereafter) is based on recognizing 

current market conditions and future short-term expectations along with the Plan's cash 

flow characteristics. Our demographic assumptions were initially set after a 2007 

Experience Study and are annually reviewed based upon actual experience. 

15. Changes in Assumptions Since Last Valuation: None 

B. Actuarial Funding 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 pmiion 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. 

8