Page 39.0

Automotive Industries Pension Plan

Checklist Item #39

Does the application include the most recently updated rehabilitation plan?

See section 7.09.

Yes. The 2015 updated rehabilitation plan is attached as Document No. 39.1. The 2012 rehabilitation 

plan is attached as Document No. 39.2. The only difference between the 2012 and 2015 rehabilitation 

plan is that the 2015 rehabilitation plan includes the following sentence to reflect the change in law 

under the Multiemployer Pension Reform Act of 2014: “If the bargaining parties subsequently fail to 

agree upon a new schedule, the contribution schedule in effect on the date the collective bargaining 

agreement expires is enforceable beginning 180 days after the bargaining agreement expiration date.” 
Document No. 39.1

AUTOMOTIVE INDUSTRIES PENSION TRUST FUND

REVISED REHABILITATION PLAN

Effective January 1, 2015

Introduction

The Pension Protection Act of 2006 ("PPA"), as amended by the Worker, Retiree, and

Employer Act of 2008 ("WRERA"), requires the Trustees of a multiemployer pension fund that

has been certified by its actuary as being in Critical Status (also known as the "Red Zone") to

develop aRehabilitation Plan. The Rehabilitation Plan should enable the fund to cease to be in

Critical Status by the end ofthe rehabilitation period.However, ifthe Trustees determine, based

upon the exhaustion of all reasonable measures, that the fund can not reasonably be expected

to emerge by the end ofthe rehabilitation period, the Rehabilitation Plan should be designed to

enable the fund to cease to be in Critical Status at a later date, or if not reasonable, to forestall

possible insolvency.

On March 28, 2008, the Automotive Industries Pension Trust Plan ("Plan") was certified by its

actuary to be in critical status for the plan year beginning January 1, 2008. It has continued to

be certified to be in critical status for subsequent plan years, including the current plan year

beginning January 1, 2012. An initial Rehabilitation Plan was adopted on March 21, 2008.

Under PPA, the Trustees are required to annually review and update the Rehabilitation Plan and

its Schedules as necessary.

This Rehabilitation Plan:

1. specifies the rehabilitation period;

2. describes alternatives the Trustees considered when preparing the Rehabilitation Plan;

3. explains why the Trustees concluded that there are no reasonable measures that would

enable the Fund to emerge from Critical Status by the end of the rehabilitation period;

4. includes one schedule (Default) of benefit and contribution changes that will be

provided to the bargaining parties, which must be implemented as part of future

collective bargaining agreements between local unions and contributing employers

entered into or renewed after the adoption of this Rehabilitation Plan;

5. describes how the Default Schedule will be automatically implemented if there is no

agreement between the bargaining parties in a timely manner; and

6. provides annual standards for meeting the requirements of the Rehabilitation Plan and

describes how the Rehabilitation Plan will be updated from time to time.

.

Page 39.1.1
Rehabilitation Period

The initial rehabilitation period was the I 0-year period from January 1, 2011 through December

31, 2020. The Trustees elected to extend this period by 3 years to December 31, 2023 under

WRERA.

Rehabilitation Plan Standard

PPA generally provides a 10-year rehabilitation period to emerge from Critical Status. Pursuant

to Section 205 of WRERA, the Trustees could elect to extend the 10-year rehabilitation period

to a 13-year rehabilitation period. However, PPA also specifically provides for a plan to emerge

from Critical Status later, if possible, or to forestall insolvency if the plan cannot reasonably be

expected to emerge by the end of the rehabilitation period, or at all, as determined by its

Trustees.

The original Default Schedule of benefit cuts and contribution increases was designed to enable

the plan to emerge by the end of the original rehabilitation period on December 31, 2020. After

reflecting actual experience through January 1,2011and the 3-year extension of the

rehabilitation period ,the supplemental contributions required in the original Default Schedule

would need to increase from 12.5% to 35.8% per year for 7 years beginning January 1,2013,

based on reasonable assumptions, to emerge by December 31, 2023. For example, the average

contribution rate would have to grow from $394 to $3,356 per month.

The Board of Trustees concluded that such changes in contribution rate to emerge from the

Critical Status by the end of the rehabilitation period were unreasonable and involved

considerable risk to the Fund and Fund participants. In reaching this conclusion the Board

considered (1) information concerning the decline in the automotive industry in general, (2) the

rapid decline of contributing employers and of active participants in the Fund, and (3)

information concerning the remaining larger contributing employers to the fund, the risk of

further substantial withdrawals in the future and the potential adverse impact of such

withdrawals. The Board concluded that the continued existence of the Fund and the Trustees'

ability to discourage bargaining withdrawals and maintain or improve the Fund's funded status

would be jeopardized by any attempt to emerge from Critical Status by the end of the

rehabilitation period.

The Board of Trustees concluded that annual contribution rate increases in excess of those

called for under the attached Default Schedule could trigger mass withdrawals and significant

losses to the Fund and participants. The Trustees further concluded that contributions required

to emerge from critical status "at a later date" would be unreasonable and therefore the

Rehabilitation Plan could not be expected to do any more than forestall insolvency.

The Board of Trustees considered several actions, options, and alternatives that would enable

the Fund to emerge from Critical Status either by the end of the rehabilitation period or as soon

asreasonably possible after the period. The Trustees have determined the remedies considered

to emerge from Critical Status were unreasonable measures that would be untenable or

counterproductive and adverse to the Fund and Fund participants. The various remedies and

alternative schedules considered included the following:

Page 39.1.2
Seek the assistance ofthe Pension Benefit Guaranty Corporation CPBGC) to improve the

funding position ofthe Fund: The Trustees have considered various possible approaches with the

PBGC. The concepts of PBGC assisted merger and PBGC approved managed mass withdrawal were

determined to be unachievable after considerable discussion. The approach of partitioning the Fund's

liability related to benefits earned by participants through service with employers who became, or

will become, bankrupt into a new pension plan that will receive assistance was alsoconsidered by the

Trustees but was determined not to be viable due to the relatively small amount of plan liability that

would be eligible for assistance.

1. Secure a merger with another fund: Various standard mergers (not PBGC-assisted) were

considered and/or explored during and before the Fund entered critical status. In each case,

the Trustees of the proposed merger partner were found to be unwilling or unable to

effectuate amerger.

Trustee Approved Rehabilitation Plan Remedies

Having considered all reasonable measures to emerge from critical status, the Trustees have

concluded that the Fund cannot reasonably be expected to emerge from critical status by the

end of the rehabilitation period or at a later date. Based on this, they have adopted the following

reasonable measures to forestall insolvency of the Fund:

1. Eliminate Early Retirement Benefits for Inactive Vested Participants

The Trustees amended the pension plan so as to eliminate early retirement benefits (i.e.,

benefits commencing prior to the Plan's age 65 normal retirement age) for inactive vested

participants, effective February 1,2011. Previously, these benefits were available on an

actuarial equivalence basis.

2. Default Schedule

Under this schedule, all non-protected and adjustable benefits for participants who retired on

or after July 1,2008 are eliminated effective July 1, 2008, or if later, the date the Default

Schedule is adopted pursuant to collective bargaining, or imposed automatically by the

Trustees.Attachment A describes the non-protected and adjustable benefits that are being

eliminated and the supplemental employer contributions.

Annual StandardsforMeeting the Rehabilitation Requirements

Based on reasonable assumptions, the Fund is projected to become insolvent. The year of 

projected insolvency will vary each year as actual experience differs from the assumptions. The

Trustees recognize the possibility that actual experience could be less favorable than the

reasonable assumptions used for the Rehabilitation Plan and the need to update the

Rehabilitation Plan on an annual basis. Consequently, the annual standard for meeting the

requirements of this Rehabilitation Plan is for updated actuarial projections each year to show,

based on reasonable assumptions, that under the Rehabilitation Plan (as amended from time to

time) the projected insolvency will occur after 2020.

Page 39.1.3
Annual Updating of Rehabilitation Plan

Each year the Fund's actuary will review and certify the status of the Fund under PPA funding

rules and whether the Fund is making the scheduled progress in meeting the requirements of the

Rehabilitation Plan. If the Trustees determine that it is necessary in light of updated

information, they will revise the Rehabilitation Plan and present updated schedules to the

bargaining parties. Notwithstanding subsequent changes in benefit and contribution schedules,

a schedule provided by the Trustees and relied upon by the bargaining parties in negotiating a

collective bargaining agreement shall remain in effect for the duration of that collective

bargaining agreement. If the bargaining parties subsequently fail to agree upon a new schedule, 

the contribution schedule in effect on the date the collective bargaining agreement expires is 

enforceable beginning 180 days after the bargaining agreement expiration date. 

Page 39.1.4
DEFAULTSCHEDULE

Attachment A

Benefit Changes

Remove early retirement subsidies -instead of the Rule of 85 or the 3% per year reductions

from age 62,reductions will be based on actuarial equ ivalence from normal retirement age

(65).

Eliminate the Early Retirement Pension for inactive vested participants.

Eliminate future Disability Pension awards.

Eliminate 36-payment pre -retirement death benefit awards.

Eliminate Automatic Joint and Survivor Benefit subsidies on all future pensioner awards;

reductions will be based on actuarial equivalence.

Eliminate all optional forms of payments on pension awards; single participants will receive

a single life annuity with no death benefits and married participants will receive the reduced

QJSA or QOSA.

Supplemental Contributions

Supplemental Contributions will be payable based on the following schedule:

Contribution increases under all agreements as follows (all increases are "off-benefit",

i.e., will not count toward benefit accruals):

Effective Date Increase in

monthly rate

Cumulative

increase

March28,2008-December 31,2012

January I,2013

January 1, 2014

January 1, 2015

January 1, 2016

January 1, 2017

January 1, 201 8

January 1, 2019

0.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

0.0%

5.0%

10.3%

15.8%

21.6%

27.6%

34.0%

40.7%

Page 39.1.5
Implementation

Attachment A (continued)

Benefit reductions for active participants become effective when their employer's collective

bargaining agreement isrenewed on or after April 27, 2008 -but no later than 180 days following

the expiration date of the prior collective bargaining agreement.

An active participant 's employer will be the participant 's most recent employer prior to retirement.

Once an employer is determined, the Plan will search its records to determine when that employer's

collective bargaining agreement expired and the benefit reductions for its employees became

effective.

For a non-collectively bargained active participant (e.g., owner-operator, alumni, etc.) that has had

contributions made to the Plan under the terms of a subscription agreement, the effective date will

be July 1, 2009. Other categories of active participants who are automatically covered by the July 1,

2009 effective date include:

Non-bargained participants covered under the Plan by working in "related non-covered

employment.”

Participants working in covered positions in the jurisdiction of a "related plan."

Participants worki n g in "recognized unrelated service."

Participants whose employer ceased to be a contri buting employer prior to July 2008.

Participants currently under a Plan "grace period" due to (1) incapacity based on a

disability that prevents them from working in covered service, (2) serving in the Armed

Forcesofthe United States, or (3) engaged in thisindustry in an ineligible classification.

Participants receiving workers' compensation benefits.

The benefits of Pensioners,surviving spouses and Alternate Payees who commenced receipt of

benefits prior to April 27,2008 or, if applicable, the benefit reduction effective date (see above) are

not subject to reduction under the Default Schedule except to the extent provided under the terms of

the Pension Plan and/or to the extent permitted by law orregulation.

Page 39.1.6
Automotive Industries Pension Fund 

Administered by: Associated Third Party Administrators 

1640 SOUTH LOOP RD • ALAMEDA, CA 94502 • TELEPHONE (510) 836-2484 Or (800) 635-3105 

Mailing Address: POST OFFICE BOX 23120 • OAKLAND, CA 94623-0120 

Website: www.aitrustfunds.org 

AUTOMOTIVE INDUSTRIES PENSION TRUST FUND 

Introduction 

REVISED REHABILITATION PLAN 

Effective July 9, 2012 

The Pension Protection Act of 2006 ("PP A"), as amended by the Worker, Retiree, and 

Employer Act of2008 ("WRERA"), requires the Trustees of a multiemployer pension fund that 

has been certified by its actuary as being in Critical Status (also known as the "Red Zone") to 

. develop a Rehabilitation Plan. The Rehabilitation Plan should enable the fund to cease to be in 

Critical Status by the end of the rehabilitation period. However, if the Trustees determine, 

based upon the exhaustion of all reasonable measures, that the fund can not reasonably be 

expected to emerge by the end of the rehabilitation period, the Rehabilitation Plan should be 

designed to enable the fund to cease to be in Critical Status at a later date, or if not reasonable, 

to forestall possible insolvency. 

On March 28, 2008, the Automotive Industries Pension Trust Plan ("Plan") was certified by its 

actuary to be in critical status for the plan year beginning January 1, 2008. It has continued to 

be certified to be in critical status for subsequent plan years, including the current plan year 

beginning January 1, 2012. An initial Rehabilitation Plan was adopted on March 21, 2008. 

Under PP A, the Trustees are required to annually review and update the Rehabilitation Plan and 

its Schedules as necessary. 

This Rehabilitation Plan: 

1. specifies the rehabilitation period; 

2. describes alternatives the Trustees considered when preparing the Rehabilitation Plan; 

3. explains why the Trustees concluded that there are no reasonable measures that would 

enable the Fund to emerge from Critical Status by the end of the rehabilitation period; 

4. includes one schedule (Default) of benefit and contribution changes that will be 

provided to the bargaining parties, which must be implemented as part of future 

collective bargaining agreements between local unions and contributing employers 

entered into or renewed after the adoption of this Rehabilitation Plan; 

5. describes how the Default Schedule will be automatically implemented if there is no 

agreement between the bargaining parties in a timely manner; and 

6. provides annual standards for meeting the requirements of the Rehabilitation Plan and 

describes how the Rehabilitation Plan will be updated from time to time. 

July20 12 
Rehabilitation Period 

The initial rehabilitation period was the 1 0-year period from January 1, 2011 through December 

31, 2020. The Trustees elected to extend this period by 3 years to December 31, 2023 under 

WRERA. 

Rehabilitation Plan Standard 

PPA generally provides a 1 0-year rehabilitation period to emerge from Critical Status. Pursuant 

to Section 205 of WRERA, the Trustees could elect to extend the 1 0-year rehabilitation period 

to a 13-year rehabilitation period. However, PP A also specifically provides for a plan to emerge 

from Critical Status later, if possible, or to forestall insolvency if the plan cannot reasonably be 

expected to emerge by the end of the rehabilitation period, or at all, as determined by its 

Trustees. 

The original Default Schedule of benefit cuts and contribution increases was designed to enable 

the plan to emerge by the end of the original rehabilitation period on December 31, 2020. After 

reflecting actual experience through January 1, 201 1 and the 3-year extension of the 

rehabilitation period, the supplemental contributions required in the original Default Schedule 

would need to increase from 12.5% to 35.8% per year for 7 years beginning January 1, 2013, 

based on reasonable assumptions, to emerge by December 31, 2023. For example, the average 

contribution rate would have to grow from $394 to $3,356 per month. 

The Board of Trustees concluded that such changes in contribution rate to emerge from the 

Critical Status by the end of the rehabilitation period were unreasonable and involved 

considerable risk to the Fund and Fund participants. In reaching this conclusion the Board 

considered (1) information concerning the decline in the automotive industry in general, (2) the 

rapid decline of contributing employers and of active participants in the Fund, and (3) 

information concerning the remaining larger contributing employers to the fund, the risk of 

further substantial withdrawals in the future and the potential adverse impact of such 

withdrawals. The Board concluded that the continued existence of the Fund and the Trustees' 

ability to discourage bargaining withdrawals and maintain or improve the Fund's funded status 

would be jeopardized by any attempt to emerge from Critical Status by the end of the 

rehabilitation period. 

The Board of Trustees concluded that annual contribution rate increases in excess of those 

called for under the attached Default Schedule could trigger mass withdrawals and significant 

losses to the Fund and participants. The Trustees further concluded that contributions required 

to emerge from critical status "at a later date" would be unreasonable and therefore the 

Rehabilitation Plan could not be expected to do any more than forestall insolvency. 

The Board of Trustees considered several actions, options, and alternatives that would enable 

the Fund to emerge from Critical Status either by the end of the rehabilitation period or as soon 

as reasonably possible after the period. The Trustees have determined the remedies considered 

to emerge from Critical Status were unreasonable measures that would be untenable or 

counterproductive and adverse to the Fund and Fund participants. The various remedies and 

alternative schedules considered included the following: 

July 2012 2 
I. Seek the assistance of the Pension Benefit Guaranty Como ration CPBGC) to improve the 

funding position of the Fund: The Trustees have considered various possible approaches 

with the PBGC. The concepts of PBGC assisted merger and PBGC approved managed mass 

withdrawal were determined to be unachievable after considerable discussion. The approach 

of partitioning the Fund's liability related to benefits earned by participants through service 

with employers who became, or will become, bankrupt into a new pension plan that will 

receive assistance was also considered by the Trustees but was determined not to be viable 

due to the relatively small amount of plan liability that would be eligible for assistance. 

2. Secure a merger with another fund: Various standard mergers (not PBGC-assisted) were 

considered and/or explored during and before the Fund entered critical status. In each case, 

the Trustees of the proposed merger partner were found to be unwilling or unable to 

effectuate a merger. 

Trustee Approved Rehabilitation Plan Remedies 

Having considered all reasonable measures to emerge from critical status, the Trustees have 

concluded that the Fund cannot reasonably be expected to emerge from critical status by the 

end of the rehabilitation period or at a later date. Based on this, they have adopted the following 

reasonable measures to forestall insolvency of the Fund: 

I. Eliminate Early Retirement Benefits for Inactive Vested Participants 

The Trustees amended the pension plan so as to eliminate early retirement benefits (i.e., 

benefits commencing prior to the Plan's age 65 normal retirement age) for inactive vested 

participants, effective February 1, 2011. Previously, these benefits were available on an 

actuarial equivalence basis. 

2. Default Schedule 

Under this schedule, all non-protected and adjustable benefits for participants who retired 

on or after July 1, 2008 are eliminated effective July 1, 2008, or if later, the date the Default 

Schedule is adopted pursuant to collective bargaining, or imposed automatically by the 

Trustees. Attachment A describes the non-protected and adjustable benefits that are being 

eliminated and the supplemental employer contributions. 

Annual Standards for Meeting the Rehabilitation Requirements 

Based on reasonable assumptions, the Fund is projected to become insolvent. The year of 

projected insolvency will vary each year as actual experience differs from the assumptions. The 

Trustees recognize the possibility that actual experience could be less favorable than the 

reasonable assumptions used for the Rehabilitation Plan and the need to update the 

Rehabilitation Plan on an annual basis. Consequently, the annual standard for meeting the 

requirements of this Rehabilitation Plan is for updated actuarial projections each year to show, 

based on reasonable assumptions, that under the Rehabilitation Plan (as amended from time to 

time) the projected insolvency will occur after 2020. 

July 2012 3 
Annual Updating of Rehabilitation Plan 

Each year the Fund's actuary will review and certify the status of the Fund under PPA funding 

rules and whether the Fund is making the scheduled progress in meeting the requirements of the 

Rehabilitation Plan. If the Trustees determine that it is necessary in light of updated 

information, they will revise the Rehabilitation Plan and present updated schedules to the 

bargaining parties. Notwithstanding subsequent changes in benefit and contribution schedules, 

a schedule provided by the Trustees and relied upon by the bargaining parties in negotiating a 

co!Jective bargaining agreement shall remain in effect for the duration of that co!Jective 

bargaining agreement. 

July2012 4 
Attachment A 

DEFAULT SCHEDULE 

Benefit Changes 

);;> Remove early retirement subsidies- instead of the Rule of 85 or the 3% per year reductions 

from age 62, reductions will be based on actuarial equivalence from normal retirement age 

(65). 

);;> Eliminate the Early Retirement Pension for inactive vested participants. 

);;> Eliminate future Disability Pension awards. 

);;> Eliminate 36-payment pre -retirement death benefit awards. 

~ Eliminate Automatic Joint and Survivor Benefit subsidies on all future pensioner awards; 

reductions will be based on actuarial equivalence. 

);;> Eliminate all optional forms of payments on pension awards; single participants will receive 

a single life annuity with no death benefits and married participants will receive the reduced 

QJSA or QOSA. 

Supplemental Contributions 

Supplemental Contributions will be payable based on the fo llowing schedule: 

Contribution increases under all agreements as follows (all increases are "off-benefit", i.e., 

will not count toward benefit accruals): 

Effective Date Increase in Cumulative 

monthly rate increase 

March 28, 2008 - December 31, 2012 0.0% 0.0% 

January I, 2013 5.0% 5.0% 

January I, 2014 5.0% 10.3% 

January I, 20 15 5.0% 15.8% 

January I, 20 16 5.0% 21.6% 

January I, 2017 5.0% 27.6% 

January I, 2018 5.0% 34.0% 

January I, 2019 5.0% 40.7% 

July2012 5 
Attachment A (continued) 

Implementation 

Benefit reductions for active participants become effective when their employer's collective 

bargaining agreement is renewed on or after April 27, 2008- but no later than 180 days following 

the expiration date of the prior collective bargaining agreement. 

An active participant's employer will be the participant's most recent employer prior to retirement. 

Once an employer is determined, the Plan will search its records to determine when that employer's 

collective bargaining agreement expired and the benefit reductions for its employees became 

effective. 

For a non-collectively bargained active participant (e.g., owner-operator, alumni, etc.) that has had 

contributions made to the Plan under the terms of a subscription agreement, the effective date will 

be July 1, 2009. Other categories of active participants who are automatically covered by the July I, 

2009 effective date inc lude: 

Non-bargained participants covered under the Plan by working in "related non-covered 

employment. 

Participants working in covered positions in the jurisdiction of a "related plan." 

Participants working in "recognized unrelated service." 

Participants whose employer ceased to be a contributing employer prior to July 2008. 

Participants currently under a Plan "grace period" due to (1) incapacity based on a disability 

that prevents them from working in covered service, (2) serving in the Armed Forces of the 

United States, or (3) engaged in this industry in an ineligible classification. 

Participants receiving workers' compensation benefits. 

The benefits of Pensioners, surviving spouses and Alternate Payees who commenced receipt of 

benefits prior to April 27, 2008 or, if applicable, the benefit reduction effective date (see above) are 

not subject to reduction under the Default Schedule except to the extent provided under the terms of 

the Pension Plan and/or to the extent permitted by law or regulation. 

July 2012 6