Exhibit 16 

{00763402} 1

REHABILITATION PLAN FOR THE

Alaska Ironworkers Pension Plan

Adopted August 30, 2010 

Last Revised July 29, 2014

Introduction

The Pension Protection Act of 2006 (“PPA”) requires an annual actuarial status determination 

for multiemployer pension plans like the Alaska Ironworkers Pension Plan (the “Plan”). A 

certification of endangered status or critical status requires specific action from the plan 

trustees. On August 27, 2010 the Plan’s actuary certified to the U.S. Department of the 

Treasury and the Trustees that the Plan was in critical status for the plan year beginning 

July 1, 2010. This was communicated in September 2010 to all plan participants and 

participating employers.

A plan in critical status must develop and maintain a rehabilitation plan. In general, a 

rehabilitation plan is comprised of one or more schedules made up of benefit adjustments 

and/or contribution increases intended to return the Plan to actuarial balance over the 

Rehabilitation Period. These schedules are presented to the collective bargaining parties for 

adoption. The Rehabilitation Period is a 10 year period beginning no later than 3 years after the

beginning of the plan year in which the plan is certified as critical. 

However, due to the unique convergence of circumstances, the Trustees have determined that 

they cannot adopt a rehabilitation plan that will enable the Plan to emerge from critical status 

using reasonable assumptions. This determination is based on returns in the investment 

markets and their impact on the Plan’s assets, the state of the economy, and the state of the 

ironworking industry in Alaska. In making this determination, the Trustees have reviewed all 

reasonable options (i.e., reducing the adjustable benefits and requiring employer contribution 

rate increases). Based on that review, the Trustees developed the rehabilitation plan, described 

herein, as the best long term option for the Plan. The Trustees believe an alternative 

rehabilitation plan with contributions sufficient to bring the Plan out of critical status would result 

in the withdrawal of most or all of its participating employers, and/or prompt an increase in 

employer bankruptcy filings. Neither outcome is judged to be acceptable to the Trustees.

Therefore, the Trustees have adopted a rehabilitation plan that reflects reasonable measures to 

forestall insolvency. In creating such a rehabilitation plan under the current circumstances, the 

Trustees have employed all reasonable measures to avoid insolvency that are available to date. 

In forestalling insolvency, the rehabilitation plan also provides time for a potential recovery in the 

economy, the industry and the investment markets.

Summary of Rehabilitation Plan Schedule

The rehabilitation plan consists of a single schedule that sets forth the benefit and contribution 

requirements. Those changes are described below. The collective bargaining parties are 

responsible for adopting the schedule, with adoption required no later than 180 days after the 

termination of their collective bargaining agreement in effect on the certification date.

Plan Benefit Changes

Reductions to benefits earned before November 1, 2010 apply to participants commencing their 

benefits on or after November 1, 2010 and will apply to payments made 30 days or more after 

the participant receives notice of those reductions.

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Exhibit 16 

{00763402} 2

Accrual Rate: The benefit accrual rate applied to contributions that are eligible for benefits 

for hours starting in July 2011 was reduced from 1.2% to 1.0% of contributions. Under 

the 1.0% accrual rate, contributions of $1,000 on a participant’s behalf are required for a 

$10.00 increase in the participant’s monthly benefit payable at normal retirement age.

The accrual rate was previously reduced from 2.1% to 1.2% of contributions for hours 

starting in July 2003.

Early Retirement Benefits on or after November 1, 2010 were changed as follows:

Age Prior Factors New Factors

60 100% 100%

59 97% 92%

58 94% 84%

57 91% 76%

56 88% 68%

55 85% 60%

54 79% 56%

53 73% 52%

52 67% 48%

51 61% 44%

50 55% 40%

Normal Retirement Age for Benefits earned on or after July 1, 2011: Normal Retirement 

Age was changed from 60 to 62 for benefits earned on or after July 1, 2011.

Early Retirement Benefits earned on or after July 1, 2011: The early retirement factors 

used to calculate early retirement benefits earned on or after July 1, 2011 are: 

Age New Factors

62 100%

61 92%

60 84%

59 76%

58 68%

57 60%

56 56%

55 52%

54 48%

53 44%

52 40%

51 36%

50 32%

Six-year certain period: The Plan had guaranteed a minimum of 72 months of payments 

regardless of the form of payment selected by the participant. Therefore, the monthly 

benefit would continue until a total of 72 payments had been made regardless of 

whether the participant or a surviving spouse entitled to further payments is alive. 

Payments now stop upon the death of the participant unless the participant’s spouse is 

entitled to further payments due to the form of payment elected at retirement. This 

applies to retirements commencing November 1, 2010 or later.

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Exhibit 16 

{00763402} 3

Lump Sum Death Benefits: The $5,000 lump sum death benefit for both pre-retirement 

and post-retirement deaths was removed. The lump-sum death benefit for non-vested 

participants equal to all contributions made to the Fund on their behalf was removed. 

This applies to deaths occurring November 1, 2010 or later.

Disability Benefits: The disability benefit under the Plan was removed. This applies to 

disabilities occurring November 1, 2010 or later.

Pop-Up Reductions: The Plan specifies a reduction of 1 percent for the pop-up benefit. 

This was changed to an actuarial equivalent. Effective for retirements commencing on 

or after November 1, 2010.

Employer Contribution Increases

The additional contributions required under the schedule will not translate into additional benefit 

accruals. These contributions are directed solely toward improving the Plan’s funding status.

Employer contributions are required to increase by $1.00 per hour in August of 2010, 2011, 

2012, 2013 and 2015. This represents the maximum increases that can be reasonably 

expected from the participating employers. The employer contribution rate at July 1, 2010 is 

$8.75 per hour. $4.00 per hour of the $8.75 has already been directed solely toward improving 

the Plan’s funded status prior to the July 1, 2010 actuarial certification of critical status and is 

incorporated as part of this rehabilitation plan. In future years, the Trustees expect to review the 

rehabilitation plan annually, and consider adjustments to the required employer contributions. 

However, notwithstanding any subsequent change in benefit and contribution schedules, a 

schedule of contribution rates 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. 

Shop Contributions

Pension contributions under shop agreements have traditionally been much smaller than the 

pension contributions made for field Ironworkers. Consequently it would be unreasonable and 

unfair to require employers under shop agreements to match the dollar increases required 

under the primary schedule. Instead, the rehabilitation plan specifies that shop agreement 

contribution increases will occur on a pro-rata basis of shop versus field pre-rehabilitation 

contributions.

Pre-rehabilitation contributions for a field ironworker were $8.75 per hour. In August 2011 there 

was a rehabilitation contribution of $2.00 in addition to the $8.75 pre-rehabilitation contribution 

for a total field ironworker contribution of $10.75. Therefore in August 2011 the corresponding 

rehabilitation shop contribution is $2.00 / $8.75 = 22.9%of the pre-rehabilitation shop 

contribution. The following chart details the percentages for future years.

Dates

Size of Shop Rehabilitation Contributions Expressed 

as a Percentage of Pre-rehabilitation Contributions 

August 1, 2011 – July 21, 2012 22.9% ($2.00/$8.75)

August 1, 2012 – July 21, 2013 34.3% ($3.00/$8.75)

August 1, 2013 – July 21, 2015 45.7% ($4.00/$8.75)

August 1, 2015 and thereafter 57.1% ($5.00/$8.75)

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Exhibit 16 

{00763402} 4

Basis for Schedule, and other Alternatives Considered

In developing the rehabilitation plan, the Trustees looked at all options for benefit adjustments 

and contribution increases. In this process, the goal of the Trustees was the future survival of 

the Plan. Given this goal, the Trustees desired to maintain both employer participation in the 

Plan and some level of ongoing benefit accruals for active participants. The schedule was 

developed as the best option to meet these goals. 

Additional considerations for benefits and contributions were as follows:

Benefits

Participant benefits under the schedule effectively reflect the maximum reduction in 

adjustable benefits, as defined by the PPA. 

Effective July 1, 2011, the accrual rate is reduced to a level equivalent to a 1.0% monthly 

benefit accrual, where the accrual is a function of contributions made on a participant’s 

behalf. This is the accrual rate in the default schedule provided by the PPA. As part of the 

discussion on the rehabilitation plan, the Trustees considered reducing the accrual rate to a 

lower percentage or even freezing accruals, but this was viewed as inconsistent with a 

viable plan with ongoing value for active participants. In particular, freezing accruals could 

lead to increased employer withdrawals, as the collective bargaining parties see no benefit 

in ongoing participation.

Contributions

The Trustees developed the required contribution increases under the schedule to maximize 

contribution levels, while limiting employer withdrawals and employer bankruptcies. The 

Trustees did consider the contribution increase levels that would be required, in combination 

with the benefit adjustments, for the Plan to emerge from critical status by the end of the 

Rehabilitation Period. However, the Trustees concluded that contributions at these levels 

would result in withdrawals or bankruptcy for many or most employers. Therefore, the 

Trustees determined that this would not represent a reasonable rehabilitation plan where the 

Plan can reasonably be expected to emerge from critical status.

In this process, the Trustees reviewed the default plan, as defined by the PPA. The default plan 

would require benefit adjustments consistent with the adjustments included in this plan, and 

contribution increases at a much higher level. The Trustees concluded that the default plan 

would not be a reasonable or practical plan, since it would likely lead to many employer 

withdrawals or bankruptcies.

In future years, the Trustees expect to review the rehabilitation plan annually, and consider 

adjustments to the required employer contributions.

Given the options available under the PPA, the combination of benefit adjustments and 

contribution increases included in this schedule represents the schedule that provides the best 

opportunity for the long term survival of the Plan, in the view of the Trustees. This schedule 

provides a significant reduction in plan liabilities, requires contribution increases, and provides 

time for potential recovery of the investment market. These actions are intended to forestall 

possibly insolvency, and maximize the probability that the Plan will eventually emerge from 

critical status.

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Exhibit 16 

{00763402} 5

Rehabilitation Plan Standards and Annual Review

A rehabilitation plan must provide annual standards for meeting the requirements of the plan; 

namely, that the plan emerge from critical status by the end of the Rehabilitation Period. 

However, because the Plan is not projected to emerge from critical status by the end of the 

Rehabilitation Period under the schedule, there are no standards available to confirm that the 

Plan will emerge.

The Trustees will review the rehabilitation plan annually, and modify it as appropriate, in order to 

meet the objective of the Plan’s long-term survival, consistent with requirements under the PPA 

to forestall insolvency and possibly emerge from critical status at a later date. The annual 

review will include a review of the funding percentage and the projection of the IRS minimum 

contribution credit balance. Included in the annual review will be consideration of employer 

contribution requirements, and the potential to increase these contributions to a higher level. 

Notwithstanding any subsequent change in benefit and contribution schedules, a schedule of 

contribution rates 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.

Adoption of the Rehabilitation Plan Schedule

Collective bargaining parties must adopt the rehabilitation plan schedule upon the expiration of 

the collective bargaining agreement (CBA) in effect on the certification date, or sooner. If the 

collective bargaining parties do not adopt a schedule within 180 days of the expiration of the 

CBA in effect on the certification date, the rehabilitation plan will be imposed, as required by the 

PPA. For each specific collective bargaining agreement, the contributions required under the 

rehabilitation plan schedule adopted by collective bargaining parties pursuant to that agreement 

will remain effective for the duration of collective bargaining agreement.

For collective bargaining parties without a CBA in effect on the certification date, the CBA will be 

considered to expire on the certification date for purposes of the deadlines noted in the 

paragraph above.

The Trustees have the authority to adopt a rehabilitation plan schedule for participants who are 

not covered by a CBA. This includes participants who have terminated active participation in 

the Plan but have a vested benefit. The Trustees have adopted the rehabilitation schedule for 

these participants effective August 30, 2010.

Restrictions on Plan Changes While Critical

While the Plan is in critical status there are certain restrictions on changes that can be made to 

the Plan. These include: 

• Collective bargaining agreements cannot be accepted that adversely affect the Plan’s 

funding status. For example, new agreements cannot reduce the contribution rate or 

exclude new employees.

• Amendments cannot be passed that are inconsistent with the rehabilitation plan.

• Amendments cannot be passed that increase benefits, unless they are paid for with 

contributions not required for the rehabilitation plan.

• Amendments cannot be passed that increase the liabilities of the Plan, unless such 

amendments are required by law.

• The Plan cannot pay benefits such as lump sum or similar benefits and no annuity 

purchases can be made (small lump sum distributions are permitted).

AIPT 401
Exhibit 16 

{00763402} 6

Potential Changes to Rehabilitation Plan

The Trustees reserve the right to alter, change and revise the rehabilitation plan, in whole or in 

part, in accordance with the Pension Protection Act of 2006 and any accompanying regulations 

issued thereunder. Any omissions and oversights will be interpreted in accordance with the 

applicable law and regulations.

AIPT 402