Checklist Item #23 Resubmitted Application for Approval of a 

Suspension of Benefits Under MPRA

Iron Workers Local 17 Pension Fund EIN: 51-0161467

Plan No.: 001

Does the application 

include a copy of the 

proposed ballot, excluding 

the information regarding 

the statement in 

opposition, the 

individualized estimate 

and the voting 

procedures? 

See section 6.01.

The application on behalf of the Iron Workers Local 

17 Pension Fund includes a proposed Ballot 

attached as pages IW17PF_846 – IW17PF_ 852. 

This Ballot includes the following:

• A description of the proposed suspension

and its effect, including the effect of the

suspension on each category or group of

individuals affected by the suspension and

the extent to which they are affected;

• A description of the factors considered by

the plan sponsor in designing the benefit

suspension, including but not limited to the

factors in paragraph (d)(6)(ii) of this section;

• A description of whether the suspension will

remain in effect indefinitely or will expire by

its own terms (and, if it will expire by its own

terms, when that will occur);

• A statement from the plan sponsor in

support of the proposed suspension;

• A statement that the proposed suspension

has been approved by the Secretary of the

Treasury, in consultation with the PBGC and

the Secretary of Labor;

• A statement that the plan sponsor has

determined that the plan will become

insolvent unless the proposed suspension

takes effect (including the year in which

insolvency is projected to occur without a

suspension of benefits), and an

accompanying statement that this

determination is subject to uncertainty;

• A statement that insolvency of the plan could

result in benefits lower than benefits paid

under the proposed suspension and a

description of the projected benefit

payments in the event of plan insolvency;

• A statement that insolvency of the PBGC

would result in benefits lower than benefits

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otherwise paid in the case of plan 

insolvency;

• A statement that the plan’s actuary has

certified that the plan is projected to avoid

insolvency, taking into account the proposed

suspension of benefits and an

accompanying statement that the actuary’s

projection is subject to uncertainty; and

• A statement that the suspension will go into

effect unless a majority of all eligible voters

vote to reject the suspension and that,

therefore, a failure to vote has the same

effect on the outcome of the vote as a vote

in favor of the suspension.

The Board of Trustees will update this proposed 

Ballot upon request or at such a time as the 

Department of Treasury issues a model ballot.

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PROPOSED BALLOT FOR RATIFICATION OF THE 

BENEFIT SUSPENSION PLAN FOR THE

IRON WORKERS LOCAL 17 PENSION FUND

[DATE]

PARTICIPANTS AND BENEFICIARIES:

The Board of Trustees for the Iron Workers Local 17 Pension Fund previously sent you a 

Notice that an Application for Approval of a Suspension Plan was filed with the Secretary 

of Treasury on December 23, 2015 and then resubmitted on July 29, 2016. This notice 

detailed the proposed benefit reductions pursuant to the Multiemployer Pension Reform 

Act of 2014 (MPRA) which would take effect on February 1, 2017 if the Application was 

approved by the U.S. Department of Treasury. The Notice explained that if the Pension 

Fund’s application was approved by the Department of Treasury, then the participants 

and beneficiaries will have the ability to vote on whether the Benefit Suspension Plan 

should go into effect. On [DATE], the Secretary of Treasury approved the Pension Fund’s 

proposed Suspension Plan. 

THIS BALLOT IS INTENDED TO ASSIST YOU IN MAKING YOUR DECISION ON 

WHETHER TO VOTE FOR OR AGAINST THE PROPOSED BENEFIT SUSPENSION 

PLAN. 

This Ballot includes the following important information:

• DEATILED INFORMATION ON THE PROPOSED SUSPENSION PLAN;

• FACTORS CONSIDERED BY THE TRUSTEES IN PREPARING THIS

SUSPENSION PLAN;

• THE SUSPENSION PLAN’S IMPACT ON YOUR BENEFITS;

• A STATEMENT FROM THE BOARD OF TRUSTEES IN SUPPORT OF THE

SUSPENSION PLAN; AND

• IMPORTANT INFORMATION ON WHAT WILL HAPPEN NOW THAT THE

SUSPENSION PLAN IS APPROVED BY TREASURY.

PROPOSED SUSPENSION PLAN AND ITS IMPACT ON YOUR PENSION

The application filed on behalf of the Iron Workers Local 17 Pension Fund gives you the 

details on the Proposed Suspension Plan which will go into effect on February 1, 2017

and stay in place indefinitely. 

The Trustees propose to amend the Pension Fund to recalculate all accrued benefits or 

benefits in pay status for all affected participants, beneficiaries and Alternate Payees 

without regard to any different category or classifications based upon employer, date of 

retirement or years of service etc. However, this recalculation will not reduce any benefit 

below 110% of the level guaranteed by the PBGC. 

The recalculation will include the following changes:

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1. Proposed Reduction of Benefit Credit Rate

The accrued benefit earned for each participant under the Pension Fund has

historically depended upon the Benefit Credit amount in effect during the your

working career and at your retirement. The rates ranged from $12.00 to $100.00

per Benefit Credit since the Pension Fund’s inception. The current Benefit Credit

rate of $50.00 was adopted in November 2004.

Under the Proposed Suspension Plan, the accrued benefit and benefit in pay

status for any affected participant, beneficiary or Alternate Payee will be

recalculated as of April 30, 2016 (the fiscal plan year-end immediately prior to the

Suspension Date) to be reduced so the highest average accrual rate is no more

than $72.00 per year of Benefit Credit.

For example: A participant had 12 full Benefit Credits and at retirement 

earned an unreduced monthly benefit of $1,020, then under the suspension 

his average benefit accrual rate would be determined by dividing $1,020 

by 12 Benefit Credits. The average rate is $85. Under the Suspension Plan, 

since $85 is greater than the $72 reduced rate, the average rate of $72 will 

be multiplied by the 12 Benefit Credits for an adjusted monthly benefit of 

$864. 

2. Proposed Elimination of Excess Benefit Credits.

During the period of May 1, 1986 to April 30, 2005, participants that worked more

than 1,200 hours in a Plan Year could earn more than one (1) full year of Benefit

Credit. Effective May 1, 2005, the Pension Fund changed the crediting schedule

to require 1,900 hours in a Plan Year to earn one (1) full year of Benefit Credit and

eliminated the ability of any participant to earn more than one (1) credit.

Under the Proposed Suspension Plan, the accrued benefit and benefits in pay

status will be adjusted so any additional Benefit Credits over one (1) will be

eliminated as of February 1, 2017.

For example: During the years of 1986 through 2005 participants could 

earn more than 1 year of Benefit Credit if they worked over 1,200 hours in 

the plan year. If the participant’s monthly benefit was based upon the 35 

years of Benefit Credit, but this included 4 years when the participant 

earned 11⁄2 Benefit Credits, the total years of Benefit Credit would be 

reduced by 2 years to 33 for purposes of calculating the reduced monthly 

benefit. 

3. Proposed Modification of Unreduced Early Retirement Benefit

Prior to 2009, the Pension Fund provided for an unreduced early retirement for

participants with long service of 30+ years of vesting service referred to as the 30

Year Service Pension.

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Under the Proposed Suspension Plan, the benefits in pay status for any affected 

participant, beneficiary or Alternate Payee that received an unreduced early 

retirement benefit will be recalculated as of February 1, 2017 to apply a 1.5% 

reduction for each month that the person’s pension commenced prior to age 62. 

For example: If a participant retired prior to May 2009 with 30 years of 

vesting service at age 57, he would receive an unreduced pension. If the 

monthly benefit was $3,200 without a reduction, the benefit would now be 

reduced by 7.5% (1.5% x 5 years) or $290. The adjusted monthly benefit 

would be $2,960. 

These changes will only apply to “Affected” participants, beneficiaries and Alternate 

Payees. You will be considered part of this “affected” group if you do not fall into one of 

the following exemptions: 

• All participants that were awarded with a disability pension and beneficiaries of 

these participants; 

• All participants and beneficiaries who are at least age 80 as of March 1, 2017; 

and

• Any participant or beneficiary that is receiving or would receive a benefit that is 

less than 110% of the PBGC guarantee in the absence of these changes.

Additionally, the Proposed Suspension Plan will limit the application of these proposed 

reductions for any participant, beneficiary or Alternate Payee that is between age 75 and 

80 as of February 28, 2017. This group, which the Suspension Plan refers to as “Limited 

Suspension Participants”, will have their accrued benefit or benefit in pay status 

recalculated under the changes that apply to the Affected Participants above called the 

recalculated benefit. However, the Pension Fund will then determine 1/60th of the 

difference between the current benefit and recalculated benefit. This factor will be 

multiplied by the number of months that you are over age 75 as of February 28, 2017 to 

determine an increase factor. The new benefit under the Proposed Suspension Plan for 

this group of Limited Suspension Participants is the sum of the reduced benefit plus the 

increase factor. 

Finally, the Pension Fund currently does not allow retirees that are younger than age 65 

to return to any work in the industry. Under the Proposed Suspension Plan, the Trustees 

would amend the current return to work restrictions on retirees who are younger than age 

65 to allow participants in pay status as of February 1, 2017 to return to work for up to 

39.5 hours per month under the same rules that currently apply to retirees that have

reached Normal Retirement Age without having their monthly benefit suspended. 

The proposed Suspension Plan does not have a different set of benefit reductions that 

applies to different categories or groups of participants and beneficiaries. All three 

proposed reductions will apply to any participant, beneficiary or Alternate Payee that does 

not qualify for an exemption. However, each participant in the Pension Fund has a 

IW17PF_847
different work history and retirement date. This means that the proposed Suspension 

Plan will impact people in different ways. To help you understand the impact each of the 

proposed reductions will have on you, we have designated the following 7 categories 

based upon the pre-suspension benefit accrual formula: 

• Category 1 – Participants with a pre-suspension $100 Benefit Credit

• Category 2 – Participants with a pre-suspension $90 Benefit Credit

• Category 3 – Participants with a pre-suspension $85.50 Benefit Credit

• Category 4 – Participants with a pre-suspension $75 Benefit Credit

• Category 5 – Participants with a pre-suspension $72.50 Benefit Credit

• Category 6 – Participants with a pre-suspension $72 or less Average Benefit Credit

• Category 7 – Participants with a pre-suspension Average Benefit Credit between

$99.99 and $72.01

If you are in any Category except 6, your post-suspension benefit will be reduced to the 

average of $72.00 per Benefit Credit as describe in Proposed Reduction #1 above. 

Within each of these Categories, everyone is further impacted differently depending upon 

whether you retired on an Unreduced Early Retirement Benefit (30 Year Service Pension) 

or if you earned more than one Benefit Credit in any year. To help you understand the 

impact of these additional benefit reductions on you if the proposed Suspension Plan is 

approved and effective February 1, 2017, we have designated 4 separate sub-groups as 

follows:

• Subgroup A = Includes the participants that did not have any extra Pension Credits and

did not retire on an Unreduced Early Benefit prior to May 2009. If you are in this subgroup, your monthly benefit after February 1, 2017 will not be further reduced.

• Subgroup B – Includes the participants that did earn extra Pension Credits but did not

retire on an Unreduced Early Benefit prior to May 2009. If you are in this sub-group, all

of the extra Pension Credits will be eliminated on February 1, 2017 as described in

Proposed Reduction #3 above.

• Subgroup C – Includes the participants that did not earn any extra Pension Credits but

did retire on an Unreduced Early Benefit prior to May 2009. If you are in this sub-group,

your monthly benefit will be reduced by an Early Retirement reduction factor of 1.5% per

year for each you retired prior to age 62 on February 1, 2017 as described in Proposed

Reduction #2 above.

• Subgroup D – Includes the participants that did earn extra Pension Credits and also did

retire on an Unreduced Early Benefit prior to May 2009. If you are in this sub-group, all

of the extra Pension Credits will be eliminated and your monthly benefit will be reduced

by an Early Retirement reduction factor of 1.5% per year for each year you retired prior

to age 62 on February 1, 2017 as described in Proposed Reductions #2 and #3 above.

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FACTORS CONSIDERED BY THE TRUSTEES IN MAKING THIS SUSPENSION PLAN

Federal law requires that any reduction of benefits under a suspension plan be distributed 

fairly among the various categories or groups of participants and beneficiaries under the 

Plan. In deciding whether the proposed reduction would be distributed fairly under the 

Plan, the Board of Trustees took into account the following factors:

(1) Age and Life expectancy of the participants in the Plan;

(2) The length of time the participants are in pay status;

(3) The amount of the benefits being provided by the Plan;

(4) The extent to which the benefits provided contain subsidies, specifically with

regard to the unreduced early retirement benefits;

(5) The history of benefit increases and reductions. Specifically the extent to which the

benefits being received are subject to the reductions which took place starting in

2004 and which changed the entire Pension Fund for participants that did not retire

prior to May 2009;

(6) Discrepancies between the benefits provided to active and retired participants;

(7) The extent to which the current active participants are reasonably likely to withdraw

support for the Plan which will cause employer withdrawals and increase the risk

of additional benefit reductions for all participants and beneficiaries in this Pension

Fund because of the burdensome level of contributions being paid for a maximum

of $50 per Benefit Credit.

BOARD OF TRUSTEES’ STATEMENT IN SUPPORT OF THE PROPOSED 

SUSPENSION PLAN

As you are aware, the Board of Trustees has the obligation to manage and preserve the 

long-term financial viability of the Pension Fund to make sure we protect the retirement 

security of all the people that have been promised a benefit upon their retirement including 

retirees, beneficiaries, terminated vested participants and active members. 

We continually monitor the state of your Pension Fund and where the Fund is headed 

based on future projections. We regularly meet with our advisors, including investment 

advisors, actuaries and attorneys, to review the Pension Fund’s status and discuss 

possible options to strengthen the Fund and protect your benefits.

The Current State of Our Pension Fund

Various economic and financial factors impact pension funds. For much of the past two 

decades, these factors have provided our Fund with unprecedented challenges.

• The investment markets continue to be volatile. While the markets have performed

better in recent years, the Fund has not fully recovered from the downturns of the last

two decades.

• Employment in our industry—nationally and throughout the Cleveland area—is

still significantly down from the highs prior to the Great Recession. Cleveland was

once an industrial based economy which provided industrial maintenance hours in the

steel mills and auto plants, but now our area’s economy is focused on education and

IW17PF_849
healthcare. Because hours worked are down, employer contributions to the 

Pension Fund are also down. 

• Retirees outnumber active participants and are retiring earlier and living longer,

causing our benefit payments to be greater than our contributions. This causes a 

decline in Fund assets.

Over the last decade, the Board of Trustees has taken a series of steps designed to 

mitigate these risk factors and strengthen your Pension Fund. We first took corrective 

action in 2004 by reducing the credit from $100.00 to $50.00. Then in 2006, we increased 

the number of hours required to earn a credit from 1,200 to 1,900 and also instituted the 

requirement that a Total and Permanent Social Security Award is required for a disability 

pension from the Fund. We then adopted a Rehabilitation Plan in 2008 when the Fund 

was designated in Critical Status, as defined by the Pension Protection Act of 2006. Even 

with this series of corrected measures, we were forced to amend that plan in 2011, when 

we projected that the Fund would run out of money in 2024. 

This year, the Pension Fund was certified in Critical and Declining Status, a new category 

created by MPRA. Until MPRA was passed, there was no real way to truly fix the problem 

of underfunded multiemployer pension funds like ours, which is only 32% funded today 

and projected to be insolvent in 8 years.

Under MPRA, trustees of severely underfunded multiemployer pension funds are allowed 

to develop relief plans that include benefit reductions for active workers, terminated 

vested participants, retirees and beneficiaries, in order to reduce the plan costs and 

continue paying benefits in the future. The relief offered by MPRA is only for funds that 

are in very dire situations.

We are taking action now because, the longer we wait, the larger that benefit reductions 

will have to be. If we wait too long, no suspension plan will be able to save the Pension 

Fund from running out of money. If that happens, the Pension Benefit Guaranty 

Corporation (PBGC) will be responsible for paying out your pension, and your payments 

will be reduced significantly more than under our proposed changes. The PBGC is 

projecting that its own fund will run out of money. If this occurs, then the pension 

payments the PBGC makes would be reduced even further and possibly to zero. 

Additionally, in the event this Pension Fund does become insolvent, the PBGC does not 

follow the same rules with regard to exempt participants. The PBGC guaranteed levels 

will apply regardless of your age or status as a disabled participant. 

We realize that these changes are big and will impact you and your family. This has been 

a very difficult decision for the Board. Reducing pensions for current retirees and 

beneficiaries is not something we ever thought we’d have to do. But it’s come to that point 

where we have to take drastic steps. We have worked very hard to create a series of 

benefit reductions that are equitably distributed between all of the groups of participants 

and beneficiaries in this Pension. There are certain groups which will not be impacted 

including participants over age 80 and those that retired on a disability pension. The only 

reason we are attempting to make these changes to the remaining participants and 

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beneficiaries is to prevent the Pension Fund from going bankrupt, and your pension 

payments from being cut even more at insolvency. Our proposed Suspension Plan is not 

designed to be a band-aid or a short-term solution; it is designed to keep your Pension 

Fund solvent for the future.

WHAT WOULD HAPPEN IF THE PROPOSED SUSPENSION PLAN IS REJECTED?

The Board of Trustees, in consultation with the Pension Fund’s Actuary, have determined 

that the Pension Fund will become insolvent in 2024 if the proposed Suspension Plan is 

not implemented on February 1, 2017. This means that during the Plan Year beginning

May 1, 2023, the Pension Fund will no longer have enough money to make the monthly 

pension benefit payments when due. This projected insolvency date is determined using 

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

guaranteed. For example, if the investment markets are better than expected and the 

Pension Fund earns more than a 6.5% return for several years, the insolvency date may 

be postponed beyond 2024. The opposite is true if the Pension Fund’s investment returns 

are less than 6.5% in the future. 

As illustrated by the Individual Benefit Estimate provided, insolvency of the Pension Fund 

may result in a monthly benefit lower than benefits paid under the reductions proposed in 

the Suspension Plan. At the time that the Pension Fund becomes insolvent, the PBGC 

will step in and provide the Pension Fund with financial assistance to continue paying a 

portion of your monthly retirement benefit. This is capped as a maximum guaranteed 

amount that is significantly less than the current benefit for most participants in this 

Pension Fund. For example, a participant with 30 years of service and a $3,000 per 

month benefit, would receive less than $1,100 from the PBGC. Additionally, the PBGC 

does not take into account your age or status as a disabled participant in making these 

adjustments to your benefits. 

The ability of the Pension Fund to receive financial assistance from the PBGC upon 

insolvency is also based upon the financial stability of the PBGC. In a recent report, the 

PBGC projected that its Multiemployer Plan Program would fully exhaust its own assets 

within ten years, possibly becoming insolvent at the same time the Pension Fund does.

In the event that the Pension Fund and the PBGC both become insolvent, participants 

and beneficiaries in pay status would be at risk of receiving benefits that would be 

dramatically lower than benefits otherwise paid in the case of the Pension Fund’s 

insolvency. If both the Pension Fund and the PBGC Multiemployer Program become 

insolvent, your benefits could be reduced to almost zero.

THE PENSION FUND IS PROJECTED TO AVOID INSOLVENCY IF THE SUSPENSION 

PLAN IS IMPLEMENTED

The Pension Fund’s Actuary has certified as part of the Application Process that the 

Pension Fund will avoid insolvency if the proposed benefit reductions under the 

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Suspension Plan are implemented. This projection requires the use of certain 

assumptions, so the determination is subject to some uncertainty. 

SECRETARY OF TREASURY’S APPROVAL OF THE PROPOSED SUSPENSION 

PLAN

This proposed Suspension Plan which includes the reduction of the accrued benefit, 

elimination of some early retirement subsidies and excess benefit credits, was reviewed 

and approved by the Secretary of Treasury, in consultation with the PBGC and Secretary 

of Labor.

IMPORTANT INFORMATION ON WHAT WILL HAPPEN NOW THAT THE 

SUSPENSION PLAN IS APPROVED BY TREASURY

Now that the Suspension Plan is approved by Treasury, all participants and 

beneficiaries have the ability to vote on whether you approve of it. The effect of 

not voting by the deadline IS the same as approving the proposed Suspension 

Plan. MPRA was written to allow the proposed Suspension Plan to go into effect 

UNLESS a majority of the participants and beneficiaries vote against the Suspension 

Plan. 

In the event that the majority of the participants and beneficiaries vote against this 

Suspension Plan, the proposed Suspension Plan will not go into effect February 1, 2017. 

The Board of Trustees will have the ability to prepare a new application with a different 

proposed suspension plan; however, this is very unlikely to occur based upon the 

limitations under the federal law and the significant expenses this process requires. 

Accordingly, if the proposed Suspension Plan is rejected, then the Pension Fund will likely 

become insolvent in approximately 2024 as projected. 

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