WESTERN PENNSYLVANIA TEAMSTERS AND EMPLOYERS 

PENSION FUND 

SUSPENSION APPLICATION 

Exhibit 4 

Record of Trustee Actions 

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File 4 Ex 4, Record of Actions 0002
File 4 Ex 4, Record of Actions 0003
2016 REHABILITATION PLAN UPDATE

Prepared for:

WESTERN PENNSYLVANIA TEAMSTERS 

AND EMPLOYERS PENSION FUND

Prepared by:

BEYER-BARBER COMPANY

December 7, 2016

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PART I

BACKGROUND

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PPA STATUS DETERMINATION

The Fund originally became Endangered in 2008 and the Trustees

adopted a Funding Improvement Plan to allow the Fund to emerge from

Endangered Status by the end of the Funding Improvement Period.

Following the unprecedented investment losses in 2008, the Fund was

determined to be Critical in 2009; however the Trustees adopted

WRERA Relief that allowed the Plan to continue as Endangered for

2009.

The Plan was certified to be Critical in 2010 and was still determined

to be Critical for this 2016 plan year.

The Trustees adopted a Rehabilitation Plan in 2010 with the objective of

“forestalling insolvency” and achieving a 51% PPA funded percentage

in 2031. It remained unchanged until the 2012 Update dropped the

attainment of a 51% PPA funded percentage in 2031 as an objective.

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CHANGES MADE TO DATE

6% increases in contribution rates for future years.

0.5% of contribution Unit Multiplier.

Normal Retirement Date increased to age 65.

Eliminated Early Retirement and Joint & Survivor subsidies

on benefits earned as of 8/1/2008 except for those eligible to

retire as of 2/1/2011.

Eliminated Disability and Burial Benefits.

Special Benefits had been “frozen” at their 8/1/2008 level

under the prior Funding Improvement Plan except for CBAs

where the contribution rate exceeded $225/wk. by

12/31/2008.

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CHANGES MADE TO DATE, continued

The benefit changes that were made eliminated all

“adjustable benefits” except for the protection of Early

Retirement and Joint & Survivor subsidies for the 8/1/2008

accrued benefits for participants who were eligible to retire

by 2/1/2011. These protections were made to avoid

incentivizing active participants to prematurely leave the

Fund.

While the benefit changes helped control future benefit

payouts, the main thrust of the 2010 Rehabilitation Plan lay

in increasing employer contribution income relative to the

level of annual benefit payouts.

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PART II

2016 REHABILITATION PLAN

SCHEDULED PROGRESS

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THE PROCESS

The first step in the analysis is to determine whether the Fund is

making the “scheduled funding progress” that had been projected

when the 2010 Rehabilitation Plan (RP) was adopted. If so, the

Trustees could take the position that no changes are necessary at

this time.

If not, then after careful analysis of any additional options

available to them, the Trustees could either:

make additional changes in benefits and/or contributions, or

conclude that they have taken all reasonable measures to

forestall insolvency.

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SCHEDULED PROGRESS

Because the objective of “forestalling insolvency” is achieved

simply by avoiding insolvency, it is not a “bright line” measure.

As shown on the following Exhibit, updated forecast projections

based on the completed 2016 Valuation show that the Fund is

achieving the Rehabilitation Plan objectives of forestalling

solvency.

However, the updated 2016 projection is less favorable than the

2010 Baseline due to an actual 6.5% average investment return

between 2010 and 2015 versus the 8% assumed, and a 15.5%

decline in active contributing members from 6,117 in 2010 to

5,167 in 2016.

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SCHEDULED PROGRESS, continued

Original 2010 Rehabilitation Plan Scheduled Progress based on

Projection January 1, 2016 Forecast

Accrued Market Accrued Market

Liability Assets PPA% Year Liability Assets PPA%

$1,621,376 $679,527 42% 2016 $1,563,426 $656,304 42%

1,617,719 658,767 41% 2017 1,558,980 626,514 40%

1,611,465 637,926 40% 2018 1,553,180 595,448 38%

1,601,825 616,752 39% 2019 1,545,914 563,209 36%

1,588,432 595,462 37% 2020 1,536,964 529,883 34%

1,571,554 574,999 37% 2021 1,526,079 495,421 32%

1,550,849 555,725 36% 2022 1,513,061 459,920 30%

1,526,566 538,649 35% 2023 1,497,663 423,810 28%

1,499,051 524,960 35% 2024 1,479,855 387,267 26%

1,468,283 515,589 35% 2025 1,459,523 350,850 24%

1,434,517 511,791 36% 2026 1,436,540 314,909 22%

1,397,944 514,870 37% 2027 1,410,793 279,862 20%

1,359,210 526,700 39% 2028 1,382,470 247,058 18%

1,318,537 548,846 42% 2029 1,351,665 217,301 16%

1,276,620 583,444 46% 2030 1,318,593 191,585 15%

1,233,774 632,416 51% 2031 1,283,696 171,052 13%

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PART III

TOOLS AVAILABLE FOR

2016 UPDATE OF

REHABILITATION PLAN

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REHABILITATION PLAN UPDATE TOOLS

Because the Fund has remained in Critical Status, and has not

entered Critical and Declining Status for the 2016 plan year,

there are only two areas of change to consider in order to achieve

the 2010-12 RP “funding objectives” :

Contribution increases above the current 6%/yr. requirement.

Comment: The Trustees have previously concluded that the 6%/yr.

increases are economically unstainable for participating employers and

will result in reduced support of the Plan by the membership.

Reductions to Adjustable Benefits:

Reduce the future service UM% of 0.5%.

Comment: This change will not reduce future benefit accruals

significantly enough nor soon enough to have a material impact on

future benefit payouts and will cause a loss of plan support by the

contributing active group.

File 4 Ex 4, Record of Actions 0014
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REHABILITATION PLAN UPDATE TOOLS, continued

Establish a minimum retirement age of 55 or 60.

Comment: While this slows the commencement and distribution of

benefits immediately, past projections have shown that it doesn’t

have a material impact.

Eliminate the previously protected Early Retirement and Joint &

Survivor subsidies on accrued benefits earned as of 8/1/2008

(including 25 & Out eligibilities) for participants who were eligible

to retire on 2/1/2011.

Comment: Again, past projections have shown that this doesn’t

have a material impact.

Freeze Special Benefit levels.

Comment: This has almost no impact as shown in past projections.

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PART IV

CONCLUSIONS

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CONCLUSIONS

Since the implementation of the 2010 Rehabilitation Plan

Update, we have prepared 5 annual analyses of the impact that

additional contribution increases and the elimination of the

remaining adjustable benefits would have on plan funding. In

each year, the Trustees have concluded that no changes were

justifiable as they would serve to erode ongoing support for the

Plan from both employers and members.

MPRA became effective in 2015 and provides the Trustees of

funds that enter Critical and Declining Status additional tools to

reduce the previously protected accrued benefits of actives,

terminated vested, retirees and beneficiaries.

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CONCLUSIONS, continued

During 2016, we have projected that the Plan will enter Critical

and Declining status for 2017 and have already begun the

process of developing recovery plans that give the Trustees

additional tools that will allow the Plan to exit the status.

While the MPRA tools, in the form of reductions to accrued

benefits are controversial, they will provide greater cost savings

and more financial security for the plan than any of the tools

available under Endangered or Critical Status.

On or before March 31, 2016 we will certify whether the plan

continues in Critical Status, or enters Critical and Declining

Status for 2017.

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CONCLUSIONS, continued

It is our recommendation that the Trustees make no changes to

the 2010 Rehabilitation Plan at this time while they continue to

consider an MPRA recovery plan in 2017.

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Please Disregard Rumors You May Have Heard

October 13, 2017

In April, 2017, the Pension Fund issued notices advising participants that it was classified as

being in Critical and Declining Status and projected to go insolvent in 2028 unless a benefit

reduction program was developed as permitted under the Multiemployer Pension Reform Act

of 2014 (“MPRA”), subject to U.S. Treasury Department approval.  Since that time, the Trustees

have watched fund after fund design benefit reduction plans which were denied by Treasury.

The Trustees believe that the Treasury Department’s August, 2017 approval of the New York

State Teamsters Pension Fund’s benefit reduction plan was the first clear guidance as to the

forecasts and calculations which must be used if a benefit reduction plan is to achieve Treasury

Department approval.  In the coming months, the Trustees will be evaluating several equitable

benefit reduction alternatives, each of which will need to include calculations which forecast

under reasonable and conservative assumptions that as a result of the proposed reductions the

Pension Fund will avoid insolvency.

ALTHOUGH THE WESTERN PENNSYLVANA TEAMSTERS AND EMPLOYERS PENSON FUND HAS

SOME SIMILARILTY TO THE NEW YORK STATE TEAMSTERS PENSION FUND, THE TRUSTEES OF

THIS FUND HAVE NOT MADE ANY DECISION ON THE TYPE OR DISTRIBUTION OF BENEFIT

REDUCTIONS THEY WILL BE PROPOSING IN THIS FUND’S UPCOMING MPRA APPLICATION.  

PLEASE DO NOT SPREAD RUMORS ABOUT THE TIMING, AMOUNT OR EQUITABLE DISTRIBUTION

OF THE PENSON FUND’S PRPOPOSED BENEFIT REDUCTIONS.  

Despite the hope that federal laws will be enacted to financially assist wide spread problems

facing most defined benefit pension funds, we cannot sit back and wait to see whether federal

aid is offered.  The Trustees must move forward with the development of a MPRA benefit

reduction proposal, giving due consideration to whether their proposal is fair, equitable and

reasonably likely to ensure the Pension Fund’s long‐term viability.

In April, 2017, the Trustees appointed former Local 205 President and retiree, William Lickert,

to serve as a representative of retirees and terminated but vested participants.  While Mr.

Lickert is present at all Trustee Meetings and is provided with all reports involving the subject of

MPRA benefit reductions, his role is limited by statute to representing the interests of retirees

and deferred vested participants.  He is not a Trustee.  Only the Trustees have authority to

adopt a MPRA benefit reduction proposal.  When the Trustees submit an application to the

Treasury Department, Mr. Lickert will have the opportunity to comment as to whether any

reduction plans which may be under consideration by the Trustees are fair and no more than

the minimum amount necessary as applied to his constituents.

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File 4 Ex 4, Record of Actions 0052
 WESTERN PENNSYLVANIA

TEAMSTERS AND EMPLOYERS PENSION FUND

Minutes Of Annual Meeting Held

July 25, 2018

DoubleTree By Hilton Pittsburgh Cranberry

Warrendale, PA

 Trustees Present Others Present

Carl A. Bailey

Rocco DiFilippo

 (via telephone

 conference)

Marc R. Dreves

Joseph A. Molinero 

Kevin M. Schmitt

Robert Cleary

Brian M. Dykes 

Gerri D. Talerico,

 Fund Office Manager

Randee W. Sekol,

Peter M. Karapelou,

 Beyer-Barber Company

John M. Yanak, CPA,

Mark D. Wolstoncroft, CPA,

 Grossman Yanak & Ford

 LLP

Joanna L. Sinchar, CPA,

 Albanese Sinchar Smith

 & Co.

Michael Sullivan,

 NEPC, LLC

Charles J. Streiff,

Vincent P. Szeligo,

 Wick, Streiff, Meyer,

 O'Boyle & Szeligo, P.C.

The Chairman, Mr. Cleary, called the Annual Meeting to order at

12:10 p.m.

Mr. Dykes stated he would vote the proxy for Mr. Dillner.

Mr. Cleary stated that he would vote the proxies for the two

unnamed Employer Trustees.

The Chairman requested that William E. Lickert (Retiree

Representative); Brian M. McCormick, CBIZ Benefits & Insurance Services, Inc. (Retiree Representative Actuary); and Jason Mettley,

Esq., Meyer Unkovic Scott (Retiree Representative Attorneys), enter

the Annual Meeting. 

Various matters concerning the development of a Suspension of

Benefits Plan pursuant to the Multiemployer Pension Reform Act

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(MPRA) were discussed by the Trustees, the Fund Consultants, and

the Retiree Representative and Consultants, as follows:

Mr. Sekol distributed his Firm’s Report, entitled ?MPRA Suspension Plan Options - July 25, 2018", which included the following:

1. Background - criteria for a successful suspension plan;

past suspension attempts.

2. New Developments - lower future expected investment return

earnings and final governmental regulations. 

 3 . Suspension Basics - process; suspension design variables;

and sample impact of 35% reduction on the retiree population.

4. Analyzing Suspension Designs - suspension design analysis.

5. Suspension Designs Results - design results at 30%, 32.5%,

33% and 35% reductions; strongest design scenarios.

6. Conclusions.

Mr. Sekol reviewed the Report in detail, and answered questions

concerning the suspension designs results. After an extensive

discussion, Mr. Dykes moved that Beyer-Barber Company prepare an

actuarial study to determined the appropriate benefit suspension

percentage, based on Scenario 2S of the Report, with the following

parameters: (1) 30% or higher reduction as necessary to all benefits earned up to December 31, 2017; (2) protect the age 55 and 30

years $3,500 monthly benefit for top tier participants; and (3)

3.5% increases in the employer contribution rates for 20 years. Mr.

Dreves seconded the motion. The motion passed unanimously. 

Mr. Szeligo discussed the Rehabilitation Plan, and stated that

it will be updated at the September 5, 2018 Meeting based upon the

results of the actuarial study.

Mr. Szeligo then distributed his Firm’s Report, entitled

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?Proposal To Revise Suspension Of Benefit Provisions Effective Upon

Implementation Of An Approved MPRA Benefit Suspension Application -

June 6, 2018". He reviewed the Report in detail, and stated that

the issue to be decided is whether, as part of the MPRA application, the allowable hours in suspendible employment should be increased and, if so, under what conditions. 

After an extensive discussion, Mr. Bailey moved that the number

of hours be increased to 100 hours per month, under the current

benefit suspension plan terms, for all retirees effective upon the

date the proposed benefit reduction becomes effective. Mr. Dykes

seconded the motion. The motion passed unanimously.

A discussion then took place concerning the timeline for filing

the MPRA application, and at the conclusion of the discussion, the

Chairman requested that the Fund Consultants provide a timeline for

discussion at the September 5, 2018 Meeting. 

Mr. Lickert, Mr. McCormick and Mr. Mettley were excused from

the Annual Meeting by the Chairman.

 

 

File 4 Ex 4, Record of Actions 0055
MPRA SUSPENSION PLAN OPTIONS

Prepared for:

WESTERN PENNSYLVANIA TEAMSTERS 

AND EMPLOYERS PENSION FUND

Prepared by:

BEYER-BARBER COMPANY

July 25, 2018

File 4 Ex 4, Record of Actions 0056
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PART I

BACKGROUND

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CRITERIA FOR A SUCCESSFUL SUSPENSION PLAN

➢ Suspension plan design (benefit reductions) must permit the plan to

avoid insolvency on both a “deterministic” and a “stochastic” basis.

➢ Deterministic Projection - One trial based on one set of expected

investment returns. Suspension design must show that the Fund does

not run out of money and shows improving funding results at the end of

the forecast projection period.

➢ Stochastic Projection – 10,000 trials based on random possibilities of

investment returns using expected returns, inflation, standard deviations

and correlations by asset class. Suspension design must show that the

Fund will be successful in over 50% of the 10,000 trails.

➢ For both projections, we must show that a lowering of the benefit

reduction by the greater of 2% or “5% of the reduction percentage” will

not be successful (i.e. if the reduction is 35%, we must show that a

reduction of 33% will not work (2% is greater than 5% of 35%).

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PAST SUSPENSION ATTEMPTS

➢ You may recall that at the June Trustees Meeting we reported that

suspension designs based on the concept of reducing the benefits earned

to 1/31/2011 were no longer going to work due to an unexpected 10%

decline in the active population between 2017 and 2018. We have

reconfirmed that conclusion again since the last meeting.

➢ As a result, at the June Meeting, the Trustees directed that we should

investigate:

➢ Suspension designs based on cuts to the benefits earned to

12/31/2017 versus 1/31/2011, and

➢ Include designs that protect the 55 & 30 - $3,500 benefit for top

level participants.

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PART II

NEW DEVELOPMENTS

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NEW DEVELOPMENTS

➢ The results we discussed at the June Trustees Meeting were based on

January 1, 2018 assets of $656M with an assumed 6.59% return for

2018 per NEPC. NEPC has since advised that the Fund’s actual return

through June 30, 2018 is 1.1% resulting in lower expected assets for the

December 31, 2018 year end.

➢ NEPC has also provided slightly lower future expected investment

return earnings:

➢ Short Term – 6.24% down from 6.37%

➢ Long Term – 7.37% down from 7.4%

➢ Ultimate Return – 7.8% down from 7.85%

➢ These lower returns have made the suspension solutions more

challenging.

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NEW DEVELOPMENTS, cont’d

➢ Final regulations require that the Fund anticipate that some portion of

lost contribution income due to the declining workforce will be replaced

by withdrawal liability income. We have identified the amount of lost

contribution income each year and with the input of Fund counsel have

assumed that 70% of that lost income will be due to employer

withdrawals, and further that 90% of those amounts will be collectible.

➢ The recently signed ABF contract provides for no increases in the

employer contribution rate. The Fund has approximately 72 ABF active

participants. At this point we continue to include this group as having

contribution rate increases because we assume the Trustees will have to

make some matching changes in the benefits for ABF participants.

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PART III

SUSPENSION BASICS

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THE PROCESS

➢ Because future benefit accruals are dependent on actual contributions

(0.5% of contributions), we cannot simply choose a benefit reduction

percentage and then solve for the level of contribution rate increase and

duration necessary. They are co-dependent.

➢ It therefore becomes more of a trial and error process where one learns

as much from the benefit reduction scenarios that fail as those that are

successful.

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SUSPENSION DESIGN VARIABLES

➢ Contribution rate increases

➢ The Trustees have concluded that 6% increases are unsustainable.

➢ The Fund economist has reported that, “...increases in

contributions of up to 3% per year over the next 10 years will not

threaten the competitiveness of employers in the Fund.”

➢ I have followed up with the economist and she concludes that

continuing increase of up to 3% beyond 10 years would also not

threaten competitiveness.

➢ As a result, we focus on 3% per year increases and test some

possibilities for slightly higher increases at 3.5%.

➢ Based on past experience with suspension designs for this plan, we

start with a maximum period of 20 years and reduce that period

where possible.

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SUSPENSION DESIGN VARIABLES

➢ Benefit reduction percentage – Based on our analyses, the cuts will

fall in the range of 30% to 35% of benefits earned to 12/31/2017

depending on levels of contribution rate increases and duration.

➢ Protect the 55 & 30 - $3,500/month benefit for top tier participants

For every suspension design tested, we look at the results of both

freezing all special benefit levels and protecting the 55 & 30 - $3,500

level for top tier participants. Because the suspension scenarios in this

report have greater benefit reductions than previously considered since

they reduce all benefits earned to 12/31/2017 versus 1/31/2011,

providing this 55 & 30 - $3,500 protection affects more members at

more retirement ages and therefore has a bigger impact on suspension

design results.

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SAMPLE IMPACT OF 35% REDUCTION ON THE 

RETIREE POPULATION

Under age 75 Ages 75 to 80

% (Count) % (Count)

$0 - $499 6.6% (2,671) 1.7% (1,149)

$500 - $999 15.7% (1,252) 4.0% ( 526)

$1,000 - $1,499 22.1% ( 680) 7.1% ( 181)

$1,500 - $1,999 31.5% ( 394) 11.1% ( 118)

$2,000 - $2,499 34.4% ( 369) 10.6% ( 79)

$2,500 - $2,999 34.8% ( 303) 10.9% ( 70)

$3,000 - $3,499 34.7% ( 390) 13.8% ( 66)

$3,500 - $3,999 34.7% ( 276) 11.6% ( 64)

$4,000 + 34.8% ( 26) N/A ( 0)

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PART IV

ANALYZING SUSPENSION DESIGNS

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SUSPENSION DESIGN ANALYSIS

➢ One of the demonstration elements of the MPRA application is to show

the “Solvency Ratio”. The Solvency Ratio is simply a calculation

showing how many times the annual amount of benefits can be paid by

remaining assets with no future contributions or interest. Most of the

filed MPRA applications bottom out at Solvency Ratios near 3 times or

higher.

➢ Obviously, any suspension design must be sufficient to keep the plan

solvent, but because each suspension scenario has a “tipping point”

(where contribution levels plus investment return on declining assets is

insufficient to turn the plan around and to make it solvent), Solvency

Ratios and Funding Ratios can drop to levels previously thought of as

undesirable.

➢ We need to focus on a suspension design that has the highest Solvency

and Funding Ratios.

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SUSPENSION DESIGN ANALYSIS, cont’d

Key decision points:

➢ How many years can contribution increases continue?

➢ Do the Trustees feel that contribution increases at 3.5% are supportable?

If so, for how long?

➢ What dollar amount of assets do the Trustees feel comfortable

bottoming out at? What Solvency Ratio? What Funding Ratio?

➢ Do the Trustees feel it is important to maintain the 55 & 30 -

$3,500/month benefit as a minimum for top tier participants?

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PART V

SUSPENSION DESIGNS RESULTS

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DESIGN RESULTS – 30% REDUCTION

➢ The exhibit on page 22 shows a summary of the designs tested grouped

by benefit reduction percentage. Note that those in red fail and those in

green are successful before other considerations.

➢ 30% reduction with contribution increases of 3.5% for 20 years.

• Scenario 2 freezing all specials - Assets bottom out at $193.6M with

Solvency Ratio at 2.94 and Funded Ratio at 20%.

• Scenario 2S protecting 55 & 30 $3,500 Special - Assets bottom out at

$153.5M with Solvency Ratio at 2.63 and Funded Ratio at 17%.

• While we have not run scenarios at the 2% lower reduction of 28%, we are

confident that they would fail so these scenarios can be considered.

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DESIGN RESULTS – 32.5% REDUCTION

➢ 32.5% reduction with contribution increases of 3.5% for the first 5 years

and 3% for the following 15 years.

• Scenario 5 freezing all specials - Assets bottom out at $211.3M with

Solvency Ratio at 3.22 and Funded Ratio at 23%.

• Scenario 5S protecting 55 & 30 $3,500 Special - Assets bottom out at

$150.3M with Solvency Ratio at 2.73 and Funded Ratio at 18%.

➢ 32.5% reduction with contribution increases of 3.5% for the first 10

years and 3% for the following 10 years.

• Scenario 6 freezing all specials - Assets bottom out at $275.8M with

Solvency Ratio at 3.61 and Funded Ratio at 27%.

• Scenario 6S protecting 55 & 30 $3,500 Special - Assets bottom out at

$238.9M with Solvency Ratio at 3.37 and Funded Ratio at 25%.

➢ Fail scenarios can be developed at the 2% lower 30.5% reduction.

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DESIGN RESULTS – 33% REDUCTION

➢ The 33% reduction scenarios were not intended to be considered as

alternatives, but were set up to demonstrate that the 35% reduction

scenarios that were successful would not be successful if the reduction

were 2% less (or 33%).

➢ The fact that Scenario 9 (33% reduction, freeze all specials,

contribution increases of 3% for 20 years) is successful, means that

Scenario 15 (35% reduction, freeze all specials, contribution increases

of 3% for 20 years) is too favorable and cannot be considered.

➢ Conversely, the fact that Scenario 9S (33% reduction, protecting the 55

& 30 Special, contribution increases of 3% for 20 years) fails, means

that Scenario 15S (35% reduction, protecting the 55 & 30 special,

contribution increases of 3% for 20 years) can be considered.

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DESIGN RESULTS – 35% REDUCTION

➢ 35% reduction with contribution increases of 3% for 17 years.

• Scenario 12 freezing all specials - Assets bottom out at $165.2M

with Solvency Ratio at 2.41 and Funded Ratio at 21% (since 33%

in Scenario 7 fails at 17 years, this scenario can be considered).

• Scenario 12S protecting 55 & 30 $3,500 Special – This scenario

runs out of money in 2058 and therefore cannot be considered.

➢ 35% reduction with contribution increases of 3% for 18 years.

• Scenario 13 freezing all specials - Assets bottom out at $221.0M

with Solvency Ratio at 3.5 and Funded Ratio at 26% (since 33% in

Scenario 8 fails at 19 years, this Scenario 13 can be considered).

• Scenario 13S protecting 55 & 30 $3,500 Special - Assets bottom

out at $122.8M with Solvency Ratio at 2.61 and Funded Ratio at

16% (since Scenario 8S fails, this Scenario 13S can be considered).

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DESIGN RESULTS – 35% REDUCTION, cont’d

➢ 35% reduction with contribution increases of 3% for 19 years.

• Scenario 14 freezing all specials - Assets bottom out at $253.9M

with Solvency Ratio at 3.65 and Funded Ratio at 28% (since 33%

in Scenario 8 fails at 19 years, this Scenario 14 can be considered).

• Scenario 14S protecting 55 & 30 $3,500 Special – Assets bottom

out at $183.0M with Solvency Ratio at 3.12 and Funded Ratio at

22% (since 33% in Scenario 8S fails at 19 years, this scenario can

be considered).

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DESIGN RESULTS – 35% REDUCTION, cont’d

➢ 35% reduction with contribution increases of 3% for 20 years.

• Scenario 15 freezing all specials - Assets bottom out at $333.9M

with Solvency Ratio at 3.69 and Funded Ratio at 32% (since

Scenario 9 with a 33% cut is successful, this Scenario 15 is too

favorable and cannot be considered).

• Scenario 15S protecting 55 & 30 $3,500 Special - Assets bottom

out at $218.9M with Solvency Ratio at 3.33 and Funded Ratio at

25% (since Scenario 9S with a 33% reduction fails, this Scenario

15S can be considered).

File 4 Ex 4, Record of Actions 0077
Run Criteria Results based on 2020 Implementation

Benefit Cont % Duration Protect $3,500 Assets Solvency Ratio Funding %

Scenario Cut % Increase of Cont Inc at 55 & 30? Bottom Out In Year Bottoms Out In Year Bottoms Out In Year Comment

Current Plan 0.0% 3.0% 20 YES $0 2029 0 2029 0% 2029

1 30.0% 3.0% 20 NO $0 2043 0 2043 0% 2043 Fails

1S 30.0% 3.0% 20 YES $0 2042 0 2042 0% 2042 Fails

2 30.0% 3.5% 20 NO $193.6M 2045 2.94 2040-42 20% 2041-44

2S 30.0% 3.5% 20 YES $153.5M 2048 2.63 2044-45 17% 2043-49

3 32.5% 3.0% 17 NO $0 2047 0 2047 0% 2047 Fails

3S 32.5% 3.0% 17 YES $0 2045 0 2045 0% 2045 Fails

4 32.5% 3.0% 20 NO $43.9M 2058 0 2058 6% 2058 Fails

4S 32.5% 3.0% 20 YES $0 2050 0 2050 0% 2050 Fails

5 32.5% 3.5%/3% 5/15 NO $211.3M 2047 3.22 2042 23% 2043-44

5S 32.5% 3.5%/3% 5/15 YES $150.3M 2051 2.73 2047 18% 2046-50

6 32.5% 3.5%/3% 10/10 NO $275.8M 2042 3.61 2035-37 27% 2034-38

6S 32.5% 3.5%/3% 10/10 YES $238.9M 2045 3.37 2039-40 25% 2038-43

7 33.0% 3.0% 17 NO $0 2049 0 2049 0% 2049 Fails

7S 33.0% 3.0% 17 YES $0 2046 0 2046 0% 2046 Fails

8 33.0% 3.0% 19 NO 0 2058 0 2058 0% 2058 Fails

8S 33.0% 3.0% 19 YES $0 2050 0 2050 0% 2050 Fails

9 33.0% 3.0% 20 NO $112.7M 2053 2.41 2049 14% 2049-53

9S 33.0% 3.0% 20 YES $0 2055 0 2055 0% 2055 Fails

10 35.0% 3.0% 15 NO $0 2054 0 2054 0% 2054 Fails

10S 35.0% 3.0% 15 YES $0 2049 0 2049 0% 2049 Fails

11 35.0% 3.0% 16 NO $61.8M 2058 0 2058 9% 2058 Fails

11S 35.0% 3.0% 16 YES $0 2052 0 2052 0% 2052 Fails

12 35.0% 3.0% 17 NO $165.2M 2053 2.41 2049 21% 2050-53

12S 35.0% 3.0% 17 YES 0 2058 0 2058 0% 2058 Fails

13 35.0% 3.0% 18 NO $221.0M 2049 3.5 2043 26% 2044-47

13S 35.0% 3.0% 18 YES $122.8M 2058 2.61 2051-53 16% 2058

14 35.0% 3.0% 19 NO $253.9M 2046 3.65 2040 28% 2035-44

14S 35.0% 3.0% 19 YES $183.0M 2050 3.12 2046 22% 2045-50

15 35.0% 3.0% 20 NO $333.9M 2040 3.69 2037-38 32% 2032-36

15S 35.0% 3.0% 20 YES $218.9M 2047 3.33 2041-42 25% 2039-2047

22

File 4 Ex 4, Record of Actions 0078
23

STRONGEST DESIGN SCENARIOS

Run Criteria Results based on 2020 Implementation

Benefit Cont % Protect Assets Bottom Solvency Bottom Funding % Bottom

Scenario Cut % Increase Duration Special At Year At Year At Year

14 35.0% 3% 19 NO $253.9M 2046 3.65 2040 28% 2035-44

6 32.5% 3.5%/3% 10/10 NO $275.8M 2042 3.61 2035 27% 2034-38

13 35.0% 3% 18 NO $221.0M 2049 3.5 2043 26% 2044-47

6S 32.5% 3.5%/3% 10/10 YES $238.9M 2045 3.37 2039 25% 2038-43

15S 35.0% 3% 20 YES $218.9M 2047 3.33 2041 25% 2039-47

5 32.5% 3.5%/3% 5/15 NO $211.3M 2047 3.22 2042 23% 2043-44

File 4 Ex 4, Record of Actions 0079
24

PART VI

CONCLUSIONS

File 4 Ex 4, Record of Actions 0080
25

CONCLUSIONS

➢ While protecting the 55 & 30 Special Benefit level comes with a price,

it may be important to maintaining the support of top tier actives whose

benefits will be hardest hit now that benefit reductions are made to all

accrued benefits earned up to 12/31/2017.

➢ Whatever benefit suspension scenario the Trustees choose may need to

be tweaked later once we receive the June 30, 2018 assets from GYF

and make the stochastic runs. This work will begin sometime during

the first week of September.

➢ In the meantime, we will be working to complete the 1/1/2018

Valuation, complete the 12/31/2017 MPPAA Report, test stochastic

forecast runs, build out MPRA application exhibits and finalize the

MPRA participant Notices.

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