International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

Does the application include a copy of the proposed ballot? 

See section 6.01. 

Document 23.1 provides a copy of the proposed ballot. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

23.1

Document 23.1

Ballot for Ratification of Benefit Reductions 

International Association of Machinists Motor City Pension Plan 

 

ATTENTION INTERNATIONAL ASSOCIATION OF MACHINISTS MOTOR CITY PENSION PLAN 

PARTICIPANTS, RETIREES AND BENEFICIARIES: 

 As described in the Notice of Proposed Reduction in Benefits under the 

International Association of Machinists Motor City Pension Plan (“Notice”), which was 

mailed to you on or about March 31, 2017, the Joint Board of Trustees (“Board of 

Trustees”) of the International Association of Machinists Motor City Pension Plan 

(“Plan”) submitted an application to the U.S. Department of the Treasury to reduce 

benefits pursuant to the Multiemployer Pension Reform Act of 2014 (“MPRA”). 

The Notice explained that if the Plan’s application to reduce benefits is approved 

by the Secretary of Treasury, all participants and beneficiaries of the Plan will be given 

the opportunity to vote on whether the benefit reductions should go into effect. The 

Plan’s application has now been approved by the Secretary of Treasury. This ballot is 

designed to assist you in deciding whether to vote to approve the proposed benefit 

reductions. Your actual vote must be cast by telephone or electronically using a secure 

website. Do not attempt to cast your vote by mailing the ballot to the Plan. 

Description of Proposed Benefit Reductions 

 The Board of Trustees proposes a reduction for all participants to 110% of the 

amount guaranteed by the Pension Benefit Guaranty Corporation (“PBGC”). With the 

exception of the individual limitations mentioned below, all participants’ and 

beneficiaries’ benefits will be reduced to 110% of their PBGC guarantee benefit on 

benefits earned through January 1, 2018. Benefits earned after January 1, 2018 will 

return to the current benefit accrual rate, which is 0.5% of credited contributions made 

on your behalf. The individual limitations are the only exceptions to this reduction: 

1. Individuals who are age 80 or older by January 31, 2018 (only partial 

reductions would be made for individuals between ages 75 and 80). 

2. Individuals who are receiving disability benefits under the terms of the 

Plan. 

3. Individuals whose benefits are already less than 110% of the PBGCguaranteed benefit level. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

23.2

The benefit reductions will eliminate the projected insolvency and allow the Plan 

to pay benefits indefinitely. Without these reductions, the Plan is projected to become 

insolvent in the plan year beginning July 1, 2025. 

The benefit reductions will apply to all Plan participants and beneficiaries, 

including Alternate Payees under a Qualified Domestic Relations Order that are 

otherwise not exempt due to their age or disability status as described above. No 

person will have his/her benefit reduced below 110% of the PBGC guaranteed level. No 

person will have his/her benefit increased due to the reduction. 

Factors Considered by the Board of Trustees 

Federal law requires that any reduction of benefits be distributed fairly among 

the various categories or groups of participants and beneficiaries under the Plan. In 

deciding whether the proposed benefit reductions would be distributed fairly, the Board 

of Trustees initially 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 type and amount of the benefits being provided by the Plan; 

4. The extent to which the benefits provided contain subsidies; 

5. The history of benefit increases and reductions, including post-retirement 

increases; 

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 Plan; 

8. The number of years to retirement for active participants; and 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

23.3

9. The extent to which a participant’s or beneficiary’s benefits are 

attributable to service with an employer that failed to pay its full 

withdrawal liability. 

While these factors above were considered, the reduction in benefits still ended 

up being the same for all participants and beneficiaries who are subject to a reduction. 

This will be 110% of the PBGC’s guaranteed benefit. This assures that the proposed 

benefit reductions would be distributed fairly. 

 

Duration of the Benefit Reductions 

If approved, the reduction of benefits described above will start on January 1, 

2018 and will remain in effect indefinitely.

Board of Trustees’ Statement in Support of the Proposed Benefit Reductions 

The Board of Trustees supports the proposed reduction of benefits. The Board 

of Trustees has done everything in its power to avoid these benefit reductions, including 

reducing active participants’ benefits and future accruals, and requiring increased 

contributions to the Plan. However, reductions in investment returns, work weeks, and 

employer contributions have forced the Board of Trustees to take this action so that the 

Plan does not become insolvent. 

Various economic and financial factors impact pension funds. The investment 

markets continue to be volatile. While the markets have performed better in recent 

years, the Plan has not fully recovered from the downturns from the early 2000’s and 

2009. Also, because weeks worked are down, employer contributions to the Plan are 

also down. Retirees outnumber active participants and are retiring earlier and living 

longer, causing benefit payments to be greater than contributions. Finally, a number of 

employers have discontinued their participation in this Plan. All of these factors have 

contributed to the decline in Plan assets. 

Approval by the Secretary of Treasury 

This Application to reduce benefits has been reviewed and approved by the 

Secretary of Treasury in consultation with the PBGC and the Secretary of Labor. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

23.4

Board of Trustees’ Determination of Insolvency 

The Board of Trustees, in consultation with the Plan’s actuary, has determined 

that the Plan will become insolvent in the Plan Year beginning in 2025 if the proposed 

benefit reductions are not implemented as of January 1, 2018. This means that during 

the Plan Year beginning in 2025, the Plan 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 and consequently are subject to some uncertainty. 

Impact of Insolvency on Plan Benefits 

The Board of Trustees is taking this action now because if too much time goes 

by, no benefit reduction plan will be able to save the Plan from running out of money. If 

that happens, the PBGC will be responsible for paying out your pension, and your 

payments will be reduced by 10% more than under these proposed benefit reductions. 

Your payments may be reduced significantly more than 10% if your benefit is fully or 

partly protected under the proposed benefit reductions. 

Effect of Insolvency of the PBGC 

The ability of the Plan 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 

by 2024, possibly becoming insolvent before the Plan does. 

In the event that the Plan and the PBGC both become insolvent, participants and 

beneficiaries would be at risk of receiving benefits that would be dramatically lower 

than benefits otherwise paid in the case of the Plan’s insolvency. In fact, if both the Plan 

and the PBGC Multiemployer Program become insolvent, your benefits could be 

reduced to almost zero. 

Plan Actuary’s Projection of Solvency

The Plan’s actuary has certified that the Plan is projected to avoid insolvency if 

the proposed benefit reductions under the reduction plan are implemented. This 

projection requires the use of certain assumptions that are reasonably expected to 

occur in the future but not guaranteed and consequently are subject to some 

uncertainty. 
International Association of Machinists Motor City Pension Fund 

EIN/Plan #: 38-6237143/001 

Checklist Item #23 – Proposed Ballot 

23.5

Effect of Yes Votes, No Votes and the Failure to Cast a Vote 

The benefit reductions will go into effect unless a majority of eligible voters vote 

to reject the reduction plan. Thus, a failure to vote has the same effect on the outcome 

of the vote as a vote in favor of the reduction plan. To preserve the retirement security 

for all Plan participants and beneficiaries, the Board of Trustees strongly recommends 

that you vote to approve this reduction plan. 

Instructions for Casting Your Vote 

 As part of this ballot, you have received an individual number that will keep your 

vote private. There are two available methods approved by the Department of Treasury 

for casting your vote: 

1. By calling a dedicated telephone number (800) ____-________ set up by 

the Department of Treasury for this purpose; 

2. By logging into a secure website at www._____________.org 

You will need your individual participant number assigned to you in order to 

register your vote. Paper ballots will not be accepted. 

By law, the period for voting to approve the proposed benefit reduction plan 

described in this Ballot will end on [DATE]. This means that you must cast your vote by 

11:59 EST on [DATE] either by telephone or online or it will not be counted.