Feb 2010 Vol. 13 No. 2

Pension reallocation vote

Summary of proposed changes

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In compliance with the Pension Protection Act of 2006 (PPA), the Pension Plan will have to undergo significant changes. The Trustees of the Pension Fund and the Bargaining Parties of the Master Agreement have taken action to address the shortfall in earnings created by the economic downturn of the last two (2) years so that the Plan will remain in conformity with the law. To accomplish this, you are being asked to consider reallocating a portion of the upcoming wage increases. The following is a brief summary of the effect of this reallocation:

A YES vote means future Wage and Pension increases will be reallocated as follows and allows the Alternative Option Rehabilitation Plan to be enacted:

This reallocation will increase the monthly benefit you will receive at retirement as follows:

In addition, if pending Federal legislation amending the PPA passes, up to 50% of the $1.00 reallocated to Pension in 2011 will be available to enhance benefits for existing retirees in the form of a 13th check and/or other benefit improvements.

A NO vote will leave the Wage and Pension allocations in 2010 and 2011 unchanged; however, significant changes to the Pension Plan will need to be imposed so the Plan remains in compliance with the PPA through a Default Plan as required by the Federal Government:

• Elimination of the Service Pension commonly referred to as “30 year & out.”
• Elimination of early retiree benefits. Starting July 1, 2012, participants will need to be age 65 to receive an unreduced pension instead of at age 62, as is in place today. Also, those individuals who do retire before age 65 will face larger benefit reductions for early retirement than are in place today.
• The accrual factor of 1.75% will be reduced to 1% effective September 1, 2012. Based on current contribution rates in place, this change will decrease the monthly benefit you will receive at retirement.

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