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INTRODUCTION This notice includes important funding information about the Equity-League Pension Trust Fund (“the Plan”). This notice also provides a summary of federal rules governing multiemployer plans in reorganization and insolvent plans and benefit payments guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. This notice is for the Plan Year beginning June 1, 2010 and ending May 31, 2011 (“2010 Plan Year”).
Funded Percentage The funded percentage of a plan is a measure of how well that plan is funded. This percentage is obtained by dividing the plan’s assets by its liabilities on the valuation date for the plan year. In general, the higher the percentage, the better funded the plan. The Plan’s funded percentage for the 2010 Plan Year and two (2) preceding Plan Years is set forth in the chart below, along with a statement of the value of the Plan’s assets and liabilities for the same period.
Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan’s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of May 31, 2011, the preliminary fair market value of the Plan’s assets was $1,272,321,643. As of May 31, 2010, the fair market value of the Plan’s assets was $1,092,395,902. As of May 31, 2009, the fair market value of the Plan’s assets was $979,571,275.
Participant Information The total number of participants in the Plan as of the Plan’s 2010 valuation date was 40,802. Of this number, 25,307 were active participants, 5,811 were retired or separated from service and receiving benefits, and 9,684 were retired or separated from service and entitled to future benefits.
Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the Plan’s objectives. A funding policy relates to the level of contributions needed to pay for benefits promised under the plan currently and over the years. The Plan is funded by contributions made by employers pursuant to collective bargaining or other written participation agreements. Once money is contributed to the Plan, the money is invested by Plan officials called fiduciaries. Specific investments are made in accordance with the Plan’s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for Plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The investment policy of the Plan is to invest in a diversified group of asset classes with target allocations that have a minimum and maximum allowed weighting as follows:
Investment Objectives: Assets of the Plan are invested in a manner consistent with the fiduciary standards of the Employee Retirement Income Security Act of 1974 ("ERISA") and supporting regulations. Through its investment portfolio, the Plan desires to preserve its capital base while generating income necessary to meet the costs of providing pension benefits to the Plan’s participants and beneficiaries in a timely fashion. Consistent with the provisions of the Plan and applicable law, the Plan’s intent is to obtain a favorable net rate of return on investments at a prudent level of risk and protect assets that will be used for the payment of pension benefits. Sufficient liquidity is maintained to meet benefit payment obligations and other Plan expenses.
Investment Guidelines: To assist the Trustees in their responsibility to invest the Plan’s assets, the Trustees have the authority to appoint and delegate responsibility for the investment of all or any portion of the Plan’s assets to Investment Managers. Each Investment Manager is a bank (trust company), insurance company, or a registered investment advisor. Each Investment Manager shall at all times be registered in good standing as an investment advisor under the Investment Advisers Act of 1940. Full discretion is granted to each Investment Manager with regard to the sector and security selection and the timing of any transactions.
Standards of Investment Performance: Each Investment Manager is reviewed regularly regarding performance, personnel, strategy, research capabilities, organizational and business matters and other qualitative factors that may affect its ability to achieve the desired investment results. Consideration will be given to the extent to which performance results are consistent with the goals and objectives set forth in the Investment Policy and/or individual guidelines provided to an Investment Manager. The Plan’s investment policy outlines prohibited investments as well as limits regarding the percentage of the Plan that may be invested in any one company and industry. Minimum credit quality guidelines are established and provided to investment managers. No investment may be made which violates the provisions of ERISA or the Internal Revenue Code. The Trustees review the Plan’s investment policy on a regular basis and make periodic changes when, based on all available information, it is prudent to do so. In accordance with the Plan’s investment policy, the Plan’s assets were invested in a diversified group of asset classes with allocations among the following categories of investments, as of the end of the 2010 Plan Year. These allocations are percentages of total assets:
For information about the Plan’s investment in any of the following types of investments as described in the chart above – common/collective trusts, pooled separate accounts, master trust investment accounts, or 103-12 investment entities - contact Mr. Arthur Drechsler, Executive Director, Equity-League Pension Trust Fund, 165 West 46th St, 14th Floor, New York, NY 10036, (212) 869-9380, or (800) 344-5220 toll free outside NYC, or pension@equityleague.org.
Critical or Endangered Status Under federal pension law a plan generally will be considered to be in “endangered” status if, at the beginning of the plan year, the funded percentage of the plan is less than 80 percent or in “critical” status if the percentage is less than 65 percent (other factors may also apply). If a pension plan enters endangered status, the trustees of the plan are required to adopt a funding improvement plan. Similarly, if a pension plan enters critical status, the trustees of the plan are required to adopt a rehabilitation plan. Rehabilitation and funding improvement plans establish steps and benchmarks for pension plans to improve their funding status over a specified period of time.
The Plan was not in endangered or critical status in the Plan Year. Right to Request a Copy of the Annual Report A pension plan is required to file with the US Department of Labor an annual report (i.e., Form 5500) containing financial and other information about the plan. Copies of the annual report are available from the US Department of Labor, Employee Benefits Security Administration’s Public Disclosure Room at 200 Constitution Avenue, NW, Room N-1513, Washington, DC 20210, or by calling 202.693.8673. Or you may obtain a copy of the Plan’s annual report by making a written request to the Plan Administrator, c/o Mr. Arthur Drechsler, Executive Director, Equity-League Pension Trust Fund, 165 West 46th St, 14th Floor, New York, NY 10036, (212) 869-9380, or (800) 344-5220 toll free outside NYC, or pension@equityleague.org.
Summary of Rules Governing Plans in Reorganization and Insolvent Plans Federal law has a number of special rules that apply to financially troubled multiemployer plans. Under so-called “plan reorganization rules,” a plan with adverse financial experience may need to increase required contributions and may, under certain circumstances, reduce benefits that are not eligible for the PBGC’s guarantee (generally, benefits that have been in effect for less than 60 months). If a plan is in reorganization status, it must provide notification that the plan is in reorganization status and that, if contributions are not increased, accrued benefits under the plan may be reduced or an excise tax may be imposed (or both). The law requires the plan to furnish this notification to each contributing employer and the labor organization. Despite the special plan reorganization rules, a plan in reorganization nevertheless could become insolvent. A plan is insolvent for a plan year if its available financial resources are not sufficient to pay benefits when due for the plan year. An insolvent plan must reduce benefit payments to the highest level that can be paid from the plan’s available financial resources. If such resources are not enough to pay benefits at a level specified by law (see Benefit Payments Guaranteed by the PBGC, below), the plan must apply to the PBGC for financial assistance. The PBGC, by law, will loan the plan the amount necessary to pay benefits at the guaranteed level. Reduced benefits may be restored if the plan’s financial condition improves. A plan that becomes insolvent must provide prompt notification of the insolvency to participants and beneficiaries, contributing employers, labor unions representing participants, and PBGC. In addition, participants and beneficiaries also must receive information regarding whether, and how, their benefits will be reduced or affected as a result of the insolvency, including loss of a lump sum option. This information will be provided for each year the plan is insolvent. Benefit Payments Guaranteed by the PBGC The maximum benefit that the PBGC guarantees is set by law. Only vested benefits are guaranteed. Specifically, the PBGC guarantees a monthly benefit payment equal to 100 percent of the first $11 of the Plan’s monthly benefit accrual rate, plus 75 percent of the next $33 of the accrual rate, times each year of credited service. The PBGC’s maximum guarantee, therefore, is $35.75 per month times a participant’s years of credited service. Example 1: If a participant with 10 years of credited service has an accrued monthly benefit of $500, the accrual rate for purposes of determining the PBGC guarantee would be determined by dividing the monthly benefit by the participant’s years of service ($500/10), which equals $50. The guaranteed amount for a $50 monthly accrual rate is equal to the sum of $11 plus $24.75 (.75 x $33), or $35.75. Thus, the participant’s guaranteed monthly benefit is $357.50 ($35.75 x 10). Example 2: If the participant in Example 1 has an accrued monthly benefit of $200, the accrual rate for purposes of determining the guarantee would be $20 (or $200/10). The guaranteed amount for a $20 monthly accrual rate is equal to the sum of $11 plus $6.75 (.75 x $9), or $17.75. Thus, the participant’s guaranteed monthly benefit would be $177.50 ($17.75 x 10). The PBGC guarantees pension benefits payable at normal retirement age and some early retirement benefits. In calculating a person’s monthly payment, the PBGC will disregard any benefit increases that were made under the plan within 60 months before the earlier of the plan’s termination or insolvency (or benefits that were in effect for less than 60 months at the time of termination or insolvency). Similarly, the PBGC does not guarantee pre-retirement death benefits to a spouse or beneficiary (e.g., a qualified pre-retirement survivor annuity) if the participant dies after the plan terminates, benefits above the normal retirement benefit, disability benefits not in pay status, or non-pension benefits, such as health insurance, life insurance, death benefits, vacation pay, or severance pay. Where to Get More Information For more information about this notice, you may contact Mr. Arthur Drechsler, Executive Director, Equity-League Pension Trust Fund, 165 West 46th St, 14th Floor, New York, NY 10036, (212) 869-9380, or (800) 344-5220 toll free outside NYC, or pension@equityleague.org. For identification purposes, the official plan number is 001 and the Plan sponsor’s employer identification number or “EIN” is 13-6696817. For more information about the PBGC and benefit guarantees, go to PBGC's website, www.pbgc.gov, or call PBGC toll-free at 1-800-400-7242 (TTY/TDD users may call the Federal relay service toll free at 1-800-877-8339 and ask to be connected to 1-800-400-7242). |
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©2001, 2002 Equity League Pension and Health Funds This site does not change or otherwise interpret the official Plan documents. To the extent that any of the information contained in this website is inconsistent with the official Plan documents (which, of course, includes the Trustees' rights to amend or modify the Plans at any time), the plan documents will govern in all cases. No official (other than the Trustees) has any authority to interpret the Plans, or other official Plan documents, or to make any promises to you about them. Terms of Use | Privacy Policy |