Notice of Pension Relief Election

EIN: 95-6392774, PN: 001

On June 25, 2010, President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 ("PRA") into law. This legislation was passed in an effort to help fundamentally sound plans that have become financially challenged by the current economic climate.

For a plan to qualify for the relief offered by the PRA, the plan's actuary has to certify that the plan is projected to have enough assets to cover all benefit payments and expenses (plan is "solvent") for the extended relief period. Based on the Zone Status certification for the plan year beginning July 1, 2010 the Southern California IBEW-NECA Pension Plan ("the Plan") qualifies for the relief because the Plan is projected to be solvent throughout the relief period.

The Board of Trustees adopted the following relief provisions on September 14, 2010:

  1. The eligible net investment loss incurred during the 2008/2009 Plan year will be segregated and amortized over the 30-year period. Other experience will continue to be amortized over 15 years for minimum funding purposes.
  2. For purposes of determining the actuarial asset value as of July 1, 2009, the Plan will recognize the 2008/2009 Plan Year net investment loss over a 10-year period rather than the 5-year recognition period under the Plan's regular asset valuation method.
  3. The July 1, 2009 actuarial asset value will reflect an upper limit of 130% of the market value in lieu of the 120% limit that applies to all other years.

Note that applying the relief offered by the PRA will decrease the minimum required contributions specified by law and may affect the Plan's certification status under §432(b) for the current and future Plan years. The relief elected in no fashion alters provisions adopted as part of the Rehabilitation Plan including the Schedules which have been adopted by the collective bargaining parties. Additionally, the decision to elect the relief means the Plan is not permitted to increase benefits for two years after the last year in which the relief is used, unless certain conditions are met.

In the event you have any questions or would like additional information about the election, you may contact the Administrative Office by phone at (800) 824-6935, or by mail at P.O. Box 910918, Los Angeles, California 90091.


Board of Trustees

cc: Pension Benefit Guaranty Corp.

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