1. Bruce Perlin PBGC NATIONAL LABOR AND MANAGEMENT CONFERENCE HOLLYWOOD, FL FEBRUARY 15, 2016 PBGC Update The opinions of Mr. Perlin are his alone and do not necessarily represent the views of PBGC.

2. Agenda Part 1: Program Financials and Recent Updates Part 2: Mergers and Partitions under MPRA 2

3. ME Program Financials – 2015 3 Net Position September 30, 2014($42.4 billion) 2015 Snapshot: Premium Income$212 million Investment Gain$68 million Assets$1.9 billion Liabilities($54.2 billion) Net Position September 30, 2015($52.3 billion)

4. Probable Plans 4 As of September 30, 2015, PBGC expects 160 multiemployer plans will exhaust plan assets and need financial assistance to pay guaranteed benefits and reasonable plan administrative expenses The present value of non-recoverable future financial assistance for these 160 plans is $54.2 billion, compared to $44.2 billion in 2014 The 160 plans in 2015 fall into three categories: 1.Plans receiving financial assistance (55 plans, $1.6 B); 2.Plans that had terminated but had not yet begun receiving financial assistance from PBGC (67 plans, $2.1 B); and 3.Ongoing plans (not terminated) that PBGC expects will require financial assistance in the future (38 plans, $50.5 B)

5. Financial Assistance to Insolvent Multiemployer Plans 5 PBGC Financial Assistance to Insolvent ME Plans (1981-2015) Year Plans Receiving Financial Assistance (1) Total Amount of Financial Assistance (in thousands USD) 19811311 198531,300 199031,000 1996124,022 2001224,526 20063370,097 2012 (2) 4995,000 2014 (2) 5396,520 2015 (2) 57103,000 Sources: http://www.pbgc.gov/open/index.html; http://www.pbgc.gov/res/data-books.htmlhttp://www.pbgc.gov/open/index.htmlhttp://www.pbgc.gov/res/data-books.html (1)A number of plans received financial assistance in more than one year. (2)2012, 2014, 2015 figures rounded.

6. MPRA - Premium and QPSA Changes Effective 2016, multiemployer premiums are $27 per participant The surviving spouse of a participant who dies after the plan has terminated or is insolvent is eligible for the QPSA This QPSA change is effective 1/1/1985 QPSA change does not apply if the surviving spouse died before 12/16/2014 (date of MPRA enactment) 6

7. Electronic Filing Regulation Final Reg. – 80 FR 55742 (Sept. 17, 2015) Must file the following notices electronically – Notice of termination under ERISA § 4041A – Notice of insolvency and insolvency benefit level under ERISA §§ 4245, 4281 – Application for financial assistance under ERISA § 4281 7

8. Electronic Filing Regulation PBGC may grant an exemption from e-filing requirement in appropriate circumstances that demonstrate good cause Part of PBGC’s ongoing implementation of Government Paperwork Elimination Act Applicable for filings made on or after 1/1/2016 8

9. E-Filing Portal 9

10. PBGC Facilitated Mergers In General – 1) When requested by two or more plans, PBGC may take such actions as it deems appropriate to promote and facilitate a merger 2) Then, PBGC must determine after consultation with the “PBGC Plan Sponsor and Participant Advocate” that the transaction is: A) in the interests of the participants and beneficiaries of at least one of the plans, and; B) is not reasonably expected to be adverse to the overall interests of the participants and beneficiaries of any of the plans 3) Such facilitation may include training, technical, and other assistance 10

11. Mergers – Financial Assistance In order to facilitate a merger which PBGC determines is necessary to enable one or more plans involved to avoid or postpone insolvency, PBGC may provide financial assistance if 1) One or more of the plans is in critical and declining status 2) PBGC reasonably expects that: A) Such financial assistance will reduce PBGC’s expected long-term loss with respect to the plans involved; and B) Such financial assistance is necessary for the merged plan to become or remain solvent 11

12. Mergers – Financial Assistance, Cont’d 3) PBGC certifies that its ability to meet existing financial assistance obligations to other plans will not be impaired by such financial assistance 4) Such financial assistance is paid exclusively from the multiemployer trust fund 5) Not later than 14 days after providing financial assistance, PBGC notifies certain Congressional committees 12

13. Partitions (with a coordinated suspension application) – Sec. 4233 Plan must be in critical and declining status PBGC determines, after consulting with the Plan Sponsor and Participant Advocate, that the plan has taken or is taking all reasonable measures to avoid insolvency, including maximum benefit suspensions, if applicable PBGC reasonably expects that 1) a partition will reduce PBGC’s expected long-term loss with respect to the plan, and 2) partition is necessary for the plan to remain solvent 13

14. Partition – Eligibility PBGC certifies to Congress it can meet existing financial assistance obligations to other plans (plans currently insolvent and plans projected to be insolvent in 10 years) and will not be impaired by such partition The cost of the partition is paid from the PBGC multiemployer trust fund 14

15. Partitions – General Information 15 Plan must notify participants within 30 days of submitting an application to PBGC PBGC generally will make a decision on a partition application within 270 days If approved by PBGC, original plan transfers liabilities to successor plan (plan created by the partition)

16. Partitions – General Information Liabilities transferred are the minimum amount of the original plan’s liabilities necessary for the original plan to remain solvent The plan sponsor and administrator of the successor plan and the original plan are the same 16

17. Partitions – General Information Original plan tops up benefits in successor plan (e.g., assume maximum suspension – benefit is 110% of guarantee level) For 10 year period following the partition date, the original plan pays premiums on behalf of participants in the successor plan Partition withdrawal liability rule for the first 10 years after the partition order date 17

18. Partitions – General Information Benefit improvement rules following partition PBGC provides notice within 14 days of the partition order to four Congressional committees and to affected participants and beneficiaries 18

19. Partition - Regulations Final Rule published in the Federal Register, 80 FR 79687 (December 23, 2015); Interim Final Rule, 80 FR 35220 (June 19, 2015) Application requirements (4233.3) Initial review process (4233.10) Notice requirements (4233.11) Determination process (4233.12) 19

20. Regulations Cont’d Coordinated application process for partition and benefit suspension (4233.13) Partition order (4233.14) Nature and operation of successor plan (4233.15) Coordination of benefits under original plan and successor plan (4233.16) Continuing PBGC jurisdiction (4233.17) 20