Annual Funding Notice
Local 805 Pension and Retirement Plan

October 20, 2008

Dear Local 805 Members:

The Employee Retirement Income Security Act of 1974 requires every employee benefit plan to provide each participant with a Summary Annual Report (SAR).  Enclosed you will find a SAR for the Local 805 Welfare and /or Pension Funds. 

This material is for your information only and does not require any action on your part.  Despite efforts reducing administrative costs and savings associated with changing medical providers, Plan assets were reduced, (as were most other Funds) due in large part to market fluctuations.   We are presently working on methods of improving the financial position of the Funds. 

If there are any questions, please contact the Fund Office.

Sincerely,

Annual Funding Notice
Local 805 Pension and Retirement Plan

Introduction
This notice, which federal law requires all multiemployer plans to send annually, includes important information about the funding level of Local 805 Pension and Retirement Plan. This notice also includes information about rules governing insolvent plans and benefit payments guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. This notice is for the plan year beginning April 1, 2007 and ending March 31, 2008.

Plan's Funding Level
The Plan's "funded current liability percentage" for the Plan Year was 69.8%.  In general, the higher the percentage, the better funded the plan. The funded current liability percentage, however, is not indicative of how well a plan will be funded in the future or if it terminates. Whether this percentage will increase or decrease over time depends on a number of factors, including how the plan's investments perform, what assumptions the plan makes about rates of return, whether employer contributions to the fund increase or decline, and whether benefits payments from the fund increase or decline.

Plan's Financial Information
The market value of the Plan's assets as of April 1, 2007 was $111,010,640. The total amount of benefit payments for the Plan Year was $10,381,724. The ratio of assets to benefit payments is 10.7. This ratio suggests that the Plan's assets could provide for approximately 10.7 years of benefit payments in annual amounts equal to what was paid out in the Plan Year. However, the ratio does not take into account future changes in total benefit payments or plan assets.

Rules Governing 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).

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. 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 The Board of Trustees of the Local 805 Pension and Retirement Plan at 44-61 11th  Street, 3rd Floor, Long Island City, NY  11101, telephone number (718) 609-6401. For more information about the PBGC and multiemployer 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)

Additional Information Regarding This Notice
The Plan’s “Funding Level” was calculated based upon the Plan’s Actuarial Value of Assets.  This Value was determined by averaging out fluctuations in asset appreciation and depreciation over the past three years.  This methodology is used in order to maintain as much as possible a relatively level amount of contributions which are required to fund the Plan from year to year.  If the Plan’s Market Value of Assets rather than its Actuarial Value of Assets were used in order to determine its Funding Level, the Plan’s “funded current liability percentage” for the Plan Year would have been 73.0% rather than 69.8%.

The term “current liability” as used in this notice is the current present value of the benefits plan participants have earned to date.  The mortality table and interest rates used in the calculation of the current liability for this notice have been mandated by federal regulation.  The plan’s actuary believes that a more realistic set of assumptions is appropriate.  Under the Plan’s actuary’s assumptions, the Plan’s “funded percentage” would be 82.1%.