pension funding notice for daughters of charity health system workers-2011

8/2/2019 Pension Funding Notice for Daughters of Charity Health System Workers-2011

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MemorandumDate: April 25, 2012To: Collective Bargaining Associations Providing for Participation in the

- Retirement Plan for Hospital Employees - (RPHE)Tom Henry f ! i lRetirement Plan Office

From:

Re: Annual Funding Notice Plan Year 2011

Enclosed is a copy of the "Annual Funding Notice" for plan year 2011 that is being mailed to allactive, terminated vested and retired participants in the RPHE. If you have any questions, pleasegive us a call at (415) 352-1080. Thanks.


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ANNUAL FUNDING NOTICEFor

Retirement Plan for Hospital Employees

Introduction

This not ice includes important funding information about the Retirement Plan for Hospital Employees ("thePian"). This notice also provides a summary of federal rules governing multiemployer plans in reorganizationand insolvent plans and benef it payments guaranteed by the Pension Benef it Guaranty Corporation("PBGe"), a federal agency. This notice is for the plan year beginning January 1, 2011 and ending December31,2011 ( "the Plan Year").Funded Percentage

The funded percentage of a plan is a measure of how well that plan is funded. This percentage is obtainedby dividing the Plan's assets by its liabilities on the valuation date for the plan year. In general, the hgher thepercentage, the better funded the plan. The Plan's funded percentage for the Plan Year and 2 precedingplan years is set forth in the chart below, along with a statement of the value of the Plan's assets andliabilities for the same period.

2011 2010 2009Valuation Date January 1, 2011 January 1, 2010 January 1, 2009Funded Percentage 92.5% 94.6% 87.7%Value of Assets $ 794,686,234 $ 737,985,523 $ 610,095,818Value of Liabilities $ 859,159,735 $ 779,755,783 $ 695,954,536

Fair Market Value of Assets

Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearerpicture of a plan's funded status as of a given point in time. However, because market values can fluctuatedaily based on factors in the marketplace, such as changes in the stock market, pension law allows plans touse actuarial values for funding purposes. While actuarial values fluctuate less than market values, they areestimates. As of December 31,2011, the fair market value of the Plan's assets was $747,880,397. As ofDecember 31,2010, the fair market value of the Plan's assets was $ 780,565,737. As of December 31,2009, the fair market value of the Pian's assets was $ 661,981,299.

A nn ua l F un din g N otic e fo r R PHE 1 of 4 P la n Y ea r 2 01 1


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Participant Information

The total number of participants in the Plan as of the Plan's valuation date was 22,322. Of this number,10,837 were active participants, 4,769 were ret ired or separated from service and receiving benefits, and6,716 were retired or separated from service and ent it led to future benefits.

Funding & Investment Policies

The law requires that every pension plan have a procedure for establishing a funding policy to carry out theplan objectives. A funding policy relates to the level of contr ibutions needed to pay for benef its promisedunder the Plan current ly and over the years. The Plan's funding policy requires each employer to contributean amount equal to the value of benefits earned by participants during the year plus an additional amounttowards paying down the Plan's unfunded liabil ity.Once money is contributed to the Plan, the money is invested by Plan off icials called fiduciaries. Specif icinvestments are made in accordance with the Plan's investment policy. Generally speaking, an investmentpolicy is a writ ten statement that provides the f iduciaries who are responsible for Plan investments withguidelines or general instructions concerning various types or categories of investment managementdecisions. The investment policy of the Plan is established to be consistent with the objectives of the Trustand the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). It is the policy ofthe Plan to diversify the Pan's assets in equities and fixed income investments (including cash) in the ratio of70% 130%, respectively. The investment policy objective is to achieve a long term inflation adjusted rate ofreturn of 4% or more and to outperform the actuarially assumed investment return over a market cycle. It isthe policy of the Plan to engage financial advisors to help shape and implement the plan's investment policy.The Plan will quarterly review the plan's investment performance and when appropriate make changes to thefunding policy and the plan's investment advisors as the Plan deems appropriate.In accordance with the Plan's investment policy, the Plan's assets were allocated among the followingcategories of investments, as of the end of the Plan Year. These allocations are percentages of total assets:

Asset Allocations Percentage1. Interest-bearing cash2. U.S. Government securities3. Corporate debt instruments (other than employer securit ies):

PreferredAll other4. Corporate stocks (other than employer securit ies):

PreferredCommon5. Value of interest in common/collect ive trusts6. Value of interest in 103-12 investment ent it ies7. Value of interest in registered investment companies (mutual funds)8. Other

0.90%20.64%13.18%0.00%0.0%45.62%

2.61%8.78%8.27%0.00%

For information about the Plan's investment in any of the following types of investments as described in thechart above - common/collective trusts, pooled separate accounts, master trust investment accounts, or103-12 investment entities - contact the Retirement Plan Office, at (415) 352-1080 or P.O. Box 2949 SanFrancisco, CA 94126-2949.

Annual Funding Notice for RPHE 2 of4 Plan Year 2011


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Critical or Endangered Status

Under federal pension law a plan generally will be considered to be in "endangered" status if, at thebeginning of the plan year, the funded percentage of the plan is less than 80 percent or in "critical" status ifthe percentage is less than 65 percent (other factors may also apply). If a pension plan enters endangeredstatus, the trustees of the plan are required to adopt a funding improvement plan. Similarly, if a pension planenters critical status, the trustees of the plan are required to adopt a rehabilitation plan. Rehabilitation andfunding improvement plans establish steps and benchmarks for pension plans to improve their fundingstatus over a specified period of t ime.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 (l.e., Form 5500)containing f inancial and other information about the plan. Copies of the annual report are available from theUS Department of Labor, Employee Benefits Security Administration's Public Disclosure Room at 200Constitution Avenue, NW, Room N-1513, Washington, DC 20210, or by calling 202.693.8673. Oryou mayobtain a copy of the Plan's annual report by making a written request t~ the plan administrator.

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 f inancial experience may need to increase requiredcontributions and may, under certain circumstances, reduce benefits that are not eligible for the PBGC'sguarantee (generally, benefits that have been in effect for less than 60 months). If a plan is in reorganizat ionstatus, it must provide notificat ion that the plan is in reorganizat ion status and that, if contribut ions are notincreased, accrued benefits under the plan may be reduced or an excise tax may be imposed (or both). Thelaw requires the plan to furnish this notification to each contribut ing employer and the labor organizat ion.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 whendue for the plan year. An insolvent plan must reduce benefit payments to the highest level that can be paidfrom the plan's available financial resources. If such resources are not enough to pay benefits at a levelspecified by law (see Benefit Payments Guaranteed by the PBGC, below), the plan must apply to the PBGCfor financial assistance. The PBGC, by law, will loan the plan the amount necessary to pay benefits at theguaranteed level. Reduced benef its may be restored if the plan's financial condit ion improves.A plan that becomes insolvent must provide prompt not if icat ion of the insolvency to participants andbeneficiaries, contributing employers, labor unions representing participants, and PBGC. In addition,participants and beneficiaries also must receive information regarding whether, and how] their benef its willbe reduced or affected as a result of the insolvency, including loss of a lump sum option. This information willbe provided for each year the plan is insolvent.The Plan was neither in Reorganizat ion nor Insolvent during the Plan Year.

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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 thePlan's monthly benefit accrual rate, plus 75 percent of the next $33 of the accrual rate, times each year ofcredited service. The PBGC's maximum guarantee, therefore, is $35.75 per month times a participant 'syears of credited service.Example 1: If a participant with 10 years of credited service has an accrued monthly benefit of $500, theaccrual rate for purposes of determining the PBGC guarantee would be determined by dividing the monthlybenefit by the participant's years of service ($500/10), which equals $50. The guaranteed amount for a $50monthly accrual rate is equal to the sum of $11 plus $24.75 (.75 x $33), or $35.75. Thus, the participant'sguaranteed 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 forpurposes of determining the guarantee would be $20 (or $200/10). The guaranteed amount for a $20monthly accrual rate is equal to the sum of $11 plus $6.75 (.75 x $9), or $17.75. Thus, the participant'sguaranteed monthly benef it would be $177.50 ($17.75 x 10).The PBGC guarantees pension benef its payable at normal ret irement age and some early ret irementbenefits. In calculat ing a person's monthly payment, the PBGC will disregard any benef it increases that weremade under the plan within 60 months before the earlier of the plan's termination or insolvency (or benefitsthat were in effect for less than 60 months at the time of termination or insolvency). Similarly, the PBGC doesnot guarantee pre-retirement death benefits to a spouse or beneficiary (e.g., a qualif ied pre-retirementsurvivor annuity) if the participant dies after the plan terminates, benef its above the normal ret irementbenefit, disability benef its not in pay status, or non-pension benefits, such as health insurance, life insurance,death benef its, vacat ion pay, or severance pay.

Where to Get More Information

For more information about this notice, you may contact the Retirement Plan Office, at (415) 352-1080 orP,O. Box 2949 San Francisco, CA 94126-2949. For identification purposes, the official Plan number is 001and the Plan sponsor's employer ident if ication number or "EIN" is 94-2995676. For more information aboutthe PBGC and benef it guarantees, go to PBGC's website, www.pbgc.gov, or call PBGC toll-free at 1-800-400-7242 (TTYITDD users may call the Federal relay service tol! free at 1-800-877-8339 and ask to beconnected to 1-800-400-7242).

Annual Funding Not ice for RPHE 4of4 Plan Year 2011
http://www.pbgc.gov%2C/http://www.pbgc.gov%2C/

pension funding notice for daughters of charity health system workers-2011

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