The Western Conference of Teamsters Pension Trust

Chairman's Announcement to Participating Employers

November 13, 2006

For the past several years, in my capacity as Chairman of the Employer Caucus of the Western Conference of Teamsters Pension Trust Fund, I have advised you of the funding status of the Trust and other relevant matters. The Trust had fallen into less than fully funded status during the declines in the investment markets between 2000 and 2002.

In the subsequent years, although the Trust had made significant gains in the numbers of members covered, increases in employer contributions, reductions in Trust operating expenses and decisive action taken by the Plan Trustees to reduce future benefit costs, the Plan still had some unfunded liability for vested benefits accrued to date (UVBL).

During these lean years, I had informed you that there was no “quick fix” to eliminate the Plan’s UVBL, and it could take a number of years to bring the Plan’s assets and vested benefit liabilities back into balance. I also stated to you then that the Trustees of the Fund, both the Employer and Union, were committed to returning the Trust to a fully funded status as soon as it was possible to do so.

Therefore, I am delighted to advise you that this commitment has been realized. Our Plan’s enrolled actuary, as well as a separate independent actuarial firm retained by the Trust, has advised the Trustees that as of January 1, 2006, the Trust no longer has an unfunded vested benefit liability (UVBL). This means there is no withdrawal liability for employers who withdraw from the Plan in 2006.

The reasons for the improvement in funding status are many – the Trust continues to add active participants, having grown over 2% in that important demographic. New groups continue to choose the Trust as the plan of choice for lifetime financial security. More than 8,000 such individuals have joined the rolls in the past four years. Trust investment performance remains stellar, ranking in the 6th percentile of Taft-Hartley trusts over the past ten years, as measured by the Wilshire Cooperative Universe. Thanks in large part to your confidence in the Trust, Employer contributions increased 7.3% last year, to a record 1.2 billion dollars. This figure also exceeded our actuaries’ estimates, adding to the positive funding environment. Taken together, the excellent financial performance and strong demographic characteristics have returned the Trust to its traditional status as “fully funded.”

Other important events have occurred recently as well, and our professional staff has completed its analysis of the recently passed Pension Protection Act of 2006. This is the most significant piece of pension legislation passed since ERISA in 1974. The Act is primarily designed to address funding concerns and requires certain new reporting requirements. Based on what I have reported above, it will probably not surprise you that the funding requirements of the new Act will not affect the WCTPT in any meaningful way. We are already complying with most of the new requirements for funding and reporting, and will have no difficulty meeting the new administrative requirements.

Your Employer Trustees remain committed to the continued success and direction of the WCTPT. Benefit increases for your employees are always an objective but never at the sacrifice of the Plan’s funding health. Instead, the goal of lifetime retirement security for your employees will be paired with prudent and responsible fiscal integrity, so that your confidence in the Plan may continue and your employees can rest assured that their benefits are safe and secure.

If you have any questions, please contact your Area Administrative Office.

Very truly yours,

Bernard T. Eilerts
Employer Chairman