Each year, your Plan’s Trustees work closely with independent investment advisors and actuaries to review different indicators of the Plan’s financial strength. Funding levels are one of the best measures of a pension plan’s strength.
In 2006, Congress passed a law called the Pension Protection Act (PPA) that requires all pension plans to measure their funding ratios in new, more stringent ways. One important ratio compares the value of Plan assets to the value of all Plan benefits earned to date by all participants. Based in part on this ratio, pension plans fall into one of four “zones,” or categories, indicating their relative strength. These four zones are Green (the strongest category), Yellow (endangered status), Red (critical status), or Deep Red (critical and declining). The Plan’s actuary has determined that the Plan’s funding ratio and other barometers of financial health place it in the Green Zone for 2016, as it has been every year since the zones were introduced.