1 NECA LABOR RELATIONS CONFERENCE SAN ANTONIO, TX OCTOBER 12-14, 2009 Presented by: Paul Heylman Dan Brandenburg Saul Ewing LLP Defined Benefit Issues (Mergers & Conversions)

2 Types of Multiemployer Plan Terminations Mass Withdrawals – All employers withdraw or cease to be obligated to contribute Plan Amendment – Plan adopts an amendment providing participants will receive no service credit after a specified date (freeze) or that makes it no longer a covered plan (conversion)

3 Each employer's contribution for each plan year beginning on or after the plan termination date (until full funding is achieved) must equal or exceed the highest rate that employer was obligated to contribute in the five preceding plan years PBGC can approve a lower contribution rate if it finds that the plan is, or soon will be, fully funded. Plan Termination as a Result of Freeze or Conversion

4 Plan Termination as a Result of a Mass Withdrawal All or substantially all employers withdraw Look-back provisions (three years) Limits on payment of benefits Ancillary benefit payments must cease PBGC rules govern

5 Merger and Asset Transfers to another Multi-Employer Plan 120 day advance notice to PBGC No immediate reduction in accrued benefits Actuarial valuations for both plans New plan must be viable PBGC compliance determination

6 Mergers and Transfers Between Multi- Employer and Single Employer No immediate reduction in accrued benefits Must have sponsor consent PBGC guarantee may be better PBGC notice Five year look-back

7 Considerations of DB and DC Plans “Guaranteed” income Pooled liability Investment management Withdrawal liability Last man standing Investment risk on employee Predictable contributions Outlive benefit No PBGC insurance Lump sums

8 CONTACT INFORMATION Paul Heylman, Esquire 2600 Virginia Avenue, N.W. Suite 1000 – The Watergate Washington, DC Phone: Fax: Dan Brandenburg, Esquire 2600 Virginia Avenue, N.W. Suite 1000 – The Watergate Washington, DC Phone: Fax:

9 Saul Ewing’s Office Locations Baltimore, Maryland Lockwood Place 500 East Pratt Street, Suite 900 Baltimore, MD fax: Chesterbrook, Pennsylvania 1200 Liberty Ridge Drive, Suite 200 Wayne, PA fax: Harrisburg, Pennsylvania Penn National Insurance Tower Two North Second Street, 7th Floor Harrisburg, PA fax: Newark, New Jersey One Riverfront Plaza Newark, NJ fax: New York, New York 245 Park Avenue, 24th Floor New York, NY Fax: Philadelphia, Pennsylvania Centre Square West 1500 Market Street, 38th Floor Philadelphia, PA fax: Princeton, New Jersey 750 College Road East Princeton, NJ fax: Wilmington, Delaware 222 Delaware Avenue, Suite 1200 Wilmington, DE fax: Washington, D.C Virginia Avenue, N.W. Suite 1000 | The Watergate Washington, D.C fax: