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We are pleased to announce an additional step toward the restoration of the yearly benefit levels under the Plumbers and Pipefitters National Pension Plan. Effective January 1, 2007, the rate of yearly benefit accruals will be increasing to 75% of the pre-2005 rate from the current 50%. This increase is possible because of better financial management of the Fund and because most locals have increased contributions by 25%. We adopted this change after careful consultation with the Fund's actuaries.
In order for your members to be eligible for this additional restoration, the applicable collective bargaining agreement must continue to provide contribution rates to the National Pension Fund that are 25% higher than those in effect at the end of 2004. This increase in contribution rates is already in effect in most local unions, and for those groups the new partial restoration level of benefits will automatically go in effect without the need for further local action. If your local collective bargaining agreement has not yet achieved the 25% contribution rate increase, you must make it effective no later than January 1, 2007 for the 75% accrual level to apply.
We are getting this information to you now so that those locals that have not yet implemented the 25% increase will have as much time as possible before January 1, 2007 to arrange for the rate increase. Also, it is important for all multiemployer funds as well as the National Pension Fund and its participants that all local unions continue to put more monies in the fund. Please keep the National Pension Fund in mind whenever you are able to allocate increases in your wage and fringe benefit package.
Our efforts to restructure the Fund's investment program have been paying off with improved returns. We will continue to review and monitor all of the Fund's investment managers carefully. We are also working closely with the independent named fiduciary for the Diplomat, and we are optimistic that a more favorable outcome on that investment will be forthcoming.
More detailed information about the partial restoration benefit levels, including detailed schedules, will be forwarded to you shortly. In the meantime, if you have any questions about the change in benefits or about contribution rate increases, please feel free to contact the Fund office.
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