Note 13 – Other Retirement Plans

Multi-Employer Plans. Certain of MasTec’s subsidiaries, including certain subsidiaries in Canada, contribute amounts to multi-employer pension and other multi-employer benefit plans and trusts, which are recorded as a component of employee wages and salaries within costs of revenue, excluding depreciation and amortization. Contributions are generally based on fixed amounts per hour per employee for employees covered under these plans. Multi-employer plan contribution rates are determined annually and assessed on a “pay-as-you-go” basis based on union employee payrolls. Union payrolls cannot be determined for future periods because the number of union employees employed at any given time, and the plans in which they may participate, vary depending upon the location and number of ongoing projects at a given time and the need for union resources in connection with those projects.

The Pension Protection Act of 2006 (“the PPA”) defines the funding rules for defined benefit pension plans and establishes funding classifications for U.S.-registered multi-employer pension plans. Under the PPA, plans are classified into one of four categories based on multiple factors, including their funded percentage, cash flow position, and whether the plan is projecting a minimum funding deficiency. The classifications, which are referred to as a plan’s “zone status,” are: Green (Safe), Yellow (Endangered), Orange (Seriously Endangered), and Red (Critical). Although multiple factors or tests may determine a plan’s zone status, plans in the Red zone are generally less than 65% funded; plans in the Orange zone are generally between 65% and 70% funded; plans in the Yellow zone are generally between 70% and 80% funded; and plans in the Green zone are generally greater than 80% funded.

A multi-employer plan that is so underfunded as to be in “endangered,” “seriously endangered,” or “critical” status is required to adopt a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”), which, among other actions, could include decreased benefits and increased employer contributions, which could take the form of a surcharge on benefit contributions. These actions are intended to improve their funding status over a period of years. If a pension fund is in critical status, a participating employer must pay an automatic surcharge in addition to contributions otherwise required under the collective bargaining agreement (“CBA”). With some exceptions, the surcharge is equal to 5% of required contributions for the initial critical year and 10% for each succeeding plan year in which the plan remains in critical status. The surcharge ceases on the effective date of a CBA (or other agreement) that includes contribution and benefit terms consistent with the rehabilitation plan. Certain plans in which the Company participates are in “endangered,” “seriously endangered,” or “critical” status. The amount of additional funds, if any, that the Company may be obligated to contribute to these plans in the future cannot be estimated due to the uncertainty of the future levels of work that could be required of the union employees covered by these plans, as well as the required future contribution rates and possible surcharges applicable to these plans.

Management evaluates the Company’s participation in the multi-employer pension plans in which it participates on an ongoing basis. In November 2014, the Company, along with other members of the Pipe Line Contractors Association (“PLCA”), voluntarily terminated its participation in several defined benefit multi-employer pension plans that were in critical status in order to mitigate potential future liability in connection with these plans. The Company’s contributions to these plans were insignificant for the years ended December 31, 2014, 2013 and 2012, and there was no withdrawal liability assessed by the plan administrators as of the date the Company terminated its participation. Although the Company does not believe that it has any material liability associated with its termination of participation, there can be no assurance that these plans, which were in critical status as of the date the Company terminated its participation, will not assess penalties in the future. Additionally, in November 2011, the Company, along with other members of the PLCA, voluntarily withdrew from the Central States Southeast and Southwest Areas Pension Fund (“Central States”), a defined benefit multi-employer pension plan. In connection with this withdrawal, the Company recorded a charge of $6.4 million in 2011, which was recorded within costs of revenue, excluding depreciation and amortization. As of December 31, 2014 and 2013, $4.2 million and $5.4 million, respectively, of this withdrawal liability remained outstanding. The Company withdrew from Central States in order to mitigate its liability in connection with the plan, which was in critical status. See Note 17 – Commitments and Contingencies for additional information.

Details of significant multi-employer pension plans as of and for the periods indicated, based upon information available to the Company from plan administrators as well as publicly available information on the U.S. Department of Labor website, are provided in the following table:

Contributions

(in millions)

For the Years Ended December 31,

Pension Protection Act Zone Status

Multi-Employer

Pension Plan

Employer Identification Number

Plan Number

2014

2013

2012

Expiration

Date of CBA

2014

As of

2013

As of

FIP/RP Status

Surcharge

Central Pension Fund of the I.U.O.E and Participating Employers

366052390

001

6.5

10.8

6.0

06/01/2017

Green

01/31/2014

(a)

Green

01/31/2013

(a)

Pipeline Industry Pension Fund

736146433

001

4.8

9.8

8.9

06/02/2017

Green

12/31/2013

(b)

Green

12/31/2012

(b)

Michigan Laborers' Pension Fund

386233976

001

2.1

4.3

0.9

06/01/2017

Yellow

08/31/2014

(a)

Yellow

08/31/2013

(a)

Implemented

Teamsters National Pipe Line Pension Fund

461102851

001

1.7

2.7

1.4

06/01/2017

Green

12/31/2013

(b)

Green

12/31/2012

(b)

Operating Engineers' Local 324 Pension Fund

381900637

001

1.7

4.5

0.8

06/01/2017

Red

04/30/2014

Red

04/30/2013

Implemented

I.B.E.W. Local 769 Management Pension Plan A

866049763

001

1.6

0.7

0.1

07/30/2016

Green

06/30/2014

(b)

Green

06/30/2013

(b)

Laborers' District Council of Western Pennsylvania Pension Fund

256135576

001

1.5

0.4

0.6

06/01/2017

Red

12/31/2013

Red

12/31/2012

Implemented

Operating Engineers' Construction Industry and Misc. Pension Fund

256135579

001

1.2

0.1

0.5

06/01/2017

Green

12/31/2013

(a)

Green

12/31/2012

(a)

Laborers' Local Union No. 158 Pension Fund

236580323

001

1.0

0.5

0.6

06/01/2017

Green

12/31/2013

Green

12/31/2012

(b)

Eighth District Electrical Pension Fund

846100393

001

0.9

2.2

1.3

02/28/2018

Green

03/31/2014

Green

03/31/2013

National Electrical Benefit Fund

530181657

001

0.9

0.2

0.0

12/31/2015

Green

12/31/2013

Green

12/31/2012

Laborers' National Pension Fund

751280827

001

0.8

1.1

1.5

06/01/2017

Green

12/31/2013

Green

12/31/2012

Midwest Operating Engineers Pension Trust Fund

366140097

001

0.7

0.0

06/01/2017

Yellow

03/31/2014

(a)

Yellow

03/31/2013

(a)

Implemented

I.U.O.E. Pension Plan of Eastern Pennsylvania and Delaware

236405239

001

0.6

0.2

0.5

06/01/2017

Green

12/31/2013

Red

12/31/2012

Other funds

5.9

(c)

6.4

4.8

Total multi-employer pension plan contributions

31.9

44.6

27.9


(a)	This plan has utilized extended amortization provisions, which provide plans with extensions of time to amortize pension funding shortfalls.


(b)	The Company’s contributions to this plan represent greater than 5% of the plan’s total contributions.

(c)

Includes approximately $0.9 million U.S. dollars of contributions to Canadian multi-employer pension plans associated with the Company’s 2014 acquisition of Pacer, a Canadian company that employs union resources subject to collective bargaining agreements in connection with certain of its project work. Canadian multi-employer pension plans are not subject to the provisions of ERISA or the funding rules under the PPA that apply to U.S. registered multi-employer pension plans. Contributions to Canadian multi-employer pension plans are based on fixed amounts per hour per employee for employees covered under these plans.

Total contributions to multi-employer plans, and the related number of employees covered by these plans, including contributions for and employees of the Company’s Canadian subsidiaries, were as follows:



	Multi-Employer Plans
	Covered Employees		Contributions (U.S. dollars in millions)
For the Years Ended December 31:	Low	High	Pension		Post-Retirement Benefit		Total
2014	590	2,167	$	31.9	$	4.5	$	36.4
2013	778	2,734	$	44.6	$	3.6	$	48.2
2012	308	2,509	$	27.9	$	1.3	$	29.2

The average number of employees covered under multi-employer plans in which the Company participates decreased from 2013 to 2014 due to fewer union resource-based projects in the Company’s Oil and Gas segment. This resulted in a decrease in multi-employer plan contributions for the same period. The number of union employees employed at any given time varies depending upon the location and number of ongoing projects and the need for union resources in connection with those projects.