Opening of Bids - MarMain Apartments Roof Replacement Proj No. 122-061 - Midland Engineering Co., Inc.

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MIDLAND ENGINEERING COMPANY, INC. NOTES TO BALANCE SHEETS December 31, 2021 and 2020 NOTE 8 -EMPLOYEE BENEFIT PLANS (Continued) As one of many participating employers in these MEPPs, the Company is responsible, with the other participating employers, for any plan underfunding. Contributions to a particular MEPP are established by the applicable collective bargaining agreements; however, required contributions may increase based on the funded status of an MEPP and legal requirements of the Pension Protection Act of 2006, which requires substantially underfunded MEPPs to implement a funding improvement plan ("FIP") or a rehabilitation plan ("RP") to improve their funded status. Factors that could impact funded status of an MEPP include investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions, and the utilization of extended amortization provisions. An FIP or RP requires a particular MEPP to adopt measures to correct its underfunding status. These measures may include, but are not limited to: (a) an increase in the contribution rate as a signatory to the applicable collective bargaining agreement, (b) a reallocation of the contributions already being made by participating employers for various benefits to individuals participating in the MEPP and/or (c) a reduction in the benefits to be paid to future and/or current retirees. In addition, the Pension Protection Act of 2006 requires that a 5% surcharge be levied on employer contributions for the first year commencing shortly after the date the employer receives notice that the MEPP is in critical status and a 10% surcharge on each succeeding year until a collective bargaining agreement is in place with terms and conditions consistent with the RP. The zone status included in the table below is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The Company could also be obligated to make payments to MEPPs if it either ceases to have an obligation to contribute to the MEPP or significantly reduces its contributions to the MEPP because of a reduction in the number of employees who are covered by the relevant MEPP for various reasons. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPP's current financial situation, the Company is unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether participation in these MEPPs could have a material adverse impact on the Company's financial condition, results of operations, or cash flow. The following table lists all MEPPs to which the Company's contributions exceeded $100,000 in 2021 or 2020. None of the plans listed below are subject to a surcharge. Contributions Greater Than 5% of Total EIN/ Plan PensionPlan PPA Zone Status (2) FIP/RP Contributions Expiration Pension Fund Number 2021 2020 Status (1) Date of CBA Sheet Metal Workers 20 South Bend Area Pension Plan 35-6054275 Red Red Yes Yes June 30, 2024 Roofers Local 23 South Bend Area Pension Plan 35-1071548 Green Green N/A No May 31, 2023 (1) This information was obtained from the respective plans' Form 5500 for the most current available filing. These dates may not correspond with the Company's calendar year contributions. The above noted contributions are based upon disclosures contained in the plans' Form 5500 filing ("Forms"), Those Forms, among other things, disclose the names of individual participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year. (2) This zone status represents the most recent available information for the respective MEPP, which is 2020 for the 2021 year and 2019 for the 2020 year. (Continued)