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REPORT Management-ILA Managed Healthcare Trust Fund Performance Update As we review results of the past year for MILA, the healtheare program that provides coverage to over 60,000 ILA members and their dependents is performing at a very high satisfaction level¸ The benefits that are provided to the participants are not only superior to most plans but offer t h e m o s t c h o i c e s ~ o e n s u Y ~ p r o p ~ c o v e ~ g e Managed care and enhanced progran~ for rehab services are just a few of the improvements introduced to MILA dunng the last year¸ Just as important ~s the fact that the financial outlook for the program remains healthy¸ As 2007 comes to a dose, we will have provided ov~ $262 million in benefits for the year¸ A s a ~ u ] t o f i n c r e a s e s m m a r t h o u r s a n d t o n n a g e , r ~ v e n u e s a r e up 64% above budget pro]ec fions, while at the same time, expenses Increased only 53% when compared to budget Even though this doe~ not seem to be a significant difference, our t~serve will actually increase by 9 4 % When we project these numbers to the end of the existing collect ire bargaining agreement m 20"10, MILA will not only have enough in ~set~e to fully fund all of our obligations on an inflationadjusted basis, but it will also have a sutplns W e a r e c u r r e n t X y r e v i e w i n g the entire MILA program to identify any shortcomings or small d~sparities that may exist so that we can start to addtess t h e m n o w The lact that we ate providing a first irtclass healthcare program, at economics that ate exceeding our expectations in a positive way, is the t~sult of much hard wink all around When you examine the health care industry and the cmTent h-ends in the United States, th~s is one t~suh of which we can be very ptx~ud We certainly owe a high level of gratitude to Ms LaVerne Thompson and her staff at the MILA administtative offlce~ for the superb level of service and eat~ that they offer on a daily bas~s to the participants >Ole A Sweedlund Executive Vice President & COO Pension Outlook Over the last few years we have under taken a review of the ILA Pension Plans from Maine to Texas As you know, the flmding for pensions is derwed hom the manhour assessments that are eollecb ively bargained by the ILA and USMX during Master Contract nagotiations The pension benefit levels are subsequently agreed to at a local trustee level in each port based upon that level of assessment With all of the change~ to United Staten Pension Law brought about by the Pension Protection Act of 2006, it was deemed important that we track the overall health of the funds to ensut~ that we are providing adequate funding and that there are t~sponslble decision ~ being made with t~spect to benefits With significant help from the local port associatioz~ and the boards of trustees of the fllnds, we have been able to create a database that reviewn the benefit levels and the financial health of each fund While not wishing to go into indwidual port detail in th~s article, we would like to advise that, overall, our lunds are m extremely good condition under the law On an actuarial liability of ovel $4 billion we have over $30 billion in assets for a 75 % lunded ponition The situation, if the Port of NY/NJ ~s discounted, ~s that all other ports are ove195 % funded! There are not too many multi employer plans that can make that claim The Port of NY/NJ has been working hard to address then specific issues and have made financial improvements to then cmTent status They have a plan in place that ~s in compliance with the new laws W e c o n t i n u e t o m o n i t o r a n d maintain the database for these hmds >Ole A &aeedlund Executive Wce President & COO

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