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53 I N D U S T R Y A S S E S S M E N T S and a prudent level of reserves, a "net funding requirement" is determined. The payroll hourly assessment rate is calculated by dividing the sum of the plan's net to funding requirements by the divisor, 41,701,081. The result is the hourly assessment rate. The hourly assessment rate is then multiplied by the estimated number of assessable hours that will be paid in the fiscal year for which the rates will be appli- cable. If the result equals the total "net funding requirement" there will be no tonnage assessments. If the hourly assessment rate generates insuf- ficient funds, the remainder of the needed money is collected from the tonnage sector. The tonnage rates are calculated in accordance with formulas described in detail on pages 32 and 33 of the 1989 PMA Annual Report. Rate Components The number of hours expected to be paid during a time period has no impact on the hourly assessment rate; only the total net funding requirement affects the hourly assessment rate. The greater the net funding requirements, the higher the hourly assessment rate becomes. Changes in tonnage rates are not as easily explained. Tonnage rates are dependent on estimates of both hours and tonnage. Given a constant benefits cost, the total dollar obligation of the tonnage sector will increase as the estimated number of hours paid decreases, but if the estimated tonnage handled increases sufficiently, tonnage assessment rates may actually decrease-even though increased ben- efits costs cause the hourly assessment rate and the total tonnage sector obli- gation to increase. The PMA Board of Directors approves the assessment rates required to fund collectively bargained fringe benefit plans. The Board also approves PMA Cargo Dues assessment rates that fund the operations of PMA. The PMA portion also pays for operation of the Joint Port Labor Relations Committees' expenses (dispatch halls), industry training programs, legal settle- ments, and other industry expenses. Assessment Rate History The waterfront organizations that preceded PMA used tonnage as a means of funding the internal opera- tions of their organizations well before the turn of the last century. The first ILWU employee benefit was a paid vacation that was funded based upon an hourly assessment paid by each employer. The vacation plan for long- shore workers, was instituted on January 1, 1946 with a 7.3¢ hourly assessment. A welfare benefits plan, the first under the auspices of the newly formed PMA, was added August 1, 1949 with a 3¢ per hour assessment. A Pension Plan was added effective July 1, 1951 and was funded by a 15¢ per hour contribution. The first tonnage assessment for a benefit was collected to fund the Walking Bosses/Foremen's Mechanization Fund effective August 10, 1959. Additional "Mechanization & Modernization" (M&M) tonnage assessments were collected for the Longshoremen's and Clerks' Mecha- nization Fund effective January 16, 1961. Shortly after the termination of the M&M Plan on June 30, 1971, the Pay Guarantee Plan was negotiated and was funded primarily by tonnage assessments. Tonnage assessments were used to fund pension, welfare, and other benefits beginning in 1980. During the last six months of 1983, all benefits were funded by assessments on hours; only the CFS plan was funded by tonnage. On December 14, 1983 the Memorandum of Agreement Concerning Assessments to Pay ILWU-PMA Employee Benefit Costs was approved and implemented. ASSESSMENT RATE HISTORY Hourly Assessment Offshore and Intercoastal Assessment Rates 401(k) Benefits Plans Benefit L/S and Walking Container General Lumber Autos & CFS Fund MCWO* Plans Clerk Boss RU/TEU Cargo & Logs Trucks Bulk RU/TEU RU/TEU 1980 $4.108 – – $0.579 $1.495 $1.014 $0.071 $0.029 – – 1981 6.878 – – 0.573 0.430 0.430 0.134 0.030 – – 1982 8.371 – – 0.621 0.467 0.467 0.144 0.033 $0.202 – 1983 12.270 – – – – – – – 0.247 – 1984 7.680 – – 18.710 1.101 1.101 0.089 0.022 1.284 – 1985 6.740 – – 14.549 0.856 0.856 0.069 0.017 1.301 – 1987 7.520 – – 13.775 0.810 0.810 0.066 0.016 0.785 – 1989 7.520 – – 13.762 0.783 0.783 0.063 0.016 0.798 – 1990 7.520 – – 13.306 0.783 0.783 0.063 0.016 1.458 – 1991 7.520 – – 12.674 0.746 0.746 0.060 0.015 1.014 – 1992 8.810 – – 13.221 0.778 0.778 0.063 0.015 0.490 – 1993 10.010 – – 14.790 0.870 0.870 0.070 0.017 0.350 – 1994 11.700 – $0.50 16.700 0.982 0.982 0.080 0.019 0.880 – 1995 9.300 – 0.50 9.790 0.576 0.576 0.047 0.011 0.660 – 1996 10.870 – 0.50 11.390 0.670 0.670 0.054 0.013 0.520 – 1997 11.530 – 2.00 9.980 0.587 0.587 0.048 0.012 0.100 – 1998 10.340 – 1.84 7.350 0.433 0.433 0.035 0.009 0.310 – 1999 10.340 $1.00 3.84 7.350 0.433 0.433 0.035 0.009 0.310 – 2001 11.040 0.83 3.49 6.280 0.370 0.370 0.030 0.007 0.190 – 2002 13.110 0.84 3.49 12.120 0.713 0.713 0.058 0.014 – – 2003 14.080 0.81 3.77 13.470 0.792 0.792 0.064 0.016 0.100 $0.280 2004 15.620 0.82 3.82 13.650 0.803 0.803 0.065 0.016 0.120 – 2005 15.710 0.87 1.35 14.790 0.870 0.870 0.70 0.017 0.090 – 2006 15.960 0.88 3.65 14.180 0.834 0.834 0.068 0.017 0.050 – 2007 17.720 0.88 3.04 16.460 0.968 0.968 0.078 0.019 0.040 – 2008 19.990 0.90 3.67 18.440 1.085 1.085 0.088 0.021 0.120 0.160 2009 27.010 1.14 4.95 24.400 1.435 1.435 0.116 0.028 0.080 1.440 2010 27.940 0.77 3.55 24.910 1.465 1.465 0.119 0.029 0.080 – 2011 28.540 0.74 2.45 24.570 1.445 1.445 0.117 0.029 0.120 – 2012 28.850 1.00 3.87 25.680 1.510 1.510 0.122 0.030 0.040 – 2013 $33.980 $0.92 $3.38 $29.380 $1.728 $1.728 $0.140 $0.034 $0.050 $0.120 * Marine Clerk Work Opportunity The assessment system formula was changed effective 12/24/83 to allow rates to vary for certain benefit plans by PMA area while maintaining a single coastwise rate. Initially, only the Welfare and Vacation Plans were included. Effective 2/23/85 the Holiday Plan was also included. The rates shown are the average assessment rates for the affected Plans. Coastwise rates for all affected plans were established on September 28, 1991. Tonnage assessments discontinued from 7/1/83 to 12/31/83 except for PMA Cargo Dues and CFS Program Fund. Prior to 1984, Container rates for benefits and the CFS Fund were assessed on a per-ton basis. Tonnage assessments were discontinued from 7/1/83 to 12/31/83 except for PMA Cargo Dues and the CFS Program Fund. 53 P A C I F I C M A R I T I M E A S S O C I A T I O N