Forms of Payment

FAST FACTS

  • The standard form of payment for married participants is the Joint & Survivor Pension.
  • The standard form of payment for unmarried participants is the Lifetime Pension with 60 Months Guaranteed (this also is an optional form for married participants).
  • If married, you may reject the Joint & Survivor form of payment and elect the Lifetime Pension with 60 Months Guaranteed form of payment only if your spouse gives voluntary written and notarized consent to rejection of the Joint & Survivor benefit.
  • If the total amount of your benefit under the Plan is $7,000 or less, the Fund will pay this amount in the form of a lump sum rather than an annuity.

When you retire at normal retirement or earlier, your pension benefit will be paid in equal monthly installments for the remainder of your life (an annuity). Keep in mind that once your payments begin, you cannot change your form of payment.

If You Are Married—Joint & Survivor Pension

If you are married on the date your benefit begins, the normal form of payment will be the Joint & Survivor Pension. This payment form provides you with a reduced monthly benefit for your and your spouse’s lifetime. If you die before your spouse, he or she will continue to receive 80% of your pension amount for his or her lifetime, unless this form is rejected.

To account for the fact that a benefit will continue to be paid to your spouse after your death if you predecease your spouse, a Normal, Early or Deferred Pension payable in the Joint & Survivor form is reduced during your lifetime to equal to 89% of your unreduced benefit minus 0.4% for each full year your spouse is younger than you or plus 0.4% for each full year your spouse is older than you (to a maximum of 98%). A Disability Pension is reduced to 81% minus 0.4% for each full year your spouse is younger than you or plus 0.4% for each full year your spouse is older than you (to a maximum of 90%).

If you and your spouse are the same age, there is no adjustment other than the 89% (or 81% for Disability).

Optional Alternative (QOSA)

In addition to the form of benefit described above, the Plan offers two optional alternatives (called the QOSA), which may be elected with the consent of your spouse. The first optional alternative pays you a reduced amount during your lifetime and 50% of your benefit to your spouse after your death. The second optional alterative pays you a reduced amount during your lifetime and 75% of your benefit to your spouse after your death. The amount of the reduction to your benefit will depend on your and your spouse’s ages as of your retirement. 

EXAMPLE OF JOINT & SURVIVOR PENSION CALCULATION

Dave is 62 and an Active Participant when he retires in 2014. The amount of his unreduced Normal Pension would be $2,000.00 per month. However, Dave’s benefit will be paid as a Joint & Survivor benefit because he is married and he and his spouse have not waived the Joint & Survivor Pension. If Dave’s spouse is age 58, his pension would be adjusted as follows:

Step 1: Determine the difference in ages:

62 58 = 4 years

Step 2: Calculate the percentage due to age difference:

0.4%

X

4 years

=

1.6%

Step: 3: Calculate the total percentage of adjustment:

89.0%

1.6%

=

87.4%

Step 4: Calculate the monthly Joint & Survivor Pension payment:

87.4%

X

$2000.00
basic pension

=

$1,748.00

Dave will receive $1,748.00 per month for the rest of his life. Should Dave die before his spouse, his spouse will receive 80% of this amount, or $1,398.40 (rounded to $1,399.00), per month for the remainder of the spouse’s life.

If you are married when you retire, your benefit will be paid in the form of a Joint & Survivor Pension unless both you and your spouse voluntarily elect, in writing signed before a Notary Public, to waive this benefit form and select either the QOSA or the optional Lifetime Pension with 60 Months Guaranteed benefit form, described below. You and your spouse must submit your election no more than 180 days and no less than 90 days before your pension begins.

EXAMPLE OF QOSA

Dave is 62 and an Active Participant when he retires in 2014. The amount of his unreduced Normal Pension would be $2,000.00 per month. Dave and his spouse decide to elect the Optional Alternative instead of the standard Joint & Survivor form. If Dave’s spouse is age 58, his pension would be adjusted as follows:

If Dave selects the 50% QOSA option, based on actuarial calculations, Dave will receive $1,836.00 per month for the rest of his life. Should Dave die before his spouse, his spouse will receive 50% of this amount, or $918, per month for the remainder of the spouse’s life.

If Dave selects the 75% QOSA option, based on actuarial calculations, Dave will receive $1,578.00 per month for the rest of his life. Should Dave die before his spouse, his spouse will receive 75% of this amount, or $1,184.00 per month for the remainder of the spouse’s life.

Pop-up Provision

The Plan contains a “Pop-up Provision” which will increase your benefit amount if you elected a Joint & Survivor Pension form or a QOSA form at retirement, and your spouse dies before you. Your increased benefit will equal the amount of your benefit prior to applying the reduction factors for the Joint & Survivor form or QOSA form of payment. Applying the Pop-up Provision to the above example, if Dave’s spouse dies before him, Dave’s benefit would “pop-up” to $2,000 per month, going forward.

Important: To receive a Pop-up of your benefit upon the death of your spouse, you must send a request in writing to the Fund office, along with satisfactory proof of your spouse’s death (e.g. a death certificate).

Qualified Domestic Relations Order

Generally, you may not assign, or direct the Fund to pay, any portion of your pension benefit to someone else. However, an exception to this rule is that a portion of your pension benefit may be assigned to your spouse, former spouse, child or other dependent (known under the law as an “alternate payee”) in a Qualified Domestic Relations Order that is entered by a court (“QDRO”). The Plan has procedures regarding QDROs, and you may request a copy of these procedures from the Fund Office. You (or your spouse) have the right to submit a proposed QDRO to the Fund Office for review prior to having it entered by a court. The Fund Office will review the order and tell you whether the Fund would accept the order as a QDRO. This step will save you money and time.

When the Fund Office receives any judgment, decree, or order that requires the Fund to pay benefits to an alternate payee pursuant to a state domestic relations law, the Plan will notify the Participant and the alternate payee of the receipt of that order and the procedures for determining whether it is QDRO.

A QDRO may assign the designated alternate payee all, or a portion of, the benefit payable to you under the Plan. Further, a QDRO may treat an alternate payee who is your former Spouse as your surviving Spouse for purposes of the Joint & Survivor annuity and any pre-retirement surviving Spouse annuity if you and your former Spouse were married for at least one year as of the date of divorce. If the beneficiary named in an approved QDRO is different from the beneficiary listed on your pension beneficiary card, benefits will be paid in accordance with the QDRO as long as the QDRO was presented to the Fund before payment of any death benefits.

If there is a QDRO regarding your benefit under the Plan, you must provide a copy of the QDRO to the Fund Office as soon as it is entered by the court.

If You are Not Married — Lifetime Pension With 60 Months Guaranteed

If you are not married on the date you begin your pension, the normal form of payment is the Lifetime Pension with 60 Months Guaranteed. This is also the form of payment if you are married and you and your spouse voluntarily waive the Joint & Survivor Pension form and elect to receive this form of payment instead.

With the Lifetime Pension with 60 Months Guaranteed, you will receive unreduced monthly payments for as long as you live. If you die before you have received 60 monthly payments, the remainder of those 60 payments will be paid to your properly designated beneficiary. If you receive more than 60 monthly payments before your death, your beneficiary will not receive any additional monthly payments after your death.

Your beneficiary may elect a single lump sum payment for any monthly payments remaining after your death. This lump sum amount will be equal to the present value of the remaining portion of the 60 monthly payments, and will be calculated by multiplying the amount of your monthly pension by the number of months remaining times a factor to account for the fact that your survivor(s) will be receiving the payments immediately, rather than over time. The factor to determine the remaining value of payments will be determined before it is paid out to your beneficiary.