The type of pension benefit you receive depends on when you retire and whether you are an Active Participant on the date you retire. Depending on the type of pension you receive, you may be eligible for an additional lump sum benefit when you retire.
Four types of pension are available under the Plan:
Early Retirement pension
Please note that you will only receive one type of pension under the Plan, no matter how many different contributing employers you work for.
You are eligible for a Normal pension if you are an Active Participant with at least five Years of Vesting Service the day you reach Normal Retirement Age, which is the later of age 62 or the fifth anniversary of the day you commenced participation in the Plan. Assuming you have no Breaks in Service, the formula for a normal pension is:
Benefit Units x Applicable Benefit Rate = Monthly Pension Benefit
Depending on your marital status when you retire, your benefit amount may be adjusted if you elect a Joint & Survivor form of payment.
EXAMPLE #1: NORMAL PENSION WITH NO BREAKS-IN-SERVICE
Derek is 62 and retires July 1, 2022 with 10 Benefit Units and no breaks-in-service. Derek is not married. Derek’s Normal pension will be calculated as follows:
Because he is not married, Derek will receive his benefit in the form of a Monthly Lifetime Pension with 60 Months Guaranteed. See the Section of this SPD entitled “Forms of Payment” for more information on the Monthly Lifetime Pension with 60 Months Guaranteed form.
EXAMPLE #2: NORMAL PENSION WITH TEMPORARY BREAKS-IN-SERVICE
Joe is married, is age 62 and retires on July 1, 2022 with 20.5 Benefit Units and one temporary Break-in-Service in 2009. Joe’s Normal pension will be calculated by multiplying his Benefit Units by the rate in effect before his Break-in-Service and then adding the benefit amounts together:
Joe’s monthly benefit would be $1,862.50 without any actuarial adjustment. However, because he is married, his benefit will be converted to a Joint & Survivor Pension, unless his spouse waives the right to a Joint & Survivor Pension. See the Section of this SPD entitled “Forms of Payment” for more information on the Joint & Survivor Pension form.
Without any Breaks-in-Service, all of Joe’s 20.5 Benefit Units would have been multiplied by the last applicable Benefit Rate of $95.00, making his benefit $1,947.50.
EXAMPLE #3: RESIDENTIAL WIREMAN WITH BOTH TYPES OF BENEFIT UNITS
Anita is 62 and retires on July 1, 2022 with a total of eight Benefit Units: four as a Residential Wireman and four as a A Journeyman Wireman. Anita is not married. Her benefit is calculated as follows:
Anita’s monthly benefit is $496.00. She will receive her benefit as a Monthly Lifetime Pension with 60 Months Guaranteed because she is not married.
Rule of 85
The Plan includes an important feature referred to as “The Rule of 85,” which enables you to receive an unreduced pension if your age (at your most recent birthday) and Years of Vesting Service add up to 85 or more. If you satisfy the Rule of 85, you will be entitled to receive a Normal pension even if you retire before your Normal Retirement Age of 62.
EXAMPLE OF RULE OF 85
Ned retired on July 1, 2022, the day after his 54th birthday. He had 31 Years of Vesting Service, earned 31 Benefit Units and had no Breaks-in-Service.
+ Vesting Service: 31
Since he meets the Rule of 85, Ned’s pension will be calculated as a Normal pension:
Ned’s unreduced pension amount, prior to any adjustment for a Joint & Survivor Pension election, would be $2,945.00.
Delayed Retirement—Bonus Credits
If you keep working in covered employment after you become eligible for the Rule of 85, or after your Normal Retirement Date, then you will earn bonus credits in addition to your regular accruals (see the section of this SPD entitled “Benefit Units and Rates” for more information on Delayed Retirement—Increased Benefit Rates).
EXAMPLE OF DELAYED RETIREMENT BONUS CREDITS
If, in the example above, Ned keeps working after he has reached age 54 and met the Rule of 85, the Benefit Rate applicable to all future years that he works will be the Bonus Credit rate, and the Benefit Rate for his years of service prior to satisfying the Rule of 85 will be based upon the Benefit Rate in effect when he retires. For example, if Ned worked until 2026 when he is age 58, his benefit at age 58 will be:
Ned’s unreduced monthly benefit is $3,451.64.
Early Retirement Pension
You are eligible for an Early Retirement Pension if you retire on or after your 55th birthday and: (a) you have at least 5 years of Vesting Service, earned at least 1600 hours of service in your final 12 months of employment and are an Active Participant immediately before you retire; or (b) you have at least 15 years of Vesting Service.
If you elect to receive an Early Retirement Pension and you do not meet the requirements for the Rule of 85, as described above, the amount of your pension benefit will be reduced based on the number of months between your retirement date and your normal retirement age, 62. If you retire before age 60, your benefit is reduced by ½ of 1% for each month between your retirement date and the month you reach age 60, and by ¼ of 1% for the 24 months between ages 60 and 62. The reduction remains in effect for as long as you receive your pension.
|If You Retire Immediately Following Your Birthday At Age||Percentage of your Normal Retirement Pension|
For example: If you retire at age 56, your pension payments will be reduced so they are 70% of what they would be if you waited until you were age 62 to retire.
*Reduction is ½ of 1% for each month you are younger than age 60; and ¼ of 1% for the 24 months between ages 60 and 62. The reduction in the Table above would be adjusted if you retire between birthdays.
EXAMPLE OF AN EARLY RETIREMENT PENSION
Tom is unmarried and does not have Breaks-in-Service. He decides to retire on his 58th birthday on July 1, 2022 with 25 Benefit Units. The plan will calculate his pension as follows:
As Tom is age 58, there are 24 months prior to age 60 and 24 more months between ages 60 and 62. The reduction is equal to:
So, Tom’s Normal pension is reduced by 18%:
Normal Pension: $2,375,00
Early Retirement reduction: 427.50 (.18 x $2,375.00)
Early Retirement Pension: $1,947.50
Once you become fully vested, you will be entitled to a Deferred pension at age 62, even if you have stopped working in Covered Employment under the Plan. Your Deferred pension will be calculated in the same manner as a Normal Pension. The Benefit Rates used to calculate your pension will be those in effect when you ceased to be an Active Participant under the Plan (see the “Participation” section of this SPD for more information). Further, if you are fully vested, and have attained age 55, you may elect to receive your Deferred pension as an Early Retirement pension but the amount of your pension would be reduced as described in the Early Retirement Pension Section above.
EXAMPLE OF A DEFERRED PENSION
Susan, a Journeyman, moved to California in February of 2020. She was 35 years old at the time and had earned eight Years of Vesting Service and eight Benefit Units while an Active Employee under the Plan. Because she left covered employment in February of 2020 with fewer than 400 Vesting Hours of Service, Susan ceased to be an Active Participant and incurred a one-year Break-in-Service on December 31, 2020. Susan can expect to receive a Deferred pension of $720.00 per month at age 62 calculated as follows:
Leaving and Later Returning (Breaks-in-Service)
If you leave, and then later return to Covered Employment and accrue additional Benefit Units, your pension will be calculated as a Normal Pension with Breaks-in-Service. Each block of Benefit Units will be multiplied by the appropriate Benefit Rate.
EXAMPLE OF A DEFERRED PENSION WITH BREAKS IN SERVICE
Greg first left active employment in 2007 after earning six Years of Vesting Service and six Benefit Units. Then, in 2013, he re-entered active participation and earned an additional three Benefit Units, leaving active participation again in 2015. He is unmarried. His pension at normal retirement will be calculated in two segments, as follows:
IBEW Local Reciprocal Program
In certain situations, you may maintain years of Vesting Service and Benefit Units earned while traveling under your “home” Plan, under the Electronic Reciprocal Transfer System (ERTS). This program makes IBEW/NECA Pension Plans “portable,” meaning you can maintain all of your credit and service in your home Plan even though you may work in several areas outside of your home Plan’s jurisdiction during your career.
Under ERTS, you must register at your Home Local in order to begin the process. It is your responsibility to register on a timely basis. For additional information about ERTS and reciprocity, contact the Fund Office or your Local Union.
If you are Vested and you become Totally and Permanently Disabled while you are working in Covered Employment or within six months of leaving Covered Employment, you are eligible to receive your pension benefit regardless of your age. You are considered Totally and Permanently Disabled if, as a result of an injury, disease, or mental disorder, you are unable to engage in any gainful occupation in which you could be reasonably expected to engage in, giving consideration to your experience, training, age, and education, provided it is reasonably certain your condition will continue for the remainder of your life.
If you were unemployed during all or part of this six month period and such period occurred between October 1, 2008 and December 31, 2010, the period of unemployment will be disregarded if: (1) your last employment before becoming Totally and Permanently Disabled was in covered employment; (2) you were available for work in covered employment throughout the period of your unemployment; and (3) you were actively seeking work in covered employment throughout the period of your unemployment.
The monthly amount of your Disability pension is calculated the same way as the Normal pension, based on the Benefit Units earned to the date of disability. There is no reduction for age, as there would be with an Early Retirement pension.
The Disability Pension will begin on the 6th month of your Total and Permanent Disability and will continue for life, provided you remain Totally and Permanently Disabled. If at any time you cease to be Totally and Permanently Disabled, your pension will be discontinued and you may re-enter Active Employment and earn additional benefits.
The Trustees will determine whether you are Totally and Permanently Disabled. In making this determination, the Trustees may:
- rely on a Social Security Disability Award;
- require you to submit medical reports; and/or
- require you to undergo a physical exam by a physician of the Trustees’ choosing.
- In order for a claim for a Disability pension to be processed, Plan Participants and their Personal Representatives may be required to provide and disclose health information and documentation in support of the Participant’s claim of Total and Permanent Disability upon request by the Plan. The Participant and/or their Representatives may be required to sign a medical authorization provided by the Plan, permitting the Plan to receive, obtain and review, health information and documentation from any source relevant to the Participant’s Disability pension application. If a Participant fails to disclose health information or refuses to sign an authorization as provided by the Plan, his or her claim for a Disability pension may be denied.
You will not be eligible for a Disability Pension if your disability results from self-inflicted injury, the use of alcohol or drugs, an injury suffered while engaging in criminal activity or, except in the limited circumstances noted below, active service in the Armed Forces of the United States or any State. If you were Totally and Permanently Disabled as a result of active service in the Armed Forces of the United States or any State and are receiving a military disability pension that is less than the Disability pension otherwise payable under this Plan, then you would be entitled to receive a Disability pension under this Plan equal to the difference between the amount of your military disability pension and the Disability pension amount you otherwise would receive from this Plan.
Lump Sum Bonus Benefit
A special feature of the Plan is the Lump Sum Bonus benefit, which is a one-time payment of $2,500 payable to certain eligible Participants on top of their annuity pension benefit. If eligible, you will receive this bonus when you retire. To qualify:
- you must be an Active Participant when you retire (meaning you cannot receive the bonus if you retire on a Deferred Pension); and
- you must be credited with at least 15 Years of Vesting Service and retire on or after your 62nd birthday,
- you must satisfy the Rule of 85.
If you retire on a Disability Pension, you will receive a Lump Sum Bonus benefit of $1,500 regardless of your age and Years of Vesting Service.
You are not eligible to receive a Lump Sum Bonus benefit if you retire on a Deferred Pension.
You can receive only one Lump Sum Bonus benefit.
If you are eligible to receive a Lump Sum Bonus from the Plan, lump sums may be eligible for a “rollover” from this Plan to another tax qualified plan. The “rollover” must occur within sixty (60) days of receipt and be transferred directly to the trustee of the successor plan. Consult with the Fund Office regarding whether your Lump Sum Bonus is eligible for “rollover” treatment, and consult with your financial representatives to determine whether the “rollover” option is something that is right for you.