Find Answers to Frequently Asked Questions about Defined Benefit
- What can I do to ensure I get the full amount of benefits coming to me when I retire?
- Each year you receive an annual statement that shows all of the hours reported on your behalf. You should compare your check stubs each year to this annual statement to verify that all hours you worked have been reported. If hours have not been reported correctly, you should send copies of your check stubs to the Administration Office so that we can bill your employer for the correct hours. This comparison can also be done each month via the Trust website.
- What are my responsibilities regarding my pension benefits?
You are required to notify the Administration Office of the following:
- Birth Date
- Address changes
- Name changes
- Marital Status changes (marriage, divorce, death of spouse)
- Beneficiary changes
- Can I add money to my pension Plan?
- Generally, Taft-Hartley Defined Benefit Plans are funded through employer contributions only. Your employer pays contributions for every hour you work (per your collective bargaining agreement) to finance the Plan. No contributions are required by, or permitted from, you.
- When I become deceased, will my spouse automatically get my pension benefits?
- Pre-Retirement Death benefits are generally dependent upon your age and Vesting Credits and in some cases if you were actively employed at the time of death.
- If you retired prior to your death, any Death benefits will be paid based upon the type of benefit you elected at your retirement.
- In addition, if you were independently vested with Local 701 at the time of your retirement you may also be eligible for a $2,000 Death Benefit payable from the Pension Plan.
- Contact the Administration Office for more details on your death benefits.
- Can I withdraw my pension benefits if I have a financial hardship?
- Pension benefits are only payable once you reach the age and service requirements and retire. They are generally a monthly benefit payable for your lifetime.
- I am planning on retiring in the next few years. How early should I apply for my retirement?
- You can apply up to a maximum of 6 months in advance of your retirement date. However, generally we recommend applying 60 days in advance.
- What types of options are available to me at retirement?
- Normally if you are married at retirement, you will be offered Spouse Options. This form of payment is reduced according to both you and your spouse's age and provides you a lifetime benefit and your spouse a lifetime benefit following your death. If you choose a Spouse Option and your spouse passes away first, your benefit will pop-up to your full benefit, the Trust Office will require an original death certificate before this adjustment can be made.
- What types of documents may I need to submit when I apply for retirement?
Depending on your marital status, some or all of the following will be required:
- Birth Certificate (for both you and your spouse)
- Marriage Certificate(s)
- Name change document(s)
- Divorce Decree(s)
- Qualified Domestic Relations Order(s)
- What is the Plan Year?
- The Plan Year is January 1 to December 31.
- How many hours of service must I work in a year (01/01 – 12/31) to earn a year of credited service?
- 500 hours of service worked in a year.
- How many years do I need to be fully Vested?
- 5 years of service without a break in service.
- What does Vested mean?
- Vested means you have earned the right to a monthly pension benefit when you are eligible to retire.
Reciprocity provides a means of combining service credits earned under Local 701 with service credits earned in other IUOE pension plans that have signed the International Union of Operating Engineers National Reciprocity Agreement (Related Pension Plans), so that you have a right to a monthly benefit.
You could benefit from this provision if your years of Vesting Service have been divided between Local 701 and one or more Related Pension Plans.
Local 701 use the pro-rata method in calculating reciprocity. To have a right to a pro-rata monthly benefit you must:
- Have service credits with Local 701 that can be combined (without a break in service) with one or more Related Plans.
- Have at least one (1) year of Credited Future Service earned in each plan based upon actual participation
- You would be paid a benefit from each of the plans separately for the Credited Future Service earned in each plan if you are determined to be Vested.
- Can I take my benefit as a lump sum?
- No. This is a defined benefit plan, meaning that benefits are paid monthly for a member's lifetime. The only circumstances where benefits are paid as a lump sum is if a member's total actuarial benefit is valued as under $5,000 (roughly $25 per month, depending on the member's age). At that time benefits are paid in one lump sum representing the total actuarial value of their benefit.
- I am planning to live outside of the United States after I retire. Will I still be able to receive my monthly benefit?
- Your monthly benefit checks can be mailed to you anywhere in the world. Checks can also be mailed to your bank for deposit outside of the US. Electronic deposit of your benefit is limited to banks in the United States.
- Can I return to work after I retire?
You can work up to 300 hours in a calendar year provided your post-retirement service is solely in covered employment. Once you reach 300-hours, your benefit will be suspended for any month in which you work 40 or more hours.
If however, one hour of your post-retirement service is in non-covered employment, you are limited to fewer than 40 hours per month for the remainder of the calendar year (meaning the 300-hour rule does not apply).
- Can I run out my medical hour bank after I retire?
- Yes. Once you run out your hour bank you will be sent a COBRA package. You may elect to continue with the same coverage and self-pay for this coverage for up to 18 months only. This plan does not offer retiree medical coverage.