Pension Fund

Although you accrue a monthly benefit by working for an employer obligated to contribute to the Pension Fund, you must vest your accrued benefit in order for a benefit to be paid.

As with benefit accrual provisions, vesting provisions have changed over the years. If you have worked at least one hour in covered employment on or after July 1, 1997:

• You are eligible to receive a pension benefit at age 62 upon accruing five (5) years of Vesting Service;
• You are eligible to receive a reduced pension benefit at age 55 upon accruing ten (10) years of Vesting Service;
• You are eligible to receive a total (unreduced) or partial (reduced) disability pension benefit at any age prior to age 62 upon accruing ten (10) years of Vesting Service. A partial disability means you are unable to work as an Operating Engineer. If you are receiving a Social Security Disability Award, you are considered totally disabled.

(A participant who fails to accrue five (5.00) years of Vesting Service may nonetheless become entitled to receive a monthly pension benefit if he or she retires from covered employment after attaining the latter of age 65 or the fifth anniversary of the participant's commencement of participation in the Plan.)

At retirement there are various forms of payment options available. Subject to certain legal rights granted to a spouse, a participant can choose to receive a monthly pension payable over his or her lifetime only or choose an option which extends benefit payments beyond his or her lifetime to a surviving spouse and/or
beneficiary(ies). If choosing an option which extends benefit payments beyond a participant's lifetime, an actuarial reduction applies to pay for the cost of extending payments. The Plan does not provide for a lump sum distribution option.

Should you expire prior to starting a retirement benefit, your benefit is payable to your surviving spouse and/or beneficiary(ies) or your estate, provided you have accrued minimum Vesting Service.

Benefit accrual provisions have changed over the years. For covered employment on and after January 1, 2011, you accrue benefits at the rate of 1% for every dollar contributed or due to be contributed up to a maximum of $75 per calendar year.

• Example 1. An employer contributes $4,500 to the Fund on behalf of a Participant in 2011. The Participant is entitled to accrual equal to 1% of $4,500 or $45 per month at Normal Retirement Age (age 62).
• Example 2. An employer contributes $9,000 to the Fund on behalf of a Participant in 2011. Although 1% of $9,000 equals $90, the Participant is entitled to only $75 per month at Normal Retirement Age because $75 is the maximum calendar year accrual.

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As of January 1, 2011, the contribution dollar amount required to accrue the maximum per calendar year benefit is $7,500 ($7,500 x .01 = $75).

Medical Coverage after retirement
Are you eligible for health coverage after retiring? (See Pension Retiree Health Coverage)

Note: If you are planning to retire or are retired and eligible for health coverage, make sure to sign up for Medicare Part B a few months before your 65th birthday to avoid a lapse in medical coverage.

Update Your Beneficiary Designation
It is critically important that you periodically review your beneficiary designation and decide whether you wish to change it, for example, in the case of divorce or death.

Subject to certain legal rights of your surviving spouse, death benefits are payable to the beneficiary on record, regardless of a previous divorce or what may be in your will. You can make life easier for those who survive you by keeping your beneficiary designation up to date.

PBGC
The Pension Benefit Guaranty Corporation (PBGC) protects the retirement incomes of nearly 44.3 million American workers in more than 31,000 private defined benefit pension plans.

Social Security
The Social Security Administration's Web site provides information about Retirement, Survivors and Disability Insurance Benefits, and Supplemental Security Income.

IRS
The Internal Revenue Service maintains a web site where you can download forms, look up laws and read about tax information.

AARP
AARP is a nonprofit membership organization dedicated to addressing the needs and interests of persons 50 and older.

Frequently Asked Questions

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