|As of 12/31||Main||Stable||Conservative|
The Local No. 8 IBEW Retirement Plan and Trust Fund is where most of our participants’ accounts are invested. The Board of Trustees meets on the fourth Thursday of each month to review and conduct the business of the Plan. (Regular meetings are occasionally rescheduled, and special meetings may be held from time to time.) Professional advisors and money managers are retained by the Trustees to prudently invest our pension funds. The Trustees can, and do, change investment managers who do not meet investment goals, and add investment managers who could enhance the average investment earnings of the Plan. The retirement funds were invested in a diversified asset allocation as of June 3, 2018 as outlined below:
|Investment Manager||Area of Investment||Year-end % of Total|
|AFL-CIO Housing Investment Trust||Fixed Income||2.1%|
|Brandes International||International Equities||8.3%|
|BlackRock Strategy Income Opp||Non-Traditional Fixed Income||8.9%|
|Blackstone Partners||Hedge Fund of Funds||4.9%|
|BUILDFUND of America||Private Real Estate||0.0%|
|Columbia Management||Large Cap/Growth Equities||10.0%|
|IBEW-NECA Equity Index Fund||Large Cap Core Equities||7.6%|
|Met West Asset Managements||Intermediate Fixed Income||12.9%|
|Mutli-Employer Property Trust||Private Real Estate||5.8%|
|Nuveen Asset Management||Mid Cap Growth Equities||6.0%|
|River Road Asset Management||Small Cap Value Equities||5.4%|
|Rocket Ventures||Venture Capital||0.7%|
|WCM Investment Management||International Equities||8.5|
|Wedge Capital Management||Large Cap Value Equities||9.0%|
What is the eligibility criteria to retire or to obtain my account balance?
All participants are encouraged to get advice from a financial planner before withdrawing pension funds. There are several ways a participant can become eligible to collect benefits from his/her pension account.
- Normal Retirement Benefits: After reaching the age of 60 years, a participant is entitled to the full value of his/her account. The participant must retire from the service of all electrical industry employers.
- In-Service Withdrawl: Upon reaching age 60, a participant is entitled to withdrawal from his/her account. A participant does not need to be retired from service to elect this option.
- Rule of 85 Retirement Benefits: After reaching the age of 55 years with at least 30 years of industry service, a participant is entitled to restricted payments from his/her account. The participant must retire from the service of all electrical industry employers. You must be at least age 55 and your age plus years of service must add up to 85 or more to choose this option.
- Benefits on Death: Upon the death of a participant, the full value of his/her account is assigned to the designated beneficiary on file with the Fund Office.
- Permanent and Total Disability Benefits: In the case of a permanent and total disability, the participant is entitled to the full value of his/her account. Permanent and total disability means a physical or mental condition for which the participant receives a Social Security disability award or which completely prevents the participant from performing duties as an employee and which will, on the basis of competent medical evidence, be permanent and continuous during the remainder of the participant’s life. A permanent and total disability must be certified by the Board of Trustees, which may rely on medical advice it deems to be appropriate.
- Termination of Employment: You can also receive a distribution if you terminate employment. Termination of employment is broken into two categories; Six (6) month Termination and Full Termination. The two categories are explained below.
- Six (6) Month Termination – If no employer contributions are made on behalf of a participant for six (6) consecutive months (including contributions received under a reciprocity agreement) AND the participant has not engaged in any electrical industry work in Local 8’s jurisdiction during those six (6) months, the participant will be eligible for a monthly distribution of $3,500 or less (depending on the participant’s election). The installments will stop after twelve (12) unless you elect to discontinue them at an earlier time. If you are still unemployed, you may qualify for the Full Termination explained below.
- Full Termination (i.e., 12 months) – If no employer contributions are made on behalf of a participant for twelve (12) consecutive months (including contributions received under a reciprocity agreement) AND the participant has not engaged in any electrical industry work in Local 8’s jurisdiction during those twelve (12) months, the participant will be eligible for a complete distribution of his or her account under the Plan. Distributions can be made in any manner allowed under the Plan (i.e., lump sums, installments, etc.).
Please contact the Fund office to discuss your particular circumstances. Again, you are encouraged to seek financial planning advice before withdrawing funds from your account. This is YOUR pension plan, and we want our participants to have the most secure future possible.
An Application for Benefits must be completed by the participant, and approved by the Board of Trustees before any payment can be processed.
Once I retire, what are my distribution options?
Once you qualify for benefit payments, you must decide which method of payment will best provide you for your retirement. If you are married, your spouse must agree to the method of payment selected. Please contact the Fund office to make an appointment to discuss your particular circumstances. The various payment options available to you are:
- Installment Payments-Age 60+ only: You only elect how much you want to be paid monthly. Payments are taxable income for the participant, but not subject to the IRS early withdrawal penalty.
- Rule of 85 Installment Payments: This is the only payment option available to participants retiring under the Rule of 85 (at least 55, and age plus years of service equal 85 or more.) Payments are taxable income to the participant. The IRS early withdrawal penalty does not apply. Annual payment limit is 10% of your account balance. Account balance is measured as of any one of the prior 12 months.The annual limit is then divided by 12 to calculate the monthly payment amount. One additional payment is allowed each year equal to 20% of your annual limit. For example:
Account Balance = $120,000
Multiple balance by 10% = $12,000 annual limit
$12,000 divided by 12 = $1,000 monthly payments
$12,000 x 20% = $2,400 additional payment allowed per year if elected by participant
- Lump Sum and Partial Payments: You may request all or part of your account balance be paid directly to you. This type of payment is taxable income for the participant. The Fund is required by law to withhold 20% income tax in most cases. If you are under age 59 at the time of payment, the Internal Revenue Service will also assess a 10% penalty for early withdrawal on your next tax return. (There are a few exceptions, check with your tax preparer or financial advisor.)
- Direct Rollovers: You may request all or part of your account balance be paid directly to an IRA or other Qualified Plan. Direct rollovers are not subject to the IRS early withdrawal penalty, are not considered taxable income, and no tax is withheld.
- Single Life Annuity: A Single Life Annuity is the automatic form of payment from the plan unless you are married, or you elect to waive this option. If your benefits are paid as a Single Life Annuity, your account balance will be used to purchase an annuity from an insurance company. The annuity will provide you with a fixed monthly payment for the rest of your life. Payment amounts depend on your age and life expectancy. After you die, no further payments will be made to your estate or your designated beneficiary.
- Joint and Survivor Annuity: If you are married, this is the automatic form of payment from the plan unless you and your spouse elect to waive this option. If your benefits are paid as a Joint Survivor Annuity, your account balance will be used to purchase an annuity from an insurance company. The annuity will provide you with a fixed monthly payment for life. After you die, your spouse (the person you were married to at the time payments began), will receive monthly payments for the rest of his/her life. The payment amount to the spouse is equal to 50% of your monthly payment. (If this spouse dies before you do, the amount of your payment will not change.)
- Additional Annuity Information: The monthly annuity payments that can be purchased with your account balance will depend on (a) your age, or the ages of you and your spouse, (b) the date payments commence, and (c) the current annuity rates available from an insurance company selected by the Board of Trustees. You are subject to income tax on annuity payments you receive. If you are interested in an estimate of a monthly annuity payment, please contact the Fund office.
How is the Pension Plan invested?
Assets of the Plan are invested according to the investment Policy established by the Board of Trustees. Currently, funds are invested by fourteen different Money Managers, with performance monitored by an Investment Advisor and the Board of Trustees.
How is my account balance valued?
Plan assets are valued each day at the close of business for the financial markets. Accounts are adjusted for investment gains, losses, and administrative expenses.
Are there any other investment options?
Two other fund options are available to those participants age 55 and older: the Stable Fund and the Conservative Fund. Qualified participants may transfer all or a portion of funds and/or direct future employer contributions into one or both of these options on a quarterly basis. The Trustees’ investment objective for the Stable and Conservative Funds is to provide safety of principal and stability of income for participants nearing retirement age.
Are distributions from the Pension Plan taxable?
All payments from your pension, except Direct Rollovers, are taxable income. When you file your taxes, you must report any pension payments you receive. We will send you a Form 1099-R each January for payments you received the previous calendar year.
On your tax return, your gross pension income is added to all other forms of income you receive, such as wages (you and your spouse) and unemployment benefits. We want you to be aware that any tax we withhold from your pension payments may not completely cover your total tax liability. Also, most non-rollover payments to participants under age 59 are subject to an additional 10% tax penalty.
Also, you should be aware that your pension withdrawals may be subject to state and local income taxes. We do not withhold any state or local taxes from your payments unless required by state law (i.e., state of Michigan).
Can I use the money in my account to purchase a house, or for my child's college education?
No, the Plan does not allow for borrowing or hardship withdrawals.
Additional information on these or any other subject is available by calling the Benefit Office at (419)666-4450, or by sending an e-mail to [email protected] .