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HOW BENEFITS ARE PAID

Husband-and-Wife Pensions

Husband-and-Wife Pensions give your spouse some security if you should die first.

The 100% Husband-and-Wife Pension is the normal form of payment for married participants.  With the 100% Husband-and-Wife Pension, you get a monthly pension benefit for as long as you live.  After you die, your spouse continues to get 100% of your monthly pension benefit.

If you would like a smaller benefit for your spouse, you may elect 50% Husband-and-Wife Pension at the time of your retirement. 

There are many different ways that pension benefits are paid by the Plan depending on whether you are married. If you are married and you wish to reject the normal form of payment (the 100% Husband-and-Wife Pension), your spouse must consent in writing to the form of payment you choose. The payment options are:

You may take either of the Husband-and-Wife Pensions or the 60-Month Post- Retirement Pension in combination with the Level Income Option or Partial Lump Sum Payment Option, provided you meet the eligibility requirements.  

The Fund Office can provide you with a calculation of your benefits under all available payment options explained in this section. You should request this Good Faith Estimate when you reach retirement age to compare the options and prepare to make your elections at retirement.

 

Single Life Pension

If you are not married, your pension will normally be paid as a Single Life Pension. This means that you will get a monthly pension benefit payment for as long as you live. If you should die before 60 monthly payments have been made, your beneficiary will receive the remainder of the 60 monthly payments, and then payments from the Plan will stop. In the event of your death after 60 monthly payments have been made, your beneficiary will not receive any pension payments.

 

60-Month Post-Retirement Pension

When you retire, you may elect to have your pension paid as a 60-Month Post-Retirement Pension. This means that your pension will be paid like a Single Life Pension for your lifetime (with the first 60 monthly payments guaranteed). If you should die before 60 monthly payments have been made, your beneficiary will continue to receive the same benefit amount for the balance of the 60 monthly payments. Then, your beneficiary will receive an additional 60 monthly payments at the same benefit amount. In the event of your death after 60 monthly payments have been made, your beneficiary will receive 60 monthly payments after your death. Because this option will guarantee at least 120 payments, the monthly pension benefit amount you receive will be reduced from the Single Life Pension.

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Husband-and-Wife Pensions

If you are married, your pension will normally be paid as a 100% Husband-and-Wife Pension. This means that you will get a monthly pension benefit for as long as you live. If you should die before 60 monthly payments have been made, your spouse will continue to receive the same benefit amount for the remainder of the 60 monthly payments. Then your spouse will get 100% of your monthly pension benefit for the rest of her or his life.

The amount of your Regular or Early Pension will be reduced because the benefit will be paid over two lifetimes—yours and your spouse’s. However, if your spouse dies before you, your monthly pension benefit will be increased to the amount you would have received before the adjustment for this payment option (pop-up).

When you and your spouse complete and sign your pension application form, you may elect a different type of payment. Your spouse’s consent to the election must be witnessed by a notary public or authorized Plan representative.  

You may want your spouse to get a smaller benefit after your death. If so, you can choose the 50% Husband-and-Wife Pension. This option works the same way as the 100% Husband-and-Wife Pension except, after your death, your spouse will get 50% of your monthly pension benefit.

Because benefits may be paid over two lifetimes, your monthly pension benefit is reduced to provide these benefits for both you and your spouse. The amount of the reduction is based on your age and your spouse’s age. In determining the age difference between you and your spouse, the number of years is rounded. If the difference in ages is: 

Example:
If you reach age 62 on June 1, 2010 and your spouse reaches age 60 on December 31, 2009, your spouse is considered to be 3 years younger than you are because on June 1, 2010 the age difference is 2 years, 6 months, and 1 day.

However, if your spouse reaches age 60 on January 3, 2010, your spouse is considered to be 2 years younger than you are because the age difference is 2 years, 5 months, and 27 days. 

The reduction factors are:

Husband-and-Wife Pension
To calculate the amount of a Husband-and-Wife Pension, reduce the Regular Pension amount by:
Non-Disability Pension
Disability Pension
50%
2% Plus 0.10% for each year your spouse is younger than you; or
Minus 0.10% for each year your spouse is older than you.
21% Plus 0.4% for each year your spouse is younger than you; or
Minus 0.4% for each year your spouse is older than you.
100%
4% Plus 0.10% for each year your spouse is younger than you; or
Minus 0.10% for each year your spouse is older than you.
35% Plus 0.6% for each year your spouse is younger than you; or
Minus 0.6% for each year your spouse is older than you.

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At the time you apply for a pension, you will receive an estimate of what your monthly pension benefit would be, including any reductions, under each of the payment options outlined above. Here is one example that shows you how a 50% Husband-and-Wife Pension would be paid:

Example:
At age 55, Joe is eligible for a Regular Pension of $2,625.  He and his wife agree that the 50% Husband-and-Wife Pension payment option is best for them.

Joe's wife is 52 (exactly three years younger than Joe is).  Here is how Joe's and his wife's monthly pension benefits are calculated.

Benefit
Calculation
Amount
50% Husband-and-Wife Pension Reduction amount
$2,625 x 2.3%
Regular Pension x Reduction Factor
$60.38
Joe’s monthly 50% Husband-and-Wife Pension amount
$2,625 - $60.38
Regular Pension – Reduction Amount
$2,565
(rounded)
Joe’s Spouse’s monthly 50% Husband-and-Wife Pension amount if Joe dies after 60 monthly payments
$2,565 x 50%
Joe’s Pension Amount x 50%
$1,283*
Joe’s monthly pension if Joe’s wife dies before Joe
$2,625

Joe's monthly 50% Husband-and-Wife Pension amount is rounded up to the next whole dollar.
* If Joe should die before 60 monthly payments are made, the total monthly benefit payable to Joe's wife for the remainder of the 60 monthly payments will be the same amount Joe was receiving until 60 monthly payments have been made.

However, if Joe and his wife choose the 100% Husband-and-Wife Pension option, here is how their monthly pension benefits are calculated.

Benefit
Calculation
Amount
100% Husband-and-Wife Pension Reduction amount
$2,625 x 4.3%
Regular Pension x Reduction Factor
$112.88
Joe’s monthly 100% Husband-and-Wife Pension amount
$2,625 - $112.88
Regular Pension – Reduction Amount
$2,513
(rounded)
Joe’s Spouse’s monthly 100% Husband-and-Wife Pension amount if Joe dies after 60 monthly payments
$2,513 x 100%
Joe’s Pension Amount x 100%
$2,513
Joe’s monthly pension if Joe’s wife dies before Joe
$2,625

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Level Income Option

If you retire before age 62 and you would like additional income before you reach your Social Security eligibility age, then the Level Income Option may help to meet your needs by giving you a level income over time.
Level Income Option

If you are eligible and retire from active Covered Employment at or after age 55, you may elect to have your pension paid in the form of the Level Income Option. Please note that if you do not retire from active Covered Employment, you must have at least 20 Years of Vesting Service or 20 Pension Credits to elect the Level Income Option. This option is not available with a Disability Pension.

The Level Income Option makes it possible for you to receive more pension income before age 62—the age at which you can begin receiving your Social Security benefit.

Under this option, your pension benefit will be 20% higher until you reach age 62. After age 62, your pension payments will be lower. This election will not affect your future Social Security benefit amount and will be lowered at age 62 whether or not you collect your Social Security benefit.

You cannot elect the Level Income Option if:

The amount of the Level Income Option payment is based on factors determined by the Fund’s actuary.   If you die before 60 monthly payments have been made and you are receiving a Level Income Option in the form of:

After 60 monthly payments, your beneficiary will receive the amount payable under the standard form of the 60-Month Post-Retirement Pension without regard to the Level Income Option for an additional 60 monthly payments.

After 60 monthly payments, your spouse will receive the amount payable under the standard form of the Husband-and-Wife Pension without regard to the Level Income Option.

Example:
When Jim retires at age 55, he is entitled to a Single Life Pension of $2,000 per month.  If Jim chooses the Level Income Option, he will receive $2,400 per month from the Pension Plan until age 62.  When Jim reaches age 62, his payments from the Plan will be reduced to $1,735.    

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Partial Lump Sum Payment Option
Actuarial Equivalent

A benefit that has the same present value as the benefit it replaces.
 

If you retire from active Covered Employment at or after age 55, you may elect to receive a pension benefit under the Partial Lump Sum Payment Option. If you do not retire from active Covered Employment, you must have at least 20 Years of Vesting Service or 20 Pension Credits to elect this option. This option is not available with a Disability Pension.  

When you elect this option, you will receive the full amount of your monthly pension under the form of payment you elect for the first six monthly pension payments. Beginning with the seventh pension payment, your monthly pension benefit will be reduced by 10% for the Partial Lump Sum Payment Option. The amount of your lump sum payment will be equal to 10% of the Actuarial Equivalent value of your monthly pension amount. The lump sum of money is paid to you at the time you receive your seventh pension payment.  

The following rules apply to the Partial Lump Sum Payment Option:

Example:
When Walt retires at age 58, he is entitled to a Single Life Pension of $2,000 per month.  Walt chooses to receive the Partial Lump Sum Payment Option.  For the first six months, Walt receives $2,000 per month from the Pension Plan.  Beginning with the seventh payment, Walt receives $1,800 per month from the Pension Plan.  At the time Walt receives his seventh payment, he also receives a lump sum payment of $33,691 (which is calculated based on his age when his pension benefit began).

This lump sum is only and estimate.  Actual lump sum amounts are based on the applicable interest rates in the Plan Year in which a participant retires. 

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60-Payment Guarantee

The Plan guarantees 60 monthly payments will be made for all types of pensions. This means that once you begin receiving a pension, a minimum of 60 monthly payments will be made in the amount you are receiving. You begin counting the 60 monthly payments at the time your first monthly payment is made.

The following chart outlines how the 60-payment guarantee will work once you begin receiving your pension benefits.

The 60-payment guarantee is not a payment option, it is included with all forms of payment. It guarantees that a minimum of 60 payments will be made, but does not guarantee that 60 payments will be paid after your death. If you receive 60 or more months of payment during your lifetime and do not elect a Husband-and-Wife Pension or the 60-Month Post-Retirement Pension, there will be no additional pension payments made to your beneficiary. 

If you are receiving this form of payment and you die before 60 monthly payments have been made
The balance of the 60 monthly payments, if any, are paid to:
After 60 monthly payments have been made:
Single Life Pension
Your beneficiary in the amount you would have received under this option
Payments stops
60-Month Post-Retirement Pension
Your beneficiary in the amount you would have received under this option
An additional 60 monthly payments are made to your beneficiary
Husband-and-Wife Pension
Your spouse, in the amount you were receiving
Your spouse receives the amount payable under the Husband-and-Wife pension from you choose at retirement (50% or 100%)
Husband-and-Wife Pension and
You and Your Spouse Die Before 60 Monthly Payments Have Been Made
Your beneficiary
Payments stop
Level Income Option
in Single Life Pension
Your beneficiary in an amount that is the greater of the:
  • Amount you would have received under the Level Income Option; or
  • Amount under the Single Life Pension form you choose at retirement without regard to the Level Income Option.
Payments stop
Level Income Option in
60-Month Post-Retirement Pension
Your beneficiary in an amount that is the greater of the:
  • Amount you would have received under the Level Income Option; or
  • Amount payable under the 60-Month Post-Retirement Pension form you choose at retirement without regard to the Level Income Option.
An additional 60 monthly payments are made to your beneficiary
Level Income Option in
Husband-and-Wife Pension
Your spouse in an amount that is the greater of the:
  • Amount you would have received under the Level Income Option; or
  • Amount payable under the Husband-and-Wife Pension form you choose at retirement without regard to the Level Income Option.
Your spouse receives the amount payable under the Husband-and-Wife pension from you choose at retirement without regard to the Level Income Option.
Partial Lump Sum Payment Option with Single Life Pension
Your beneficiary in the amount you would have received under the option you choose (along with the lump sum payment if you die before receiving this payment)
Payments stop
Partial Lump Sum Payment Option with 60-Month Post-Retirement Pension
Your beneficiary in the amount you would have received under the option you choose (along with the lump sum payment if you die before receiving this payment)
An additional 60 monthly payments are made to your beneficiary
Partial Lump Sum Payment Option with Husband-and-Wife Pension
Your spouse in the amount you would have received under the option you choose (along with the lump sum payment if you die before receiving this payment)
Your spouse receives the amount payable under the Husband-and-Wife pension from you choose at retirement (50% or 100%)

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Small Benefit Payment

If the present value of your vested pension benefit is $1,000 or less, it will be paid to you as a single lump sum. If the present value of your vested pension benefit is more than $1,000, but not more than $5,000, you have the option to take as a single lump sum. When a lump sum payment is made, no additional benefits will be payable from the Plan.

If you receive a small benefit distribution that is eligible for a rollover, you may roll over all or part of it to an individual retirement account (IRA) or another qualified plan.  If you do not choose to roll over the small benefit payment, federal law requires the Plan to withhold 20% of the total amount as federal income tax withholding.