Monday, August 15, 2022

Frequently Asked 401(k) (Part B) Questions


Q. Who is eligible to become a Participant of the Plan?
A. You are eligible to participate in the Plan if you are an employee of an employer who is signatory to a Collective Bargaining Agreement between the Local Union No. 684, International Brotherhood of Electrical Workers, (IBEW) and the National Electrical Contractor Association, (NECA), an you are performing work covered by these agreements for such employers, or an employee of the Union signatory thereto. You become a participant when you worked at least 500 hours of Covered Employment within two consecutive Plan Years.
Q. What determines the value of the accrued benefit in my Individual account?
A. First, of course, is the amount of contributions that are paid on your behalf. This money along with the contributions in all other Individual accounts; is invested under policies established by the Board of Trustees of the Fund. Any interest or dividends is added to the contributions; changes in the value of investments also result in increases or decreases in the value of each individual account. From this accumulation is deducted a uniform share of the Plan’s operating expenses.
Q. What is the exact amount of money I would get when I am eligible for benefits?
A. Due to the fluctuation in the amount of the yield on investments as wells as the fluctuating value of stocks or bonds or other investment assets, the exact amount you will receive in the future when you are eligible for benefits cannot be determined now. However, the amount you will receive will be calculated as follows: the sum of all contributions received on your behalf, plus all actual investments earnings, minus changes in the value of the Plan’s investments, minus your share of the Plan’s operating expenses.
Q. May I assign my benefits under the Plan?
A. No, you may not assign your benefits unless required by law under a Qualified Domestic Relations Order (QDRO).
Q. Are the employer’s contributions taxable to me?
A. No. The employer’s contributions are not taxable income to the individual, nor are earnings thereon, as this is tax exempt qualified Pension Trust. However, taxes are due when you withdraw money from your account.
Q. When do I retire?
A.
  • Normal Retirement Age-Your normal retirement date will be the first day of the month coinciding with or next following your 62nd birthday after you have ceased working in covered employment. The benefit is your account balance.
  • Retirement prior to Age 62-You may elect to retire prior to age 62 if you retire under the IBEW Local No. 684 Defined Benefit Pension Plan (Part A) or any other IBEW local union pension plan. You can receive your account balance at that time.
  • You may retire at any time if you are awarded Social Security Disability Benefits.
Q. May I withdraw my funds prior to retirement?
A. Yes, under certain circumstances, and individual may withdraw the accumulated fund in his Individual account if you have not been employed in covered employment for a period of 12 consecutive months, and cease work for any Employer that is a signatory contractor or any other employer performing work that would be covered if that employee was a signatory contractor, you may apply for benefits if your Individual account has a value of less than $5,000.00.

Additionally, hardship distributions are now available from this Plan. These type of distributions are strictly regulated by the Internal Revenue Code and are limited. A hardship distribution is an immediate and pressing financial need which cannot be met by obtaining funds from any source other than the Participant’s account. Such distributions are allowed subject to the Trustees approval as specified below:

  • Medical expenses previously incurred by the Participant or the Participant’s spouse or dependents or necessary for those persons to obtain medical care
  • The need to prevent either eviction from his/her primary residence or the foreclosure of the mortgage of the Participant’s principal residence
  • Expenses for to repair damage to the Participant’s principal residence that would qualify for the casualty deduction under IRC Section 165, whether or not the loss exceed 10% of the adjusted gross income
  • Burial an funeral expenses of an immediate family member (spouse, child, sibling, parent or grandparent)
Q. Can I transfer my account balance to other IBEW pension plans?
A. The IBEW Local No. 684 Defined Contribution Pension Plan is signatory to the National Electrical Industry Pension Reciprocal Agreement. Defined Contribution funds are transferred according to the Reciprocal Agreement on a monthly basis. Traveling employees must complete the reciprocal authorization form which is available at participating Local Union offices and send the form to the Fund Manager's office.
Q. What is the application procedure for payment of my accrued benefit?
A. All applications must be in writing and filed with the fund office in a manner prescribed by the Board at least 30 days before payment of your accrued benefit is to be made.
Q. Is there a procedure to follow if an application is denied?
A. Yes, the claim and appeal procedure is described in detail in the Summary Plan Document and it should be followed precisely if a claim for benefits is denied.