Thursday, May 6, 2021

Frequently Asked Annuity Questions

Q. What are some of the requirements for borrowing from the Annuity Fund?

You must have been a participant in the Plan for five or more years.Loans will be only be granted for one of the following three reasons (you must provide all required documentation supporting the reason for the loan):

  • Purchase of a principal residence
  • Improvement of a principal residence
  • To meet your living expenses if you or your spouse has a catastrophic illness, as defined in the Plan.

The minimum loan amount is $2,000.00 and the maximum amount is 50% of your account balance (but no more than $50,000.00). If you have an outstanding loan balance within the previous 12 months, the $50,000 amount is reduced by the highest amount of any outstanding loan balance of the yours during the preceding 12 months.

You cannot have more than one loan outstanding at any time.

You can not have a previous default on a Plan loan.

Q. What is the interest rate?
A. The interest rate on your loan is a fixed percentage determined by the Trustees, acting on the advice of the Fund's depository bank.
Q. What is the payback period for my loan?

All loans must be repaid within five (5) years of the date the loan is made unless the loan is used for the purchase of your principal residence, in which case the period for repayment can exceed five years, but cannot exceed twenty (20) years.

Q. Where is the money for a loan coming from?

Your accrued benefit account secures the amount that you borrow. Your loan is treated as one of your investments in the Fund's Self-Directed Investment program, and the amount securing your loan cannot be invested in any other way while the loan is outstanding. The principal and the interest you pay is credited to your account.

Q. What documents must I sign to borrow from the Fund?

To apply for a loan, you must first fill out a loan application that you may request from the Fund office. This loan application will include a Spousal Consent form. If you are married, your spouse must consent to the loan and sign the Spousal Consent form before a notary public. If you are single, you must sign and have notarized a Statement of Single Status. In addition, if you were previously married, you must present a copy of your divorce decree.

If your loan application is approved, you must then sign a promissory note and a loan agreement with the Fund.

Q. Where do I send my payments?

Loan payment checks should be made out to: Sheet Metal Worker's Local 80 Annuity Fund and mailed to the Fund office at 700 Tower Drive, Suite 300, Troy, MI 48098.

Q. Can I make additional payments to the principal or pay off the loan early?

No, monthly scheduled payments may not include additional money to be applied to the principal or interest, nor any future payments. Federal Regulations require that payments be made in accordance to the loan schedule. However, you may pay the entire outstanding amount of your loan at any time, with no prepayment penalty. Please contact the Fund Office for an accurate pay off amount and due date.

Q. Are there any penalties for late payment?

Yes. A payment received after the due date will be assessed a $10.00 late charge. An additional $10.00 will be added for each month the payment remains unpaid. If you become four months behind in your payments, you will default on your loan.

Q. What happens if I default on my loan?

Once you have defaulted on your loan, you have two months during which to repay the entire outstanding balance on the loan including interest and late charges. Once you are in default, you cannot simply catch up on the unpaid payments. If you do not repay the entire outstanding balance within two months, you will be considered to have received a "deemed distribution" from your Annuity Fund accrued benefit account in the amount of the entire outstanding balance as of the date of your default. This amount will be reported to the Internal Revenue Service. This could result in serious tax consequences to you and your family.

Q. Is borrowing from the Fund a good idea?

Neither the Fund Office personnel nor the Trustees are tax consultants. You are strongly advised to seek competent tax advice before you take a loan from the Fund.

Q. How do I become a participant in the Annuity Fund?

You will become a Participant when, within any period of 12 consecutive months, you are credited with 435 Hours of Service for work with one or more employers.

Q. How do I become vested in my account?

Once you become a Participant you are 100% vested in the value of your Accrued Benefit Account.

Q. How will my contributions be invested?

The Annuity Fund has a self-directed investment program which is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and Title 29 of the Code of Federal Regulations Section 2550.404c-1. The fiduciaries of the plan may be relieved of liability for any losses which are the direct and necessary result of investment instructions given by a participant.

You have the right to direct the investment of your Accrued Benefit Account in any of the following options chosen and monitored by the Trustees in multiples of 5%, for a total of 100%.

  • American Europacific GR FD R3
  • American Growth FD of Amer R3
  • Columbia Acorn Fund-A
  • Davis NY Venture FD CL A
  • Federated Capital Appreciation
  • Franklin Capital Grwth FD CL A
  • Franklin Sml -Mid Cap Grwth A
  • Hotchkis&Wiley Mid Cap Val A
  • ML S&P 500 Index Fund CL I
  • Neuberg BER Genesis FD ADV CL
  • State Street Aurora FD CL A
  • Templeton Foreign Fund
  • Van Kampen Comstock FD CL A
  • Evergreen Core Bond CL A
  • FID AD Ltd Trm Bond CL A
  • ML Ret Preservation Trust
  • Loan Fund
  • GoalManager

If for any reason you do not make an investment selection, your Account will be invested in the Merrill Lynch Preservation Trust, which is a balance of stocks and bonds.

Q. How do I decide how to invest my Account?

The principal source of information on each investment option is its prospectus. A prospectus is a document which the mutual fund is required by the Securities and Exchange Commission to produce each year and which contains detailed information on investing style, past performance, fees, assets under investment, as well as other information. When you become a Participant, you will receive from Merrill Lynch a complete set of prospectuses on all of the mutual funds available for self-directed investments. If the Trustees add a new optional fund, you will receive a prospectus on that new fund. You will also receive a prospectus whenever you elect to invest in a fund in which you have not previously invested. Finally, you are entitled to receive a prospectus for any fund at any time upon request by calling Merrill Lynch Retirement Services' Participant Telephone Service (PTS) at 800-229-9040, 24 hours a day, seven days a week. For additional information, Merrill Lynch Customer Service Representatives are available 8:00 a.m. to 7:00 p.m., Monday through Friday. You are encouraged to seek out other sources of information as well.

Neither the Trustees, the Union Hall, nor the Fund Office will offer investment advice to participants. It is highly recommended that you seek the advice of an investment professional to assist in the decisions regarding the management of your money.

Q. How will I know how much is in my account?

You will receive a statement on your Annuity Fund balance each quarter.

You may call Merrill Lynch Retirement Services' Participant Telephone Service (PTS) at 800-229-9040, 24 hours a day, seven days a week to get account information or make changes to your account. For additional information, Merrill Lynch Customer Service Representatives are available 8:00 a.m. to 7:00 p.m., Monday through Friday.

You may also access your account information via the Internet. The web site address is To access your account information, you will need a secure browser (one that supports 128-bit encryption), your Social Security number and your PIN. Your PIN is the same PIN you use for the PTS (you will be assigned a Personal Identification Number upon becoming a participant in the Fund.)

Through both the PTS and the web site you can find out your account balance, loan balance, investment performance, change your PIN, change your investment options or request a prospectus. However, address changes for your statements and application requests must be made through the Fund Office.

Q. Can I withdraw money from my Accrued Benefit Account?

The Annuity Plan is a retirement plan, not a savings account. Therefore, there are strict limitations on when money may be withdrawn from the Plan imposed by Federal law.

You are eligible to receive a distribution of your Accrued Benefit Account balance under the following conditions:

  • Retirement - If you are eligible for benefits from the Sheet Metal Workers' Local Union No. 80 Pension Trust Fund, you are eligible for retirement benefits from the Annuity Fund.
  • Disability - If you are totally and permanently disabled (if you are, based upon medical evidence, totally and permanently prevented by a physical or mental condition from engaging in further employment as a sheet metal worker) you are eligible for benefits from the Annuity Fund.
  • Separation from Service: If you work no hours in covered employment and the Fund receives no contributions (including any received by reciprocity transfer) on your behalf for at least three consecutive Plan Years and you do not do any work as a sheet metal worker in the geographic area covered by the Fund during that time, you will be considered to be separated from employment and entitled to receive benefits. The "Plan Year" is the consecutive twelve month period, running from June 1 through May 31.
  • Death - Upon your death, your Accrued Benefit Account balance will be paid to your designated beneficiary. (Beneficiary designation forms are available from the Fund Office).

Does the Plan allow for distributions based on a personal hardship?


No, the Plan has no hardship distribution provisions.