Thursday, December 2, 2021

Frequently Asked Annuity Questions

Q. How will I know how much is in my account?
A. You will receive a statement on your Annuity Fund balance each quarter. You may call BeneSys Retirement Services Department at 248-813-9800 extension 4594, to get account information or make changes to your account. BeneSys Customer Service Representatives are available from 7:30 a.m. to 4:30 p.m., Monday through Friday. You may also access your account information by going to myplanaccess.com. 
Q. Can I withdraw money from my Accrued Benefit Account?
A. 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 Therefore, there are strict limitations on when money may be withdrawn from the Plan imposed by Federal law.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. 292 Pension 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 twenty-four consecutive months 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.
  • 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).
Q. Does the Plan allow for distributions based on a personal hardship?
A. Yes, the Plan does offer a Hardship Provision.
Q. May I borrow from the Fund?
A. Yes, you may borrow up to 50% of your Annuity balance (with certain limitations). Minimum loan amount is $1,000. There is a $50 Loan Initiation Fee and an annual $50 Loan Maintenance Fee for the duration of your loan.
Q. What if I am late making my payment?
A. Any payment not received by the Fund on or before its due date shall be assessed a $10.00 late fee, and an additional $10.00 late fee will be assesed for each calendar month the full payment remains unpaid. If a full scheduled monthly payment is not received, along with all accrued late fees due, the loan will be in default, however there is a cure period you may take advantage of. You will have until the last day of the calendar quarter following the quarter in which a missed payment was due to cure the default. If the payment is made within that time frame, the loan will no longer be in default and you can continue making monthly payments as scheduled.


Loans

Q. Who is eligible for a plan loan?
A. To be eligible for a Plan loan, you must be a Participant in the Fund.
Q. Is there a maximum and a minimum amount I can borrow?
A. Yes. The maximum amount you can borrow is 50% of your Accrued Benefit Account, but no more than $50,000. For purposes of determining the maximum amount you can borrow, the amount of your Accrued Benefit Account which will be considered will be reduced by any amount which an alternate payee has an interest in pursuant to a qualified domestic relations order. Also, the $50,000 figure shall be reduced by your highest outstanding loan balance over the twelve months preceding this new loan. The minimum amount you can borrow is $1,000.
Q. Where is the money I borrow from?
A. Your accrued benefit account is reduced by the amount that you borrow. Your loan is treated as one of your investments in the Fund’s Self-Directed Investment program. The principal and the interest you pay are credited to your account.
Q. Do I need a special reason to get a loan?
A. No
Q. Is my spouse involved when I take a loan from my Accrued Benefit Account?
A. Yes. No loan may be granted unless your spouse consents, in writing, before a notary public or a Fund representative. Your spouse’s consent must be given no sooner than 30 days and no longer than 90 days prior to the date the loan is issued.
Q. What if my spouse had died or I am divorced?
A. If your spouse is deceased, you must present the Plan Administrator a certified copy of the death certificate. If you are divorced, you must present the Plan Administrator a true copy of your divorce decree, which will be reviewed to see if your spouse was granted any interest in your benefit
Q. What documents must I sign to take a loan from my Accrued Benefit Account?
A. To apply for a loan, you must first fill out a Loan Application. If you are married, your spouse must sign a Spousal Consent Form. If the Loan Application is approved, you must then sign a Truth-In-Lending Statement and Promissory Note.
Q. How often can I borrow from the Fund?
A. There is no limit as to how often you can borrow from the Fund. However, only one loan may be outstanding at any time and no loan shall be made to a Participant who has ever defaulted on a loan from the Fund and as a result received a deemed distribution.
Q. What is the interest rate on loans from the Annuity Fund?
A. The interest rate on your loan is the prime interest rate for the Fund’s custodial bank, plus 2%, on the last day of the month prior to the month your loan is issued. That rate is fixed for the duration of the loan. While the Fund has the self-directed investment program in place, your loan is treated as one of your investments, and your account is credited with all of the interest you pay as if it was investment return.
Q. What is the payback period for my loan?
A. In general, all loans must be repaid within five (5) years of the date the loan is made. However, monthly payments will not be arranged for less than $50 per month. Therefore, if you borrow less than approximately $3,000 (depending on the current interest rate), your payback period may be shorter.
Q. Are there any costs to borrowing from the Fund?
A. The Fund’s recordkeeper, BeneSys, will deduct $50 from your account as a loan origination fee and $50 from your accrued benefit account each year as a loan maintenance fee. These amounts are not part of the loan and are not repayable.
Q. Are there any penalties for late payment and insufficient funds?
A. 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. Late charges collected are not credited to your account. They are retained by the Fund as a whole to pay for the increased administrative costs to the Fund for processing late payments. Late payments will be taken out of any subsequent payments you make first. If you fail to pay a late payment or fail to add it to your next payment, you risk underpaying your monthly payment and defaulting on your loan, so in order not to default on your loan, be certain that your next payment includes all of your late charges.
Q. Can I prepay my loan?
A. Yes. The Fund will accept payment in full of the outstanding balance (which the Fund will determine at your request) at any time
Q. Will I default on my loan if I miss one payment?
A. Yes. If the full scheduled monthly payment is not received by the scheduled due date, the loan will be considered to be in default. You will have until the last day of the calendar quarter following the quarter in which the missed payment was due to cure the default.
Q. What happens if I default on my loan?
A. If a missed payment, together with all accrued late charges, is not made on or before the last day of the calendar quarter following the quarter in which the missed payment was due, the whole outstanding balance of the loan, including interest and late fees, will become a "deemed distribution" and will be reported to the IRS as such. This could result in serious tax consequences to you and your family. You will also be prevented from taking another loan from the Plan in the future.