Saturday, September 19, 2020

Frequently Asked Pension Questions


Q.

What is the purpose of the Plan?

A.

The purpose of the Plan is to provide you with monthly income during your retirement years. This is a traditional pension plan (a defined benefit plan), not an individual account plan. There are no loans and no hardship withdrawals. Your retirement benefits are not paid in a lump sum, with certain minor exceptions.

Q.

Who is eligible to participate in the Plan?

A.

All employees who work in covered employment under a collective bargaining agreement of a participating Local Union, in a position which calls for contributions to the Plan, are eligible to be participants. The sponsoring Local Union is the Sign, Pictorial, and Display Union Local 510. An employee becomes an Active Participant when he or she has worked 500 hours of covered employment in a Plan Year. (A Plan Year starts on May 1 of each calendar year and ends on April 30 of the next calendar year). Employees working under Local 510 Installer agreements on May 1, 1995 became Participants on that date. An employee remains an Active Participant so long as he or she works 500 hours in each Plan Year. If you are no longer an Active Participant, you will still have a right to a pension if your Plan benefits are “vested.” (See Question 8 of the Summary Plan Description.)

Q.

What type of benefits are paid by the Plan?

A.

The Plan pays benefits on Normal or Early Retirement to vested employees who have met the eligibility requirements for those types of retirement (see Question 11 of the Summary Plan Description). Retirement benefits are paid in the form of monthly benefits for your life alone, or for your life followed by reduced benefits to your surviving spouse or child. See Question 12 of the Summary Plan Description for how your benefit is calculated, Question 14 for the rules for electing a form of benefit, and Question 15 for the forms of benefit available. The Plan also pays pre-retirement death benefits (see Question 17 of the Summary Plan Description).

Q.

How do I choose a form of benefit?

A.

When you are ready to retire, you will be provided information about how much you would receive under the various forms of benefit available under the Plan. You may also visit the Plan office for a pension consultation, which includes guidance about the pension application process and retirement options. Guidance is available in English or Spanish. You must then complete a Plan application form, on which you choose a form of benefit and designate a beneficiary. Your spouse’s written consent to your election and designation may be required on the Plan’s application form, processing of your application will be delayed until it is complete.

Note that this is your last opportunity to choose a form of benefit and to designate a beneficiary to receive your benefits after your death. Your form of benefit and your beneficiary designation cannot be changed after you first check is chased or deposited. The designation of your spouse at retirement will not be changed after your first check is cashed or deposited. The designation of your spouse at retirement will not be changed by your subsequent divorce; and if the person you designate at retirement predates you, you may not designate another beneficiary.

The forms of benefit from which you may personally elect, and the requirements for that election, depend on your marital status at retirement:

  1. If you are single at retirement, you may elect any form of benefit available under the Plan (other than the Joint Pension or the 75% Qualified Optional Survivor Annuity), and if appropriate for the form you elect, designate any one of your children as your beneficiary.
  2. If you have been married for twelve months or more at retirement, you will automatically receive benefits in the form of the Joint Pension, unless you elect another form of benefit and your spouse consents in writing to that election. Additionally, if you elect another form of benefit with your spouse’s consent and designate a person other than your spouse as beneficiary, your spouse must consent in writing to that designation.
  3. If you have been married for fewer than twelve months at retirement, you may elect any form of benefit available under the Plan, and designate either your spouse or one of your children as beneficiary, but the following special rules apply:
  • An election of the Joint Pension or any other form of benefit with a survivor benefit for your spouse is not effective unless you remain alive and married through the twelfth month of your marriage.
  • An election of a form of benefit other than the Joint Pension is automatically revoked in favor of the Joint Pension if you remain alive and married through the twelfth month of your marriage, unless your spouse consented to the election of the other form of benefit and, if your designated a person other than your spouse as beneficiary, to the designation of that other person as beneficiary.
Q.

Can I borrow against my pension?

A.

In general, your benefits under the Plan may not be alienated or assigned. That rule means you may not use your pension as security for a loan from a third party, and you may not receive a loan from the Plan. Your benefits may be assigned under a Qualified Domestic Relations Order (see Question 20 of the Summary Plan Description).

Q.

What happens to my pension if I get divorced?

A.

If you were married for any of the time that you were working in covered employment, and you get divorced, your benefits from the Plan may be the subject of a Qualified Domestic Relations Order (“QDRO”), which divides your pension between you and your former spouse. The Plan will comply with any QDRO with which it has been served, and which does not call for the payment of benefits which would not otherwise be payable under the Plan. The Plan’s Legal Counsel reviews all domestic relations order affecting the Plan to confirm that they are qualified under federal law, but if you are getting divorced, you and your spouse are each responsible for protecting your own interests. You may obtain, without charge, a copy of the Plan’s formal procedures governing QDRO determinations form the Plan Administration Office.

Q.

Can my creditors get any part of my pension?

A.

In general, your creditors may not attach or garnish your pension. However, the IRS may levy a portion of your benefits, if they are in pay status, to collect unpaid taxes.