• SPD Table of Contents
  1. Introduction
  2. Funding Improvement Plan
  3. Pension Plan Highlights
  4. Beginning Work
  5. Leaving Work
  6. Getting Married or Divorced
  7. Preparing for Retirement
  8. Receiving a Pension
  9. Choosing a Payment Option
  10. Returning to Work
  11. In the Event of Death
  12. Administrative Information
  13. Definitions
  14. Table 1: Early Retirement Pension Reduction Factors for Benefits Accrued on or Before May 31, 2018
  15. Table 1A: Early Retirement Pension Reduction Factors for Benefits Accrued on or After June 1, 2018
  16. Table 2: Deferred Pension Early Retirement Reduction Factors
  17. Table 3: Actuarial Equivalent Reduction Factors for Pension Before Suspension of Benefits

Choosing a Payment Option

Your payment options are based on your marital status before your pension payments begin. The normal form of payment if you are:

• Not married, is a Single Life Pension; or
• Married, is a 50% Participant and Spouse Pension.

In addition, if you are eligible for a Regular or Early Retirement Pension you may choose to receive your Single Life Pension, 50% Participant and Spouse Pension, or 75% Participant and Spouse Pension in conjunction with one of these optional forms of payment:

• Lump Sum Readjustment Allowance; or
• Level Income Option.

If you are married, you may elect to receive your benefit as a Single Life Pension or elect an optional form of payment in conjunction with a 50% or 75% Participant and Spouse Pension. However, you will need your spouse’s written consent witnessed by a notary public or Plan representative, except for the election of the 75% Participant and Spouse Pension.

If the present value of your benefit is $5,000 or less, you will receive your benefit as a Lump Sum Payment.

Normal Forms of Payment

Single Life Pension

A Single Life Pension pays a monthly pension to you for your lifetime. After your death, no monthly benefits are paid to a beneficiary. However, your beneficiary may be eligible for a death benefit, see page 42 for more information.

50% Participant and Spouse Pension

To be eligible for the 50% Participant and Spouse Pension form of payment, your spouse must be a qualified spouse or eligible for payment under a Qualified Domestic Relations Order (QDRO), see page 11 for more information.

The 50% Participant and Spouse Pension provides you with reduced monthly pension payments for your lifetime. After you die, your surviving spouse receives 50% of your monthly benefit for the rest of his or her life. The 50% Participant and Spouse Pension has a “pop-up” feature. With the pop-up feature, if your spouse dies before you, your monthly benefit will increase to your benefit amount before the adjustment was made for the 50% Participant and Spouse Pension and you will receive that higher amount for the rest of your lifetime. (This is effective for retirements on or after June 1, 1994.) The adjustment will begin with the first scheduled benefit payment after your spouse’s death, provided you notify the Fund Office.

If you remarry, the 50% Participant and Spouse Pension cannot be reinstated, and the adjusted benefit amount will continue until your death.

For the 50% Participant and Spouse Pension, your pension is reduced based on your and your spouse’s age to provide for the benefits your spouse will receive after your death. The reduction factor is 90%:

• Increased by 0.4% times the number of full years your spouse is older than you are; or
• Decreased by 0.4% times the number of full years your spouse is younger than you are.

The factor cannot be more than 99.9%.

You will receive a notice that explains the 50% Participant and Spouse Pension form of payment. You may waive this form of payment with your spouse’s written, notarized consent. A waiver is valid only if a written explanation is given to you no earlier than 180 days, but no later than 30 days before your payments begin. You may file a new waiver or revoke a previous waiver at any time during the 180-day period before your payments begin. If you and your Spouse want to start receiving payments before the required 30-day distribution waiting period, you may file a waiver, with your spouse’s consent, with the Trustees. After your payments begin, your form of payment cannot be changed.

To elect an optional form of payment (other than the 75% Participant and Spouse Pension) instead of the 50% Participant and Spouse Pension or in conjunction with this form of payment, you must apply in writing and receive your spouse’s consent, witnessed by a notary public or Plan representative. You may waive the 50% Participant and Spouse Pension if:

• You file the waiver in writing and your spouse consents to it in writing, witnessed by a notary public or by a Plan representative;

• You are not married;

• Your spouse whose consent would be required cannot be located; or

• Your spouse’s consent cannot be obtained because of extenuating circumstances, as provided in Internal Revenue Service regulations.

Optional Forms of Payment

75% Participant and Spouse Pension

To be eligible for the 75% Participant and Spouse Pension form of payment, your spouse must be a qualified spouse or eligible for payment under a Qualified Domestic Relations Order (QDRO), see page 11 for more information. You may elect this form of payment without obtaining spousal consent.

Like the 50% form of payment, the 75% Participant and Spouse Pension provides you with reduced monthly pension payments for your lifetime and has a “pop-up” feature. With the pop-up feature, if your spouse dies before you, your monthly benefit will increase to your benefit amount before the adjustment was made for the 75% Participant and Spouse Pension and you will receive that higher amount for the rest of your lifetime. (This is effective for retirements on or after June 1, 1994.) The adjustment will begin with the first scheduled benefit payment after your spouse’s death, provided you notify the Fund Office. If you remarry, the 75% Participant and Spouse Pension cannot be reinstated, and the adjusted benefit amount will continue until your death.

For the 75% Participant and Spouse Pension, your pension is reduced based on your and your spouse’s age to provide for the benefits your spouse will receive after your death. The reduction factor is 85.5%:

• Increased by 0.5% times the number of full years your spouse is older than you are; or

• Decreased by 0.5% times the number of full years your spouse is younger than you are.

The factor cannot be more than 99.9%.

Lump Sum Readjustment Allowance

If you are eligible for a Regular or Early Retirement Pension, or a Disability Pension at the time it is converted to an Early Retirement Pension, you may elect to receive a reduced monthly pension in exchange for a lump sum payment, called a Lump Sum Readjustment Allowance. The Lump Sum Readjustment Allowance may not be elected if you are retiring on a Deferred Pension. Once it is elected, it may not be revoked.

You may request that your lump sum payment be made at any time up to January 31 of the calendar year following the year in which you retire. As noted above, in the case of a Disability Pension, the request is made when the Disability Pension is converted to an Early Retirement Pension at age 55. If you are married, you must have the written consent of your spouse to elect the Lump Sum Readjustment Allowance.

The lump sum payment may be elected if your pension is paid as a Single Life Pension or as a 50% or 75% Participant and Spouse Pension. However, if you are receiving a 50% or 75% Participant and Spouse Pension, the amount of your benefit will be calculated under the Lump Sum Readjustment Allowance first, and then the amount of your 50% or 75% Participant and Spouse Pension will be calculated.

The lump sum amount must be an even dollar amount and may not be more than 15% of your monthly pension benefit. The lump sum payment is based upon your age when your pension begins and the amount your monthly benefit is reduced. It will be determined by multiplying each dollar of your monthly benefit by a lump sum factor based on your age at the time of the payment. The set of factors used to determine the amount of the lump sum payment are adjusted each year. For a current list of factors, contact the Fund Office. See page 35 for more information about rolling over your lump sum payment.

Level Income Option

The pension you receive from the Plan is in addition to any other retirement benefits, you are eligible to receive (such as Social Security or National Electrical Benefit Fund (NEBF) benefits). The earliest you can receive reduced Social Security benefits is age 62 or full Social Security benefits is age 65 or later, based on your date of birth. The earliest you can receive your NEBF benefits is age 60. If you retire before your Social Security or NEBF benefits begin, you may have a gap, or reduction, in your income until you begin receiving Social Security or NEBF benefits.

Under the Level Income Option, your Regular or Early Retirement Pension would be increased by either 20% or 40% (based on your election) until you reach age 62 or 65 (based on your election). This reduces the gap in your monthly income until your Social Security or NEBF benefits begin. You may elect the Level Income Option in addition to the Lump Sum Readjustment Allowance; however, the Level Income Option will be figured after the lump sum adjustment and/or any adjustment for payment as a 50% or 75% Participant and Spouse Pension.

Once you reach age 62 or 65 (based on your election), your pension will decrease because you received a larger pension (the 20% or 40% increase) before that age. However, your lower Pension Plan benefit when combined with your Social Security and NEBF benefits will provide you with a more level total retirement income throughout your Retirement.

Eligibility

To be eligible to elect the Level Income Option, you must be:

• Between age 55 and 65; and
• Eligible to receive a Regular or Early Retirement Pension.

However, if the Level Income Option adjustment reduces your monthly pension amount after you reach age 62 or 65 to less than $100 per month, you are not eligible to elect this option. After your Level Income Option election is chosen and the first payment is made, it cannot be changed.

If you are married when you retire, your spouse must consent to the Level Income Option election in writing. If you elect to receive your pension as a 50% or 75% Participant and Spouse Pension with the Level Income Option and:

• You die before your spouse and you elected the 50% Participant and Spouse Pension form of payment, your spouse will receive a lifetime monthly benefit that will be equal to half the amount they would have received after adjustment for the 50% Participant and Spouse Pension form of payment, without the Level Income Option adjustment, or
• You die before your spouse and you elected the 75% Participant and Spouse Pension form of payment, your spouse will receive a lifetime monthly benefit that will be equal to three-quarters of the amount they would have received after adjustment for the 75% Participant and Spouse Pension form of payment, without the Level Income Option adjustment, or
• Your spouse dies before you your monthly benefit will be increased or “pop-up” to the amount you would have received had your pension been adjusted for the Level Income Option only without the 50% or 75% Participant and Spouse Pension adjustment.

Returning to Covered Employment

After you retire, your pension may be suspended if you work in certain types of employment, based on your age. If you elect the Level Income Option, your monthly pension will be suspended if you:

• Are under age 60 and work:

• One or more hours in an occupation covered by the Collective Bargaining Agreements; or

• 40 or more hours per month in the electrical industry, at a trade or craft that you were working in at any time you were covered under the Plan including employment with NECA, IBEW, or any of their mutual funds (excluding work as an electrical inspector for a governmental authority).

• Are between ages 60 and 65 and work 40 or more hours in a month:

• In an occupation covered by the Collective Bargaining Agreements; or

• In the electrical industry, at a trade or craft that you were working in at any time you were covered under the Plan including employment with NECA, the IBEW or any of their mutual funds (excluding work as an electrical inspector for a governmental authority).

• Are age 65 or over and work 40 or more hours per month in an occupation covered by the Collective Bargaining Agreements.

If you retire and return to Covered Employment and retire again before age 65, you cannot elect the Level Income Option for the additional Pension Credits earned after your original Retirement (regardless of your original pension payment option).

If you elect the Level Income Option and your pension is suspended before your pension is scheduled to be reduced (at age 62 or 65), your reduced pension will be adjusted to reflect that you did not receive your full pension amount for the months your pension was suspended.

Lump Sum Payment

If the actuarial present value of your pension benefit is $5,000 or less at the time you are eligible to receive payment, your benefit will be paid as a Lump Sum Payment. However, if the value of your benefit is more than $1,000, but no more than $5,000, you must provide written consent before the payment will be made. This means that your entire pension benefit is paid to you in one payment. Once you receive a Lump Sum Payment, no additional benefits will be payable from the Plan.

Benefit Payments Generally

If you become entitled to additional benefits after reaching Normal Retirement Age, whether through additional service or because of a benefit increase, the actuarial increase to those benefits will start from the date they would first have been paid to you rather than the date you reach Normal Retirement Age. If your Annuity Starting Date falls after your Normal Retirement Age, your monthly benefit will be actuarially increased for each month you do not work in disqualifying employment. The actuarial increase will be 1% per month for the first 60 months after you reach Normal Retirement Age and 1.5 % per month for each month thereafter. Note that as of the April 1 of the calendar year following the calendar year in which you reach age 70½, no employment will be considered disqualifying employment.

In making distributions under the Plan, the Plan will comply with the required minimum distribution rules in accordance with United States Treasury regulations and Section 401(a)(9) of the Internal Revenue Code. Your pension will not be considered due and payable for any month in which you work in disqualifying employment (refer to the “Returning to Work” section beginning on page 37 for more information on disqualifying employment).

Direct Rollover

If you become eligible for a Lump Sum Payment from the Plan, you may defer payment by rolling your distribution over to an eligible retirement plan (if that plan accepts rollovers).

To be considered an eligible retirement plan, a plan must be:

• A traditional IRA (not a SIMPLE IRA, or Coverdell Education Savings Account, formerly known as an education IRA); or

• A Roth IRA described in Internal Revenue Code Section 408A that accepts roller distributions; or

• An eligible Employer plan, which includes a plan qualified under section 408(a) of the Internal Revenue Code, an individual retirement annuity described in sections 408(b) or 401(a) of the Internal Revenue Code (including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, money purchase plan, section 403(a) annuity plan, section 403(b) tax-sheltered annuity, or eligible section 457(b) plan maintained by a governmental Employer).

The above also applies to a surviving spouse, spouse, or former spouse who is an alternate payee under a Qualified Domestic Relations Order (QDRO). In addition, non-spouse beneficiaries may also roll over a distribution to an individual retirement account.

An eligible rollover does not include a distribution made on account of a financial hardship.

You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least once a year and that will last for:

• Your lifetime (or your life expectancy);

• Your lifetime and your beneficiary’s lifetime (or life expectancies); or

• A period of 10 or more years.

Beginning in the year you reach age 70½ (age 72 if you turned 70½ after December 31, 2019), a certain portion of your payment cannot be rolled over because it is a required minimum payment that must be paid to you.

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