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The monthly benefit payable will be "actuarially reduced" such that the expected value of payments made to you over this longer retirement period are equal in expected value of payments that would have been made to you had you waited until age 65 to begin receiving payments. In essence, the early retirement benefit has the same expected value as if you had waited until age 65 to retire.
Under the terms of the Plan prior to the April 1, 2017 change date, the Plan allowed Participants retiring early to collect their full monthly benefit instead of having it actuarially reduced. This resulted in early retirement benefits being more valuable than benefits commencing at the Plan's normal retirement age of 65. The difference between the value of the unreduced early retirement benefit and the value of the benefit payable at age 65 is called an early retirement subsidy.
The table below shows the early retirement benefit at various ages both before and after April 1, 2017 assuming a hypothetical 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule Accrued Benefit of $1,000 per month payable at age 65.
|Age at Retirement||9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule Monthly Retirement Benefit||Decrease in Monthly Benefit|
April 1, 2017
April 1, 2017
*Amounts are rounded for purpose of example. Slightly different amounts would be payable for benefits accrued under the Default ScheduleFurthermore, unlike accruals under the 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule where there is the possibility for a full subsidy for retirements at age 56 with at least 44,500 hours, there is no subsidy for retirements on or after April 1, 2017 for accruals under the 9/28/2016 Rehabilitation Plan (as amended) Default Schedule.
In the context of early retirement benefits, a benefit is subsidized if the expected value of the early retirement benefit payments is of greater expected value than the normal retirement benefits payable under a Plan. The column labeled Decrease in Monthly Benefit in the table above, is essentially the monthly early retirement subsidy that was payable to those retiring prior to age 65 under the old Plan provisions. As you can see the subsidy was substantial and thus very expensive for the Plan to provide.
If you had not attained your age 55 and completed 10 or more years of credited service prior to April 1, 2017, the accrual rate under 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedules 1 & 2 was 1.9% on Contributions (the amount of Employer Contributions paid on behalf of the Participant excluding off-benefit contributions) for covered hours in excess of 42,500. Effective April 1, 2017, if you have not attained your age 55 and completed 10 or more years of credited service, the accrual rate under 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedules 1 & 2 is 1.45% on Contributions under 44,500 covered hours, and is 1.90% on Contributions in excess of 44,500 covered hours. However, if you have attained your age 55 and completed 10 or more years of credited service, your accrual rate under 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedules 1 & 2 is 1.9% on Contributions regardless of your total covered hours.
No. Subsidized early retirement benefits are still available under the Plan for those retiring from active status after attaining age 56 and completing 44,500 covered hours. For such Participants, only the benefits they earned under an 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule are available on a subsidized basis. Benefits earned under the 9/28/2016 Rehabilitation Plan (as amended) Default Schedule are not available on a subsidized basis.
When a Participant works outside this Plan's jurisdiction (i.e. is a traveler), his pension contributions are sent back to his home fund (this is known as reciprocity). All such contributions sent back to this Plan and the resulting benefits are considered to be subject to the 9/28/2016 Rehabilitation Plan (as amended) Default Schedule. As such, there is no early retirement subsidy, disability benefit, 60-month guarantee period, or 120-month guarantee period for pre-retirement death benefits available on such benefit accruals.
Yes, for pension benefits under the 9/28/2016 Rehabilitation Plan (as amended) Alternative and Default Schedules, separate elections can be made at retirement. Many of the features at retirement are separate and distinct.
For example, if an Active Participant meets the age 56 and 44,500 hours requirement to receive their 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule benefit in an unreduced fashion, the Participant can elect to receive the 9/28/2016 Rehabilitation Plan, (as amended), Alternative Schedule benefit early and defer receipt of the Default Schedule benefit until a later date.
Consider a Participant who accrued a benefit of $2,000/mo. under a 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule and $200/mo. under the Default Schedule. If this Participant has met the conditions for unreduced early retirement benefits (which are only available on benefits earned under an 9/28/2016 Rehabilitation Plan (as amended) Alternative Schedule) the participant may elect to begin receipt of the $2,000/mo. accrued benefit earned under the Alternative Schedule and defer (postpone) receipt of the $200/mo. earned under the Default Schedule until a later date.
Additional examples can be found beginning in the September 28, 2016 Rehabilitation Plan, as amended. Examples are provided (most of which are as an excerpt of the booklet) appearing as Exhibit A of this document for your easy reference.
(a) Take all of the steps described in Answer 9 subparts (a) through (d) in order that you cash an early retirement check issued prior to April 1, 2017.
(b) When you retire, you may work in other industries and continue to receive your Pension; however, your monthly benefits from the Plan will be suspended if you return to work in the Electrical Industry, except under very limited circumstances. Your early retirement pension benefit will be suspended until age 65 if you engage in Non-Covered Electrical Employment as defined in the Plan. Your early retirement benefit is suspended for any month you perform any work as a union electrician. Portions of your early retirement benefit are also subject to suspension if you engage in any of the prohibited activities set forth in Plan Section 9.7(b)(2). These activities are described in the Summary Plan Description and in subsequent Statements of Material Modifications. These prohibited activities will result in a suspension of all or a portion of your early retirement pension benefit in accord with the Central Laborers’ Pension Fund vs. Heinz decision discussed below. Under the Plan, you have a right to contact the Fund Office in advance and advise it of any prospective employment or employment related activity, such as registering on the out-of-work book at the Local Union. Under the Plan, it is the responsibility of the Fund Office to then advise you as to the portions of your early retirement benefit which will be suspended if you engage in the proposed activity.
Once you have attained age 65, the only suspendible or prohibited employment is working 40 or more hours in California in work of the type performed by Participants of the Plan and utilizing directly or indirectly the same skills of Participants working under the Plan. Upon attainment of age 70 ½, pensioners can work as many hours in any activity or location they desire without having any portion of their pension benefits suspended.
In the 2004 United States Supreme Court decision known as Central Laborers' Pension Fund v. Heinz ("Heinz" decision), the Court ruled that if a Board of Trustees added to the prohibited activities of early retirement pensioners that result in a suspension of early retirement benefits, only benefits accrued on and after the date of a Plan Amendment adding such restrictions would be subject to suspension. If an early retirement pensioner had accrued benefits both before and after the date of the Plan Amendment, only those benefits accrued after the date of the Plan Amendment could be subject to suspension if the early retirement pensioner engaged in the prohibited activity. Merely as one example, in 1986 the Board of Trustees amended the Pension Plan to provide that the benefits of an early retirement pensioner would be suspended in any month in which the early retirement pensioner was on the books at a Local Union. Under Heinz, if an early retirement pensioner signs the books at a Local Union, benefits accrued on and after July 1, 1986 are subject to suspension while benefits accrued prior to that date are not subject to suspension.
Please see the following:
As of April 1, 2017 the disability benefits under the Plan are eliminated. Participants who become disabled before they have become eligible for unreduced early retirement benefits should contact the Fund Office to determine what, if any, benefits may be payable to them.
If you can no longer work as a wireman due to becoming disabled, you should apply to Social Security for a disability award and if you are a Veteran, you should apply for benefits from Veterans Affairs (the VA). Additionally, in some circumstances you may be eligible for Supplemental Security Income benefits. If you are eligible for retirement benefits from the Plan, you can also apply for retirement.
If your injury was job related, you may be eligible for Workers Compensation benefits. If your injury was not job related, you should apply for California State Disability Insurance (SDI) benefits. Nothing prevents you from applying for both Workers Compensation benefits and SDI benefits at the same time if there is some dispute as to whether your injury was or was not covered by any applicable Workers Compensation law.
Benefits subject to an alternative schedule are treated differently than those benefits that are subject to the default schedule. Your marital status at the time of your death also impacts the benefits available. The following table is intended to help you understand the Pre-Retirement Death Benefits available depending on your marital status for benefits not subject to the 9/28/2016 Rehabilitation Plan (as amended) Default Schedule and those that are subject to the Default Schedule.
|Marital Status||Death Benefits Not Subject to the Default Schedule||Death Benefits Subject to the Default Schedule|
|Single Participants||No changes in the Rehabilitation Plan to the current benefit. Current benefit is 120 monthly payments equal to 50% of the accrued benefit starting the month after death. If the member is not survived by children under the age of 21, benefits will be paid to the designated beneficiary.||No benefits are available|
|Married Participants||No changes in the Rehabilitation Plan to the current benefit. Current benefit is equal to 50% of the accrued benefit starting the month after death. If the spouse dies prior to receiving 120 monthly payments, the balance of 120 months will be paid to the beneficiary designated by Spouse. Note, if the participant was active and eligible for normal or unreduced early retirement benefits at the time of death, the Joint and 100% Survivor benefit is payable.||Qualified Pre-Retirement Spouse Annuity equal to 50% of the benefit available under the 50% Joint and Survivor form of benefit assuming the member had retired and died the day before the first payment is due.|