Defined Benefit – Part A

Frequently Asked Questions

Who Is Eligible to Participate in the Plan?

Employees working under the collective bargaining agreement negotiated by the International Brotherhood of Electrical Workers Local 332 and National Electrical Contractors Association, Santa Clara Valley Chapter, or under another collective bargaining agreement negotiated by I.B.E.W. Local 332 requiring contributions to the Plan. Sole proprietors, partners and corporate owner-officers are not eligible to participate in this Plan. Employees of the Union are eligible to participate if the Union elects to include its employees and notifies the Trustees in writing of its election.

When Should an Application for a Pension Be Filed?

If you believe you are eligible for a pension and wish to retire, you should write the Plan Administrator’s Office (6800 Santa Teresa Blvd Ste 100, San Jose, CA 95119) and an application with instructions will be sent to you. No benefit will be paid until the application has been approved by the Trustees. The Trustees may, however, authorize pension payments to an employee otherwise eligible to commence up to six (6) months preceding the date of receipt of the application for retirement, provided that the late filing of the retirement application is determined by the Trustees to be for good cause.

What Are the Past Service Benefits?

“Past Credited Service” means credit earned during the 10-year period of employment preceding January 1, 1972. Benefits will be credited on the following basis:

PAST CREDITED SERVICE
FOR WORK PERFORMED PRIOR TO JANUARY 1, 1972
Hours Worked in Calendar Year
Yearly Credit
Retirements Prior to 1/1/85
Monthly Pension Credit
Retirements After 1/1/85
Monthly Pension Credit
less than 300
0.00
0.00
0.00
300 but less than 370;
0.1
.64
1.0
370 but less than 440
0.2
1.28
2.0
440 but less than 510
0.3
1.92
3.0
510 but less than 590
0.4
2.56
4.0
590 but less than 670
0.5
3.20
5.0
670 but less than 750
0.6
3.84
6.0
750 but less than 830
0.7
4.48
7.0
830 but less than 910
0.8
5.12
8.0
910 but less than 1,000
0.9
5.76
9.0
1,000 and over
1.0
6.40
10.0

 

What Are the Requirements for Past Service Credits?

An individual shall be eligible for past service credit if employed for three hundred (300) hours or more during one (1) of the two (2) years immediately prior to January 1, 1972 by an employer falling within the requirements which would have caused contributions to the Plan.

Are There Any Exceptions to the Requirements?

Yes.

  1. If an individual was totally disabled, eligible for and drawing Social Security Disability Benefits for the two (2) years prior to January 1, 1972, such individual shall be eligible for past service credit.
  2. If an individual was employed for three hundred (300) hours or more during one (1) of the two (2) years immediately prior to January 1, 1972 as an apprentice such individual shall be eligible for up to two (2) years of past service credit if the hours worked immediately precede the participant’s first covered hour of employment with the same or different employer.
  3. An individual who was in the Armed Forces of the United States for the two (2) years prior to January 1, 1972 shall also be eligible for past service credit.
  4. An individual who is 55 years or older as of January 1, 1974 and has completed ten (10) years of past service credit.

What Is Credited Future Service and What Are the Benefits?

Future service credits are based on the hours worked under the collective bargaining agreement providing for employer contributions after April 25, 1972, at which time employer contributions commenced. Yearly service credits will depend on the amount of hours worked with a full year credit given for 1,000 or more hours and graded down according to the following schedules. Due to the short first year, April 25 to December 31,1972, a separate schedule for that year only is also provided. (See Exhibit A)

Future service benefits earned depend upon the amount of credited employer contributions. For retirements on or after January 1, 1985, the monthly pension benefit is determined by multiplying 3% times the credited employer contribution for each year. Retirements between January 1, 1977 thru December 31,1984 have a 2% computation and a 1.6% computation for retirements prior to January 1, 1977.

Effective for retirements on or after January 1, 1989, the future service benefit is calculated as follows: (1) Credited employer contributions for future service within your first 20 years of credited service are multiplied times 3%. (2) Credited employer contributions for the next 5 years of future service are multiplied times 3.25%. (3) Credited employer contributions for all subsequent years of future service are multiplied times 3.5%.

For all hours worked on or after June 1, 1997, the “credit rate” for employer contributions shall be $3.00 per hour worked, regardless of the actual contribution. The credit rate for any plan year may be increased by vote of the Board of Trustees.

The credit rate is $3.30 for hours worked between June 1, 1997 and December 31, 1999.

Future Credited Service For Vesting 
For All Work Performed After January 1, 1973
HOURS WORKED IN CALENDAR YEAR FOR WHICH PAYMENT IS MADE TO THE FUND CREDIT
less than 300
0.0
300 but less than 370
0.1
370 but less than 440
0.2
440 but less than 510
0.3
510 but less than 590
0.4
590 but less than 670
0.5
670 but less than 750
0.6
750 but less than 830
0.7
830 but less than 910
0.8
910 but less than 1,000
0.9
1,000 and over
1.0

 

Is There a Minimum Number of Hours I Must Work in a Year to Receive Credit?

Yes. If you fail to work 300 hours or more, you will receive no credit for that year.

Can I Lose My Service Credit?

Yes. If you are not vested and you fail to accrue a minimum of 300 hours of covered employment in a Plan Year, such will be considered a break year. If you have at least five consecutive break years and if the number of break years exceeds your accumulated years of credited service, all the years of credited service shall be forfeited. Years of credited service shall be determined by combining full credits and partial credits earned pursuant to the schedule above. As an example, 590 hours worked per year for two years would total one year of credited service.

When Am I Eligible for a Normal Retirement Benefit?

You are eligible when you meet the following requirements:

  1. Upon reaching the normal retirement age of 65 but not before accumulating at least 1,000 hours of credited service in each of five (5) Plan Years without an intervening break-in-service and at least one (1) hour of credited service on or after December 31, 2000; or
  2. Upon remaining a Participant for a period of at least five consecutive years which ends on or after your 65th birthday, but ignoring years when participation was retained based upon an excused absence due to disability or military service; and
  3. You have ceased working in the electrical industry as defined In Article III, Section 5, of the Plan Document.

How Much Is the Normal Retirement Benefit?

The monthly normal retirement benefit is an amount equal to the total of:

  1. All years of credited past service monthly benefit, plus
  2. All years of credited future service monthly benefit.

When Am I Eligible for an Early Retirement Benefit?

You are eligible when you have met the following requirements:

  1. You are age 55 or older;
  2. You have at least ten (10) years of credited service of which at least two (2) years is future credited service; and
  3. You have ceased working in the electrical industry as defined in Article III, Section 5, of the Plan Document.

Exception: Any employee who works in Non-Qualified Employment will not be entitled to early retirement benefits attributable to covered hours worked after October 1, 1987.

Will I Get the Same Amount of Benefit if I Retire Before Age 65?

No. If you retire before age 65, your monthly benefit will be reduced to allow for the fact that payments are starting earlier than usual and you will receive more of them. For all benefits earned before January 1, 1993, the reduction is 1/4 of 1% for each month prior to age 65 (3% per year). Effective January 1,1993, the 3% reduction applies only if you retire with at least 30 years of credited service. If you retire with less than 30 years of service, benefits earned on or after January 1, 1993 will be reduced by 1/2 of 1% for each month your retirement date precedes age 65 (6% per year).

If you retire on or after January 1, 2004, have at least 22 years of vesting credit, and retire from the trade as defined below, you are eligible for the 22 year early retirement from the trade, which is calculated as follows: for all benefits earned, the reduction is one-quarter of one percent for each month the early retirement date precedes age 58 (3% per year).
Retirement from the trade means that in the 48 months prior to retirement you accrued at least 3,500 hours of vesting credit. The 48-month period does not include (1) months that you were receiving State Disability Insurance or workers compensation benefits; (2) up to 12 months that you were on the Out of Work List and actively seeking employment; or (3) up to 24 months that you received Social Security Disability benefits.

What Does Vesting Mean?

To be vested means you cannot lose your accumulated years of service and benefit credits even though you are no longer in the trade. Once you are vested, the pension benefits earned are non-forfeitable.

What Are the Vesting Requirements?

You may become vested in three ways:

  1. Ten-Year Vesting. Under this rule, you become vested when you have earned at least ten (10) years of credited service without a permanent break-in- service. Yearly vesting credit is credited on the following schedule for both past and future service:
  2.  

    HOURS WORKED IN CALENDAR YEAR FOR WHICH PAYMENT IS MADE TO THE FUND CREDIT
    less than 300
    0.0
    300 but less than 370
    0.1
    370 but less than 440
    0.2
    440 but less than 510
    0.3
    510 but less than 590
    0.4
    590 but less than 670
    0.5
    670 but less than 750
    0.6
    750 but less than 830
    0.7
    830 but less than 910
    0.8
    910 but less than 1,000
    0.9
    1,000 and over
    1.0

     

  3. Five-Year Vesting. This rule applies only if you work at least one hour in covered employment on or after January 1, 1998. Under this rule, you become vested when you have earned at least 1,000 hours of credited service in each of five (5) calendar years without a permanent break-in-service. Years in which you earn fewer than 1,000 hours do not count toward five-year vesting.
  4. Normal Retirement Age. Your benefits become vested if you attain normal retirement age without a permanent break-in-service, even if you do not qualify under the ten-year or five-year rule. For purposes of this paragraph, normal retirement age means the later of age 65 or the fifth (5th) anniversary of your participation in the Plan.

Pension Benefit Examples

EXAMPLE 1. (NORMAL RETIREMENT)

Let us suppose that Employee A enters the Plan when the Plan started at which time the employee was age 50 and had a total of nine years of Past Service Credit. The retirement commenced after January 1, 1985 and prior to January 1,1989 therefore each year of Past Service would be credited at the rate of $10.00 per year.

Past Service: 9 years at $10.00 per year……………………………$ 90.00

Future Service:

YEAR
EMPLOYER CONTRIBUTION AMOUNT
FUTURE SERVICE CREDIT
1972
$256 x 3% =
$7.68
1973
$300 x 3% =
$9.00
1974
$320 x 3% =
$9.60
1975
$650 x 3% =
$19.50
1976
$675 x 3% =
$20.25
1977
$1,125 x 3% =
$33.75
1978
$1,350 x 3%=
$40.50
1979
$1,575 x 3% =
$47.25
1980
$1,725 x 3% =
$51.75
1981
$1,725 x 3% =
$51.75
1982
$2,287 x 3% =
$68.61
1983
$3,000 x 3% =
$90.00
1984
$3,150 x 3% =
$94.50
1985
$3,600 x 3% =
$108.00
1986
$3,600 x 3% =
$108.00
1987
$3,600 x 3% =
$108.00
Total Future Service Credit
$868.14
Total Monthly Benefit at age 65
$958.14

 

EXAMPLE 2. (NORMAL RETIREMENT)

Let us suppose that Employee B enters the Plan at the same time as Employee A but only has four years of Credited Past Service and was age 34 at the time he/she entered the Plan in 1972.
The employee also worked for a contributing employer more than 300 hours in 1985-86 and 87, thus entitling him or her to the $20 Past Service Benefit.
Past Service: 4 years at $20.00 per year ………………………………………..$ 80.00

Future Service:

YEAR
EMPLOYER CONTRIBUTION AMOUNT
FUTURE SERVICE CREDIT
1972 through 1987
$39,488 x 3.0% =
$1,184.64
1988 through 1993
$12,010 x 3.25% =
$390.33
1994 through 2003
$35,000 x 3.50% =
$1,225.00
Quit at age 64 and started his/her pension at age 65
Total Monthly Benefit at age 65
$2,879.97

 

Examples 1 & 2 assume the hourly employer contribution will remain the same as it is in 1986.

EXAMPLE 3. (EARLY RETIREMENT)

Employee C enters the Plan in 1972 and is age 40 and works to the age of 60 at which time he/she elects to take Early Retirement under the Plan. Employee C had eight years of past service and accumulated the following Future Service Credits, and also worked more than 300 hours in the year 1985-86 and 87.

Past Service: 8 years at $20.00 per year ……………………………………………. $160.00

Future Service:

YEAR
EMPLOYER CONTRIBUTION AMOUNT
FUTURE SERVICE CREDIT
1972 through 1983
$24,924 x 3.0% =
$747.72
1984 through 1988
$10,385 x 3.25% =
$337.51
1989 through 1992
$10,385 x 3.5% =
$363.48
Total Benefits
$1,608.71
Less 1/4 of 1% for each month prior to age 65
$3,600 x 3% = 60 months early = 15% reduction
-$241.31
Total Monthly Early Retirement Benefit
$1,367.40

 

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