Bakery Drivers Local 734 - Health and Welfare Fund | Forms of Payment
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Forms of Payment

Other Optional Forms of Payment

A pension may be paid in a form other than a single life pension or a 50% joint and survivor pension. These forms are called optional forms and are described below. If you are legally married to your spouse during the 12-month period before the time your pension becomes payable, your spouse must provide written notarized consent to payment under one of these optional forms. You may elect, change or revoke a joint and survivor option at any time before the date your pension commences. If you change and revoke a joint and survivor option your spouse must also consent. You cannot change or revoke an optional form of payment after payment of your benefit has begun.

Ask the Fund Office for estimates before you intend to retire.

100 % Joint and Survivor Option
If you want to provide a larger survivor benefit to your eligible spouse, you may elect the 100% joint and survivor option in writing before retirement.

Under a 100% joint and survivor option, you would receive a reduced pension payment during your lifetime and, after your death, 100% of your reduced pension will be payable to your spouse for life. The reduction in your pension depends upon your and your spouse’s age at the time of retirement. These age-based factors are shown in Appendix B.

75 % Joint and Survivor Option
This form of payment provides a reduced pension payment during your lifetime and, after your death, 75% of your reduced pension will be payable to your eligible spouse for life. The reduction in your pension depends upon your and your spouse’s age at the time of retirement. These age-based factors are shown in Appendix B.

100 % Joint and Survivor Option With A Pop-up Feature
This form of payment provides a reduced monthly benefit payable to you for your lifetime and 100% of that benefit payable upon your death to your eligible spouse for his or her lifetime. However, if your spouse dies before you, your pension will “pop up” to the unreduced amount for the remainder of your life. The reduction in your pension is based on your and your spouse’s age at time of retirement. These age-based factors are shown in Appendix B.

75 % Joint and Survivor Option With A Pop-up Feature
This form of payment provides a reduced monthly benefit payable to you for your lifetime and 75% of that benefit payable upon your death to your eligible spouse for his or her lifetime. However, if your spouse dies before you, your pension will “pop up” to the unreduced amount for the remainder of your life. The reduction in your pension is based on your and your spouse’s age at time of retirement. These age-based factors are shown in Appendix B.

50 % Joint and Survivor Option With A Pop-up Feature
This form of payment provides a reduced monthly benefit payable to you for your lifetime and 50% of that benefit payable upon your death to your eligible spouse. If your spouse dies before you, your monthly benefit will increase to the unreduced benefit amount and you will receive the higher amount for the remainder of your lifetime. The reduction in your pension is based on your and your spouse’s age at the time of retirement. These age-based factors are shown in Appendix B.

Example:
Assume you are age 65 and eligible to receive a regular pension of $2,100.00. If you are married and your spouse is age 63, your benefit payable under the joint and survivor options with and without the pop-up feature would be determined as follows:

pension benefits

10-Year Certain And Life Option
Under a 10-year certain and life option, you will receive a benefit for the rest of your life. However, your pension payments are guaranteed for a minimum of 10 years. This means if you die within 10 years after you retire, your beneficiary would continue to receive the same benefit you were getting for the balance of the 10 years (120 months). After a total of 120 monthly payments have been made, payments to your beneficiary would stop. Your beneficiary is designated by you and does not have to be your spouse. If you are married, your spouse’s written consent is required if you elect this optional form of payment. The factors that are used to calculate your benefit are shown in Appendix C. Please ask the Fund Office for estimates before you intend to retire.

Note: If your designated beneficiary dies before the 10-year certain period ends, you may elect another beneficiary. If you had not designated a new beneficiary, any remaining plan benefits would be paid to your estate. Please contact the Fund Office if you need to change your beneficiary designation.

Level Income Option
The pension that you receive from this plan is in addition to any Social Security benefits to which you are entitled. The earliest that you can receive Social Security benefits, however, is age 62. If you retire prior to age 62, you can provide for an approximately level total retirement income for life by electing the level income option.

Under the level income option, your regular, reduced regular or early retirement pension from the plan would be increased until you qualify for Social Security at age 62. Once eligible for Social Security, your pension from the plan would decrease. Taking into consideration both your pension from the plan and Social Security, your retirement income would be approximately level through your lifetime.

The factors used to calculate this optional form change each Plan Year, as required by the IRS. If you are interested in more information on this option, please contact the Fund Office.

Please note that during the period that the Plan is in “critical status,” as defined under the Internal Revenue Code, the level income option cannot be chosen as a payment option. Each year, participants will receive notification if the Plan is in critical status.

Lump-Sum Payments
If the value of your pension is less than or equal to $5,000, your pension will be paid in a lump-sum payment. If the value of your pension is less than $1,000, the lump sum payment will be automatically made. If the value of your pension is between $1,000 and $5,000, you may choose to receive a lump-sum payment. This is a one-time payment and no future payments will be made. If your monthly pension is less than $50 per month, you may elect a lump-sum payment.

Please note that during the period that the Plan is in “critical status,” as defined under the Internal Revenue Code, lump sum payments cannot be chosen as a payment option, unless the lump-sum payment is less than $5,000. Each year, participants will receive notification if the Plan is in critical status.

Direct Rollovers
If you receive a lump sum distribution from the plan, you may defer payment by rolling over the taxable portion of your distribution 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 Roth IRA, SIMPLE IRA, or Coverdell Education Savings Account, formerly known as an education IRA) or individual retirement annuity (408 (b)); or
  • An eligible employer plan, which includes a plan qualified under section 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, and eligible section 457(b) plan maintained by a governmental employer).

The above also applies to surviving spouses and alternate payees under a Qualified Domestic Relations Order (QDRO).

You cannot rollover 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 ten or more years.