March 2011 Vol. 14 No. 3

Your Health, Your Benefits

Know your pension options- and the rules

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With all the Baby Boomer hype surrounding us lately, it seems a good time to review your pension options with the Trust Fund. Whether or not you're a Baby Boomer, knowing what your benefits are and how they work is essential.

You and your spouse should start your pre-retirement planning discussions well in advance of your planned retirement date- I'm talking years, not months. You need to be prepared financially and emotionally for this big change!

Here are the different pension options available through your Northern California Carpenters Pension Trust Fund:

Service Pension- You must have a minimum of 30 Northern California Pension Eligibility Credits. This provides an unreduced monthly pension benefit at any age.

Normal Pension- You must have 5 Pension Eligibility or Vesting Credits, and be at least age 65. This provides an unreduced monthly pension benefit.

Regular Pension- You must have a minimum of 10 Pension Eligibility Credits, and be at least age 62. This provides an unreduced monthly pension benefit.

Early Pension- You must have a minimum of 10 Pension Eligibility Credits, and be at least age 55. This provides a monthly pension benefit with a reduction of ½ of 1% for each month you are younger than age 62 (example: 42% reduction at age 55).

Disability Pension- You must have a minimum of 10 Pension Eligibility Credits, have a permanent Social Security Disability Award and have earned at least 3/12ths Pension Eligibility Credits in the 5-year period prior to your total disability. This provides an unreduced monthly pension benefit.

If you're married at the time of retirement, there are survivor options to be considered. The survivor option provides a reduced pension benefit to you during your lifetime, but allows for a 50%, 75% or 100% benefit to be paid to your surviving spouse when you pass away. Survivor benefits not only affect pension benefits, but may affect continuing health benefits for your surviving spouse as well. Be sure you and your spouse understand all the options before making your final choices.

The Department of Labor's website, "Taking the Mystery out of Retirement Planning," includes interactive worksheets to guide you through your future projected income needs and expenses. Check it out and see where you are: Employee Benefits Security Administration.

There are many tools similar to this on the Internet or through financial programs like Quicken. If you are self-directing your annuity, there's a retirement planner on the Benefits Complete website.

Employment After Retirement

When you retire from the Carpenters Pension Fund, you must also retire from the Building and Construction Industry. To return to work in the Building and Construction Industry can be considered Prohibited Employment and can cause your pension benefit to be suspended. Before returning to work in any field, you should make a written inquiry to the Trust Fund office to be sure your intended employment is not Prohibited Employment. You must notify the Trust Fund in writing if you return to work in the Building and Construction Industry.

If you are at least 55 years old and retired, a window period between June 2009 and August 2011 allows you to return to work for a Contributing Employer up to 480 hours per calendar year without jeopardizing your pension benefit.

If you are younger than 55 and retired, you may not return to work in the Building and Construction Industry and continue to draw your pension. Examples of jobs that are not prohibited after age 55 include work for a Contributing Employer as an estimator, project manager, work as a building inspector for a public sector employer, i.e., governments, municipalities, school districts, work in a hardware store as long as the job is strictly a retail-oriented position. Even though you may think the job you are considering is not prohibited, be sure to check with the Trust Fund Office first!

There does come a point at which you will "age-out" of Prohibited Employment rules. At age 70½ Retirees may be involved in any type of work at any location without suspension of pension benefits.

Your pension benefit will be an integral part of your retirement income and you want to be sure it's protected at all times. If you're thinking of leaving the industry before retirement or working after retirement, be sure to talk with the Trust Fund to help determine if your new job will impact your future or current pension benefits.

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