Know Your Benefits by Bill McDevitt
Your Annuity Plan
The Annuity Plan was established in 1983 as a retirement savings benefits program for members and is intended to provide a source of retirement income in addition to your pension and Social Security benefits.
Your employer contributes to the Annuity Fund according to the Collective Bargaining Agreement. Participants are vested with the first contribution to their individual accounts. Your individual account includes contributions from your employer and a share of any of the net investment earnings the Annuity Fund has earned throughout the year. Please note that contributions must be in the Annuity Fund for at least one year to receive earnings.
During your career, the balance in your account is expected to grow, tax-deferred, until you retire or leave covered employment and receive your accumulated share as a retirement benefit.
The money in the Annuity Fund is invested by professional investment managers selected and monitored by the Board of Trustees. Each year, the Annuity Fund is audited. The audit is necessary to determine net earnings. Earnings depend on market performance and interest rates. This means that even during periods when no contributions are made, your balance may fluctuate from year to year.
When you can collect your benefit
• You retire at normal retirement age (the later of age 62 or your fifth anniversary of Plan participation, provided that, in either case, you are a participant at that time); or
• You retire from the industry at age 55 or later; or
• Contributions have not been made on your behalf to the Pension, Health Benefits, and/or Annuity Fund for 12 consecutive months and/or you have not worked in covered employment for 12 consecutive months; or you become totally and permanently disabled. In this last case, please contact the Fund Office for further information.
The Annuity Fund permits loans. A participant may borrow 30% of their balance with a minimum loan of $1,000 and a maximum of $50,000. You select a repayment period of 1 to 5 years. The loan is made by East Boston Savings Bank using your annuity account as collateral. If you do not repay the loan in full, any unpaid portion becomes a distribution to you and is subject to taxes. In addition, the unpaid portion is a default. If you default on a loan, you can never take another loan.
Do you need a Beneficiary?
Yes! In the event of your death before retirement, your annuity balance will be paid to the beneficiary on file in the Fund Office. If you do not have a beneficiary on file, it will be paid to your estate. To add, change or verify your beneficiary, contact the Fund Office. Periodically reviewing your beneficiary choice ensures it reflects your current life circumstance.
You are sent two statements each year. One reflects the contributions that were made to your account from July 1 through December 31; the other shows contributions for the full Plan Year plus your proportionate share of investment earnings.
This is a brief summary of the Annuity Plan’s benefits and loan program and does not include all Plan information. Contact the Fund Office with any questions or for additional information.
In addition, notify the Fund Office at (617) 524-1240 if you find an error in your balance or hours worked. We also ask you contact the Fund Office if you move or if you receive more than one annuity statement with two different identification numbers.
On behalf of the Board of Trustees, the Fund Office staff and myself, I wish you a Happy and Healthy Holiday Season and a Happy and Healthy New Year!