KERN COUNTY ELECTRICAL WORKERS PENSION FUND LOCAL UNION # 428

Transcription

1 KERN COUNTY ELECTRICAL WORKERS PENSION FUND LOCAL UNION # 428 Date Printed - January 1, 2013

2 PENSION PLAN FOR THE KERN COUNTY ELECTRICAL PENSION FUND Board of Trustees Employee Trustees James Elrod Brian Holt Danny Kane Employer Trustees James Chilko Carl Jarrett Paul White * * * Legal Counsel Matthew T. Kissane, Esq. * * * Pension Consultant and Actuary Segal * * * Administrator Construction Benefits Administration 3805 North Sillect Avenue Bakersfield, CA (661) * * * January 1,

3 A MESSAGE FROM THE BOARD OF TRUSTEES OF THE KERN COUNTY ELECTRICAL PENSION FUND To All Covered Employees: We are happy to provide you with this new booklet explaining your updated Pension Plan. This booklet provides a Summary Plan Description (SPD) describing the terms of the Plan Document. The Plan Document itself is available upon request from the Administrative Office. We believe you will want to read this booklet very carefully in order to understand your rights to a pension. We have tried to explain all sections of the Plan as clearly as possible. It is, however, a complicated document. The Plan must operate under very precise and detailed rules since it provides important protection for a great many people and must take into account a wide variety of conditions affecting participants in the Plan and the industry. Please remember, when reading the SPD, that if the facts and circumstances of a particular situation occurred prior to the printing of this booklet, then the provisions of the Plan in effect at the relevant date may be applicable. Those provisions may be different from the Plan presently in effect and printed in this booklet. If any significant changes are made to the Plan after the printing of this booklet, you will receive a notice explaining those changes. Since the inception of the Plan, the Trustees have had numerous editions of the benefits booklet printed and distributed as well as booklet inserts and supplements. Therefore, you may have questions after reading this booklet. You can call or write the Administrative Office for answers to any questions you may have about the Plan, and how any rule affects you and your beneficiaries. Please bear in mind that for your protection only the full Board of Trustees is authorized to interpret the Plan. Information you receive from the Union or individual Employers or their representatives should be regarded as unofficial. Any information or opinion concerning your rights under the Plan, to be official, must be communicated to you in writing, signed on behalf of the full Board of Trustees. Also, be sure to inform the Administrative Office of any change in your mailing address to ensure that you receive all communications. We hope that you will find this booklet helpful and that you and your family will enjoy the protection of the Plan for many years to come. Sincerely, BOARD OF TRUSTEES - 2 -

4 TABLE OF CONTENTS Page Some technical terms used in this booklet... 4 Participation... 6 Pension Credit and Benefit Units... 6 Credit for Military Service... 7 Vesting Service... 7 Attaining Vested Status... 8 Break in Covered Employment... 9 Types of Pension Regular Pension Delayed Retirement Early Retirement Pension Disability Pension Service Pension Pro-Rata Pension Reciprocal Pension Forms of Payment at Retirement Single Life Annuity with 36-Month Certain Period Husband-and-Wife Pension (Basic and Optional) Joint and Survivor Option, Joint and Survivor Option with Pop-Up Pre-Retirement Death Benefit Suspension of Pension Payments for Certain Employment After Retirement How to apply for benefits Pension effective dates How to Obtain Benefits and Secure Review of Adverse Benefit Determinations Trustee Authority Some Questions and Answers About the Plan Checklist: Things for you to do Information Required by ERISA

5 The Administrative Office SOME TECHNICAL TERMS USED IN THIS BOOKLET The term "Administrative Office" means the office to which all communication about your pension, and anything for the Board of Trustees, should be addressed. Any inquiries about your rights and benefits and responsibilities and any notice you may be required to give the Plan should be addressed to this office. The telephone number is (661) and the address is: Ms. Debbie Green Construction Benefits Administration 3805 North Sillect Avenue Bakersfield, CA Employee The terms Employee, Electrician and Active Participant, as used in this book and in the Rules and Regulations of the Plan have the same meaning; that is, a person who has earned and is still entitled to Pension Credit under this Plan. Covered Employment The term "Covered Employment" means work under a Collective Bargaining Agreement, which requires the Employer to contribute to this Pension Trust. Pension Credits, Benefit Units, and Vesting Service These are units measuring the amount of time an Electrician has worked in Covered Employment for pension purposes (NOTE: credits also may be earned during certain non-working periods under conditions specified in the Plan Document). Although Pension Credits, Benefit Units and Vesting Service are similar, they are calculated by different methods and used for different purposes. An Employee's eligibility for pension benefits is established either by Pension Credits or by Vesting Service; however, only Pension Credit is used to determine the amount of the monthly pension payments to which an Employee is entitled. Break in Covered Employment Failure to earn a required minimum of Vesting Service over specified periods of time can result in a Break in Covered Employment. Unless certain conditions are met, a Break in Covered Employment can cause the loss of an Electrician s previously-earned Credits. This is known as a Permanent Break in Covered Employment. A detailed explanation of what causes a Break in Covered Employment is in the section on Break in Covered Employment. Separation from Covered Employment If you have three consecutive One Year Breaks in Covered Employment after January 1, 1981, you will have a Separation from Covered Employment as of the last day of the third One Year Break. This means that the monthly benefit based on your service before the Separation will be determined under the terms of the Plan as in effect at the time of the Separation. If you later return to Covered Employment and earn additional benefits, the newly earned accrual will be calculated without considering the previous Separation from Covered Employment

6 Related Plans The Trustees have made reciprocal agreements with plans covering Electricians in certain other areas. These then become Related Plans. Under the agreements, it is possible for work covered by Related Plans to be considered together with work covered by this Plan in order to enable an Electrician to qualify for pension benefits, for a higher benefit, or to avoid a Break in Covered Employment. For more information refer to the section on Pro-Rata Pensions on page 18. Plan Year The term Plan Year means the 12 consecutive-month period from January 1 through December 31 of the calendar year. The Plan became effective on January 1, Normal Retirement Age The term Normal Retirement Age means age 65, or, if later, an applicable anniversary date. The anniversary date is the earlier of (1) the 10th anniversary of participation in the Plan, or (2) the 5th anniversary of participation in the Plan counting only service on and after January 1, If the applicable anniversary date is later than age 65, then the Plan requires that you be an Active Participant on your anniversary date in order to attain Normal Retirement Age. See page 6 for an explanation of how Active Participant status is established and terminated under the Plan s Rules. Hour of Service The term Hour of Service refers not only to hours worked in Covered Employment, but also to hours paid but not worked (such as vacation or holiday). Hours in Continuous Non-Covered Employment, as defined below, are also counted as Hours of Service. Continuous Non-Covered Employment The term Continuous Non-Covered Employment means employment for an Employer in a job not covered by this Plan which is continuous with Covered Employment with the same Employer. A period of non-covered employment will be considered to be continuous with Covered Employment only if there is no quit, discharge or other termination of employment between the period of Covered Employment and non-covered employment. Explanations of other terms and further detail are provided in the following pages of this Summary Plan Description

7 PARTICIPATION You will become an Active Participant in the Plan on the first day of the month after you have completed 300 Hours of Service in Covered Employment. Covered Employment is work for an employer who is required to make contributions to the Pension Fund on your behalf. Continuous Non-Covered Employment (see page 5) will also count toward this requirement. If you have a Permanent Break in Covered Employment you will cease to be an Active Participant. You will be reinstated as an Active Participant, however, as of your date of reemployment after you complete one year of Vesting Service (300 Hours of Service in Covered Employment in a Plan Year). Also see the section on Break in Covered Employment on pages 9 through 12. PENSION CREDIT AND BENEFIT UNITS Your Pension Credits measure your service in Covered Employment. Your Pension Credits are used to determine your eligibility for a pension. There are two types of Pension Credit: Past Service Credit, generally for periods before January 1, 1965, and Future Service Credit for periods on or after January 1, Benefit Units are used to determine the amount of your pension payments. For eligible retirees, the Plan also uses Past Service Credit to determine your benefit amount. Contribution Date A contribution date is the date on which employers become obligated by a collective bargaining agreement to contribute to the Fund on behalf of their employees. The Contribution Date under this Plan for most employees is September 1, 1964, but the Contribution Date may be later for those employers who agreed to participate on a later date. Past Service Credit (generally for work before January 1, 1965) For work between December 31, 1949 and January 1, 1965, an Electrician receives one Pension Credit for each calendar year in which he worked at least five months in employment covered by a collective bargaining agreement with the Union. Since it may be difficult for an Electrician to establish his past service because of employment patterns in those years, entitlement to Past Service Credit may be proven by a Union statement showing its record of the Electrician s work in Covered Employment during the period prior to January 1, 1965, in the areas covered by the Plan. You cannot receive more than one Pension Credit for work in one calendar year. No more than 15 Past Service Credits will be recognized. Future Service Credit (for work on or after January 1, 1965) An Electrician will be credited with one year of Pension Credit (Future Service Credit) for each year in which he works at least 300 hours in Covered Employment on or after January 1, Benefit Units Benefit Units are multiplied by a dollar amount to determine the amount of your monthly pension. You will earn one Benefit Unit for each 1,500 hours you work in Covered Employment on and after January 1, 1965 (and proportionately less for fewer than 1,500 such hours). The method under which Benefit Units are used to calculate your monthly pension is explained on pages 13 and

8 CREDIT FOR MILITARY SERVICE Participants who satisfy conditions imposed by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) will be entitled to have their period of military service treated the same as Covered Employment for purposes of vesting, benefit eligibility, benefit accrual, and avoiding a One Year Break in Covered Employment. Your entitlement to benefits for time spent in military service also depends on your compliance with other legal requirements of USERRA, including the following: Your separation from military service must be other than disqualifying under USERRA, such as where you have a dishonorable or bad conduct discharge. The total length of your absence due to military service may not exceed five years. You report or submit an application for re-employment following military service within the time allowed by law, as shown below: Length of Military Service Reemployment Deadline Less than 31 days 1 day after discharge 31 through 180 days 14 days after discharge More than 180 days 90 days after discharge You must not have had a One Year Break in Covered Employment at the beginning of your military service. You must have worked at least in Covered Employment at some time during the three calendar months before entering military service. Each full week of Qualified Military Service is equal to your average weekly hours of Covered Employment during the 12 months preceding the start of Qualified Military Service. Credit is pro-rated on 40 hours if the period of Qualified Military Service is less than a full week. Until you or your employer notify the Fund Office that you have met the foregoing conditions you will not receive credit for your military service. As the rules for crediting military service are complex, we recommend that you contact the Trust Office before you leave and after you return from military service. If you think you may be eligible for contributions for a period of military service, please provide the Trust Office with accurate records of your service. USERRA is effective for eligible veterans returning to Covered Employment on or after December 12, VESTING SERVICE Vesting Service is another measure of an Electrician s work in Covered Employment for pension purposes. But Vesting Service differs from Pension Credit in several respects: (1) it is earned only for work after December 31, 1964; (2) certain additions and exceptions apply; (3) it is only used to establish the Electrician s vested status (See the Attaining Vested Status section on page 8; and (4) it is used in determining when an Electrician has incurred a Permanent Break in Covered Employment (see pages 9 through 12 of this summary for an explanation). Vesting Service is not used to determine the amount of your monthly pension; it is only used to determine when you have attained a nonforfeitable right to a Pension. The amount of your pension is calculated on the basis of - 7 -

9 your Pension Credits and Benefit Units. You earn Vesting Service for work in Covered Employment after December 31, After becoming an Active Participant, you will be credited with one year of Vesting Service for each year (after December 31, 1964) in which you complete 300 hours of service in Covered Employment. If you work in noncovered employment for a period after December 31, 1975, so long as your employment is Continuous Non- Covered Employment, your hours of service in the noncovered employment will be counted toward Vesting Service. No Vesting Service is given for years preceding a Break under rules in effect prior to February 1, 1976, or for years preceding a Permanent Break in Covered Employment. For deaths that occur while performing Qualified Military Service on and after January 1, 2007, such service will be recognized for purposes of determining Vesting Service. ATTAINING VESTED STATUS Once you are vested, you retain the right to Pension benefits even if you leave the industry before retirement age. Once you have met the requirements listed below, you will be eligible for a Pension when you meet age and other requirements, regardless of any Break in Covered Employment you may incur after becoming vested. You will not lose any Pension Credits, Vesting Service or Benefit Units you have earned upon becoming vested. This is true even if you do not work in Covered Employment after that point. (NOTE: be sure to keep the Administrative Office regularly informed of your whereabouts during any extended absence from the industry). You will be vested upon the earliest of the following: (1) Having at least 10 Years of Vesting Service; (2) Having at least 10 Pension Credits and at least one Benefit Unit; (3) For non-bargained Employees, having at least 5 Years of Vesting Service and at least one Hour of Service on or after January 1, 1989; (4) Having at least 5 Years of Vesting Service and at least one Hour of Service on or after January 1, 1997; or (5) Having attained Normal Retirement Age (generally age 65, but see page 5)

10 BREAK IN COVERED EMPLOYMENT The Pension Trust was created to provide security for Electricians who earn their living over a major portion of their working years by work in this industry. For this reason, reasonable standards for continuity of service were written into the regulations. This is the basis for the Break in Covered Employment regulations. If, over a specified period of time, you do not have the required amount of service, then you will incur a Break in Covered Employment. If the Break in Covered Employment is prolonged beyond specified limits, it can become a Permanent Break in Covered Employment, resulting in the cancellation of your previously-earned Pension Credit, Vesting Service, and Benefit Units. However, if you have attained vested status, then you cannot incur a Permanent Break. The loss of Pension Credit, Vesting Service, and Benefit Units due to a Permanent Break in Covered Employment can be a costly and painful loss to any Electrician. It is important, therefore, to understand the Break in Covered Employment regulations, particularly how a Break in Covered Employment becomes a Permanent Break, and how to prevent that from happening. The rules on what constitutes a Break in Covered Employment and how to prevent a Break in Covered Employment from becoming a Permanent Break have been revised from time to time, based on changing conditions in the industry, the laws and other factors. At all times, the requirements have been specified in the Plan Document. Following, on pages 9 through 12, are explanations of the Break in Covered Employment Rules in effect during the Plan s history. BREAK IN COVERED EMPLOYMENT BEFORE JANUARY 1, 1976 Between January 1, 1950 and January 1, 1965 You must have worked at least six (6) months in any period of three (3) consecutive calendar years during this time in order to avoid a Permanent Break in Covered Employment (certain grace periods, explained later in this section, were provided which may have extended the period in which the required Pension Credit could be earned). Between January 1, 1965 and January 1, 1976 During these years, you must have worked at least 300 hours in Covered Employment in any period of two (2) consecutive calendar years in order to avoid a Permanent Break in Covered Employment. (See explanation of grace periods below). Grace Periods before January 1, 1976 An Electrician may be eligible for a grace period if the failure to earn the required Pension Credit during years before 1976, was for certain specified reasons. A grace period extends the time which the Electrician has to earn the required Credit. A grace period does not count as service for additional Pension Credit. For years before 1976, the following reasons may apply: - 9 -

11 1. Disability. In some cases, when the Electrician was disabled, the time of disability may have provided a grace period. 2. Military Service. In some cases, time spent in the Armed Forces of the United States may have provided a grace period. There are certain restrictions however. For example, you must have returned to Covered Employment within 90 days of discharge. 3. Supervisory Electrical Work. In some cases, when the Electrician was engaged in supervisory capacity within the industry up to one year. These points should be noted in connection with grace periods: If you were in a grace period prior to January 1, 1976, you resumed earning Pension Credit only after you returned to Covered Employment. A grace period does not count for Pension Credit. A lengthy grace period may affect the amount of your eventual pension because, under some conditions, pension benefits for service before the grace period will be calculated according to the benefit scale then in effect, rather than the benefit scale in effect at the time you apply for pension. Grace Periods on and After January 1, 1976 Like Grace Periods prior to January 1, 1976, Grace Periods on and after January 1, 1976 extend the time which the Electrician has to earn the required Credit to avoid a Permanent Break in Covered Employment. Grace Periods do NOT count as service for additional Pension Credit. For years after 1976, the following rules apply: 1. Disability. In some cases, when the Electrician was disabled, the time of disability may be considered a grace period. After January 1, 1984, the Electrician must give written notice to the Trustees during each year he is claiming entitlement to a grace period due to Disability. The Trustees may also require that the Electrician submit to a medical examination. 2. Military Service. In some cases, the time spent in the Armed Forces of the United States may provide a grace period. Certain restrictions apply. The Electrician must have been employed under a Collective Bargaining Agreement immediately preceding his induction into the Armed Forces; he must not have been dishonorably discharged; and he must return to Covered Employment within 90 days of discharge. If the Electrician enlisted or was called to active duty, there are additional conditions that must be satisfied in addition to the conditions outlined in the above paragraph 2. If you have questions regarding eligibility for a Grace Period, you should contact the Administrative Office. The Grace Periods for Military Service, as described in the two preceding paragraphs, are different from Qualified Military Service as explained on page 7 of this booklet

12 ONE-YEAR BREAK IN COVERED EMPLOYMENT AFTER JANUARY 1, 1976 Beginning January 1, 1976, you will incur a One-Year Break in Covered Employment in any Plan Year (the calendar year) in which you do not have at least 300 Hours of Service (see page 5). Beginning January 1, 1986, Hours of Service will also include hours corresponding to an absence from Covered Employment due to a maternity or paternity leave. You will be credited up to 301 hours in the Plan Year of such absence. If you work less than 300 hours in a calendar year, make sure the Administrative Office is notified of periods when you are disabled or have other paid non-work periods which should be counted to avoid a break. PERMANENT BREAK IN COVERED EMPLOYMENT FROM JANUARY 1, 1976 THROUGH DECEMBER 31, 1985 During this period, you will incur a Permanent Break in Covered Employment (unless you are vested) if you have a One-Year Break in Covered Employment in two (2) or more consecutive Plan Years and the number of consecutive One-Year Breaks equals or exceeds the number of years of Vesting Service you have earned. PERMANENT BREAK IN COVERED EMPLOYMENT ON AFTER JANUARY 1, 1986 During this period, you will incur a Permanent Break in Covered Employment (unless you are vested) if you have a One-Year Break in Covered Employment in five (5) or more consecutive Plan Years and the number of consecutive One-Year Breaks equals or exceeds the number of years of Vesting Service you have earned. Here is an example of how a Permanent Break in Covered Employment can occur after January 1, 1986: 1. You have earned four years of Vesting Service; 2. You then have five successive One-Year Breaks in Covered Employment (because in each of those five consecutive Plan Years, you had fewer than 300 Hours of Service). 3. Because you have at least five consecutive One-Year Breaks in Covered Employment and the number of your consecutive One-Year Breaks exceeds your number of years of Vesting Service, you suffer a Permanent Break in Covered Employment. If you have attained vested status (see page 8), then you cannot incur a Permanent Break in Covered Employment

13 EFFECT OF A PERMANENT BREAK IN COVERED EMPLOYMENT When an individual incurs a Permanent Break in Covered Employment, his plan participation is cancelled, and all of his Pension Credit, Vesting Service, and Benefit Units accumulated prior to the Permanent Break are cancelled. Summary of the provisions on Break in Covered Employment after January 1, 1976: You incur a One-Year Break in Covered Employment if you do not have at least 300 Hours of Service in a Plan Year. Any time before incurring a Permanent Break in Covered Employment, you can stop a succession of One- Year Breaks in Covered Employment with one calendar year in which you have at least 300 Hours of Service. Between January 1, 1976 and January 1, 1986, you will have a Permanent Break in Covered Employment if you have incurred two or more consecutive One-Year Breaks and the number of consecutive One-Year Breaks equals or exceeds the number of years of Vesting Service you earned up to that time. On and after January 1, 1986, you will have a Permanent Break in Covered Employment if you have incurred five or more consecutive One-Year Breaks and the number of consecutive One-Year Breaks equals or exceeds the number of years of Vesting Service you earned up to that time. If you have attained vested status (see page 8), then you cannot incur a Permanent Break in Covered Employment

14 TYPES OF PENSION Several types of pension are available to Employees under this Plan. Eligibility requirements for the different types of pension vary as do rates of payment. The Administrative Office can tell you about your eligibility and explain various factors to be considered when you are ready to think about retirement. This section describes the types of pension and the eligibility requirements for each. The amount of monthly pension payment with each type of pension will vary according to a number of factors, including when your pension credits were earned, when you apply for pension and the options you select. Benefit amounts may also be affected by a Separation from Covered Employment (see page 4). 1. REGULAR PENSION Eligibility for the Regular Pension Upon application and retirement, you will be eligible for a Regular Pension if you have attained age 60 and you have achieved vested status (see page 8). Monthly Amount of the Regular Pension The monthly amount of a Regular Pension that becomes effective on or after January 1, 1998 but prior to January 1, 2006 will be the sum of (1) and (2) below: (1) $10.00 per Past Service Credit (no more than 15 Past Service Credits may be granted). (2) $ per Benefit Unit. The monthly amount of a Regular Pension that becomes effective on or after January 1, 2006 will be the sum of (1), (2), and (3) below: (1) $10.00 per Past Service Credit (no more than 15 Past Service Credits may be granted); plus (2) $ per Benefit Unit earned prior to January 1, 2006; plus (3) $80.00 for each Benefit Unit (and proportionately less for fractional Benefit Units) earned on and after January 1, See page 6 regarding Past Service Credit, and also regarding Benefit Units. The calculation of the monthly pension may be affected by a Separation from Covered Employment (see page 4 of this summary). The monthly pension amounts shown above are based on single life protection, and will be adjusted, if applicable, for the form of payment that you (and your spouse, if any) elect. The available forms of payment are explained on pages 20 through 26. Example You are actively working in Covered Employment, with 7 Benefit Units earned through December 31, 2005, and you continue to work under the Plan for another eight years before retirement at age 60. Your hours of Covered Employment from 2006 through 2013 are as follows: 2006: 1,726 hours 2007: 1,250 hours 2008: 1,510 hours

15 2009: 1,604 hours 2010: 1,355 hours 2011: 1,430 hours 2012: 1,521 hours 2013: 1,233 hours Your total hours for this eight-year period = 11,629 hours 11,629 hours x (1 Benefit Unit /1,500 hours) = Benefit Units At the end of the 2013 Plan Year, you would have 7 Benefit Units earned before January 1, 2006, and Benefit Units earned on and after January 1, Assume you apply for benefits and will have a Pension Effective Date of January 1, Your monthly pension, effective January 1, 2014, will be $1,362.22, calculated as follows: (7 x $106.00) + ( x $80.00) = $ $ = $1, DELAYED RETIREMENT If the effective date of your pension is after Normal Retirement Age (generally age 65, but see page 5) and you did not work at least 40 hours in each month between Normal Retirement Age and the effective date, the benefit may be calculated differently. You will receive the greater of: 1. The monthly benefit payable at retirement based on all of your accrual, and calculated as described above; OR 2. The monthly benefit you would have received if you had retired at Normal Retirement Age (based on the accrual you had at that time, and based on the terms of the Plan as in effect at that time) actuarially increased for each month after that date in which you were not considered suspended. The actuarial increase will be 1% per month for the first 60 months after Normal Retirement Age and 1.5% per month for each month thereafter (but not beyond your Required Beginning Date). Your benefits will be considered suspended for all months after Normal Retirement Age in which you work in Prohibited Employment Between Normal Retirement Age and Required Beginning Date as described on page 27 of this booklet. You will not receive the actuarial increase for months of delayed retirement during which you worked in such Prohibited Employment. If you are 65 (or Normal Retirement Age, if later) and you do not apply for benefits, then you will receive a formal suspension notice. This notice simply means that when you do eventually retire, the Plan's suspension rules will be applied in determining the months for which you are or are not entitled to an actuarial increase for delayed retirement

16 3. EARLY RETIREMENT PENSION Eligibility for the Early Retirement Pension Upon application and retirement, you will be eligible for an Early Retirement Pension if you meet all of the following requirements: 1. You are at least age 55 and not yet 60 (you would be eligible for a Regular Pension at age 60); AND 2. You have earned at least 10 years of Pension Credit (Past and Future); AND 3. You have earned at least one Benefit Unit. Monthly amount of the Early Retirement Pension With an Early Retirement Pension, you will receive less than the Regular Pension amount because you are retiring at an earlier age and, therefore, you will be receiving pension benefits for a longer time. For Early Retirement Pensions that become effective on or after January 1, 1985, the first step in determining the monthly amount of the Early Retirement Pension is to figure out what the amount would be if you were age 60 and were retiring on a Regular Pension with the same amount of service (see page 13). The second step is to reduce that amount by.25% for each month by which you are younger than age 60 on the date your Early Retirement Pension becomes effective. For ease of reference, the following table shows the adjustment percent at certain ages: Exact Age on Effective Percentage of Date of Pension Regular Pension 55 85% 56 88% 57 91% 58 94% 59 97% To determine what your actual monthly Early Retirement benefit will be, multiply the amount you would be eligible to receive on a Regular Pension at age 60 by the percentage shown for the age at your last birthday before retirement. This amount would then be adjusted upwards for any fraction of a year you might be past your birthday at the time. You may find it easier to simply multiply the number of months by which you are younger than age 60 by.25% and subtract that value from 100% to determine what percent of the Regular Pension amount you would be able to receive as an Early Retirement Pension. For example, assume you will be age 57 years, 9 months on the date you wish your Early Retirement Pension to be effective. This is 27 months younger than age months x.25% per month = 6.75% reduction 100% % = 93.25% At age 57 years, 9 months, you could receive 93.25% of the monthly pension to which you would be entitled if you waited until you reached age 60. The monthly pension amount determined as shown above would be based on single life protection, and would be adjusted, if applicable, for the form of payment that you (and your spouse, if any) elect. The available forms of payment are explained on pages 20 through

17 4. DISABILITY PENSION Eligibility for the Disability Pension Upon application and retirement, you will be eligible for a Disability Pension if you meet all of the following conditions: 1. You are totally and permanently disabled, prior to attaining age 65; AND 2. You have at least 5 years of Pension Credit (Past and Future); AND 3. You have earned at least one Benefit Unit; AND 4. You have a currently effective award of Social Security Disability Benefits under Title II of the Social Security Act. Proof of Disability As used here, total disability means an injury or illness which prevents the Electrician from engaging in any substantial gainful activity, that is, that keeps the Electrician from earning a living. To prove disability, an Electrician must submit to the Administrative Office the official determination by the Federal Social Security Administration that he is entitled to Social Security Disability Benefits. Once an Electrician reaches age 60 while on a Disability Pension, his pension payments will continue for life regardless of disability. If the Electrician recovers from the disability before age 60, Disability Pension payments would cease. His right to pension thereafter and the amount of his monthly pension payments would be determined by the Rules of the Plan for the other types of pension. Amount of the Disability Pension The monthly amount of the Disability Pension is calculated in the same way as the Regular Pension (see pages 13 and 14). There is no reduction for commencement before Normal Retirement Age. The monthly pension amount determined by that method would be based on single life protection, and would be adjusted, if applicable, for the form of payment that you (and your spouse, if any) elect. The available forms of payment are explained on pages 20 through 26. Procedures for Disability Pension Payments You should file your notice of entitlement to Social Security Disability Benefits with the Administrative Office. It should be submitted together with your application for Disability Pension if it wasn t previously filed). The notice of entitlement should be filed not more than 60 days after the date shown on the Social Security notice. If that is done, you will receive retroactive payments for the period between the date of entitlement to Social Security Disability Benefits and the month in which the Disability Pension becomes payable. If either the notice or the application for pension are not filed within 60 days following the date on the Social Security notice, disability benefits will not be payable until the first month after all required documents have been filed with the Administrative Office. In no event will payments commence sooner than the first day of the sixth month of disability. It is best to file your application for Disability Pension with the Administrative Office at the same time you apply to the U.S. Government for Social Security Disability Benefits. To ensure that your pension benefits become effective as early as possible, submit your notice of entitlement promptly when it is received

18 Conversion of an Early Retirement Pension to a Disability Pension If an Electrician is receiving an Early Retirement Pension and is later awarded Social Security Disability Benefits, and the effective date of the award is on or before the effective date of his Early Retirement Pension, his Early Retirement Pension will be converted to a Disability Pension upon written application to the Plan. The conversion to the Disability Pension will be effective as of the first day of the month on or after the date the Social Security Disability Benefit becomes effective, or on the effective date of the Early Retirement Pension, whichever date is later. In no event will an Electrician be eligible to receive benefits during the initial fivemonth waiting period. Recovery of a Disability Pensioner If an Electrician on Disability Pension loses his entitlement to Social Security Disability Benefits or if he recovers from his disability, he must report this to the Administrative Office. This must be done within 30 days after the date of the notice of discontinuance of Social Security Disability Benefits. If the Pensioner does not give this notice to the Administrative Office, then, upon re-retirement, a 6-month delay (not to extend beyond Normal Retirement age) in the reinstatement of this pension will be imposed. If the Disability Pensioner returns to work in Covered Employment after he recovers, he can, of course, earn additional Pension Credit and Vesting Service which will be added to the credits earned before he became disabled. 5. SERVICE PENSION Eligibility for the Service Pension Upon application and retirement, you will be eligible to retire on a Service Pension if you meet the requirements of 1 or 2 below: 1. You are retiring on or after January 1, 1999, you are at least age 50, AND the sum of your age (only full years are counted) and the number of your Benefit Units is at least eighty-five (85). 2. You are at least age 58, AND you have at least twenty-five (25) Pension Credits, AND you were not awarded an Early Retirement Pension prior to January 1, The eligibility requirements were different for Service Pensions that became effective prior to January 1, Monthly Amount of the Service Pension The monthly amount of the Service Pension is calculated in the same way as the Regular Pension (see pages 13 and 14). There is no reduction for commencement before Normal Retirement Age. The monthly pension amount determined by that method would be based on single life protection, and would be adjusted, if applicable, for the form of payment that you (and your spouse, if any) elect. The available forms of payment are explained on pages 20 through

19 6. PRO-RATA PENSION Arrangements have been made with certain related Pension Trusts to enable credits earned by an Electrician under the other plans to be combined with credits he has earned under this Plan to provide Pro-Rata Pensions. By combining credits earned under more than one Pension Plan, an Electrician may be able to qualify for a Pension for which he would not be able to qualify on the basis of his credits under any one Plan. In the same way he may be able to qualify for higher benefits by avoiding a loss of credits which would otherwise result from a Break in Covered Employment. In effect, the Pro-Rata provisions allow an Electrician - for the purpose of meeting the eligibility requirements for a pension or avoiding a Break in Covered Employment - to consider pension credits earned under Related Plans as though they were Kern County Electrical Pension Credits. Eligibility for the Pro-Rata Pension Upon application and retirement, you will be eligible for a Pro-Rata Pension if you meet all of following conditions: 1. You would not otherwise be eligible for a pension under this Plan; AND 2. Your Combined Pension Credits, if treated as Kern County Electrical Pension Credits, would be enough to make you eligible for a Regular, Early Retirement, Disability, Service or Vested Pension under this Plan; AND 3. You have earned at least one Benefit Unit under this Plan. Pension Amount A Pro-Rata Pension amount is determined in the same way as the Regular, Early Retirement, Disability, Service or Vested Pension under this Plan. The monthly amount of pension payable by this Pension Trust will be based on the number of credits earned under this Trust only. Each Pension Trust under which you earned the Credits will pay its own share of your total pension payment based on the credits earned under that Trust

20 7. RECIPROCAL PENSION In addition to the Pro-Rata Pension arrangement described above, the Pension Plan has entered into a Reciprocal Agreement with certain other IBEW local unions. The Agreement provides for money-follows-the-man reciprocity, which simply means that an Electrician who works temporarily in signatory jurisdictions outside of his Home Pension Fund (defined below) can have contributions made on his behalf forwarded to his Home Pension Fund. In order to understand how the Agreement works, it is important to first become familiar with a few technical terms which are used frequently in the Agreement. These terms include: 1. Home Pension Fund. The local union to which the Electrician belongs, which has adopted the Reciprocal Agreement, or, if he is not a member, the Participating Fund in which the Electrician is currently participating at the time he files an authorization form requesting reciprocity. 2. Participating Fund. A local IBEW union which has signed the Reciprocal Agreement and covers employment within the jurisdiction of an IBEW local union. 3. Temporary Employee. An Employee who is temporarily employed outside the jurisdiction of his Home Pension Fund, and within the jurisdiction of a Participating Fund. Eligibility Under the terms of the Agreement, an Electrician is eligible to have the contributions that are made on his behalf transferred to his Home Pension Fund if he: 1. is temporarily employed outside the jurisdiction of his Home Pension Fund and within the jurisdiction of a Participating Fund; AND, 2. has filed a written authorization form electing to have contributions made on his behalf transferred to his Home Pension Fund. Upon receipt of these contributions, the Home Pension Fund credits the Employer contributions and hours received in accordance with the Home Pension Fund s Plan provisions. In addition, the following guidelines must be met: Vesting Service: Benefit Accrual: Each hour for which a contribution is received by the Home Pension Fund from a Participating Fund on behalf of an Electrician shall be credited as Vesting Service by the Home Pension Fund on an hour for hour basis as required by ERISA (the federal law governing private pension plans, such as yours). However, if the same hours are reported by more than one Participating Fund, the Home Pension Fund shall only be required to credit the hours once. A year of Vesting Service shall be whatever each Home Pension Fund decides, so long as the requirements of ERISA are met. Each hour for which a contribution is received by the Home Pension Fund from a Participating Fund on behalf of an Electrician shall be credited for benefit accrual purposes in accordance with the rules of the Home Pension Fund. Where the benefit accrual is not based on hours but rather on actual contributions, all Employer Contributions so transferred shall be credited to the Electrician s account. For more information about Reciprocal Pensions, please refer to Article III-B of the Pension Plan. If you would like to find out if a particular IBEW local union is party to the Reciprocal Agreement, please contact the Administrative Office

21 FORMS OF PAYMENT AT RETIREMENT The monthly pension amounts discussed on pages 13 through 19 are based on the single life annuity with 36- month certain period. Benefits are first calculated in single-life with 36-month certain form. This amount is then adjusted according to the Plan provisions applicable if another form of payment is being elected. The Plan provides various forms of retirement benefit payment. Only one form of payment may be chosen and, once benefit payments have begun, cannot be changed (one exception to this is the ability, under certain circumstances, to convert an Early Retirement Pension to a Disability Pension see page 16). The Rules of the Plan specify the automatic form of payment for unmarried retirees and the automatic form of payment for married retirees. All pensions will be paid in the automatic form which corresponds to the retiree s marital status unless that form is properly rejected. The forms of payment provided by the Plan are (1) the single life annuity with 36-month certain period, (2) the Husband and Wife Pension (Basic and Optional), and (3) the Joint and Survivor Option under which an unmarried retiree may elect a 50% or 100% joint and survivor annuity. The Joint and Survivor Option is available with or without an additional Pop-up feature as explained on pages 23 through 25. The following pages provide a detailed explanation of each form of payment. The Administrative Office will be glad to help you calculate your benefit under any of the available forms so that you can decide which form of payment you want. 1. Single Life Annuity With 36-Month Certain Period The automatic form of payment if you are unmarried is a single life annuity with a 36-month certain period. This means that the monthly benefit for which you qualify based on your age and service is payable for your lifetime. Upon your death, payments cease unless fewer than 36 monthly payments have been made, in which case payments would continue to your designated beneficiary until the number of monthly payments made to you and to your beneficiary totaled 36. For example, if you received 20 payments prior to your death, then your beneficiary would receive 16 monthly payments. The amount of monthly payment to the beneficiary is equal to the monthly pension the retiree was receiving at the time of death. 2. Husband-and-Wife Pension There are two types of Husband-and-Wife Pensions under this Plan. One type is called the Basic Husbandand-Wife Pension, and the other is called the Optional Husband-and-Wife Pension. The automatic form of payment if you are married is the Basic Husband-and-Wife Pension. However, you and your spouse may reject this form of payment on a notarized form. The Basic Husband-and-Wife Pension provides monthly payments to your surviving spouse for her lifetime in an amount equal to the monthly amount that you received during your lifetime. If you and your spouse decide to reject the Basic Husband-and-Wife Pension and wish, instead, to receive the Optional Husband-and-Wife Pension, your surviving spouse will receive monthly pension payments for her lifetime in an amount equal to 50% of the amount that you received each month during your lifetime

22 Both types of Husband-and-Wife Pension extend protection over two lifetimes, therefore, benefit levels are adjusted accordingly. Under each type of Husband-and-Wife Pension, you will receive monthly benefits at a lower level than you would receive with single-life protection. Husband-and-Wife Pension Amounts. The amount of benefit reduction with either Husband-and-Wife Pension depends mainly on the difference in age between you and your spouse. If the spouse is much younger than you, benefits will be reduced more than if you and your spouse were close to the same age or if your spouse is older than you. The reason is that a younger spouse is likely to receive benefits from this added protection for a longer period of time. The adjustment percentage shown in this summary apply only to pensions that become effective on and after January 1, Basic Husband-and-Wife Pension Non-Disability Pension. If you are not disabled and elect the Basic Husband-and-Wife form of payment, then your monthly benefit in the single-life with 36-month certain form of payment will be reduced for the Basic Husband-and-Wife Pension by multiplying it by 90% minus.6% for each year by which your spouse is younger than you or plus.6% for each year by which your spouse is older than you. The maximum percentage is 100%. Disability Pensions. If you are disabled and elect the Basic Husband-and-Wife form of payment, then your monthly benefit in the single-life with 36-month certain form of payment will be reduced for the Basic Husband-and-Wife Pension by multiplying it benefit by 75% minus.6% for each year by which your spouse is younger than you or plus.6% for each year by which your spouse is older than you. Optional Husband-and-Wife Pension Non-Disability Pensions. If you are not disabled and you elect the Optional Husband-and-Wife Pension, then your monthly benefit in the single life with 36-month certain form of payment will be reduced for the Optional Husband-and-Wife Pension by multiplying it by 99% minus.4% for each year by which your spouse is younger than you or plus.4% for each year by which your spouse is older than you. The maximum percentage is 100%. Disability Pensions. If you are disabled and you elect the Optional Husband-and-Wife Pension, then your monthly benefit in the single life with 36-month certain form of payment will be reduced for the Optional Husband-and-Wife Pension by multiplying it by 89% minus.4% for each year by which your spouse is younger than you or plus.4% for each year by which your spouse is older than you. Husband-and-Wife Pension Calculation Examples Following are two examples that illustrate the difference in the amount you would receive if you were to retire on a Regular Pension with the Basic Husband-and-Wife Pension or a Disability Pension with the Basic Husband-and-Wife Pension. Example 1: You are eligible for a Regular Pension of $1, per month. You are 60 years old and your spouse is 55 years old. In order to determine the Basic Husband-and-Wife Pension, first determine the number of years younger or older than you your spouse is, then multiply that number of years by.6%. In this case, your spouse is 5 years younger than you are, so 5 years is multiplied by.6%, which equals 3%. Since your spouse is younger than you are, you must subtract 3% from 90%, which equals 87%. Therefore, your Regular Pension of $1, is multiplied by 87%, which equals $ This is the monthly amount of pension you would