Your Pension Benefits

Transcription

1 N I G P P Your Pension Benefits NATIONAL INTEGRATED GROUP PENSION PLAN Summary Plan Description

2 National Integrated Group Pension Plan Summary Plan Description The Plan, as restated effective July 1, 2005, generally applies to employees who, on or after July 1, 2005, have an Hour of Service in Covered Employment credited with an NIGPP Participating Employer under an NIGPP Participation Agreement. This is a summary of the main features of the Plan. The official Plan text governs the Plan s actual operation and the determination and payment of benefits. Therefore, this summary creates no rights separate and apart from the Plan. If there is a difference between this summary and what is written in the Plan text,the Plan text will govern. The benefit amounts and factors contained in this Summary Plan Description are for illustrative purposes only. The benefits payable to you or on your behalf will depend on your particular circumstances. Specific information on benefits and copies of the Plan may be obtained from the NIGPP Administrative Agency at

3 Table of Contents 1 Overview Of Your Pension Plan 3 Earning Your Pension Benefit 7 When You Can Receive A Pension 11 Pension Payment Options For Age Pensions 15 Life Events That Affect Your Pension 21 Applying For A Pension 23 Other Important Plan Provisions 25 Administrative Information 27 Plan Facts 28 Board Of Trustees 29 Your ERISA Rights 31 Frequently Asked Questions This is a summary of the main features of the Plan. The official Plan text governs the Plan s actual operation and the determination and payment of benefits. Therefore, this summary creates no rights separate and apart from the Plan. If there is a difference between this summary and what is written in the Plan text, the Plan text will govern. The benefit amounts and factors contained in this Summary Plan Description are for illustrative purposes only. The benefits payable to you or on your behalf will depend on your particular circumstances. Specific information on benefits and copies of the Plan may be obtained from the NIGPP Administrative Agency at

4 Overview of Your Pension Plan Fast Facts The National Integrated Group Pension Plan (NIGPP) provides: A monthly pension benefit that is based on your years of service and the Benefit Level(s) specified in the Participation Agreement between your employer and NIGPP; Portability If you work for more than one employer who participates in the Plan, all your service may be combined toward a single pension; The ability for unmarried participants to name anyone as their beneficiary; a spouse is automatically the beneficiary for married participants or they may name another beneficiary with their spouse s consent; A pension as early as age 55; A Disability Pension if you meet certain Plan requirements; Several options for receiving benefits; and A death benefit for your eligible spouse if you die before retirement. Your Benefit NIGPP is a nationwide multiemployer plan, which means it is composed of hundreds of participating employers and many international and local unions. NIGPP Participating Employers contribute to the Plan on your behalf to provide you with a pension benefit when you retire. NIGPP (the Plan) is a defined benefit plan, meaning that your retirement benefit is based on a formula that recognizes: The time you work for employers who participate in the Plan in a job or category that is considered Covered Employment; and The Benefit Level or Contribution Rate paid by your Participating Employer(s) for each Hour of Service that is generally stated in the Participation Agreement between your Participating Employer, your Union and NIGPP.

5 Portability Hundreds of employers participate in the Plan as well as many Unions. You may be able to continue to earn credit toward a pension if you change jobs and work for a Participating Employer in another job. Tracking Your Benefit You will receive periodic personalized statements that show your benefit status including information on when you become eligible for a pension and the amount of your pension at age 65 (based on your service and contributions by Participating Employers). Several Types of Pensions Offered The Plan offers several types of pensions: Normal Retirement Age Pension, when you are age 65 or older; Early Retirement Age Pension, when you are age 55 or older; 62/30 Pension, available at age 62 if you have at least 30 Benefit Units, provided this option is offered in your Employer s Participation Agreement; and A Disability Pension, which may be available if you meet certain Plan requirements, described on page 8. In addition, the Plan provides a Pre-Retirement Death Benefit, available to your eligible spouse if you die before receiving any pension payments. How Pensions are Paid The Plan provides several options for receiving your pension, described in this booklet. Plan Administration The Plan is administered by a Board of Trustees, which is composed of an equal number of representatives from Participating Employers and Unions. The Trustees are charged with applying and interpreting the rules and regulations of the Plan. They are assisted by an Administrative Agency that has the responsibility for day-to-day Plan operation and paying benefits. Contributions are held and benefits paid from a separate trust fund independent of any employer or Union. Benefits are insured, within certain legal limits by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency.

6 Earning Your Pension Benefit

7 Vesting is calculated in Vesting Units, which are based on your Hours of Service. Vesting Units are calculated as follows: 1. Any Vesting Units you had on December 31, 1988; or 2. Any Vesting Units credited to you as specified in the Participation Agreement if your Participating Employer joined the Plan after 1988; Plus 3. One Vesting Unit for each Plan Year after 1988 that your group is in the Plan in which you met at least one of these requirements: You are credited with at least 750 Hours of Service while in Covered Employment; or Contributions are made for you by your Participating Employer for at least 750 Hours of Service; or You are credited with at least 750 Hours of Service with a Participating Employer in noncovered employment immediately before or after a period of Covered Employment with the same Participating Employer. There are three ways that you can become Vested. You need either: 5 Vesting Units or 5 Benefit Units if you have been credited with one Hour of Service after 1988; or 10 Vesting Units if you have not been credited with an Hour of Service after 1988; or You may become automatically Vested in certain cases when you reach age 65. If you are not already Vested as described above, at age 65 you become automatically Vested if you are working for a Participating Employer and if: You are credited with at least 1/10 of a Benefit Unit in the Plan Year in which you reach your 65th birthday or in one of the two Plan Years right before that birthday; or You are credited with at least 375 Hours of Service in the Plan Year in which you reach your 65th birthday or in the Plan Year right before that birthday. Example Adding Up Vesting Units for Tom Tom has five Vesting Units, so he is fully vested, based on the following: Tom Calendar Year Hours of Service Vesting Units Earned Minimum Hour Requirement Met ,500 1 Yes ,200 1 Yes No (less than 750 hours) No (less than 750 hours) Yes Yes Yes Total N/A 5 N/A

8 Example Adding Up Benefit Units for Adriane Adriane is Vested in four years, as shown below. One Benefit Unit = 1800 Hours of Service. Calendar Year Hours of Service Benefit Units Earned , , , , Total N/A 5.6 Adriane If you stop working for a Participating Employer or leave Covered Employment before you are Vested, you can lose the Vesting Units you have earned to date. Review the section If You Do not Keep Working in Covered Employment (page 16). How Your Pension Is Calculated Your pension is calculated by multiplying your Benefit Level by your Benefit Units. All Contributions are made by employers as spelled out in the Participation Agreement. For more information about how certain types of pensions are calculated, refer to the next chapter, When You Can Receive a Pension. What Is the Benefit Level? Your Benefit Level is a dollar amount set forth in the Certification of Participation Agreement that is used to calculate your pension benefit. It is established by the Board of Trustees using actuarial methods and assumptions to calculate the desired Benefit Level for Plan participants based on factors such as their age and service, the contribution rate of Participating Employers, the date contributions started and any assets from prior plans. If you work for several different Participating Employers during your career, their Participation Agreements are likely to indicate different Benefit Levels. In that case, the pension benefit applicable to each agreement will be determined separately. Then the amounts will be added together to provide your total pension benefit.

9 What Are Benefit Units? Benefit Units are used to measure your period of service. Benefit Units are calculated as follows: 1. For service as of December 31, 1988, you are credited with any Benefit Units you had on that date; or 2. If your Participating Employer joined the Plan after 1988, you may be credited with Benefit Units for prior service if that is specified in the Participation Agreement; Plus 3. For service after December 31, 1988 or the date your Participating Employer joined the Plan, if later you receive one Benefit Unit for each 1,800 Hours of Service in a Plan Year. Alternatively, if your Participating Employer makes contributions on a dollars-perweek basis, you receive one Benefit Unit for each 45 weeks worked in a Plan Year. If your Hours of Service total more than 1,800 (or 45 weeks) in a Plan Year, you will be credited with an additional fraction of a unit, rounded to the nearest one-tenth of a Benefit Unit. For example, if you have 1,940 Hours of Service, you would receive one-tenth of a Benefit Unit for the additional 140 hours, for a total of 1.1 Benefit Units for the year (1940/1800=1.1). If you had 2,080 Hours of Service, you would receive 1.2 Benefit Units. Should your Hours of Service total less than 1,800 in a Plan Year, your Benefit Units would be reduced proportionately, to the nearest one-tenth of a unit. For 1,650 Hours of Service, for example, you would be credited with 0.9 Benefit Units. If your Participation Agreement specifies a required Waiting Period, Benefit Units will not be credited to you until you have completed the Waiting Period. Keeping Track of Your Service You will receive an annual benefit statement from NIGPP if your Participating Employer reports Hours of Service for you for a Plan Year. These statements will be based on your service to date and show your Benefit Units, Vesting Units, applicable Benefit Level(s) and an estimate of your monthly Age Pension at age 65.

10 When You Can Receive a Pension Fast Facts The type of pension you are eligible for depends on your age, and the Benefit Units and Vesting Units you have earned. A pension can be paid as early as age 55, but it is reduced for every month you receive it before your 65th birthday. At age 65, Normal Retirement Age, you may begin to receive an unreduced pension. The 62/30 Pension provides an unreduced Early Retirement Age Pension as early as age 62 if available through your employer s Participation Agreement. By delaying receipt of your pension beyond Normal Retirement Age, you increase its value. A Disability Pension is available for vested participants who qualify to receive Social Security disability benefits and meet the age and service requirements as of the Date of Entitlement. The Plan offers the following pensions for participants who meet the eligibility requirements. In order to be eligible for any of these pensions, you must be Vested (see page 3). The amount of that pension will depend on your Benefit Units, employer contribution rate and Benefit Level (see page 5). Early Retirement Age Pension available at age 55 or older if you are Vested and no longer work for a Participating Employer; the pension amount is reduced depending on how many months you receive the pension before your 65th birthday; Normal Retirement Age Pension available at age 65 or older if you are Vested and no longer working for a Participating Employer; the pension amount is increased for each month after your 65th birthday that you wait to receive benefits.

11 62/30 Pension available only if your employer s Participation Agreement provides this option, the 62/30 Pension is available on the later of: The date you are credited with at least 30 Benefit Units; or Your 62nd birthday. Disability Pension available if you: Are vested; Are no longer working for a Participating Employer; Are entitled to Social Security disability benefits; and Meet the following Date of Entitlement criteria: Have attained age 50 as of Date of Entitlement Earned 10 or more Benefits Units as of Date of Entitlement Were credited with at least 40 Hours of Service within six months of Date of Entitlement The Date of Entitlement is identified on the Social Security Award Certificate Example Mike Mike is Vested and leaves Covered Employment in In 2007, at age 53, he becomes disabled and is entitled to Social Security disability benefits. The Date of Entitlement on his Social Security Award Certificate is August 13, Because Mike was not credited with 40 Hours of Service within six months of his Date of Entitlement, he is not eligible for a Disability Pension from the Plan. You cannot receive a Disability Pension for the same month(s) you receive an Age Pension. For more information on Disability Pensions, see page 18. Calculating Your Pension Generally, an Age Pension is calculated by multiplying your Benefit Level by your Benefit Units. For example, if you begin receiving your pension at age 65, and if your Benefit Level is $40 and if you have 30 Benefit Units, your monthly pension would be $1,200 ($40 x 30 = $1,200). However, if you begin receiving an Early Retirement Age Pension or provide a continuing pension for your spouse, that calculation will be modified, as described on the next page. A Disability Pension is calculated using the same formula as an Age Pension, but with no reduction for retiring before age 65. When you reach age 65, your Disability Pension will terminate and you will be eligible for a regular Age Pension. For more information, refer to page 18 of the Life Events section.

12 Early Retirement You may retire as early as age 55, but your pension will be reduced for every month you are younger than age 65 when you start receiving your pension benefit. This actuarial reduction is based on average life expectancy. In other words, your pension is reduced because it starts sooner so it is likely to be paid out for more years. The amount of your benefit reduction depends on your age when you leave Covered Employment. The reduction is equal to: If you were age 55 or older when you left Covered Employment, and your Age Pension Date is after 1998, you will then receive the greater of the following: Your Benefit Units as of December 31, 2006 multiplied by your Benefit Level as of December 31, 2006 reduced by one-third of one percent (0.0033) for each full month before age 65 or your Benefit Units on your Age Pension Date multiplied by your Benefit Level on your Age Pension Date reduced by one-half of one percent (0.005) for each full month before age 65. Example Bob Bob stops work on his 59th birthday and begins receiving his pension. A comparison calculation will be done to give Bob the greater of his Benefit Units as of December 31, 2006 multiplied by his Benefit Level as of December 31, 2006 reduced for each full month before age 65 or his Benefit Units on his Age Pension Date multiplied by his Benefit Level on his Age Pension Date reduced by for each full month before age 65. If you were younger than age 55 when you left Covered Employment, your pension will be reduced by one-half of one percent (0.005) for each full month before 65 that you begin receiving your pension. Example Rita left Covered Employment at age 45. She begins receiving her pension benefit at age 62. She had 20 Benefit Units and a Benefit Level of $35. Her unreduced pension is equal to 20 x $35 = $700. Rita Her benefit would be reduced by 18% for Early Retirement (Her pension is beginning 36 months prior to age 65: 36 months x = 0.18) $700 x 0.18 = $126. $700 - $126 = $574, Rita s Early Retirement Pension

13 Receiving Your Pension Benefit When You Turn Age 70 1 /2 If you turned 70 1 /2 before January 1, 1999: You must begin receiving your Age Pension when you reach age 70 1 /2. You may continue to work more than 40 hours per month and still receive your pension benefit. If you continue to work, your benefit would be recalculated each year. If you turn 70 1 /2 on or after January 1, 1999: You must wait to begin receiving your pension benefit until after you leave Covered Employment. Deferred Pension Retirement If you stop working on or after age 65 and choose not to begin receiving your pension immediately, for every full month you postpone your pension, the amount will be increased. The increase is equal to: One and one-quarter percent (0.0125) per month for the first 36 months after you attain age 65; and One and one-half percent (0.015) per month for each month thereafter. Example Pension Increase for Deferred Retirement T.K. stops working on his 65th birthday with 25 Benefit Units and a Benefit Level of $30. Because his spouse is still working, he decides to postpone receiving his pension until he is 67. His unadjusted pension at age 65 is equal to 25 x $30 = $750. Plus, he would receive a delayed retirement increase of $225 because he delayed receiving his pension for 24 months after reaching age 65: 24 months x (factor from above) = 0.3 x $750 (his accrued Age Pension at age 65) = $225 $750 + $225 = $975, T.K. s Deferred Pension Benefit TK 10

14 Pension Payment Options for Age Pensions Fast Facts If you are married, an Age Pension is automatically paid out as a Post- Retirement Spousal Benefit in order to provide a pension benefit to your spouse after your death. Note that under this option, your monthly benefit is reduced in order to extend the payments over two lifetimes yours and your spouse s. With a Contingent Annuity Option, you can choose any beneficiary you want to receive a portion of your pension after your death. If you are married, your spouse must agree in writing. The Level Benefit Adjustment Option works with your Social Security benefits to even out your retirement income, so it is level both before and after you receive Social Security. If you are married, your spouse must agree in writing. For certain smaller pension amounts, you may receive your benefit as a single lump sum. If you are married, your spouse must agree in writing. You can choose from several forms of payment for an Age Pension or a 62/30 Pension: Post-Retirement Spousal Benefit; Contingent Annuity Option; or Level Benefit Adjustment Option. Note: If your monthly benefit is less than $50 per month, you can elect to receive your benefit as a lump-sum payment under the Single Sum for Small Pension Option. 11

15 Post-Retirement Spousal Benefit If you are married when your pension begins, federal law requires that payments be made in a form that provides benefits to your spouse upon your death unless you and your spouse agree to another form of payment in writing. With this form of payment, you receive a reduced monthly pension for your life. Then upon your death, your spouse receives 75% of your pension until his or her death. Note: The 75% Post-Retirement Spousal Benefit is available to you if you: Had one Hour of Service on or after July 1, 2001; or Returned to Covered Employment after July 1, 2001 and earned 1/10 of a Benefit Unit; or Were age 55 or older when you left Covered Employment and deferred your pension benefit until July 1, 2001, or after. If none of these apply to you, your normal form of pension if you are married is a 50% Post-Retirement Spousal Benefit. If you do not want this form of pension, you and your spouse must provide a notarized consent form agreeing to the payment option you select. The consent form states that, without a Post-Retirement Spousal Benefit, all benefits will stop upon your death and your spouse will receive nothing. If you name a beneficiary other than your spouse, your spouse must also approve this alternate beneficiary. The amount your pension is reduced to provide the Post-Retirement Spousal Benefit depends on two factors: Your age when your pension begins; and The age difference between you and your spouse. Note: If you are more than six full years older than your spouse, the 5% reduction will be increased by 1 /2 of 1 percent for each additional full year. If your spouse is older than you by six or more full years, the 5% will be decreased by 1 /2 of 1 percent for each additional full year. If your spouse is 15 or more years older than you, there will be no reduction in your pension. Once you begin receiving payments under the Post-Retirement Spousal Benefit option, no changes are permitted even if: Your spouse dies before you do; or You divorce your spouse. Example Pension Reduction for Post-Retirement Spousal Benefit Jim s Age Pension is calculated at $600 a month at age 65. He decides to accept the Post-Retirement Spousal Benefit pension to provide a continuing benefit of 75% to his spouse, who is age 60. Since he is less than six years older than his spouse, his pension is reduced 5% to provide the Post-Retirement Spousal Benefit. Here are the calculations: $600 x 5% (or 0.95) = $570, Jim s reduced monthly pension amount. Jim 75% of $570 = $427.50, the monthly amount Jim s spouse would receive after Jim s death. 12

16 Two Pension Reductions: Early Retirement and Spouse Benefit If you receive the Post-Retirement Spousal Benefit and elect an early retirement pension, your pension will be reduced twice. First, your benefit will be reduced because payments are starting before age 65. In addition, your pension will be reduced to create a lifetime survivor pension for your spouse. As explained in the section Early Retirement (page 9), your pension will be reduced a fraction for every month your retirement date precedes age 65. Two reductions could mean a substantial reduction in your monthly benefit. Be sure to consider the impact and calculate the effect before making a decision. Contingent Annuity Option With this option, you decide who will receive a lifetime pension following your death and what percentage of your monthly pension that individual will receive. This optional form of payment will reduce your monthly pension because benefits will be paid for two lifetimes, yours and your beneficiary s. The amount of the reduction depends on: The percentage of your pension your beneficiary receives for example, 50%, 75%, or 100%; The age difference between you and your selected beneficiary (who is called the Contingent Annuitant ); and The age you start receiving pension payments. If you are married and you name a Contingent Annuitant other than your spouse, your spouse must agree to all these decisions by signing a consent form that explains the effect of the Contingent Annuity Option. Once pension payments begin, you cannot make any changes in the form or amount of your pension, even if your Contingent Annuitant dies before you. Example Contingent Annuity Option of 100% for Sister Laura s Age Pension is calculated at $700 a month when she reaches age 65. She elects a Contingent Annuity Option to provide a continuing benefit of 100% to her sister, who is age 56. Her monthly pension is calculated as follows: $700 x = $ Her pension would be reduced by a reduction factor of That would provide Laura with a monthly benefit of $ for life. Upon Laura s death, her sister would receive $ for her lifetime. Laura 13

17 Level Benefit Adjustment Option The purpose of this option is to provide you with a level income (pension plus Social Security) from the time you retire for the rest of your life. With this option, you elect to have your pension payments increased until Social Security starts. Then when Social Security starts, your pension benefit will be reduced by the amount of your estimated Social Security benefit. This creates a level monthly income throughout your retirement. If you are married, you and your spouse must jointly reject the Post-Retirement Spousal Benefit in order to elect the Level Benefit Adjustment Option. Your spouse must sign a consent form that explains that benefits will stop upon your death and he or she will receive nothing further. Once pension payments begin, you cannot make any changes. If you are considering this option, you should request annual earnings information from Social Security at least three to six months before you retire. Example Level Benefit Adjustment Option Ben s monthly benefit at age 58 is $1,000 per month after applying the Early Retirement reduction factor. His estimated Social Security benefits at age 62 are $500 per month. If he elects the Level Benefit Adjustment Option, he would receive a pension of $1,339 from age 58 to age 62. At 62, his pension would drop to $839, which, when combined with Social Security of $500, would provide a monthly income of $1,339. Ben Single Sum for Small Pension Option For smaller pension amounts, you may elect to receive your benefit in a single lump-sum payment when you retire. Effective January 1, 2000, this option is available if your monthly pension is less than $50. With this option, you receive the lump-sum payment and then no further benefits to you or your spouse. The amount of the lump-sum payment is an actuarial calculation, based on the present value of your lifetime pension. If you wish, you may choose to have any portion of the lump-sum payment, but not less than $200, paid directly to an Individual Retirement Account (IRA), an individual retirement annuity, or a qualified plan that accepts eligible rollover distributions. You may want to do this to reduce the taxes otherwise payable when you receive a large lump-sum payment. If you elect this option, you cannot change your mind once the lump sum is paid to you. 14

18 Involuntary Cash Out of Certain Small Benefits If you are a Vested Participant who left Covered Employment prior to October 1, 2005, have not started to receive your benefit payments, and your benefit as of your Normal Retirement Date is a $1.00 per month or less, then your benefit was paid or will be payable in the form of a lump sum as soon as possible following October 1, If you are a Vested Participant who left Covered Employment prior to October 13, 2006, have not started to receive your benefit payments, and your benefit as of your Normal Retirement Date is $9.25 per month or less (excluding a benefit that produces a single sum payment greater than $1,000), then your benefit will be paid in the form of a lump sum as soon as possible following October 13, Life Events That Affect Your Pension Fast Facts Changes in your marital status may affect your pension payout. If you divorce after pension payments begin, the Plan may be required to pay benefits to your ex-spouse. If you are not Vested and have a period when you do not work the necessary hours in Covered Employment, you could have a Break in Service. You could lose your service credits, and eligibility for a pension, if you have a Break in Service. If you work for more than one employer who participates in the Plan, all your service and credits may be combined toward a single pension. If your employer terminates from the Plan, your benefits could be reduced. If You are Married Being married affects how your pension is paid. In addition, a special Pre-Retirement Death Benefit is available only to spouses who have been married for at least one year. Upon Retirement By law, you must share your pension with your spouse by providing a continuing pension to him or her after your death unless your spouse gives written notarized consent to do otherwise. The automatic form of payment with an Age Pension is a Post-Retirement Spousal Benefit. Your pension is reduced in order to provide payments for both your lifetime and your spouse s lifetime. Your spouse receives 75% of that amount (or 50%, if you retired before July 1, 2001 see Post-Retirement Spousal Benefit on page 12 for more information). If that s not how you want to receive the pension, your spouse must sign a consent form agreeing to the form of payment you want. 15

19 Should you marry after your pension payments have begun, your pension benefit will not change. Once payments have started, you cannot change the form of your pension payout to provide for that new spouse. For details see the section Post-Retirement Spousal Benefit (page 12). Upon Your Death If you are not receiving pension payments but you are vested when you die, your eligible spouse may receive a Pre-Retirement Death Benefit. To be eligible, your spouse must have been married to you for at least one year prior to your death. The amount of the monthly benefit to your spouse is a percentage of the reduced pension you would have received if you had commenced receiving a benefit on the date of your death. For more information, see the section If You Die Before Receiving a Pension (page 20). If You Divorce The Plan may be required to pay benefits to your ex-spouse or children if you divorce. This would occur if you divorce your spouse after pension payments have begun and the form of pension you had selected provides a benefit for your spouse upon your death. The law requires that such decisions cannot be changed even if you are no longer married. Similarly, the Plan may be required to pay benefits to others if a Qualified Domestic Relations Order (QDRO) is issued. A QDRO is a court order describing your rights and those of your former spouse or dependent children to your benefits under the pension plan. Under the terms of a QDRO, certain payments could be made from your pension to pay alimony, child support or marital property rights of your spouse, former spouse or other dependents. A QDRO may also specify which form of pension payment offered by the Plan you must elect. The Trustees recommend that you obtain the assistance of a lawyer if you are served with a QDRO. Participants and beneficiaries can obtain, without charge, a copy of the Plan procedures governing Qualified Domestic Relations Orders (QDRO) from the Plan Administrator at the address shown on page 27. If You Do Not Keep Working in Covered Employment If you stop working for a Participating Employer or work in a position that is not Covered Employment, you could lose benefits. Remember this rule: Until you are vested, the Benefit Units and Vesting Units you have earned toward a pension may be forfeited under certain circumstances. Once you become vested, you cannot lose the benefit you have earned. If you are not vested, you will lose your status as a Plan participant and your accumulated units of service if you have five consecutive years of Break in Service. That can occur both when you do not work in Covered Employment or when you do not work enough hours in Covered Employment. You are charged with a Break in Service for any calendar year in which you do not have at least 90 Hours of Service. 16

20 However, there are some exceptions to the requirement for 90 hours or 1 /10 of a Benefit Unit in a calendar year. Caring for a Child. You may be credited with up to 90 Hours of Service for time not worked if you left active employment because you were pregnant, your child was born, you adopted a child, or you spent time caring for your newly born or adopted child. Family and Medical Leave Act. Similarly, effective August 3, 1993, you may be credited with up to 90 Hours of Service for time not worked if you are taking leave as provided under the federal Family and Medical Leave Act. You will receive the 90 hours in the year you start the leave if you need the credit to meet the 90-hour requirement. Otherwise, you will receive the 90-hour credit the following year. Military Service. You may be credited with up to 90 Hours of Service for time not worked if you leave Covered Employment to enter service in the U. S. Armed Forces, provided you meet the requirements of the Uniformed Services Employment and Reemployment Rights Act (USERRA). Non-Covered Employment. If you work in a job with the same Participating Employer that is not considered Covered Employment by the Plan, you will not be charged with a Break in Service as long as you are credited with 90 Hours of Service during the Plan Year right before or the Plan Year right after you left Covered Employment. Example Losing Credit Due to a Break in Service Rick began to participate in the Plan on January 1, 1988, and his reported Hours of Service record looks like this: Calendar Year Hours of Service Benefits Units Earned Vesting Units Earned Minimum Hour Requirement Met , Yes , Yes , Yes No - Had Break in Service No - Had Break in Service No - Had Break in Service No - Had Break in Service Total N/A 3 3 N/A Rick At the beginning of 1995, Rick would still be a Plan participant even though he had four years in a row with a Break in Service. The Vesting Units and Benefit Units earned to date would still be credited to him. That is because his Breaks in Service totaled less than five. 17

21 If You Work for Different Participating Employers If you move from Covered Employment with one Participating Employer to another Participating Employer, your pension is calculated under the terms of your employers Participation Agreements. If you do not lose Benefit Units or Vesting Units due to a Break in Service as described above, your pension will be determined with separate calculations. Each calculation will be based on the Benefit Units and Benefit Levels applicable to that Participating Employer. This portability feature allows you to earn the required Vesting Units and Benefit Units from two or more Participating Employers. Example More Than One Participating Employer Ellen earns four Benefit Units with Company A, which has a Benefit Level of $20. She then leaves and immediately goes to work for Company B where she is credited with three more Benefit Units at a Benefit Level of $25. Her Age Pension would then be determined separately for each employer, multiplying her Benefit Units by her Benefit Level, as follows: Company A: 4 Benefit Units x $20 Benefit Level = $80 Company B: 3 Benefit Units x $25 Benefit Level = $75 Total pension: $80 + $75 = $155 per month Ellen Note that Ellen needed the additional Benefit Units with Company A and Company B in order to become Vested (which requires five Benefit Units for service after 1988) and become eligible to receive a pension. The service with Company A or Company B, by itself, would not give Ellen a benefit. If You Return to Work After Retirement Should you decide to return to work after retirement, generally pension payments under the Plan will stop for any month in which your Participating Employer credits you with 40 or more Hours of Service. When you stop working and return to retirement, your pension benefits will start again. If you have been credited with at least 0.1 ( 1 /10) of a Benefit Unit during your re-employment period, your pension will increase to reflect the additional time worked. If You Become Disabled While an Active Participant You may be eligible for a Disability Pension under the Plan if you are Vested, become disabled, and qualify for Social Security disability benefits. In addition, you must have been credited with 40 hours of service within six months of the Date of Entitlement on your Social Security Award Certificate, attained age 50 on or before the Date of Entitlement, and have 10 or more Benefit Units as of the Date of Entitlement. 18

22 Applying for a Disability Pension You may apply for a Disability Pension by submitting an application and providing proof of your entitlement to disability insurance benefits under the Social Security Act. The Board of Trustees may require you to furnish proof but no more than once a year that you are still entitled to Social Security disability in order for your Disability Pension to continue. If you recover from disability, you must notify NIGPP. Payment of a Disability Pension A Disability Pension is payable from the first of the month after the Date of Entitlement indicated on your Social Security Award Certificate. Note that while you are disabled, you may be eligible to receive Trustee-granted increases to your benefit. Monthly benefits continue until the earlier of the date: You are no longer eligible for Social Security disability benefits; You attain age 65; or You die. Note: When you reach age 65, your Disability Pension will terminate and you will be eligible to elect a regular Age Pension. If You Become Disabled After Retirement If you stop working and begin receiving an Early Retirement Age Pension and then become disabled prior to age 65, you may apply for a Disability Pension if you otherwise meet the requirements for a Disability Pension. That could benefit you financially because a Disability Pension is not reduced if you are under 65 unlike an Age Pension. If you meet the requirements and begin receiving a Disability Pension, your Age Pension will be suspended as of the date of your entitlement to benefits according to your Social Security Award Certificate. At age 65 (or sooner if you become ineligible for a Disability Pension), an Age Pension will resume. If Your Participating Employer Leaves the Plan If your Employer s participation in the Plan terminates (for example, for failure to make required contributions), your pension may be reduced. You do have the following protections: 1. Your pension will be fully protected if you are at least age 72 and have been receiving pension payments for at least five years when your Participating Employer stops participating in NIGPP. 2. If you are Vested when your Participating Employer stops participating, you will be entitled to at least the pension earned to date for service with your Participating Employer after it joined the Plan, as well as for service earned under any earlier plans that were merged with NIGPP. 3. If you are Vested and your current Benefit Level has been in effect for at least three years, then 100% of your pension is guaranteed. 19

23 If You Die Before Receiving an Age Pension If you are a Vested participant and you die before beginning to receive your Age Pension, your surviving spouse may be eligible for a Pre-Retirement Death Benefit. In order to be eligible, your spouse must have been married to you for at least the entire year before your death. The amount of the payment, if you die on or after July 1, 2001, will be 75%* of the reduced pension you would have received if you had retired on the date of your death with the Post- Retirement Spousal Benefit. Payments to your spouse under the Pre-Retirement Death Benefit will begin: The first day of the month following your death if that occurs after you have reached age 55; or On the first day of the month following the date you would have reached age 55. Your spouse may defer payment of this benefit, but no later than your Normal Retirement Date. If benefit payments are delayed until the date you would have been age 65, the death benefit will be larger because it will not include a reduction for early receipt. The benefit to your spouse will continue until his or her death. If your spouse dies before any payments begin, no benefit is paid. In order to receive the Pre-Retirement Death Benefit, your spouse or other family members must provide the Board of Trustees with appropriate documentation verifying: Your date of birth and date of death; Your spouse s date of birth; and The fact that you and your spouse were married for the entire year before your death. After Receiving a Pension If you die after you begin receiving your pension benefit, your spouse or your beneficiary should contact NIGPP as soon as is practical to learn about the benefits that he or she may be entitled to under the Plan. Before any benefits can begin, your spouse or beneficiary must provide the Board of Trustees with appropriate documentation verifying your date of birth and date of death. * or 50%, if you retired before July 1, 2001 see Post-Retirement Spousal Benefit on page 12 for more information. 20

24 Applying for a Pension Fast Facts To be eligible to receive a pension you must complete an application. Your application requires documentation of your age and marital status. Complete the application as soon as you know when you will retire at least 30 days before the first day of the month in which you wish to retire. If your application for benefits is denied, you may file an appeal with NIGPP within 60 days after you have received notice of the denial. To receive any benefits from the Plan, you need to complete a pension application and return it to NIGPP as soon as you know when you will retire. Pension application forms are available from NIGPP. It is a good idea to file as soon as you decide on your intended retirement date. This will avoid a delay in the processing of your application and payment of benefits. However, because of certain government requirements, you should not file more than 180 days before your intended retirement date. When you apply, you must submit proof of your date of birth, and, if you are married, proof of your spouse s date of birth and a copy of your marriage certificate. If you are disabled, you must submit proof of your entitlement to any Social Security disability benefits. Benefits may be withheld until such information is furnished. 21

25 Generally, pension benefits will be paid no sooner than the first of the month after your application is received. However Disability Pension benefits may be paid retroactively to the date you became entitled to receive Social Security disability benefits. If your pension application is in order but payments are delayed or miscalculated due to administrative error, you will receive the amount of the adjustment in a lump-sum payment. If Your Pension Application is Denied If your application for benefits is denied, you may file a written appeal with NIGPP no later than 60 days after you received written notice of the denial. The notice will include the specific basis for the decision, references to the specific Plan provisions on which the denial was based, and a description of additional information or material that you could submit to support your claim. It will also explain why the additional information is needed and how to appeal the denial of your claim. The Board of Trustees or a designated committee will decide the appeal within 60 days (under special circumstances, within 120 days) after it was filed. The decision will be in writing and will include the specific basis for decision and specific references to Plan provisions on which the decision was based. The decision of the Board or its designated committee will be final and binding on all concerned. 22

26 Other Important Plan Provisions Fast Facts The Trustees reserve the right to change the Plan. If the entire Plan terminates, benefits are insured by the federal Pension Benefit Guaranty Corporation, within specified limits. You cannot use your retirement benefits as collateral or have them garnished in any way except as provided under a Qualified Domestic Relations Order. Investments are handled by the Plan s funding agencies. Future of the Plan While the Trustees fully expect to continue the Plan indefinitely, it could be terminated for reasons such as: Replacement with another type of pension plan. Failure to meet requirements of the Internal Revenue Service or Department of Labor. A determination by the Pension Benefit Guaranty Corporation to terminate the Plan. Every Participating Employer withdraws from the Plan within the meaning of ERISA section 4203, or upon the cessation of the obligation of all Participating Employers to contribute under the Plan. A decision and Plan amendment to freeze all future vesting and benefit accrual. 23

27 If the Plan is terminated, you will not accrue (earn) any further benefits under the Plan. However, benefits you already have accrued will become Vested that is, nonforfeitable to the extent of the assets available under the Plan and as guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency (see page 25 for more information on the PBGC). The Trustees will notify each Participating Employer and Union upon termination of the Plan. Plan Changes The Board of Trustees reserves the right to change the Plan. The Trustees intend that the Plan satisfy all federal and applicable state requirements and reserve the right to make any changes necessary to meet those requirements. Participants and affected beneficiaries will be told of any material modifications to the Plan or any changes in your rights under the plan as provided under the Employee Retirement Income Security Act (ERISA). Use the back pocket of this booklet to store any Plan updates you receive. Limit of Plan Liability You have a right to a pension benefit within the terms of the Plan. However, as described in the section If Your Participating Employer Leaves the Plan (page 19), benefits may be reduced if the funds available to pay pensions are limited. Pension Maximums The Internal Revenue Code limits6boun(limito a pension beneiarhify e aensile idlableo a pent to )TjETBT/T1_0 1

28 Administrative Information Investments Investments are handled by the Plan s funding agencies. These funding agencies are insurance companies, banks and trust companies selected by the Board of Trustees and under contract to carry out these responsibilities. No Assignment of Benefits Your retirement benefits are intended for your personal financial security. They cannot be sold, borrowed against, garnished or attached in any way. However, the Plan is required by law to honor a Qualified Domestic Relations Order (QDRO) to settle property rights or pay child support, as explained in the section If You Divorce (see page 16). The Plan must also honor a federal tax lien against your benefits. Substitute Pension Recipient If the Trustees determine that you are physically or mentally unable to give a valid receipt for your benefit payment, unless you have a duly appointed guardian, payment will be made to another person or institution, which the Trustees determine, is providing for your care and maintenance. Benefit Insurance Your pension benefits under this multiemployer plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency, if the entire Plan terminates. A multiemployer pension plan is a collectively bargained pension arrangement involving two or more unrelated employers. Generally, the PBGC guarantees most Vested Age Pensions and certain survivor s pensions. However, PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit protection is subject to certain limitations. 25

29 The PBGC guarantees vested pension benefits at the level in effect on the date of termination of the entire Plan. However, if pension benefits have been increased within five years before Plan termination, such benefit increase will not be guaranteed. In addition, there is a ceiling on the amount of monthly pension benefit that the PBGC guarantees, which is adjusted periodically. For more information about the PBGC and the benefits it guarantees, ask the Administrative Agency, or contact the PBGC at P.O. Box , Alexandria, VA, or call or (not a toll-free number). TTY/TDD users may call the federal relay service toll-free at and ask to be connected to Additional information about the PBGC s insurance program is available through the PBGC s website on the Internet at Multi-Employer Pension Plan Amendments Act of 1980 (MPPAA) Under MPPAA, a Participating Employer that withdraws from the NIGPP may be liable for its proportionate share of the Plan s unfunded benefit obligations. NIGPP will not assess withdrawal liability for a withdrawal that occurs in a Plan Year after 1992 which immediately follows a year in which the Plan is fully funded. The NIGPP provisions that determine the calculation, assessment and collection of withdrawal liability have been approved by the PBGC. Special Provision for Certain Merged Plans The Plan provides that, in some situations, provisions that applied under a former plan now merged with NIGPP still apply. These certain provisions might affect you if you were employed by: A former Participating Employer in the Arrowhead Automobile Dealer s UAW Retirement Income Plan and hired prior to May 1, 1996; A former Participating Employer in the UAW Local Union-OPEIU Retirement Income Plan and hired prior to May 1, 1997; A former Participating Employer in the Brunner Bargaining Unit Pension Plan and hired prior to January 1, 2000; A former Participating Employer in the New Haven Foundry, Inc. Hourly Employees Retirement Income Pension Plan and hired prior to January 1, 2001; A former Participating Employer in the Universal Refractories, Inc. Hourly Pension Plan for Employees of Wampum, PA and hired prior to November 1, 2002; A former Participating Employer in the P.R. Hoffman Machine Products, Inc. Pension Plan for Hourly Employees and hired prior to May 3, 2004; or A former Participating Employer in the Wisconsin Aluminum Foundry/USW Local 125 Pension Plan and hired prior to June 1, If you are in one of these groups, you may contact the NIGPP Plan Administrator for further information. Top-Heavy Rules If in any Plan Year, the Plan is considered top-heavy for your Participating Employer, certain special rules apply. Top-heavy means that certain key employees are receiving more than a limited percentage of Plan benefits. It is extremely unlikely that the Plan could become top-heavy but if it does, you will be notified and certain special federal requirements will be met. 26