pension benefit fund

PENSION BENEFIT FUND
None of the following information relating to the IBEW Pension Benefit Fund (PBF) shall be deemed a legal document as to
rights accorded members of the IBFW
It is intended only as an informational resource. If a dispute arises concerning the terms
of the IBFW PBF, provisions of the IBFW
Constitution shall prevail.
' E hose who enjoy " A " membership
in the IBEW participate in the
IBEW Pension Benefit Fund (PBF).
Article X I of the IBEW Constitution
establishes the terms of the plan. A
detailed history of the PBF is recorded elsewhere; however, a brief review
of the major steps in the evolution of
the plan to its present status may help
define this pension plan's importance
to the IBEW membership.
After World War I, the officers o f
the IBEW realized that a significant
number of IBEW electrical workers
fell victim to electrocution and other
hazards associated with the industry.
The International Officers of the
IBEW approached the problem from
two perspectives. First, the officers
attempted to institute safety-related
programs to minimize the chances of
electrical workers being injured or
killed while working in their chosen
profession. Second, in 1922 the officers established a death benefit fund,
the Electrical Workers Benefit
Association (EWBA), to ensure sufficient resources to provide a dignified
burial when a member died. Between
1922 and its amalgamation into the
IBEW Pension Benefit Fund on
January 1,1992, the EWBA paid
more than $271 million in death
benefits to the surviving famihes of
deceased members of the IBEW.
Life insurance was not the only
benefit beyond the reach of those
who labored in the electrical industry
during the early part of the 20th century. None of our members could
expect any form of pension benefit
inasmuch as the Social Security
Administration was not created until
1935, and the National Electrical
Contractors Association (NECA) and
the IBEW did not establish the
National Electrical Benefit Fund
(NEBF) until 1947. In 1927 the
IBEW Pension Benefit Fund was
established, another innovation of our
International Officers. Both the
EWBA and the PBF were funded by
the payment of dues; this situation
resulted in the establishment of two
types of IBEW membership. Basic
membership was classified as "BA"
membership, and " A " membership
was assigned to participants in the
pension and death benefits associated
with the EWBA and the PBF.
Over the years the two plans
evolved simultaneously. While
enhanced safety programs and i m provements i n the general health o f
the population reduced the mortality rate among electrical workers,
the lower mortality rate enabled
the EWBA to grow and to increase
the death benefit paid to our members' families.
On the other hand, the PBF
always met the pension payments
required of it, but failed to grow
because of insufficient funding due to
the lack of accurate actuarial projections for pension plans. Such projections are a product of more recent
times. As recently as December 1943,
" A " members were stiU only contributing 37 cents monthly toward
their pension benefit. In August 1951
the monthly contribution was raised
to $1.60; it was raised again in
January 1957 to $3.20 monthly and
to $10 monthly on January 1,1967.
On January 1, 1992, the monthly
dues apportioned to the PBF rose to
$11.30. Until 1967 the amount of
pension received by members who
retained active membership through
the month in which they turned 65
years of age depended on the number of years o f continuous and active
" A " membership held by the retirees
at the time they retired. The minimum benefit was $30 (after 20
years), with the maximum benefit
rising to $50 monthly after 40 years
of participation.
Beneficial members aged 65 retiring after January 1, 1967, were eligible to apply for a retirement benefit
of $2 monthly for each full year of
continuous good standing as an " A "
member immediately preceding
application for benefits. Ehgibihty to
apply for pension benefits was
attained only after 20 years of continuous good standing as an " A " member. The IBEW International
Convention in 1966 added provisions
for disability and for vested pension
benefits. Each of these benefits
required 20 years of continuous good
standing as an " A " member, and were
received only after an application was
submitted to and approved by the
lEC. At the same time, a $1,000 normal and $2,000 accidental-deathbenefit provision was added. This
death benefit was in addition to that
associated with the EWBA.
The 1970 IBEW International
Convention added an Optional
Spouse's Benefit to the plan, which
enables a retiree to permit one-half of
the pension benefit to continue after
the retiree's death as payment to the
surviving spouse for the remainder of
the spouse's life.
As of January 1973, an early retirement provision was added which permitted a member with at least 20
years of continuous good standing as
an " A " member to apply for pension
benefits upon reaching age 62. The
pension benefit was computed on the
basis of $2 monthly for each fuU year
of continuous " A " membership, but
reduced by 6.66 percent for each year
or fraction thereof that the member
was under age 65 at the time of
retirement under the plan.
After the EWBA raised its death
benefit to $2,400 in January 1986, no
significant changes were made to
either the IBEW Pension Plan or the
Electrical Workers Benefit Association
until the Conventions o f the EWBA
and the IBEW m October 1991. At
that time delegates to the EWBA
Convention voted to discontinue a
separate death benefit fund and to
combine the assets of the EWBA
with those of the IBEW Pension
Benefit Fund. Following this action,
the IBEW Convention delegates
agreed to combine the two plans and
make certain changes in the plans
which became effective January 1,
1992.
As a result of actions of the 1991
Convention, the normal, early, and
disability pension benefit was
increased for all "A" members to
$3.50 per month for each full year of
continuous "A" membership earned
after January 1,1992. The delegates
also voted to increase the death benefits available for the families and beneficiaries of "A" members. After
December 31,1991, each active " A "
member of the IBEW, by participating
in the IBEW Pension Benefit Fund,
was covered by death benefits of
$5,000 for normal death or $10,000
for accidental death. For all retired
members, the minimum death benefit
was increased to $2,400.
In a 1998 referendum vote, the
members agreed to increase the pension benefits again. Accordingly, the
normal, early, and disability pension
benefit was increased to $4.50 per
month for each full year of continuous "A" membership earned in and
after January 1, 1998.
The benefits were further increased
at the Convention held in San
Francisco in September 2001.
Delegates to the Convention voted to
increase the active members' pension
benefits; for all benefit credits earned
prior to January 1,1992, increase the
death benefit available to both active
and retired members; and amend the
Optional Spouse's Benefit provision.
The following summarizes the
current provisions of the IBEW PBF.
NORMAL PENSION
As of January 1, 2002, an active
"A" member of the IBEW with at
least five years of continuous good
standing, who has retired from the
electrical industry, and who has
reached 65 years of age can apply for
IBEW normal pension benefits. The
monthly pension benefit the retiree
would receive would be computed on
the basis of $3.50 per month for each
full year of "A" membership earned
through 1997, and $4.50 per month
for each full year of continuous "A"
membership earned in and after 1998.
For instance, a retired "A" member
initiated on June 15,1984, who
turned 65 on March 15, 2002, would
be eligible to apply for normal retirement pension benefits as of April
2002. I f the member applied for a
pension benefit to begin the first of
the month following that in which
the member turned 65, the pension
benefit would be computed from
June 1984 through March 2002. At
that time the member would have
completed only 17 fiiU years of IBEW
"A" membership and would receive a
monthly benefit of $63.50 beginning
in April 2002. The same member
could tender dues for April and May
2002, retire in June 2002, and receive
18 fuU years of IBEW pension credit,
13 of which will be credited at the
rate of $3.50 and five at the rate of
$4.50 monthly. So, the member would
receive $68 monthly, or $4.50 monthly more than i f the member had
retired under the plan in April.
However, to obtain this additional
$4.50 monthly benefit the member
would be required to pay two additional months of dues and forgo two
months of pension benefits at $63.50
per month (April and May). I f we
assume the monthly dues to be $25,
the total cost to the member of
delaying retirement for two months
would be $177—two months of pension benefits ($127) plus two months
of dues ($50). Given these circumstances, the member would not
recover the additional cost from the
pension plan until receiving 39
monthly pension payments after the
June 2002 retirement date—39
monthly payments multiplied by
$4.50 equals $175.50. The cost to the
member will be greater i f the time
between the 65th birthday and the
anniversary date is greater.
A "BA" member transferring to
"A" membership, or beginning a new
"A" membership later in life, is eligible to apply for a normal retirement
pension i f he has five or more years
of continuous good standing at the
time of his application and has
reached age 65. For example, i f an
electrical contractor is organized, and
there is a new member who is 62
years old, that member will be eligi-
ble for a benefit at age 67 i f he
remains current as an "A" member,
even i f he retires at 65.
Participants who became eligible
for PBF pension payments on or after
January 1, 2003, whose payment is
$30 USD or less automatically receive
a lump-sum payment for the actuarial
equivalent of their benefit. The lumpsum payment applies only to pension
payments, not to any death benefit
payment due members receiving a
normal or early pension payout.
EARLY RETIREMENT
Early retirement pension benefits
(after age 62 but prior to age 65) are
computed in a manner similar to that
for normal retirement pension benefits, with the exception that the
member must hold not less than 20
years of continuous and active " A "
membership at the time application is
made for pension benefits.
Additionally, the pension benefit must
be reduced by 6.66 percent for each
year or part thereof that the member
is under 65 years of age when the
pension benefit begins.
DISABILITY PENSION
Disability pension benefits under
the IBEW PBF are computed in the
same fashion as normal retirement
pension benefits.Typically, however, a
disability pension claimant may be
anywhere from 38 to 64 years old.
Under the IBEW Pension Plan, disability pension benefits can only be
paid after a member has achieved 20
years of continuous good standing as
an "A" member and has provided
documentation of total disability. I f
the claimant acquires a disability
award letter from the Social Security
Administration or the Canada or
Quebec Pension Plan, the
International Secretary-Treasurer will
permit the immediate payment of
IBEW pension benefits. In the
absence of an award letter, the member must provide medical documentation which would convince an
independent physician of the member's total disability. Such information, when mailed to the pension
plan of the IBEW, will be submitted
to the International SecretaryTreasurer for his review and consideration. I f the International
Secretary-Treasurer agrees that the
member can be declared totally disabled, pension benefits will begin
without regard to whether the member has achieved disability status with
a U.S. or Canadian federal agency.
VESTED PENSION
Applicants for a vested pension
benefit from the IBEW Pension
Benefit Fund must be fully retired
from the electrical industry and hold
not less than 20 years of continuous
and active " A " membership in the
IBEW for the period immediately
preceding a request for vested pension benefits. There is no automatic
vesting under the IBEW PBF; and a
member is only granted a vested pension, as defined under the plan, i f and
when his or her appHcation is
approved. The benefit is computed in
the same manner as that for normal
pension benefits. However, for each
year or part thereof that a vested pension applicant is less than 65 years of
age, $3.50 monthly will be deducted
from the prospective pension benefit.
Payment will go into effect the first
of the month following that in which
the member turns 65.
For example, an " A " member of
the IBEW who is 55 years old and
has retired from the electrical industry with 35 years of continuous and
active " A " membership through an
anniversary date in 2002 will have
acquired a pension benefit of $127.50
monthly. Since the member retires
under the vested provision 10 years
prior to age 65, however, the plan
will subtract $3.50 for each such year.
This win reduce the prospective
monthly benefit to the vested retiree
to $92.50 at age 65.
OPTIONAL SPOUSE'S BENEFIT
Each eligible " A " member who
retires under either the normal, early,
or disabihty retirement pension provision may elect an Optional Spouse's
Benefit. This will result in a reduced
pension as long as the pensioner lives,
with the provision that, after the
retiree's death, one-half of the
reduced pension shall continue to be
paid to the surviving spouse for as
long as the spouse lives.
The reduced pension payment
under this election is actuarially
equivalent to the pension otherwise
payable. I f the spouse and member are
the same age, the member's pension is
reduced to 86.5 percent of the
amount that would have been computed under the normal, early, or disability retirement provisions of the
plan. After the retiree's death the
spouse will receive one-half of this
amount for life. I f the spouse is older
than the member, the amount of the
reduced pension is increased by 0.5
percent for each year the spouse is
older. I f the spouse is younger than
the member, the amount of reduced
pension is decreased by 0.5 percent
for each year the spouse is younger. A
member electing this option must do
so at the time of retirement on a
form provided by the International
Secretary-Treasurer. The option
becomes effective on the date the
member is placed on IBEW pension
benefit. I f the member and member's
spouse are subsequently divorced, or
if the member's spouse predeceases
the member, the benefit payable to
the member shall be recalculated and
shall be equal to the unreduced benefit which would have been provided
under normal, early, or disability pension. This recalculated benefit commenced the month of January 2002
for those members who became
divorced or whose spouses predeceased them prior to or on
December 31, 2001. For all other
members the recalculated benefit
commenced as of the last date of the
month next following either the date
of the divorce or the death of the
spouse.
DEATH BENEFITS
Each " A " member of the IBEW,
by participating in the IBEW Pension
Benefit Fund, is covered by death
benefits of $6,250 for normal death
or $12,500 for accidental death while
still an active " A " member of the
IBEW. Any new member who joins
" A " membership, or any " A " member
who returns from honorary withdrawal card status or from vestedpension status, or any member who
transfers from " B A " to " A " membership, must achieve six months of continuous good standing as an " A "
member before the death benefit
becomes effective.
The local union Financial
Secretary's office should have an
ample supply of PBF Beneficiary
Designation forms.The form may be
mailed to the International Office by
either the member or the local
union. Members may designate any
person or institution to whom they
wish payment to be made upon their
death.
I f an " A " member fails to complete a Beneficiary Designation
form, the death benefits will be paid
first to the member's spouse or, i f
there is no surviving spouse, in equal
shares to the surviving children. I f
there are no surviving children, the
benefit will be paid in equal shares to
the member's parents or, should there
be no parents, to the member's estate.
All death benefits wiU he deemed
to be normal, unless events surrounding a member's death clearly support
a claim for accidental death. A beneficiary claiming an accidental death
benefit shall have the burden of documenting and proving that the death
was by accident.
Upon retirement the basic death
benefit is set at $6,250 but is reduced
for each dollar received by the retiree
from the IBEW Pension Benefit
Fund until the amount is finally
reduced to $3,000.The minimum
death benefit thereafter will be fixed
at $3,000.
For example, i f an IBEW retiree
had received $1,000 ffom the PBF
while in retirement and was suddenly
killed in an accident, the death benefit would be $5,250. I f the retiree had
elected the Optional Spouse's
Benefit, the amount of pension benefit the member was receiving would
be reduced by 50 percent and paid to
the surviving spouse for the remainder of the spouse's fife. The death
benefit is available to " A " members
under the normal, early, or disability
provisions o f the PBF. However, n e i ther the Optional Spouse's Benefit
nor the death benefit is available to
those w h o retire under the vestedpension provision o f the plan. A vested pensioner w i l l receive only the
m o n t h l y benefit computed for that
vested retiree.
To receive the death benefits, a
claimant or the beneficiary need only
provide the International Office w i t h
a copy o f a death certificate and a
b r i e f note identifying the person or
institution w h i c h is making claim for
the benefit. I f there is no dispute, the
death benefit w i l l be paid w i t h i n a
few days o f notice to the
International Office.
PBF
APPLICATIONS
A n " A " member w h o meets the
age and other qualifications and is
about to leave the electrical trade
obtains n o r m a l pension benefits by
completing an application f o r m for
the I B E W pension. T h e Financial
Secretary submits the member's application to the local u n i o n for action.
Following a report to the local union,
the Financial Secretary completes the
local u n i o n p o r t i o n o f the application
f o r m and affixes the local u n i o n seal.
The local u n i o n President, Financial
Secretary, and Recording Secretary
sign the application; the Business
Manager endorses i t and forwards i t
to the International SecretaryTreasurer. T h e International
Secretary-Treasurer approves or disapproves the member's application. I f
the application is denied, the member
may appeal the International
Secretary-Treasurer's decision to the
lEC.
A member on a participating
withdrawal card requests the necessary forms directly f r o m the
International Secretary-Treasurer. T h e
International Secretary-Treasurer
notifies the local u n i o n w i t h w h i c h
the member was last affihated that
application for retirement benefits has
been made and inquires o f the local
u n i o n as to whether i t has any
knowledge o f the member's relationship to the electrical industry. The
International Secretary-Treasurer may
also w r i t e to the local u n i o n i n
whose jurisdiction the participating
withdrawal card member resides, i f
that jurisdiction differs f r o m the local
u n i o n w i t h w h i c h the member was
last affiliated. I n each case the purpose
is to establish whether or not the
member w i l l be fully retired from the
electrical industry at the time i t is
expected that the member's I B E W
pension w i l l become effective.
Disabihty pension benefits w i l l be
paid f r o m the date o f commencement o f total disabihty. The member
must continue good standing u n t i l
the claim for disability pension is
approved. T h e International p o r t i o n
o f dues w i l l be refunded retroactive
to the m o n t h w h e n disability began.
T h e procedure for applying for disability pension is essentially the same
as that described for normal pension,
except for p r o o f o f disability. Proof o f
disability is simplified i f the member
has already quahfied for total disability under a state, territorial, or p r o v i n cial government retirement system;
the C i v i l Service Retirement A c t ; the
Railroad Retirement Act; the Canada
Pension Plan; the Quebec Pension
Plan; the Canadian Disabled or B l i n d
Persons A c t ; or the Social Security
Act. A member o n one o f these disability retirement plans is usually presumed disabled for purposes o f the
I B E W disabihty pension. However,
documentation o f total disability may
be necessary fi-om the attending
physician. I n other cases it is necessary for the attending physician to
provide medical evidence supporting
total disability. This medical evidence
is reviewed by a physician, w h o evaluates it for the fund. Additionally, the
local union, the International
Secretary-Treasurer, or the l E C may
require p r o o f o f continued total disability o f members on disability pension.
O T H E R BENEFITS OF THE P B F
The members' pension plan n o w
has assets o f approximately $1.5 b i l lion. Like any pension plan, the
funds must be invested i n a prudent
manner w i t h the p r i m e concern
being the needs o f present and future
retirees. Nonetheless, the pension plan
strives to make investments w h i c h
promote the interests o f I B E W m e m bers i n j o b formation. The trustees o f
the plan invest PBF money i n p r o jects that not only deliver a high rate
o f return as an investment, but
enhance j o b opportunities for our
members and others i n organized
labor.
The I B E W PBF is a union-duesfinanced pension plan for w h i c h
there are no employer contributions.
As such, it is exempt f r o m the rules
o f vesting adopted for nearly all other
pension plans under the Employee
Retirement Income Security Act o f
1974 (ERISA). Consequently, no
member o f the I B E W is entitled to
any pension benefit u n t i l an applicat i o n is filed and is approved by the
trustees o f the plan.
R E T U R N TO T R A D E
T h e Constitution provides that
any member w h o receives pension
benefits shall not be permitted to
p e r f o r m w o r k o f any k i n d coming
under the IBEW's jurisdiction, either
for compensation or gratis for anyone, except that a member may w o r k
as an instructor i n an IBEW-recognized apprenticeship program or as an
electrical inspector for a governmental authority where electrical inspectors are not covered by an approved
I B E W collective bargaining agreement. Members o n pension w h o
return to w o r k should notify the
International Secretary-Treasurer at
once and resume payment o f dues.
W h e n this procedure is followed, the
local u n i o n w i l l receive a r e t u r n - t o trade letter, w h i c h the local u n i o n
w i l l return to the International
Secretary-Treasurer prior to the 15th
o f the m o n t h i n w h i c h the member
desires to go back o n pension.
Members retired under the PBF
may attend local u n i o n meetings and
may w i t h the local union's approval
have a voice but no vote.
USA Benefit Form 124
CAN-ENG Benefit Form 124