PENSION QUESTIONS AND ANSWERS

Who administers the Plan?

An independent Board of Trustees consisting of an equal number of representatives appointed by I.U.O.E., Local No. 12, and the Employer Associations in accordance with Federal law.

When did pension benefits begin?

February, 1962, was the first month in which benefits were paid.

What does "retirement" mean?

Prior to age 65, you will be considered "retired" if you withdraw completely and refrain from any work in employment of the type covered by a Collective Bargaining Agreement regardless of the location of such employment or whether such employment is actually covered by a Collective Bargaining Agreement.

After age 65, you will be considered "retired" if you withdraw and refrain from employment in excess of 39 hours in a calendar month in the same industry, in the same trade or craft, in the States of California and Nevada.

Generally speaking, your pension will not be paid during any month in which you work at the kind of job which is prohibited by the Plan. (See question 25 on for more information).

Must I retire when I reach a specific age?

No. You may continue working as long as you like. Retirement under this Pension Plan is voluntary. There is no mandatory retirement age. HOWEVER, IF YOU ARE A 5% OWNER OF THE EMPLOYER OR YOU HAVE STOPPED WORKING IN COVERED EMPLOYMENT, YOUR PENSION PAYMENTS WILL AUTOMATICALLY BEGIN NO LATER THAN APRIL I OF THE CALENDAR YEAR FOLLOWING THE YEAR IN WHICH YOU TURN 70 1/2 YEARS OF AGE.

When should I file my application for benefits?

Applications for pensions must be filed prior to the first day of the month on which you expect your pension payments to begin.

How do I get the application forms?

When you are ready to retire, simply call or write the Fund Office, and an application with instructions will be sent to you. You may also download and print the application form here.

How much do I pay for my pension?

You do not pay for your pension benefits. All contributions received by the Pension Trust are employer contributions and never put on your paycheck and then deducted.

Can I withdraw pension contributions?

No. Withdrawals or transfers of any credits or monies are not made under any circumstances. Benefits from this Trust are paid only in the manner provided by the Plan.

May anyone participate in this Plan?

No. Participants must be Employees of Employers obligated by contract to pay contributions to the Pension Trust for the benefit of those particular employees.

Contributions are accepted only as obligated by such contracts for hours worked by or paid to a Participant.

No one may purchase benefits for any person by making voluntary payment to the Pension Trust.

Also, contributions will not be accepted on behalf of any person who is self-employed (sole proprietor). Even if such contributions are paid, the self-employed person cannot receive benefits under the Plan.

10.

Is there a minimum or maximum pension?

No. Pension benefits are based upon the actual credits you earned. There is no limit on the amount you can receive because there is no limit on the number of credits you may earn.

11.

Will proof of age be required?

Yes. You must furnish evidence of your age. If benefits are due under the Husband-and-Wife Pension, evidence of your spouse's age and proof of marriage must also be furnished.

12.

May I work until I receive my first pension check?

No. The rules of the Plan require that a you completely withdraw from covered employment as of the date your pension becomes effective. For example, if your pension application is filed on October 31, and you request that the pension be awarded on November 1, your first pension payment would probably not be issued until the latter part of November or the first part of December. But, because your pension is effective on November 1, you cannot continue in covered employment after October 31.

13.

Does employment between 1939 and June 1, 1960, have to be continuous in order to be counted as Prior Service Credit?

No. A Participant receives Prior Service Credit for all periods of employment even though some periods may have been separated by a number of years.

14.

Does employment after June 1, 1960, have to be continuous in order to be counted as Service Credits?

Yes, under some circumstances. Click here for a general description of the break-in-service rule. See Article II, Section 4 of the Plan Rules for the complete description.

15.

What is a permanent break in employment?

A permanent break in employment applies to participants who are not vested. It is a specified period of time when you were not reported to the Pension Trust. All of the hours reported prior to the break are forfeited.

16.

What is a break in employment?

A vested member who incurs a break in employment has his credits frozen. He will not lose his credits but he will not receive any increases on those credits after the date of the break. His payment for those credits will be based on the payment rate in effect on the break date, not the retirement date.

17.

How is a grace period obtained?

You must give written notice to the Board and present written evidence required by the Trustees in order to determine entitlement to a grace period.

18.

Does the Plan provide any benefits upon the death of an Active participant?

Yes. If you die before retirement, a lump sum Death Benefit equal to $250 for each Pension Credit you accumulated, up to a maximum of $2,500, will be paid to your surviving spouse or designated beneficiary. However, in no event will the amount of this lump sum Death Benefit be less than $1,000.

In addition to the lump sum Death Benefit outlined above, upon the death of a participant, benefits will be paid in the form of either a Husband-and-Wife Pension or the guaranteed payments.

19.

Are there any benefits payable after the death of a retiree?

Yes. If you are not receiving a Husband-and-Wife Pension and die before receiving 120 monthly pension payments, the monthly payments will be continued to your spouse, if living, otherwise to your designated beneficiary until a total of 120 monthly payments have been made to you and your spouse or beneficiary.

20.

Are pension or death benefits taxable?

Generally, yes. The benefits have been designed to qualify for the most favorable tax treatment available. You should contact the Internal Revenue Service or your tax advisor regarding your individual situation, particularly regarding Disability Pension and Death Benefits.

Income tax may be withheld from your pension check if you so desire.

21.

Are statements for tax purposes furnished?

Yes. By January 31 of each year the Fund Office will mail a statement of benefits paid during the prior calendar year for your use in conjunction with your tax reports.

22.

May pension benefits be assigned?

No. Assignment is prohibited by the Pension Plan and by Federal Law. However, the Plan is required by Federal Law to pay benefits in accordance with a qualified domestic relations order in the event of divorce or legal separation.

23.

Are pension benefits available in a lump-sum payment?

Only on a limited basis. If the actuarial value of your pension is less than $5,000, the Trustees will pay that amount to you in one lump sum. Pensions with an actuarial value that exceeds $5,000 can only be paid in the form of monthly payments. No other lump-sum payments are possible.

Benefits to be paid as a lump-sum may be subject to mandatory 5% withholding for Federal Income Tax unless you elect to rollover such payments into another qualified retirement account. You should consult with your financial and/or tax advisor to select the best approach. Neither the Board of Trustees nor the Fund Office may give tax advice.

Rollovers to qualified retirement accounts such as 401K plans are allowable only if you qualify for a lump sum payment from the Plan. If the actuarial value of your Pension benefit is more than $5,000, benefits must be paid monthly and cannot be rolled over.

24.

What is a "qualified domestic relations order"?

A qualified domestic relations order is a court order issued by a state family law court which requires part or all of your pension to be paid to your spouse, former spouse, child or dependent for alimony or child support or to divide marital property. The Trust must comply with this type of order if it meets the requirements of Federal law. You may click here for a sample qualified domestic relations order.

25.

Can I work after I retire?

An Early, Service or Regular Pensioner can do anything EXCEPT work as an Operating Engineer while receiving pension benefits. The plan specifically prohibits employment as an Operating Engineer anywhere for anyone by an Early, Service or Regular Pensioner under age 65. Such employment is a violation of the rules and any member doing so is subject to suspension of pension benefits and penalties.

If you return to work as an Operating Engineer, you must notify the Fund Office within 30 days of re-employment. This does not mean employment as an Operating Engineer strictly in Local # 12's area. It applies to employment as an Operating Engineer anywhere in the world. If you are under 65 and return to work at the trade, your pension benefit will be suspended for any month in which you work. Multiple returns to work and re-retirements will result in additional penalties. Details are available from the Fund Office.

Once you attain age 65, Federal law allows you to work less than 40 hours a month at the trade without penalty. You must notify the Fund Office of such employment and comply with all other requirements of the Plan.

If you turn 70 1/2 on or after January 1, 1996, Federal law now allows you to work unlimited hours at the trade and defer receiving pension benefits without any penalty, until you stop working as an Operating Engineer. At that time, pension payments must begin and the benefit will be actuarially increased for the period after age 70 1/2 in which you did not receive benefits. This law does not apply to a 5% owner of the employer. (Participants who were older than 70 1/2 on January 1, 1996, were treated differently under previous Federal law and may contact the Fund Office for more information.)

Disability Pensioners are treated differently. In order to have qualified for a Disability Pension, you must have proved that you were incapable of what is known as substantial, gainful employment. The Trustees currently define that as employment which results in the earning of income in excess of $399 a month.

Disability Pensioners are not allowed to be employed in any substantial capacity. They must be totally and permanently disabled and therefore, incapable of employment. A Disability Pensioner who becomes employed will have his pension benefits suspended. The Trustees do allow for trial work periods and any Disability Pensioner in that category should get in touch with the Pension Department for the specific details before starting work. Each case is judged on an individual basis.

26.

If a pensioner returns to work, can he earn additional credit?

Yes. Disability Pensioners, Early Pensioners and Regular Pensioners can earn additional credit upon return to covered employment.

A Disability Pensioner who recovers from total and permanent disability and returns to covered employment will receive full credit for any additional credits earned for such employment. The Trustees encourage Disability Pensioners to do so.

Effective July 1, 1990, Early Pensioners and Regular Pensioners who return to covered employment receive one credit for each 1,000 hours reported at the Master Contribution Rate. However, unless you have reached age 65, you may NOT work at the trade and continue receiving pension benefits.

Penalties for repeated returns to work and re-retirement may apply in some cases. You should contact the Fund Office if you intend to return to work at the trade at any time before you reach age 65.

27.

Do pensioners receive increases?

Generally speaking, no. The Trustees do not increase the credit value for pensioners once the pension is effective.

In recent years the Trustees have approved an additional benefit known as the "13th Check" which provides for payment of an additional amount. However, the Trustees do not guarantee a 13th check every year and there are no cost-of-living provisions in the Plan.

28.

Do Early pensioners have their percentage factor increased as they get older?

No. The Early Percentage Reduction Factor stays constant for the life of the pensioner. An individual who retires at age 52 will receive 70% of the Regular Pension benefit for his lifetime, unless he incurred a break in employment. The percentage will not increase or change as he approaches Regular Retirement age.

Additionally, if the Early Pensioner returns to covered employment, when he re-retires the Early Percentage Factor based on his age at re-retirement will be applied to the new hours worked.

29.

Do widows or beneficiaries receive increases in their monthly amount?

No. The Trustees do not increase benefits for beneficiaries or widows. Widows and beneficiaries are also not entitled to a 13th Check when one is paid to the pensioners.

30.

May a non-vested member withdraw the pension contributions made on his behalf?

No. Pension contributions to the Pension Trust are made by contributing employers in accordance with the Collective Bargaining Agreement with Local #12 and the Agreement of Trust with the Pension Trust. They represent income deferred by the membership from the negotiated wage package. This Plan is not an IRA-type of Plan where monies may be accumulated and withdrawn. Benefits are payable only at retirement or when death occurs prior to retirement. Someone not eligible for benefits forfeits contributions made on his behalf.

31.

When are pensions paid?

Pensions are paid on the first of the month for the month in which they are due. In other words, the check you receive on April 1, is for the month of April. Checks are mailed by the Fund Office three working days before the first of the month.

32.

Are the benefits retroactive?

Benefits are never retroactive prior to the first of the month after receipt of the application in the Fund Office.

33.

Can my check be direct-deposited to my bank?

Yes. In order to have your monthly check directly deposited to your bank account, we need your written instructions to do so. You need to provide the Pension Department with the name and address of the bank, the account number and routing number. We recommend this procedure as it eliminates the possibility of lost or stolen checks. Call the Pension department and the Direct Deposit form will be mailed to you upon request or you may download and print it here.

You may also have your monthly check mailed to your bank for deposit. However, if you choose this procedure, there is no guarantee that your check won't be lost or stolen.

34.

Why doesn't the Fund Office change my address when I send a change of address to Local #12?

Local # 12 and the Trust have different offices. Address changes should be sent to
both simultaneously. While we do exchange information with each other, sometimes
delays occur during the course of transmitting information between offices.

Once your pension becomes effective, your pension check address will not be changed unless you send a written authorization to the Fund. You may download and print a Change of Address form here.

Frequently Asked Questions

PENSION QUESTIONS AND ANSWERS