Central PA Teamsters

Frequently Asked Pension Questions

The information contained in the Frequently Asked Questions Section contains general information regarding the Central Pennsylvania Teamsters Pension Plan. Please refer to the Pension SPDs for definitions of terms used in the Frequently Asked Questions. In the event of any inconsistency between the information contained in these FAQ’s and the Fund documents, the terms of the Fund documents will control in all cases. Contact the Pension Department if you have specific questions regarding your eligibility or benefit amounts.

What Benefits are Provided by the Central PA Teamsters Pension Fund?

There are two plans under the Central Pennsylvania Teamsters Pension Plan: the Defined Benefit Plan and the Retirement Income Plan (RIP) 1987.  Benefits accrued in the Defined Benefit Plan from September 1, 1955 until the expiration of a participant’s collective bargaining agreement ending in 1987, 1988 or 1989 (whichever is applicable) are referred to as “Old DB” or Past Service benefits. Benefits accrued in the Defined Benefit Plan beginning January 1, 2003 are referred to as “Future Service” benefits. The Retirement Income Plan 1987 is a type of defined contribution plan referred to as a money purchase pension plan because the contribution amount is fixed (in this case based on a collective bargaining agreement), rather than based on an employer's discretion or profitability. The Retirement Income Plan 1987 was frozen to new contributions for work performed after 2002.  Effective December 31, 2009, the RIP 2000 Plan was merged into the RIP 1987 Plan. The Retirement Income Plan 2000 accepted contributions beyond 2002, up until the next contract expiration date after January 1, 2003. Participants may have participated in more than one plan. Refer to your Summary Plan Description and annual pension statement or contact the Pension Department for additional information.

Can the Government or the Trustees Take Our RIP Accounts to Pay the Unfunded Liability of the Defined Benefit Plan if it Became Insolvent?

We do not know exactly how rumors get started.  But this rumor that the Government (or the Trustees) may confiscate our participants’ accounts in the Retirement Income Plan 1987 (“RIP”) and transfer that money to the Defined Benefit Plan has disturbed some participants who recently telephoned the Fund.  To get out in front of this rumor, we have decided to write this article.

 By way of background, the Defined Benefit Plan is not insolvent and is not projected to become insolvent  at any future time under the actuary’s projections. The Defined Benefit Plan is one of the few multiemployer plans that is neither in endangered status nor in critical status. More important, and as explained below, current law forbids the use of private employer or union or joint employer/union sponsored defined contribution plan assets to pay the debts of a defined benefit plan whether such action is initiated by the government or by the  trustees of a defined benefit or a defined contribution plan.

First, unlike the case with a single employer defined benefit plan, if a multiemployer defined benefit plan becomes insolvent, the PBGC (the governmental agency which insures a portion of the benefits payable by most privately sponsored defined benefit plans) does not take over the plan.  The plan continues to be administered by the trustees of the plan.  Instead of taking over the plan, the PBGC loans money to the multiemployer plan in an amount sufficient to allow the plan to continue to pay the guaranteed level of benefits. The PBGC will not start lending money to the plan until the plan is insolvent (the plan’s available resources are insufficient to pay benefits under the plan when due for the plan year) and the plan has reduced the benefits to the level guaranteed by the PBGC.  Available resources generally are the plan’s own cash, marketable assets, and withdrawal liability payments.  Available resources do not include assets of a defined contribution plan, even if the plan sponsor is the same and even if the participants in both plans are identical.

The Central PA Teamsters Defined Benefit Plan is a separate legal entity.  It has its own plan document, its own Summary Plan Description, its own plan number, its own tax return, and its own IRS determination letter.  The RIP also is a separate legal entity.  Using RIP plan assets to benefit the Defined Benefit Plan would violate one of the most basic tenants of ERISA-the exclusive benefit rule set forth in Section 404(a)(1)(A) of ERISA.  This rule provides that the assets of an ERISA plan may be used solely to provide benefits for participants and beneficiaries of that plan and to defray the reasonable costs of administering that plan. Not one penny of RIP’s assets may be used by the Trustees or by the government to benefit participants and beneficiaries of the Defined Benefit Plan.   Under certain circumstances, a participant may elect to transfer his or her own RIP assets to the Defined Benefit Plan.  Such a transfer may only occur at the time of retirement and may only be made by the affected participant.

 Years ago when money was needed in the Defined Benefit Plan, future contributions by employers to the RIP were required to be made to the Defined Benefit Plan. Because the money had never been contributed to the RIP, and related to contributions for future work which was not yet performed, the money had never been an asset of RIP so the federal district court held that it could be contributed to the Defined Benefit Plan. Once money is contributed to a qualified plan, such money, and earnings on that money, can’t be used except to pay for benefits for participants and beneficiaries of that plan and to pay the reasonable costs of administering that plan.  Using RIP money would also violate the exclusive benefit rule in the Internal Revenue Code and a number of other provisions of ERISA.   

When Am I Eligible for Pension Benefits under the Defined Benefit and Retirement Income Plans?

Please refer to the Defined Benefit and Retirement Income Plan Summary Plan Descriptions which are posted on this website.

I recently received my annual Benefits Statement from the Central Pennsylvania Teamsters Pension Fund. Can you give me an explanation of how contributions and benefits are calculated for the annual statement?

The annual benefits statements for the prior year are generally mailed in the spring. The Pension Department waits until mid-February to allow for the majority of contributions to be reported before that information is forwarded to the Fund actuaries to calculate the benefit estimates and produce the statements. It is important to note that the annual benefits statements are estimates only and based on the information available to the Pension Department at the time the statements are produced. In addition, future benefit projections are estimates only and are a function of future contributions, benefit accruals and “benefit caps” in effect for a specific year. Future benefit amounts are based on the assumption that future contributions and accruals do not change.

Monthly contributions to the Central Pennsylvania Teamsters Pension Fund are negotiated amounts paid to the Fund on a specified hourly or monthly basis. Some factors which may influence the amount your employer remits (and for which you are credited) include the number of hours that your employer reports you worked in a month (this number is affected if you are out of work due to illness or injury) whether contributions are credited at a later than normal date (such as contribution obligations uncovered during an audit) or delinquent payments from your employer. In addition, contributions may change at the anniversary date of a contract (for example, a negotiated increase in pension contribution rates may occur mid-year).

Your Future Service monthly benefit is equal to 1.25% of the aggregate Contributing Employer contributions made on your behalf for Plan Years beginning on or after January 1, 2003, subject to the maximum benefit accrual (the “benefit cap”) in effect during a particular year. In addition, you may also be eligible for a Past Service monthly benefit you may have earned prior to the expiration date of your collective bargaining agreement in 1987, 1988 or 1989, plus an account balance from the Retirement Income Plan (RIP) 1987. Your pension benefits statement includes all plans when calculating your estimated retirement benefit.

The Central Pennsylvania Teamsters Pension Fund Board of Trustees sets the “benefit cap” each year after the Plan’s actuary determines the financial status of the Plan. For all participants, the cap resets back to $140 at the beginning of each year subject to revision by the Board of Trustees.

 

What Are My Options for Receiving Benefits under the Defined Benefit Plan at Retirement?

There are two normal forms of benefit payments. If you are unmarried when your payments commence, your benefit automatically will be paid in the form of a Single Life Annuity with 36 Months Certain.

If you are married when your payments commence, your benefits will be paid in the form of a Qualified Joint and 50% Survivor Annuity, unless you elect to have your benefit paid in a Single Life Annuity with 36 Months Certain, subject to written spousal consent. You may also elect to have your benefit paid in the form of a Qualified Joint and 75% Survivor Annuity or Qualified Joint and 100% Survivor Annuity without the consent of your spouse. Amounts paid in the form of a Qualified Joint and 50% Survivor Annuity, Qualified Joint and 75% Survivor Annuity or a Qualified Joint and 100% Survivor Annuity are actuarially equivalent to the amounts you would have been paid under the form of a Single Life Annuity with 36 Month’s Certain based upon the joint life expectancies of you and your spouse.  
 
Please note:  The Qualified Joint and 50% Survivor Annuity, the Qualified Joint and 75% Survivor Annuity and the Qualified Joint and 100% Survivor Annuity benefits are payable upon your death only to the spouse you named at the time you completed your retirement application. If your spouse at the time of retirement pre-deceases you, the monthly benefit does not continue to be paid to another beneficiary. If you and your spouse at the time of retirement become divorced, your spouse at the time of retirement would still receive the Qualified Joint and Survivor Annuity benefit you elected for the remainder of his or her lifetime upon your death.

If you meet certain age and service requirements, you also have the option of taking your benefits early. There may be a reduction in the amount of your benefits if you choose one of the early options.

The benefit otherwise payable to you under the Defined Benefit Plan may be increased if you are eligible for (1) the Combined Minimum Monthly Benefit, (2) the Rule of 82-85, or the (3) Additional Alternative Benefit.  Refer to your Summary Plan Description for details.

Who is Eligible for the Combined Minimum Monthly Benefit?

Subject to the age and service requirements described in the above chart entitled Central Pennsylvania Teamsters Pension Fund Eligibility and Amount of Pension Benefits, the Combined Minimum Monthly Benefit is available to:

All eligible UPS employees who completed an Hour of Service on or after October 1, 2002, and

All other eligible participants who completed an Hour of Service on or after November 1, 2002.

In addition, subject to the specific eligibility requirements described below, the following three groups are eligible for the Combined Minimum Monthly Benefit:

Former participants who were laid off by Consolidated Freightways on or after September 3, 2002 (and who would have been eligible for the Combined Minimum Monthly Benefit for that layoff) are eligible for this benefit if they (i) had 25 or more years of Benefit Service at September 3, 2002 and (ii) were age 57 by November 1, 2002.

Certain participants who were laid off from Covered Employment on or after January 1, 2002 and who, at the date they were laid off otherwise met the age and service requirements for the Combined Minimum Monthly Benefit.

Certain participants who became disabled on or after January 1, 2001, and who, at the date they became disabled, otherwise met the special eligibility requirements for the Combined Minimum Monthly Benefit.

If you leave Covered Employment on or after your attainment of age 57 with 25 or more Years of Benefit Service under the Plan, your benefit will be at least equal to the Combined Minimum Monthly Benefit.

To qualify for the Combined Minimum Monthly Benefit, you must:

Retire on or after November 1, 2002 (October 1, 2002 for eligible participants who are UPS employees), and

Be at least age 57 with 25 or more Years of Benefit Service when you retire.

 In addition, you must satisfy the following three rules:

  • “Two Year” Rule-To satisfy this rule, your Employer must have been obligated to contribute to the Plan on your behalf for at least 1,000 Hours of Service in any two consecutive 12-month periods that end on or after you attain age 57 and on or after November 1, 2002 (October 1, 2002 for eligible participants who are UPS employees).
  • “45-day” Rule-To satisfy this rule, if your employer is a monthly contributor, it must have been obligated to contribute to the Plan on your behalf for at least two of the four months immediately preceding the date you first become eligible for the Combined Minimum Monthly Benefit. If your Employer is an hourly contributor, it must have been obligated to contribute to the Plan on your behalf for at least 200 total hours in at least three of the four months preceding the date you first become eligible for the Combined Minimum Monthly Benefit.
  • No Prior Withdrawal of Your RIP Account Balance or Prior Retirement from the Plan-Because the Combined Minimum Monthly Benefit incorporates your RIP account balance, you will not be eligible for the benefit if you have made a prior withdrawal of your RIP account (except pursuant to a Qualified Domestic Relations Order or because you receive a minimum distribution due to attainment of age 70 ½.)

If you have already Retired and are receiving payments from the Plan (except for Disability Retirement Benefits or payments made because of the Plan’s mandatory age 70 ½ rule), the Combined Minimum Monthly Benefit is not available to you.

What is the Rule of 82-85?

Under the Rule of 82 to 85, a participant whose combined age and Years of Benefit Service under the Central Pennsylvania Teamsters Pension Fund equal 82, 83, 84 or 85, will be entitled to a monthly benefit, set forth below, from the Defined Benefit Plan upon retirement. A participant must have at least 26 Years of Benefit Service to qualify for this benefit.

See the link above entitled Central Pennsylvania Teamsters Pension Fund Eligibility and Amount of Pension Benefits for monthly benefit information.

In order to qualify for the Rule of 82-85, the Participant must transfer his entire account balance in the Retirement Income Plan 1987 (RIP 1987). Participants who previously withdrew money from RIP 87 or RIP 2000 are not eligible unless the withdrawal was on account of a qualified domestic relations order or was a legally required minimum distribution on account of attaining age 70 ½.

In addition, to be eligible for the benefit, a participant must satisfy the Two Year Rule and the 45 Day Rule.

  •  “Two-Year Rule- To satisfy this rule, your Employer must have been obligated to contribute to the Plan on your behalf for at least 1,000 Hours of Service in any two consecutive 12-month periods that end after May 31, 2006 and are immediately preceding the date you first become eligible for the Rules of 82-85. The same rules apply if you fail to satisfy the Two-Year Rule on account of layoff or disability as apply under CMMB.
  • “45-day” Rule- To satisfy this rule, if your Employer is a monthly contributor, it must have been obligated to contribute to the Plan on your behalf for at least two of the four years immediately preceding the date you first became eligible for the Rule of 82-85. If your employer is an hourly contributor, it must have been obligated to contribute to the Plan on your behalf for at least 200 total hours in at least three of the four months immediately preceding the date you first become eligible for the Rule of 82-85. 

What is the Additional Alternative Benefit?

Participants who meet certain conditions may elect to receive an Additional Alternative Benefit. This benefit is available to participants who:

  • Elect to receive a Single Life Annuity with 36 Months Certain or a Qualified Joint and 50% Survivor (or 75% or 100%) Survivor Annuity.
  • Have an account balance in the RIP; and
  • Are not ineligible because they elected to receive a Partial Pension, they do not have a balance in the RIP, or they work for an employer that has only participated in the RIP. 

Beneficiaries of Qualified Pre-Retirement Survivor Annuities (whether payable to widows of Participants who died before reaching Normal Retirement Age) and of Single Life Annuity with 36 Months Certain Benefits are ineligible to elect the Additional Alternative Benefit.

In order to elect this benefit, you must elect to have a trustee-to-trustee transfer made on your behalf from the RIP to the Defined Benefit Plan. The amount to be transferred must consist of the portion of each Employer’s contribution to the RIP on your behalf through February 28, 2002 that does not exceed your Base Level of contribution, plus earnings allocable thereto. For this purpose, the Base level means the highest contribution.

Your transferred amount will then be converted to an actuarially equivalent benefit you had otherwise accumulated under the Defined Benefit Plan so that you will be deemed to have accumulated vesting and benefit service through February 28, 2002 under the Defined Benefit Plan at the same rate and under the same conditions that existed as of the effective date of your participation under the RIP Plan.

What are My Options for Receiving Benefits under the RIP 1987 Plan?

Your options for receiving benefits under the RIP 1987 Plan are as follows:

  • Total Lump Sum Payment. You may receive the entire amount in a check, roll over the entire amount, or receive part of the distribution and roll over the balance. (Partial rollovers are not permitted for amounts less than $500.) 
  • Partial Lump Sum Payment and Monthly Installments. (The Partial Lump Sum may not exceed 50% of the total balance, and the remainder is paid in monthly installments each of which must be the greater of $125 or 1/240th of the remaining balance.  Payments must be for a period of at least 12 months.) In addition, participants may elect to take a partial lump sum payment in an amount of no less than $1,000 once per calendar year.
  • Partial payment (once per calendar year: amount must be in excess of $1,000).
  • Monthly Installment Payments of the greater of $125 or 1/240th of the balance each month for a period of at least 12 months. If you are married, you must obtain written spousal consent for this option.

MONTHLY INSTALLMENT PAYMENTS ADDITIONAL RULES:   If you elect to receive installment payments, you may increase, but never decrease your monthly installments. You may elect to increase the monthly amount one time each year until the balance is exhausted. If you elect to increase the amount of the monthly installment, the 10 year or less payout test for tax purposes is recalculated based upon the current balance and installment payment. See below for discussion summarizing tax consequences. If you begin receiving monthly installments, and you later decide to withdraw your remaining balance, your balance will ONLY be paid out or rolled over after the next monthly valuation following receipt of the appropriate written instructions. 

NOTE:   If you receive a total or partial lump sum, or you elect monthly installment payments for a period of less than 10 years, then you must complete the Direct Rollover Election Form to let us know whether you want to roll over your benefits to another employer plan or an IRA. In either case, if you are married, your spouse must consent and sign the Spousal Waiver Form.

  • Purchase of a Joint and Survivor Annuity from an insurance company using your entire Account. You may elect a Single Life Annuity (with your spouse’s consent if you are married) or a 50%, 75% or 100% Joint and Survivor Annuity.
  • Transfer to the Central Pennsylvania Teamsters Defined Benefit Plan.  This option is available only if you are eligible for the CMMB, the Rule of 82-85 or the Additional Alternative Benefit.  If the option you select does not require you to transfer your entire Account balance, then you receive your balance in a lump sum, which you may roll over, receive in a check, or both (assuming that the amount to be rolled over is at least $500). 

If you elect to receive a Total or Partial Lump Sum Payment from the Retirement Income Plan 1987 (RIP 1987), you may choose to do any of the following options with your RIP balance:

  • You may receive the RIP 1987 benefit when you stop working for all contributing employers after you reach retirement age, or you may leave your balance in the Fund until you attain age 70 ½, at which time distribution must begin. The Account will continue to be credited with the same net earnings or net losses as are the Accounts of the active participant.  If you elect to receive your entire account balance, you may receive the entire amount in a check, roll over the entire amount to another employer plan or to an IRA or receive part in a check and roll over the balance.  To the extent that you receive a distribution for which you do not request a rollover, there are special tax rules, summarized below.
  • You may receive a partial lump sum benefit and the balance in monthly installments, subject to the rules in the preceding section.  To the extent that you receive a distribution for which you do not request a rollover, there are special tax rules, summarized below.
  • Retirement Income Plan balances under $500 can be paid either as a lump sum or rolled over but not both.   

IMPORTANT TAX RULES IF YOU RECEIVE A DISTRIBUTION FOR WHICH YOU DO NOT ELECT A DIRECT ROLLOVER

  • If you elect to receive any amount as a distribution from the Fund (unless it is an installment in a series of monthly installments payable for a period of at least 10 years) and do not elect to have the Fund roll over your distribution to another employer plan or to an IRA, the Fund is required to withhold 20% of your distribution and pay it to the IRS.   There is an exception if the total amount paid to you in a calendar year does not exceed $200.  You can take a credit against your federal income taxes for the amount that the Fund must withhold.
  • If you receive a distribution for which you do not elect a direct rollover before you reach age 59 ½, you usually will be subject to a 10% non-deductible IRS penalty tax in addition to federal income tax. The 10% penalty tax will not apply if you continue to work for a contributing employer until you have reached at least age 55 and then request a distribution at or after retirement. There are several other exceptions to the 10% penalty tax.  You should request a summary of these rules from the Fund Office and also consult with your own tax advisor. 

I have retired from employment and am eligible to begin receiving retirement benefits under the Defined Benefit and RIP Plan. Must I begin receiving benefits from my DB and RIP Plan immediately, or can I delay receiving benefits from one or both plans?

You may elect to defer benefits after you stop working for a contributing employer by completing a form provided to you by the Pension Department. You may receive benefits from one Plan, but decide to defer receipt of benefits from another Plan.  Please note however that your right to elect the CMMB or Rule of 82-85 benefits may be jeopardized or lost if you elect to receive your RIP benefits and defer receipt of your benefits under the Defined Benefit Plan.  In accordance with IRS regulations, you are required to begin collecting all benefits on or before April 1 of the year following the year you attain the age of 70 ½. The receipt of benefits required by this rule will not impact your eligibility for the CMMB or the Rule of 82-85 benefits.  

What Are the Rules for Suspension of Benefits if I Work After I Begin to Receive Benefits?

The Pension Fund’s Suspension of Benefit Rules generally provide that your monthly pension benefit will be suspended (i.e. stopped) if you are reemployed after retirement in a similar type job (or supervising a similar type job) that you had prior to retirement. *   However, there are exceptions to this rule.

Your monthly pension benefits will not be suspended for any month in which you are paid for less than 56 hours, regardless of whether the pay is for working or non-working hours. In determining whether you are paid for 56 or more hours, the Fund doesn’t count pay you receive for vacation, sick time, holidays, disability or severance.

Additionally, your benefits will not be suspended unless all three of the following apply to your new job:

  • The job is in an industry or business in which employees covered by the Pension Fund are employed, and
  • The job is in the trade or craft in which you worked as a Teamster. (Note: this “trade or craft requirement” for suspension will generally be met if your present job requires you to use the skills that you used as a Teamster), and
  • The job is in the same geographic area covered by the Pension Fund. 

Furthermore, the Pension Fund will not suspend pension checks to any person who is age 70 ½ or older.

NOTE-Effective June, 2003, the Fund will not suspend the benefits of individuals who have attained age 67, have participated only in the Fund’s Defined Benefit Plan, and whose total monthly benefit does not exceed $150. However, this rule only applies to individuals who work for a contributing employer in a position for which contributions to the Fund are not required.

NOTE-Effective June, 2004, the Fund will not suspend the portion of a Retired Employee’s benefits that were earned prior to January 1, 1987 unless the Retired Employee is working for an employer for whom he worked prior to January 1, 1987 or for an employer that is a successor to such employer or an affiliate of such an employer.

If you have any questions about whether or not your acceptance of a new job would cause your benefits to be suspended, you should contact the Pension Fund for guidance. It is each participant’s responsibility to advise the Pension Fund if he or she returns to work after retiring.

The entire Suspension of Benefits policy can be found on the Fund’s website, www.CentralPATeamsters.com under the Pension Section.

*Prior to your retirement (cessation of work for a contributing employer and application for Retirement Benefits), your benefits will not be paid unless you have attained age 70½.

When Should I Notify the Fund That I am Planning to Retire?

It takes about 90 days to process your paperwork for retirement. If you had time in another Teamsters Pension Fund and are requesting a reciprocal pension, the processing time can take up to 6 months.  Therefore, make sure to notify the Fund Office at least 90 (or 180 days) in advance of your desire to start your pension.

When Is My Last Day of Work?

The Pension Fund will request a statement from your employer indicating your last day of work. The Fund considers your last day of work to be your last physical day of work for the contributing employer (regardless of whether or not you are working in Covered Employment). 

What If I Had Time in Any Other Teamsters Fund?

If you have time in another pension fund(s) besides the Central PA Teamsters, you will be asked to provide the employer name, Local Union Number(s) and approximate dates of employment.  The Central PA Teamsters Pension Fund requires this information in order to research the records of other funds in order to determine if you qualify for a reciprocal pension.

Is My Spousal Information Up-to-Date?

Please check with the Fund Office to confirm your beneficiary information. You will need to supply your marriage certificate with your pension request, as well as birth certificates (or acceptable alternative proof if securing a birth certificate is impossible) for yourself and your spouse. If you are divorced from your spouse who is listed on your beneficiary information, you will need to provide a divorce decree. If your spouse is deceased, you will need to supply a copy of the death certificate.  It is very important that you make sure that your beneficiary designation names the person or persons that you want to receive any benefit available on your death.  You should contact the Fund Office to update your information if it is out-of-date.

How Do I Get Started with My Request for Pension?

Call the Pension Department at the Fund Office to notify us of your intent to retire. The Pension Department will send you a “Request for Pension Application” for you to complete. You will be asked to complete and return the request, along with copies of your and your spouse’s (if you are married) birth certificates as well as a copy of your marriage certificate.

Central Pennsylvania Teamsters Pension Fund
P.O. Box 15223
Reading, PA 19612-5223
Toll Free in PA:
1-800-343-0136
Toll Free in USA:
1-800-331-0420

 

Central Pennsylvania Teamsters Health & Welfare Fund
P.O. Box 15224
Reading, PA 19612-5224
Toll Free in PA:
1-800-422-8330
Toll Free in USA:
1-800-331-0420

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