Transcript FIRST PAGE

Elevator Constructors Union Local No. 1
Annuity and 401 (k) Plan
Retirement Seminar
October 29, 2009
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Elevator Constructors Union Local No. 1
Annuity and 401 (k) Plan
Retirement Seminar
Presenters
National Elevator Industry Pension Plan
Rob Betts, Executive Director
Jim Govannicci, Benefit Manager Pension Plan
ECU Local No. 1 Annuity and 401(k) Plan
Rita Wisniewski, Fund Manager
Caroline Gordon, Assistant Administrator
Lucille Hart, Administrator
Vanguard (ECU Local No. 1 401(k) Plan)
Colleen McGinley
Maureen Rayburn
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WHEN CAN I RETIRE
AND HOW MUCH MONEY DO I NEED?
To answer this question, consider the following:
 Age
 Marital Status
Can I afford to retire?
 Financial Obligations
 Expected Retirement Income
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AGE
 What is your life expectancy?
 Will you have enough money for all the years you are expected
to live?
 At what age can you get your pension?
 Are there penalties for taking your pension early?
Example of life expectancy:
Male age 63 is expected to live to age 82
Female age 63 is expected to live 85½
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MARITAL STATUS
 Are you married?
 Do you want to provide a
survivor benefit for your
spouse?
 Do you have children?
 How old are they?
 How will you provide for their
future?
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FINANCIAL OBLIGATIONS
 Mortgage
 Tuition
 Car Payments
 Medical Expenses
Experts say you will need 80% of your pre-retirement income after
retirement.
For example, if you earned $100,000 a year before retirement, you would
need $80,000 a year after retirement to maintain your life style.
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EXPECTED RETIREMENT INCOME
Retirement Bench
Personal Savings
Savings Accounts
Real Estate Investments
IRA’s
Social Security
Pension Plans
NEI Pension Plan
Local 1 Annuity & 401(k) Plan
Social Security
Retirement Benefits
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RETIREMENT INCOME FROM PERSONAL SAVINGS
 Savings Accounts
 CD’s
 Investments
 IRA’s
 Equity in your Home
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RETIREMENT INCOME FROM SOCIAL SECURITY
 Based on earnings throughout your working career
 Average Social Security Monthly Benefit $945
 Age for full Social Security Benefits increases from 65 – 67
For example:
If you were born 1937 or earlier
1943 – 1954
1960 or later
Full Social Security at 65
Full Social Security at 66
Full Social Security at 67
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RETIREMENT INCOME FROM PENSION PLANS
National Elevator Industry Pension Plan
ECU Local No. 1 Annuity Plan
ECU Local No. 1 401(k) Plan
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PENSION PLANS
NEI Pension Plan – Defined Benefit Plan
Pension formula is stated in Plan rules
Participant must meet age and service requirements
Example formula:
Years of Service x $ Amount = Monthly Pension
25 (years)
30 (years)
x
x
$ 98
$ 98
= $ 2,450
= $ 2,940
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PENSION PLANS
ECU Local No. 1 Annuity Plan – Defined Contribution Plan
Contribution is defined in collective bargaining agreement
For example, current Annuity contribution rates for Journeypersons are:
For construction work - $7.25 per hour
For service work $7.10 per hour
Total of all Contributions
- Loan Balance
- Withdrawals
+/- Investment Income
- Operating Expenses
-------------------------------------= Annuity Account Balance
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PENSION PLANS
ECU Local No. 1 401(k) Plan – Defined Contribution Plan
Voluntary Plan
Pre-tax Employee Contribution
% of Wages or Flat Dollar Amount up to Annual Statutory Limit
2009 Annual Limit
2010 Annual Limit
$16,500 + $5,500 Catch-up
$16,500 + $5,500 Catch-up
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Annuity
401(k)
Assets (as of 12/31/08)
$376,009,118
$45,828,179
Administration
Board of Trustees
Board of Trustees
Investments
Trustee Directed
Participant Directed
Participation
Automatic
Voluntary
Vesting
Immediate 100%
Immediate 100%
Contributions
Specified Amount per hour per CBA
Account Statements
Quarterly and Annual
% of wages or flat $, up to annual
limit
Quarterly
Loans
Yes
No
Special Financial Needs Withdrawals
Yes
No
Account Distribution
Payment Methods
Beneficiaries
Requirements are the same for both.
Differ between Annuity and 401(k)
Same for both
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Tax Consequences
Same for both
LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Account Distribution - Requirements
 Age 65
 Leave the Industry (no contributions for 6 months)
 Retire from the NEI Pension Plan
 Total and Permanent Disability (SSA Award)
 Age 70½ Minimum Distributions
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Payment Methods
1. Lump Sum Payment - Rollover over or direct payment to Participant –
Available for both Annuity Account and 401(k)
2. 10 Annual Installments – methods are different under each plan
3. Qualified Joint and Survivor Annuity (monthly benefit to Participant with
survivor benefit to spouse) – Available for Annuity Account only
4. Straight Life Annuity (monthly with no survivor benefit) – Annuity only
4. Investment Yield Only – Applies to Annuity Account only
5. Partial Lump Sum Payment with 10 annual installments
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Who will get your Annuity and 401(k) Contributions if you die?
Before you Retire:
 If married, Spouse, unless you designated another person and your
spouse consents
 If not married, you may name anyone as Beneficiary
 Designated Beneficiary under NEI Pension Plan
 Your estate
After You Retire:
 Spouse, if you are receiving a QJSA
 No one, if you received a Lump Sum or Straight Life Annuity
 Designated Beneficiary for all other payment methods
(If married, spouse must consent)
Special Note: Qualified Domestic Relations Orders (QDRO’s)
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Distribution Rules
Annuity Account Only
• Application postmarked or hand delivered to Fund
Office by April 1 – Participant receives:
– Account Balance as of 12/31 of prior year
– Plus contributions between January 1 and distribution
– Less Loan Balance
**********************
– 100% of Account Balance if Prior Year’s Yield and Operating
Expense has been calculated or
– 80% Initial Payment & remaining 20% when Prior Year’s Yield and
Operating Expense is determined (by end of March)
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Example #1
• Jim has Annuity Account of $200,000 as of 12/31/08
• Jim’s application is postmarked before April 1, 2009
• If the prior year’s Yield and Operating Expense have been calculated by
the time Jim files his Application, Jim will receive one payment = 100%
of his 12/31/08 plus/minus the 2008 Yield and Operating Expense.
*******************************
• If the prior year’s Yield and Expense have not been calculated by the
time Jim files his Application, Jim will receive two payments:
• First Payment = 80% of his 12/31/08 Account Balance ($160,000)
• Second Payment = 20% withheld from Account, plus/minus the Prior
year’s Yield and Expense
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Distribution Rules
Annuity Account Only
• Application postmarked or hand delivered to Fund
Office after April 1 – Participant receives:
–
–
–
–
Account Balance as of 12/31 of prior year
Plus contributions between January 1 and distribution date
Less Loan Balance
Plus/Minus Pro rata of current year’s Yield and Operating Expense (based
on number of days full Account remained in Fund divided by 365)
***************************
– Initial Payment = 80% of Account Balance as of 12/31 (paid in year
distribution is requested)
– Supplemental Payment = 20% withheld from Account, plus/minus pro rata
share of current year Yield and Operating Expense (paid in following year)
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Example #2
• Sam has an Annuity Account of $400,000 as of May 1, 2009
• Sam’s application is received at the Fund Office on May 15, 2009
• Assume the Yield for 2009 is 5% and the Expense is $580
********************
• Sam will receive his Annuity Account in two payments as follows:
– Payment # 1 = 80% of Sam’s Account ($320,000) will be paid June 15, 2009
– Payment #2 = The remaining 20% ($80,000), plus a pro rata share of the
Yield ($9,095.88), minus a pro rata share of the Operating Expense
($263.78) will be paid in March of 2010. The supplemental check would
total $88,832.10
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Tax Consequences
 Federal, state and local taxes due when Pension is paid to you
 Rollovers (to a traditional IRA or other qualified plan) – no taxes withheld
or due in current year. You can roll over a Lump Sum or Partial Lump
Sum
 Payments eligible for Rollover that are paid directly to participant –
Mandatory 20% withheld as federal income tax
 Payments not eligible for Rollover (e.g., 10 annual installments, monthly
annuity) – Mandatory 10% withheld unless you elect other amount
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Tax Consequences (Continued)
 10% penalty for withdrawal prior to 59½ unless rolled over (exceptions include
separation from service during or after age 55 and retirement due to disability)
 Special tax treatment for individuals born before 1/1/36 (10 year average or
capital gain – see accountant)
 Spouse has same options as Employee.
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SAMPLE BENEFIT CALCULATION #1
Lump Sum Payment – Rollover or direct payment
 Entire account is paid in a lump sum
 Can be rolled over to another qualified plan or IRA
 Not taxed when rolled over
 Taxed as ordinary income as you take money out of the roll over
 If not rolled over, mandatory 20% tax withholding
Example of Benefit Calculation
Lump Sum
Member Works
Annuity Account Balance
Member Age:
Spouse Age:

25 years
$235,000
63
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Lump Sum – Participant receives entire account balance $235,000
Earnings %
$235,000
$235,000
$235,000
$235,000
@
@
@
@
Annual Earnings
4%
6%
8%
10%
=
=
=
=
Lump Sum (earning 6%)
+ NEI Pension Benefit (with 50% J&S)
+ Social Security
+ Local No. 1 401(k) Plan
+ Personal Savings
$ 9,400
$ 14,100
$ 18,800
$ 23,500
Monthly Earnings
$ 783.33
$ 1,175
$ 1,567
$ 1,958
$ 1,175
$ 2,075
$ 1,000
$ 4,250 taxable monthly retirement income
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SAMPLE BENEFIT CALCULATION #2
Qualified Joint and Survivor Annuity (monthly with survivor benefit)








Account balance used to purchase monthly annuity from an insurance company
50% J&S
Reduced monthly payment to pensioner with 50% continuing to spouse
If spouse dies, pensioner continues to get reduced monthly amount
Cannot be rolled over
Taxed as ordinary income as you receive the benefit
Automatic for married participant
Participant can elect another payment method, with written spousal consent
Example of Benefit Calculation
Qualified Joint and Survivor Annuity
Member Works
Annuity Account Balance
Member Age:
Spouse Age:
QJSA (50% J&S)
+ NEI Pension Benefit (with 50% J&S)
+ Social Security (reduced @ age 63)
25 years
$235,000
63
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$ 1,230 per month*
$ 2,075
$ 1,000
$ 4,305 taxable monthly retirement income
+ Local No. 1 401(k) Plan
+ Personal Savings
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* If pensioner dies before spouse, spouse receives $615 per month for life.
SAMPLE BENEFIT CALCULATION #3
Ten Annual Installments
 Annual payments = 1/10th of original account balance = +/- investment income and expenses
 Two payments each year: 1/10th in January and net investment income in April
 Taxed as ordinary income as you receive the benefit
 Cannot be rolled over
Member Works
Annuity Account Balance
Member Age:
Spouse Age:


Example of Benefit Calculation
Ten Annual Installments
25 years
$235,000
63
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Ten Annual Installments
First Year
$ 23,500 ($1,958 per month)
Second Year
$ 23,500 +/- Earnings and Expenses
Third Year
$ 23,500 +/- Earnings and Expenses
Etc.
Ten Annual Installments (Approx.)
$ 1,958 Per Month (ends in 10 years)
+ NEI Pension Benefit (with 50% J&S)
$ 2,075
+ Social Security
$ 1,000
$ 5,033 Taxable monthly retirement income 1st 10 years)
$ 3,075 Monthly after 10 years
+ Local No. 1 401(k) Plan
+ Personal Savings
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Highlights of Recent Plan Changes
• 401(k) Investment Manager changed to Vanguard – July 1, 2008
• Participants no longer have to take Annuity and 401(k) accounts at the
same time
• Participants can make direct rollovers of Annuity and 401(k) accounts to
Roth IRA’s
• Non-spouse beneficiaries can make direct rollovers to IRA’s
• Annuity, J&S and Investment Yield Only eliminated as payment methods
under the 401(k) plan
• 75% J&S added as payment method for Annuity accounts
• Investment Consultant changed to The Dobbs Group at Graystone
Consulting
• Our webpage is getting a facelift
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Write or Call the Fund Office at
ECU LOCAL NO. 1 ANNUITY AND 401(k) PLAN
2185 Lemoine Avenue, Fort Lee, NJ 07024
(201) 592-6800
(212) 564-4800
or
Visit our Web Site at: www.benserconj.com
and click on the Local 1 logo
 If you have questions
 To change your address or marital status
 To request a Beneficiary Designation form
 To apply for your Annuity and 401(k) withdrawals
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ELEVATOR CONSTRUCTORS UNION LOCAL No. 1
ANNUITY AND 401(k) PLAN
2185 LEMOINE AVENUE, FORT LEE, NJ 07024
(201) 592-6800
(212) 564-4800
Union Trustees
Leonard Legotte
Michael Riegger
Robert Stork
Employer Trustees
E. James Walker, Jr. (Emany)
Michael Shields
(Schindler)
Vincent Schiavone
(Kone)
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