How the Plan Works
For every hour you work in covered employment, your employer contributes on your behalf to the Plan. You earn one-tenth of a benefit unit for every 90 hours you work during the year, up to a maximum of one benefit unit per year. Then, when it’s time for you to retire, we add up all the benefit units you earned throughout your career (while your employer and union participated in the Plan) and multiply them by your benefit level. This result is used to determine the monthly amount you’ll receive in retirement, subject to adjustments from the 2010 Rehabilitation Plan, as amended. The precise amount you’ll receive each month also depends on the type of pension you select.
Your union and your employer bargained over a benefit level. If you work for multiple participating employers during your career, your benefit units are likely to have different benefit levels. You may also have different benefit levels for different periods you work in covered employment.
Schedules and Participant Categories
Participant Categories and Schedules are outlined in the Adjustable Benefits notice dated April 30, 2010. Contact the Administrative Agency if you have any questions.
During collective bargaining, your union and your employer likely agreed to one of two schedules: the Preferred Schedule or the Default Schedule. If your union and employer didn’t agree to a schedule, you’re automatically covered by the Default Schedule. You can request a benefit estimate from the Administrative Agency that will include the schedule and category that applies to you.
You belong to one of five Participant Categories.
Category 1: Participants covered under the Preferred Schedule of the Rehabilitation Plan.
Category 2: Participants covered under the Default Schedule of the Rehabilitation Plan.
Category 3: Participants not covered under a Schedule due to not working in covered employment on or after April 30, 2010, or leaving covered employment after April 30, 2010, without retiring on an age pension or a disability pension and before becoming covered by a Schedule.
Category 4: Participants who retired directly from employment on an age pension or a disability pension before their employer adopted a Schedule.
Category 5: Participants covered by the Preferred Schedule with a participating employer that withdrew from the Plan within three years of adopting the Preferred Schedule.
When you work 750 hours of service in a year, you earn a vesting unit. Once you have enough vesting units, you become vested in your pension. Being vested means that you have a non-forfeitable right to a pension benefit from the Plan when you retire.
You become vested in your pension as soon as you meet one of the following conditions:
- You earned at least five vesting units or benefit units and worked at least one hour of service after 1988
- You earned at least 10 vesting units and didn’t earn at least one hour of service after 1988
- You reach age 65 while working in covered employment for a participating employer, and:
- You earned at least 1/10 of a benefit unit in the year you turn age 65, or
- You earned at least 1/10 of a benefit unit in one of the two years prior to the year in which you turn age 65, or
- You work at least 375 hours of service in the year you turn 65, or the year prior.
Breaks in Service
With only a few exceptions, like caring for a new child or taking a medical leave, you incur a break in service any year that you work fewer than 90 hours of service. Unless you’re already vested, you’ll lose all vesting units and benefits units after incurring five consecutive breaks in service.
Types of Pensions
The type of pension you’re eligible for depends on your Participant Category and your collective bargaining agreement.
Early Retirement Age Pension
The Early Retirement Age Pension is available to Category 1, Category 2, and Category 4 participants. If eligible, you can elect the Early Retirement Age Pension as early as age 55.
Your pension benefit under the Early Retirement Age Pension is reduced based on how early you retire prior to reaching age 65. The benefit is reduced based on average life expectancy. When you retire early, the pension benefit is likely to be paid for longer.
Normal Retirement Age Pension
The Normal Retirement Age Pension is available beginning at age 65 to all participants. Because the Normal Retirement Age Pension can begin at the normal retirement age of 65, no benefit reduction applies. However, if you choose not to apply for a Normal Retirement Age Pension upon reaching age 65, your benefit will be increased to account for the delay.
You’re required to begin receiving your pension beginning no later than April 1 of the year following the later of:
- the calendar year in which you attain your Required Minimum Distribution (RMD) age; or
- the calendar year in which you terminate covered employment.
No further benefit increases will occur after your required beginning date. Generally, the monthly amount you receive in retirement is calculated by multiplying your benefit units by your benefit level.
You’re only eligible for a 62/30 Pension if your union and your employer agreed to it during bargaining. If eligible, you can begin receiving a 62/30 Pension when you reach age 62 and are credited with at least 30 benefit units.
A Disability Pension is available to Category 1, Category 3, and Category 4 participants who qualify for Social Security disability benefits under the federal Social Security Act and satisfy the eligibility criteria as required by the Plan for a Disability Pension.
Ready to retire?
Contact us at least 90 days ahead of time to get a benefit estimate and to request an application package.