The Midwest Operating Engineers Pension Fund is designed to provide members with a steady monthly income after they retire. Contributing employers pay the full cost of the Fund Plan and make all contributions. Employee contributions are neither required nor allowed. Employer contributions are based on the rate(s) specified in applicable collective bargaining agreements.
You become a participant in the Plan once your employer is required to make contributions to the Fund on your behalf.
Vesting gives you a non-forfeitable right to your pension. Generally, you earn a Vesting Service Year for each Plan Year (April 1 through March 31) you work at least 500 hours in Covered Employment. You earn a Vesting Service Year for your first Plan Year, as long as you work at least one hour in Covered Employment. You are 20% vested after you have three Vesting Service Years, and then 20% for each additional Vesting Service Year until you reach seven years. Once you have seven Vesting Service Years, you are 100% vested.
There are four types of benefits. The type of benefit you receive depends on your age and your Vesting Service Years when you terminate from Covered Employment.
Your monthly benefit amount is determined based on a calculation utilizing the following information:
If you retire or terminate Covered Employment on or after April 1, 2000 and you worked at least 500 hours in Covered Employment during any Plan Year beginning April 1, 1998 or April 1, 1999, the Plan determines your monthly Normal Retirement Pension by adding the following amounts and multiplying the sum by your Vested Status:
3.6% of all Employer Contributions made on your behalf before April 1, 2000; PLUS 3.6% of all Employer Contributions made on your behalf from April 1, 2000 through March 31, 2006; PLUS
3.0% of all Employer Contributions made on your behalf from April 1, 2006 through December 31, 2008; PLUS
2.0% of all Employer Contributions made on your behalf from January 1, 2009 through September 30, 2009; PLUS
1.5% of all Employer Contributions, excluding Supplemental Contributions, required to be made on your behalf between October 1, 2009 and September 30, 2013; PLUS
1.0% for all Employer Contributions, excluding Supplemental Contributions, required to be made on or after October 1, 2013.
If you left Covered Employment prior to April 1, 2014, your benefits will be based on the Plan provisions in effect when you terminated Covered Employment.
Assume that you retire on April 1, 2014 when you are age 60, have 16 Vesting Service Years (100% vested), and you worked at least 500 hours in Covered Employment during the Plan Years beginning April 1, 1998 and April 1, 1999. Employer contributions made on your behalf prior to April 1, 2006 were $66,000, from April 1, 2006 through December 31, 2008 were $16,500, from January 1, 2009 through September 30, 2009 were $4,500, from October 1, 2009- through September 30, 2013 were $18,000 (excluding Supplemental Contributions), and from October 1, 2013 through March 31, 2014 were $4,500 (excluding Supplemental Contributions).
Your monthly Normal Retirement Pension would be calculated as follows:
|Employer Contributions prior to April 1, 2006||$66,000 x 3.6% = $2,376 Plus|
|Employer contributions from April 1, 2006 – December 31, 2008:||$16,500 x 3.0% = $495 Plus|
|Employer contributions from January 1, 2009 – September 30, 2009:||$4,500 x 2.0% = $90 Plus|
|Employer contributions from October 1, 2009 – September 30, 2013:||$18,000 x 1.5% = $270 Plus|
|Employer contributions from October 1, 2013 – March 31, 2014:||$4,500 x 1.0% = $45|
|Status x 100% Monthly Normal Retirement Pension $3,276||$3,276 Times Your Vested|
In this example, your Normal Retirement Pension is $3,276 a month—or $39,312 a year*. This monthly benefit will be paid under the normal form of payment for a single participant (i.e. 5 Year Certain and Life Annuity) If you choose any other form of benefit, your monthly benefit will be adjusted.
If you decide to retire early, your monthly Normal Retirement Pension will be reduced by .25% per month for each month you are less than your Normal Retirement Age.
Effective October 1, 2009, a portion of each hourly contribution will be allocated to the Fund as a “Supplemental Contribution”, not to be used to calculate pension benefits but will instead be added to the Plan reserves to fund the 2008 and 2009 financial market losses. In no event will the amount of supplemental Contributions be more than 50% of the total hourly employer contribution rate.
|Hourly Supplemental Contribution amount:||For hourly contributions made on your behalf from:|
|$1.00||October 1, 2009 through September 30, 2010|
|$2.00||October 1, 2010 through September 30, 2011|
|$2.50||October 1, 2011 through October 31, 2012|
|$3.50||November 1, 2012 through September 30, 2013|
For example, the chart above shows $3.50 hourly Supplemental Contributions effective November 1, 2012. However, if your employer contributes $5.00 per hour on your behalf on that date, your Supplemental Contributions will be limited to $2.50 (50% of $5.00) per hour, with the remaining $2.50 hourly employer contribution being used to determine your final monthly pension benefit when you retire.
Please refer to the Funding Improvement Plan (FIP) for more details regarding the need for Supplemental Contributions. The FIP is a temporary measure to improve the Pension Fund’s financial stability.
The forms of payment available to you depend on whether you’re single or married when you retire.The Plan offers the following forms of payment:
|If You Are Unmarried:||If You Are Married:|
|5 Year Certain & Life||Joint & 50% Survivor|
|10 year Certain & Life||Joint & 75% Survivor|
|Joint & 100% Survivor|
|Joint & 50% Survivor with Pop-Up|
|Joint & 75% Survivor with Pop-Up|
|Joint & 100% Survivor with Pop-Up|
|5 Year Certain & Life|
|10 Year Certain & Life|
* Please note: You can coordinate any of the above forms of payment with your Social Security monthly benefit to receive an Accelerated Level Income Option. You will need to submit your most recent Social Security benefit statement in order to provide you with these optional forms of payment. Please contact the Fund Office for more information.
Your pension is protected if you die. Your spouse or beneficiary may be eligible for a benefit. In the event of death, your spouse or beneficiary should contact the Fund Office.
The amount and duration of your disability benefits depends on which type of disability you have: Operating Engineer Total Disability or All Work Total Disability.
To qualify for an Operating Engineer Disability Pension, you must have accumulated at least five Vesting Service Years. You must have worked in Covered Employment for a total of at least 900 hours for which contributions were paid to the Fund in the three Plan Years immediately preceding the disability. You must be actively employed or seeking employment as an Operating Engineer with a Contributing Employer at the time the disability occurs. Based on medical evidence, you must have a physical or mental condition that, prevents you from working in regular or light duty work as an Operating Engineer.
To qualify for an All Work Total Disability Pension, you must have received a Social Security Award. You must have accumulated at least five Vesting Service Years. You must have worked in Covered Employment for a total of at least 900 hours for which contributions were paid to the Fund in the three Plan Years immediately preceding the disability. You must be actively employed or seeking employment as an Operating Engineer with a Contributing Employer at the time the disability occurs. Based on medical evidence, you must have a physical or mental condition that, prevents you from working in any occupation.
The Board of Trustees will review your disability application and will either approve or deny this benefit based on the medical evidence provided.
If you work as an Operating Engineer outside of the geographic area covered by this Fund, you may be able to have your contributions transferred to this Fund. There are two types of reciprocity: a transfer of contributions from the Away Fund to your Home Fund, and Pro-Rata, which allows you to use vesting service you earn with an Away Fund to count toward your Home Fund’s vesting service. Most reciprocity agreements have time limits for the transfer of contributions and will only cover contributions made on your behalf going back six months or less. Therefore it is important that you submit your Transfer Authorization Form immediately. As soon as you know you will be transferred to another Operating Engineers Local, call the Fund Office to check that the Fund you are going to is a reciprocal fund and to get a Transfer Authorization Form.