pension fund

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.

Getting in the Plan

You become a participant in the Plan once your employer is required to make contributions to the Fund on your behalf.

Vesting Service

Vesting gives you a non-forfeitable right to your pension. Generally, you earn a year of vesting service for each Plan year (April 1 through March 31) you work at least 500 hours in covered employment. You earn a year of vesting service 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 years of vesting service, and then 20% for each additional year of vesting service until you reach seven years. Once you have seven years of vesting service, you are 100% vested.
 

Vesting Service Credits

Vesting service credits are used to determine the type of benefit–if any–you’re eligible to receive. Once your participation begins, you generally earn one year of vesting service credit for each year in which you work at least 500 hours in covered employment.

Types of Pension

There are four types of benefits. The type of benefit you receive depends on your age and service credits when you retire from covered employment.

·         Normal Retirement Pension at age 65 (must be at least partially vested with less than 10 years of service)

·         Normal Retirement Pension at age 60 (must be 100% vested with 10 years of vesting service)

·         Early Retirement Pension at age 55 – 59 (must be 100% vested with 10 years of vesting service)

·         Disability Pension

Benefit Amount

Four factors determine the amount of the benefit you get when you retire. The amount of your monthly pension will depend on the amount of contributions made on your behalf, the benefit multiplier in effect when you earned those contributions, the type of benefit you’re eligible to receive, and the form of payment you elect. The benefit multiplier in effect as of April 1, 2006, for contributions made on your behalf on or after April 1, 2006, is 3.0%.  The benefit multiplier in effect as of January 1, 2009 for contributions made on your behalf on or after January 1, 2009 is 2%.  The benefit multiplier in effect as of October 1, 2009 is 1.5%.

How Pension Benefit Is Calculated

As of October 1, 2009, this is how a currently active particpant's Normal Retirement Pension is calculated:
 

 
Example of pension benefit for contributions paid before April 1, 2006:
$95,000.00 x 3.6% x 100% = $3,420.00 per month

To be eligible for the 3.6% benefit rate, you must have retired or terminated covered employment on or after April 1, 2000 and must have worked at least 500 hours in covered employment during any one of the Plan Years beginning April 1, 1998 or April 1 ,1999.

Example of pension benefit for contributions paid on and after April 1, 2006:
$150,000.00 x 3.0% x 100% = $4,500.00 per month

Example of pension benefit for contributions paid on and after January 1, 2009:
$250,000.00 x 2% x 100% = $5,000.00 per month

The Normal Retirement Pension is calculated differently if you left covered employment before April 1, 2000 or if you did not work at least 500 hours in covered employment in either the Plan year that began April 1, 1998 or April 1, 1999.

Depending on the form of payment you elect, you will receive an adjusted monthly benefit.

Supplemental Contributions

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 financial market losses.  The supplemental amount will be $1.00 effective October 1, 2009, increasing by $1.00 on October 1, 2010, and increasing by another $0.50 each year beginning October 1, 2011 through October 1, 2014.  However, at no time wii the amount of the supplemental contribution exceed 50% of the total hourly contribution amount.

Forms of Payment

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:
 

Surviving Spouse or Survivor Benefits

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.

Disability Benefits

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 with the Pension Plan. 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. You must have a physical or mental condition that, based on medical evidence, the Trustees find 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 with the Pension Plan . 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. You must have a physical or mental condition that, based on medical evidence, the Trustees find prevents you from working in any occupation.

Working after Retirement

The Midwest Operating Engineers Pension Fund was established to pay a pension benefit to a participant when he or she stops working and retires. If you return to work in disqualifying employment, your pension benefits may be suspended. “Suspension of Benefits” for a month means non-entitlement to pension benefits for the month.

Before normal retirement age, your pension benefit will be suspended for any month in which you work. After normal retirement age, your pension benefit will be suspended for any month in which you work 41 or more hours. If you return to work, you must be dispatched by the Union Hall.

If benefits were paid for a month for which benefits were later determined to be suspended, the overpayment shall be recoverable through deductions from future pension payments, pursuant to the provision of the Plan Document. For more information about suspension of benefits, click here.

The Plan requires that you do not work at all in your effective month of pension. For example, if your retirement date is September 1st, you cannot work during the month of September.

Reciprocity

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 or click here.