Frequently Asked Questions
Q. When am I eligible to participate in this Plan?
A. You become a Participant in the Plan as of the first date that you work for an employer which is obligated under a collective bargaining agreement to make a contribution to the Fund on your behalf.
Q. How much of my compensation can I defer?
A. You may elect to defer up to twenty-two percent (22%) of your compensation (in 1% increments), but no more than the maximum amount set by the IRS on an annual basis. The maximum is $18,000 for 2017 and increases to $18,500 in 2018. (Participants age 50 and above may defer an additional $6,000 per year.) Your employer will deduct the amount you have elected from your wages and will contribute this amount to the Plan, in addition to any contribution it is required to make on your behalf pursuant to the collective bargaining agreement.
Q. What do I become vested in my benefits?
A. You are always 100% vested in your deferred compensation and the money contributed on your behalf by your employer. In other words, you have a non-forfeitable right that money, even if you separate from service.
Q. How do I apply for benefits?
A. You apply for benefits by filing an Application for Retirement Benefits with the Fund Office.
Q. Are there any penalties for withdrawing my account balance?
A. In an effort to encourage savings for retirement, the IRS generally imposes a 10% penalty on the amount of your withdrawal. This penalty is in addition to any income tax you may owe on the withdrawn amount.
The 10% penalty does not apply to:
- A withdrawal after you have reached age 59½;
- A distribution to your beneficiary following your death;
- A distribution to you due to your total and permanent disability;
- A withdrawal after you have reached age 55 and have ceased all employment;
- A payment to an alternate payee pursuant to a Qualified Domestic Relations Order.
You can also avoid the 10% penalty (and income tax on the distribution) if you roll the distribution over to an IRA or to another qualified plan which accepts rollover contributions.
Q. What happens to my account if I die?
A. Upon your death, the balance of your account is paid to your designated beneficiary. You may choose anyone as your beneficiary. However, if you are married, your spouse must provide notarized written consent to the designation of anyone else as your beneficiary. If there is no designated beneficiary on file with the Fund, your account balance is paid to your spouse. If you have no surviving spouse, the account balance is paid to your surviving children in equal shares. If there are no surviving children, the account balance is paid to your estate.
Q. Can I get a loan from the Fund?
A. Yes. You may apply for a loan if you have had contributions made on your behalf by an employer during the two consecutive years before applying for the loan. The minimum loan amount is $1,000; the maximum loan amount is the lesser of $50,000 or 50% of your account balance. Your spouse must give written, notarized consent to the loan. The maximum period for paying back the loan is five years. (A loan taken to purchase a home can be paid back over a longer period of time.) If you default on your loan payments, you cannot apply for any additional loans. You can apply for a loan (or to refinance a current loan) once every twelve months from the date of your previous loan.
Q. Am I allowed to withdraw any money from my account while I am working?
A. You can make a hardship withdrawal from that part of your account that comes from your compensation deferrals, but only if you can prove that the withdrawal is necessary due to an extreme financial hardship. Extreme financial hardship includes, but is not necessarily limited to, the following situations encountered by you or your immediate family:
- Uninsured physician or hospital expenses;
- College educational expenses for the next 12 months;
- Purchase of a principal residence;
- Prevention of eviction from, or foreclosure of a mortgage on, your principal residence.
The amount of the withdrawal cannot be more than the amount that you need to meet your financial obligations. A hardship withdrawal cannot be taken if you have other sources from which you can obtain funds to meet your extreme financial hardships. These sources include, but are not limited to, loans that you can take from this Fund or the Annuity Fund of the Electrical Industry of Long Island. Hardship withdrawal requests may be made to the Trustees only once each Plan Year, upon thirty days prior written notice. In the event of a hardship distribution, your compensation deferrals will be suspended for six (6) months after receiving the distribution.