"A Pension is only important if you live ... which most of us do, far longer then we expect."

A traditional pension fund promises you a secure, guaranteed income as long as you and your spouse live. Some employers will tout their 401(k) retirement plan, but these plans are limited in that you receive the account balance (which you paid the most if not all of), but once the balance is depleted, that's all you receive.

Using a simple example lets say you have saved $300,000.00 in your 401(k) fund. You retire at 60 and plan for you or your spouse to live 30 years. $300,000.00 / 30 years = $10,000.00 per year which would equal $833.33 per month or $192.31 per week plus any Social Security that may be available. That isn't much to live on even if you were to reduce your living expectations to 20 years, it only gives you an additional $96.15 per week to live on.

I know you are thinking, I would be investing this money and would earn dividens. This may be true however, the reverse could also be true, (remember 2008), you could lose money in your investments. Regardless you would need to be saving $7,500.00 per year for 40 years to reach the above amount without considering any dividens earned or lost. A pretty tall order for most working people who are finding their earnings getting stretched thinner and thinner every year.

With a "defined benefit" pension, you and your spouse (determined by the method of payment you choose) receive benefits your entire life. The monthly benefit you receive is based on the pension credits you have earned as of the date you retire, the benefit rate for each credit in effect when you retire, and are paid for entirely by the Employer.

Local 505 members will receive three separate pensions and can possibly receive four which include:

National Electrical Benefit Fund (NEBF) - Paid by the Employer - 100% at age 62

Local 505 Pension Fund - Paid by the Employer - 100% at age 60

IBEW International Pension - funded by your quarterly dues available at 62

IRC 414(k) (funded by Employer payments made on your behalf that exceed the required Local 505 Pension Fund rate)

For example, currently when you retire from Local 505 with 30 years of service, based on 1750 hrs per year (most workers work more hours), you will receive a monthly pension payment of $2,575.39 or $30,904.68 per year which equals $594.32 per week average for the rest of your life, this is in addition to Social Security, IBEW International Pension, and any IRC 414(k) funds in your personal account.

Local Pension: 1750 x 30 = 52,500 hrs ÷ 130 = 403.85 units x $4.00 (current benefit unit) = $1615.39 NEBF - 30 years x $32.00 per year (current monthly benefit unit) = $960.00

Note: Above example based on retirement at 62 with no surviving spouse benefit selected and at the current benefit rate of $4.00 per unit. Earlier retirement at age 60 will reduce the NEBF calculation and/or selection of 50%, 75% or 100% surviving spouse benefit will reduce the above calculation for both pension plans. Also, this example is only based on 1750 hours per year which is less than most members work.

Considering that less than 24% of U.S. workers with a high school diploma or associate's degree received a pension in 1999 and those who did receive a pension received an average income of $964 a month, our Pension Programs help to allow you the opportunity to retire with the dignity and security you deserve. If you would like to find out how you can work towards your retirement, instead of working for your employer's ability to retire, contact us.