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1. Who we are and how to reach us. ( <--- click here)
2. Where can I get the information regarding all the Funds and related benefits?
All Summary Plan Descriptions (SPD's) are available at the Fund office. A binder, designed to maintain these SPD's will be provided to you. In addition, hardcopies of the current benefit applications, the disability and life insurance as provided under the Health & Benefit Fund, a copy of the NEBF Pension Plan, and other pertinent benefit information are also included.
3. What are the duties and compensation of the various professionals employed by the Funds?
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Actuary - The Actuary assists and advises the Trustees in determining and interpreting eligibility rules, Plan design, Plan amendments, and applicable legislative and regulatory updates. As part of that responsibility, they prepare calculations regarding the necessary contribution levels and investment returns that are required to support the Pension Fund, as well as yearly calculations of Fund valuations, accrued benefits (P and H&B), and Pension benefits (Plan and individual) and the various costs associatred with these items. Fees are set on a retainer basis for normal services and additional fees are determined on an as needed basis for "special projects" (i.e.- Pension mergers).
- Accountants/Auditors - In the past, the auditors would perform not only a complete audit of the financial and procedural aspects of the Funds, but would also provide bookkeeping and financial recordkeeping services. With the issuance of SOX-99 (Sarbanes Oxley), auditors are no longer allowed to perform both; therefore, the auditors perform the audit and issue their opinions on those annual financial statements. They also provide advice and assist in the preparation and filing of required tax documents (990's; 5500's), and review of year-end tax filings (i.e. 1099's). In addition, cyclical payroll audits of all participating contractors (a 3 year period for 1/3 each year) are performed using an independent payroll auditor.
- Advisors- Fund assets (investments) are invested, monitored, managed, and custodied by two distinct professionals. The custodians (in our case Victory Capital Management) receive the employer contributions from the Funds' office, maintain and monitior the existence of the assets, and tender their management and guidance to the advisor. The advisor(s), operating within the investment guidelines and disciplines as set by the Trustees, directs the purchase and sale of the investment vehicles chosen. In our case, SEI Investments, employing a unique "Manager of Manager" approach, steamlines the process of investing. The Funds do not invest in any specific stocks or bonds. Instead, the monies are invested in "funds" (similar to mutual funds) of such investment classes (stocks and bonds), By investing in multiple sub-Advisors and funds to maintain the specified investment mix, we can achieve the necessary returns while exposing our assets to the least downside risk possible while still retaining a liquidity necessary to react to changes in today's fast-paced domestic and international marketplaces. SEI fees cover all aspects and levels of this consolidated process, and because of this, their fees remain about 75% or less of their predecessors. Generally, their fees are calculated based upon basis points which encompass the total assets invested. Finally, they assume a fiduciary stance alongside the Trustees which is unlike traditional advisors who accept no fiduciary responsibility for the investments. The services provided include advice regarding asset allocation, performance measurements, proxy voting, and related tasks.
- Attorney - Fund Counsel represents the Trustees in any legal matters. Generally, the attorney will be on retainer, and is required to attend all Trust meetings, interpret sensitive legal matters within the operation of the Funds, file court documents regarding collections and any litigation, assist members' legal representation to develop acceptible QDRO's (for property allocation in marital issues), and advise the Trustees on legal matters of consequence.
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Administrator - Represents the Trustees in their fiduciary capacity to oversee the daily operations of the Funds and staff. Gathers, prepares, correalates, and interprets information pertinent to the Funds and membership, safeguards those records and information, prepares for presentation to the Trustees and the membership. Ensures required filings, collection of employer contributions, and benefit payments, and payment of general Fund operating expenses are timely and correct. Acts as the Trustees' agent in dealing with vendors, government agencies, financial institutions, and the membership.The administrative staff as a whole has assumed the responsibility for many of the duties formerly performed by the Plan Professionals listed above, but at a fraction of their cost. The administrator and assistant administrator are salaried positions, and staff positions are hourly.
4. What makes up the "administrative fees" we see in the Summary Annual Reports (SARs) the Funds send to membership each year?
- The "Administrative fees" actually are any items not directly attributable to "benefit payments" and include the following components:
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All operational costs - rents, supplies, postage, utilities, printing;
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payroll - salaries, employer taxes and benefits (health insurance, Pension, Annuity);
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Professional fees - actuarial, auditing, attorney;
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Insurance - liability and the required fiduciary insurance for each Fund;
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And investment fees - custodial, advisory, and bank fees. The majority (approx. 60%) of the "Administrative fee" is attributable to the investment fees.
5. (H&B) Are research and future costs (such as storage of the umbilical cord for future stem cell recovery) reimbursable under the HRA Plan?
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No. Deductible medical expenses include expenses incurred for the diagnosis, treatment, cure, prevention, or mitigation of a disease or illness. For example, cord preservation has not been determined to be deductible because it may never be used for any purpose. However, if a cord is stored and stem cells are later extracted from that stored cord, and that extraction is used for the cure or treatment of an eligible participant's disease, then the expense of storage may be determined to be a deductible expense.
6. Why do I need to provide so many more personal records than I did in the past?
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As our lives become more and more complicated by laws, regulations, and governmental restrictions, verifiable proof of identity and existence are a necessary evil to comply with those demands. Birth cerificates, social security cards, driver & marriage licenses, separation and divorce documents (see QDRO's below), spousal approval (Pension and Annuity), school enrollment verification, power of attorney (POA), current dependent and benficiary information - all these items determine rights - yours, your spouse's, dependents', beneficiaries', estate's - to the benefits and balances within your Fund accounts. Not only can you be delayed or denied 236 Funds' benefits due to lack of or incorrect information - but you may also be denied or delayed any benefits under the International or NEBF Pensions which you worked so hard to earn. Any information obtained by the Funds office will not be given to any outside parties unless proper authorization from you is present and on file (i.e. - HIPAA). In the case of spouses or dependents, these documents must be on file in order for any benefits or information to be obtained. These include: coverage under the Fund's health insurance; reimbursements for uninsured health costs; educational costs incurred to be reimbursed under the Annuity Plan; inheritance and successor rights to the Funds after your death; the ability to obtain information about your/their accounts or coverages.
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In the instance of separation and/or divorce, a Qualified Domestic Relations Order (QDRO) must be in place in order for either party to exercise their rights over the existing Funds, including the International and NEBF Pensions. To make matters simple and cost effective, these QDRO's should be in place (as part of your court issued documents) prior to the final execution of the Divorce decree. Contact the Fund office to obtain documentation regarding the International and NEBF Pension QDRO formats, and please have your attorney contact us so that we may arrange for them to contact the Funds' attorney regarding the "236" requirements. We have developed a general format to incorporate all these documents, which will save you both time and expense - and ensures that what you get is sufficient under existing laws, and meets all the standards set by all the entities. The lack of proper documentation can severely delay your application for any Pensions - in particular the International and NEBF Pensions - and re-opening such documents years later can be difficult, compromising, and costly.
7. (PENSION) What is meant by "full funding" in a Pension? Why have we not increased the benefits over the past few years when we see solid returns in 2004 & 2005?
Brothers and Sisters,
I would like to talk about the Pension Fund and address some of the issues being talked about by the members.
Eliminating the 3% reduction for retiring early would be a benefit increase and would not result in less (actual) money in the Pension trust Fund or any more money (fees) for the Actuary. Our Actuary is paid a set yearly fee, no more or no less, regardless of how much money is in the Fund. His main job is to do the year ending actuarial valuation but also valuations for our Annuity and Health & Benefit Funds.
Our investment advisors, SEI Investments, are paid a percent of the money they manage. Their fee is 50 basis points per year. A basis point is 1/100th of 1% so 50 basis points is 0.50% (1/2 of 1%). The better the Fund investments do (grow), the more income for them (SEI), which gives them an incentive to do well. However, the amount of money in the trust Fund would not be any less because of that benefit increase. The amount in our Pension trust Fund is directly related to our rate of contributions, the rate of return we earn each year (on our investments), and our yearly costs for Pension benefits and administrative expenses. The biggest effect that a benefit increase would have would be on the funded status of the Plan.
Let me explain what that is.
Every year the Fund is required by law to submit a tax return (5500) to the IRS and the DOL. This return proves that we are meeting an ERISA requirement called the minimum funding standard. We get this information, along with other calculations, from the actuarial valuation which we must have done every year. One of the results of this valuation shows us the funded status of the Plan. This funded status is the difference between the Plan's liabilities and its assets. The liabilities, called the actuarial present value of accumulated Plan benefits, are the payments due for all the present and future benefits that have been earned as of the end of the Plan year (ended June 30th) based on each participant's service history. The participants are all active members, plus current Pensioners, and separated vesteds. Separated vesteds are people that are due a benefit but no longer receive contributions to the Fund (vested with 5yrs or more service but have left covered employment with signatory contractors for other jobs). The assets are the amount of money (cash, investments, other holdings) in the trust Fund. As of year ending 6/30/2005, the ratio of assets to present value of accrued benefits is 81%. That is our funded status. We are 81% funded. We have 81% of the money needed to pay all of our liabilities. This calculation provides us with a needed benchmark to track the status and health of the Fund into the future. A benefit increase will change the funded status of the Plan. Our liabilities will increase because larger payments will be due for future benefits and our percent of full funding (funded status) will decrease, but, the change in the amount of money we have now would not be seen until future benefits start coming due, and even then the assets may not be affected if we raise the contribution rate to cover the future liabilities. The reduction for early retirement was already decreased from 6% a year to 3% when we merged the Funds in June 2002. The reason for the reduction is to help offset the extra cost of paying a benefit before normal retirement age (more total payments to the early retiree due to longer retirement period and less contributions for that individual). We also understand that due to the physical demands of our business, early retirement is a great option and would be more viable if we could further subsidize this benefit.
One of the main duties of the Trustees of the Pension Fund is to assure that the funded status of the Plan will be sufficient to cover not only the current Pensioners but the future beneficiaries of the Plan so that present and future Pensioners can be assured of benefits that will last the rest of their lives so they may be comfortable and secure in their retirement years.
The funded status of the Plan is not yet at a point to support a benefit increase. The percent of full funding must be at a level where we can safely see that a benefit increase will not adversely affect the funded status so we can be assured there will be enough assets for future beneficiaries, The percent of full funding is getting better. For the Plan year ended June 30, 2003, it was 73%; for 2004, it was 78%; and for 2005, it is 81% ( for 2006 it remains at 80%).
Brothers and Sisters, we are Electricians, not Actuaries nor Investment Advisors nor Lawyers. We are allowed, and have an obligation, to hire professionals in those fields to provide us with experience, insight, and recommendations, and we thankfully do that. I can assure you that Don and the Trustees want to provide the best benefits possible to the members. We also have to ensure that our trust Funds remain strong, secure, and legally sound for the present and future. We have taken that oath, as have all of the Trustees before us, and as all after us must do.
Anyone who tells you anything different is wrong, Anyone who says we are keeping the Fund fat for the actuaries and lawyers is wrong. Anyone who says that we do not have the best interests of the members in mind is wrong. If we are accused of listening to the advice of our Actuary and Plan professionals as to the best course of action to keep this Fund safe and viable for all the members- past, present, and future-, then, guilty as charged.
Please contact me if you need to know the right answers to any questions or concerns you have.
Yours in Brotherhood,
Phil Pacifico
ppacifico@ibew236.org
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Important Aspects
- Familiarize yourself with the entire booklets.
- Application must be made for all Benefits.
- The Fund Office should be aware of all your pertinent information including your current address, contact information, marital status, and dependents.
- Keep your Benefit beneficiary designations up-to-date.
- All claim forms must be completed and submitted in a timely manner. Due to space and time limitations, incomplete or incorrect forms will be returned and/or denied or returned, and must be resubmitted once completed. Forms received after cut-off will be included in the batch for the following cycle.
- At no time will any personal information be given out from the Fund offices without your written authorization. That includes, but is not limited to such items as accrued Pension benefits, Annuity balances, or any Health information. Authorized parties include the Trustees (as needed), Funds staff, Plan professionals (as needed), government agencies (under QMSCO, QDRO, etc.), and authorized services associates (medical insurers as noted in HIPAA specific documentation). Spouses, family members, third-party representatives, and Union personnel must be specifically named prior to any release of information.
- The Fund office, and now both the Union and JATC offices, is able to sign any member up on the ERTS (electronic reciprocal transmission system). It is advisable that you sign up whether you intend to travel out of the 236 jurisdiction or not, but it is required that you be registered on ERTS in order for you to work on any other jurisdiction. Once signed up, you can edit your information and fund(s) designations yourself. In the future, you may also be able to track the remitance of your benefits to your home local by using the system.
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