Planning for the future: Concept of Pension/Retirement

Planning for the future: Concept of Pension/Retirement

Disclaimer: Your pension benefit is “unique” and can only be calculated by the pension trust offices.  Give them a call and ask them to calculate your retirement numbers.  They will answer all your questions and strive to give you “peace of mind”.

Have you ever wondered how our pension (in general) is supposed to work when you retire?

For the Inside Wireman and Traffic Signal, the idea (that we are shooting for) is, when you stop working 40 hours a week then your retirement should provide you the same net “take home” amount to live off of.

You start on your 30 year career in the union electrical trade.  You are a good hard worker, working 2000 hours a year as a Journeyman wireman.  You get married and you and your spouse decide to buy a home.  The bank will only qualify you for a 30-year mortgage.  That means that you as a couple, as a family, must live off of the remaining 75% monthly take home income.  You work consistently for 30-years, two things should be occurring 1) your home mortgage is paid off 2) you have reached the qualifying age and earned hours to start your retirement.  The monthly retirement income amount should be comparable to the 75% work income you learned to live off for 30-years.  Since you no longer have a mortgage, you no longer need the additional 25% to pay it off.  That’s roughly the principle design of the Defined Benefit Pension Plan. But Wait! There’s more!

The Inside and Traffic Signal Wireman have four additional retirement plans!  The Defined Contribution Plan (Annuity) can be budgeted to pay a monthly amount that makes up the other 25% of take-home pay.  Additionally, there are two Pensions that come from the International Office (National IBEW Pension) called the National Electrical Benefit Fund (NEBF) and the Pension Benefit Fund (PBF).

The NEBF Pension Benefit is $32 per year of service (service being at least 300 hours per plan year), so if you worked 30 years then your monthly benefit amount would be (30 x $32 = $960) $960 per month.  Now there are plan choices that will reduce that monthly amount, but this is just to give you a general understanding.

The PBF Pension pays a small amount but it is something you earn $4.50 per year of paying your monthly “yellow” dues.  You pay your dues every month for 30 years then your benefit is (30 x $4.50 = $135) $135 per month.

Last, don’t forget that you also get Social Security which pays a monthly benefit for life.

All in all, your retirement should look something like this:

D.B. Pension – 75% of the take home income
D.C. Pension – 25% of the take home income
N.E.B.F Pension — $960.00 per month
P.B.F. Pension — $135.00 per month
S.S. Pension – (check with SSA for your amount)
Total amount should be sufficient to live off of and take care of income taxes

It should be noted that all of these retirement plans don’t necessarily start at the same time.  The intention here is to give you an understanding of generally what this career has to offer.

 

Disclaimer: Your pension benefit is “unique” and can only be calculated by the pension trust offices.  Give them a call and ask them to calculate your retirement numbers.  They will answer all your questions and strive to give you “peace of mind”.

 

By Rusty Roten
IBEW 11 President
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