When you make the decision to retire, you will receive a written explanation from the Trust Fund Office asking you to choose how you want your pension to be paid. The term payment form is used when describing the options available to you when you retire.  Regardless of which payment form you choose, once payments begin, you cannot change that payment form even if you later marry, divorce, or remarry.

If you retire before Normal Retirement Age (65) and then you return to Covered Employment and earn additional benefit accruals through that re-employment, you will have a separate Annuity Starting Date for the additional benefit accrual(s). You also have the option of selecting a different payment form for the additional benefit accrual. There will be no change, however, to the payment form of the pension benefit you elected prior to earning additional benefit accruals.

If you are married when you retire, the standard 50% Joint-and-Survivor Pension is the automatic payment form. Your pension is actuarially reduced to provide the 50% survivor benefit. Your monthly pension will be adjusted as follows:

·       You will receive 95% of your pension during your lifetime if you and your Spouse are the same age. If your Spouse is younger or older, the following adjustments apply:

o   If your Spouse is younger, the 95% factor is decreased by .4% for each full year your Spouse is younger than you.

o   If your Spouse is older, the 95% factor is increased by .4% for each full year your Spouse is older than you, not to exceed the maximum factor of 99%.

If you elect to waive the standard 50% Joint-and-Survivor Pension, you must do so with your Spouse’s written consent on a form approved by the Board. Your Spouse’s signature must be witnessed by either a Notary Public or a Trust Fund Representative. Your Spouse must present legal identification when signing the waiver form.

You may wish to provide your Spouse with a survivor pension that is more than 50% of your pension amount upon your death. Instead of the standard 50% Joint-and-Survivor Pension, you may instead choose to take your pension in the form of an optional 75% Joint-and-Survivor Pension. Under this optional payment form, your Spouse receives a larger survivor benefit after your death, but the actuarial reduction from your monthly pension is greater to provide for the larger survivor benefit.

·       Your pension will be adjusted as follows:

o   You will receive 91% of your pension during your lifetime if you and your Spouse are the same age. If your Spouse is younger or older, the following adjustments apply:

o   If your Spouse is younger, the 91% factor is decreased by .4% for each full year your Spouse is younger than you.

o   If your Spouse is older, the 91% factor is increased by .4% for each full year your Spouse is older than you, not to exceed the maximum factor of 99%.

You may wish to provide your surviving Spouse with the highest survivor benefit available - the 100% Joint-and-Survivor Pension. Under this optional payment form, the actuarial reduction of your monthly pension is the highest. Your pension will be adjusted as follows:

·      You will receive 87% of your pension during your lifetime if you and your Spouse are the same age. If your Spouse is younger or older, the following adjustments apply:

o   If your Spouse is younger, the 87% factor is decreased by .4% for each full year that your Spouse is younger than you.

o   If your Spouse is older, the 87% factor is increased by .4% for each full year your Spouse is older than you, not to exceed the maximum factor of 99%.

Joint-and-Survivor Pensions – Disability Pensions only: The adjustment factors outlined previously for 1) the standard 50% Joint-and-Survivor Pension, 2) the optional 75% Joint-and-Survivor Pension, and 3) the optional 100% Joint-and-Survivor Pension are different for Disability Pensions. If you have questions regarding the Joint-and-Survivor Disability Pension, contact the Trust Fund Office.

If you are receiving a Joint-and-Survivor Pension, and the Spouse to whom you were married on your Annuity Starting Date dies before you, your monthly benefit will increase to the amount that would have been payable had you not elected the Joint-and-Survivor Pension. The increased monthly benefit becomes payable on the first day of the month following the death of your Spouse. This pop-up feature is offered at no additional charge to Pensioners who have elected the Joint-and-Survivor Pension. You must notify the Trust Fund Office of the death of your Spouse and provide a Certified Copy of your Spouse’s Death Certificate.

If you are single, or if you are married and your Spouse elects to waive her rights to a Joint-and-Survivor Pension, you will receive monthly pension payments for as long as you live. If you die before receiving 36 monthly payments, the balance of the 36 payments will be paid to the Spouse to whom you are married on the date of your death. If you are not married on the date of your death, no further benefits are payable.

If you are entitled to a Service, Early Retirement, Pro Rata, Early Retirement, Deferred Vested Service or Deferred Vested Early Retirement Pension, with at least 10 Years of Northern California Credited Service, you may be able to select the Level Income Option instead of any other option available under the Plan.

You may select this option if:

·       You are between the age of 55 and 62, and

·       You are not electing a Joint-and-Survivor Pension.

Under this option, you receive a higher monthly amount from the Plan until you reach age 62, the age at which you can begin receiving early Social Security benefits. Once you become age 62, the higher amount you were receiving will drop by $100.00 a month.

The purpose of the Level Income Option is to provide a, more or less, level income for life, taking into account the likelihood you will begin receiving Social Security at age 62.

The actual Level Income Option benefit amount is based on your age at retirement and the Plan’s formula in effect when you retire.

The Level Income Option must be elected before pension payments begin. Once payments begin, you cannot change that payment form.

If a Pensioner who is receiving payments under the Level Income Option dies before receiving an amount equal to the total amount which would have been paid had the Level Income Option not been elected, his surviving Spouse will receive any balance due in monthly installments. The total paid to the Pensioner will be subtracted from the amount that would have been payable under the Three-Year Guarantee. Any remaining balance will only be paid to the surviving Spouse.

If the Actuarial Present Value of the monthly benefit is $5,000 or less, the Plan will pay to you, or your surviving Spouse, the lump sum amount of the Actuarial Present Value in lieu of the monthly benefit. If this provision applies, you may not elect any other payment form.

Federal Income Tax Withholding

Federal income taxes will be withheld from any benefits paid by the Plan which exceed the limits established by the Internal Revenue Service, unless you elect not to have income taxes withheld. You will be given detailed information and the opportunity to elect or reject withholding when you apply for benefits.

State Income Tax Withholding

State income taxes will be withheld from any benefits paid by the Plan which exceed the limits established by the California Franchise Tax Board, unless you elect not to have income taxes withheld. You will be given detailed information and the opportunity to elect or reject withholding when you apply for benefits.

Speak to a tax advisor before making these decisions.

For  information about Rollover Distributions and Early Distribution Penalties, CONTINUE READING.