Pension
What You Need to Know
As a member of the Rhode Island Laborers’ Benefit Funds, you may be eligible to participate in the Pension Plan. Since 1961, the Pension Plan has provided eligible members with retirement income as a reward for their hard work and service in the industry.
You pay nothing toward your pension benefit. Your employer contributes to the Pension Fund on your behalf. Your benefit depends on the benefit rate contributed by your employer, how long you participate in the Fund, your age at retirement, and the payment form you elect at retirement.
Becoming a Participant
You’re eligible to participate in the plan after you’ve completed 250 hours of work in covered employment in a 12-month period. Covered employment means you work for an employer who contributes to the plan on your behalf, based on a collective bargaining agreement with the Fund.
Your participation in the plan begins the next month after completing 250 hours of work.
Once you become a participant, the hours you work will determine the amount of pension credit and vesting service you earn.
Pension Credit
Pension credit helps determine the value of your pension at retirement. You earn credit for the hours you work in covered employment. If you work 1,000 hours or more in a calendar year, you earn one pension credit. You can earn partial credit if you work at least 250 hours but less than 1,000 hours in a calendar year.
Vesting Service
You must be vested in the plan to receive a pension benefit at retirement. You become vested after earning five years of vesting service.
You earn vesting service the same way you earn pension credit. If you work 1,000 hours in a calendar year, you earn one vesting credit. You can earn partial vesting service if you work at least 250 hours but less than 1,000 hours in a calendar year.
Earning Credit for Non-Work Periods
Losing Your Participant Status
If you aren’t vested in the plan and you don’t work at least 250 hours in a calendar year (called a “break in service”), your participant status will end the last day of the calendar year in which the break happens. After you lose participant status, you can become a participant again when you work at least 250 hours in a calendar year.
If you have a break in service, the break is eliminated if, before you have a permanent break in service, you earn at least one-quarter of a year of vesting service. See the Pension SPD for details about breaks in service.
Using Pension Credit to Calculate Your Pension Benefit
When you retire, the number of pension credits you’ve earned is multiplied by a “benefit rate.”
Benefit rates are determined by the Board of Trustees. The rates change periodically. The current benefit rate for participants who earn at least one-half of a pension credit in 2020 or later is $125. For prior service, check the benefit rate in effect for the year you earned the pension credit.
To determine the value of your pension benefit, multiply the benefit rate by the pension credit you earned during the applicable benefit rate period. Add the amounts to estimate your unreduced monthly pension benefit.
For example...
Dave reaches age 65 on July 1, 2021 and elects to retire with a Regular Pension after earning 32.5 years of pension credit. His pension amount is calculated as follows:
½-year of pension credit earned from January 1, 2021 through June 30, 2021 x $125 = $62.50
Plus
1 year of pension credit earned from January 1, 2020 through December 31, 2020 x $115 = $115
Plus
2 years of pension credit from January 1, 2018 through December 31, 2019 x $105 = $210
Plus
11 years of pension credit earned from January 1, 2007 through December 31, 2017 x $100 = $1,100
Plus
18 years of pension credit earned before 2007 x $90 = $1,620
_______________________________________________________
Equals
$3,107.50 monthly life annuity pension benefit at age 65
Types of Pensions
Regular Pension
Eligibility: At least age 65, you’ve reached the fifth anniversary of plan participation, and you are a current participant at that time.
Early Retirement Pension
Eligibility: Age 55 – 64 with at least five pension credits or five years of vesting service.
Service Pension
Eligibility: Any age, with at least 30 pension credits.
Deferred Vested Pension
Eligibility: At least age 65 with five years of vesting service, or payable earlier if you meet the requirements for a Regular or Early Retirement Pension.
Delayed Retirement
If you work after age 65, you may earn additional benefits under the plan until you retire.
When you retire, your monthly benefit will be increased to reflect additional pension credits earned and may include an actuarial increase of up to 1.5% per month for the amount of time you delay retirement.
The IRS requires you to start receiving benefit payments by April 1 of the calendar year following the year in which you reach age 70-½.
Partial Pension
If your employment is divided among one or more Laborers’ plans that have reciprocal agreements with this plan, you may be eligible to receive a Partial Pension.
Disability Retirement Pension
If you become totally and permanently disabled before age 65, you may be eligible to receive a Disability Retirement Pension if the Trustees determine that you are totally and permanently disabled and you meet other criteria. See the Pension SPD.
A Disability Retirement Pension is calculated the same as a Regular Pension. Payments may begin on the first day of the month following the fifth month of your total and permanent disability.
Auxiliary Disability Benefit
Pension Payment Options
Joint and Survivor Annuity
You have the option to elect the Qualified Optional Survivor Annuity to provide 50% of your benefit to your spouse if you die first. If this benefit is less than it would be under the Joint and Survivor Annuity, you will need your spouse’s written consent to elect this option. See the Pension SPD for details.
To provide either of the above benefits to your spouse after your death, your benefit at retirement is reduced based on your spouse’s age.
Once benefit payments begin, you can’t change your payment option even if you divorce or if your spouse dies before you do.
Life Annuity
If you are unmarried when you retire, you’ll receive your retirement benefit as a Life Annuity.
This option provides an unreduced benefit, payable for your lifetime only. However, if you die before you’ve received 60 monthly pension payments, the monthly amount that you were receiving when you died will be paid to your designated beneficiary for the remaining months of the 60-month period.
If you are married, you can choose this option with your spouse’s notarized consent.
Automatic Lump Sum Payment
If you retire and the total value of your benefit is less than $5,000, you’ll receive your benefit as a lump sum payment.
Ready to Retire?
1. If you are ready to retire, submit a completed pension application and send it to the Fund Office. Or, call the Fund to request a pension application: 401-942-8690. You must apply for your pension at least 30 days before the first day of the month in which you wish to retire (but less than 90 days before your retirement date).
2. Complete the application and return it to the Fund Office with:
- Proof of your age (e.g., a copy of your birth certificate); and
- If you are married, proof of your spouse’s age and a certified copy of your marriage certificate.
Be Sure to Get Your Timing Right!
Returning to Covered Employment After Retiring
If you retire, return to covered employment, then retire again, your benefit will be recalculated based on any additional pension credits you earn under covered employment. The additional pension credits earned after you return to covered employment will be based on the benefit rate in effect for each additional pension credit you earn after you return to covered employment.
Questions?
If you are ready to retire, submit a completed pension application and send it to the Fund Office. Or, call the Fund Office to request a pension application.
Fund Office
200 Midway Road
Cranston, RI 02920
401-942-8690