Summary Plan Description

Retirement Payment Options

Under normal, early and disability retirement, your benefit amount is the vested combined balance of your five subaccounts on the later of your retirement effective date or on your distribution date(s). No benefit reduction is made for early retirement under this plan. Any non-periodic payment from this plan of less than ten years is subject to a 20 percent mandatory federal income tax withholding, unless it is rolled over to an Individual Retirement Account (IRA) or eligible retirement plan, including the pension enhancement option (please see below).

There are a variety of payment options available when you retire under this plan. Each of these payment options is described below. Your retirement benefits under this plan are taxable
income.

Your payment from this plan is generally provided to you on the first business day of the month following timely receipt of your Explanation of Payment Options and Election of Retirement Benefits form.

  • For additional information about the benefit amount available under normal and early retirement, please see Article 4.1 on pages 66-67.
Lump Sum Distribution

You receive a one-time, lump sum payment of your account balance. You may elect to rollover all or part of the lump sum. If your account balance is $5,000 or less, benefits will be paid in this form. This is the standard form of payment for a participant whose only contributions are for hours worked on or after January 1, 2014.

  • For additional information about a lump sum distribution, please see Article 4.4 on pages 68-69.
Pension Enhancement Option

You can use all or a portion of your vested account balance in the Carpenters Individual Account Pension Plan to increase your monthly benefit in the Carpenters Retirement Plan of Western Washington. This plan feature is commonly referred to as a "cash fund annuity" with the Carpenters Retirement Plan as the annuity. The pension enhancement option provides you with several important financial advantages:

  • The same actuarial assumptions (investment, retirement and mortality) used to calculate your monthly benefit under the Carpenters Retirement Plan will be used to calculate the
    pension enhancement from your Carpenters Individual Account Pension Plan.
  • Your pension enhancement provides you and your spouse or other designated beneficiary (if applicable) with a lifetime monthly benefit from the Carpenters Retirement Plan. The enhancement is added to the monthly benefit already earned under the Carpenters Retirement Plan. As with the monthly income provided by the Carpenters Retirement Plan, you cannot outlive the income provided from the enhancement. In addition, the enhancement does not experience fluctuations in investment earnings or losses as does the monthly income available from the Carpenters Individual Account Pension Plan.
  • The amount used to generate the enhancement to your monthly benefit is guaranteed. If you die before the enhancement amount is distributed, any remaining balance is paid to your beneficiary.
  • The enhancement provides you with a lifetime monthly benefit without the purchase and processing fees associated with the purchase of a commercial annuity or other investment incomes.

The examples below illustrate how the pension enhancement option works.

To elect the pension enhancement option, you must elect to retire from the Carpenters Retirement Plan at the same time.

  • For additional information about the pension enhancement option, please see Article 10.6 on pages 87-88.
Calculations
You retire at age 62 with a single life benefit of $2,000.00 per month from the Carpenters Retirement Plan. You elect to use a portion of your Carpenters Individual Account Pension Plan to increase your $2,000.00 monthly benefit from the other plan. The following three examples illustrate how this can be done. The annuity conversion factors are listed in Table 3 on pages 32-34.
Example 1

You use $20,000.00 to increase your $2,000.00 monthly benefit from the Carpenters Retirement Plan:

$20,000.00 ÷ Annuity Conversion Factor = Pension Enhancement Amount
$20,000.00 ÷ 126.4856 = $158.12
$2,000.00 + $158.12 = $2,158.12

In this example, $20,000.00 from the Carpenters Individual Account Pension Plan adds $158.12 to your $2,000.00 monthly benefit paid from the Carpenters Retirement Plan. Because you elected a single life benefit from the Carpenters Retirement Plan, the pension enhancement option will provide you an extra $158.12 per month for the rest of your life.

The annuity conversion factor used to calculate the enhancement is age related so this portion of your monthly benefit is not subject to any early retirement reduction (if applicable). The enhancement amount is, however, subject to any joint and survivor reduction (also if applicable).

Example 2

You use $80,000.00 to increase your $2,000.00 monthly benefit from the Carpenters Retirement Plan:

$80,000.00 ÷ Annuity Conversion Factor = Pension Enhancement Amount
$80,000.00 ÷ 126.4856 = $632.48
$2,000.00 + $632.48 = $2,632.48

In this example, $80,000.00 from the Carpenters Individual Account Pension Plan adds $632.48 to your $2,000.00 monthly benefit under the Carpenters Retirement Plan. Because you elected a single life benefit from the Carpenters Retirement Plan, the pension enhancement option will provide you an extra $632.48 per month for the rest of your life. This amount is subject to the joint and survivor reduction (if applicable).

Example 3

You would like to increase your $2,000 monthly benefit under the Carpenters Retirement Plan by exactly $500.00:

Pension Enhancement Amount x Annuity Conversion Factor = Required Enhancement Amount
$500.00 x 126.4856 = $63,242.80

In this example, a $500.00 increase to your $2,000.00 Carpenters Retirement Plan monthly benefit requires $63,242.80 from your Carpenters Individual Account Pension Plan. This amount is subject to the joint and survivor reduction (if applicable).

Table 3
Annuity Conversion Factors

The annuity conversion factors determine the single life benefit provided by the pension enhancement option. First, determine the amount from your Carpenters Individual Account Pension Plan you wish to increase your Carpenters Retirement Plan monthly benefit with. Second, select the year and month closest to your age on your retirement date. Then divide your pension enhancement amount by the corresponding annuity conversion factor. The result is the monthly amount added to your monthly benefit under the Carpenters Retirement Plan if you select a single life benefit. If you select one of the joint and survivor options, this amount will be reduced to provide for a survivor benefit for your spouse or other designated beneficiary.

Table 3
Age Factor
55 – 0 140.0753
55 – 1 139.9275
55 – 2 139.7797
55 – 3 139.6319
55 – 4 139.4841
55 – 5 139.3363
55 – 6 139.1885
55 – 7 139.0407
55 – 8 138.8929
55 – 9 138.7451
55 – 10 138.5973
55 – 11 138.4495
56 – 0 138.3017
56 – 1 138.1490
56 – 2 137.9963
56 – 3 137.8436
56 – 4 137.6909
56 – 5 137.5382
56 – 6 137.3855
56 – 7 137.2328
56 – 8 137.0801
56 – 9 136.9274
56 – 10 136.7747
56 – 11 136.6220
57 – 0 136.4693
57 – 1 136.3120
57 – 2 136.1547
57 – 3 135.9974
57 – 4 135.8402
57 – 5 135.6829
57 – 6 135.5256
57 – 7 135.3683
57 – 8 135.2110
57 – 9 135.0538
57 – 10 134.8965
57 – 11 134.7392
58 – 0 134.5819
58 – 1 134.4204
58 – 2 134.2589
58 – 3 134.0974
58 – 4 133.9359
58 – 5 133.7744
58 – 6 133.6130
58 – 7 133.4515
58 – 8 133.2900
58 – 9 133.1285
58 – 10 132.9670
58 – 11 132.8055
59 – 0 132.6440
59 – 1 132.4771
59 – 2 132.3103
59 – 3 132.1434
59 – 4 131.9765
59 – 5 131.8097
59 – 6 131.6428
59 – 7 131.4759
59 – 8 131.3090
59 – 9 131.1422
59 – 10 130.9753
59 – 11 130.8084
60 – 0 130.6416
60 – 1 130.4702
60 – 2 130.2987
60 – 3 130.1273
60 – 4 129.9559
60 – 5 129.7845
60 – 6 129.6131
60 – 7 129.4417
60 – 8 129.2702
60 – 9 129.0988
60 – 10 128.9274
60 – 11 128.7560
61 – 0 128.5846
61 – 1 128.4097
61 – 2 128.2347
61 – 3 128.0598
61 – 4 127.8849
61 – 5 127.7100
61 – 6 127.5351
61 – 7 127.3602
61 – 8 127.1853
61 – 9 127.0104
61 – 10 126.8355
61 – 11 126.6605
62 – 0 126.4856
62 – 1 126.3076
62 – 2 126.1296
62 – 3 125.9515
62 – 4 125.7735
62 – 5 125.5955
62 – 6 125.4174
62 – 7 125.2394
62 – 8 125.0613
62 – 9 124.8833
62 – 10 124.7053
62 – 11 124.5272
63 – 0 124.3492
63 – 1 124.1684
63 – 2 123.9877
63 – 3 123.8069
63 – 4 123.6261
63 – 5 123.4453
63 – 6 123.2646
63 – 7 123.0838
63 – 8 122.9030
63 – 9 122.7223
63 – 10 122.5415
63 – 11 122.3607
64 – 0 122.1799
64 – 1 121.9968
64 – 2 121.8137
64 – 3 121.6305
64 – 4 121.4474
64 – 5 121.2643
64 – 6 121.0811
64 – 7 120.8980
64 – 8 120.7149
64 – 9 120.5317
64 – 10 120.3486
64 – 11 120.1655
65 – 0 119.9823
66 – 0 117.7094
67 – 0 115.4097
68 – 0 113.0826
69 – 0 110.7391
70 – 0 108.3837
71 – 0 105.9531
Partial Distribution

You receive a portion of your total vested account balance at retirement and defer receipt of the balance (including any investment gains or losses) to a later tax year. You may elect a different
payment option for the balance of your account. Each partial distribution is subject to the application and election procedures. Until all of your funds are distributed to you, your account
continues to experience investment gains and losses based on the investment performance of the entire plan. If you die before the second payment is made, your designated beneficiary
receives the second payment.

  • For additional information about a partial distribution, please see Article 4.3(c) on page 68.

Key Point

If you need greater payment flexibility than provided for by the distribution options available under this plan, you may wish to roll your account into an Individual Retirement Account (IRA) or eligible retirement plan that provides the needed flexibility.

Period Certain Payments

You receive benefits over a specified number of months. The amount is fixed, essentially equal guaranteed monthly payments (subject to adjustment for gains and losses in the plan). You elect the number of months over which the payments will be made, however, the payment period cannot exceed the joint life expectancy of you and your beneficiary. If you die before receiving all payments, payments will continue to your beneficiary. If you elect a payment period that is less than ten years, payments may be rolled over. You must designate your spouse as beneficiary, unless your spouse consents to your designation of another beneficiary.

  • For additional information about period certain payments, please see Article 4.3(a) on page 68.

Key Point

If you elect any of the periodic payment options (except one of the two annuity income options), you may elect, at any time, to cash out your remaining account balance. Please contact Retirement Service at the Trust Office for the appropriate application. This process may take up to 60 days.

Minimum Annual Payout

You receive a specified dollar amount each month until you exhaust your account balance. You designate the monthly amount of the payout. The amount will be adjusted annually to account for investment gains or losses. If you die before receiving all payments, payments continue to your beneficiary. You must designate your spouse as beneficiary unless your spouse consents to your designation of another beneficiary.

You may also receive a specified monthly benefit based on your account balance divided by your life expectancy. The amount is adjusted annually to account for investment gains or losses. If
you die before receiving all payments, payments continue to your beneficiary. You must designate your spouse as beneficiary unless your spouse consents to your designation of another beneficiary.

  • For additional information about a minimum annual payout, please see Article 4.3(b) on page 68.
Deferred Distribution

You may defer your distribution from this plan to a later date. On your future distribution date you may elect any one of the distribution options except the pension enhancement option. During the deferral period, your account balance continues to experience investment gains and losses based on the investment performance of the entire plan.

Key Point

Among the retirement payment options available to you are several which leave a portion of your account invested in this plan. Your account is not invested in a more conservative manner when you elect one of these payment options. The plan's investments consist of a mix of stocks, bonds and real estate designed to produce growth and income over a period of time. This mix involves some investment risk which means the value of your account (and therefore the size of your monthly benefit or other future distribution) may increase or decrease.

Lifetime Annuity Income

If contributions were made to the plan for work before January 1, 2014, you may elect to have the Board of Trustees purchase, on your behalf, a non-transferable annuity. You may elect to have your benefit paid to you as a lifetime monthly income. The amount of your monthly benefit is based on your vested account balance on your retirement effective date as well as other parameters (including your age and life expectancy and the interest rate) assumed by the insurance company providing the annuity. Annuities are not available to retirees whose first contributions to the plan are attributable to work beginning January 1, 2014 and later.

Two annuity options are available depending on your marital status when you retire:

Qualified Joint and Survivor Annuity

The standard form of payment for the married participant with contributions in the plan for work performed before January 1, 2014, is a joint and survivor annuity. This annuity provides a monthly benefit for your life and, if you die before your spouse, 50 percent of that amount for the remainder of your spouse's life. Your annuity income is based on your vested account balance on your retirement effective date.

  • For additional information about a qualified joint and survivor annuity, please see Article 4.2(a) on page 67.
Single Life Annuity

The standard form of payment for the single participant with contributions in the plan for work performed before January 1, 2014, is a single life annuity. This annuity provides a monthly income for your life. Your annuity income is based on your account balance on your retirement effective date.

  • For additional information about a single life annuity, please see Article 4.2(b) on page 67.

Please contact Retirement Services at the Trust Office for assistance with the two annuity income options.