Informational Guide - IAM National Pension Fund

Informational Guide
to the Pension Application
Informational Guide
to the Pension Application
This guide will provide you with instructions
and important details to assist you in the
pension application process.
Here is an overview of the topics you’ll find
in this guide:
Instructions for Completing the Pension Application . . . . . . . . . . . . 1
Your “Pension Effective Date” . . . . . . . . . . . . . . . . . . . . . . . . 3
Notice Regarding Your Right to Defer Pension Payment . . . . . . . . . . 3
Proof of Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Proof of Marriage . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Proof of Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . 5
IAM National Pension Plan Rules Pertaining to Pensioner Employment . . 5
Restriction on Employment by Disability Pensioner . . . . . . . . . . . 6
IAM National Pension Plan Your Rollover Options . . . . . . . . . . 6
Addendum - Special Tax Rules for Puerto Rico Participants . . follows page 9
Have a question about the
application? Contact the Pension
Department at the I.A.M. National
Pension Fund.
The Fund’s toll-free phone number
is 1-800-424-9608.
Instructions for Completing the
Pension Application
Section B - Disability Application
(page 3 of application)
Section A - Participant’s Information
(page 2 of application)
Complete this section only if you are applying
for a Disability Pension. Provide a copy of
your notice of eligibility or ineligibility for Social
Security Benefits. If you have not yet applied
for Social Security Disability Benefits, please
apply immediately.
Questions 1 through 6
Provide general information in Questions 1
through 6 (Proof of Age will be required to
confirm your date of birth. A list of acceptable
documents can be found in this booklet on
page 4).
If you have not yet applied or you are
awaiting a determination, do not delay in
submitting your application. You may send
the notice at a later date.
Question 7 - Intended Retirement Date
Section C - Spouse’s Information
(page 4 of application)
Intended Retirement Date - Your intended
retirement date is the date you plan to stop
working, or your last day of work (in any
employment). The date must be before the
expiration date of this application.
Provide information for the spouse to whom
you are married on your Pension Effective Date
(if you select the 50%, 75% or 100% Spouse
Pension as your form of payment, in addition
to your own proof of age, proof of age for your
spouse as well as a copy of your marriage
certificate will also be required).
Pension Effective Date - Your pension effective
date is the first day of the first calendar month
after your last day of work, or after the Fund
Office receives your completed application,
whichever is later.
Section D - Employment History
(page 5 of application)
Note: If you intend to work and receive
your Pension, please read the Rules
Pertaining to Pensioner Employment on
page 5 of this booklet and enter the date
you would like your Pension to be effective
(1st of the month) in question 7.
Provide the name, city and state, job
classification, and lodge number for all
employers for whom you worked while the
employer had an I.A.M. Collective Bargaining
Agreement. Also list periods of military service.
Question 8 - Marital Status
Section E - Beneficiary Information
(page 6 of application)
I am Married - Please select this box if you are
currently married.
You must complete the Beneficiary Designation
section if you selected one of the following
forms of payment:
I am Not Married - Please select this box
if you are not currently married (you will be
required to complete section H of the Pension
application.
• 60 Certain Payments
Question 9a. Provide dates of all divorces.
• 120 Certain Payments
Note: If you are currently married or single,
but you were previously divorced and
your divorce occurred on or after January
1, 1985, the Fund Office requires that you
submit a copy of each divorce decree and
any settlement agreements.
• 60 Certain Payments with Partial Lump Sum Payment
• 120 Certain Payments Partial Lump Sum
Payment
If you are married, your spouse must check the
box verifying review of your beneficiaries, sign,
and date at the bottom of the page.
Question 9b. Check Yes or No.
1
Section F - Participant’s Statement
(page 7 of application)
National Pension Plan Your Rollover Options”
on page 6 of this booklet.
Read the Participant’s Statement and this
Informational Guide carefully.
Complete the form by checking the appropriate
box, signing and dating the election form on
pages 10 and 11 of the application.
Refer to the booklet “Your Pension Benefit
Payments,” for detailed descriptions of the
forms of payment available to you. The form
you choose will have an effect on the amount
of your monthly payment.
Additional Documents:
Electronic Direct Deposit Form
(page 12 of application)
Select one payment form from the available
forms provided. Sign and date in the space
provided.
Complete the Authorization For Automated
Deposits form on page 12. Attach a voided
check or deposit form for the account in which
you would like your payments deposited.
Section G - Spouse’s Statement
(page 8 of application)
Authorization to Obtain Earnings Data
from the Social Security Administration
(page 13 of application)
Please read the Spouse’s Statement and
Informational Guide carefully. Your Spouse
must review the form of payment that you
selected and the beneficiaries that you
designated in Section E.
This form will be used to verify your
employment if needed. Be sure to sign and
date where required. Return the form to the
Fund Office with your application.
If a form of payment other than the 50%,
75% or 100% Spouse Pension is elected,
your spouse must agree by completing the
Spouses’s Statement and having his/her
signature notarized.
Retirement Declaration
(page 15 of application)
We cannot begin payment of pension benefits
until this form is received. Select the applicable
box regarding your employment, read the
acknowledgments, and sign and date the form.
Note: If you elect a Spouse Pension, your
Spouse is not required to complete the
Spouse’s Statement.
The Fund Office will determine and advise you
of your Pension Effective date upon receipt of
your application.
Section H - Statement By Applicant Who
Is Not Married (page 9 of application)
If you are not married, please complete this
section of the application. If you have been
married between January 1, 1985 and your
pension effective date and your marriage
ended as a result of the death of your spouse,
provide a copy of the death certificate.
Application Checklist
(back cover of application)
The application checklist is provided so that
you can ensure completion and return of all
requested documents.
If your marriage(s) ended as a result of divorce,
provide copies of each divorce decree and
settlement agreement for all divorce(s) that
occured on or after January 1, 1985. Your
signature must be notarized on the Statement
By Applicant Who Is Not Married.
Have a question about the
application? Contact the Pension
Department at the I.A.M. National
Pension Fund.
Section I - Direct Rollover Election Form
(page 10 of application)
The Fund’s toll-free phone number
is 1-800-424-9608.
If you have elected a form of payment that
includes a partial lump sum payment option or
if you are eligible to receive a cash out of small
pensions, please read the section entitled “IAM
2
Your “Pension Effective Date”
Notice Regarding Your Right to
Defer Pension Payment
Your Intended Retirement Date is not the
same as your Pension Effective Date. Your
Intended Retirement Date is the day you will
stop working in any employment, other than
non-disqualifying employment (see Rules
Pertaining to Pensioner Employment). Your
Intended Retirement Date must be before your
Pension Effective Date.
In accordance with the Pension Protection
Act of 2006, the IAM National Pension Plan
is required to provide you with this notice
that describes the provisions of the Plan that
may materially affect your decision to defer
distribution of your pension benefit until a later
date.
Your Pension Effective Date is the first day of
the first calendar month after your last day of
work, or after you have submitted a completed
and signed pension application to the Fund
Office, whichever is later.
1. Actuarial Adjustment before Age 65 - If
you begin receiving benefits before age 65,
your monthly pension benefit may be actuarially
reduced to account for your age. Whether your
benefit will be actuarially adjusted and how
much your benefit will be actuarially adjusted
will depend on your type of pension:
The Pension Effective Date for a disability
pension is the first day of the seventh month
following total and permanent disability, or
after you have submitted a completed and
signed pension application to the Fund Office,
whichever is later.
► 30 and Out Pension. If you qualify for a 30 and Out Pension, your benefit will not be actuarially reduced to account for your age.
► Early Unreduced Retirement Pension at Age 62. If you qualify for an Early Unreduced
Retirement Pension at Age 62 and you have
not attained age 62, your monthly benefit
will be actuarially reduced by four-tenths of 1
percent (0.4%) for each month by which you
are younger than age 62 on your Effective
Date of benefits.
Federal law requires that you consent to the
payment of your pension benefit and elect
any optional form of payment before the
effective date of your pension, but after you
have received the enclosed descriptions of the
available benefit options.
You must receive this information no more than
180 days but no less than 30 days before the
effective date of your pension. Thus, you have
the right to at least 30 days to consider the
available benefit payment options.
► Early Retirement Pension. In the event
you receive an Early Retirement Pension or
Early Vested Deferred Pension, your monthly
benefit will be actuarially reduced by fourtenths of 1 percent (0.4%) for each month by
which you are younger than age 65 on your
Effective Date of benefits.
However, if you wish to establish an effective
date before the expiration of this 30-day period,
you may return your signed application sooner.
For more information regarding how your age
may affect the amount of your monthly benefit,
see your Summary Plan Description.
Under no circumstances will your effective
date be earlier than the first of the month
after the Fund Office receives your signed
application.
2. Required Beginning Date - You have the
right to defer receipt of your pension until no
later than your Required Beginning Date. In
general, your Required Beginning Date is the
April 1st of the calendar year following the later
of the calendar year in which you attain age
70½ or the calendar year in which you retire.
You may postpone your Pension Effective
Date by writing to us at any time. You may
not postpone your effective date beyond your
Required Beginning Date. In general the
Required Beginning Date is the April 1st of the
calendar year following the later of the calendar
year in which the Participant attains age 70½
or the calendar year in which the Participant
retires.
3
3. Actuarial Adjustment after Normal
Retirement Age - If you defer retirement
until after Normal Retirement Age, and do not
engage in Disqualifying Employment after
Normal Retirement Age, your monthly benefit
will be actuarially increased for each calendar
month between Normal Retirement Age and
your Effective Date of benefits. However, the
amount of such increase will be offset by any
increase in your benefit attributable to Hours
of Service after Normal Retirement Age. The
actuarial increase will be 1.0% for the first
60 months after Normal Retirement Age and
1.5% per month for each month thereafter.
“Normal Retirement Age” is either age 65 or
the fifth anniversary of your commencement of
participation in the Plan, whichever is later.
Primary Proofs of Age
• Birth Certificate
• Baptismal Certificate or a statement as to the
date of birth shown by a church record,
certified by the custodian of such records.
• Registration of birth. This may be:
(a) Delayed Certificate of Birth,
(b) an Affidavit of Birth or
(c) valid notification of registration of birth.
The document must be filed in a public
registry of vital statistics.
4. Disqualifying Employment - Certain types
of employment may result in the suspension of
your pension benefit. In general, Disqualifying
Employment before Normal Retirement Age is
employment with any employer who contributes
to the Plan or employment in any geograhic area
covered by the Plan within the same industry,
trade and craft you worked in while in the Plan.
In general, for periods after Normal Retirement
Age, your monthly pension benefit will be
suspended for any month in which you work 40
hours or more in “Disqualifying Employment.”
The Plan’s rules regarding suspension of
benefits are described under the section
entitled IAM National Pension Plan Rules
Pertaining to Pensioner Employment on page 5
of this Guide.
• Naturalization Papers
• Immigration Papers
• Passport
• Hospital Birth Record that includes the
authorized signature of the custodian of
record .
Attempts to acquire these documents
should be made before submitting a proof
of age document from the secondary list of
secondary proof documents.
Birth records can be obtained from the Bureau
of Vital Statistics in the state where you were
born. If you were born in another country, you
can write to a similar agency in that country.
5. Rollovers of Certain Types of
Distributions - If you are eligible for a Partial
Lump Sum Payment Option, the portion of
your benefit that may be paid as a lump sum is
subject to special treatment, the rules of which
are described starting on page 6 of this Guide.
You may submit copies of your documents. If
you choose to submit original documents, the
Fund Office will make copies and return the
originals to you.
Proof of Age
If the name on your pension application
differs from your proof of age, please submit
documentation that substantiates the name
change, such as a marriage certificate. In
addition, if you elect the 50%, 75% or the 100%
Spouse Pension and your spouse’s last name
on your marriage certificate is not her maiden
name, submit documentation that substantiates
the name change, such as a prior marriage
certificate.
You must submit the best proof of age with your
application, as described below. In addition, if
you elect the 50%, 75% or the 100% Spouse
Pension, you must submit the best possible
proof of age for your spouse also.
If you have not located suitable proof-of-age
documentation when you want to submit your
application, send in your application anyway.
Then submit your proof of age to the Fund
Office as soon as possible. The Fund will follow
up with you if it has not received your proof of
age by two weeks after receipt of your pension
application. Further delay could delay your
first pension check or necessitate starting
over with the application process.
If your document is in a language other than
English, submit both the document and a
notarized translation if possible.
If you are unable to provide any of the proofs
of age from the Primary Proofs of Age list, you
must submit two documents from the following
Secondary Proofs of Age list.
What does best proof of age mean? The best
proof is one document from the following
Primary Proofs of Age list.
4
Secondary Proofs of Age (must show
date of birth or age on document)
• A signed statement by the physician or
midwife in attendance at birth. This statement
must be notarized.
• U.S. Census Record.
Proof of Name Change
• School record certified by the custodian of
such records.
If the name shown on a proof of age document
does not agree with the individual’s current
name, you must submit suitable name-change
documentation, such as a marriage certificate.
• Military discharge papers (DD214)
• Vaccination record certified by the custodian
of such records.
• The signed application of a life insurance
policy and attached insurance policy bearing
the age or date of birth of applicant.
IAM National Pension Plan
Rules Pertaining to Pensioner
Employment
• Marriage records showing the date of birth or
age. Application for marriage license,
marriage certificate, or church record certified
by the custodian of such records.
A. For pensioners who have reached
Normal Retirement Age
• Child’s Birth Certificate showing your age at
the time of their birth.
The Plan is intended to provide retirement
benefits. Certain types of employment may
result in the suspension of your pension benefit
if you cease to be “retired” in accordance
with the Plan definition.
• A signed statement by someone in attendance
at birth or who has direct knowledge of your
date of birth. This statement must be
notarized.
1. If you are age 65 or older (Normal Retirement
Age) and you work 40 hours or more per month,
your pension may be suspended if you work 40
or more hours per month for a Contributing
Employer under the Plan while also in the same
trade or craft you worked in while in covered
employment under the Plan.
• Driver’s license
• State issued ID
• Military ID that includes your date of birth
• Certified Copy of School Transcripts that
include your date of birth
• Certified Copy of Employer Records that
include your date of birth
2. The precise Plan language in Section 7.6 (b)
& (c) dealing with employment after Normal
Retirement Age is as follows:
• Certified Copy of Union Records that include
your date of birth
"(b) Disqualifying Employment means
employment with any Contributing Employer
under the Plan, provided the employment is
in the same trade or craft in which the
Pensioner was employed prior to his
retirement.
• Voter Registration that includes your date of birth
Proof of Marriage
If you are married and elect the 50%, 75%
or 100% Spouse Pension, you must provide
proof of your marriage, such as a marriage
certificate. Do not wait to send in your
pension application if you are unable to locate
your proof of marriage. Send the pension
application, and then follow up with the proof of
marriage as soon as you can.
If you are married and elect a form of payment
other than the standard 50% Spouse Pension
or the optional 75% or 100% Spouse Pension,
you do not need to submit proof of marriage
or proof of spouse’s age. But remember, if you
are married and select any form other than
the 50%, 75% or 100% Spouse Pension, your
spouse must sign his or her consent and this
signature must be notarized.
(c) It is permissible for a Pensioner who
has reached Normal Retirement Age
to work fewer than 40 hours per month
without causing the suspension of his
pension."
5
This rule does not apply to Pensioners who
have not reached Normal Retirement Age.
Normal Retirement Age is defined in Section
1.11 of the Plan as follows:
A Ruling on whether employment is Disqualifying
may be requested in advance of acceptance of
any post retirement employment.
“Normal Retirement Age” shall mean the later
of:
Restriction on Employment by
Disability Pensioner
(a) the date a Participant attains age 65, or
(b) his age on the 5th anniversary of the
commencement of his participation in this Plan
or in Prior Pension Plans A or B.
A Disability Pensioner shall report in writing to
the Fund Office any and all earnings from any
employment within 15 days after the end of each
month in which he has had earnings in any sort
of employment or pursuit. If a Disability Pensioner
fails to make timely report as required, he may be
disqualified from benefits for six months for each
violation.
All Pensioners must report all employment to
the Fund Office within 30 days of
commencement of such employment and
request a Ruling on whether such employment
is Disqualifying. A Ruling on whether any
employment is Disqualifying may be requested
in advance of acceptance of such employment.
If a Disability Pensioner who would have been
qualified for an Early Retirement Pension at the
time of his retirement shall subsequently cease to
be disabled, he shall then be entitled to apply for
an Early Retirement Pension which shall become
effective as of the month his Disability Pension
terminates and shall be based on his attained age
when he first retired on a Disability Pension.
B. For pensioners who have not reached
Normal Retirement Age
1. Your pension may be suspended if: (a) you
work in any job classification with a Contributing
Employer, OR (b) you work for an employer in a
geographic area covered by the Plan at the time
of your retirement and in any industry and trade
or craft in which you were working while
covered by the Plan.
Any Disability Pensioner who performs services
for remuneration or profit during any period of trial
work under the Social Security Act shall not have
his Disability Pension terminated as a result of the
performance of such services during such period.
2. Your pension will be suspended for any month in
which you work in Disqualifying Employment.
IAM National Pension Plan Your
Rollover Options
3. The precise Plan language in Section 7.7 (a)
& (b) dealing with employment before Normal
Retirement Age is as follows:
If you have elected a Lump Sum Payment Option or
will receive an automatic or voluntary cash out of your
pension benefit under the rules of the IAM National
Pension Plan (the “Plan”), the payment may be eligible
to be rolled over to an IRA or an employer plan. This
notice is intended to help you decide whether to do
such a rollover. This notice describes the rollover rules
that apply to payments from the Plan that are not from
a designated Roth account (a type of account with
special tax rules in some employer plans). Rules that
apply to most payments from a plan are described in the
“General Information about Rollovers” section. Special
rules that only apply in certain circumstances are
described in the “Special Rules and Options” section.
"(a) Disqualifying Employment before Normal
Retirement Age means employment with any
Contributing Employer, or employment in any
geographic area covered by the Plan at the
time of the Pensioner's retirement, if the
employment is in any industry and trade or
craft in which the Pensioner worked at any
time after his Contribution Date. Pension benefits
will be suspended for any month in which a
Pensioner works in Disqualifying Employment
before Normal Retirement Age.
General Information About Rollovers
(b) All Pensioners must report all employment to
the Fund Office within 30 days of commencement of
such employment and reqeust a ruling on whether
such employment is Disqualifying."
How can a rollover affect my taxes?
6
You will be taxed on a payment from the Plan if you do
not roll it over. If you are under age 59½ and do not do
a rollover, you will also have to pay a 10% additional
income tax on early distributions (unless an exception
applies). However, if you do a rollover, you will not
have to pay tax until you receive payments later and
the 10% additional income tax will not apply if those
payments are made after you are age 59½ (or if an
exception applies).
payment is eligible for rollover.
If I don’t do a rollover, will I have to pay the 10%
additional income tax on early
distributions?
If you are under age 59½, you will have to pay the
10% additional income tax on early distributions
for any payment from the Plan (including amounts
withheld for income tax) that you do not roll over,
unless one of the exceptions listed below applies.
This tax is in addition to the regular income tax on
the payment not rolled over.
Where may I roll over the payment?
You may roll over the payment to either an IRA (an
individual retirement account or individual retirement
annuity) or an employer plan (a tax-qualified plan,
section 403(b) plan, or governmental section 457(b)
plan) that will accept the rollover. The rules of the IRA
or employer plan that holds the rollover will determine
your investment options, fees, and rights to payment
from the IRA or employer plan (for example, no
spousal consent rules apply to IRAs and IRAs may
not provide loans). Further, the amount rolled over will
become subject to the tax rules that apply to the IRA
or employer plan.
The 10% additional income tax does not apply to the
following payments from the Plan:
► Payments made after you separate from service
if you will be at least age 55 in the year of the
separation;
► Payments that start after you separate from
service if paid at least annually in equal or close
to equal amounts over your life or life expectancy
(or the lives or joint life expectancy of you and your
beneficiary);
How do I do a rollover?
There are two ways to do a rollover. You can do either
a direct rollover or a 60-day rollover. If you do a direct
rollover, the Plan will make the payment directly to
your IRA or an employer plan. You should contact the
IRA sponsor or the administrator of the employer plan
for information on how to do a direct rollover.
► Payments made due to disability;
► Payments after your death;
► Corrective distributions of contributions that
exceed tax law limitations;
If you do not do a direct rollover, you may still do a
rollover by making a deposit into an IRA or eligible
employer plan that will accept it. You will have 60 days
after you receive the payment to make the deposit.
If you do not do a direct rollover, the Plan is required
to withhold 20% of the payment for federal income
taxes. This means that, in order to roll over the entire
payment in a 60-day rollover, you must use other
funds to make up for the 20% withheld. If you do not
roll over the entire amount of the payment, the portion
not rolled over will be
► Payments made directly to the government to
satisfy a federal tax levy;
► Payments made under a qualified domestic
relations order (QDRO);
► Payments up to the amount of your deductible
medical expenses; or
► Certain payments made while you are on active
duty if you were a member of a reserve component
called to duty after September 11, 2001 for more
than 179 days.
taxed and will be subject to the 10% additional income
tax on early distributions if you are under age 59½
(unless an exception applies).
How much may I roll over?
If I do a rollover to an IRA, will the 10% additional
income tax apply to early distributions from the
IRA?
If you wish to do a rollover, you may roll over all or part
of the amount eligible for rollover. Any payment from
the Plan is eligible for rollover, except:
If you receive a payment from an IRA when you
are under age 59½, you will have to pay the 10%
additional income tax on early distributions from
the IRA, unless an exception applies. In general,
the exceptions to the 10% additional income tax for
early distributions from an IRA are the same as the
exceptions listed above for early distributions from
a plan. However, there are a few differences for
payments from an IRA, including:
► Certain payments spread over a period of at least
10 years or over your life or life
expectancy (or the lives or joint life expectancy of you
and your beneficiary);
► Required minimum distributions after age 70½ (or
after death);
► Corrective distributions of contributions that exceed
tax law limitations.
The Plan Administrator can tell you what portion of a
► There is no exception for payments after
separation from service that are made after age 55.
7
► The exception for qualified domestic relations
orders (QDROs) does not apply (although a special
rule applies under which, as part of a divorce or
separation agreement, a tax-free transfer may
be made directly to an IRA of a spouse or former
spouse).
contributions and is not a governmental section 457(b)
plan). You can do a 60-day rollover to an employer
plan of part of a payment that includes after-tax
contributions, but only up to the amount of the payment
that would be taxable if not rolled over.
If you miss the 60-day rollover deadline
► The exception for payments made at least
annually in equal or close to equal amounts over a
specified period applies without regard to whether
you have had a
separation from service.
Generally, the 60-day rollover deadline cannot be
extended. However, the IRS has the limited authority
to waive the deadline under certain extraordinary
circumstances, such as when external events
prevented you from completing the rollover by the
60-day rollover deadline. To apply for a waiver, you
must file a private letter ruling request with the IRS.
Private letter ruling requests require the payment of a
nonrefundable user fee.
► There are additional exceptions for: (1) payments
for qualified higher education expenses, (2)
payments up to $10,000 used in a qualified firsttime home purchase, and (3) payments after you
have received unemployment compensation for 12
consecutive weeks (or would have been eligible to
receive unemployment compensation but for selfemployed status).
For more information, see IRS Publication 590,
Individual Retirement Arrangements (IRAs).
If you were born on or before
January 1, 1936
Will I owe State income taxes?
This notice does not describe any State or local
income tax rules (including withholding rules).
If you were born on or before January 1, 1936 and
receive a lump sum distribution that you do not roll
over, special rules for calculating the amount of the
tax on the payment might apply to you. For more
information, see IRS Publication 575, Pension and
Annuity Income.
Special Rules and Options
If your payment includes after-tax contributions
After-tax contributions included in a payment are
not taxed. If a payment is only part of your benefit,
an allocable portion of your after-tax contributions
is generally included in the payment. If you have
pre-1987 after-tax contributions maintained in
a separate account, a special rule may apply to
determine whether the after-tax contributions are
included in a payment.
If you roll over your payment to a
Roth IRA
You can roll over a payment from the Plan made before
January 1, 2010 to a Roth IRA only if your modified
adjusted gross income is not more than $100,000 for
the year the payment is made to you and, if married,
you file a joint return. These limitations do not apply to
payments made to you from the Plan after 2009. If you
wish to roll over the payment to a Roth IRA, but you
are not eligible to do a rollover to a Roth IRA until after
2009, you can do a rollover to a traditional IRA and
then, after 2009, elect to convert the traditional IRA into
a Roth IRA.
You may roll over to an IRA a payment that includes
after-tax contributions through either a direct
rollover or a 60-day rollover. You must keep track of
the aggregate amount of the after-tax contributions
in all of your IRAs (in order to determine your
taxable income for later payments from the IRAs).
If you do a direct rollover of only a portion of the
amount paid from the Plan and a portion is paid to
you, each of the payments will include an allocable
portion of the after-tax contributions. If you do a
60-day rollover to an IRA of only a portion of the
payment made to you, the after-tax contributions
are treated as rolled over last. For example, assume
you are receiving a complete distribution of your
benefit which totals $12,000, of which $2,000 is
after-tax contributions. In this case, if you roll over
$10,000 to an IRA in a 60-day rollover, no amount is
taxable because the $2,000 amount not rolled over
is treated as being after-tax contributions.
If you roll over the payment to a Roth IRA, a special
rule applies under which the amount of the payment
rolled over (reduced by any after-tax amounts) will be
taxed. However, the 10% additional income tax on early
distributions will not apply (unless you take the amount
rolled over out of the Roth IRA within 5 years, counting
from January 1 of the year of the rollover).
For payments from the Plan during 2010 that are rolled
over to a Roth IRA, the taxable amount can be spread
over a 2-year period starting in 2011. If you roll over
the payment to a Roth IRA, later payments from the
Roth IRA that are qualified distributions will not be
taxed (including earnings after the rollover). A qualified
distribution from a Roth IRA is a payment made after
you are age 59½ (or after your death or disability, or
as a qualified first-time homebuyer distribution of up to
$10,000) and after you have had a Roth IRA for at least
You may roll over to an employer plan all of a
payment that includes after-tax contributions,
but only through a direct rollover (and only if the
receiving plan separately accounts for after-tax
8
5 years. In applying this 5-year rule, you count from
January 1 of the year for which your first contribution
was made to a Roth IRA. Payments from the Roth IRA
that are not qualified distributions will be taxed to the
extent of earnings after the rollover, including the 10%
additional income tax on early distributions (unless an
exception applies). You do not have to take required
minimum distributions from a Roth IRA during your
lifetime. For more information, see IRS Publication
590, Individual Retirement Arrangements (IRAs).
inherited IRA.
You cannot roll over a payment from the Plan to a
designated Roth account in an employer plan.
► Payments under a qualified domestic relations
order. If you are the spouse or
former spouse of the Participant who receives a
payment from the Plan under a qualified domestic
relations order (QDRO), you generally have the
same options the
Participant would have (for example, you may roll
over the payment to your own IRA or an eligible
employer plan that will accept it). Payments under
the QDRO will not be subject to the 10% additional
income tax on early distributions.
If you are not a Plan Participant
If you are a nonresident alien
► Payments after death of the Participant. If you
receive a distribution after the
Participant’s death that you do not roll over, the
distribution will generally be taxed in the same manner
described elsewhere in this notice. However, the 10%
additional income tax on early distributions and the
special rules for public safety officers do not apply,
and the special rule described under the section “If
you were born on or before January 1, 1936” applies
only if the Participant was born on or before January
1, 1936.
If you are a nonresident alien and you do not do a
direct rollover to a U.S. IRA or U.S. employer plan,
instead of withholding 20%, the Plan is generally
required to withhold 30% of the payment for federal
income taxes. If the amount withheld exceeds the
amount of tax you owe (as may happen if you do
a 60-day rollover), you may request an income tax
refund by filing Form 1040NR and attaching your
form 1042-S. See Form W-8BEN for claiming that
you are entitled to a reduced rate of withholding
under an income tax treaty. For more information,
see also IRS Publication 519, U.S. Tax Guide for
Aliens, and IRS Publication 515, Withholding of Tax
on Nonresident Aliens and Foreign Entities.
► If you are a surviving spouse. If you receive a
payment from the Plan as the surviving spouse of a
deceased Participant, you have the same rollover
options that the Participant would have had, as
described elsewhere in this notice. In addition, if you
choose to do a rollover to an IRA, you may treat the
IRA as your own or as an inherited IRA.
Other special rules
If a payment is one in a series of payments for
less than 10 years, your choice whether to make a
direct rollover will apply to all later payments in the
series (unless you make a different choice for later
payments).
An IRA you treat as your own is treated like any other
IRA of yours, so that payments made to you before
you are age 59½ will be subject to the 10% additional
income tax on early distributions (unless an exception
applies) and required minimum distributions from your
IRA do not have to start until after you are age 70½.
If your payments for the year are less than $200,
the Plan is not required to allow you to do a direct
rollover and is not required to withhold for federal
income taxes. However, you may do a 60-day
rollover.
If you treat the IRA as an inherited IRA, payments
from the IRA will not be subject to the 10% additional
income tax on early distributions. However, if the
Participant had
started taking required minimum distributions, you will
have to receive required minimum distributions from
the inherited IRA. If the Participant had not started
taking required minimum distributions from the Plan,
you will not have to start receiving required minimum
distributions from the inherited IRA until the year the
Participant would have been age 70½.
You may have special rollover rights if you recently
served in the U.S. Armed Forces. For more
information, see IRS Publication 3, Armed Forces’
Tax Guide.
For More Information
You may wish to consult with the Plan Administrator,
or a professional tax advisor,
before taking a payment from the Plan. Also, you
can find more detailed information on the federal tax
treatment of payments from employer plans in: IRS
Publication 575, Pension and Annuity Income; IRS
Publication 590, Individual Retirement Arrangements
(IRAs); and IRS Publication 571, Tax-Sheltered
Annuity Plans (403(b) Plans). These publications are
available from a local IRS office, on the web at www.
irs.gov, or by calling 1-800-TAX-FORM.
► If you are a surviving beneficiary other than a
spouse. If you receive a payment from the Plan
because of the Participant’s death and you are a
designated beneficiary other than a surviving spouse,
the only rollover option you have is to do a direct
rollover to an inherited IRA. Payments from the
inherited IRA will not be subject to the 10% additional
income tax on early distributions. You will have to
receive required minimum distributions from the
9
Special Tax Rules for Participants in Puerto Rico
Supplement to the
Summary Plan Description and to the
Special Tax Notice Regarding Payments of the
IAM National Pension Fund
This supplement summarizes the U.S. and Puerto Rico income tax implications of the
IAM National Pension Fund (Fund) with respect to participants who are residents of the
Commonwealth of Puerto Rico at the time that they are receiving benefits from the Plan
(Puerto Rico Participants).
The Plan is currently qualified under Section 401(a) of the United States Internal
Revenue Code of 1986, as amended (US Code), and under Section 1165(a) of the
Puerto Rico Internal Revenue Code of 1994, as amended, and is seeking a tax
determination letter with respect to its qualification under Section 1081.01(a) of the
Puerto Rico Internal Revenue Code of 2011, as amended (PR Code).
**THIS NOTICE IS NOT INTENDED AS TAX ADVICE. PLEASE CONSULT YOUR
OWN TAX ADVISOR REGARDING SPECIFIC QUESTIONS.**
The withholding disclosures in this supplement are intended to provide you with
an overview of the tax rules that may be applicable to your benefit from the Fund.
Any income taxes on distributions from the Fund are subject to the applicable
U.S. and Puerto Rico income tax provisions in effect at the time of distribution
and those provisions may be different from the disclosures in this supplement.
The U.S. and Puerto Rico tax information described in this notice are stated in
general terms only. Neither the Fund’s Board of Trustees nor any other party
associated with the Fund can or will provide any tax advice to participants and
beneficiaries of the Fund. Consequently, you and your beneficiaries should
consult with your own tax advisor with respect to all U.S., Puerto Rico and state
tax consequences of Fund distributions, including without limitation, regarding
U.S., Puerto Rico and estate tax consequences of Fund distributions made as a
result of your death. You should also consult your personal tax advisor as to any
other state tax imposed with respect to Fund distributions.
U.S. Taxation of Fund Distributions to Puerto Rico Participants
1
In General. The portion of a distribution attributable to contributions to the Fund are not
taxable for U.S. tax purposes to the extent the contributions were made in connection
with services performed in Puerto Rico, and you receive your distribution or payment in
a taxable year in which you are a bona fide resident of Puerto Rico for the entire taxable
year. However, the portion of a distribution attributable to contributions made in
connection with services performed in the U.S., and distributions or payments received
in a taxable year in which you are not a bona fide resident of Puerto Rico may be
subject to U.S. income taxes.
Furthermore, since the IAM National Pension Fund is located in the United States, the
portion of a Fund distribution attributable to the earnings and profits obtained by the
trust investments are considered income from sources within the United States, and
may be subject to U.S. income taxes at the time you receive benefits from the Plan.
U.S. Income Tax Withholding. Distributions from the Fund that constitute taxable
income under the US Code may be subject to U.S. income tax withholding, unless you
direct the Fund to make a “direct rollover” (see below). However, if you are a bona fide
resident of Puerto Rico during the entire taxable year in which you receive a distribution,
only the portions of the distribution that relate to: (i) services you performed in the U.S.;
and, (ii) income derived from investments in the Fund would be subject to federal
income tax withholding, unless you direct the Fund to make a “direct rollover” (see
below). If the amount withheld from your pension benefit for U.S. income tax purposes
is greater than your U.S. income tax obligation for the year, you will be able to file a
federal income tax return and request a refund for the amount withheld in excess of
your federal income tax liability, if any.
Rollovers. Only that part of your Fund distribution that is eligible for rollover for U.S.
tax purposes and which will be includible in your gross income for U.S. income tax
purposes (i.e., contributions related to service in the U.S., and dividends, interest and
other investment earnings) is eligible to be rolled-over to an individual retirement
account qualified under the US Code (US-IRA) or to another retirement plan qualified
under the US Code (US-Plan). As further discussed below, US-IRAs and US-Plans
generally do not comply with the qualification requirements imposed by the PR Code.
Therefore, you may only defer both federal and Puerto Rico taxation on the amount
distributed from the Fund by rolling over the Fund distribution to a plan that is qualified
under both the US Code and the PR Code.
Reporting. After the end of each year you will receive an IRS Form 1099-R reflecting
the taxable and non-taxable portions for U.S. income tax purposes of the distributions in
the previous year, any amounts that were rolled-over, and any U.S. income taxes
withheld thereon. You may claim an income tax credit against your federal income taxes
for that year for the amount of tax withheld.
Please consult your tax professional for further information.
Puerto Rico Taxation of Fund Distributions to Puerto Rico Participants
Lump-Sum. If you receive a total single distribution of your accounts entire benefit
within a single taxable year on account of your separation from service or the
termination of the Fund (lump-sum distribution), the distribution will be subject to a
mandatory 20% Puerto Rico income tax withholding, and it will be subject to Puerto
Rico income taxes as a long-term capital gain, at a maximum 20% income tax rate.
2
Annuities or Installments. If you receive your benefit in the form of an annuity or in
installments payment on account of your separation from service or the termination of
the Fund, the distribution will be subject to a 10% Puerto Rico income tax withholding,
but only with respect to the amount exceeding the following amounts each year:
Calendar Year
2014
2015 and thereafter
Amount Exempt
From Puerto Rico Income Tax Withholding
Under Age 60 as of 12/31 Age 60 or Older as of 12/31
$26,500
$30,500
$31,000
$35,000
Distributions in the form of an annuity or in installments on account of your separation
from service or the termination of the Fund are subject to Puerto Rico income taxes at
the applicable ordinary tax rate, but only with respect to the amount exceeding $11,000
per year ($15,000, if you are age 60 or older at the end of the applicable year).
Other Distributions. Distributions from the Fund that are not due to a separation in
service are subject to a 10% Puerto Rico income tax withholding. Other distributions
from the Fund are also subject to the applicable ordinary income tax rates in the year of
the distribution.
Rollovers. Only lump-sum distributions on account of your separation from service or
the termination of the Fund are allowed to be rolled-over under the PR Code. If you
choose to rollover all or a portion of your lump-sum distribution, the amount that you
choose to rollover would not be subject to Puerto Rico income taxes if the distribution is
transferred within 60 days after receipt to another Puerto Rico qualified pension plan or
to an individual retirement account qualified under the 2011 PR Code (PR-IRA).
Reporting. After the end of each year you will receive a PR Treasury Form 480.7C
reflecting the taxable and non-taxable portions for Puerto Rico income tax purposes of
the distributions in the previous year, any amounts that were rolled-over, and any
Puerto Rico income taxes withheld thereon. You may claim an income tax credit against
your Puerto Rico income taxes for that year for the amount withheld.
Please consult your tax professional for further information.
3
Reglas Contributivas Especiales para Participantes en Puerto Rico
Suplemento al
Resumen Descriptivo del Plan y a la
Notificación Contributiva Especial sobre Pagos del
Fondo Nacional de Pensión de IAM
(“IAM National Pension Fund”)
Este suplemento resume las consecuencias contributivas de Estados Unidos y Puerto
Rico del Fondo Nacional de Pensión de IAM (“IAM National Pension Fund”, y en
adelante, el Fondo o el Plan) con respecto a los participantes que son residentes de
Puerto Rico al momento que reciben beneficios del Plan (Participantes de Puerto Rico).
Al presente, el Plan está cualificado bajo la Sección 401(a) del Código de Rentas
Internas de Estados Unidos de 1986, según enmendado (Código Federal), y bajo la
Sección 1165(a) del Código de Rentas Internas de Puerto Rico de 1994, según
enmendado, y está solicitando una carta de determinación con respecto a su
cualificación bajo la Sección 1081.01(a) del Código de Rentas Internas de Puerto Rico
de 2011, según enmendado (Código PR).
**ESTE AVISO NO TIENE LA INTENCION DE SER ASESORIA CONTRIBUTIVA.
FAVOR DE CONSULTAR A SU PROPIO ASESOR CONTRIBUTIVO SOBRE
PREGUNTAS ESPECIFICAS.**
Las divulgaciones sobre retenciones en este suplemento tienen la intención de
proveerle con un resumen de las reglas contributivas que pudieran ser aplicables
a su beneficio del Fondo. Cualquier contribución sobre distribuciones del Fondo
están sujetas a las cláusulas contributivas de Estados Unidos o Puerto Rico
aplicables en efecto al momento de la distribución y tales cláusulas pudieran ser
diferentes a las divulgadas en este suplemento.
La información contributiva de Estados Unidos y Puerto Rico descrita en este
aviso está reflejada solamente en términos generales. Ni la Junta de Fiduciarios
del Fondo (“Fund’s Board of Trustees”), ni cualquier otra parte asociada al Fondo
puede o podrá proveer asesoría contributiva a participantes o beneficiarios del
Fondo. Por lo tanto, usted y sus beneficiarios deben consultar con su propio
asesor contributivo con respecto a todas las consecuencias contributivas de
Estados Unidos, Puerto Rico o estatales de las distribuciones del Fondo,
incluyendo, pero no limitado a, las consecuencias contributivas de caudales
relictos o herencia de Estados Unidos o Puerto Rico de distribuciones del Fondo
hechas por razón de su muerte. Usted debe consultar con su asesor contributivo
1
personal sobre cualquier otra contribución estatal impuesta con respecto a
distribuciones del Fondo.
Tributación de Estado Unidos Sobre Distribuciones del Fondo a Participantes de
Puerto Rico
En General. La porción de una distribución atribuible a las aportaciones al Fondo no
es tributable para propósitos de Estados Unidos en la medida que las aportaciones
fueron hechas en relación con servicios prestados en Puerto Rico, y usted recibe su
distribución o pago en un año contributivo durante el cual usted es un residente bona
fide de Puerto Rico durante todo el año contributivo. Sin embargo, la porción de una
distribución atribuible a aportaciones hechas en relación con servicios prestados en
Estados Unidos, y distribuciones o pagos recibidos en un año contributivo durante el
cual usted no es un rediente bona fide de Puerto Rico pudiera estar sujeta a
contribución sobre ingresos de Estados Unidos.
Además, debido a que el Fondo Nacional de Pensión de IAM está localizado en los
Estados Unidos, la porción de una distribución del Fondo atribuible a las ganancias y
utilidades obtenidas por las inversiones del fideicomiso se considera ingreso de fuentes
de los Estados Unidos, y pudiera estar sujeto a contribución sobre ingresos de Estados
Unidos al momento en que usted reciba beneficios del Plan.
Retención Contributiva de Estado Unidos. Distribuciones del Fondo que constituyan
ingreso tributable bajo el Código Federal pudieran estar sujetas a retención de
contribución sobre ingresos de Estado Unidos, a menos que usted dirija al Fondo a
hacer una transferencia directa (“direct rollover”) (véase a continuación). Sin embargo,
si usted es un residente bona fide de Puerto Rico durante todo el año contributivo en el
cual usted recibe la distribución, sólo las porciones de la distribución hechas en relación
con: (i) servicios prestados en Estados Unidos; e, (ii) ingresos derivados de inversiones
en el Fondo, estarían sujeto a retención de contribución sobre ingresos de Estados
Unidos, a menos que usted dirija la Fondo a hacer una transferencia directa (véase a
continuación). SI la cantidad retenida sobre su beneficio de pensión para propósitos de
contribución sobre ingresos de Estado Unidos es mayor que su obligación contributiva
de Estados Unidos para el año, usted podrá presentar una planilla de contribución
sobre ingresos federal y solicitar un reembolso de la cantidad retenida en exceso de su
responsabilidad contributiva federal, si alguna.
Transferencias (“Rollovers”). Sólo aquella parte de su distribución del Fondo que es
elegible para transferencia (“rollovers’) para propósitos contributivos de Estados Unidos
y la cual será incluida en su ingreso bruto para propósitos contributivos de Estados
Unidos (i.e., aportaciones relacionadas a servicio en los Estados Unidos, e intereses,
dividendos y otras ganancias de inversión) es elegible a ser transferida a una cuenta de
retiro individual calificada bajo el Código Federal (US-IRA, por sus siglas en inglés) o a
otro plan de retiro cualificado bajo el Código Federal (Plan de EE.UU.). Como se
explica más adelante, US-IRAs y Planes de EE.UU. no cumplen con los requerimientos
de cualificación impuestos por el Código PR. Por lo tanto, usted puede solo aplazar
tanto las contribuciones federales como las de Puerto Rico sobre la cantidad distribuida
2
del Fondo al transferir la distribución del Plan a un plan que esté calificado bajo ambos
el Código Federal y el Código PR.
Reportes. Después de finalizado cada año usted recibirá un formulario 1099-R del IRS
reflejando las porciones tributable y no-tributable para propósitos contributivos de
Estados Unidos de las distribuciones en el año anterior, cualquier cantidad que fue
transferida, y cualquier cantidad retenida de contribución sobre ingresos de Estados
Unidos. Usted podrá reclamar un crédito contra su contribución sobre ingresos federal
de ese año por la cantidad retenida.
Favor de consultar con su asesor contributivo para información adicional.
Tributación de Puerto Rico Sobre Distribuciones del Fondo a Participantes de
Puerto Rico
Distribuciones en Suma-Global. Si usted recibe una sola distribución de su beneficio
total en el Plan durante a un sólo año contributivo por concepto de separación del
servicio o terminación del Plan (distribución en suma global), la distribución estará
sujeta a una retención mandatoria de 20% de contribución sobre ingresos de Puerto
Rico, y estará sujeta a contribución sobre ingresos de Puerto Rico como una ganancia
de capital a largo plazo, a una tasa contributiva máxima de 20%.
Anualidades o Plazos. Si usted recibe su beneficio en la forma de una anualidad o a
plazos por concepto de su separación del servicio o la terminación del Plan, la
distribución están sujeta a una retención de contribución sobre ingresos de Puerto Rico
del 10%, pero sólo con respecto a la cantidad que exceda las siguientes cantidades
cada año:
Año Calendario
2014
2015 y siguientes
Cantidad Exenta de la
Retención de Contribución Sobre Ingresos de PR
de Edad al 31/12
de Edad al 31/12
$26,500
$30,500
$31,000
$35,000
Distribuciones en la forma de una anualidad o a plazos por concepto de su separación
del servicio o la terminación del Plan están sujetas a contribución sobre ingresos de
Puerto Rico a la tasa ordinaria aplicable, pero sólo con respecto a la cantidad que
exceda de $11,000 por año ($15,000, si usted tiene 60 años o más al finalizar el año
aplicable).
Otros Distribuciones. Distribuciones del Fondo que no sean por concepto de
separación del servicio están sujetas a una retención de contribución sobre ingresos de
Puerto Rico del 10%. Otras distribuciones del Fondo también están sujetas a la tasa
contributiva ordinaria aplicable en el año de la distribución.
Transferencias (“Rollovers”). Sólo distribuciones en suma-global por concepto de
separación del servicio o terminación del Fondo pueden ser transferidas bajo el Código
PR. Si usted decide transferir todo o parte de una distribución en suma global, la
cantidad que elija transferir no estará sujeta a contribución sobre ingresos de Puerto
Rico si la distribución es transferida dentro de los 60 días luego del recibo a otro plan
3
cualificado de Puerto Rico a una cuneta de retiro individual cualificada bajo el Código
PR (PR-IRA).
Reportes. Después de finalizado cada año usted recibirá un formulario 480.7C del
Departamento de Hacienda reflejando las porciones tributable y no-tributable para
propósitos contributivos de Puerto Rico de las distribuciones en el año anterior,
cualquier cantidad que fue transferida, y cualquier cantidad retenida de contribución
sobre ingresos de Puerto Rico. Usted podrá reclamar un crédito contra su contribución
sobre ingresos de Puerto Rico de ese año por la cantidad retenida.
Favor de consultar con su asesor contributivo para información adicional.
4
I.A.M. National Pension Fund
1300 Connecticut Avenue N.W.
Suite 300
Washington, DC 20036-1711
1-800-424-9608
Fax: 1-202-463-8098
e-mail: [email protected]
To learn more about the National Pension Plan,
visit our Website at iamnpf.org
10/2014