Frequently Asked Questions

Annuity Plan

The Annuity Plan is a Defined Contribution Pension Plan with benefits paid in by your employer and invested with Vanguard.

You are vested upon the first dollar of employer contributions being made on your behalf to the Annuity Plan.

Simply go to the section of this website titled “Forms” and print out a new beneficiary form to complete.

Married account holders are reminded that their spouse is automatically their beneficiary. However, with your spouse’s notarized consent, you may name anyone other than your legal spouse as a primary beneficiary. The Plan also recommends that you should name a secondary and tertiary (third) beneficiary in the event your primary beneficiary predeceases you.

If you are single, you should also name a beneficiary. Single participants that do not have a beneficiary on file with the Plan will have their monies paid out in accordance to the beneficiary payout provisions listed within the Plans Summary Plan Description Book.

​Generally, a journeyperson or employee becomes eligible for a disbursement 1) upon retirement; 2) if a participant becomes totally disabled (must submit a copy of their Social Security Disability Award Letter); 3) Upon no contributions being received after a twenty-four-month consecutive time period.

Unless you have requested a Rollover to another qualified plan or to an IRA, the entire gross distribution from your Fund will be subject to a 20% mandatory withholding for Federal Income Tax.

In addition to being liable for income tax, for withdrawals taken prior to the age of 59 ½, a participant may be subject to a 10% early withdrawal penalty under the Internal Revenue Code. This is not a penalty imposed by the Plan, but rather a Federal requirement which the Plan must adhere to. As such, the Plan recommends that participants should consult with a professional tax advisor prior to taking payment of benefits from their account.

A journeyperson or employee is permitted to borrow the lesser of 50% of their account balance or $50,000.

Please note that the use of the terms journeyperson and employee is specific. The Plan rules do not allow beneficiaries and former spouses to borrow against their account.

You may have only one loan outstanding at a time. An outstanding loan balance (active or defaulted) must be paid in full prior to applying for a subsequent loan.

A loan’s interest rate is always one percent (1%) above the prime rate on the day the loan application is approved by the Plan. Once the application is approved, the rate is fixed and will remain constant for the five-year duration of the loan or, in the case of a loan for a primary residence, remain fixed for up to ten years.

IRS regulations require loans that are deemed to be in default to be tracked and to accumulate interest until distribution. Disclosure rules require this information to be displayed on the statement. This amount is not invested, and it is not deducted from the invested amounts at distribution. A participant may pay back the defaulted loan in full plus interest at any time, and that repaid amount will not be taxable at distribution.

No. There are no hardship loan or withdrawal provisions under the Annuity Fund.

The Money Purchase Plan and Trust is a retirement fund. Until such time that you have a qualifying event as stipulated by Plan rules and IRS regulations, or if you do not meet the Plan’s loan provisions, you do not have access to these monies.

It depends. If your former spouse is entitled to a portion of your Annuity Fund account, then your Annuity Fund balance will be reduced by the amount stipulated within the approved QDRO. If your former spouse is not entitled to a portion of your Annuity account, your account will not be affected by your divorce.

In either scenario you must notify the Annuity Fund office in writing of the event and supply the office with your complete divorce decree and any supporting documents (stipulation agreements). If your former spouse is entitled to a portion of your Annuity Fund account, a QDRO should be submitted to the Annuity Fund office for review and consideration.

In the event of a divorce, you should review your beneficiary on file with the Annuity Fund, Health and Benefit Fund, Union Office, NEBF and the I.O.

Unless your spouse signs and notarizes the change of beneficiary form, your spouse will remain your beneficiary.

Yes! Many people erroneously think that once they retire or stop working for a Local 697 signatory employer, they must withdraw their account. This is not true! You can stay invested in the Annuity Plan and continue to receive the following benefits:

  • Continued tax-deferred savings
  • Ability to stay invested in low-cost and plan-specific investment options
  • Periodic disbursements
  • Free retirement guidance and support from Vanguard

Additionally, many investment professionals will lead you to believe that the Plan’s investment options are not sufficient to meet your retirement needs and goals in order to get your account. In most cases they are incorrect. Caveat emptor!