Sheet Metal Workers' International Association
Local Union No.73
Pension Welfare and Annuity Funds

 











 


Partial Lump Sum Payment Option

If you retire on or after April 1, 1996, you may elect to have the amount of your monthly benefit reduced by not more than 10% in return for a lump sum payment at the time your monthly pension is first payable.

Payment of the Partial Lump Sum Payment Option is subject to the following conditions:

  • You must elect to have your monthly benefit reduced by an even dollar amount not to exceed 10% of the monthly benefit. The minimum lump sum payable is $500. The maximum lump sum payable is $20,000.

  • You can only elect the Partial Lump Sum Payment Option before the Trustees approve your pension application. Thereafter, you may not elect a Partial Lump Sum Payment, even following subsequent reemployment. Once the Board of Trustees approves the Partial Lump Sum Payment Option, it cannot be revoked.

  • You cannot elect the Partial Lump Sum Payment Option in connection with the 50% Husband-and-Wife Option unless both you and your spouse provide written consent. If you elect the 50% Husband-and-Wife Option, the amount will be computed after adjustment for the Partial Lump Sum Payment.

  • You may not elect the Partial Lump Sum Payment Option in connection with the Level Income Option or the 75% or 100% Husband-and-Wife Options.

  • The Partial Lump Sum Option is not available if you are receiving a Disability Pension

  • Only one Partial Lump Sum Payment will be awarded during your lifetime.

EXAMPLE:

 

 

 

 

Mike, a married participant, retires at age 62 as of October 1, 2009 and is eligible for a Regular Pension of $1,200.00 per month. He elects the Partial Lump Sum Option (with the
consent of his spouse) and chooses to reduce his pension dollar amount by the maximum 10% allowed (limited to $20,000). In this case, Mike’s reduction in his monthly pension equals $120.00 per month. On the Effective Date of his pension, Mike receives a lump sum payment of $18,333.42 (as determined by the Fund Office) and his monthly pension of $1,080.00 ($1,200.00 minus $120.00).
If Mike and his spouse wish to receive the remainder of his pension as a 50% Husband-and-Wife Option, the $1,080.00 monthly benefit would be reduced. Assuming that Mike’s spouse is the same age as Mike (age 62), the monthly benefit would be $972.00 (90% of $1,080.00). Upon Mike’s death, his surviving spouse will receive $486.00 per month (50% of $972.00) for life.

If the total lump sum value of your
benefit is $1,000 or less, you will
receive it as a lump sum distribution. If the value is at least $1,000 but less
than $5,000, the entire benefit will be
paid in a lump sum following your
consent to the distribution.

The amount of the Partial Lump Sum Payment is based on factors determined by the Fund’s actuary. These factors change each year on July 1 based on interest rates and a mortality table defined by federal law to calculate lump sum payments.

The lump sum payments shown above are determined on a before-tax basis. The rules regarding taxation of a lump sum distribution are very complex. You may wish to consult a tax advisor prior to electing this option.

 

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