The Western Conference of Teamsters Pension Trust

This section explains the benefit you earn for your covered employment in 1987 and later under the contribution account benefit formula.

Topics Below

Contribution Account Benefit Formula
Contributory Service Benefit
Years of Service
Estimating Your Contributory Service Benefit
Non-Contributory Service Benefit Based on Past Employment
Past Employment
Rules for Units Reentering the Plan
Non-Contributory Service Benefit Based on Intermediate Employment

Contribution Account Benefit Formula

If you join the Plan in 1987 or later, all your retirement benefits are calculated under the contribution account benefit formula explained in this section.

If you joined the Plan before 1987, your benefits are earned under two different formulas: your five-year average benefit earned for your covered work through 1986 (explained in the Five-Year Average Benefit section) and your contribution account benefit earned for your covered work in 1987 and later (explained in this section).

Under the contribution account benefit formula, you earn a monthly retirement benefit based on a percentage of the basic contributions your employers make for all your contributory service (covered hours) after 1986. This is called your contributory service benefit.

In most cases, your contribution account benefit equals your contributory service benefit. However, if you first join the Plan after 1986, you may also qualify for non-contributory service benefit based on your employment before you entered the Plan.

Or, if you rejoin the Plan after 1986 as part of a new bargaining unit, you may qualify for a non-contributory service benefit based on your employment between your two periods of covered employment (see Non-Contributory Service Benefit Based on Intermediate Employment).

If you qualify, your contribution account benefit equals the total of your contributory service benefit (explained next) plus your non-contributory service benefit (also explained below.)

There is no maximum to the benefit you can earn under the contribution account benefit formula. Your benefit grows each month that your employer makes contributions to the Pension Trust on your behalf.

The Internal Revenue Service does place a maximum on the total monthly benefit you can receive from this Plan. See Federal Limit on Benefit Amounts where this limit is discussed.

Contributory Service Benefit

Beginning in 1987, you earn a contributory service benefit that is a percentage of all the basic contributions your employers make for your covered hours after 1986.

BENEFIT PERCENTAGES
Your contributory service benefit is calculated by multiplying all the basic contributions your employers pay into the Pension Trust for your covered employment in each calendar year after 1986 by the benefit percentage that applies to that year. The results from all of those years are then added together to arrive at your total contributory service benefit. The benefit percentage is not the same for every year.

The benefit percentage for some years depends on whether your covered employment in that year occurs during your first 20 years of service or comes after your first 20 years of service. Years of service are explained next.

Click here to see the specific benefit percentages that apply to each year of covered employment from 1987 forward.

Years of Service

Your years of service are only used to determine when you cross the 20 years of service line. You cross that line at the end of your 20th calendar year of service.

You earn one year of service for:

Each calendar year that ends during your period of unbroken past employment, up to a maximum of 10 years. Click here for details.
Each calendar year of vesting service that ends on or after your first covered hour under the Plan. Click here for details.

You cannot earn more than one year of service during a calendar year.

Although only basic employer contributions for your covered employment after 1986 count when calculating your contribution account benefit, all your years of service—before and after January 1, 1987—count when adding up your years of service. This also includes years of vesting service you earn based on non-covered employment.

Click here for a example of how to determine your years of service.

Estimating Your Contributory Service Benefit

Your contribution account benefit is based on all your covered employment after 1986 up to your date of retirement.

Remember, if you joined the Plan before 1987, your retirement benefit is based on the combined total of your contribution account benefit and your five-year average benefit (explained in the Five-Year Average Benefit section).

Two tables give you an easy way to estimate how your contributory service benefit adds up each year until you retire.

Use this table to estimate the monthly benefit you earn in a calendar year before you cross the 20 years of service line. Use this table to estimate the monthly benefit you earn in a calendar year after you cross the 20 years of service line.

To use either table, you need to know:

How many years of service you have at the beginning of the year, and
The basic contribution rate that applies to your covered hours during that year (as listed in your collective bargaining agreement).

Note: Your basic contribution rate is set in your collective bargaining agreement. It does not include supplemental PEER contributions that your employer may be required to make. See Types of Contributions on page 3 for more information.

Step 1—First, determine your total years of service at the beginning of the year. If you have not yet crossed the 20 years of service line, use this table . If you already have 20 or more years of service at the beginning of the year, use this table .

Step 2—Next, select the basic hourly contribution rate closest to your own from the appropriate table. Both tables show typical hourly contribution rates from 10¢ to $9.00 and total basic contributions for the year at that rate assuming full-time employment of 2,080 covered hours. Keep in mind that PEER contributions are not used to calculate your contribution account benefit, only basic employer contributions.

Note: These tables assume that you work exactly 2,080 covered hours in a calendar year. If you work more or fewer than 2,080 covered hours in a year, your monthly benefit earned for the year may be different. If you want to use a different contribution rate than shown in the tables, the amount is in between the ones shown for the nearest rates.

Step 3—The last step determines the estimated monthly benefit you earn for your covered employment during the calendar year. Select from the appropriate column the year you would like to estimate your benefit. In that column, identify the contribution rate you chose in Step 2. This is your estimated monthly contributory service benefit available at your normal retirement age.

Click here for an example of how a contributory service benefit is calculated.

Non-Contributory Service Benefit Based on Past Employment

Eligibility
If your first covered hour in the Plan is after 1986 and you qualify for past employment, you may be eligible for a non-contributory service benefit.

Your non-contributory service benefit is based on your total years and months of past employment. Click here to learn about past employment.

To qualify for a non-contributory service benefit based on past employment, you must meet all of the following conditions:

Your first covered hour must be after 1986, and
You must qualify for past employment, and
You must complete at least one year of contributory service in a calendar year that ends after your first covered hour and before your 10th anniversary under the Plan.

If you are eligible for a non-contributory service benefit, you need to be familiar with two key terms:

Year of non-contributory Service
Year of contributory Service

Note: If you leave covered employment and rejoin the Plan after 1986 as part of a new bargaining unit, you may also be eligible for a non-contributory service benefit based on your intermediate employment. Click here for the rules that apply to this type of non-contributory service benefit based on Intermediate Employment.

Year of Non-Contributory Service
You are credited with one full year of non-contributory service for each full year of unbroken past employment. (You earn 1/12 of a year of noncontributory service for each full month of unbroken past employment.)

You cannot earn more than 10 years of non-contributory service and your years of non-contributory service can never be more than the period of your unbroken past employment. Also, your total years of non-contributory service cannot be more than twice your total years of contributory service.

Put another way, every year of contributory service you complete converts two years of your unbroken past employment into years of noncontributory service. This is sometimes called the two-for-one rule.

For example, suppose you enter the Plan with nine years and two months of unbroken past employment. You leave the Plan having completed four years of contributory service. Under the two-for-one rule, you are limited to eight years of non-contributory service because that’s twice the number of your years of contributory service.

Continuing with this example, if you leave the Plan with five or more years of contributory service, you qualify for nine years and two months of non-contributory service. Under the two-for-one rule, your limit is either 10 years (twice the number of your five years of contributory service), or your total period of unbroken past employment, whichever is less. Remember, you can never qualify for more than 10 years of non-contributory service.

Year of Contributory Service
Each calendar year in which you complete at least 500 covered hours counts as one of your years of contributory service.

How to Calculate Your Non-Contributory Service Benefit
There are three steps to figuring your non-contributory service benefit:

Step 1—Calculate the average amount of basic contributions paid for your covered employment in each of your first five years of contributory service (years when you earned at least 500 covered hours). Contributions for calendar years that begin on or after your 10th anniversary under the Plan cannot be used to calculate your non-contributory service benefit.

Step 2—Take 1.20% of your average annual contributions from Step 1. This amount determines the value of each year of non-contributory service you have earned. If your first covered hour under the Plan is before July 1, 2003, the percentage used to determine your non-contributory service benefit is 2.00% rather than 1.20%.

Step 3—Multiply the result from Step 2 by your years of non-contributory service.

The result from Step 3 is your non-contributory service benefit. Add this amount to your contributory service benefit to determine your total contribution account benefit.

Click here for an example of how a non-contributory service benefit is calculated.

Past Employment

Certain work performed before you first become covered by the Plan (called past employment) may count when calculating your retirement benefit. Your unbroken past employment is used to calculate either of the following:

Non-contributory service benefit under the contribution account benefit formula (if your first covered hour is in 1987 or later), or
Past service credits under the five-year average benefit formula (if your first covered hour is before 1987).

Unbroken past employment can also count as years of service when determining your contributory service benefit (See Years of Service for more details).

There are two types of past employment. You can qualify for either or both depending on your situation:

Continuous Past Employment
Special Past Employment

Continuous Past Employment
Continuous past employment is your unbroken employment with an employer before the employer starts making contributions to the Plan for your bargaining unit. To qualify, you must be a member of that bargaining unit when it becomes covered by the Plan, that unit must be considered a “newly covered unit” (explained to the right) and you cannot have any prior Plan coverage.

You do not qualify for continuous past employment if you are a corporate officer at the time of your first covered hour or earlier.

Special Past Employment
Special past employment is your unbroken employment after age 30 in a bargaining unit represented by a local union affiliated with the International Brotherhood of Teamsters within the 13 Western states. You cannot have any breaks between this employment and your covered employment and you cannot have any prior Plan coverage.

If you are a corporate officer at the time of your first covered hour or earlier, you qualify for special past employment only if that period of past employment was covered by a collective bargaining agreement with a local union affiliated with the International Brotherhood of Teamsters within the 13 Western states.

Periods of self-employment (that is, employment as a sole proprietor or a partner) do not qualify as past employment. Your past employment does not count for vesting or protect you from a loss of Plan benefits.

Exception: In some cases, your hours of work for an employer before you first become covered by the Plan may count toward your vesting (see Special Vesting Rule For New Groups and Hours of Non-Covered Employment).

Rules for Units Reentering the Plan

One of the requirements for continuous past employment (or intermediate employment) is that your unit must qualify as a newly covered unit when Plan coverage begins. This requirement is satisfied if your unit was never previously covered under the Plan.

If your unit was covered under the Plan at some time in the past, leaves the Plan and then rejoins the Plan again at a later date, it is not considered a newly covered unit. Employees in the unit at the time it rejoins the Plan do not qualify for continuous past employment (or intermediate employment). This limitation does not apply if the Trustees determine to their satisfaction, based on all the facts and circumstances, that recognition of the unit as a newly covered unit is not adversely selective against the Plan.

If a Teamster bargaining unit is considering reentering the Plan, the Trustees may require certain statistics about the unit before making their decision whether to treat the unit as a newly covered unit, such as:

Length of time between the date the unit leaves the Plan and its reentry date.
Number of employees in the unit compared to the original unit when it left the Plan.
Number of employees in the unit when it left that are still in the unit.
The extent to which any of the employees in the reentering unit could qualify for PEER.
The difference between the unit’s original and proposed contribution rates.

A Teamster bargaining unit considering reentering the Plan should contact their Area Administrative Office about this special rule and how to send a request to the Trustees for recognition of the unit as a newly covered unit.

Non-Contributory Service Benefit Based on Intermediate Employment

If you leave covered employment and later rejoin the Plan after 1986 as part of a new Teamster bargaining unit, you may be eligible for a noncontributory service benefit based on your intermediate employment.

Eligibility
If you leave covered employment at any time and then rejoin the Plan after 1986 as part of a new Teamster bargaining unit, you may be eligible for a non-contributory service benefit. This benefit is based on your total years and months of intermediate employment. Intermediate employment is your unbroken non-covered employment with an employer before that employer first starts contributing to the Plan for your unit.

To qualify for a non-contributory service benefit based on your intermediate employment, you must meet all of the following conditions:

You must be a member of a Teamster bargaining unit when it becomes covered by the Plan, and
Your bargaining unit must enter the Plan after 1986, and
You must not have a forfeiture of service while you are away from covered employment, and
Your bargaining unit must never have been covered under the Plan or the Trustees determine to their satisfaction, based on all the facts and circumstances, that recognition of the unit as a newly covered unit is not adversely selective against the Plan (click here for more information).

Up to 10 years of intermediate employment may be recognized. However, if you receive credit for years of past employment under the Plan’s five-year average benefit formula (see Five-Year Average Benefit for more information) or contribution account benefit formula (click here for more information), the 10-year maximum is reduced by those years of past employment.

The rules on intermediate employment are similar to those for past employment as explained on the previous page. Your Area Administrative Office can provide more information about intermediate employment.

The formula for calculating a non-contributory service benefit based on intermediate employment is similar to the formula used for calculating a non-contributory service benefit based on past employment. Your Area Administrative Office can provide more information about how this benefit is calculated and whether you qualify.

Click here for questions and answers about Contribution Account Benefit.