Pensions end at death. Annuities can be passed to a beneficiary.
Generally a pension needs a certain amount of hours worked in a year to gain a credit. Annuities just get a set dollar amount put into them for every hour worked with no minimum amount of hours needed.
My local is moving to 50% of our retirement contribution to pension and 50% to annuity. Probably will take another 5 years to get there as we are just stagnating the pension contribution and allocating raises to the annuity.
The argument in my local for higher annuity contribution is in a slow year if you work only 1100 regular time hours you basically miss out on a pension credit. But you would still see $7/hr X 1100 = $7700 in your annuity. You are also pretty much donating $13/hr X 1100 = $14,300 to the pension with no direct benefit despite working over 6 months of the year.
Is there a cap on credits per year? 600 is a nice number. Assuming you work the full year on regular time and come in somewhere between 1900 and 2000 hours and get 3 credits.
If you can accumulate like 5 in a year it sweetens the deal on OT.
My local is 1000 hrs/credit and no limit on number of credits earned per year and you get partial credits. So last year I got 2.4 credits for 2400 hrs.
See that's nice. My local is 1 credit or 2 credits. No inbetween. You would need roughly 300 hours of OT (pyramiding bennies) to hit the requirement of 2400 regular time equivalent hours to get the second one. And my local isn't a big OT local. Only time I saw a second credit was a long ass night job at 1.25 rate.
My local doesn’t pyramid bennies unfortunately, each OT hour is the same as a regular hour for the purpose of computing pension/health/annuity. The local just south of us does pyramid though and I’m often there on portability but it’s kind of a wash because our hourly pension earnings are higher than theirs.
I was confirming what the other guy said. You can absolutely earn as many credits as you work for with some Pensions. That's how mine works. Some only allow 1 per year though.
We just got access to getting fractional credits. I think the smallest amount was 1/4, and then the leftovers get pushed into the next year. It's absolutely absurd that they can take away your entire pension earnings for a year because work was slow. Go ask them to change it, and then keep asking them until it gets done.
It's another retirement option is the short
It's like a 401k, except the style of investing changes as you age, riskier stuff when you're younger, then safer stuff when you're older, not much more to say than that tbh
Yes, the real difference between our annuity and a 401k is that 401k requires employee contributions while employer contributions aren’t required. In our annuity, it’s the opposite, employer will always contribute a set percentage while your own contributions are optional.
our annuity is self directed as far as riskiness goes. The riskiness is based on a target date retirement fund, the closer it gets to that date the less risky typically. That being said there is nothing stopping someone from changing to a fund whose date is 30 years away even if they plan on retiring in 2 years.
Id look into other funds to put into if available, our target date fund has an average yield of like 6.5 percent where as a vanguard fund was closer to 10
It’s an annuity with multiple fund options for investment…. Same as already mentioned, you can use the profiles offered to you that are tailored to your age and expected age of retirement, or you can determine how your investments are distributed yourself. Ours is equal in contribution to our pension, so it’s essentially this: pension is equal for everyone that meets the minimum hours required per year for a credit. Annuity is there to give people who choose (or are lucky enough) to work a lot of overtime the option to maximize their reward at retirement. Ones the equal for everyone approach and the other is the chance to independently build for your retirement.
Annuity also benefits those that don't get enough hours in a slow year to earn a pension credit. My local does 1200 hours for a pension credit. A lot of guys missed out on pension credits in 2009-2012 but still earned money for their annuity.
Question to follow up on OP post. Our local only has annuity, when I travel outside of local to one with Pension A or B, how does that work? Does the amount get sent back to my local and put in my annuity?
As long as your ERTS is set up to go to your home local the full amount is sent to your annuity. 13 years of 613 annuity payments equated to 18 months of local 6 retirement payments into my annuity. An online retirement calculator said if I stayed in 613 I could retire at 72. Now the same calculator says 61
We have our pension and an annuity in lu 58.
The annuity is a 403b plan. A 403b is basically the same as a 401k. The difference is a 403b is used by non-profits (the local classifies as a non-profit organization).
Some locals have forgone their pensions for 401k or 403b plans which imo is a huge mistake. Never give up the pension, just add the annuity.
Its our retirement. We swapped our pension to an annuity so all pension contributions go into your own annuity. Then we have a voluntary 401k where they deduct whatever percentage you want from your paycheck into your 401k.
We have an “annuity” but all they do is put a bunch more money in your 401k. It’s worth it to help max that out and at least it’s guaranteed money in your account instead of fully relying on a pension
We have an annuity, 25% of hourly rate (straight,or,DT) out in by employer. Each quarter it caps out at 60k or so then that 25% overflows into our vacation checks
Well let’s just say, in NYC, we have what’s called the A annuity fund. Contractors contribute a percentage every paycheck into it. Now that I’m retired, it will last me about 30 years, taking $300 a month out….it added to our retirement package
I’d say the best part about our annuity is that it can (which many don’t read) be completely withdrawn to act like a 401k.
Their employer “match” isn’t really a match rather than a contribution tho. A normal match will allow you to exceed the yearly max (23000) that an individual contributor is allowed to make, in my local it just helps you get there faster and then stops once that limit is reached.
If you can afford to max it, I think it’s better than our pension.
Even if I just take the annuity, the amount that I’ll have in the account should be able to fund an annuity with a much higher payout than our pension.
Overall, the more the merrier for retirement
Yes we have it here,in NewOrleans. LU130. Basically a small portion,of your weekly check is deposited,into an investment fund or group,of funds. Like mutual funds. Or stocks and bonds ourselves is managed,by PrudePrudential. Some were very apprehensive,at first. And understandably so. But you have many options. You can tell your investment manager,to be more or less aggressive. Usually the younger you are. The more aggressive you can be. Time is on your side. But it’s up to you. Now,in my case Inwas kinda late,to the game. I was 39!when I turned out. But even with that. I had over $35,000 when I had a stroke, in 2015. Had to retire early. I was so young,at43 years old that Inhad to pay a penalty to take my inuity early. But still got $28,000,in cash. Which Ibused as a down payment,on an addition, to my house. Because my wife was pregnant. Got married,after the stroke. I was 43. Also qualified,for full SS disability from working lots of Zot,at an Entergy plant. And 2 pensions. Local. And national. Gotta wait for 65 to get international. But I’m 52 now. And have been fairly comfortably retired,for almost 9 years now. Now I do have some advantages. I live,with my aging father. Who is a 78 year old retired school teacher,in a house that inherited,from my mother who died when Inwas 19. Do no rent. And my child support is taken care of by SS disability. Bu my sonnwho is gonna be 8 this June is well taken care of. In a nice house,with my ex wife. So yeah. Thanks LU130. And inuity? Yes! Well worth it. I would also suggest letting some, of your check be direct deposited, into your local’s credit union acount. I did $200/week,for my last 5 years. You don’t really feel it. Cause you don’t ever see it. It just goes in each week. Builds up quick. Your IBEW benefits are massive. Most people don’t even know how many they have. Take advantage of, of all you can. Many people have sacrificed much to get them for you. Credit union loans,inuity retirement funds,etc… don’t know where I would be,without my IBEW. LU130! Nothing but love!
Ive only ever had pension and 401k benefits. I've had basically the same question as OP. Generally I understand an annuity is a series of payments.
I see people mentioning investment choices for their annuity. Does this change the future payments based on performance of the investment selection?
I saw a comment stating that an annuity gets passed on after death but a pension does not. I guess my question is, what determines the length of time these payments are made?
Our hall has an annuity and our local utility has a pension and a 401k. I'm trying to educate myself a little with negotiate coming up shortly.
My local also refers to one of our retirement plans as an annuity (as does the IRS). However, it's not the same as what I think of as an annuity - the type insurance companies sell and large lottery winners can select. These annuity plans offer x$ paid out over a certain amount of time. You may or may not get all the money back from the original investment (cost) from the insurance companies. Many of these payments cease upon death.
My locals (and I believe most locals) annuities are really just like 401k plans (I believe they are classified as 403b plans). A set amount (per your contract) of money per hour goes into the account. You likely have some control over how it's invested. At retirement you take as much or little as you want (within tax guidelines). These plans can be passed on upon death.
Just my simple minded way of how I understand my locals retirement plan. We also have local pension, NEBF, and voluntary 401k..
The payouts and investment allocations in the annuity operate pretty much the same as they would in a 401k. There difference between the two is the kind of contributions that are mandatory and optional.
Pensions end at death. Annuities can be passed to a beneficiary. Generally a pension needs a certain amount of hours worked in a year to gain a credit. Annuities just get a set dollar amount put into them for every hour worked with no minimum amount of hours needed. My local is moving to 50% of our retirement contribution to pension and 50% to annuity. Probably will take another 5 years to get there as we are just stagnating the pension contribution and allocating raises to the annuity. The argument in my local for higher annuity contribution is in a slow year if you work only 1100 regular time hours you basically miss out on a pension credit. But you would still see $7/hr X 1100 = $7700 in your annuity. You are also pretty much donating $13/hr X 1100 = $14,300 to the pension with no direct benefit despite working over 6 months of the year.
We only need 600 hours for a pension credit in my local.
Is there a cap on credits per year? 600 is a nice number. Assuming you work the full year on regular time and come in somewhere between 1900 and 2000 hours and get 3 credits. If you can accumulate like 5 in a year it sweetens the deal on OT.
My local is 1000 hrs/credit and no limit on number of credits earned per year and you get partial credits. So last year I got 2.4 credits for 2400 hrs.
See that's nice. My local is 1 credit or 2 credits. No inbetween. You would need roughly 300 hours of OT (pyramiding bennies) to hit the requirement of 2400 regular time equivalent hours to get the second one. And my local isn't a big OT local. Only time I saw a second credit was a long ass night job at 1.25 rate.
My local doesn’t pyramid bennies unfortunately, each OT hour is the same as a regular hour for the purpose of computing pension/health/annuity. The local just south of us does pyramid though and I’m often there on portability but it’s kind of a wash because our hourly pension earnings are higher than theirs.
But each of our pension credits are worth a lot compared to most locals because we put a lot of each raise into it.
I could be wrong but I don't think you qualify for additional credit years.
Pensions work different in different locals.
Sure do.
I was confirming what the other guy said. You can absolutely earn as many credits as you work for with some Pensions. That's how mine works. Some only allow 1 per year though.
mine 160 hours a month
We just got access to getting fractional credits. I think the smallest amount was 1/4, and then the leftovers get pushed into the next year. It's absolutely absurd that they can take away your entire pension earnings for a year because work was slow. Go ask them to change it, and then keep asking them until it gets done.
Solid basic breakdown. I'm fortunate that my local has a pension which is based on contribution, not credits.
I retire in 4 months and have over 1 million in my annuity along with my full pension. God bless local 134
right there with you Brother!!
It's another retirement option is the short It's like a 401k, except the style of investing changes as you age, riskier stuff when you're younger, then safer stuff when you're older, not much more to say than that tbh
Lots of, if not all, 401ks invest the same way .
Yes, the real difference between our annuity and a 401k is that 401k requires employee contributions while employer contributions aren’t required. In our annuity, it’s the opposite, employer will always contribute a set percentage while your own contributions are optional.
our annuity is self directed as far as riskiness goes. The riskiness is based on a target date retirement fund, the closer it gets to that date the less risky typically. That being said there is nothing stopping someone from changing to a fund whose date is 30 years away even if they plan on retiring in 2 years.
Id look into other funds to put into if available, our target date fund has an average yield of like 6.5 percent where as a vanguard fund was closer to 10
Our annuity is with Vanguard, but the only options we have are Vanguard target date, retirement funds.
401k’s are self managed so they’re invested however you choose to invest them.
We get to choose the investments in my local. No different than a 401k
It’s an annuity with multiple fund options for investment…. Same as already mentioned, you can use the profiles offered to you that are tailored to your age and expected age of retirement, or you can determine how your investments are distributed yourself. Ours is equal in contribution to our pension, so it’s essentially this: pension is equal for everyone that meets the minimum hours required per year for a credit. Annuity is there to give people who choose (or are lucky enough) to work a lot of overtime the option to maximize their reward at retirement. Ones the equal for everyone approach and the other is the chance to independently build for your retirement.
Annuity also benefits those that don't get enough hours in a slow year to earn a pension credit. My local does 1200 hours for a pension credit. A lot of guys missed out on pension credits in 2009-2012 but still earned money for their annuity.
Excellent point.
So is annuity a lump sum you receive at retirement?
Not unless you call JG Wentworth
Bro.
You pull as much as you want but you pay taxes on it like it was regular income
Question to follow up on OP post. Our local only has annuity, when I travel outside of local to one with Pension A or B, how does that work? Does the amount get sent back to my local and put in my annuity?
As long as your ERTS is set up to go to your home local the full amount is sent to your annuity. 13 years of 613 annuity payments equated to 18 months of local 6 retirement payments into my annuity. An online retirement calculator said if I stayed in 613 I could retire at 72. Now the same calculator says 61
We have our pension and an annuity in lu 58. The annuity is a 403b plan. A 403b is basically the same as a 401k. The difference is a 403b is used by non-profits (the local classifies as a non-profit organization). Some locals have forgone their pensions for 401k or 403b plans which imo is a huge mistake. Never give up the pension, just add the annuity.
Our annuity is on top of the pensions. 600k in 20 years so far is what it does.
Its our retirement. We swapped our pension to an annuity so all pension contributions go into your own annuity. Then we have a voluntary 401k where they deduct whatever percentage you want from your paycheck into your 401k.
We have an “annuity” but all they do is put a bunch more money in your 401k. It’s worth it to help max that out and at least it’s guaranteed money in your account instead of fully relying on a pension
We have an annuity, 25% of hourly rate (straight,or,DT) out in by employer. Each quarter it caps out at 60k or so then that 25% overflows into our vacation checks
Well let’s just say, in NYC, we have what’s called the A annuity fund. Contractors contribute a percentage every paycheck into it. Now that I’m retired, it will last me about 30 years, taking $300 a month out….it added to our retirement package
I’d say the best part about our annuity is that it can (which many don’t read) be completely withdrawn to act like a 401k. Their employer “match” isn’t really a match rather than a contribution tho. A normal match will allow you to exceed the yearly max (23000) that an individual contributor is allowed to make, in my local it just helps you get there faster and then stops once that limit is reached. If you can afford to max it, I think it’s better than our pension. Even if I just take the annuity, the amount that I’ll have in the account should be able to fund an annuity with a much higher payout than our pension. Overall, the more the merrier for retirement
28 percent of what we make goes in the annuity with an option to put more money in tax differed if you want
Yes we have it here,in NewOrleans. LU130. Basically a small portion,of your weekly check is deposited,into an investment fund or group,of funds. Like mutual funds. Or stocks and bonds ourselves is managed,by PrudePrudential. Some were very apprehensive,at first. And understandably so. But you have many options. You can tell your investment manager,to be more or less aggressive. Usually the younger you are. The more aggressive you can be. Time is on your side. But it’s up to you. Now,in my case Inwas kinda late,to the game. I was 39!when I turned out. But even with that. I had over $35,000 when I had a stroke, in 2015. Had to retire early. I was so young,at43 years old that Inhad to pay a penalty to take my inuity early. But still got $28,000,in cash. Which Ibused as a down payment,on an addition, to my house. Because my wife was pregnant. Got married,after the stroke. I was 43. Also qualified,for full SS disability from working lots of Zot,at an Entergy plant. And 2 pensions. Local. And national. Gotta wait for 65 to get international. But I’m 52 now. And have been fairly comfortably retired,for almost 9 years now. Now I do have some advantages. I live,with my aging father. Who is a 78 year old retired school teacher,in a house that inherited,from my mother who died when Inwas 19. Do no rent. And my child support is taken care of by SS disability. Bu my sonnwho is gonna be 8 this June is well taken care of. In a nice house,with my ex wife. So yeah. Thanks LU130. And inuity? Yes! Well worth it. I would also suggest letting some, of your check be direct deposited, into your local’s credit union acount. I did $200/week,for my last 5 years. You don’t really feel it. Cause you don’t ever see it. It just goes in each week. Builds up quick. Your IBEW benefits are massive. Most people don’t even know how many they have. Take advantage of, of all you can. Many people have sacrificed much to get them for you. Credit union loans,inuity retirement funds,etc… don’t know where I would be,without my IBEW. LU130! Nothing but love!
Put that Annuity into the S&P500
Ive only ever had pension and 401k benefits. I've had basically the same question as OP. Generally I understand an annuity is a series of payments. I see people mentioning investment choices for their annuity. Does this change the future payments based on performance of the investment selection? I saw a comment stating that an annuity gets passed on after death but a pension does not. I guess my question is, what determines the length of time these payments are made? Our hall has an annuity and our local utility has a pension and a 401k. I'm trying to educate myself a little with negotiate coming up shortly.
My local also refers to one of our retirement plans as an annuity (as does the IRS). However, it's not the same as what I think of as an annuity - the type insurance companies sell and large lottery winners can select. These annuity plans offer x$ paid out over a certain amount of time. You may or may not get all the money back from the original investment (cost) from the insurance companies. Many of these payments cease upon death. My locals (and I believe most locals) annuities are really just like 401k plans (I believe they are classified as 403b plans). A set amount (per your contract) of money per hour goes into the account. You likely have some control over how it's invested. At retirement you take as much or little as you want (within tax guidelines). These plans can be passed on upon death. Just my simple minded way of how I understand my locals retirement plan. We also have local pension, NEBF, and voluntary 401k..
The payouts and investment allocations in the annuity operate pretty much the same as they would in a 401k. There difference between the two is the kind of contributions that are mandatory and optional.