Why Participate
- Does the IAM National Pension Fund have contributing employers in every state?
No. There are only a few states that do not have contributing employers.
- How does portability of benefits between contributing employers work?
If you change jobs and go to work for an employer who also contributes to the National Pension Plan without incurring a permanent break-in-service, your years of vesting and credited service follow you to your new job and you can continue to accrue benefits.
- As an employer, why should I give up the control and flexibility I have with my current pension plan?
Many employers prefer to keep control of their company's pension plan so they can opt to fund the plans on a year-by-year basis. Obviously, during strong investment periods it may not be necessary to contribute to your plan. However, this short-term flexibility can lead to greater pension costs for your company over the long haul. Making steady contributions to the IAM National Pension Fund is likely to represent better value—for you and your employees. You can focus on your business, comfortable in the knowledge that we are handling your pension-related matters—and handling them well.
- My advisors say the National Pension Plan is a bad idea!
We are always happy to address employers' concerns about the IAM National Pension Fund. We welcome the chance to respond to questions from the professionals who serve you. We want to make sure there are no misconceptions about our plan. We have a track record of providing solid benefits, often better than those a single-employer plan can provide. When you compare our costs and benefits, you will see that the National Pension Plan is a good proposition.
- As an employer, why should I switch to the National Pension Plan when we already administer a company pension plan?
Switching to the National Pension Plan are that offers secure lifetime retirement benefits, and the ease of having the Fund administer the plan for you. Employers who adopt the National Pension Fund after terminating their own plans or by merging their plans into the National Pension Fund will save time and money. For example, if you have the IAM National Pension Fund as your sole pension provider, you don't have to worry about regulatory compliance. You can focus on your business, comfortable in the knowledge that we are handling your pension-related matters—and handling them well.
- As an employer, why would I get involved with a union-affiliated pension plan?
The IAM National Pension Fund (the "Fund") exists to provide pension benefits to IAM members, but the Fund is legally independent from the union. It is a separate entity managed by an active Board of Trustees composed of members of both labor and management. Employers have an equally strong vote in the Fund’s management.
Our trustees set policy and investment strategy. That strategy is based on thorough research and analysis and expert advice from some of the most trusted names on Wall Street and nationwide. The Fund has a sound investment approach and a record of more than 50 years of unblemished integrity.
- Will employees lose their vested benefits in my company plan if I switch to the IAM National Pension Fund?
An employee's vested benefits belong to the employee—that's what vesting means. When a company becomes a contributing employer to the IAM National Pension Fund, its employees' status as participants in the National Pension Plan has no impact on vested benefits in the company's own plan. And, vesting service in the company plan counts in the National Pension Plan for vesting and some eligibility purposes.
Negotiating the Plan
- How a Multiemployer Pension Plan Works
The IAM National Pension Fund (the "Fund") is a multiemployer fund, managed by a joint labor-management Board of Trustees. Union members are able to participate in multiemployer funds through the collective bargaining process. In a multiemployer plan, numerous companies contribute to the plan on their employees' behalf. Because the costs are spread out and risks are pooled, multiemployer plans can provide a competitive benefit for the same amount of money when compared to a single employer or defined contribution (e.g. 401(k)) plan.
The Fund is a conservatively managed multiemployer plan. It has a broad industry and geographic base, so no single industry downturn or localized economic slump can seriously weaken the Fund’s solvency. By contrast, the health of a single-employer plan depends on the company's fiscal health and investment management practices.
- Information the IAM National Pension Fund Needs to Assist You
If the group is currently covered by a company defined benefit pension plan, you will need to provide the following information:
The Summary Plan Description and/or Plan Document and all amendments The form 5500 for the last three plan years with all attachments, including the Schedule B The most recent Annual Funding Notice The most recent Zone Notice and/or Rehabilitation Plan, if applicable The low, medium and highest employee wages if the benefit is based on a percentage of compensation The date the company plan started. Please be sure to advise the Fund Office of the name(s) and effective date(s) of all predecessor companies and predecessor pension plans to the current plan. The IAM National Pension Fund may recognize service under a predecessor plan for our 5-year vesting requirement and towards eligibility for our early unreduced benefits (any age with 30 years of vesting or credited service or at age 62 with 20 years of vesting or credited service).
If the group has 10,000 or more employees, we will need census data to determine the applicable benefit level. The census data is typically provided by the employer and can be provided in an electronic format. The format is outlined in the table below.
Employee Census Data and File Format Employee's Name:
First Name
Middle
Last Name
Suffix
Social Security Number Date of Birth: Formatted MM/DD/YYYY Date of Hire: Formatted MM/DD/YYYY Sex (M or F) Years of Vesting Service with another Pension Plan, if any - Prepare a text file delimited by /. Include a position for every field, even if empty.
- Use MS Excel or other spreadsheet software.
- Provide the record layout.
- Provide a count of the records included on the disc.
If the company currently offers a defined contribution plan (e.g. 401(k)) to its IAM employees, forward the following information to the Education and Employer Services Department at the Fund Office address:
Does the company make an automatic contribution to the defined contribution plan? If so, how much? Does the company match the employees' contributions to the defined contribution plan? If yes, how much? Can employees defer their own money into the defined contribution plan and at what percent? Low, medium and highest employees wages. The date the defined contribution plan started. Be sure to advise the Fund Office of the name(s) and effective date(s) of all predecessor companies and predecessor pension plans to the current plan. The IAM National Pension Fund may recognize service under a predecessor plan for our 5-year vesting requirement towards eligibility for our early unreduced benefits (any age with 30 years of vesting or credited service or at age 62 with 20 years of vesting or credited service).
- How the IAM National Pension Fund Can Help Negotiate the National Pension Plan
The IAM National Pension Fund (the "Fund") staff is here to help you negotiate the plan. Contact your IAM Pension Coordinator to request Fund Office assistance.
We can attend meetings with your bargaining committee, membership and employer. We are also able to participate in negotiating sessions to help the bargaining parties negotiate the National Pension Plan (the "Plan") Standard Contract Language. You may also contact the Fund's Education and Employer Services Department at any time for assistance, preferably at least three to six months in advance of the expiration of a group's collective bargaining agreement.
The Fund maintains information about IAM employers that do not offer the Fund. If a non-participating employer is in our database, we will send you a letter four months before the expiration of a group's collective bargaining agreement. The letter will remind you about the information needed to begin negotiating the Plan and offer our assistance.
We offer a variety of materials, online, in print and video, to help you educate your membership and employers about the value and benefits of joining the plan.
For example, take a look at the Plan's pension calculator. This software program models "what if" pension benefit scenarios for both current participants and nonparticipants. You can demonstrate how an increase in the negotiated contribution rate every three years will affect a retirement benefit.
- Withdrawal Liability
The most frequent objection an employer may use about participating in a multiemployer plan is the potential for withdrawal liability.
What is withdrawal liability? Withdrawal liability is part of a federal law called the "Multi-Employer Pension Plan Amendment Act" (MEPPA) that was introduced in 1984. It is created when a multiemployer pension plan has unfunded vested benefits (i.e., the value of the plan's vested benefits exceeds its assets). It applies to employers who stop contributing to the plan. When this occurs the employer is liable for its share of the employees' unfunded vested benefits. The law requires the withdrawing employer to pay a proportional share of the plan's unfunded vested benefits. Only employers that withdraw are subject to withdrawal liability; the ongoing contributing employers are not subject to withdrawal liability.
Employers who do not withdraw from The National Pension Fund (the "Fund") are not subject to withdrawal liability; their participation continues as usual, and they only pay the contributions negotiated in their collective bargaining agreements as specified in the plan's Standard Contract Language.
Employers who do withdraw are subject to withdrawal liability. However, the law provides a "de minimis" rule so that smaller employers or employers with a smaller amount of withdrawal liability are provided with relief in the form of a complete or partial waiver of the amount owed.
Also note, there is a special provision in the Fund, called the 5-year free look provision, which means that new contributing employers to the National Pension Plan (the "Plan") are not subject to withdrawal liability if they stop contributing within five years of their contribution date to the Plan.
- Company Plan Mergers
Often, in order to relieve their administrative burden, a company may be interested in merging its company plan, which covers IAM employees, into the National Pension Plan. In these cases, the IAM National Pension Fund (the "Fund") takes over the burden of administering the company plan.
In the event of a plan merger, the employer agrees to give the Fund the assets needed to fund the company plan liability.
If a company is interested, contact the Fund's Employer Services Department to request a merger study. You will receive a letter confirming your request. The merger study and possible merger proposal may take several months, and participation in the National Pension Plan should not be made contingent on the results of the merger study. The best approach is to agree to freeze the company plan and bargain new participation in the National Pension Plan while the merger study is being conducted.
- Standard Contract Language Issues
All employers that participate in the IAM National Pension Fund (the "Fund") must agree to the Standard Contract Language (SCL), which sets forth the basis for contributions. It may either be signed separately or incorporated into the collective bargaining agreement.
NPF SCL (Preferred Schedule) (PDF)
NPF SCL (Default Schedule) (PDF)
NPF Auto Calculation Worksheet (XLS)
There are options that may be negotiated such as 40-hour weekly cap or annual cap, probationary exclusions, exclusions for certain paid time (with the exception of vacation and holiday time), etc. You or the company may not change the SCL without approval. In many cases changes must be presented to the Trustees for approval and there is no guarantee they will be approved.
Some common issues that employers may raise with regard to the SCL are:
Exclusion of part-time or temporary employees
If you need assistance completing the SCL or have questions, please contact the Employer Services department at 202-785-2658 or email by clicking here.
Inclusion of language regarding withdrawal from the National Pension Plan in the event the plan enters an endangered or critical status zone of the Pension Protection Act or if the plan has withdrawal liability.
- Affiliated Groups
Other union employees working for the same employer may also participate in the IAM National Pension Fund (the "Fund") as long as the IAM participates. This is sometimes desirable to the employer if they are freezing or terminating a company pension plan that covers multiple unions and are interested in a company plan merger.
Non-bargaining unit employees may also participate, but special rules apply. Also, your territory General Vice President must approve their participation.
Contact the Fund's Education and Employer Services Department for more information about affiliated groups.
- You've Negotiated the National Pension Plan. Now What?
Notify the Fund Office and send a copy of the signed Standard Contract Language (SCL) and/or signed collective bargaining agreement as soon as possible to the Education and Employer Services Department. If these documents are not ready, notify the Fund Office and we will pursue them.
The Education and Employer Services Department will send a letter to you and the employer representative outlining additional documents and data necessary to complete participation requirements and issue an acceptance letter, such as:
Complete collective bargaining agreement and SCL Employee census data Remittance method preferred by employer and employer's payroll system readiness
It can take several months to get the required documents and data. Once the acceptance letter is issued, a Welcome Letter and Summary Plan Description books are sent to the employees.
Sometimes the employer begins sending in contributions before the acceptance process is complete. In this case, contributions are put in escrow and are released once the acceptance letter is issued and contributions reconciled to the remittance report
Contributions and Benefits
- What is the current range of employer contribution rates?
Contribution rates range from $0.10 to $28.50 per hour.
- What is the average employer contribution rate?
The current average contribution rate is $1.95 per hour.
- How do I negotiate a future contribution increase under my collective bargaining agreement?
For help in determining how best to negotiate contribution rate increases, contact your IAM Education Representative.
- Are there death and disability benefits under the National Pension Plan?
Yes. If you pass away, your spouse or your beneficiary(ies) may be eligible for death benefits under the terms of the plan. If you become totally and permanently disabled before normal retirement age, you may also be entitled to a Disability Pension.
- Can I make contributions to the National Pension Plan on my own behalf?
The IAM National Pension Fund (the "Fund") is a multi-employer non-contributory Trust Fund. Only employer contributions made in accordance with the IAM Collective Bargaining Agreement or Special Class Participation Agreement with the Trustees may be accepted by the Fund. All employer contributions and Fund assets, from whatever source, are pooled and used to pay pension benefits.
- Can I withdraw all of my benefits from the National Pension Plan and roll them over to another plan?
No money is credited to an individual account, as the National Pension Plan of the IAM National Pension Fund is a defined benefit plan. It is designed to provide a monthly income at retirement. There is no benefit paid until a Covered Employee retires and applies for pension.
- Can I name my estate as my beneficiary?
You may only designate people as beneficiaries. If none of your beneficiaries are alive at the time of your death, any benefit payable may be made to your estate.