WHAT IS A DEFINED BENEFIT PENSION?
A “defined benefit pension” promises a specified monthly benefit at retirement. The pension benefit for a new participant is calculated based on multiplying the contributions received on the participant’s behalf by a percentage called the Benefit Accrual Rate. Upon retirement, a vested CPF participant collects monthly benefits for the rest of his or her life.
WHAT IS VESTING?
A vested interest means you have a right to a benefit upon retirement that cannot be forfeited.
HOW LONG DOES IT TAKE TO GET VESTED?
A participant is vested in the plan after 5 years of service of at least 1,000 hours per year.
WHAT IS VESTING PAST SERVICE?
A worker may receive vesting past service for the number of years he has continuously worked for an employer prior to its joining the CPF, if that employer is the first employer required to make contributions on his behalf. For example, engineers at Mandalay Bay organized with Local 501 and signed a contract with their employer in 2014, which included participation in the CPF. Workers at Mandalay Bay who had been employed there for 5 years or more prior to the new contract are vested after only 1,000 contributing hours at Mandalay Bay vested due to their past service credits at the company.
HOW CAN I CALCULATE MY PENSION BENEFIT?
The pension benefit for a new participant payable at Normal Retirement Age is calculated based on multiplying the contributions received on the participant’s behalf by a percentage called the Benefit Accrual Rate. Effective April 1, 2015 CPF's Benefit Accrual Rate increased from 1% of contributions to 1.25%. A basic calculation for your benefit accrued during the course of a year is as follows:
[HOURS WORKED] X [CONTRIBUTION PER HOUR] X [BENEFIT ACCRUAL RATE] = MONTHLY BENEFIT
As an example, let’s look at a participant’s benefit over a five year period (10,400 hours) under different contribution rates.
• EXAMPLE 1: 10,400 hours X $2 per hour X 1.25% = $260.00 monthly benefit
• EXAMPLE 2: 10,400 hours X $3 per hour X 1.25% = $390.00 monthly benefit
• EXAMPLE 3: 10,400 hours X $4 per hour X 1.25% = $520.00 monthly benefit
• EXAMPLE 4: 10,400 hours X $5 per hour X 1.25% = $650.00 monthly benefit
• EXAMPLE 5: 10,400 hours X $6 per hour X 1.25% = $780.00 monthly benefit
WHO DETERMINES A PARTICIPANT’S PER-HOUR PENSION CONTRIBUTION?
The decision about per-hour contributions to the CPF is voted on by each bargaining unit. For instance, workers at the Bellagio voted to contribute $3.30 per hour to the CPF, while workers at the Mirage voted to contribute $1.50 per hour.
AT RETIREMENT HOW LONG CAN I COLLECT BENEFITS?
Upon retirement, a vested participant will collect his accrued monthly benefit for the rest of his life.
WHAT HAPPENS TO MY BENEFITS UPON MY PASSING?
Generally speaking if you pass away while receiving a retirement benefit, your beneficiary may receive a survivor benefit depending upon the form of payment you elected at the time of retirement. If you die before retirement, are married and have a vested interest, your spouse will receive a survivor annuity for life equal to 50% of your accrued normal retirement benefit. If you are single, your beneficiary will receive a return of all contributions made on your behalf. There are also special rules that apply if you die while receiving a disability benefit or die after you had a right to receive a Normal or Special Retirement benefit, but had not yet applied. For more details See Section 9 of the current Summary Plan description on the CPF website: www.cpfiuoe.org
HOW IS THE CPF FUNDED?
The Plan is funded by employer contributions, which are held in trust pursuant to a Trust Agreement between the International Union of Operating Engineers and Participating Employers who have collective bargaining agreements with the International Union of Operating Engineers or affiliated local unions. Contributions are made by Participating Employers under the provisions of their respective Collective Bargaining Agreements.
WHAT IS THE SOURCE OF CPF CONTRIBUTIONS?
Participating Employers pay a monthly amount based upon the hours worked and/or paid based on the provisions of the relevant Collective Bargaining Agreement. The amounts contributed are pre-tax contributions and are not considered employee wages for purposes of income tax or Social Security Tax.
WHO MANAGES CPF’S ASSETS?
CPF's assets are managed by professional managers who follow the investment objectives established by the Board of Trustees.
WHAT IS THE FUNDED PERCENTAGE OF THE PLAN?
The funded percentage of a plan is a measure of how well that plan is funded. This percentage is obtained by dividing the Plan's assets by its liabilities on the valuation date for the plan year. In general, the higher the percentage, the better funded the plan. As of January 31, 2015, the CPF is FUNDED AT approximately 95%, with $14.17 billion in assets.
HOW MANY PARTICIPATING EMPLOYERS ARE IN THE CPF?
Approximately 6,000 employers
HOW MANY INDIVIDUAL PARTICIPANTS ARE IN THE CPF?
As of January 31, 2015 the Fund had 81,013 Active Participants; 67,856 Retired Participants & Beneficiaries receiving payments and 38,588 Inactive Vested Participants entitled to future benefits