2015 Annual Funding Notice
The Central Pension Fund mailed the 2015 Annual Funding Notice (AFN) to all plan participants on Tuesday, May 26, 2015. Please note, this notice was sent for informational purposes only and does not require any further action be taken.
The notice can be viewed on the CPF website by clicking on the below link.
2015 Annual Funding Notice
Below are some of the most common questions we get from plan participants regarding the Annual Funding Notice.
Frequently Asked Questions:
1. What is the Annual Funding Notice?
The Annual Funding Notice (AFN) includes important information about your pension plan (“the Plan”). The Notice also provides a summary of federal rules governing multiemployer plans in reorganization and insolvent plans and benefit payments guaranteed by the Pension Benefit Guaranty Cooperation (PBGC), a federal agency.
2. Why am I getting the Annual Funding Notice?
As outlined by the Pension Protection Act of 2006, all sponsors of defined benefit pension plans are required to provide plan participants with certain information about the funded status of their plan. Plan participants include employees, former employees with vested benefits, retirees who are receiving a benefit, beneficiaries, and alternate payees.
3. Do I need to do anything with the Notice?
You do not need to do anything with the Notice. The AFN is sent for informational purposes only.
4. Does this notice mean that my pension benefits will be terminated or that PBGC is taking over my benefit?
No, this notice does not mean that your pension plan is ending or that PBGC is taking over payment of your benefit. The description of the PBGC and its benefits is provided for informational purposes only.
5. I am currently receiving a monthly payment. Will my benefit amount change?
No. If you are a retiree, alternate payee, or beneficiary and are currently receiving benefits from the Plan, those benefits will continue unchanged.
6. I am currently not receiving a benefit, will my Accrued Benefit change? Will the method of determining my benefit at commencement date change?
No. There is no impact on your accrued benefits. The Annual Funding Notice is sent for informational purposes only. It does not in any way change the way your benefits accrue under the Plan.
7. What is the Pension Benefit Guaranty Corporation (PBGC)?
The PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. Currently, it protects the pensions of nearly 44 million American workers and retirees in over 29,000 private single-employer and multiemployer defined benefit pension plans. For more information on PBGC, please visit their website: http://www.pbgc.gov/.
8. Who determines whether the Central Pension Fund is adequately funded?
CPF hires accredited actuaries who have the necessary credentials to perform an evaluation of our minimum funding requirements and have been licensed to do so by the Joint Board of the U.S. Treasury and Labor Departments. The actuary measures the liabilities and assets of the Plan and, each year, determines the minimum contribution requirement under the law (ERISA).
9. How is the funded percentage determined?
The funded percentage is determined 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 is.
10. What is an Asset?
An asset is everything of value that is owned by the Plan. It is money and other valuables belonging to the Plan and held in the trust for the benefit of the participants.
11. What is a Liability?
Liability is the present value of all future benefits expected to be paid to the participants.
12. What is ERISA?
ERISA is a federal statute that establishes minimum standards for defined benefit pension plans in private industry and provides for extensive rules affecting transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries.