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Central Pension Fund Pension Reciprocity - Another IUOE Benefit In 1972 the IUOE pioneered the concept of pension reciprocity to link together all IUOE-sponsored multiemployer pension plans throughout the United States and Canada. The goal was to assure that IUOE members would maximize their ability to vest in their pension benefits no matter how many different plans they might work in during their careers as operating engineers. Today the Central Pension Fund, all 31 IUOE Local Union plans in the United States, and 4 province-wide IUOE plans in Canada are signatory to the National Reciprocity Agreement. By signing the National Reciprocity Agreement each plan has agreed to recognize service accrued in any other plan just as if it was service in its own plan for vesting purposes. Generally speaking, pension plans require either 5 years or 10 years of service in the plan before a participant attains a vested interest--or non-forfeitable right--to a benefit. For IUOE members, the National Reciprocity Agreement minimizes the possibility that they will fail to achieve a vested interest in receiving a benefit from any and all IUOE pension plans into which they may have had contributions made during their working careers. While implementation of the National Reciprocity Agreement requires additional administrative work by all of the signatory plans, from the member’s standpoint it works quite simply. Take for example a member who has worked a total of 20 years within the jurisdiction of three different IUOE pension plans, accruing 15 years in the first plan, 3 years in the second and 2 years in the third. While his 15 years in the first plan would fully vest him in his accrued benefit there, in the absence of the National Reciprocity Agreement, he would not have achieved vesting in either the second or third plans. However, because both of those plans are IUOE plans, they would recognize the combined service in all three plans--20 years--for vesting purposes, and would pay a benefit to the member based upon the 3 years and 2 years of credited service in those plans. Likewise if the member had worked only a total of 5 years in the three plans during his career, and if each plan required 5 years of service for vesting, each would consider the member vested and each would pay a pension based on the contributions made to their plan. As employer-provided pension coverage continues to decline in both the United States and Canada, IUOE members can take pride in the IUOE network of defined-benefit pension plans throughout the United States and Canada, all of which are linked together with the additional protection of the National Reciprocity Agreement. Originally
published in the International Operating Engineer |