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Central Pension Fund CPF Trustees Improve Benefits At its January 2001 meeting, the Board of Trustees of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers adopted an amendment to the plan that will increase the future pension benefits of most currently active participants. The improvement is effective for those qualifying participants with retirement dates on or after January 1, 2001. The Board's action increased the benefit accrual rate to 3.5% on all contributions for service prior to January 1, 2001. The effect of this action was to increase by 3% the value of contributions made prior to January 1, 1999 (which had been at a 3.4% accrual rate), and to increase by 6% the value of contributions made in 1999 and 2000 (which had been at a 3.3% accrual rate). The accrual rate on contributions for service on or after January 1, 2001 remains at 3.3%, preserving the Board's ability to enhance the value of that service in the future, when and if it is prudent to do so. The Board's action applies only to active participants who had at least 1,000 hours of service in calendar year 2000, or who earn at least 1,000 hours of service in a future calendar year. Limiting this enhancement to active participants assures that it will benefit those who are currently supporting the Fund. Those who have left the Fund, and who do not return, will receive the level of benefits in effect when they last participated. Contrast With 401(k) Plans. Ironically, CPF participants were being informed of this increase in their accrued pension benefits at the same time that 401(k) plan participants across the United States were receiving their year-end statements showing the battering their retirement accounts took in the year 2000 at the hands of the U.S. stock markets. Thus, while 401(k) participants were facing the harsh reality of a less generous retirement--or delayed retirement to make up for their losses--CPF participants were learning that their benefits had been increased. This highlights the fundamental contrast between 401(k) plans and defined benefit plans, like CPF and the pension plans maintained by IUOE Local Unions. 401(k) retirement security is entirely dependent upon individual skill, or luck, in picking wise investments. Defined benefit plans provide certain, and clearly defined, benefits for life--regardless of stock market returns. New CPF Web Site. A description of the recent CPF benefit increase, together with a wealth of other information concerning the Central Pension Fund, are now available on the Fund's internet web site found at www.cpfiuoe.org. Participants can not only review all of the Fund's plan documents, links to other relevant web sites, and related articles on retirement issues, but may also download and print out all forms required to apply for CPF benefits, which can then simply be filled out and mailed from home. An additional feature of the web site is the ability it offers participants to conduct word searches of all CPF documents to find references to any topic of interest. It is anticipated that CPF participants will find the web site helpful in better understanding the many benefits of the Central Pension Fund, and that it will be widely utilized in the years to come. Originally published in the International Operating
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