FIRST PAGE

1
Elevator Constructors Union Local No. 1 Annuity
and 401 (k) Plan Retirement Seminar November 6,
2008
2
Elevator Constructors Union Local No. 1Annuity
and 401 (k) Plan Retirement Seminar

• Presenters
• National Elevator Industry Pension Plan
• Rob Betts, Executive Director
• Jim Govannicci, Benefit Manager Pension Plan
• ECU Local No. 1 Annuity and 401(k) Plan
• Rita Wisniewski, Fund Manager
• Caroline Gordon, Assistant Administrator
• Lucille Hart, Administrator
• Vanguard (ECU Local No. 1 401(k) Plan)
• Maura Gustafson

3
WHEN CAN I RETIRE AND HOW MUCH MONEY DO I NEED?

• To answer this question, consider the following
• Age
• Marital Status
• Financial Obligations
• Expected Retirement Income

Can I afford to retire?
4
AGE

• What is your life expectancy?
• Will you have enough money for all the years you
  are expected to live?
• At what age can you get your pension?
• Are there penalties for taking your pension
  early?
• Example of life expectancy
• Male age 63 is expected to live to age 82
• Female age 63 is expected to live 85½

5
MARITAL STATUS

• Are you married?
• Do you want to provide a survivor benefit for
  your spouse?
• Do you have children?
• How old are they?
• How will you provide for their future?

6
FINANCIAL OBLIGATIONS

• Mortgage
• Tuition
• Car Payments
• Medical Expenses

Experts say you will need 80 of your
pre-retirement income after retirement. For
example, if you earned 100,000 a year before
retirement, you would need 80,000 a year after
retirement to maintain your life style.
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EXPECTED RETIREMENT INCOME
Retirement Bench
Social Security
Personal Savings
Pension Plans
Savings Accounts NEI Pension Plan Social
Security Real Estate Investments Local 1 Annuity
401(k) Plan Retirement Benefits IRAs
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RETIREMENT INCOME FROM PERSONAL SAVINGS

• Savings Accounts
• CDs
• Investments
• IRAs
• Equity in your Home

9
RETIREMENT INCOME FROM SOCIAL SECURITY

• Based on earnings throughout your working career
• Average Social Security Monthly Benefit 945
• Age for full Social Security Benefits increases
  from 65 67
• For example
• If you were born 1937 or earlier Full Social
  Security at 65
• 1943 1954 Full
  Social Security at 66
• 1960 or later Full
  Social Security at 67

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RETIREMENT INCOME FROM PENSION PLANS

• National Elevator Industry Pension Plan
• ECU Local No. 1 Annuity Plan
• ECU Local No. 1 401(k) Plan

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PENSION PLANS
NEI Pension Plan Defined Benefit Plan Pension
formula is stated in Plan rules Participant must
meet age and service requirements Example
formula Years of Service x Amount
Monthly Pension 25 (years) x 98
2,450 30 (years) x 98
2,940
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PENSION PLANS
ECU Local No. 1 Annuity Plan Defined
Contribution Plan Contribution is defined in
collective bargaining agreement For example,
current Annuity contribution rates for
Journeypersons are For construction work -
7.25 per hour For service work - 7.10
per hour Total of all Contributions - Loan
Balance - Withdrawals /- Investment Income -
Operating Expenses-------------------------------
------- Annuity Account Balance
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PENSION PLANS
ECU Local No. 1 401(k) Plan Defined
Contribution Plan Voluntary Plan Pre-tax
Employee Contribution of Wages or Flat Dollar
Amount up to Annual Statutory Limit 2008 Annual
Limit 15,500 5,000 Catch-up 2009 Annual
Limit 16,500 5,500 Catch-up
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Differ between Annuity and 401(k)
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LOCAL NO. 1 ANNUITY AND 401(k) PLAN
Account Distribution - Requirements

• Age 65
• Leave the Industry (no contributions for 6
  months)
• Retire from the NEI Pension Plan
• Total and Permanent Disability (SSA Award)
• Age 70½ Minimum Distributions

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LOCAL NO. 1 ANNUITY AND 401(k) PLANPayment
Methods

• Lump Sum Payment - Rollover over or direct
  payment to Participant Available for both
  Annuity Account and 401(k)
• 10 Annual Installments methods are different
  under each plan
• Qualified Joint and Survivor Annuity (monthly
  benefit to Participant with survivor benefit to
  spouse) Available for Annuity Account only
• Straight Life Annuity (monthly with no survivor
  benefit) Annuity only
• Investment Yield Only Applies to Annuity
  Account only
• Partial Lump Sum Payment with 10 annual
  installments

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LOCAL NO. 1 ANNUITY AND 401(k) PLAN

• Who will get your Annuity and 401(k)
  Contributions if you die?
• Before you Retire
• If married, Spouse, unless you designated another
  person and your spouse consents
• If not married, you may name anyone as
  Beneficiary
• Designated Beneficiary under NEI Pension Plan
• Your estate
• After You Retire
• Spouse, if you are receiving a QJSA
• No one, if you received a Lump Sum or Straight
  Life Annuity
• Designated Beneficiary for all other payment
  methods
• (If married, spouse must consent)
• Special Note Qualified Domestic Relations
  Orders (QDROs)
• 
  

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Distribution RulesAnnuity Account Only

• Application postmarked or hand delivered to Fund
  Office by April 1 Participant receives
• Account Balance as of 12/31 of prior year
• Plus contributions between January 1 and
  distribution
• Less Loan Balance
• 100 of Account Balance if Prior Years Yield and
  Operating Expense has been calculated or
• 80 Initial Payment remaining 20 when Prior
  Years Yield and Operating Expense is determined
  (by end of March)

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Example 1

• Jim has Annuity Account of 200,000 as of
  12/31/08
• Jims application is postmarked before April 1,
  2009
• If the prior years Yield and Operating Expense
  have been calculated by the time Jim files his
  Application, Jim will receive one payment 100
  of his 12/31/08 plus/minus the 2008 Yield and
  Operating Expense.
• If the prior years Yield and Expense have not
  been calculated by the time Jim files his
  Application, Jim will receive two payments
• First Payment 80 of his 12/31/08 Account
  Balance (160,000)
• Second Payment 20 withheld from Account,
  plus/minus the Prior years Yield and Expense

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Distribution Rules Annuity Account Only

• Application postmarked or hand delivered to Fund
  Office after April 1 Participant receives
• Account Balance as of 12/31 of prior year
• Plus contributions between January 1 and
  distribution date
• Less Loan Balance
• Plus/Minus Pro rata of current years Yield and
  Operating Expense (based on number of days full
  Account remained in Fund divided by 365)
• Initial Payment 80 of Account Balance as of
  12/31 (paid in year distribution is requested)
• Supplemental Payment 20 withheld from Account,
  plus/minus pro rata share of current year Yield
  and Operating Expense (paid in following year)

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Example 2

• Sam has an Annuity Account of 400,000 as of May
  1, 2009
• Sams application is received at the Fund Office
  on May 15, 2009
• Assume the Yield for 2009 is 5 and the Expense
  is 580
• Sam will receive his Annuity Account in two
  payments as follows
• Payment 1 80 of Sams Account (320,000)
  will be paid June 15, 2009
• Payment 2 The remaining 20 (80,000), plus a
  pro rata share of the Yield (9,095.88), minus a
  pro rata share of the Operating Expense (263.78)
  will be paid in March of 2010. The supplemental
  check would total 88,832.10

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LOCAL NO. 1 ANNUITY AND 401(k) PLAN

• Tax Consequences
• Federal, state and local taxes due when Pension
  is paid to you
• Rollovers (to a traditional IRA or other
  qualified plan) no taxes withheld or due in
  current year. You can roll over a Lump Sum or
  Partial Lump Sum
• Payments eligible for Rollover that are paid
  directly to participant Mandatory 20 withheld
  as federal income tax
• Payments not eligible for Rollover (e.g., 10
  annual installments, monthly annuity) Mandatory
  10 withheld unless you elect other amount

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LOCAL NO. 1 ANNUITY AND 401(k) PLAN

• Tax Consequences (Continued)
• 10 penalty for withdrawal prior to 59½ unless
  rolled over (exceptions include separation from
  service during or after age 55 and retirement due
  to disability)
• Special tax treatment for individuals born before
  1/1/36 (10 year average or capital gain see
  accountant)
• Spouse has same options as Employee.

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SAMPLE BENEFIT CALCULATION 1

• Lump Sum Payment Rollover or direct payment
• Entire account is paid in a lump sum
• Can be rolled over to another qualified plan or
  IRA
• Not taxed when rolled over
• Taxed as ordinary income as you take money out of
  the roll over
• If not rolled over, mandatory 20 tax withholding
• Example of Benefit Calculation
• Lump Sum
• Member Works 25 years
• Annuity Account Balance 235,000
• Member Age 63
• Spouse Age 51
• Lump Sum Participant receives entire account
  balance 235,000
• Earnings Annual Earnings Monthly
  Earnings
• 235,000 _at_ 4
  9,400 783.33
• 235,000 _at_ 6
  14,100 1,175

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SAMPLE BENEFIT CALCULATION 2

• Qualified Joint and Survivor Annuity (monthly
  with survivor benefit)
• Account balance used to purchase monthly annuity
  from an insurance company
• 50 JS
• Reduced monthly payment to pensioner with 50
  continuing to spouse
• If spouse dies, pensioner continues to get
  reduced monthly amount
• Cannot be rolled over
• Taxed as ordinary income as you receive the
  benefit
• Automatic for married participant
• Participant can elect another payment method,
  with written spousal consent
• Example of Benefit Calculation
• Qualified Joint and Survivor Annuity
• Member Works 25 years
• Annuity Account Balance 235,000
• Member Age 63
• Spouse Age 51

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SAMPLE BENEFIT CALCULATION 3

• Ten Annual Installments
• Annual payments 1/10th of original account
  balance /- investment income and expenses
• Two payments each year 1/10th in January and
  net investment income in April
• Taxed as ordinary income as you receive the
  benefit
• Cannot be rolled over
• Example of Benefit Calculation
• Ten Annual Installments
• Member Works 25 years
• Annuity Account Balance 235,000
• Member Age 63
• Spouse Age 51
• Ten Annual Installments
• First Year 23,500 (1,958 per month)
• Second Year 23,500 /- Earnings and Expenses
• Third Year 23,500 /-
  Earnings and Expenses
• Etc.
• Ten Annual Installments (Approx.) 1,958 Per
  Month (ends in 10 years)

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Highlights of Recent Plan Changes

• 401(k) Investment Manager changed to Vanguard
  July 1, 2008
• Participants no longer have to take Annuity and
  401(k) accounts at the same time
• Participants can make direct rollovers of Annuity
  and 401(k) accounts to Roth IRAs
• Non-spouse beneficiaries can make direct
  rollovers to IRAs
• Annuity, JS and Investment Yield Only eliminated
  as payment methods under the 401(k) plan
• 75 JS added as payment method for Annuity
  accounts

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LOCAL NO. 1 ANNUITY AND 401(k) PLAN

• Write or Call the Fund Office at
• ECU LOCAL NO. 1 ANNUITY AND 401(k) PLAN
• 2185 Lemoine Avenue, Fort Lee, NJ 07024
• [phone] [phone]
• or
• Visit our Web Site at www.benserconj.com
• and click on the Local 1 logo
• If you have questions
• To change your address or marital status
• To request a Beneficiary Designation form
• To apply for your Annuity and 401(k) withdrawals

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• ELEVATOR CONSTRUCTORS UNION LOCAL No. 1
• ANNUITY AND 401(k) PLAN
• 2185 LEMOINE AVENUE, FORT LEE, NJ 07024
• [phone] [phone]
• Union Trustees Employer Trustees
• Leonard Legotte E. James Walker, Jr. (Emany)
• Michael Riegger Michael Shields
  (Schindler)
• Robert Stork Vincent Schiavone (Kone)