Posted:
April 1, 2014
As a reminder, AMO Pension and Medical Plan rules affecting the benefit status and eligibility of American Maritime Officers members and pensioners working in non-covered employment in the maritime industry took effect Oct. 1, 2013. A bulletin explaining the rules was distributed to AMO Plans participants prior to the effective date.
These rules are intended to protect the benefits of active AMO members working in covered employment. The rules apply to a limited number of people, in particular those who do not retire and choose to leave covered employment to work elsewhere in the maritime industry, and to pensioners who return to work in the maritime industry without permission.
These rules are also intended to expedite to the greatest extent possible the defined benefit Pension Plan's attainment of fully funded status. This requirement must be met in order for full contributions under Schedule 2.1 of the AMO Defined Contribution Plan to be applied for all active AMO members.
The AMO Plans Board of Trustees remains committed to maintaining the '20 and out' retirement option with monthly benefits from the defined benefit AMO Pension Plan. This is an important retirement option for AMO members, but also increases the Plan's projected liabilities, and therefore negatively impacts the Plan's funding status from year to year. The projected cost of providing the '20 and out' benefit for all eligible vested AMO members is by far the most significant factor in the difference between the value of the Plan's assets and its liabilities.
AMO members with less than 20 years of credited time
Under the rules of the Pension Plan, if an AMO member who is vested in the Plan and has less than 20 years of credited time goes to work in non-covered employment in any capacity with an employer in the maritime industry, he or she will immediately become an Inactive Vested Participant. As such, he or she will no longer be eligible for unreduced early retirement benefits from the defined benefit AMO Pension Plan under the '20 and out' option. Inactive Vested Participants will only be eligible for normal retirement benefits from the Pension Plan upon reaching age 65.
For an Inactive Vested Participant to re-establish eligibility for unreduced early retirement benefits under the Pension Plan's '20 and out' option upon returning to covered employment, he or she will need to work the years required to achieve 20 years of credit in covered employment. Additionally, an Inactive Vested Participant under these circumstances will need to work one year in covered employment for each year he or she worked in non-covered employment in the maritime industry (up to a maximum of five years) in order to regain eligibility for unreduced benefits under the '20 and out' option.
Under the rules of the AMO Medical Plan, if an AMO member with less than 20 years of credited time goes to work in non-covered employment in the maritime industry, eligibility for medical benefits will cease on the first day of such employment.
AMO members with 20 or more years of credited time
Under the rules of the Pension Plan, if an AMO member who has 20 or more years of credited time goes to work in non-covered employment in any capacity with an employer in the maritime industry, he or she will immediately become ineligible for unreduced monthly benefits under the Plan's '20 and out' option.
Under these circumstances, if the individual retires prior to age 65, any benefit from the defined benefit AMO Pension Plan will be reduced for early retirement. The benefit reduction equates to approximately 6 percent for each year prior to age 65.
In order to re-establish eligibility for unreduced early retirement benefits under the Pension Plan's '20 and out' option, the AMO member will be required to work one year in covered employment for each year he or she worked in non-covered employment in the maritime industry (up to a maximum of five years).
Under the rules of the AMO Medical Plan, if an AMO member with 20 or more years of credited time goes to work in non-covered employment in the maritime industry, eligibility for active medical benefits will cease on the first day of such employment.
AMO members with 20 or more years of credited time who go to work in non-covered employment in the maritime industry will not be eligible for lifetime retiree medical benefits upon retirement unless they re-establish eligibility by working one year in covered employment for each year worked in non-covered employment in the maritime industry (up to a maximum of five years).
AMO pensioners working in non-covered employment without permission
AMO pensioners must receive permission from the AMO Plans Board of Trustees to return to work in any position with an employer in the maritime industry.
AMO pensioners who go to work in non-covered employment in the maritime industry without permission will not be eligible for their pension benefit for any month worked under such circumstances, and for six months beyond the termination date of the non-covered employment.
AMO pensioners who go to work in non-covered employment in the maritime industry without permission permanently forfeit eligibility for retiree medical benefits under the AMO Medical Plan.
AMO Plans reminder: Pension and Medical Plan rules regarding AMO members and pensioners working in non-covered employment
As a reminder, AMO Pension and Medical Plan rules affecting the benefit status and eligibility of American Maritime Officers members and pensioners working in non-covered employment in the maritime industry took effect Oct. 1, 2013. A bulletin explaining the rules was distributed to AMO Plans participants prior to the effective date.
These rules are intended to protect the benefits of active AMO members working in covered employment. The rules apply to a limited number of people, in particular those who do not retire and choose to leave covered employment to work elsewhere in the maritime industry, and to pensioners who return to work in the maritime industry without permission.
These rules are also intended to expedite to the greatest extent possible the defined benefit Pension Plan's attainment of fully funded status. This requirement must be met in order for full contributions under Schedule 2.1 of the AMO Defined Contribution Plan to be applied for all active AMO members.
The AMO Plans Board of Trustees remains committed to maintaining the '20 and out' retirement option with monthly benefits from the defined benefit AMO Pension Plan. This is an important retirement option for AMO members, but also increases the Plan's projected liabilities, and therefore negatively impacts the Plan's funding status from year to year. The projected cost of providing the '20 and out' benefit for all eligible vested AMO members is by far the most significant factor in the difference between the value of the Plan's assets and its liabilities.
AMO members with less than 20 years of credited time
Under the rules of the Pension Plan, if an AMO member who is vested in the Plan and has less than 20 years of credited time goes to work in non-covered employment in any capacity with an employer in the maritime industry, he or she will immediately become an Inactive Vested Participant. As such, he or she will no longer be eligible for unreduced early retirement benefits from the defined benefit AMO Pension Plan under the '20 and out' option. Inactive Vested Participants will only be eligible for normal retirement benefits from the Pension Plan upon reaching age 65.
For an Inactive Vested Participant to re-establish eligibility for unreduced early retirement benefits under the Pension Plan's '20 and out' option upon returning to covered employment, he or she will need to work the years required to achieve 20 years of credit in covered employment. Additionally, an Inactive Vested Participant under these circumstances will need to work one year in covered employment for each year he or she worked in non-covered employment in the maritime industry (up to a maximum of five years) in order to regain eligibility for unreduced benefits under the '20 and out' option.
Under the rules of the AMO Medical Plan, if an AMO member with less than 20 years of credited time goes to work in non-covered employment in the maritime industry, eligibility for medical benefits will cease on the first day of such employment.
AMO members with 20 or more years of credited time
Under the rules of the Pension Plan, if an AMO member who has 20 or more years of credited time goes to work in non-covered employment in any capacity with an employer in the maritime industry, he or she will immediately become ineligible for unreduced monthly benefits under the Plan's '20 and out' option.
Under these circumstances, if the individual retires prior to age 65, any benefit from the defined benefit AMO Pension Plan will be reduced for early retirement. The benefit reduction equates to approximately 6 percent for each year prior to age 65.
In order to re-establish eligibility for unreduced early retirement benefits under the Pension Plan's '20 and out' option, the AMO member will be required to work one year in covered employment for each year he or she worked in non-covered employment in the maritime industry (up to a maximum of five years).
Under the rules of the AMO Medical Plan, if an AMO member with 20 or more years of credited time goes to work in non-covered employment in the maritime industry, eligibility for active medical benefits will cease on the first day of such employment.
AMO members with 20 or more years of credited time who go to work in non-covered employment in the maritime industry will not be eligible for lifetime retiree medical benefits upon retirement unless they re-establish eligibility by working one year in covered employment for each year worked in non-covered employment in the maritime industry (up to a maximum of five years).
AMO pensioners working in non-covered employment without permission
AMO pensioners must receive permission from the AMO Plans Board of Trustees to return to work in any position with an employer in the maritime industry.
AMO pensioners who go to work in non-covered employment in the maritime industry without permission will not be eligible for their pension benefit for any month worked under such circumstances, and for six months beyond the termination date of the non-covered employment.
AMO pensioners who go to work in non-covered employment in the maritime industry without permission permanently forfeit eligibility for retiree medical benefits under the AMO Medical Plan.