What is the difference between a defined contribution plan and a defined benefit plan?
The basic difference between these two types of retirement plans qualified by the Internal Revenue is risk. In a defined benefit plan the fund assumes the risk and in a defined contribution plan, the individual assumes the risk.
This plan is administered by a joint Board of Trustees. The Executive Board of General Teamster Local 959 selects the Labor (Union) Trustees. The Management (Employer) Trustees were originally selected out of the largest employers. The Management Trustees select the replacement of Management Trustees that leave the Board. As required by ERISA that there be a balanced Board, there are an equal number of Union Trustees and Management Trustees.
Can I transfer the funds from my 401(k) into my Teamster retirement fund?
No, this plan does not accept direct rollovers or transfers from other plans. You can however, rollover into the Teamsters 401(k) Plan under certain circumstances. Please call us to discuss further.
What is an accrual rate? How does it compare to a return on investments?
The Plan's benefit accrual rate is 1.00% of contributions. This is the formula under which your benefit amount is determined. This is not the return on investments. The Plan is invested with an asset allocation strategy to gain a return adequate to cover the cost of benefits. The rate needed is 7.25%. When the fund has excess returns, the fund must be used to improve benefits.
What are the Federal 415 Limitations? How could it affect my retirement benefit?
Section 415 is a section in the Internal Revenue Code that limits the amount of benefit you can receive. Since few people are impacted by this legislation, please contact the Trust Office to discuss whether or not this impacts you.