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IAM National Pension Fund FAQ

Please view the following FAQ regarding the IAM National Pension Fund (IAMNPF).

During the airline industry restructuring of the 2000s, most airlines either terminated of froze employee defined-benefit pension plans and replaced them with defined contribution (401k) plans. The move was aimed to slash future financial obligations to current employees and shift the risk and funding of retirement plans from the airlines to their employees.

IAM-represented airline employees, however, fared much better than did other airline employees because of the IAM National Pension Fund (IAMNPF). IAM negotiators were able to replace terminated or frozen pension plans with the IAM National Pension Plan (IAMNPP), most notably at United Airlines and US Airways.

Please visit the www.iamnpf.org for more information and please read the below FAQ.

Links to important IAMNPF pamphlets:

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Information Guide.

Pension Benefits Payment Options.

View the Annual Funding Notice.

What payment options are available under the plan?

The plan offers a 50%, 75% or 100% spouse pension, lifetime pensions with 60 or 120 certain payments, Social Security option and a partial lump sum option with 60 or 120 certain payments. Benefits are payable for the participant's lifetime. The plan also provides a mandatory cash out payment if the actuarial equivalent benefit is less than $5,000, or a voluntary cash out payment if the actuarial equivalent benefit is less than $10,000.

What are some of the advantages of the National Pension Plan compared to a 401(k) plan?

Some advantages of the National Pension Plan are that benefits are guaranteed by the Pension Benefit Guaranty Corp. (PBGC) and are payable for your lifetime. Contributions are made by your employer, not you, and the Fund assumes the full risk for providing benefits. In addition, given the same assumptions in terms of contributions and earnings, the National Pension Plan may provide higher benefits.

If the National Pension Plan is better, why are 401(k) plans so popular?

401(k) plans are popular with employers because they shift the expense and investment risk to employees. They are popular with employees because 1) payroll deductions are made on a before-tax basis (which allows employees to defer paying taxes on the portion they contribute to the plan); 2) they often offer a choice of investment options and 3) account balances are generally accessible either through loans, hardship withdrawals or in-service withdrawals, or at the time an employee leaves the employer.

Why is the National Pension Plan so valuable?

For four good reasons: 1) contributions are made by the employer and not the employee; 2) since the benefits are guaranteed by the PBGC, there is limited risk to you when you participate in the plan; 3) the benefits are solely for retirement and cannot be used for any other purpose; and 4) benefit amounts are known and are paid for your lifetime.

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