Vesting and Building Your Benefit

Vesting

You become a Participant in NEBF on your first day of Covered Employment. Your hours in Covered Employment will count toward your eligibility for a benefit from NEBF. You shall no longer be a Participant upon the loss of your Vesting Service Credits.

Once you become Vested, you have a right to a benefit from NEBF and you cannot lose that right. If you stop working in Covered Employment before you are Vested, you remain a Participant until your Vesting Service Credits are lost.

Effective January 1, 1988, you are considered Vested when you have accumulated five Vesting Service Credits. Different rules apply to becoming Vested prior to January 1, 1988.

Why Is It Important to Be Vested?

There are three reasons why it is important to be Vested.

1. You have a right to a benefit from NEBF and you cannot lose that right.
2. You will not lose any Vesting Service Credits or Pension Credits that you have already earned should you incur a Break in Service.
3. You may earn additional Pension Credits if you return to Covered Employment without having to become Vested again.

What Happens If I Do Not Become Vested?

If you are not Vested and incur a Break in Service, you lose all Vesting Service Credits and Pension Credits that you have accumulated. However, if you retire at age 65 or older and have not lost your Pension Credits, you may be eligible for a benefit even if you are not Vested.

Your Benefit

Earning Credits Toward a Benefit

Your eligibility for a benefit and the amount of that benefit depend on the number of credits you earn. Generally, credits are earned for hours worked in Covered Employment. There are two types of credits you can earn: Vesting Service Credits and Pension Credits.

Vesting Service Credits

How Do I Earn Vesting Service Credits?

Generally, you earn Vesting Service Credits by accumulating hours worked in Covered Employment in Good Years. There is a 1,000 hour requirement for each Vesting Service Credit.

You generally earn one Vesting Service Credit for each year you work 1,000 hours or more.

The hours in excess of 1,000 can be used to meet the 1,000 hour requirement for other Good Years in which you worked less than 1,000 hours.

For hours to count toward the 1,000 hour requirement, you must have a Good Year. A Good Year is generally a year in which you work 300 or more hours in Covered Employment.

You can earn only one Vesting Service Credit in any calendar year.

In the event you believe you are entitled to Vesting Service Credits for time not reflected in NEBF’s records, it will be your responsibility to produce records proving your entitlement to such Vesting Service Credits.

For more information regarding Vesting Service Credits, see the Summary Plan Description.

Pension Credits

Pension Credits are generally earned while working in Covered Employment. They are used to determine your benefit amount. You cannot earn Pension Credits for hours worked in Non-Covered Employment. Pension Credits are not based on union membership.

There are two types of Pension Credits: Benefit Service Credits and Past Service Credits.

These are added together to give the total number of Pension Credits that are used to determine your benefit amount.

Benefit Service Credits

Benefit Service Credits are earned based on the number of hours you work in Covered Employment.

How Do I Earn Benefit Service Credits?

Generally, you earn Benefit Service Credits by accumulating hours worked in Covered Employment in Good Years. There is a 1,000 hour requirement for each Benefit Service Credit.

You generally earn one Benefit Service Credit for each year you work 1,000 hours or more.

The hours in excess of 1,000 can be used to meet the 1,000 hour requirement for other Good Years in which you worked less than 1,000 hours.

For hours to count toward the 1,000 hour requirement, you must have a Good Year. A Good Year is generally a year in which you work 300 or more hours in Covered Employment.

You can earn only one Benefit Service Credit in any calendar year.

In the event you believe you are entitled to Benefit Service Credits for time not reflected in NEBF’s records, it will be your responsibility to produce records proving your entitlement to such Benefit Service Credits.

For more information regarding benefit service credits, see the Summary Plan Description.

Past Service Credits

Past Service Credits are credits that recognize the years you worked in a job classification that was not Covered Employment, but later becomes Covered Employment for that employer.

How Do I Earn Past Service Credits?

You may earn a maximum of five Past Service Credits. These credits are earned on a one-for-one basis (one Past Service Credit for one Benefit Service Credit). Past Service Credits also count toward earning a Vesting Service Credit.

You earn one Past Service Credit in any year you meet the following requirements:

Calculating Your Benefit

For each Benefit Service Period, the number of Pension Credits you have earned is multiplied by the pension rate, and the results are added together. The total is your benefit amount for that Benefit Service Period.

What Is a Benefit Service Period?

A Benefit Service Period is a period of time to which a particular pension rate applies. A Participant may have multiple Benefit Service Periods due to a gap in employment.

If you leave Covered Employment or are out of Covered Employment for a specific period of time, the Pension Credits you previously earned will be added together and a specific pension rate will be applied to them. Some Participants may have multiple pension rates applied in determining their benefit amount, while others may have only one.

What is the Pension Rate?

The pension rates paid for Pension Credits have improved over the years. The pension rate is based on the pension rates that are in effect at your Effective Date. Currently, the pension rate is $32.00 per pension credit.

For more information regarding calculating your benefit, see the Summary Plan Description.