Health Eligibility Chart, Effective 10/1/2003
Health Fund eligibility is established by working the required number of weeks during a 12 month period (the Eligibility Period). Work weeks in an Eligibility Period earn coverage for a corresponding Benefit Period. Benefit Periods begin each calendar quarter (January, April, July & October).
For Actors first establishing initial eligibility, or for Actors whose previously established eligibility is expiring, the Fund will look back over a previous 12 months Eligibility Period to see if the Actor worked the minimum number of required weeks. As shown in the chart below, there is a two-month gap between the Eligibility Period and the Benefit Period. The test is satisfied if the Actor has worked in covered employment for at least the minimum required weeks during the previous 12 months Eligibility Period. If the test is met, the Actor becomes eligible for coverage beginning on the first day of the following quarter. If the test is not met, the Fund looks again each quarter to see if the required weeks were worked.
The new rule applies to Benefit Periods beginning on and after October 1, 2003. The Eligibility Periods and Benefit Period starting dates remain unchanged. If you are covered by the Health Fund now, the new rule will apply upon your next eligibility anniversary date.
ELIGIBILITY PERIOD BENEFIT PERIOD
12 MONTHS ENDING
LAST SUNDAY
October January 1
January April 1
April July 1
July October 1
Under the new rule, if a participant works 20 weeks or more in the 12 month Eligibility Period they receive 12 months of coverage starting with the corresponding Benefit Period. If a participant works at least 12 weeks but less than 20 weeks in the 12 month Eligibility Period they receive 6 months of coverage starting with the corresponding Benefit Period. In other words, 20 weeks of work earns 12 months of coverage and 12 weeks of work earns 6 months of coverage.
All Eligibility Period look backs are 12 months long. Since there are overlaps when the look back occurs after 6 months, unused weeks worked during the overlap period can be carried forward. If you work more than 12 weeks but less than 20 weeks, weeks in excess of 12 (13- 19) earned during the second six months of the Eligibility Period are carried forward and included in the next Eligibility Period to be used to earn coverage for the next Benefit Period. If the combined weeks (newly earned and/or carried forwards) equals at least 12 or 20, you receive 6 or 12 more months of coverage. Weeks used for a previous eligibility determination are not used again.
The examples on the next page illustrate four continuation possibilities for participants after they have achieved 6 months of coverage. The central principle is that those who earn more than 12 but less than 20 work weeks during a 12-month long Eligibility Period receive 6 months of benefit coverage. The next time the Fund will look at their work history is six months later. Because each look back period is 12 months long, there are 6 months that overlap between any two periods. Work weeks earned during the first 12-month period that also fall within the second Eligibility Period that were not used to establish the first 6 months of coverage are counted towards the second Eligibility Period tally.
Example 1:
- Jane earned nineteen work weeks (blue) during the Eligibility Period look back beginning in November 2002 and ending in October 2003. The first twelve weeks (red) she earned during the period are counted toward six months of coverage for the Benefit Period that begins on January 1, 2004. These weeks cannot be used again. The remaining unused seven weeks (green) were all earned during the later half of the look back period between May 2003 and October 2003.
- Because she earned only six months of coverage, we look back again in six months for the twelve month Eligibility Period that runs from May 2003 through April 2004 to determine if Jane will remain covered as of July 1, 2004. Any weeks unused during the overlapping months (May 2003 through October 2003) that fall within the first and second Eligibility Periods are counted towards eligibility for the new Benefit Period beginning July 1, 2004. In this case, Jane had seven unused weeks that she can combine with the eight new weeks (blue) she earned between November 2003 and April 2004. She would be entitled to another six months of coverage that would begin on July 1, 2004. In addition, she has three unused weeks that can be applied during the next Eligibility Period look back to determine her eligibility beginning January 1, 2005.
Example 2:
- Like Jane, Jim earned nineteen weeks (blue) during the initial Eligibility Period for six months of coverage with seven unused weeks (green), earning him 6 months of coverage beginning January 1, 2004.
- Jim worked a lot during his second Eligibility Period look back. He earned fourteen additional work weeks (blue) between November 2003 and April 2004. With the seven unused weeks and the new fourteen weeks all falling within the applicable Eligibility Period (May 2003 –April 2004), he has the twenty required work weeks (red) and is entitled to 12 months of coverage for the Benefit Period beginning July 1, 2004 and ending June 30, 2005.
- Jim’s next Eligibility Period look back will run for the 12 months from May 2004 to April 2005 to establish eligibility for July 1, 2005. Since Jim earned 12 months of coverage there is no overlap between the two Eligibility Periods. Without an overlap, the one week he did not use to gain the twelve months of coverage does not carry forward.
Example 3:
- Jason has the same work history during the initial Eligibility Period as Jane and Jim.
- Although he carried forward seven unused weeks (green), Jason only worked two weeks (blue) in April 2004 during the entire November 2003 through April 2004 time. His total of nine work weeks is not enough to earn him continuing coverage. He is not covered for the Benefit Period beginning July 1, 2004.
- However, eight of the nine unused weeks (green) can be carried forward because they were earned between August 2003 and April 2004 and will fall within the next Eligibility Period look back used to determine eligibility for October 1, 2004.
Example 3a:
- Because Jason lost eligibility, the Fund will re-examine his work history at three-month intervals to see if he works enough to earn coverage. The next Eligibility Period will be the 12 months from August 2003 to July 2004 to determine eligibility for October 1, 2004. Jason earned seven new work weeks during the period. (blue) Adding together the unused weeks (green) with the new work weeks gives Jason a total of fifteen work weeks. Jason uses twelve weeks (red) to regain eligibility for six months of coverage beginning October 1, 2004. At the end of this Eligibility Period he has three unused weeks (green) that may be used for the next Eligibility Period look back for coverage beginning April 1, 2005. To re-cap, Jason was covered from January 2004 to July 2004, had a three month gap with no coverage, earned six more months of coverage beginning on October 1, 2004 and had three unused weeks available for the next look back.
Click on Chart for Larger View
Click on Chart for Larger View
Drastic Changes in Health Fund Go Into Effect on October 1, 2003
Drastic Changes in Health Fund Go Into Effect on October 1, 2003
The cost of providing health benefits continues to rise at an alarming rate. Despite the measures we have taken to resolve this problem, we are still faced with increased costs that now seriously threaten the Fund’s very existence. We are compelled by ever-increasing deficits to reduce benefits as soon as possible.
HEALTH FUND CHANGES EFFECTIVE OCTOBER 1, 2003
• New Eligibility Rules. Starting with Benefit Periods beginning on and after October 1, participants who work 20 weeks or more in the 12-month Eligibility Period will receive 12 months of coverage starting with the corresponding Benefit Period. Participants who work at least 12 weeks but less than 20 weeks in the 12-month Eligibility Period will receive six months of coverage starting with the corresponding Benefit Period. In other words, 20 weeks of work will earn 12 months of coverage, and 12 weeks of work will earn six months of coverage. Please note that the Eligibility Period and Benefit Period starting dates remain unchanged.
• All Eligibility Period look backs are 12 months long, so there are overlaps when the look- back occurs after six months. The unused weeks worked during the overlap period are carried forward and included in the next Eligibility Period, to be used to earn coverage for the next Benefit Period. If a participant works more than 12 weeks but less than 20 weeks, weeks in excess of 12 earned during the second six months of the Eligibility Period are carried forward. If the combined weeks (newly earned and/or carried forward) equal at least 12 or 20, the participant receives six or 12 more months of coverage, as applicable (There will be examples of how this works in Now Playing).
• Elimination of the Dental Plan. The Trustees implemented a voluntary self-pay dental benefit, January 1, 2004.
• Consolidation of our Indemnity Medical Plans under one Comprehensive Medical Plan, to be administered by CIGNA HealthCare. CIGNA will replace both the current Blue Cross hospital and Union Labor Life/Beech Street medical programs. The CIGNA plan will provide a more extensive PPO network than the Beech Street network for a substantially lower premium than the Fund is paying for the current programs. CIGNA will also provide the out-of-network indemnity benefits that are currently provided by Blue Cross and Union Labor Life.
• The PPO In-Network Office Visit Co-pay will increase from $15 to $25. The Out-of-Network deductible ($350) and co-insurance amounts (70% of Usual and Customary Charges) remain unchanged. As a reminder, effective January 1, 2005 the PPO Plan changed over to the OAP In-Network Plan.
• CIGNA will replace Merck-Medco as the administrator of the Prescription Drug benefit, effective October 1, 2003. Effective January 1, 2004, the annual Prescription Drug benefit deductible will increase to $100.
The Trustees arrived at these decisions after careful evaluation of alternatives. We also took into consideration how other Funds in our industry have dealt with the same dilemma. As difficult as it is to reduce benefits, especially in today’s economy, the fact is that the Trustees are legally responsible for the fiscal health of the Fund. With the Fund’s very existence threatened, we had no other choice but to take these steps in an attempt to preserve it for current and future participants. Indeed, even these changes may not eliminate the entire deficit.
You will receive more details on each of these changes in a special edition of our Now Playing newsletter, to be mailed within a month. As always, the Fund Office is available to assist you. If you have questions after reviewing the details of these changes, please contact the Fund Office.
If you would like to see if your current doctor, or which doctors are covered as an in-network provider under the CIGNA plan, go to the CIGNA online provider directory. Select Physician, enter your zip code, and enter your Physician's last name. To search for in-network providers in your area, just put in your zip code and click continue.
We hope you understand the difficult situation that our Health Plan and most other health programs throughout the country are experiencing.
The Board of Trustees
Equity-League Health Trust Fund
Equity-League Pension Fund Reaches $1 billion
The Equity - League Pension Fund reached new heights with Fund assets breaking the $1 billion mark as of December 31, 2004.The Fund’s assets amounted to approximately $450 million ten years ago and were just over $200 million twenty years ago.
Of course, as stock market results in recent years have shown, the value of assets fluctuates up and down and the Pension Fund may have dipped back below $1 billion in 2005. .
The Pension Fund pays benefits to about 5,000 pensioners and beneficiaries totaling about $31 million annually. This is projected to increase so that by 2015 we will have more than 8,000 pension recipients receiving more than $55 million in annual benefits.
Our Pension Fund is in fine shape and most retirees were recently awarded a 10% increase in their monthly benefits.
For more information on our Pension Fund contact the Fund Office at 212-869-9380 from the NYC area or 800-344-5220 from outside the NYC area.
CIGNA HealthCare New ID Cards
Dear Member:
CIGNA HealthCare will mail you and your family new ID Cards TWICE before the end of the year (one in September and one in December). Therefore, please read this information carefully so you understand the changes and so that you always use the correct ID cards.
FAILURE TO USE THE CORRECT ID CARDS MAY RESULT IN DELAYED CLAIM PAYMENTS OR DIFFICULTY FILLING PRESCRIPTIONS AT YOUR LOCAL PHARMACY.
You Will Receive New ID Cards in September
If you remain eligible for coverage under the plan, during the last week in September you will receive new ID cards for your medical and pharmacy benefits with CIGNA HealthCare. Your new ID cards will contain a new Group Number (3209088). Your doctor(s) must have this new group number in order to file claims with CIGNA HealthCare, so you should show your ID cards with your new Group Number to your doctors, pharmacists and other health care providers each time you visit them.
Please be aware that if your health coverage is terminating as of October 1, 2004, and you elect to self-pay through COBRA for October 1, 2004, then you and/or your dependents will also receive new identification cards. This pertains to members who self-pay for Medicare Supplemental coverage, as well as those who participate under the Vesting Beyond COBRA eligibility options.
When you receive your new ID cards, remember to dispose of your old CIGNA ID cards. If you don’t get new ID cards prior to October 1, 2004 please contact CIGNA HealthCare at 800-CIGNA-24.
You Will Also Receive New ID Cards in December
Your privacy is very important to us at CIGNA HealthCare. To help protect your personal information against identity theft, CIGNA HealthCare will no longer use your Social Security Number on ID cards and most other correspondences that you receive from CIGNA.
If you remain eligible for coverage under the plan, you will again receive new member ID cards during the last week in December, even if you received new ID cards in September. The new ID cards will also have the new CIGNA Group Number (3209088) on it, but instead of using your Social Security Number as your Member ID Number, the new cards will include a unique alpha-numeric number in the “ID Number” field. This new identification number is called your Alternate Member Identifier (AMI).
Please be aware that if your health coverage is terminating as of January 1, 2005, and you elect to self-pay through COBRA for January 1, 2005, then you and/or your dependents will also receive new identification cards. This pertains to members who self-pay for Medicare Supplemental coverage, as well as those who participate under the Vesting Beyond COBRA eligibility options.
Your new member ID cards will continue to have a two-digit “relationship code” number that will follow your AMI. The two-digit “relationship code” helps to identify you and your family:
- Alternate Member Identifier Number + (01) for You
- Alternate Member Identifier Number + (02) for Your Spouse
- Alternate Member Identifier Number + (03 – 99) for Your Child (Children)
You and your dependents will use your AMI and relationship code in the same way that you used your Social Security Number. You should provide your cards with your AMI to your doctors, pharmacists and other health care providers each time you visit them, and when you call CIGNA HealthCare’s Member Services Representatives.
Your Alternate Member Identifier will appear on most letters and correspondences that you receive from CIGNA HealthCare, including your Explanations of Benefits that are sent to you following each visit to a health care provider.
When you receive your ID cards in December, remember to dispose of your old CIGNA ID cards (including the ones you received in September). If you don’t get ID cards prior to October 1, or if you have questions about your Alternate Member Identifier, please contact CIGNA HealthCare at 800-CIGNA-24.
If you have any general questions regarding your eligibility under the plan, please contact the Equity-League Fund Office at (212) 869-9380, or toll free at (800) 344-5220.
401(k) available for WCLO Contracts
Dear Participant:
The Board of Trustees is pleased to announce a retirement benefit available through the Equity-League 401(k) Trust Fund for members performing under a WCLO Contract.
This benefit will be effective September 8, 2003, and applies to Actors and Stage Managers employed under the terms of the Western Civic Light Opera Theatre (WCLO) contract. If you are so employed, you may defer some of your salary into the Equity-League 401(k) Plan (the "Plan"). You may defer up to 85% of your salary, up to a maximum deferral of $4,675.00 per week. You may change the percentage at any time. The percentage will be automatically deducted from your weekly salary pursuant to your authorization.
For the year 2005, the maximum amount of salary that you may defer from ALL EMPLOYERS is $14,000.00. Note that if you are 50 or older, you are eligible to defer an additional $4,000.00 for the year 2005.
Example:
Weekly salary: $786.00
Participant’s deferral: (10%) -$ 78.60
Total deferrals made to 401(k) account: $ 78.60
Gross salary for federal income tax purposes: $707.40
Your voluntary salary deferral, automatically deducted from your weekly salary by your employer, is treated as a pre-tax contribution made before federal income taxes are calculated and deducted, thereby reducing the amount of your current taxable income and lowering your current tax liability. In addition, all interest earned is tax deferred. You do not owe federal income tax until the money in your account is withdrawn.
You are eligible to withdraw your account balance if:
• You reach Normal Retirement Age (59½),
• You are not employed for 12 months under any collective bargaining agreement allowing for deferrals to this plan for 12 months and are not so employed when you apply for withdrawal of your account,
• You are permanently and totally disabled (as defined by the Plan), or
• You qualify for a Hardship Withdrawal (as defined by the IRS).
If you die, your account will be paid as a death benefit under the rules of the Plan.
Record keeping and investments are provided for the Plan through MassMutual Retirement Services. MassMutual Retirement Services has an excellent reputation in the retirement services industry and currently manages more than $55 million in retirement plan assets. Working in partnership with MassMutual Retirement Services, the Fund Office staff will assist you during the entire 401(k)-benefit administration process.
Through MassMutual, some of the features available from the Plan will include:
• Fourteen (14) investment options
• A toll-free number and an Internet site providing participants with:
•Access to your account balance
•The ability to make changes to your investment options
•The ability to review investment performance
• Educational information on the Internet site regarding:
•Financial planning basics
•Plans for building an investment strategy
• A quarterly statement mailed to you, reporting:
•Account information
•Your personal rate of return
•Contributions made to your account segregating salary deferral by each producer
The Plan charges an annual fee of $90.00. This fee will be charged directly to your account on a monthly basis and will be reflected on your quarterly statement.
A MassMutual customer service representative will be available through the toll free number to answer your questions. You may also contact the Fund Office at the above address and telephone numbers or through the Fund’s website- www.equityleague.org
Very truly yours,
Board of Trustees
Equity-League 401(k) Trust Fund
Transition of Care for Serious Medical Conditions
Participants with certain serious medical conditions (like AIDS, cancer, or heart disease for example) can continue their treatment for a limited period of time if your provider was In-Network under the Cigna PPO, but is not in the Cigna OAP. To apply for this "Transition of Care" of benefits, you must complete a CIGNA Transition of Care Benefits form. Please contact the Fund Office for more details.
 Transition of Care for Serious Medical Conditions Form (PDF, 36K) cignatrans.pdf
 You'll need the free Acrobat Reader to view these forms.
Changes to the Health Plan, Effective July 1, 2003
- A participant must work as least 12 weeks under covered employment within a 12 month “earnings period” to be eligible for health benefits. Please be aware that this eligibility change is for newly eligible/reinstatement participants who will begin receiving health coverage effective 7/1/03.
- The annual major medical deductible in the out-of-network (non-PPO) indemnity plan will increase to $350 per person from $250 per person. A $700 per family annual deductible will apply (at least one person will have to meet the $350 deductible and the balance of the family deductible can be a combined total).
- The major medical out-of-network Co-Insurance percentages (80%/20% co-pay) will be decreased to 70%/30%.
- The major medical out-of-network annual out-of-pocket expense limit will increase to $5,000 per participant from $2,000 per participant.
- While the 12 week eligibility provision will affect participation for everyone, the other three changes will only affect participants in the indemnity plan who do not utilize the PPO.
An Explanation of the Changes in the Health Plan:
As you know, the cost of medical care and prescription drugs have been increasing at alarming rates. The Equity - League Health Fund has been hit especially hard, with insurance companies premium increases of up to 45%!
Because the Health Fund's expenses exceed the Fund's income, the Board of Trustees has adopted the following changes EFFECTIVE JULY 1, 2003. We'll be totally up front and acknowledge that in some circumstances these changes will put more of the financial responsibility for health care costs on participants, but that's because the Health Fund simply cannot continue to absorb the increased costs. And, even though these changes don't go in for several months, we're telling you now to give you time to adjust to them.
Even with these changes, if the current medical cost trends continue, we will have no choice but to implement other changes that will help us preserve the Health Fund's financial health.
TIGHTENING THE ELIGIBILITY RULES
Starting with the July 1, 2003 quarterly eligibility period, you must have at least 12 weeks of work under covered employment to be covered under Health Fund benefits. This means that anyone currently eligible for Health Fund benefits whose current eligibility status is up for renewal on or after July 1, 2003, will need at least 12 weeks of covered employment in the applicable eligibility period to maintain coverage.
If You're In the Indemnity Medical Plan, You'll Pick Up More of Your Out-of-Network (non-PPO) Expenses Out-of-network care is expensive because we have no control over what these doctors charge for their services. PPO providers, on the other hand, charge the discounted fee they've agreed to. Paying this preferred rate lowers the Health Fund's costs and keeps your out-of-pocket costs to a minimum. While we're not taking away the option of going out-of-network, we have no choice but to make it a more expensive alternative. In fact, STARTING JULY 1, 2003, each time you choose to go to non-network providers instead of PPO providers, you'll pay more toward the cost of your eligible expenses.
Health Fund participants with Medicare as their primary insurance provider CANNOT take advantage of the PPO benefit.
Please remember that these changes apply to out-of-network care only. Those of you who use the Indemnity Plan's PPO network will not be affected by the higher cost-sharing thresholds.
The Deductible Is Going Up
The Indemnity Medical Plan deductible that applies to out-of-network major medical expenses will go from $250 to $350 per person. If you have family coverage, your family's major medical deductible will be capped at $700 for the year, but at least one family member has to meet his/her $350 individual deductible. (The remaining $350 still has to be met, but it doesn't matter how you get there. For example, two people with $175 each in deductibles, one person with $200 + one with $150, one person with $200 + two with $75 each, and so on - as long as it adds up to $350.)
You'll Pay More In Coinsurance
STARTING JULY 1, 2003, the Indemnity Medical Plan will reimburse 70% of your eligible out-of-network major medical expenses. That means your coinsurance will go from the current 20% to 30% of eligible charges. (Remember, you could be on the hook for even more if your out-of-network expenses are over ULLICO's reasonable and customary charge.)
You'll Pay More Before the Plan Kicks in at 100%
Even though you'll be paying 30% coinsurance on your eligible out-of-network expenses, you don't pay your 30% share indefinitely, thanks to the annual coinsurance limit, which puts a cap on what you pay toward your eligible medical expenses in a given plan year. Once you hit the coinsurance limit, your remaining expenses for that plan year are reimbursed at 100% of eligible charges. However, STARTING JULY 1ST, you'll be paying more before getting to the 100% level, since the coinsurance limit is being raised from $2,000 to $5,000 per person.
Use the PPO!
The PPO offers quality, coordinated care for the least amount of money. Most in-network care is covered in full, with some services (such as office visits) requiring only a nominal copay. And you can't beat the simplicity of the PPO: there's no deductible to meet, no coinsurance to pay, no claims to file, no paperwork to keep track of. With thousands of PPO providers to choose from, there's no reason you can't find doctors right in your own area - and take advantage of the lower cost and sheer convenience of in-network care.
Health Fund participants with Medicare as their primary insurance provider CANNOT take advantage of the PPO benefit.
If you have any questions regarding these changes, please do not hesitate to call the Fund Office.
Pension Fund Update
The Trustees of the Equity-League Pension Trust Fund utilize the services of Segal Advisors, an independent investment consultant, to assist them in the monitoring of the investment program. According to Segal, the Fund was valued at $806 million on June 30, 2002. The assets were diversified among 12 investment firms with varying mandates in terms of asset class (stocks and bonds), style (value and growth) and capitalization (small cap, mid-cap and large cap). The overall allocation was 54% to equity holdings and 46% to fixed income holdings. Like most investors, the Fund had some exposure to the recent bankruptcies of Enron and Worldcom; however, the impact was minimized through the diversified investment program. The participants can be assured that the investment program is designed to provide diversification in several forms i.e. by manager, by asset class, by investment style, by market capitalization, by sector, and by security. In addition, the investment guidelines, which govern the Pension Fund, are structured in a manner to limit the exposure in any single holding. Therefore, any one particular success or failure will have a limited impact on the overall results.
Important Notice Regarding the Equity-League 401(k) Trust Fund
Participants in the Equity-League 401(k) Trust Fund receive quarterly statements from MassMutual. The quarterly statements report all salary deferrals and employer contributions received during the period, listed separately by employer. It is very important that you review this information to determine that all deferrals and contributions owed on your behalf are received by the Fund. Occasionally employers make errors and it is important to resolve these errors as soon as possible. If you suspect an error in the amounts that should have been contributed on your behalf, call the Fund Office immediately, 212-869-9380 or 800-344-5220 (outside NYC) and ask to speak to Vincent Cinelli.
SUPPLEMENTAL WORKERS’ COMPENSATION BENEFITS - - CLAIMS AND APPEALS PROCEDURES UPDATES
Effective January 1, 2002, the Board of Trustees of the Equity-League Pension Trust Fund adopted changes to the Fund’s Supplemental Workers’ Compensation Benefits claims appeal process. Please click on the Supplemental Workers' Compensation Plan for the latest information.
Pension Reciprocity Agreement between AEA & CAEA
Actors' Equity Association and Canadian Actors' Equity Association have agreed to provide a better access to retirement funds to members of both unions.
American AEA members who work under a contract with CAEA can have their pension contributions sent directly to the Equity-League Pension Trust Fund. Credits toward vesting will also be earned. If you are working under a Canadian AEA Production contract in the United States, contributions to the Equity-League 401(k) Fund will also be made on your behalf.
You may download the Pension Designation Forms here or request them from your producer.
Please log on the AEA website at www.actorsequity.org or the CAEA website at www.caea.com for complete information.
Full Time College Student Dependent Coverage Extended to Age 25
The Board of Trustees of the Equity-League Pension and Health Trust Funds has approved extended coverage for college-age dependent children, subject to verification, while they are enrolled in a full time training or education program.
Effective April 1, 2001, participants who are paying for dependent coverage may continue this benefit under the plan while the dependent is enrolled in a full time program, as long as premiums are paid. Documentation of enrollment must be provided by the school's Registrar on a yearly basis.
Please contact the Fund Office for continued coverage information.
Early Pensioners May Now Work in Any Type of Employment and Receive Pension Benefits Regardless of Earnings
The Equity-League Summary Pension Plan states that "during a calendar year, a pensioner under age 65 must return his or her pension payment for any month in which he or she earns more than $500 in gross wages working under the Actors' Equity Association Jurisdiction."
The Board of Trustees of the Equity-League Pension and Health Trust Funds changed this policy effective January 1, 1999.
Participants on an early retirement pension may now work in any type of employment and receive pension benefits regardless of earnings.
Pension Benefits Increase
The Board of Trustees approved several significant increases in the Pension Fund retroactive to January 1, 1998.
· For all participants who have not retired before January 1, 1998, the accrual rate will be increased to 3% for all salary covered under the Plan since its inception. Previously, the accrual rate was 2.8% for the first $50,000 and 2.1% for salary above $50,000.
· For all participants who have not retired before January 1, 1998, the service portion of the pension will be increased from $108 for each year of credit ($9 per month) to $120 per year of credit ($10 per month).
· For all pensioners who retired before January 1, 1998, their pensions will be increased by 15% but in no instance will the increase be less than $50.00.
Pensioner Tax Notice 2002
This notice explains how you can continue to defer federal income tax on your retirement savings in the Equity-League Pension Plan (the “Plan”) and contains important information you will need before you decide how to receive your Plan benefits.
You have received this notice from the Fund Manager (your “Plan Administrator”) because all or part of the payment that you will soon receive from the Plan may be eligible for rollover by you or your Plan Administrator to a traditional IRA or an eligible employer plan. A rollover is a payment by you or your Plan Administrator of all or part of your benefit to another plan or IRA that allows you to continue to postpone taxation of that benefit until it is paid to you. Your payment cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account (formerly known as an education IRA). An “eligible employer plan” includes a plan qualified under section 401(a) of the Internal Revenue Code, including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; a section 403(a) annuity plan; a section 403(b) tax-sheltered annuity; and an eligible 457(b) plan maintained by a governmental employer (governmental 457 plan).
An eligible employer plan is not legally required to accept a rollover. Before you decide to roll over your payment to another employer plan, you should find out whether the plan accept rollovers, and if so, the types of distributions it accepts as a rollover. You should also find out about any documents that are required to be completed before the receiving plan will accept a rollover. Even if a plan accepts rollovers, it might not accept rollovers of certain types of distributions, such as after-tax amounts, you may wish instead to roll your distribution over to a traditional IRA or split your rollover amount between the employer plan in which you will participate and a traditional IRA. If an employer plan accepts your rollover, the plan may restrict subsequent distributions of the rollover amount or may require your spouse’s consent for any subsequent distribution. A subsequent distribution from the plan that accepts your rollover may also be subject to different tax treatment than distributions from this Plan. Check with the administrator of the plan that is to receive your rollover prior to making the rollover. If you have additional questions after reading this notice, you can contact the Fund Office at (212) 869-9380 (Outside Metropolitan New York City (800) 344-5220) or at www.equityleague.org <http://www.equityleague.org>.
There are two ways you may be able to receive a Plan payment that is eligible for rollover:
(1) Certain payments can be made directly to a traditional IRA that you establish or to an eligible employer plan that will accept it and hold it for your benefit ("DIRECT ROLLOVER"); or
(2) The payment can be PAID TO YOU.
If you choose a DIRECT ROLLOVER:
· Your payment will not be taxed in the current year and no income tax will be withheld.
· You choose whether your payment will be made directly to your traditional IRA or to an eligible employer plan that accepts your rollover. Your payment cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account because these are not traditional IRAs.
· The taxable portion of your payment will be taxed later when you take it out of the traditional IRA or the eligible employer plan. Depending on the type of plan, the later distribution may be subject to different tax treatment than it would be if you received a taxable distribution from this Plan.
If you choose to have a Plan payment that is eligible for rollover PAID TO YOU:
· You will receive only 80% of the taxable amount of the payment, because the Plan Administrator is required to withhold 20% of that amount and send it to the IRS as income tax withholding to be credited against your taxes.
You will receive only 80% of the taxable amount of the payment, because the Plan Administrator is required to withhold 20% of that amount and send it to the IRS as income tax withholding to be credited against your taxes.
· The taxable amount of your payment will be taxed in the current year unless you roll it over. Under limited circumstances, you may be able to use special tax rules that could reduce the tax you owe. However, if you receive the payment before age 591/2, you may have to pay an additional 10% tax.
· You can roll over all or part of the payment by paying it to your traditional IRA or to an eligible employer plan that accepts your rollover within 60 days after you receive the payment. The amount rolled over will not be taxed until you take it out of the traditional IRA or the eligible employer plan.
· If you want to roll over 100% of the payment to a traditional IRA or an eligible employer plan, you must find other money to replace the 20% of the taxable portion that was withheld. If you roll over only the 80% that you received, you will be taxed on the 20% that was withheld and that is not rolled over.
Your Right to Waive the 30-Day Notice Period. Generally, neither a direct rollover nor a payment can be made from the plan until at least 30 days after your receipt of this notice. Thus, after receiving this notice, you have at least 30 days to consider whether or not to have your withdrawal directly rolled over. If you do not wish to wait until this 30-day notice period ends before your election is processed, you may waive the notice period by making an affirmative election indicating whether or not you wish to make a direct rollover. Your withdrawal will then be processed in accordance with your election as soon as practical after it is received by the Plan Administrator.
MORE INFORMATION
I. PAYMENTS THAT CAN AND CANNOT BE ROLLED OVER
II. DIRECT ROLLOVER
III. PAYMENTS PAID TO YOU
IV. SURVIVING SPOUSES, ALTERNATE PAYEES, AND OTHER BENEFICIARIES
I. PAYMENTS THAT CAN AND CANNOT BE ROLLED OVER
Payments from the Plan may be “eligible rollover distributions.” This means that they can be rolled over to a traditional IRA or to an eligible employer plan that accepts rollovers. Payments from a plan cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account. Your Plan Administrator should be able to tell you what portion of your payment is an eligible rollover distribution.
The following types of payments cannot be rolled over:
Payments Spread Over Long Periods. You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least once a year and that will last for:
• your lifetime (or your life expectancy), or
• your lifetime and your beneficiary's lifetime (or life expectancies), or
• a period of ten years or more.
Required Minimum Payments. Beginning when you reach age 70½ or retire, whichever is later, a certain portion of your payment cannot be rolled over because it is a "required minimum payment" that must be paid to you. Special rules apply if you own 5% or more of your employer.
Corrective Distributions. A distribution that is made to correct a failed nondiscrimination test or because legal limits on certain contributions were exceeded cannot be rolled over.
The Plan Administrator of this Plan should be able to tell you if your payment includes amounts which cannot be rolled over.
A DIRECT ROLLOVER is a direct payment of the amount of your Plan benefits to a traditional IRA or an eligible employer plan that will accept it. You can choose a DIRECT ROLLOVER of all or any portion of your payment that is an eligible rollover distribution, as described in Part I above. You are not taxed on any taxable portion of your payment for which you choose a DIRECT ROLLOVER until you later take it out of the traditional IRA or eligible employer plan. In addition, no income tax withholding is required for any portion of your Plan benefits for which you choose a DIRECT ROLLOVER. This Plan might not let you choose a DIRECT ROLLOVER if your distributions for the year are less than $200.00.
DIRECT ROLLOVER to a Traditional IRA. You can open a traditional IRA to receive the direct rollover. If you choose to have your payment made directly to a traditional IRA, contact an IRA sponsor (usually a financial institution) to find out how to have your payment made in a direct rollover to a traditional IRA at that institution. If you are unsure of how to invest your money, you can temporarily establish a traditional IRA to receive the payment. However, in choosing a traditional IRA, you may wish to consider whether the traditional IRA you choose will allow you to move all or a part of your payment to another traditional IRA at a later date, without penalties or other limitations. See IRS Publication 590, Individual Retirement Arrangements, for more information on traditional IRAs (including limits on how often you can roll over between IRAs).
DIRECT ROLLOVER to a Plan. If you are employed by a new employer that has an eligible employer plan, and you want a direct rollover to that plan, ask the plan administrator of that plan whether it will accept your rollover. An eligible employer plan is not legally required to accept a rollover. Even if your new employer's plan does not accept a rollover, you can choose a DIRECT ROLLOVER to a traditional IRA. If the employer plan accepts your rollover, the plan may provide restrictions on the circumstances under which you may later receive a distribution of the rollover amount or may require spousal consent to any subsequent distribution. Check with the plan administrator of that plan before making your decision.
DIRECT ROLLOVER of a Series of Payments. If you receive a payment that can be rolled over to a traditional IRA or an eligible employer plan that will accept it, and it is paid in a series for less than ten years, your choice to make or not make a DIRECT ROLLOVER for a payment will apply to all later payments in the series until you change your election. You are free to change your election for any later payment in the series.
Change in Tax Treatment Resulting from a DIRECT ROLLOVER. The tax treatment of any payment from the eligible employer plan or traditional IRA receiving your DIRECT ROLLOVER might be different than if you received your benefit in a taxable distribution directly from the Plan. For example, if you were born before January 1, 1936, you might be entitled to ten-year averaging or capital gain treatment, as explained below. However, if you have your benefit rolled over to a section 403(b) tax-sheltered annuity, a governmental 457 plan, or a traditional IRA in a DIRECT ROLLOVER, your benefit will no longer be eligible for that special treatment. See the sections below entitled “Additional 10% Tax if You Are under Age 59 ½” and “Special Tax Treatment if You Were Born before January 1, 1936.”
If your payment can be rolled over under Part I above and the payment is made to you in cash, it is subject to 20% federal income tax withholding on the taxable portion (state tax withholding may also apply). The payment is taxed in the year you receive it unless, within 60 days, you roll it over to a traditional IRA or an eligible employer plan that accepts rollovers. If you do not roll it over, special tax rules may apply.
Income Tax Withholding:
Mandatory Withholding. If any portion of your payment can be rolled over under Part I above and you do not elect to make a DIRECT ROLLOVER, the Plan is required by law to withhold 20% of that amount. This amount is sent to the IRS as federal income tax withholding. For example, if you can roll over a payment of $10,000, only $8,000 will be paid to you because the Plan must withhold $2,000 as income tax. However, when you prepare your income tax return for the year, unless you make a rollover within 60 days (see “Sixty-Day Rollover Option” below), you must report the full $10,000 as a taxable payment from the Plan. You must report the $2,000 as tax withheld, and it will be credited against any income tax you owe for the year. There will be no income tax withholding if your payments for the year are less than $200.
Voluntary Withholding. If any portion of your payment is taxable but cannot be rolled over under Part I above, the mandatory withholding rules described above do not apply. In this case, you may elect not to have withholding apply to that portion. If you do nothing, 10% will be taken out of this portion of your payment for federal income tax withholding. To elect out of withholding, ask the Plan Administrator for the election form and related information.
Sixty-Day Rollover Option. If you receive a payment that can be rolled over under Part I above, you can still decide to roll over all or part of it to a traditional IRA or an eligible employer plan that accepts rollovers. If you decide to roll over, you must contribute the amount of the payment you received to a traditional IRA or another qualified plan within 60 days after you receive the payment. The portion of your payment that is rolled over will not be taxed until you take it out of the traditional IRA or the eligible employer plan.
You can roll over up to 100% of your payment that can be rolled over under Part I above, including an amount equal to the 20% of the taxable portion that was withheld. If you choose to roll over 100%, you must find other money within the 60-day period to contribute to the traditional IRA or the eligible employer plan, to replace the 20% that was withheld. On the other hand, if you roll over only the 80% that you received, you will be taxed on the 20% that was withheld.
- Example: The portion of your payment that can be rolled over under Part I above is $10,000, and you choose to have it paid to you. You will receive $8,000, and $2,000 will be sent to the IRS as income tax withholding. Within 60 days after receiving the $8,000, you may roll over the entire $10,000 to a traditional IRA or an eligible employer plan. To do this, you roll over the $8,000 you received from the Plan, and you will have to find $2,000 from other sources (your savings, a loan, etc.). In this case, the entire $10,000 is not taxed until you take it out of the traditional IRA or the eligible employer plan. If you roll over the entire $10,000, when you file your income tax return you may get a refund of part or all of the $2,000 withheld.
- If, on the other hand, you roll over only $8,000, the $2,000 you did not roll over is taxed in the year it was withheld. When you file your income tax return you may get a refund of part of the $2,000 withheld. (However, any refund is likely to be larger if you roll over the entire $10,000.)
Additional 10% Tax If You Are Under Age 59½. If you receive a payment before you reach age 59½ and you do not roll it over, then, in addition to the regular income tax, you may have to pay an extra tax equal to 10% of the taxable portion of the payment. The additional 10% tax generally does not apply to (1) payments that are paid after you separate from service with your employer during or after the year you reach age 55, (2) payments that are paid because you retire due to disability, (3) payments that are paid as equal (or almost equal) payments over your life or life expectancy (or your and your beneficiary's lives or life expectancies), (4) dividends paid with respect to stock by an employee stock ownership plan (ESOP) as described in Code section 404(k), (5) payments that are paid directly to the government to satisfy a federal tax levy, (6) payments that are paid to an alternate payee under a qualified domestic relations order, or (7) payments that do not exceed the amount of your deductible medical expenses. See IRS Form 5329 for more information on the additional 10% tax.
The additional 10% tax will not apply to distributions from a governmental 457 plan, except to the extent the distribution is attributable to an amount you rolled over to that plan (adjusted for investment returns) from another type of eligible employer plan or IRA. Any amount rolled over from a governmental 457 plan to another type of eligible employer plan or to a traditional IRA will become subject to the additional 10% tax if it is distributed to you before you reach age 59 ½, unless one of the exceptions applies.
Special Tax Treatment If You Were Born before January 1, 1936. If you receive a payment from a plan qualified under section 401(a) or a section 403(b) annuity plan that can be rolled over under Part I and you do not roll it over to a traditional IRA or an eligible employer plan, the payment will be taxed in year you receive it. However, if the payment qualifies as a "lump sum distribution," it may be eligible for special tax treatment. A lump sum distribution is a payment, within one year, of your entire balance under the Plan (and certain other similar plans of the employer) that is payable to you after you have reached age 59½ or because you have separated from service with your employer (or, in the case of a self-employed individual, after you have reached age 59-1/2 or have become disabled). For a payment to be treated as a lump sum distribution, you must have been a participant in the Plan for at least five years before the year in which you received the distribution. The special tax treatment for lump sum distributions that may be available to you is described below.
Ten-Year Averaging. If you receive a lump sum distribution and you were born before January 1, 1936, you can make a one-time election to figure the tax on the payment by using "10-year averaging" (using 1986 tax rates). Ten- year averaging often reduces the tax you owe.
Capital Gain Treatment. If you receive a lump sum distribution and you were born before January 1, 1936, and you were a participant in the Plan before 1974, you may elect to have the part of your payment that is attributable to your pre-1974 participation in the Plan taxed as long-term capital gain at a rate of 20%.
There are other limits on the special tax treatment for lump sum distributions. For example, you can generally elect this special tax treatment only once in your lifetime, and the election applies to all lump sum distributions that you receive in that same year. You may not elect this special tax treatment if you rolled amounts into this Plan from a 403(b) tax-sheltered annuity contract or from an IRA not originally attributable to a qualified employer plan. If you have previously rolled over a distribution from this Plan (or certain other similar plans of the employer), you cannot use special averaging treatment for later payments from the Plan. If you roll over your payment to a traditional IRA, governmental 457 plan, or 403(b) tax-sheltered annuity, you will not be able to use special tax treatment for later payments from that IRA, plan or annuity. Also, if you roll over only a portion of your payment to a traditional IRA, governmental 457 plan or 403(b) tax-sheltered annuity, this special tax treatment is not available for the rest of the payment. See IRS Form 4972 for additional information on lump sum distributions and how you elect the special tax treatment.
IV. SURVIVING SPOUSES, ALTERNATE PAYEES, AND OTHER BENEFICIARIES
In general, the rules summarized above that apply to payments to employees also apply to payments to surviving spouses of employees and to spouses or former spouses who are "alternate payees." You are an alternate payee if your interest in the Plan results from a "qualified domestic relations order," which is an order issued by a court, usually in connection with a divorce or legal separation.
If you are a surviving spouse or an alternate payee, you may choose to have a payment that can be rolled over, as described in Part I above, paid in a DIRECT ROLLOVER to a traditional IRA or to an eligible employer plan or paid to you. If you have the payment paid to you, you can keep it or roll it over yourself to a traditional IRA or to an eligible employer plan. Thus, you have the same choices as the employee.
If you are a beneficiary other than a surviving spouse or an alternate payee, you cannot choose a direct rollover and you cannot roll over the payment yourself.
If you are a surviving spouse, an alternate payee or another beneficiary, your payment is generally not subject to the additional 10% tax described in Part III above, even if you are younger than age 59 ½. If you are a surviving spouse, an alternate payee or another beneficiary, you may be able to use the special tax treatment for lump sum distributions. If you receive a payment because of the employee's death, you may be able to treat the payment as a lump sum distribution if the employee met the appropriate age requirements, whether or not the employee had 5 years of participation in the Plan.
HOW TO OBTAIN ADDITIONAL INFORMATION
This notice summarizes only the federal (not state or local) tax rules that might apply to your payment. The rules described above are complex and contain many conditions and exceptions that are not included in this notice. Therefore, you may want to consult with the Plan Administrator or a professional tax advisor before you take a payment of your benefits from the Plan. Also, you can find more specific information on the tax treatment of payments from qualified employer plans in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on the IRS's Internet Web Site at www.irs.gov, or by calling 1-800-TAX-FORMS.
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