WHAT YOU NEED TO KNOW

The Massachusetts Laborers’ Annuity Fund (“the Fund”) is designed to provide income that supplements your pension and Social Security benefits in retirement.

Your employer makes regular contributions to your account based on your work hours (as required by the collective bargaining agreement). The contributions are invested on your behalf with the goal of growing your account over time. Your benefit, when you become eligible to receive it, will be the full value of your account balance, including any potential investment earnings.

For details about your benefit, review your Annuity Fund Summary Plan Description.

PARTICIPATION

As a Laborer, an account is established in your name on day one when you begin working for a contributing employer. After you work 100 hours in a calendar year, you become a vested participant in the Annuity Fund, and you’re entitled to all the money in your individual account.

Once you become a participant, you’ll need to name your beneficiaries. If you’re married, your spouse is automatically your beneficiary. When you apply for a distribution from the Annuity Fund, you can designate another beneficiary with your spouse’s consent. See the box below for more information about beneficiaries.

Learn How the Annuity Fund Works

ABOUT YOUR BENEFIT

The benefit you receive from the Annuity Fund is based on:

  • Contributions your employer makes to your account based on the hours you work and
  • Any investment returns your account earns from the Fund’s investments.

Three Superpowers of the Annuity Fund

1. Tax-free growth

Because the Annuity Fund is a retirement benefit, your account balance and earnings accumulate tax free until you retire. (Note that tax penalties may apply if you withdraw your money too early.)

2. Compounding

The interest you earn in your account then accumulates more earnings. This buildup of earnings on earnings is called “compounding.” It’s the secret sauce that makes your Annuity Fund a retirement-account superstar.

Example: Let’s say your $1,000 account earns $40 the first year. Assuming the same rate of return of 4% the next year, you’ll see a gain of $41.60, because the rate is based on an account balance of $1,040.

3. Time

Enjoying the fruits of compounding takes patience—and time. While compounding may not seem like a big deal in the example above, the true magic of compounding happens over a long stretch of time: The money earned on the initial investment has the potential to earn even more and can snowball the longer you stay invested. The longer you leave your money in your account, the bigger it may grow!

Case in point: The average Annuity Fund account balance was more than $250,000 for participants 60 or older, with $112,736 the average account balance for all participants!*

*As of 2022, the most recent year for Plan data.

  • The Board of Trustees, with the help of investment professionals, invests the Annuity Fund on your behalf.
  • Their goal is to grow the Fund and minimize the potential for losses when the financial markets go down.
  • Since the Fund was started in December 1986 through December 2023, the Fund has produced a 7.7% average annual return.
  • Market conditions can change, sometimes quickly, which may cause investments—and thus your account—to lose value.
  • The Fund invests in a variety of institutional-quality investments, including stocks, bonds, and other investments, to spread out risk. These investments aren’t generally available to individual investors and are often lower cost than similar investments in Individual Retirement Accounts (IRAs).

Your account is updated on a monthly basis and summarized in an annual account statement issued at the end of each year. The annual account statement you will receive contains the following information:

  • Employer contributions made on your behalf
  • Investment earnings and/or losses
  • Distributions made from your individual account (if applicable)
  • Administrative expenses, which are covered by a low fee charged to all participants through their accounts.

You can also view your account by visiting the Member Dashboard.

Review the annual Annuity Fund performance update for the prior year.

Because the Annuity Fund is meant to provide you with additional income in retirement, certain rules apply as to when you may qualify to receive the money in your individual account. Refer to the Summary Plan Description for details.

You may qualify to receive your benefit when you:

  • Retire under the Massachusetts Laborers’ Pension Plan or begin collecting Social Security benefits;
  • Leave covered employment (that is, have no employer contributions for 12 consecutive months); or if you
  • Become totally disabled.

Track your Benefit

Track your work history and Fund account balance by visiting the Member Dashboard. If you move, update your contact information with your new address or go to Important Resources and Documents to download a change-of-address card to complete and return to the Fund Office. Call the Fund Office at 781-272-1000, ext. 150 if you have any questions about your benefits.

PAYMENT OPTIONS

Once you’re eligible for your benefit, you can receive it in the following ways:

  • Periodic payments, which provide a monthly income for a period you choose—from one to 15 years. If you die before the specified number of monthly payments are made, the remaining payments are paid to your beneficiary (or beneficiaries).
  • Lump-sum payment
  • Combination of periodic payments and a lump-sum payment
  • Rollover or partial rollover
  • Joint and Survivor annuity (pays you a lifetime monthly benefit and pays a lifetime monthly benefit to a surviving spouse upon your death – will be provided through an external vendor).

If You Leave Employment Before Retirement Age

You’re eligible to receive a benefit from your Annuity Fund account if no contributions have been paid to the Fund on your behalf for at least 12 consecutive months.

Note that tax implications and penalties may apply for taking a distribution from the Fund before certain ages.

Because of this, the Fund allows you to keep your account balance in place for as long as you like, so you can continue to benefit from the Fund’s:

  • Institutional investments that are at a lower cost than similar investments available to individual investors
  • Professional oversight, like selecting, monitoring, and adjusting the mix of investments over time.

There’s no deadline for when to apply for your benefit; however, you’re required by federal tax law to begin taking minimum distributions in your 70s (the exact age depends on when you were born). Visit IRS.gov for current regulations.

About Taxes and Penalties

Distributions from the Annuity Fund may be taxed (similar to when you begin taking distributions from an IRA, which may also be taxed). How much you’re taxed depends in part on how and when you take your distribution. Your distributions are usually taxed as ordinary income.

If you choose a lump-sum payment, 20% will automatically be withheld to pay federal income taxes. Depending on where you live, state income taxes may also apply. If you choose a direct rollover to an eligible retirement plan, no taxes or penalties will be withheld, but you’ll eventually pay taxes on the distributions from your IRA.

In many cases, a 10% federal tax penalty may apply if you take a distribution before you reach age 59½. Before deciding to retire or electing a payment option, you may want to consult with a professional tax advisor.

For more information on your benefits, please review the Annuity Fund’s Summary Plan Description.

APPLYING FOR YOUR BENEFIT

Call the Fund Office at 781-272-1000, ext. 150 when you are considering retirement. A specialist can walk you through the process and provide you with the necessary forms to apply for your benefit.

When you’re eligible and ready to retire, you’ll need to submit an annuity application at least 30 days—but not more than 90 days—before the month you would like to begin receiving your benefit. You can also download a copy of the Annuity Application. Spanish, and Portuguese versions of the annuity application are available.

If your application is approved, you should start receiving your payment about 30 days after the approval date. Your benefit must start no later than April 1 of the year after you reach age 73. According to federal tax law, you must begin taking required minimum distributions (RMDs) when you reach age 72 (73 if you reach age 72 after Dec. 31, 2022). Visit IRS.gov for current regulations. Contact the Fund Office if you have any questions.

If your application is denied, you have the right to appeal within 60 days of receiving word of your rejection. During an appeal process, your account will remain active and will continue to earn investment income and be professionally managed by the Trustees’ investment professionals. As always, the value of the investments depends on the financial markets and can go up or down.

Submitting your Annuity Fund application

You can submit the application by mail, email, or fax, or call us if you want to drop it off in person. Appointments are required for in-office visits.

Mail to: 1400 District Ave., Suite 200, Burlington, MA 01803
Email: Annuity@mlbf.org
Fax: 781-272-2226
Phone: 781-272-1000, ext. 150

If you have questions, contact the Fund office.

Action Required: Pick Your Person

A beneficiary is a person (or persons) you name to receive a benefit in the event of your death. The Annuity Fund provides a benefit to your spouse or beneficiary (or beneficiaries) if you die before you retire.

Naming a beneficiary ensures your money will go where you want it to go in the event of your death. Your loved ones will get timely access—with minimal legal hassles—to money you’ve worked hard to save.

As your life changes, make sure to update your beneficiary information with the Fund Office accordingly. Life events like marriage, divorce, the birth of a child, and the passing of a loved one may have an impact on your beneficiary information.

You’re not limited to naming one individual to be your beneficiary; you can elect more than one person to be your primary beneficiary and designate the percentage share of your benefit that you want each person to receive. You may also elect a secondary beneficiary—known as a contingent beneficiary.

If you’re married, your spouse is automatically your beneficiary if you die before you retire. When you retire, you would be able to name another beneficiary for your Annuity benefit when you apply for it if your spouse consents in writing.

To designate or update your pension beneficiary, submit your annuity beneficiary card to the Fund Office. Spanish, and Portuguese versions of the card are also available on the MLBF website.

Call the Fund Office (781-272-1000) if you have any questions about your beneficiary (or beneficiaries).

FREQUENTLY ASKED QUESTIONS

Participating in the Fund

No. You’ll automatically become a vested participant in the Fund after you have worked in covered employment and the Fund receives contributions on your behalf for at least 100 hours in a calendar year. Covered employment means you work in a position covered by a collective bargaining agreement between an employer and the union.

Once you become a participant, you’ll need to name your beneficiary (or beneficiaries). If you’re married, your spouse is automatically your beneficiary unless you tell us otherwise when you apply for a distribution from the Annuity Fund with your spouse’s consent.

You can check the value of your Annuity through the Member Dashboard.  Once logged into your account, go to “My Annuity Contributions” to view details, such as your balance, hours, credits, and earnings.

You’ll receive an annual statement (usually in late fall) that shows the value of your individual account as of December 31 of each year.

Once you’ve completed 100 hours of covered employment in a calendar year, you’ll be considered vested, which means you’ll own 100% of your benefit.

No. The Fund does not offer either of these options.

No. Only collectively bargained employer contributions can be added to your account.

Your benefit amount will be based on the balance of your individual account as of the last monthly valuation date, plus any employer contributions made since the last valuation date, less any distributions or administrative expenses. For example, if you apply June 1 (your application must be received no later than the 15th of the month), the amount you receive July 1 will be based on the value of your account as of May 30.

Applying for Your Benefit

You can apply for your benefit when you meet eligibility requirements and you reach the Fund’s retirement age, or if no contributions have been paid to the Fund on your behalf for at least 12 consecutive months.

Submit your application at least 30 days before the month in which you wish to begin receiving your benefit.

Provided your application is approved, your check will be mailed as soon as administratively possible.

You’ll need to submit a photocopy of your birth certificate or one of the other documents listed on the application and a copy of your driver’s license or a state-issued photo I.D. Refer to the application for details.

While there is no deadline for when to apply for your benefit, tax implications and penalties may apply for withdrawing from the Fund before certain ages.

The Fund permits you to keep your account balance in place for as long as you like before or even after you retire, allowing you to continue to benefit from the Fund’s institutional investments, competitive fee structure, and professional oversight.

However, you must begin taking required minimum distributions (RMDs) in your early 70s.

Receiving your benefit

If you’re under the age of 59½ when you receive your benefit, you will pay a 10% federal early withdrawal penalty tax in certain circumstances. Be sure to read the Special Tax Notice Regarding Plan Payments that you’ll receive when you elect to receive your benefits. Consider consulting a tax advisor before you make your benefit election.

A mandatory federal income tax of 20% is imposed on all lump-sum distributions and most periodic distributions. A 10% federal early withdrawal penalty tax is imposed on most lump-sum distributions made before age 59½ (or age 55 if you’re retired and collecting a pension). Depending on where you live, state income taxes may also apply. Consider consulting a tax advisor before you make your benefit election.

Administrative expenses include any expense that is associated with operating the Fund, such as day-to-day operational expenses (payroll, taxes, office rent and telephone) and professional consulting fees (legal, accounting and programming fees). The administrative expense is a low fee charged to all participants’ individual accounts.

If you meet the qualifications, you can withdraw a portion of your Annuity Fund account balance and leave the remainder in the account. Your account balance will continue to earn investment income, if applicable, and be managed by the Trustees’ investment professionals. As always, the value of the investments depends on the financial markets and can go up or down.

Yes. Any remaining balance in your account is subject to earnings or losses from the Fund’s underlying investments. 

The Annuity Fund and Social Security are separate benefits. You apply for Social Security separately from applying for a distribution from the Annuity Fund. Your Annuity Fund benefit does not have any impact on—and will not reduce—your Social Security benefits. Visit the Social Security Administration website to learn more about your Social Security benefit.

If your application is completed and returned by the 15th of the month and your application is approved, your benefit will be direct deposited to the financial institution you have chosen or will be sent as a check mailed to you on the first of the following month, depending on how you elect to receive it.

No. All checks are sent out via regular mail delivery or deposited directly to the account you name on the direct deposit form included in the application.

No. The check will be mailed directly to the financial institution you have chosen.

What happens to your benefit if you die

If you’re married, your spouse is generally the automatic beneficiary. Your surviving spouse will receive your account balance paid as a pre-retirement survivor annuity, or your spouse can elect to receive the benefit as periodic payments (from one up to 15 years) or as a lump sum. If your spouse then remarries, it will not affect benefit payments.

If you get divorced and you don’t update your beneficiary designation naming a new beneficiary, then your ex-spouse may be entitled to benefits upon your death. If you divorce and then get remarried, your current spouse would automatically be the beneficiary.

If you’re not married when you die, your benefit will be paid to your beneficiary/beneficiaries (or your estate if you don’t have a designated beneficiary on file with the Fund Office).

It’s important to name a beneficiary and keep your beneficiary designation up to date so that your wishes can be carried out in a timely manner. If you have not named a beneficiary or wish to change your beneficiary, fill out the Annuity Beneficiary Card and send it to the Fund Office.

If you are single and have designated a beneficiary, and then you marry, your new spouse automatically becomes your beneficiary—unless you file a new beneficiary designation card with the Fund Office and your spouse agrees in writing to the designation.

The benefits payable after your death will depend on the form of payment you elected when you retired. For example, if you elect the lump sum and withdraw your full account balance, then nothing would be payable to a spouse upon your death.

No. Benefit payments to your surviving spouse will not be affected by a remarriage. Refer to the Summary Plan Description for details.

If you’re actively employed when you die and the Fund Office is notified of your death, the Fund Office will contact your spouse or beneficiary. Otherwise, your spouse or beneficiary will need to notify the Fund Office of your death to get the distribution process started. You should alert your spouse or beneficiary to that requirement.

Important Resources and Documents

Bargaining Unit Alumni Program

Summary Plan Description

Summary Annual Reports

Change of Address

Annuity Application

Qualified Domestic Relations Order

Application for Alternate Payee Benefits

Annuity Beneficiary Card

Survivor’s Application

Annuity Direct Deposit

Applicant’s Statement

Rollover Forms