BAC Save: Two Great Ways to Build Savings, Security

JOURNAL: ISSUE 3 - 2012

With a proven track record of more than 22 years, both the BAC Save Retirement Savings Plan Annuity (RSP) and 401(k) programs provide an important supplement to one's retirement income while offering significant tax advantages. As defined contribution plans, the BAC Save 401(k) and RSP complement a member's traditional pension plan – also known as a defined benefit plan –that members may already have through the International Pension Fund (IPF) and/or their Local. Designed specifically for IPF participants, BAC Save and RSP offer favorable rates of return through solid investment practices, low fees, and tax savings for retirement. In addition to offering financial hardship and inactive benefits, when participants retire they can choose how they want their benefits to be structured, such as monthly joint and survivor or single life annuities, monthly installments, lump sums, and rollover options.

Plan Status Updates

Despite fluctuations in financial markets, the RSP's conservative investment strategy consisting of 70% in fixed income investments and 30% in equity investments has provided an average annual rate of return of 5.11% since the Plan was created in 1990. The recently mailed 2011 RSP annual statements reported a 2.8% return for that year. RSP's assets total more than $93 million and cover 16,615 participants in 14 states. BAC members working under the ICE agreement are also covered by the RSP. The average RSP account balance is more than $5,400, with 339 participants with balances of greater than $50,000 and 68 participants with accounts valued at over $100,000.

The principal advantage of the BAC Save 401(k) is flexibility it affords participants. Members of Local Unions that have negotiated the 401(k) into its collective bargaining agreements may contribute $.25 per hour to a maximum of $6.25 per hour to the Plan. All contributions are made before taxes and participants are immediately vested. In addition to selecting contribution levels, 401(k) participants can choose from 13 investment options, combinations of those options, or age-based investment options that become more conservative as a participant ages, maximizing returns and then protecting assets as retirement nears. The BAC Save 401(k) Plan provides quarterly statements and access to service representatives by phone and online. At present, members from 25 Locals participate in the 401(k). The average contribution rate is $1.75 per hour.

Hardship Provisions

While designed as long-term savings vehicles, the built-in hardship provisions in both the RSP and 401(k) plans assist members in times of extraordinary financial need. Plan rules require applicants to provide documentation of their financial hardship. Participants seeking hardship withdrawals are urged to discuss the tax implications of such withdrawals with their tax preparers.

Participation

Participation in RSP is collectively bargained by your Local Union. Once an agreement stipulating RSP participation is reached, every member receives the same hourly contribution to his or her RSP account from their employer. If your Local Union does not offer a supplemental defined contribution plan, contact your Local Union or the International Pension Fund for more information regarding the BAC Save RSP or the BAC Save 401(k) by calling 1-888-880-8BAC or visiting IPF online at www.ipfweb.org.