Putting Members on Solid Financial Footing

JOURNAL: ISSUE 2 - 2015

Designed as a tax-advantaged supplemental savings vehicle for International Pension Fund (IPF) participants, BAC SAVE consists of both a Retirement Savings Plan (RSP) and a 401(k) plan. The IPF Board of Trustees established BAC SAVE to help IPF participants achieve an even greater level of financial security than that afforded by defined pension benefits alone. While BAC SAVE’s mission is to build retirement security, each Plan’s hardship provisions allow participants to address financial emergencies.

The RSP’s average annual yield since inception stands at an impressive 5.44%.

BAC SAVE Retirement Savings Plan

The RSP’s history of performance and security spans nearly a quarter of a century and is built on investment practices that generate solid long-term returns at low fees. The RSP’s investment policy places approximately 60% of Plan assets in Fixed Income including the Amalgamated Bank Longview Construction Loan Fund and AFL-CIO Housing and Building Investment Trusts and 40% Equities. As of December 31, 2014, assets of the RSP totaled more than $121 million covering 17,194 participants in 14 states and under the ICE agreement. The average participant account balance is more than $6,660 with 523 members having accounts in excess of $50,000 and 159 members with amounts greater than $100,000. The average hourly Local contribution rate is $3.12. The RSP’s average annual yield since inception stands at an impressive 5.44%.

Participation in the RSP is collectively bargained by Local Unions. Once an agreement stipulating RSP participation is reached, every member receives the same hourly contribution to his or her RSP account from their employer.

BAC SAVE 401(k) Plan

BAC SAVE’s 401(k) Plan is also specifically designed for BAC members. Once the plan is collectively bargained by a Local/ADC, members elect whether to participate and how much to contribute through salary deferral per hour. As of December 31, 2014, the assets of the BAC SAVE 401(k) Plan total over $3.2 million covering 171 members of 25 Local Unions who choose to participate. The average participant account balance is $29,801. Currently, 18 members have amounts in excess of $50,000 and 3 members with amounts greater than $100,000. The average participant hourly contribution rate is $1.75.  

Local/ADC collective bargaining agreements that provide for contributions to this Plan allow members to contribute a minimum of $.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. Aside from selecting contribution levels, 401(k) participants can choose from an array of 13 investment options, combinations of individual options, or age-based investment options that become more conservative as a participant ages.

Participants wishing to receive distributions from their accounts are offered several options including joint and survivor and single life annuities, monthly installments, lump sums, and rollover options. Hardship provisions allow two withdrawals per Plan year out of both the RSP and 401(k) Plans. The rules require applicants to provide written documentation of their financial hardship as outlined in the BAC SAVE Summary Plan Description. Of the $9.4 million in withdrawals processed under the RSP in 2014, $6.1 million were for financial hardship. Participants seeking withdrawals will be provided information concerning tax withholding but may wish to discuss the tax implications of withdrawals with their tax preparers.

New Participating Groups

The BAC SAVE Trustees are pleased to announce the March 2015 participation of new groups, including members of BAC Local 7 Ohio, opting for participation in the BAC SAVE 401(k) and the Utah Chapter of the Four Corners District Council, opting for BAC SAVE RSP participation. Other recently participating groups include members of Locals in Ohio, Indiana, New Mexico, South Dakota, and Arizona.

If your Local/ADC does not offer a supplemental defined contribution plan, contact your Local/ADC or the International Pension Fund for more information regarding the BAC SAVE RSP or the BAC SAVE 401(k) toll free at 1-888-880-8BAC or at ipfweb.org.