No credit for earnings over a certain limit

[Guest steward]

Our pension plan gives credit for earnings up to a certain limit. Any earnings above that limit are not credited to the participant even thogh the employer is contributing on all earnings. Is this proper?

[Effen]

Assuming this is a multiemployer plan, and generally speaking... the Plan Trustees control the benefit formula and the collective bargainig process controls the contributions. The Trustees look at the amount of money coming into the plan and set the benefit level accordingly. The two don't necessarily need to be related.

It is rare that a multiemployer plan bases the benefit on compensation. Typically the benefit is a function of service or contributions.

Do salaried employees participate in the plan? Does the plan benefit any non-bargained employees? Is it a multi-employer (more than one contributing employer) or is there only one contributing employer? What union is it?

[Guest steward]

Assuming this is a multiemployer plan, and generally speaking... the Plan Trustees control the benefit formula and the collective bargainig process controls the contributions. The Trustees look at the amount of money coming into the plan and set the benefit level accordingly. The two don't necessarily need to be related.

It is rare that a multiemployer plan bases the benefit on compensation. Typically the benefit is a function of service or contributions.

Do salaried employees participate in the plan? Does the plan benefit any non-bargained employees? Is it a multi-employer (more than one contributing employer) or is there only one contributing employer? What union is it?

Contributions are a percentage based on wages earned. The pension one receives is based on the gross wage payed but even though the employers pay the percentage on all wages earned the credit that the employee receives is capped at $50,000 of earnings so all wages earned above that are not credited to the employee. This is a Taft Hartley multi employer pension

[Effen]

You said "contributions are a percentage based on wages earned", this is normal. What are the benefits based on. Specifically, what is the benefit formula?

[Guest steward]

You said "contributions are a percentage based on wages earned", this is normal. What are the benefits based on. Specifically, what is the benefit formula?

I am not quite sure of the formula. The contribution rate by the employer is 8%. Once the employee earns say $50,000 he receives no additional credit even though the employer continues to pay 8% on all of his earnings above $50,000.