Local Unions Supplemental Pension & Severance Trust Fund.
Many years of work have gone into LUSP, the Local Unions Supplemental Pension & Severance Trust Fund, to make it a secure savings and retirement plan. Thousands of Union members studied the plan, recognized its superiority and are now enrolled and saving for a more secure life in retirement.
Nationwide Insurance Company, one of the largest insurance companies in the United States, was selected by the Plan Administer, to provide guarantees for all member’s savings and earnings.
The Trustees strongly urge you to study the program and make a commitment to yourself and the future. Local Unions Supplemental Pension & Severance Fund Trust, Plan Administrator.
What is it?
It’s a Retirement Plan… The power behind a retirement plan lies not just in the money with which it is funded, but in the way the money is invested. Investment superiority has made Nationwide a leader in the pension funding field. One of the many reasons why pension planners in all types of businesses choose Nationwide professionals to design, implement and manage their retirement programs.
It’s a Savings Plan… Recognizing the fact that there are many compelling reasons to save long term for events in our lives, Lusp Trust provides a safe and guaranteed vehicle to plan for them. Whether buying a home, planning a college education or retirement, it is now possible to save for these and other reasons, tax deferred.
LUSP permits limited withdrawals from your savings without penalties assessed by the Trust. Taxes will have to be paid on the portion of the distribution that is deemed to be earnings. A 10% excise tax imposed by IRS on early withdrawals (on the earnings only), may also be owed.
Nationwide guarantees your contribution and the earnings on them. You will not be subject to the wide market fluctuations of the stock market because the guaranteed minimum interest is announced each year. This makes it easier to plan with a degree of certainty for future events.
It’s not a Mutual Fund…
What is a mutual fund? It is a company that takes money from investors and issues them shares in their fund in exchange. The daily value of this fund varies because the underlying stocks and bonds in the fund vary in value from day to day. The contributions in LUSP Trust are not invested in mutual funds.
Nationwide invests the assets of the Trust in a wide variety of fixed income securities such as mortgages, government securities and high‑grade corporate bonds and similar securities. Nationwide underwrites the principal and interest guarantee, your account value is stable and secure and will not vary with market conditions.
About your plan….
1) How much may I contribute? You may save as much as you wish. You may open your individual account by saving as little as $7.00 per week or as much as you like (in multiples of $7.00). For example, $14.00, $21.00 or $28.00 and up can be saved on a regular basis. You may also contribute money to your account in single payment lump sums ($500 minimum) as often as you wish, even after you retire. Your saving will begin earning interest, compounded daily, as soon as the deposit is received by the Trust. Your account will continue to earn interest until the day of withdrawal.
2) How do I make my contributions? If you work for Verizon, your after‑tax savings contributions can be made by convenient payroll deduction. Whatever amount you choose to save will be withheld automatically from each paycheck. If your company does not offer payroll deduction, it may be possible for you to make other arrangements. To start payroll deductions, or to discuss other arrangements, call the Plan Administrator at 845-367-7625.
3) How do I change the amount that I’m contributing? If necessary, you may increase, decrease or temporarily suspend your payroll deductions by contacting the Plan Administrator to obtain the appropriate form. There is a cut-off date each month for changes effecting the following month’s payroll deductions.
4) If I save $28.00 each week for 30 years, how much could I accumulate? Based on the illustration below, the charts show an estimate of how your account could grow with annual interest guarantees (APR) of 3.03% and 3.05% and 4.00%. Illustration APR Total Contribution Amount 3.03% $50,344 $79,861 3.05% $50,344 $86,508 4.00% $50,344 $95,181
If you elected to make a lump sum deposit of $50,000. You would accumulate the amounts below at an assumed APR of 4.5%. Lump Sum 15 Years 20 years 25 years 30 years $50,000 $96,776 $126,071 $150,344 $187,401
These rates are for illustration purposes only.
5) What rate of interest will my money earn?
Your contributions to the Plan will earn a minimum rate of interest which is negotiated annually. The actual rate of interest paid on your savings may be higher than the minimum rate that is guaranteed, depending on the investment experience of the fund, but, it will never be lower.
6) What about taxes on my interest earnings?
Your interest earnings are not currently taxable. They are tax‑deferred. Unlike interest earned in a savings account from a bank or savings and loan, the interest you earn in the LUSP plan is not reportable or taxable until you withdraw your money. Instead of paying some of the interest to the government each year in the form of taxes, it stays in your account working for you!
7) What happens to my money after my payroll deductions have been made?
Your payroll deductions are sent directly to the Plan’s custodial bank. The custodial bank transmits your money to Nationwide Insurance Company who has the responsibility to manage and invest your money on your behalf.
8) If this is a savings and retirement program, why are my payroll deductions sent to an insurance company?
Insurance companies manage over half the retirement plans of corporations and businesses in the United States. Your plan chose Nationwide Insurance Company because of its recognized excellence in the field. Established in 1929, Nationwide now ranks among the twenty largest financial services companies in the nation with over $113 billion in assets.
9) Will I receive information about the progress of my account?
Once payroll deductions have begun, Nationwide will furnish a statement each quarter showing the current value of your account. You can access your account via the Nationwide website and view all transactions in your account 24/7. You may request an additional statement by contacting the Plan Administrator.
10) Can I make contributions to my account over and above the amount of my payroll deductions?
Yes, you can make additional contributions as an actively employed Union member or after you retire. Additional lump sum contributions may be made payable to LUSP by bill payment on line, personal check, or money order. Such deposits must be $500 or more. Forms and instructions are available from the Plan Administrator.
11) What happens to my money if I die?
Your designated beneficiaries can do one of the the following: Withdraw the account in a lump sum, choose a monthly annuity option to suit his/her needs, or leave the money in the Plan, changing the name on the account to his/her name.
12) How do I designate or change my beneficiaries?
You can name or change your beneficiaries by contacting the Plan Administrator who will provide you with the proper form to complete.
13) What are my options if I terminate employment and am no longer an active Union member, or decide to withdraw my savings?
Complete flexibility! When one of the above happens, you have several options:
a) You may withdraw all or part of your money at any time. However, unlike most retirement plans, you are never required to begin taking your money out. You may leave your money in the trust for as long you like, even after you reach age 70 1/2. If you wish to take a partial distribution of your account, you may do so once in a 12‑month period. You may take up to 60% of the accumulated balance at the time of withdrawal.
b) You may select from a wide range of annuity (guaranteed monthly income) options.
c) Any weekly contributions and lump sum contributions you previously made will continue to earn the rate of interest which is payable to the fund that year. You may also make additional lump sum contributions with a minimum of $500 per contribution.
Most savings and retirement plans penalize their participants for making early withdrawals by decreasing their interest rate. This is not so with your plan! You may withdraw the full value of your account at any time without loss of interest. There will only be a small handling charge to cover the cost of processing your withdrawal. Upon withdrawal, all earnings may be subjected to a 10% excise penalty. Please consult with your tax adviser prior to withdrawal.
14) If I decide to withdraw my money in guaranteed monthly lifetime payments, how much income can I expect to receive each month?
This depends on your age and account balance at the time you wish your payments to begin. For example, if you had $21.00 payroll deducted each week, and these deductions accumulate at an annual annuity rate of 8.00% for 25 years, your account balance after 25 years would be $83,045. If you then purchased a life annuity, the amount you would receive each month for the rest of your life would be approximately:
Age When Payment Begins, Estimated Monthly Benefit
Age Monthly Benefit
55 $462.56
60 $499.10
65 $548.93
15) How do I notify Nationwide of my intent to withdraw my money or receive a monthly income?
Contact the Plan Administrator for the proper form to complete. Withdrawal payments are processed as received by Nationwide, so you should receive payment in about 7-10 business days. Please keep us informed of any change of address so that we can keep our records current.
Let’s review some of the unique features of your Plan…
Convenience: Savings by payroll deduction – the easiest way for you to save.
Competitive Return: The current interest rate is generally higher than that which can be earned through banks and similar institutions.
Safety: Your principal is backed by Nationwide Insurance Company, a proven leader in administering savings and retirement plans. Nationwide administers over $113 billion in retirement plans.
Tax Advantages: Your interest earnings are not currently taxable. The money you would have paid in taxes keeps working for you.
Flexibility: Your contributions can be as much as you want. They may be increased, reduced, stopped or restarted at any time without an interest penalty.
You are not committed, except to yourself!
