Frequently Asked Questions

• Plan Administrators FAQ

  • What is a church pension plan?

    A church pension plan is a plan that serves the employees of an organization that is either a church or is associated with (and shares common religious bonds with) churches or associations of churches.

    On December 21, 2004, President George W. Bush signed a bill into law which clarified that plans of the YMCA Retirement Fund are church plans.

  • How is the YMCA Retirement Fund different from other retirement plans?

    As an administrator of church plans, the Fund can offer retirement income accounts, commingle assets for investment purposes and provide annuities without paying an insurance company.

    In addition, the Retirement Plan and the Savings Plan have a unique plan design. Unlike a typical 401(k) retirement account, retirement savings at the YMCA Retirement Fund are protected during stormy economic times as a result of this unique structure of the plans. Not once in the Fund’s 100-year history have account balances ever gone down.

  • Is the money in the Fund insured by the federal government?

    The YMCA Retirement Fund’s plans, like defined contribution plans, 401(k)s, 403(b)s, etc., are not insured by the government.

  • Is money saved in the Fund safe?

    Yes. The safety of the Fund is in its highly diversified portfolio, managed by professionals and a dedicated Board of Trustees. Not once in the history of the Fund have account balances ever gone down nor have annuity payments ever been missed. The Fund’s plans are designed in a way that minimizes the risk of investment loss to the participant.

  • What is ERISA and does the YMCA Retirement Plan follow the ERISA rules?

    The Employee Retirement Income Security Act of 1974, as amended (ERISA) was passed to protect employee pensions in response to some spectacular company failures in the 1960’s, most notably the Studebaker automobile company. They had failed to put aside sufficient money to pay pensions if they went out of business and, when they did, all their retirees lost their pensions.

    This federal law requires certain standards for participation, enrollment, vesting and benefit payments. It also requires that the people who manage a pension plan (fiduciaries) meet certain standards.

    The law generally classifies pension plans into three groups: company plans, government plans and church plans. There are different rules for each of these. It also classifies plans as defined benefit (formula) or defined contribution (individual account). Plans created before ERISA was enacted may not fall clearly into one of these categories.

    Although church pension plans are not subject to ERISA, the YMCA Retirement Plan elected to become subject to ERISA in connection with the 2004 legislation confirming its status as a church pension plan.

  • What are the benefits of the Fund?

    The Fund’s benefits are:

    • Opportunities for tax-deferred savings for retirement
    • Retirement income for participants and their beneficiaries (see annuity)
    • Income for participants who are permanently and totally disabled
    • Death benefits for beneficiaries of active and retired participants

  • What is the total and permanent disability benefit and how does one qualify for it?

    The Fund offers retirement benefits to Y employees who become permanently and totally disabled. That means if an individual is incapable of working for a living, and their condition is not expected to improve, they may be eligible to receive an annuity from the Fund. To qualify for this benefit, the employee must:

    • be under age 60
    • have had at least five full years of participation in the Retirement Plan
    • have become disabled while working for a participating Y
    • have not taken a withdrawal from their YMCA Account and Personal Account (for Ys that require employee contributions) since leaving a Y
    • apply for benefits within six months after terminating Y employment

    As the Fund’s total & permanent disability claims administrator, Lincoln Life Assurance Company of Boston reviews all applications and renders a decision on claims.

  • Why is it important to designate a beneficiary?

    Designating a beneficiary informs the Fund how to pay out death benefits. It is important that all Fund participants keep their beneficiary designations up-to-date so that their benefits are paid according to their wishes. If at any time there is a major change in a participant’s life, such as marriage, birth of a child, widowhood, or a divorce, they should review their beneficiary designation and make any necessary changes.

    To designate or update beneficiaries, a participant can either log in to their account and make the change online, or submit a Designation of Beneficiary form to the Fund.

    For any participant who dies before retirement on or after October 15, 2017, without designating a beneficiary, the pre-retirement benefit will be payable to the following, in order:

    • the participant’s surviving spouse of at least one year, and if none, then to
    • the participant’s living children in equal shares, and if none survive the participant, then to
    • the participant’s estate.

    If anyone who is not an eligible spouse or a child of the participant wishes to collect the benefit, he or she will have to be the executor/administrator of the participant’s estate or, if eligible, use the small estate procedure of the decedent’s state.

    If a participant died before retirement, and prior to October 15, 2017 without designating a beneficiary, as long as they have been married one year or longer, his or her surviving spouse will automatically be entitled to 50% of the participant’s total account balance unless she/he decides to waive this benefit. (If a spouse of an active participant waived this benefit prior to the participant attaining age 35, a new waiver must be submitted to the Fund. Otherwise, the spouse will automatically be entitled to 50% of the total account balance.)

    The remaining pre-retirement benefit for a participant who died prior to October 15, 2017 will be payable to the following, in order:

    • the participant’s estate, and if no estate is established or it is terminated before payment, then to
    • the participant’s children in equal shares, and if none survive the participant, then to
    • the participant’s parents in equal shares, and if none survive the participant, then to
    • the participant’s siblings in equal shares, and if none survive the participant, then to
    • the participant’s nieces and nephews in equal shares, and if none survive the participant, then to
    • the participant’s nearest living next-of-kin, and if there are more than one with the same degree of relationship to the participant, then to each of them in equal shares.

  • What happens if a retiree does not designate a beneficiary?

    If a retiree dies without designating a beneficiary, or if the beneficiary the retiree named predeceased the retiree and the retiree did not submit a new Designation of Beneficiary for the Retired Death Benefit form to designate another, the retiree’s Retired Death Benefit will be payable to the following, in order:

    If the retiree dies on or after October 15, 2017:

    • the retiree’s surviving spouse of at least one year, and if none, then to
    • the retiree’s living children in equal shares, and if none survive the retiree, then to
    • the retiree’s estate.

    If the retiree died prior to October 15, 2017:

    • the retiree’s estate, and if no estate is established or it is terminated before payment, then to
    • the retiree’s children in equal shares, and if none survive the retiree, then to
    • the retiree’s parents in equal shares, and if none survive the retiree, then to
    • the retiree’s siblings in equal shares, and if none survive the retiree, then to
    • the retiree’s nieces and nephews in equal shares, and if none survive the retiree, then to
    • the retiree’s nearest living next-of-kin, and if there are more than one with the same degree of relationship to the retiree, then to each of them in equal shares.

  • How does a participant change their beneficiary?

    Participants can change their beneficiary at any time. Those who have not yet started their annuity can designate and update their beneficiaries online.

    They may also designate their beneficiaries by submitting the proper form to the Fund. The form they use depends on whether or not they still work for the Y. The Designation of Beneficiary—for current Y Employees must be either notarized or signed by HR. The Designation of Beneficiary—for former Y Employees must be notarized.

    For participants who have already started their annuity, the Designation of Beneficiary for the Retired Death Benefit must be notarized and mailed in. (Contact the Fund if an annuity has been started under the Principal Guarantee Annuity Option.)

    NOTE: Federal law imposes strict rules for married employees designating beneficiaries other than their spouses. The employee must have notarized consent from their spouse if the spouse is not the only beneficiary.

  • What happens if a participant dies while still working for a Y?

    Their beneficiary will receive the greater of $10,000 or the sum of the amounts in their Personal Account, YMCA Account (Legacy) and YMCA Account. Any voluntary accounts they have will be paid to their beneficiary as well. All benefits will be paid as either a withdrawal or an annuity.

  • Who can be named as a beneficiary?

    Anyone or any entity can be named as a beneficiary. Generally, all people named as beneficiaries get the same choices regarding benefits. However, since estates, trusts, Ys and other organizations do not have a life expectancy, they may only take a withdrawal and are not entitled to an annuity.

    Married participants need notarized consent from their spouse if they do not name their spouse as their only primary beneficiary.

  • If a participant has accounts in the Retirement Plan and Saving Plan, can they designate different beneficiaries for each plan?

    Before retirement, a participant’s beneficiary designation will apply to both plans.

    At retirement, they have the option to separately annuitize the plans. A beneficiary designation is necessary for the plan that is left at the Fund. If the Savings Plan is left at the Fund and the Retirement Plan is annuitized, they can designate beneficiaries for the Savings Plan and select separate beneficiaries for the Retirement Plan’s Retired Death Benefit.

    Also, if they decide to annuitize the plans separately, they may designate different survivors (if they select the Joint & Survivor Annuity options) for each plan.

  • Is enrollment in the Retirement Plan optional?

    No, individuals employed at Ys that participate in the Fund’s retirement plans must be enrolled in the Retirement Plan as soon as they are eligible, as a condition of employment, regardless of financial hardship. Only new employees hired for the first time by a Y after age 60, who are working for a Y that requires employees to make contributions, may elect to waive participation. These employees must complete a Waiver of Participation.

  • What if an employee moves from one Y to another, or works at multiple Ys?

    Ys must take into account all of the employee’s prior and concurrent service at participating Ys when establishing eligibility to be enrolled in the Retirement Plan.

    If there is no break in Y employment, or a minimal break in Y employment (less than 12 months), employees who have completed the service and age requirements will be enrolled on the first day of the month following their original anniversary date, even if by that time they are employed by a participating Y other than the one that first hired them. (If their original anniversary date has already passed when they begin employment with the new Y, they will be immediately enrolled.)

    Example: Mary, age 23, was hired on July 31, 2019. On January 1, 2020, she was hired part-time at a second participating Y. During each of the 12-month periods beginning on July 31, 2019 and July 31, 2020, she accumulated well over 1,000 hours between her two Y jobs. She will be enrolled in the Retirement Plan on August 1, 2021.

    Example: Nick, age 36, was hired on February 15, 2019. He worked 1,000 hours in the 12-month period beginning on February 15, 2019. From February 15, 2020 to November 30, 2020 he completed another 1,000 hours before leaving his Y. On December 1, 2020, he was hired by another participating Y. Because Nick had met the eligibility and age requirements already, his new Y employer enrolled him in the Retirement Plan on March 1, 2021, the first of the month following his original date of hire.

    Example: Gary, age 50, was hired on May 15, 2019. He worked 1,000 hours in the 12-month period beginning on May 15, 2019. From May 15, 2020 to August 31, 2020, he worked 500 hours before leaving his Y. On January 1, 2021, he was hired by another participating Y and worked 500 hours from January 1 to May 14, 2021. His new Y employer will enroll him in the Retirement Plan on June 1, 2021, the first of the month following his original date of hire.

    Example: Lydia, age 39, was hired on July 1, 2018. She worked 1,000 hours in the 12-month period beginning on July 1, 2018. From July 1, 2019 to May 31, 2020 she completed another 1,000 hours before leaving her Y. On September 1, 2020, she was hired by another participating Y. Because Lydia had met the eligibility and age requirements already, her new Y employer enrolled her immediately in the Retirement Plan (her original date of hire had already passed).

  • What if an employee believes they have achieved eligibility, but the Y did not enroll them in the Retirement Plan?

    Participants should first approach the local plan administrator at their Y and ask them to recheck their eligibility calculations. Participants may also call the YMCA Retirement Fund. If the matter is not resolved to their satisfaction, they may make a written request for a review of the matter in accordance with the claims procedures for the Retirement Plan.

  • Can a former Y employee who took a withdrawal from the Fund return to work at a Y?

    It is inappropriate and not in the spirit of the existing law to engage in a pre-arranged strategy to collect retirement benefits while still employed. This is a violation of the Fund’s Retirement Plan rules as well as federal tax law.

    Whether a participant is hired by any Y in the future is entirely at the discretion of the employing Y. In order to avoid potential problems, it is recommended that the participant and Y discuss specific situations with their legal counsels and secure written legal options prior to taking any action.

    YMCA RETIREMENT PLAN DOCUMENT:
    Section 5.1 &”A Participant’s eligibility to receive benefits under the Retirement Plan… must be the first day of a month subsequent to the cessation of Compensation and the severance from YMCA employment.”

    Section 6.3 &”In no event shall any Participant who is employed by a Participating YMCA have the right to a withdrawal of his/her Accumulated Basic Participant Contributions or his/her YMCA Account Balance.”

    TREASURY REGULATIONS:
    Treasury Regulation Section 1.401(a)-1(b)(1)(i) &”In order for a pension plan to be a qualified plan under section 401(a), the plan must be established and maintained by an employer primarily to provide systematically for the payment of definitely determinable benefits to its employees over a period of years, usually for life, after retirement or attainment of normal retirement age.”

    IRS Rev. Rul. 74-254 &”Revenue Ruling 56-693, as modified by Rev. Rul. 60-323, holds that a pension plan fails to meet the requirements for qualification under section 401(a) of the Code if it permits employees to withdraw prior to normal retirement any part of the funds accumulated on their behalf, which consist of employer contributions or increments thereon prior to the severance of employment or the termination of the plan. Therefore, a pension plan does not qualify if it permits distributions prior to normal retirement and prior to termination of employment or termination of the plan.”

  • Can a participant contribute money that is not from their Y paycheck?

    The only way this can be done is if a participant rolls over money from an eligible pension account.

  • Are there limits on the amounts a participant can save for retirement?

    The federal government sets limits on the total amount of retirement contributions an employee and their employer can make each year, and on the amounts someone can contribute annually to their 403(b) Smart Account.

  • Can a retiree who is receiving an annuity from the Fund, or who has received a lump-sum distribution, return to work at a Y?

    There are certain legitimate situations where an individual may become re-employed by a Y after he or she begins receiving a lifetime annuity, or has taken a lump sum distribution from the Fund. Whether they are hired by any Y in the future is entirely at the discretion of the employing Y. In order to avoid potential problems, it is recommended that the retiree and Y discuss specific situations with their legal counsels and secure written legal opinions prior to taking any action.

    Here are three examples of acceptable situations:

    • Jerry retired as a Branch Executive Director and began collecting his retirement benefit. Negotiations with his replacement fell through, and subsequently the Board asked him to return as the Branch Executive in an interim capacity while a new search is undertaken.
    • Mary retired as Secretary of the Membership Department and began collecting her retirement benefit. After gardening and fixing up her home, she became bored, applied for and was accepted for a part-time position in the development office at another Y.
    • George terminated his Y employment because he was relocating from his hometown to another state to be closer to his sister. He applied for and received a lump sum distribution from the Retirement Plan. Since George and his sister were not getting along, he moved back to his hometown, applied for and was accepted for another position at the Y.

    Here are three examples of unacceptable situations:

    • A very difficult personal situation necessitated that Brad find a way to add to his household income. Accordingly, he arranged with his supervisor that he would retire, begin collecting his retirement benefit then be rehired to his existing job.
    • Lucy was all set to retire as the CEO, but the Board had not yet found her replacement. The Board asked her to stay on for three extra months while they extended their search. She agreed, with the understanding that she would continue earning her salary and also start her retirement annuity
    • Because Robin needed money to pay off her bills, she arranged with her supervisor that she would terminate employment, take a distribution from the Fund then be rehired to her existing job.