THe union’s premier benefit


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One of the premier benefits of being a part of the union is the access to gives you to pension plans, which are retirement plans that are paid for by the employer. You are quite lucky that you are looking into or are already a part of the electrical trade, as the IBEW offers numerous fruitful pension plans depending on your location.

Table Of Contents

  1. National Electrical Benefit Fund (NEBF)
  2. Defined Benefit Pension
  3. Defined Contribution Pension
  4. National Electrical Annuity Plan (NEAP)
  5. 401K

National Electrical Benefit Fund (NEBF)

The NEBF is the second largest Taft Hartley Pension Plan in the United States. Anyone covered under an IBEW Collective Bargaining Agreement (CBA), regardless if they are a union member, journeyman, apprentice, or non-apprentice receives this benefit. Participants accumulate credits based on their years of work, and the number of credits upon retirement is used to calculate a defined benefit payout. 

Contributions to the fund are made by the Employer, not the employee. The employer will put the equivalent of 3% of the employee’s gross pay into the fund on their behalf each pay period, but this amount is NOT taken out of the employee’s check, this benefit is in addition to their pay. 


To receive a credit, you must work a minimum of 1000 hours in a year. Any hours in excess of 1000 can be used for the hour requirement of another “Good Year” in which you worked less than 1000 hours. A Good Year is generally a year in which you work 300 hours or more.  You cannot receive more than one credit per year. After earning 5 credits, you become vested in the plan, which means you qualify to receive the benefits of the NEBF, and cannot lose this right even if you no longer become a participant. 

Calculating the benefit

The pension payout is calculated by multiplying the total number of credits earned by the retirement rate. From 2001 going forward, the retirement rate is $32. Let’s say you started working today, and worked 40 years full time, which earns you 40 credits. Assuming the retirement rate stayed the same, your monthly benefit would be calculated by multiplying 40 by $32, which is $1,280. If halfway though working the rate was increased, you would have two retirement rates and you would add the total. For example, if for the first 18 years the rate was $32, then for the next 22 years it was $40, your calculated benefit would look like so;

18 x $32 = $576  22 x $40 = $880.    $576 + $880 = $1456 a month. 

NEBF Summary Plan PDF

Defined benefit pension

Most locals offer a defined benefit pension. This type of pension upon retirement gives you a set monthly benefit for the rest of your life. The defined benefit pension is always employer funded, the amount of which is a dollar amount per hour worked set by the Collective Bargaining Agreement. The more that is contributed, the more your benefit would be.

Every local has their own requirements for getting vested and for calculating the exact benefit pay out. Local 569 uses the formula;

Hours Worked x Contribution Rate x 1.9% = Monthly Benefit .

Lets punch in the numbers; in a typical year you will work 2000 hours, and Local 569’s current contribution rate (as of April 2022) is $6.85 for every hour worked.

2000 x $6.85 x 1.9% = $260.30

Estimate results

So for that year you have earned a monthly benefit of $260.30. Add up all the years you worked using the above formula, and you will find your monthly benefit you will receive.

If I use the 569 pension calculator online, I find my projected benefit to be $9270.84 a month, assuming 2000 hours worked per year until I’m 65. However this also assumes a set contribution rate when in reality it will increase over time. I did an excel sheet of this formula, and if the contribution rate goes up an average of 2% a year to keep with inflation my monthly benefit would be closer to $18,000 a month.

While it sounds like a lot, remember also inflation goes against you and that $18,000 a month in 2061, when I’m set to retire, is $6,871 in todays dollars.

Defined Contribution Pension

The defined contribution pension is similar to the defined benefit in that it is employer funded, and that amount is set by the CBA. All contributions go into your individual account, and are invested from there in accordance to the specific plan. Upon retirement you would receive a single lump sum amount equal to the total of all contributions and investment earnings. Employees cannot elect to contribute to the defined contribution pension, it is only funded by the employer.

National Electrical Annuity Plan (NEAP)

The NEAP is an individual retirement account funded by the employer, the amount of which is determined by the local unions Collective Bargaining Agreement. The NEAP is only available to workers covered under a bargaining agreement in District 10 (Arkansas, North Carolina, South Carolina, and Tennessee). While it is an individual retirement account, an employee cannot make contributions to it.  It is similar to the defined contribution benefit as the amounts funded will be invested, and a lump sum will be offered at the time of retirement.

NEAP Summary Plan PDF


While not a pension plan, it’s important to note that most locals offer a 401K, which is an employer sponsored individual retirement account where you can opt in to have a portion of your gross pay invested for retirement. While most locals offer a 401k, only a handful have in their agreements for the contractor to contribute to this fund.

Despite having other retirement options as an IBEW member, I highly recommend contributing at least 10% of your gross pay to your 401k. Especially if you start early, the power of compounding interest can add hundreds of thousands or potentially millions of dollars to your retirement portfolio! Play around with the compound interest calculator below and see for yourself.

Calculator Instructions

Invested Amount: Unless you already have contributed to your 401K, set this to 0.
Annual Contribution: Find your home locals base hourly rate in the IBEW Pay Scale chart. Multiply it by 2000, which is the number of hours worked in a typical year, to find your yearly gross income. Take 10% of that number to find your annual contribution.
Interest Rate: 8% Annual returns are typical, although you can change this depending on how you think the markets will do over time.
Number of years: Subtract your ideal retirement age from your current age.
Compounding Percentage: Keep this at 100%, meaning all your profits will be reinvested. This is an automatic process in your 401K once set up.

When filling out the form, DO NOT USE COMMAS as it will cause issues. After clicking submit the page will reload and your results will be at the bottom.

Investment Compounding Calculator

Invested amount : Your initial investment
Annual Contribution: Optional
Interest rate: % Return on investment (Interest)
Number of years:
Compounding percentage: % reinvested profits
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