As of January 1, 1998, a Participant becomes vested in the pension plan once he/she accrues five Qualified Years of covered writing employment.
A Qualified Year is a calendar year in which a writer earns at least $5,000 from covered writing services. The five Qualified Years don’t have to be consecutive in order for a writer to vest, however if a writer had Qualified Years before 1998 which were interrupted by a Permanent Break in Service then any Qualified Years during this period were forfeited.
Permanent break in service
A Permanent Break in Service is a five-consecutive-years period in which a writer had less than $5,000 in covered earnings in each of the five consecutive years. After 1998, Permanent Breaks in Service were abolished.
What if a writer had qualified years before 1998 that were interrupted by a permanent break in service?
One a Permanent Break in Service occurs, there is no way to recover the previous Qualified Years.
What it all means
What does it mean to be “vested”? Simply put, once a writer “vests” in the pension plan, he/she is entitled to pension benefits. If the actuarial value of a writer’s retirement benefit is $5,000 or less, he/she may opt a lump sum payment. Once the actuarial value of the benefits is greater than $5,000 the pension benefits will be disbursed in accordance with the rules of the pension plan in accordance with the retirement benefits selected by the writer.
A few final thoughts
Pension rules are heavily regulated and understanding how they work can be daunting. If a writer is close to retirement age, contact the Pension Department at the PWGA and make an appointment to discuss all the available options. In addition the answer to a number of frequently asked questions can be found here. The complete plan document can be found here. A slightly less dense description of what the pension plan provides can be found in the Summary Plan Description here.