Your Annuity Fund: The Retirement Account You May Not Know You Have
What you'll learn
Many union workers have an annuity fund in addition to their pension — it's a portable, individual account that grows with employer contributions. This lesson explains how annuity funds work, how they differ from pensions, and what to do with yours.
Why This Matters
Your annuity fund is money that belongs to you — it follows you if you change locals, gets paid out when you retire or leave the trade, and in many plans you can direct how it's invested. Ignoring it means leaving real retirement wealth on autopilot.
The Core Concept
Unlike a pension (which pays a fixed monthly benefit), an annuity fund is an individual account balance. Employers contribute a set hourly amount on your behalf. That balance grows through investment returns over your career. At retirement, you can take it as a lump sum, roll it into an IRA, or convert it to monthly income.
Real-World Example
Donna is a pipefitter who has worked in the trade for 18 years. Her employers contributed $3.50/hour to her annuity. At 2,000 hours/year × $3.50 × 18 years = $126,000 in base contributions. With investment growth at a modest 5% average, her account could be worth over $200,000. She had no idea — she never checked the portal.
Common Mistakes
- Never logging into the fund portal to check your balance or investment elections
- Cashing out the annuity early and paying income tax plus a 10% penalty
- Not rolling it over to an IRA when leaving the trade — leaving it in a default low-yield fund
- Treating it as "extra money" instead of a core retirement asset
- Not updating your beneficiary after life changes
Action Steps
- 1Log into your annuity fund portal and check your current balance today
- 2Review what investment options are available and whether your elections match your timeline
- 3Calculate your projected balance at retirement using your fund's online estimator
- 4Update your beneficiary designation if needed
- 5If you are leaving the trade, consult a fee-only financial advisor before cashing out
Questions to Ask Joe
Educational Information Only
MWM Financial Awareness provides general educational information only. Content is not individualized investment, tax, legal, insurance, or retirement plan advice. Pension and benefit rules vary by plan. Members should review official plan documents and consult the appropriate plan administrator or qualified professional before making decisions.
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