AMO Currents - AMO Plans calculating Defined Contribution Plan deposits

AMO Currents - Posted: March 15, 2011

AMO Plans calculating Defined Contribution Plan deposits

The AMO Plans Benefits Department is calculating the initial amounts to be deposited into personal retirement savings accounts established for all AMO deep-sea, Great Lakes and inland waters merchant vessel officers under the new AMO Defined Contribution Plan.

The amount to be deposited into each vessel officer's Defined Contribution Plan account will be a percentage of the officer's combined base benefit wage and vacation pay. Each vessel officer's age and years of service will determine this percentage.

The AMO Plans Benefits Department expects to complete its calculations and the required audit by March 30. The department will then provide each vessel officer with a statement of his percentage for 2011 and the amount of the first deposit, along with information on mutual funds available for individual investment and additional AMO Plans information.

Deposits into individual AMO Defined Contribution Plan accounts will begin upon completion of the percentage calculations. Deposits will increase with each additional year of age and service.

These deposits will be funded exclusively by employer contributions, which are due on the 10th of each month under deep-sea and inland waters collective bargaining agreements and on the 20th of each month under Great Lakes contracts. All employer contributions will be based on covered employment in the previous month - for example, employer contributions made in February were for days worked in January.

Under the rules of the AMO Defined Contribution Plan - which began for all AMO vessel officers on January 1, 2011 - 100 days of covered employment equal one year for benefit calculation purposes.

Up to 10 years of service in the Seafarers International Union immediately prior to employment under AMO contract are credited for benefit calculation as an incentive to keep the hawsepipe open to help AMO meet its growing manpower commitments in domestic and international trades.

When the separate, defined benefit AMO Pension Plan emerges from "critical" funding status as defined by the federal Pension Protection Act of 2006 and is funded sufficiently, all AMO vessel officers will have two options:

Retiring with monthly benefits from the AMO Pension Plan, along with their AMO 401(k) Plan, AMO Pension Plan Money Purchase Benefit (MPB) and AMO Defined Contribution Plan account balances, or
Adding their earned, accumulated AMO Pension Plan benefits to their AMO Defined Contribution Plan accounts as lump sum deposits.

Participants who choose the lump sum rollover option will be permitted to continue working at sea under AMO contract, earning additional benefits from the AMO 401(k), MPB and Defined Contribution Plans.