Central Pension Fund:

Why the CPF is Clearly Superior to 401(k) Plans

• CPF is a real pension plan--401(k)s are just tax-deferred savings plans.
• Only employers make CPF contributions--employees must make 401(k) contributions from their wages.
• At retirement CPF participants receive a guaranteed monthly benefit for life--401(k)participants just get a lump sum repayment of their contributions and investment income, and must then make that lump sum last for life.
• CPF has available lifetime surviving spouse benefits--401(k) plans do not.
• 401(k) participants bear all of the risk of bad investment decisions--CPF investments are made by professionals, and participants bear no risk.
• CPF benefits are guaranteed by the U.S. Pension Benefit Guaranty Corporation--401(k) benefits are not.

CPF Fundamentals

• Participating employers negotiate contracts with IUOE Local Unions, agreeing to make contributions to CPF on behalf of each employee for every hour worked.
• CPF keeps separate records of contributions received for every employee.
• When employees reach normal retirement age, they are entitled to a monthly benefit for life.

CPF Benefits

• Normal Retirement Benefit: Payable at normal retirement age (usually 65). It is a monthly benefit for life.
• Early Retirement Benefit: Payable as early as age 55 with 10 years of service. It is equal to the Normal Retirement benefit reduced by 3% per year for years prior to age 65.
• Special Retirement Benefit: Payable at age 62 with 25 years of service. It is equal to the Normal Retirement benefit.
• Post-retirement Surviving Spouse Benefit: Payable to the surviving spouse of a deceased retiree for life, at optional levels of 50%, 66 2/3%, 75% or 100%. It is actuarially equal to the Normal Retirement benefit paid over two lifetimes.
• Pre-retirement Surviving Spouse Benefit: Payable at any age to the surviving spouse of a vested participant who dies before retirement. It is a lifetime benefit equal to 50% of the Normal Retirement benefit.
• Disability Benefit: Payable before age 55 with 15 years of service. It is equal to the Early Retirement benefit calculated as if member were 55 years old. Disability Retirement after age 55 is equal to early retirement.