May-June 2012 - The International Organization of Masters, Mates ...

Masters, Mates & Pilots Plans
Princeton, N.J. The Scholarship Recognition Award Program
will review the qualifications of all applicants and then select
the winners. The names of the winners will be presented to the
Trustees for final approval at their meeting in June 2013. To
request an application packet, please contact Madeline Petrelli at
the Plan Office at 410-850-8615.
Medicare Part D
For pensioners and their dependents who are covered under
Medicare and are secondary under the MM&P Health & Benefit
Plan, the Plan’s Prescription Drug Program has been and continues
to be comparable to the prescription coverage offered
by the Medicare Part D Program. The Plan in September 2011
sent participants the required annual notice explaining that
the Plan’s prescription coverage is “creditable” for 2012. This is
why we advise pensioners and dependents not to enroll in the
Medicare Part D program. The only exception is for retirees and
dependents belonging to the Columbia Northwest Group; their
prescription drug coverage is “non-creditable.” Participants and
dependents in the Columbia Northwest Retiree Group should
enroll in the Medicare Part D Prescription Drug Program.
Because the MM&P Health & Benefit Prescription Drug
Program is “creditable,” the Plan has applied for and received a
subsidy for a percentage of the prescription drug costs incurred
by Medicare-eligible Offshore retirees and dependents. To
receive the subsidy, every year the Plan must file an application
with the Center for Medicare and Medicaid Services (CMS).
The subsidy equals approximately 28 percent of the cost of the
prescription drug benefit of this Group.
For the 2012 calendar year, the Plan’s application has been
approved. For 2011, the Plan requested and received approximately
$1,074,800 in subsidies, which have helped defray the
costs of providing this benefit to the Plan’s Offshore retirees and
dependents.
IRAP and Pension Plan
For your reference, we have listed below the Internal Revenue
Service limitations for 2012. The defined benefit plan limits listed
below apply only to participants in the Offshore Pension Plan.
The 401(k) limits apply only to members whose collective bargaining
agreements provide for IRAP/401(k) participation.
IRS Limitations for 2012
2012 2011
Maximum Annual 415 Payout at
Age 62 From a Defined Benefit Plan $200,000 $195,000
Maximum Annual Contribution
to an Individual’s Defined
Contribution Account Under 415(c) $50,000 $49,000
Maximum Effective 401(k) Deferral $17,000 $16,500
401(k) Catch-Up Limit-
Age 50 and Older $5,500 $5,500
Maximum Amount of Annual
Compensation That Can Be Taken
Into Account for Determining
Benefits or Contributions Under a
Qualified Plan $250,000 $245,000
Wage Base:
a) for Social Security Tax*
b) for Medicare
$110,100
No Limit
$106,800
No Limit
Please note that the Social Security tax withholding rate on
employee salaries was reduced for the 2011 and 2012 tax years
from 6.2 percent to 4.2 percent. The Medicare rate remains the
same at 1.45 percent.
May - June 2012 - 12 - The Master, Mate & Pilot