Traditional IRA
Take advantage of tax benefits with a flexible retirement savings option.
With Pension Fund’s Traditional Individual Retirement Account (IRA), you’re in control of your retirement. Depending on your income level, your IRA contributions may be partially or fully deducted from your taxes, and your earnings grow tax-deferred until retirement. For those unable to participate in an employer sponsored plan—or who just want to save more to retire comfortably—our Traditional IRA can help you meet your savings goals.
About IRAs
Who is eligible for the Traditional IRA?
If you're an employee or former employee of an eligible employer, you're eligible to participate. Spouses of an eligible employee are also able to open an IRA.
Why the Traditional IRA?
Advantages:
- Contributions may be fully or partially tax-deductible.
- Earnings grow tax-deferred until retirement (good for someone planning on retiring in a lower tax bracket).
- No income limits for contributions.
- As an individual retirement program, you don’t have to enroll through an employer, and if you ever change jobs, your money stays with you.
- Make contributions on your own schedule or roll over funds from another account.
- Designate beneficiaries to ensure your money lives on.
- Competitive, guaranteed base rate of 3-6% with no downside market risk.
- Value increases with Good Experience Credits, additional interest earnings awarded when excess reserves exist.
Good for employees who:
- Like to save without income limits (I.e., high income earners).
- Are looking for additional tax deductions on income.
- Plan to retire in a lower income bracket.
- Have available funds to roll over into a Traditional IRA.
Traditional IRA vs. Roth IRA:
- Like the Roth IRA, the Traditional IRA is based on after-tax contributions, allows rollovers, can be used to designate beneficiaries, has a 3-6% base interest rate, and is eligible for Good Experience Credits.
- Unlike the Roth IRA, the Traditional IRA has no income limits, offers additional tax deductions, and tax is deferred until distribution (based on your income at retirement).
3.5%
is the current base interest rate for the Traditional IRA.
How it Works
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Benefit from tax-deferred savings and no income limits: The Traditional IRA is not taxed until distribution and may allow you to reduce your tax liability with tax-deductible contributions.
To participate: Pension Fund will need a completed enrollment form with the amount you wish to contribute. If you are a current member with access to the Member Portal, you can enroll securely online by logging into your portal and submitting your enrollment application online. You may also download our enrollment form and mail, email or fax a copy to Pension Fund.
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In addition to regular contributions, the Traditional IRA welcomes rollovers from eligible third-party accounts. Those eligible can request to make a rollover contribution from retirement plans, including:
- 401(k) plan (pre-tax)
- 401(a) (pre-tax)
- 403(b) plan (pre-tax)
- 457(b) governmental only (pre-tax)
- A Traditional IRA from another institution
Depending on whether you or your spouse are covered by an employer retirement plan (such as the Pension Plan or TDRA), you may be able to deduct your contributions from your taxes, however the amount may be reduced based on your modified adjusted gross income (MAGI) and tax filing status. (View IRS’s IRA guidelines here).
Even if you aren’t eligible for a tax deduction, you can still take advantage of a Traditional IRA to contribute additional funds for retirement.
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This product offers a competitive, guaranteed base interest rate of 3-6%, reducing your downside risk. Each account also qualifies for Good Experience Credits (additional interest earnings) when designated by Pension Fund’s Board of Directors.
These credits allow members to benefit directly from the upside of stronger markets (when underlying investments have performed well + minimum reserve requirements have been met). In combination with the Traditional IRA’s base interest rate, Good Experience Credits may help you reach your retirement income goals faster.
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Because Traditional IRA participants can choose beneficiaries to receive the funds, a Traditional IRA may be used as an estate planning tool to leave an inheritance.
By choosing beneficiaries, it is possible to save an inheritance for children above and beyond retirement needs within IRS guidelines for maximum contributions. Each participant (or their beneficiaries) will ultimately receive the balance in the account.
What Our Members Are Saying:
FAQs
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Good Experience Credits are additional interest earnings. Each year, the Pension Fund Board of Directors reviews reserves required for current and future benefits, as well as reserves needed for any potential market declines. When reserves exist above what is required, the Board of Directors may declare Good Experience Credits for all IRA participants. Over time, these extra earnings can make a significant difference when saving for retirement.
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Because the Traditional IRA uses after-tax dollars, your taxes are deferred until funds are distributed.
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Depending on whether you or your spouse are covered by an employer retirement plan (such as the Pension Plan or TDRA), you may be able to deduct your contributions from your taxes, however the amount may be reduced based on your modified adjusted gross income (MAGI) and tax filing status. (View IRS’s IRA guidelines here).
Even if you aren’t eligible for a tax deduction, you can still take advantage of a Traditional IRA to contribute additional funds for retirement.
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By choosing beneficiaries, it is possible to save an inheritance for your children or other family members, above and beyond retirement needs within IRS guidelines for maximum contributions. Each participant will ultimately receive the balance in the account.
Additionally, the Traditional IRA can be used for charitable giving by making a qualified charitable distribution (QCD) when you reach the age of 73 to satisfy your required minimum distribution.
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Pension Fund welcomes rollovers from eligible third-party accounts, including:
- Pre-Tax Qualified Retirement Plans (401(k), 401(a), 403(b) (pre-tax) and 457(b)-governmental only
- Traditional IRAs
For more information, see our Rollover Transfer Overview Tip Sheet.
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If you are an employee or former employee of an eligible employer, you are eligible to participate. Spouses of an eligible employee are also able to open an IRA.
*Not available to residents of Canada or Puerto Rico.
View more FAQs on our General FAQs page.
In need of help?
Our team of Area Directors can answer your retirement and savings questions and help you decide which product is right for you.
How does our Traditional IRA compare with other products?
View an overview of how the Traditional IRA competes with similar retirement products.
Brochures & Member Resource Books
Learn all there is to know about the Traditional IRA with our helpful product guides and resources.