P E N S I O N
How Your Retirement Benefit Is Calculated
This section describes how your benefit is calculated for each of the five types of retirement available under the plan — normal retirement, early retirement, late retirement, vested terminated retirement and disability retirement.
Normal Retirement Benefit
To determine your monthly normal retirement benefit, a formula is used. This formula uses your total credited years of service up to a maximum of 25, your total credited hours of service up to a maximum of 20,000, and the base retirement
pension.
The chart below shows how your normal retirement benefit is calculated.
| Step 1 |
Your total credited years of service (up to 25) |
÷ |
50 |
| |
Step 2
|
Your total credited
hours of service (up to
20,000) |
÷ |
40,000 |
| |
| Step 3 |
(Step 1 + Step 2) |
x |
Base retirement
pension |
Equals |
Monthly normal retirement benefit |
Take a look at an example of a normal retirement benefit calculation.
An example |
| If an employee retires with 22 credited years of service and 19,800 credited hours of service, his or her benefit would be determined like this: |
Step 1
|
22 credited years of service |
÷ |
50 = .440 |
| |
| Step 2 |
19,800 credited hours
of service |
÷ |
40,000 = .495 |
| |
|
|
|
| Step 3 |
.935
(.440 + .495) |
x |
$2,025 per month
(base retirement
pension) |
Equals |
Monthly normal retirement benefit of $1,893.38 |
This retirement plan benefit of $1,893.38 per month is in addition to any monthly Social Security benefit the employee receives.
When you receive a normal retirement benefit, you may also be eligible to receive a supplemental pension benefit.
Early Retirement Benefit
After you reach age 57 and complete five credited years of service, you may choose to retire early. The amount of your monthly benefit will be based on your total credited years and hours of service and your age when you retire.
If you decide to retire between ages 57 and 60, the amount of your benefit will be reduced. That’s because you’ll receive that benefit over a longer period of time. Your benefit will be reduced by:
v 5/9% for each month you retire early — between age 58 and 60
v 5/18% for each additional month you retire early — between age 57 and age 58.
Instead of using fractions, you can also use these equivalent factors based on the age at which early payment begins.
Age At Early Payment |
Factor |
60 |
1.000 |
59
|
.933 |
58 |
.867 |
57 |
.833 |
An example |
Suppose you retire and your monthly benefit payable at normal retirement would be $1,750. If you choose to begin payments early at age 59, the benefit will be reduced by a factor of .933 for early payment at that age:
$1,750 x .933 = $1,632.75 monthly benefit |
When you receive an early retirement benefit, you may also be eligible to receive a supplemental pension benefit.
Late Retirement Benefit
If, after normal retirement age, you continue to work, your late retirement benefit will be determined by the same formula as a normal retirement benefit, using your credited years and hours of service as of your actual retirement date.
Vested Terminated Retirement Benefit
You will be eligible for a benefit at retirement if you leave with five credited years of service before retirement. This is called your vested benefit.
Your vested benefit is determined by the plan formula. The benefit amount is based on your credited years of service at the time you leave. You may apply for this benefit at early retirement, age 57-59, or normal retirement, age 60.
Disability Retirement Benefit
If you become totally disabled after you have at least five credited years of service, you may be eligible for a disability benefit. To be considered disabled, two doctors — one
appointed by the Joint Pension Committee and one of your choice — must agree that your disability:
v prevents you from performing most of the duties of the job to which you are regularly assigned
v has lasted for at least six months
v is expected to be permanent.
You will not be eligible for a disability benefit if your disability is the result of:
v criminal activity
v regular abuse of alcohol or addiction to drugs
v self-inflicted injury
v service in the armed forces of any country for which you receive a military pension
v venereal disease.
If the two doctors do not agree on your disability, a third doctor chosen by the other two doctors will be used to determine your condition. The third doctor’s decision will be
final. If the two original doctors cannot agree on a third doctor, the Joint Pension Committee will decide with you on a third doctor.
Once you start receiving disability benefits, the Joint Pension Committee may require you to have an examination at any time before you reach age 60 to determine if you are still disabled. If you are no longer disabled or if you refuse to be examined, your disability benefits will stop.
Disability Benefit Amount
To determine your monthly disability retirement benefit, a formula is used. This formula uses your total credited years of service, your total credited hours of service and the base retirement pension. The chart below shows how your disability retirement benefit is calculated.
Step 1
|
Your total credited
years of service (up to
15) |
÷ |
30 |
| |
| Step 2 |
Your total credited
hours of service (up to
20,000) |
÷ |
40,000 |
| |
|
|
|
| Step 3 |
(Step 1 + Step 2) |
x |
Base retirement
pension |
Equals |
Monthly disability retirement benefit |
An example |
| If an employee becomes disabled after 15 credited years of service and 14,500 credited hours of service, his or her benefit would be determined like this: |
| Step 1 |
15 years of credited
service |
÷ |
30 = 500 |
|
|
| Step 2 |
14,500 credited hours
of service |
÷ |
40,000 = .363 |
|
|
| Step 3 |
.863
(.500 + .363) |
x |
$2,025 per month
(base retirement
pension) |
Equals |
Monthly disability retirement benefit of $1,747.58 |
If you receive disability retirement benefits, you may be eligible to receive a supplemental pension benefit.
Pension Supplement
If you retire after October 1, 1997, with more than 20 years and/or more than 20,000 hours of credited service, you are eligible to receive a pension supplement. The supplement is determined by a formula that uses your years of service over 20, your credited hours of service over 20,000 and the base retirement pension. The chart below shows how your supplemental pension benefit is calculated.
Step 1
|
Your years of service
over 20
|
x |
2% |
| |
| Step 2 |
Your total credited hours of service - 20,000
(The result is rounded up to
the nearest .001) |
÷ |
100,000 |
| |
|
|
|
| Step 3 |
(Step 1 + Step 2) up to a
maximum of .70 |
x |
Base retirement
pension |
Equals |
Monthly pension supplement |
An example |
If an employee retires with 28 credited years of service and 25,000
credited hours of service, his or her benefit supplement would be determined like this: |
| Step 1 |
8 credited years of
service over 20
(28 - 20 = 8) |
x |
2% = .160 |
|
|
| Step 2 |
25,000 credited hours of
service - 20,000 = 5,000 |
÷ |
100,000 = .050 |
|
|
| Step 3 |
.21
(.16 + .05) |
x |
$2,025 per month
(base retirement
pension) |
Equals |
Monthly pension supplement of $425.25 |
The pension supplement of $425.25 will be paid in addition to this employee’s monthly retirement benefit each month.
Your pension supplement cannot be more than 70% of the base retirement pension.
How The Pension Supplement Can Increase Your Normal Retirement Benefit
The chart below shows how the supplemental pension benefit can increase your normal retirement benefit.
An example |
If an employee retires with 22 credited years of service and 19,800
credited hours of service, his or her normal retirement benefit would be $1,893.38. This employee would be eligible to receive a supplemental pension benefit, as figured below: |
Step 1
|
2 credited years of
service over 20
(22 - 20 = 2) |
x |
2% = .040 |
| |
| Step 2 |
19,800 credited hours of
service - 20,000 = 0 |
÷ |
100,000 = 0 |
| |
|
|
|
| Step 3 |
.040
(.04 + 0) |
x |
$2,025 per
month
(base retirement
pension) |
Equals |
Monthly pension supplement of $81.00
When the normal retirement benefit and the pension supplement are
combined, this employee will receive a monthly benefit of $1,974.38. |
Additional Benefits
If you retired on or after January 1, 1993, and die on or after January 1, 1997, with less than 10 credited years of service, your beneficiary(ies) is eligible for a $10,000 death benefit under the pension plan.
The $10,000 benefit will be paid as a lump sum to your beneficiary of record in the Welfare Fund Office, after your death. Or, you may choose to have the benefit paid to your beneficiary as a $5,000 lump sum payment, with the balance paid (without interest on the unpaid balance) in monthly payments of $100 each.
Retirees Who Began Receiving Benefits Before October 1, 2000
If you are retired and you began receiving your retirement benefit before October 1, 2000, your monthly retirement benefit was increased by approximately 2.54% as of October 1, 2000.
Vested terminated employees who left employment before October 1, 2000 but who did not begin receiving benefits are not eligible for any benefit increase.
Surviving spouses who began receiving monthly retirement benefits before October 1, 2000 are not eligible for any benefit increase.
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