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NORMAL RETIREMENT

When Am I Eligible for a Normal Retirement Payment?

Assuming you remain in bargaining unit employment until age 65, you are eligible to retire with a normal retirement payment on the first day of the month in which you attain age 65, your normal retirement date, regardless of the number of your service credits. Service credits are defined on pages 12, 13 and 14.

However, if you were first hired and first became a Plan participant at age 65 or later, you will not become eligible to retire with a normal retirement payment until the fifth anniversary of the date of your initial participation in the Plan.

What Is the Amount of the Normal Retirement Payment?

The annual amount of your normal retirement payment depends on when you last worked in bargaining unit employment. Please note that the provisions set forth below relate to the terms of the Plan as in effect in February, 2015.

The plan may be amended or terminated at any time, and future benefit accruals (if any) may be different from those that previously applied.

If you retired or terminated your bargaining unit employment prior to January 11, 2008, your retirement benefit will be determined in accordance with the terms and conditions contained in the Plan as of the date of your retirement or your date of termination of bargaining unit employment, whichever is earlier.

If you were an active regular employee of the Company on or after January 11, 2008 (or were treated as if you were an active regular employee for purposes of receiving Future Service credit on or after January 11, 2008— see "Is There Any Way an Employee Can Receive Service Credit for Time When Not in Bargaining Unit Employment?" on page 14), your retirement benefit (stated in the form of a single life annuity) will be determined as the sum of Part 1, Part 2, Part 3 and Part 4 of the following formula:

Your retirement benefit (stated in the form of a single life annuity) will be determined as the sum of Part 1, Part 2, Part 3 and Part 4 of the following formula:

Part 1
2.03% x Final Average Pay
x
Years of Past and Future Service earned prior to January 1, 2004
up to a maximum of 40 years;
Plus

Part 2
1.80% x Final Average Pay
x
Years of Future Service earned after December 31, 2007 but prior to
January 1, 2013 up to a maximum number of years equal to:
(a) 40 years (or, if less, your total Years of Past and Future Service), minus
(b) the number of years of Past and Future Service used in Part 1, above;
Plus

Part 3
1.68% x Final Average Pay
x
Years of Future Service earned after December 31, 2003 but prior to January 1, 2008 up to a maximum number of years equal to:
(a) 40 years (or, if less, your total Years of Past and Future Service), minus
(b) the number of years of Past and Future Service used in Parts 1 and 2, above;
Plus

Part 4
0.65% x Final Average Pay
x
Years of Future Service earned after December 31, 2012
up to a maximum number of years equal to:
(a) 40 years (or, if less, your total Years of Past and Future Service), minus
(b) the number of years of Past and Future Service used in Parts 1, 2 and 3, above.

For example, if you commenced bargaining unit employment on January 1, 1974, worked continuously on a full-time basis until you stopped working and retired on December 31, 2014, earning 41 total Years of Past and Future Service, and were at least age 65 as of the month of January 2015, then effective as of January 1, 2015, your normal retirement payment would equal:

30 Years of Future Service multiplied by the 2.03% accrual rate, plus
5 Years of Future Service multiplied by the 1.80% accrual rate, plus
4 Years of Future Service multiplied by the 1.68% accrual rate, plus
1 Year of Future Service multiplied by the 0.65% accrual rate*,

all multiplied by your Final Average Pay (calculated taking into account all of your pay earned through December 31, 2014).

* You only get one year of Future Service after December 31, 2012, instead of two years, because you already got credit for 39 years of Future Service prior to January 1, 2013, and one more year of Future Service brings you to your maximum of 40 years of total Past and Future Service.

The calculations above do not apply to terminated vested participants or to members of decertified groups. If you are in one of these groups, please ask the Fund Office about your benefit payments. The Plan provisions in effect at the date your bargaining unit employment terminated will usually (but not always) apply. The Plan provisions govern the applicable formula.

Your Final Average Pay is your yearly average Base Pay determined based on the highest 20 of the most recent 40 full calendar quarters immediately preceding your death or termination of bargaining unit employment.

Effective January 1, 1988, your Base Pay is the rate of base pay in effect for the job grade classification in which you are normally assigned on the first day of the calendar month.

Your Base Pay includes any amounts that you elect to be contributed as employee tax deferred contributions to the ABC Savings and Investment Plan. However, it does not include overtime pay, penalties, turnaround pay, night shift differential, over-scale pay or any other form of extra compensation or pension plan contribution made on your behalf.

Further, if you were hired before January 1, 1983, and you were an active regular employee of the Company on or after January 11, 2008 (or were treated as if you were an active regular employee for purposes of receiving Future Service credit on or after January 11, 2008—see "Is There Any Way an Employee Can Receive Service Credit for Time When Not in Bargaining Unit Employment?" on page 14), your retirement benefit (stated in the form of a single life annuity) will not be less than the benefit produced by the formula below, which depends on Base Pay.

  1. 1.90% of your Base Pay for the Plan Year 1978 times your years of Past Service (see page 13), and Future Service through 1978 (see pages 12 and 13), plus
  2. 1.90% of your Base Pay during each Plan Year of Future Service after December 31, 1978 and prior to January 1, 2004 (see pages 12 and 13), plus
  3. 1.68% of your Base Pay during each Plan Year of Future Service after December 31, 2003 but prior to January 1, 2008 (see pages 12 and 13), plus
  4. 1.80% of your Base pay during each Plan Year of Future Service after December 31, 2007 but prior to January 1, 2013 (see pages 12 and 13), plus
  5. 0.65% of your Base pay during each Plan Year of Future Service after December 31, 2012 (see pages 12 and 13).

Effective January 1, 1992, the maximum amount of service credit recognized by the Plan was increased to 40 years of Past and/or Future Service. Under this provision, if you accumulate credit for more than 40 years of Past and/or Future Service, the amount of your retirement payment will be based upon your last 40 years of service credit. However, in applying this limitation, in no event will the amount calculated as of any date be less than the amount calculated as of any prior date.

The following example illustrates the normal retirement payment calculation:

John became a regular employee of the Company on January 1, 1974. His base pay for the 1978 Plan Year was $29,000 and his base pay from 1979 until his normal retirement date of January 1, 2015 is shown below.

Year Base Pay
1979 $30,000
1980 $30,000
1981 $31,500
1982 $32,000
1983 $33,000
1984 $33,500
1985 $34,000
1986 $35,000
1987 $38,000
1988 $39,000
1989 $40,000
1990 $41,000
1991 $41,000
1992 $42,000
1993 $45,000
1994 $45,000
1995 $50,000
1996 $50,000
1997 $52,000
1998 $53,000
1999 $55,000
2000 $55,000
2001 $57,000
2002 $57,000
2003 $59,000
2004 $59,000
2005 $60,000
2006 $60,000
2007 $62,000
2008 $63,000
2009 $63,000
2010 $64,000
2011 $65,000
2012 $66,000
2013 $67,000
2014 $68,000

John's final average pay (2010-2014) is equal to $66,000. At his normal retirement date, after 41 years of Future Service (only 40 of which count under the Plan's formulas), John's retirement payment would be the greater of (1) or (2) below.

  1. Under the Plan's regular formula (see pages 3 and 4), John's benefit is calculated as follows:

    Part 1 (2.03% x 30 years of Future Service prior to January 1, 2004 x $66,000) +
    Part 2 (1.80% x 5 years of Future service between 2008 and 2012 x $66,000) +
    Part 3 (1.68% x 4 years of Future Service between 2004 and 2007 x $66,000) +
    Part 4 (0.65% x 1 year of Future Service after December 31, 2012* x $66,000) =
    $40,194.00 + $5,940.00 + $4,435.20 + $429.00 =
    $50,998.20 per year ($4,249.85 per month)

  2. Under the Plan's minimum formula (see page 5), John has 5 years of continuous employment as of December 31, 1978. However, because only the last 40 of his 41 years of Future Service ordinarily count under this formula, only 4 years of Future Service as of December 31, 1978 are counted. This results in the following annual benefit calculation as of January 1, 2015:
    1. (1.90% x $ 29,000 1978 Base Pay x 4 years of Future Service prior to 1979), plus
    2. (1.90% x $1,078,000 Base Pay between 1979 and 2003), plus
    3. (1.68% x $ 241,000 Base Pay between 2004 and 2007), plus
    4. (1.80% x $ 321,000 Base Pay between 2008 and 2012), plus
    5. (0.65% x $ 135,000 Base Pay between 2013 and 2014).
    This calculation adds up to $33,390.30 per year as of January 1, 2015.

    However, we also test to see if the benefit under this formula at any prior date was higher. In this case, we look at John's benefit as of January 1, 2014 (at which time he had 40 years of total Future Service, counting all five years prior to 1979). The calculation as of January 1, 2014 looks like this:
    1. (1.90% x $ 29,000 1978 Base Pay x 5 years of Future Service prior to 1979), plus
    2. (1.90% x $1,078,000 Base Pay between 1979 and 2003), plus
    3. (1.68% x $ 241,000 Base Pay between 2004 and 2007), plus
    4. (1.80% x $ 321,000 Base Pay between 2008 and 2012), plus
    5. (0.65% x $ 67,000 Base Pay for 2013).

      *John has two years of Future Service after December 31, 2012, but only one year counts, since 39 years of Future Service were already counted in Parts 1, 2 and 3.
    This calculation adds up to $33,499.30 per year ($2,791.61 per month).

    Since this amount as of January 1, 2014 is greater than the amount as of January 1, 2015, it becomes the minimum benefit formula amount.

Therefore, John's annual normal retirement payment (stated in the form of a single life annuity) is determined under the Plan's regular formula (method (1), above) in the amount of $50,998.20, which is greater than the benefit produced under the Plan's minimum formula (method 2, above).

  1. $50,998.20
  2. $33,499.30

John's benefit, if paid in the form of a single life annuity, would be payable in equal monthly installments of $4,249.85 for life ($50,998.20 divided by 12).

Note that the amount of your Base Pay that is counted for purposes of determining your benefits under the Plan may be limited by applicable law and the terms of the Plan.


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