Chapter: Retirement Benefit Payment Options
Section: Retirement Benefit Payment Options
Retirement Benefit Payment Options
Under
the Plan, you may elect to receive your retirement
benefits in one of the following methods of payment. Only one method
of payment may be chosen and, once benefit payments have begun, the method of
payment cannot be changed.
The decision of how you want your retirement benefit to be paid
is an important and irrevocable one. The Administrative Office personnel will
be glad to help you calculate your benefit under any of the available options
so that you can decide which method of payment you want.
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Joint and 50% Survivor Annuity. This method of payment
provides a reduced monthly retirement benefit to the Participant
for life, with 50% of such reduced benefit payable to the Participant’s
surviving legal spouse or Qualified Domestic Partner for his or her life
in the event of the Participant’s death. This method of payment is automatic
for a married Participant or a Participant with a Qualified Domestic Partner
unless the Participant, with the spouse’s or Qualified Domestic Partner’s
written and notarized consent, rejects this method and elects another of
the following payment options.
The amount of the Joint and 50% Survivor Annuity is determined by multiplying
the monthly benefit otherwise payable by 90.0% minus .4% for each year the
spouse or Qualified Domestic Partner is younger than the Participant or
plus .4% for each year the spouse or Qualified Domestic Partner is older
than the Participant, with a maximum of 100.0%.
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Five-Year Certain and Life Annuity. This method of payment
provides an unreduced monthly retirement benefit to the Participant
for life, with the guarantee that if the Participant should die before having
received 60 monthly payments, the remaining payments will continue to the
named beneficiary until a total of 60 payments have been made. This method
of payment is automatic for an unmarried Participant who does not have
a Qualified Domestic Partner unless the Participant elects another payment
option.
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Ten-Year Certain and Life Annuity. This method of payment
provides a reduced monthly retirement benefit to the Participant
for life, with the guarantee that if the Participant should die before having
received 120 monthly payments, the remaining payments will continue to be
paid to the named beneficiary until a total of 120 such payments have been
made.
The amount of the Ten-Year Certain and Life Annuity option is determined
by multiplying the monthly benefit otherwise payable by the percentage corresponding
to the Participant’s age in accordance with the following table:
|
Age of Participant at Retirement Benefit
Commencement
|
|
|
Percentage
|
|
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
|
98.5%
98.4
98.2
98.0
97.8
97.6
97.3
97.0
96.7
96.3
95.9
95.4
94.8
94.2
93.6
92.9
92.1
91.3
90.5
89.6
|
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50%, 66-2/3% or 100% Joint and Survivor Annuity. This method
of payment provides a reduced monthly retirement benefit to the Participant
for life, with 50% or 66-2/3% or 100% (whichever the Participant chooses)
of such monthly benefit payable to the named beneficiary for his or her
lifetime upon the death of the Participant. The beneficiary is called a
Joint Annuitant and may be any person whom the Participant chooses; it need
not be the spouse or Qualified Domestic Partner. However, in accordance
with federal regulations, if a Participant wishes to name a Joint Annuitant
who is not his spouse, he may not elect the 100% option if the Joint Annuitant
is more than ten years younger than the Participant, nor may he elect the
66-2/3% option if the Joint Annuitant is more than 24 years younger than
the Participant. A married Participant may name a non-spouse Joint Annuitant
only with his spouse’s written and notarized consent. A Participant with
a Qualified Domestic Partner may name another individual or Joint Annuitant
only with his Qualified Domestic Partner’s written and notarized consent.
Please note that you may not change the Joint Annuitant after your retirement
date.
The amount of the 50%, 66-2/3% and 100% Joint and Survivor Annuity options
are calculated as follows:
|
a.
|
50% Joint and Survivor Annuity. Multiply the
monthly benefit otherwise payable by 90.0% minus .4% for each year the Joint
Annuitant is younger than the Participant or plus .4% for each year the
Joint Annuitant is older than the Participant, with a maximum of 100%. |
|
b.
|
66-2/3% Joint and Survivor Annuity. Multiply
the monthly benefit otherwise payable by 87.0% minus .5% for each year the
Joint Annuitant is younger than the Participant or plus .5% for each year
the Joint Annuitant is older than the Participant, with a maximum of 100%.
|
|
c.
|
100% Joint and Survivor Annuity. Multiply the
monthly benefit otherwise payable by 81.0% minus .7% for each year the Joint
Annuitant is younger than the Participant or plus .7% for each year the
Joint Annuitant is older than the Participant, with a maximum of 100%.
|
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50%, 66-2/3% or 100% Joint and Survivor Annuity with a Pop-up
Option. This option is similar to the Joint and Survivor Annuity discussed
above. The difference is that if the Joint Annuitant dies before the Participant,
then, beginning on the first of the month following the month in which such
death occurs, the monthly amount payable to the Participant shall be increased
to the amount that would have been payable under the Five-Year Certain and
Life Annuity option. (However, there is no five-year guarantee.)
This method
provides a reduced monthly benefit payable to the Participant, determined
by multiplying the monthly retirement benefit otherwise payable as follows:
|
a.
|
50% Joint and Survivor Annuity with Pop-up.
Multiply the monthly benefit otherwise payable by 89.0% minus .4% for each
year the Joint Annuitant is younger than the Participant or plus .4% for
each year the Joint Annuitant is older than the Participant, with a maximum
of 100%. |
|
b.
|
66-2/3% Joint and Survivor Annuity with Pop-up.
Multiply the monthly benefit otherwise payable by 86.0% minus .5% for each
year the Joint Annuitant is younger than the Participant or plus .5% for
each year the Joint Annuitant is older than the Participant, with a maximum
of 100%. |
|
c.
|
100% Joint and Survivor Annuity with Pop-up.
Multiply the monthly benefit otherwise payable by 79.5% minus .7% for each
year the Joint Annuitant is younger than the Participant or plus .7% for
each year the Joint Annuitant is older than the Participant, with a maximum
of 100%. |
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Social Security Adjustment Benefit. If you retire early
and your benefit payments from this Plan begin before your Social Security
benefits begin, you may elect this method of benefit payment. If you do
so, you must decide whether you want your Social Security benefits to begin
at age 62 or 65. You will, under this payment option, receive larger monthly
benefit payments from this Plan than you would otherwise have been entitled
to receive until the date you elected to have Social Security benefits begin.
Your benefit payments from this Plan will be reduced or terminated after
the date you elected to have your Social Security payments begin. This method
of payment seeks to provide, as nearly as possible, a uniform total retirement
income from both sources. (In order for the Plan to provide you with an
estimated Social Security Adjustment Benefit, you will be required to provide
the Plan with a copy of the estimate provided by the Social Security Administration.
Please note it is our understanding that if you do not specify whether you
want benefits to begin at age 62 or 65, the Social Security Administration
will choose which age to use for calculating the estimate.)
If you elect this payment option you may not elect a beneficiary because
there will be no continuation of benefits to anyone after your death.
The amount of the Social Security Adjustment Benefit payable from this Plan
prior to the expected commencement date of your Social Security benefit
is determined as follows:
(i) Multiply your estimated
Social Security benefit payable at the expected commencement date of your
Social Security benefit by the factor for your age on your retirement date
from the following table:
|
Age of Participant on Retirement Date
|
Social Security Payable at 62
|
Social Security Payable at 65
|
|
52
53
54
55
56
57
58
59
60
61
62
63
64
|
.4718
.5057
.5427
.5830
.6270
.6753
.7282
.7863
.8505
.9214
–
–
–
|
.3646
.3908
.4194
.4505
.4846
.5218
.5627
.6077
.6572
.7120
.7728
.8403
.9157
|
Months as well as years of attained age shall be taken into account, and
the factor for each month in excess of an attained age shall be interpolated
from the table.
(ii) Add the product determined in (i) above to the monthly benefit otherwise
payable from the Plan.
The amount of the Social Security Adjustment Benefit payable from this Plan
upon the expected commencement date of your Social Security benefit is determined
by subtracting the estimated Social Security benefit from the increased
benefit determined in (ii) above.
Notwithstanding the foregoing, effective January 1, 2000, your Social Security
Adjustment Benefit will not be less than the actuarial equivalent of the
Early Retirement Benefit that would be paid if the Five-Year Certain and
Life Annuity were elected. For this purpose, the actuarial equivalent factors
are the annual interest rate on 30-year treasury securities as specified
by the Internal Revenue Service for October of the year before the Plan
Year in which you retire and the mortality table specified by the Internal
Revenue Service.
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Lump Sum. If the lump sum actuarial value of your annual
retirement benefit is $5,000 or less, the benefit will be paid as a lump
sum.
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