Chapter: Types of Retirement Benefits
Section: Amount of Normal Retirement Benefit
Amount of Normal Retirement Benefit
Currently, the annual amount of your Normal Retirement Benefit is generally
equal to 48.30% (effective as of January 1, 2000) of the contributions made
to the Plan on your behalf by Employers, such benefit to be paid in twelve equal
monthly installments. However, the Internal Revenue Code imposes limits on the
amount of compensation in any year, which the Plan may recognize for purposes
of determining benefit accrual for that year. There are also limits on the amount
of benefit a Participant can receive from the Plan each year. (These limits
are described in greater detail here.)
In addition, as described above,
if you had a permanent Break in Service, contributions made prior to the Break
in Service are ignored.
In the case of a single Participant, the amount described in
the preceding paragraph is paid for life, but in no event for less than five
years. The monthly amount of the Normal Retirement Benefit payable to a married
Participant or a Participant who has a Qualified Domestic Partner (see Glossary)
will be actuarially reduced and paid as a Joint and 50% Survivor
Annuity (i.e., the surviving spouse to whom the Participant was married or the
Participant’s Qualified Domestic Partner at retirement receives a benefit equal
to 50% of the Participant’s annuity) unless the Participant elects otherwise
with the spouse’s or Qualified Domestic Partner’s written and notarized consent.
Example:
A married Participant age 65 retires with five Qualified Years on January 1,
2002. The Participant’s spouse is age 60. The contributions made to the Plan
on the Participant’s behalf total $15,000. The monthly Normal Retirement Benefit
is computed as follows:
- 48.30% of $15,000 = $7,245 (total annual benefit)
- $7,245 ÷ 12 = $603.75 (monthly benefit)
- Joint and 50% Survivor Annuity Factor is 88% (based upon
the difference in age between the Participant and spouse).
- 88% of $603.75 = $531.30 per month is payable to the Participant
for life. Upon the Participant’s death, 50% of that benefit ($265.65) is payable
for life to the spouse to whom the Participant was married at the time of
retirement. (If the Participant and spouse decide they do not want the Joint
and 50% Survivor Annuity, they must elect another form of benefit payment
as described in Retirement Benefit Payment Options).
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