TYPES OF PENSION

Early Retirement Pension

Under certain circumstances, you may choose to start your pension benefit anytime after you reach age 55. You qualify for this Early Retirement Pension if you have at least 15 years of Vesting Service. You also qualify for the Early Retirement Pension if you are 100% vested in your pension and you retire as an Active Participant after you reach age 55, provided you have 1600 Hours of Vesting Service in the year immediately before you retire.

If you decide to take early retirement and begin to receive your pension benefit before age 62, your pension will be reduced based on the number of months you are retiring prior to your normal retirement age, 62. If you retire after age 60, then the benefit is reduced by ¼ of 1 percent for each month you are younger than age 62 when your Early Retirement Pension begins. If you retire before age 60, then the benefit is reduced by ½ of 1% for each month you are younger than age 60 and by ¼ of 1 percent for the 24 months between ages 60 and 62. Keep in mind, you will receive the same total amount during your retirement, but your monthly payments will be reduced since you will receive them over a longer period. The reduction remains in effect for as long as you receive your pension.

Early Retirement Pension Percentages

If You Retire Immediately Following Your Birthday At Age:

Percentage of your Normal Retirement Pension

Retiring Before Age 60*

Percentage of your Normal Retirement Pension

Retiring On or After Age 60*

55

64.00%

--

56

70.00%

--

57

76.00%

--

58

82.00%

--

59

88.00%

--

60

--

94.00%

61

--

97.00%

62

--

100.00%

For example: If you retire at age 56, your pension payments will be reduced so they are 70% of what they would be if you waited until you were age 62 to retire. Remember, you are receiving the same total amount of money, but you are spreading it out over more payments.

*Reduction is ½ of 1% for each month you are younger than age 60; and ¼ of 1% for the 24 months between ages 60 and 62. The reduction in the Table above would be adjusted if you retire between birthdays.

EXAMPLE OF AN EARLY RETIREMENT PENSION

Tom is 58 and unmarried and does not have Breaks-in-Service. He decides to retire on July 1, 2014 with 25 Benefit Units. The Plan will calculate his pension as follows:

Benefit Units

 

Benefit Rate

 

Monthly Pension Benefit

25

x

$90.00

=

$2,250.00

As Tom is age 58, there are 24 months prior to age 60 and 24 more months between ages 60 and 62. The reduction is equal to:

24 months

x

.005

(which is ½ of 1%)

+

24 months

x

.0025

(which is ¼ of 1%)

=

0.12

+

0.06

=

.18 or 18%

So, Tom’s normal pension is reduced by 18%:

  •  Normal Pension

$2,250,00

  •  Early Retirement reduction

405.00 (which is .18 x $2,250.00)

  • Early Retirement Pension

$1,845.00