Pension Calculations

If your pension payments start after you reach age 65, the monthly pension is $4 times the number of years of past service credits, plus 4.0% times total contributions made by you and your employer. After 2009 it is 3.5% times total contributions.

Example calculation

Assume you retire in 2019 with 21 years of future service credit and 10 years of past service credit. Work in a covered job classification before September of 1976 is called past service credit. Work in a covered job classification after September of 1976 is called future service credit (while you contribute to the plan).

Assume contributions by you and your employer totaled $10,000 during the 21 years.

$4.00 x 10 Years = $40.00
.040 x $6,000 = $420.00
.035 x $4,000 = $140.00
$380.00

Early Retirement

If you retire early you will receive a reduced monthly pension payment. You would figure the pension out in the same way, as if you were age 65. It is then reduced by 6% for each year (1/2% per month) that you are less than age 65.

For example, if your pension is first paid at age 55 it would be reduced by 60%. Let’s assume that your pension at age 65 would be Bda $440.00. Here is how your early retirement pension would be figured:

Monthly Pension if payments start at age 65.

Amount %
$440.00 100%
$264.00 -60%
Bda. $176.00 40%

Five Year Certain Option

You figure the pension the same way as if you were electing the life only form. If you select this option your pension will be 95% of the life only amount, but you will be guaranteed 60 monthly pension payments.

Should you die before receiving 60 monthly payments, your payments shall be continued to your named Beneficiary until the total 60 payments have been made. Your monthly benefit will be continued until your death.

Spousal Payouts

Will my spouse continue to receive a pension if my spouse lives longer than I do?

Not unless you elect to receive a reduced monthly benefit under spouse annuity form. If you elect the spouse annuity form you will receive a reduced monthly benefit during your lifetime and if you die first, your surviving spouse will receive 50% of that reduced amount for the rest of his or her life.

If I elect the spouse annuity form of payment, how is this calculated?

You figure the pension the same way as if you were electing the life only form. If you and your spouse are the same age, your pension will be 90% of the life only amount. If your spouse is living at the time of your death, 50% of the reduced amount is payable for the remainder of your spouse’s life.

For example:

  • Suppose you retire at age 62 with life only pension of Bda $440.00 and your spouse is within 5 years of your age. Under the spouse annuity form, your pension is Bda $396.00 for life (90% x $440.00).
  • If your spouse survives you, he or she will receive Bda $198.00 a month for life (50% x $396.00 ).

What happens if my spouse is more than 5 years older or younger than me?

 

If your spouse is more than 5 years younger or more than 5 years older than you, the 90% factor is adjusted. The factor is adjusted upward by 1/2% for each year that your spouse is more than 5 years older or downward by 1/2% for each year that your spouse is more than 5 years younger.

For example:

If your spouse is 7 years younger, the adjustment downward would be 2 x 1/ 2% = 1% The 90% factor is therefore adjusted to 89%.

What happens if, after I select the spouse annuity form of payment, my spouse dies before me?

Your pension will revert to the amount of life only pension effective the month following the death of your spouse.

For Example:

Your Pension under the Spouse Annuity Form $396.00.

If your spouse dies before you, your pension becomes $440.00.

Yes, I meet the criteria

Pension payments start as soon as you have met all of the requirements such as age and service and file a completed Pension Application form. Payments are made on the first day of the month.

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