Page 26 - Pay'n Save Retirement Truat fund

SOUND RETIREMENT | 24

Example: 55/30 Partly Reduced Pension Benefit
Alex’s effective date of coverage is October 1, 1982. He has 35 years of
credited future service, and works an average of 1,800 hours per year under
the Sound Plan. He has no credited past service or breaks in service. Alex
retires on October 1, 2017, at age 58, when he is entitled to a regular pension
benefit of $1,881.62 per month (payable at age 65 as a single life annuity).
Alex’s benefit through September 1, 2003 equaled $1,463.34, which will
not be reduced. However, because Alex retired at age 58 with a 55/30
partly reduced pension benefit, the pension amount he earned on and after
September 1, 2003 will be adjusted as follows.

For a
Alex’s early retirement reduction is standard early
For ages…
calculated as… retirement
reduction of…
60 to 63 36 months x 1/2 of 1% per month 18%
58 to 60 24 months x 1/3 of 1% per month 8%

Alex’s 55/30 early retirement reduction at age 58 = 26%

After adding together Alex’s reduction percentages based on his age at
retirement, then subtracting from 100%, Alex is eligible for a standard early
retirement pension equal to 100% of his benefit earned before September 1,
2003 ($1,463.34), plus $309.53 of his regular pension amount ($418.28 x 74%)
earned on or after September 1, 2003. He will therefore receive $1,772.87 per
month ($1,463.34 + $309.53), payable as a single life annuity. If Alex selects a
different form of payment (for example, if he is married and selects the 50%
spouse pension), this monthly amount will be further reduced.