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SOUND RETIREMENT | 80

Examples: Rule of 85 With Wear Away Meat Plan Pension

Example 1: Retirement From Active Employment Before Age 55
As of October 1, 2016, Neal is age 53 and has 30 years of credited service
under the Meat Plan and 3 years of credited service that he earned in the
Sound Plan after the Meat merger into the Sound Plan. With age plus service
equal to 86 (age 53 plus 33 years of combined service), Neal elects to retire
at age 53 on October 1, 2016 from active service under the Sound Plan and
receive benefits that are available at that age. Later at age 55, Neal elects to
receive any additional benefits he has earned.
Neal accumulated a benefit (payable at normal retirement) of $2,300 as of
June 30, 2010, $2,400 as of June 30, 2014 and $2,470 as of September 30,
2016.
When he retires on October 1, 2016, Neal is age 53, so he is only eligible
to receive the $2,300 regular Meat Plan benefit that he earned for service
through June 30, 2010. At age 55, Neal is not entitled to any additional Meat
Plan benefits because his $2,300 benefit as of June 30, 2010 is larger than
his Standard Reduced Meat Plan benefit of $859.20 (based on the $2,400
he has accumulated through June 30, 2014 multiplied by the Meat Plan age
55 reduction factor of 0.358). Neal did earn an additional $70 benefit for
the 3 years of service he earned during July 1, 2014 through September 30,
2016. At age 55, he could also receive the Sound Plan Standard Reduced
early retirement of $43.40 (the $70 he earned multiplied by the Sound Plan
early retirement factor for age 55 of 62%) making his total benefit at age 55
$2,324.50 per month ($2,300 he was receiving plus the additional $24.50 he
earned in the Sound Plan).
Note, if Neal was a Kroger related participant on June 30, 2014, he would be
entitled to the same benefits but he would need to apply to the Consolidated
Plan to receive his $2,300 benefit for service through June 30, 2014. He would
apply to the Sound Plan upon reaching age 55, to receive the $24.50 benefit
for service earned after that date.