Defined Benefit Pension Summary Plan Description

7. Will my benefit be reduced for an Early Retirement Benefit?

This answer applies to Early Retirement Benefits first in pay status on or after April 1, 2017. For benefits prior to April 1, 2017, please see the applicable historical SPD.

Early Retirement Benefits earned under the Plan's Default Schedule are always actuarially reduced.

Early Retirement Benefits covered by an Alternative Schedule are actuarially reduced, unless the Participant meets the requirements for an unreduced Early Retirement Benefit. Generally, you would meet the eligibility requirements for an unreduced Early Retirement Benefit if you:

  1. Are an Active Participant;
  2. Are at least age 56; and
  3. Have at least 44,500 Covered Hours.

If you meet the above requirements for an unreduced Early Retirement Benefit, there are still circumstances when your benefit would be reduced. For example, under either of the following situations, your Early Retirement Benefit is calculated by reducing the applicable portion of your Normal Retirement Benefit by 0.4% for each month your Early Retirement Benefit date precedes your Normal Retirement Date:

  1. If a benefit reduction is required because of a Grace Period, the pension payable with respect to service prior to the Grace Period would be reduced. Please refer to Question 18 on page 35 for more details. If you cease to be a Covered Employee because you become a signatory contractor, the Grace Period will be waived and the benefit will not be reduced.
  2. If you are an Inactive Vested Participant or Inactive Participant and were not eligible for an Early Retirement Benefit at the completion of your most recent Grace Period, the pension payable with respect to service prior to the Grace Period will be reduced.

In general, if you meet the requirements for an unreduced Early Retirement Benefit, but incurred Grace Periods, a Grace Period reduction will not occur if:

  1. You completed no more than two (2) Grace Periods, and the total number of Plan Years in which you failed to earn at least 375 Covered Hours does not exceed a combined total of five (5) Plan Years; and
  2. Combining your overall Credited Service, you complete at least 25 years of Total Credited Service prior to receiving your Early Retirement Benefit.

Example: Participant qualifies for Unreduced Benefits on portion of benefit

The following table shows example benefit calculations for a Participant with benefits under an Alternative Schedule.

  • The Participant is qualified for an unreduced Early Retirement Benefit on a $2,000 monthly benefit, with an additional $1,000 that is still subject to a Grace Period Reduction (i.e. $2,000 + $1,000 = $3,000 payable as a Normal Retirement Benefit).
  • The Participant has no reciprocal contributions after October 28, 2009 (i.e. no benefits under the Plan's Default Schedule).
  • The Grace Period reduction is calculated by multiplying 0.4% for each month the Participant's Early Retirement Benefit date precedes the Participant's Normal Retirement Date.
Age Benefit Begins Benefit % payable on Unreduced Early Retirement Benefit $2,000 Unreduced Benefit not Subject to Grace Period Reduction Grace Period Reduction Percentage Benefit Percentage payable after Grace Period Reduction at Early Retirement $1,000 Monthly Benefit after Grace Period Reduction Total Benefit Payable
56 100% $2,000.00 43.2% 56.8% $568.00 $2,568.00
57 100% 2,000.00 38.4% 61.6% 616.00 2,616.00
58 100% 2,000.00 33.6% 66.4% 664.00 2,664.00
59 100% 2,000.00 28.8% 71.2% 712.00 2,712.00
60 100% 2,000.00 24.0% 76.0% 760.00 2,760.00
61 100% 2,000.00 19.2% 80.8% 808.00 2,808.00
62 100% 2,000.00 14.4% 85.6% 856.00 2,856.00
63 100% 2,000.00 9.6% 90.4% 904.00 2,904.00
64 100% 2,000.00 4.8% 95.2% 952.00 2,952.00
65 100% $2,000.00 0.0% 100.0% $1,000.00 $3,000.00

Example: Actuarially Reduced Early Retirement Benefit

Early Retirement Benefits earned under the Plan's Default Schedule are always actuarially reduced. Early Retirement Benefits covered by an Alternative Schedule are actuarially reduced, unless the Participant meets the requirements for an unreduced Early Retirement Benefit.

Benefits earned under the Default Schedule can be commenced at a different time than those earned under an Alternative Schedule.

The table below shows Early Retirement Benefit calculations for a Participant with a $2,500 benefit subject to the actuarially equivalent reduction at ages 55 to 64.

Age Benefit Begins Benefit Percentage payable at Early Retirement – Alternative Schedule Resulting Monthly Benefit –Alternative Schedule Benefit Percentage payable at Early Retirement –Default Schedule Resulting Monthly Benefit Default Schedule
55 35.13% $878.25 34.58% $ 864.50
56 38.70% 967.50 38.13% 953.25
57 42.71% 1,067.75 42.11% 1,052.75
58 47.19% 1,179.75 46.59% 1,164.75
59 52.23% 1,305.75 51.63% 1,290.75
60 57.91% 1,447.75 57.33% 1,433.25
61 64.32% 1,608.00 63.78% 1,594.50
62 71.59% 1,789.75 71.12% 1,778.00
63 79.84% 1,996.00 79.48% 1,987.00
64 89.25% 2,231.25 89.03% 2,225.75
65 100.00% $2,500.00 100.00% $2,500.00

In accordance with the Rehabilitation Plan, all Early Retirement Benefits are reduced for Participants retiring prior to age 56 based on actuarial reductions from Normal Retirement Age (age 65) effective for benefits first commencing after April 1, 2017.
Article 4 of the Plan Document covers benefit calculations. Please contact the Administrative Office if you would like an estimate of your pension benefit.