NORMAL FORMS OF BENEFIT PAYMENT
Regardless of whether you are single or married, if the total value of your
retirement benefit is $1,000 or less, you will receive a single lump-sum payment
of your retirement benefit.
If the total value of your retirement benefit is more than $1,000, you will
be able to choose from several payment options. Your benefit is automatically
paid in the normal form unless you choose otherwise.
There are two normal forms of benefit payment methods. If you are:
- Single – Refer to the Single Life Annuity
- Married – Refer to the Standard Joint & Survivor Annuity (50% J&S)
You do, however, have the right to elect an optional form of benefit payment.
You may change your election at any time before your retirement date. Upon
your retirement date your election becomes irrevocable.
Single Life Annuity
If you are single when you are ready to begin receiving your benefit, your
normal form of payment is a single life annuity. Under this form of payment, you
receive a monthly benefit for the rest of your life; no benefit will be payable
after you die.
Standard Joint and Survivor Annuity (50% J & S)
If you are married when you are ready to begin receiving your benefit, the
normal form of payment is a standard 50% joint and survivor annuity for you and
your spouse. Initially, your benefit amount is calculated according to the
benefit formula shown in the SPD. Under this form of payment, you receive
monthly payments for the rest of your life and, after your death, 50% of your
benefit will be paid to your spouse for his or her lifetime. To reflect the fact
that benefits are paid over two lifetimes, the joint and survivor annuity amount
payable to you is less than the single life annuity amount. The amount is
reduced by an actuarial factor determined on the basis of the joint life
expectancy of you and your spouse. For the purposes of this plan, your “spouse”
is your husband or wife to whom you were legally married on the date Plan
benefits begin. Even if you are not married to your “spouse” at the time of your
death, the benefit will still be payable to your “spouse” unless your “spouse”
pre-deceases you.
Your benefit will be paid according to one of these methods, unless you elect
an optional payment form in writing.
OPTIONAL FORMS OF BENEFIT PAYMENT
You can elect an optional form of payment instead of the normal form. The
value of any optional form of benefit is the actuarial equivalent of the normal
form of benefit.
If you are married and choose an optional form, your spouse must consent in
writing before a notary public. You may revoke this election at any time prior
to when your benefit begins.
If your election is made less than 30 days before your retirement date, your
first month’s payment will be in the normal form. Then, the following month,
your elected form of payment will begin. The value of any optional form of
benefit is the actuarial equivalent of the normal form of benefit
Any optional form of benefit elected by a married participant will not be
effective unless the spouse’s consent is given in writing before a notary
public.
Cashout
If the actuarial present value of your vested accrued benefit is
$5,000 or less when you terminate employment, you will be eligible to receive a cashout (a single sum payment) as soon as administratively possible. If you
receive a cashout, no further benefits will be payable under the Plan. You may
elect to roll over the portion of your cashout that qualifies as an eligible
rollover distribution directly to an IRA or another qualified plan that accepts
rollover contributions.
- If the actuarial present value of your vested accrued benefit is $1,000
or less, you will automatically be given a cashout.
- If the actuarial present value of your vested accrued benefit is more
than $1,000 but is $5,000 or less, you may elect to receive a cashout.
Single Life Annuity
With your spouse’s consent, you may choose a single life annuity as an
optional form of payment even though you are married. Under this form of
payment, you receive a monthly benefit for the rest of your life; no benefit
will be payable after you die.
Ten Year Certain and Continuous
You receive an actuarially reduced monthly benefit for your lifetime with a
guarantee that at least 10 years (120 months) of benefit payment will be made.
If you die before 120 payments (10 years of payments) are received, your
beneficiary will receive the remaining monthly payments. You may name both
primary and contingent beneficiaries. If you and your beneficiaries die before
the 120 months of payments have been made, the remaining monthly benefits will
be paid in a single sum to the estate of the last survivor. If your life
expectancy, according to actuarial life expectancy tables is less than 10 years,
you are not eligible to elect this form of benefit payment
50%, 75% or 100% Joint and Survivor Annuity
You receive an actuarially reduced monthly benefit for your lifetime. You may
choose to continue payments to your survivor equal to 50%, 75% or 100% of the
amount you had been receiving. After your death, your surviving beneficiary
receives the elected percentage of your benefit until their death. Your
surviving beneficiary may be anyone you name – be it a spouse, a relative, or a
friend. To reflect the fact that benefits are paid over two lifetimes, the joint
and survivor annuity amount payable to you is less than the single life annuity
amount. If you elect the 100% Joint and Survivor Annuity and the surviving
beneficiary is someone other than your spouse, the percentage of your monthly
payments to be continued to your survivor may be limited. The amount of
reduction in your pension will depend upon, among other factors, the percentage
you choose and your age and that of the survivor you name. Your named survivor
must be one individual and cannot be changed after benefits have commenced.
Level Income
If you retire before you are eligible for Social Security benefits, you may
elect an approach that can provide you with a level income throughout
retirement. Currently, Social Security benefits may begin as early as age 62. A
level income is accomplished by increasing your retirement income from the Plan
by an amount estimated to be close to your Social Security benefit. The
increased payments are made until you are eligible for Social Security benefits.
At the time you are eligible to receive Social Security benefits, your monthly
pension payment is reduced, whether you actually receive Social Security
benefits or not.
This means you can keep your income fairly level throughout retirement.
However, because your initial benefit is based on estimated Social Security
benefits, your ultimate combined income from Social Security and the Plan may be
somewhat higher or lower than originally calculated.
Single Sum Payment
If at the time you retire the present value of your retirement benefit is
$10,000 or less, you may elect to receive your benefit in a single sum payment.
If you choose this option, upon receipt of the single sum, you are not entitled
to receive any further benefits under the Plan.
This payment is the actuarial present value of your total expected future
monthly payments paid in a single sum using interest and mortality tables
adopted by the Plan. No further benefits are available to you or a beneficiary.
If you elect to receive your benefit as a 50%, 75%, or 100% joint and
survivor annuity, and your named survivor(beneficiary) dies within 30 days after
your retirement date, your benefit will be payable as a single life annuity.