This Pension
Walkthrough takes Anne, our sample participant, through all the
steps she needs to determine the amount of her pension. The following
points will help you to understand the significance of the Regular
Pension amount - a key element in the overall pension calculation
process.
The monthly
Regular Pension amount is the monthly pension payable at age 65
under the "normal form" of benefit for an unmarried
participant, which is a monthly pension guaranteed for life. The
"normal form" is called Five-Year Certain because if
Anne dies before she has received payment for 60 months (5 years),
her beneficiaries will get the remainder of the 60 payments.
Since Anne is married, she and her husband John will receive a
reduced Husband and Wife pension unless they both elect another
form in writing.
All types
and forms of pension benefit are derived from the Regular Pension
amount.
If one of
the Optional Forms of payment is elected, the amount that Anne
gets will be determined by applying a "reduction factor"
to the Regular Pension amount. The reduction factor is based on
Anne's age and in some cases the age of her spouse or beneficiary.
