Walkthrough takes Jill, 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
- The monthly Regular Pension amount represents the monthly pension payable at age 65 under the Five-Year Certain normal form of benefit, which is a life annuity with 60 monthly payments guaranteed.
- As you can see in the Pension Plan Summaries, Early Retirement, Disability Retirement, Vested Pension, and Pre-Retirement Death Benefit calculations are all based on the Regular Pension amount.
- If one of the various Optional Forms of pension payment is elected, the reduction factor for that form (which varies according to the age of the participant and the spouse at retirement) is applied directly to the Regular Pension amount, or the resultant Early, Disability or Vested Pension amount.
- It is apparent then that the monthly Regular Pension amount is the cornerstone of most of the retirement calculations under the Pension Plan. The following Walk-Through Example is designed to provide Plan Participants with an illustration of the steps followed in the derivation of this key element in the pension benefit calculation process.
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