Prior
Service Benefit (for earnings prior to 1961)
PLUS
Current
Service Benefit (for 1961 and later earnings)
The Current
Service Benefit is the greater of the amount determined
under two calculation methods:
Annual
Earnings Method
OR
Average
Earnings Method
This
sum, divided by 12, is the monthly Regular Pension amount.
For
this walkthrough example, the following assumptions were made:
Anne had
no Prior Service (earnings prior to January 1, 1961).
Anne's
earnings did not exceed $150,000 in any calendar year (as that
would have made the calculation even more complicated).
Anne retires
at age 65 (or earlier), because retirement after 65 involves
the calculation of an actuarial increase, which is described
in the plan document if you really want to read about it.
