Pension – Payment Options
How Your Pension Will Be Paid
When you make your decision to retire, you will be asked to choose the way you want your pension to be paid. The forms of payment available to you are described in this section.
Standard Form If You Are Single
If you retired prior to July 1, 2011 and were single, you receive monthly pension payments guaranteed for 60 months after your retirement date. The same is true if you were married and you and your spouse rejected the Marital Annuity. Benefits are paid to you for your lifetime, but if you live less than 60 months after retirement, monthly payments will continue to your beneficiary for the remainder of the 60-month period.
For Example: If a Participant’s pension became effective September 1, 1997, and he/she died in August 1998 (12 months later), his/her beneficiary would have received payments under this Plan through August 2002 (60 payments minus 12 payments received = 48 months remaining) so that between the two of them, a total of sixty payments were received.
New Rule Effective July 1, 2011
- Rehabilitation Plan – Recommended Schedule. For pensions with an effective date on or after July 1, 2011, the Life Annuity will no longer have a guarantee of 60 monthly payments. In other words, there will be no further payments payable to any beneficiary regardless of when you die after your pension payments begin.
100% Marital Annuity
Standard Form If You Are Married
If you were married when you retired before July 1, 2011, you automatically received a 100% Marital Annuity with a 60-month guarantee. Under this form of payment, you received a monthly amount for your lifetime, and after your death, your surviving spouse receives a lifetime monthly benefit equal to 100% of the amount you were receiving at the time of your death. There was no reduction in your benefit for this form of payment, which means that both you and your spouse receive 100% of the benefits that you accrued by your retirement date. In addition, if both you and your spouse die before at least 60 monthly payments have been made, the remainder of the 60 monthly payments are paid to your designated beneficiary (see page 31 of the Summary Plan Description).
- Rehabilitation Plan – Recommended Schedule. For pensions with an effective date on or after July 1, 2011, the 100% Marital Annuity continues to be the automatic form of payment if you are married when you retire. However, it no longer has a guarantee of 60-monthly payments. In other words, there will be no further payments payable to any beneficiary regardless of when you and your spouse die after your pension payments begin.
- Non-covered Glazing Service. If your benefits are frozen as a result of work in Non-covered Glazing Service as of July 1, 1997, the 100% Marital Annuity is not available to you and you will automatically receive the 50% Marital Annuity that was in effect on the date of the freeze.
Under the 50% Marital Annuity, you receive a reduced monthly amount for your lifetime, and after your death, your spouse will receives a lifetime monthly benefit equal to 50% of the reduced amount you were receiving. The amount you would normally receive will be reduced to take into account the expected life span of you and your spouse. The amount of the reduction will be based on the 50% Marital Annuity in effect under the Plan on the date of your freeze. Different reduction formulas apply depending upon when your freeze occurred. If you engaged in Non-covered Glazing Service as of July 1, 1997, you should contact the Plan Office to find out the reduction formula that applies to your particular situation.
Example: A Participant retires with a Normal Pension in the amount of $1,000.00 per month. He/she and his/her spouse are both age 62. Because he/she worked in Non-covered Glazing Service and all of his/her benefit is subject to its benefit freeze rule, the 100% Marital Annuity is not available to him/her. At the time of his/her freeze, the 50% Marital Annuity formula provided for Participants with spouses who were the same age to receive 87% of their benefit. The 87% factor would be adjusted upward or downward depending on how much older or younger the spouse was compared to the Participant. Therefore, under the 50% Marital Annuity, the amount of this Participant’s pension is reduced from $1,000.00 to $870.00 per month and, if he/she dies before his/her spouse, he/she will continue to receive $435.00 per month for the remainder of his/her life.
Depending upon when your freeze occurs, a “pop-up” feature in connection with the 50% Marital Annuity may be available for you to elect. Under this feature, if the spouse to whom you were married on your pension effective date dies before you, your monthly benefit will “pop-up” to the amount payable as if you had not elected the 50% Marital Annuity. If this feature is available and you elect it, your pension benefit will be reduced by an additional 2%.
You may – with the consent of your spouse – reject the 50% Marital Annuity form of payment in favor of one of the other options offered by the Plan at that time.
The Non-covered Glazing Service rule determines whether or not the 100% Marital Annuity is available to you and, if not, what formula applies if you elect the 50% Marital Annuity. However, a Rehabilitation Plan Schedule formula will supersede any freeze formula if it produces a lower benefit.
Optional Payment Form - 75% Marital Annuity
In cases where the 100% Marital Annuity is provided at no cost to the Participant (e.g., Participants who have not engaged in Noncovered Glazing Service and who are not covered under the Rehabilitation Plan Default Schedule for benefits accrued on or after July 1, 2011), it does not make sense for a married Participant to elect another payment form. However, in cases where there is a cost to electing a 100% Marital Annuity or the 50% Marital Annuity (with an actuarial reduction) is the only available payment form for a married Participant, a Participant may wish to elect an alternative 75% Marital Annuity.
Under the 75% Marital Annuity, you will receive a reduced monthly amount for your lifetime, and after your death, your spouse will receive a lifetime monthly benefit equal to 75% of the reduced amount you were receiving. The amount you would normally receive will be reduced to take into account the expected life span of you and your spouse. The amount of the reduction will be based on the age of you and your spouse on your date of retirement.
The table below shows how a participant’s benefit is adjusted for the 75% Marital Annuity at selected Participant and spouse ages. For the sake of simplicity, we have assumed that both the Participant and spouse are the same age.
|Age of Participant and Spouse||Percentages|
|Both are age 52||91.43%|
|Both are age 55||90.14%|
|Both are age 60||87.58%|
|Both are age 62||86.37%|
|Both are age 65||84.42%|
|Both are age 70||81.17%|
Example: A Participant retires and elects a 75% Marital Annuity for $500.00 of his/her Normal Pension. He/she and his/her spouse are both age 62. The amount of his/her $500.00 pension is reduced to $431.85 per month and, if he/she dies before his/her spouse, he/she will continue to receive $323.89 per month for the remainder of his/her life.
Electing a Payment Form
When you apply for your pension, you will be sent documents explaining the following:
- Your right to defer payment of your benefit to a later date and any consequences of failing to defer payment (For example: If you are applying for an Early Retirement Benefit with an age reduction and you decide to retire with an Early Retirement Benefit on a later date, your benefit will be larger since you will be closer to age 62 at that time).
- A detailed explanation of terms and conditions of the various payment forms, including your right to make and the effect of any election waiving the standard form of payment and, if you are married, the right of your spouse to consent to any election to waive the standard form of payment for married participants, and your rights to revoke any prior election/waiver during the election period ending on the effective date of your pension.
- The relative actuarial values of benefits payable under the Plan’s different payment forms.
You have the right to review this material during the 180-day period prior to your pension effective date. In order for the election of you and your spouse (if applicable) to be valid, it must be made within this period. You and your spouse may also revoke any prior election made during this period. If you want your pension effective date to be sooner than 30 days or less after getting the payment form explanations, you and your spouse need to sign a written waiver of your right to review the materials for a longer time.
Documents involving you and your spouse’s election or waiver of a payment form must be witnessed by a notary public or an authorized Plan representative.
|Your retirement benefit will be paid according to the standard form that applies to you unless you and your spouse (if applicable) reject this form of payment.|
Automatic Lump-Sum Payment of Benefit
If you, your spouse, or other payee is entitled to pension benefits whose actuarial present value is $1,000 or less, the benefit shall be paid in a single lump-sum payment. In such case, you do not have the option of electing another form of payment. Such payment would represent you or other payee’s full entitlement to benefits under the Plan.