Benefit Calculations
Overview | Eligibility
| How the Plan Works | Benefit
Calculations | Payment Options
| Administrative Details
• Normal Retirement
• Accrued Pension
• Early Retirement
Normal Retirement (age 65) Benefit Calculation Example
You are eligible for normal retirement at age 65, and you are entitled to receive
a monthly benefit beginning on your normal retirement date payable for the rest
of your life. The formula used to determine your pension benefit is:
| 1.0%
x final average compensation (up to ½ of the 5-year average of the Social
Security wage base) multiplied by benefit service earned after 2001 |
| Plus |
| 1.5% x final average
compensation (over the ½ of the 5-year average of the Social Security wage
base) multiplied by benefit service (to a maximum of 35 years) earned after 2001
|
| Plus |
| Your accrued benefit as of December
31, 2001 under the former pension plan, adjusted for future compensation increases. |
Let's look at a sample benefit calculation.
Example
Jeff is a former Mercy employee who retires at age 65. Jeff has earned a monthly
accrued benefit under the former Mercy plan of $165. (This is Jeff's pension benefit
as of December 31, 2001 under the former plan). Jeff works 10 years under the
Trinity Health Pension Plan. His final average compensation at retirement is $27,000
($2,250 a month). The estimated ½ of the five-year average of the Social
Security wage base is $40,200 ( $3,350 a month). His total monthly benefit under
the Trinity Health Pension Plan:
|
1.0% x $2,250 x 10 |
|
|
Monthly Benefit |
|
Jeff's prior accrued benefit is adjusted for increases in his pay:
| $165 x Pay Adjustment
factor (1.35) |
= $222.75
|
| current benefit adjusted for future
increases in pay: |
=$222.75
|
total monthly pension benefit at
retirement:
$225 + $222.75 |
=$447.75
|
For a more detailed calculation see Accrued Benefit
Calculation |
