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Participants

Benefit Calculations

Overview | Eligibility | How the Plan Works | Benefit Calculations | Payment Options | Administrative Details

Normal Retirement
Accrued Pension
• Early Retirement

Normal Retirement Accrued Pension Benefit Calculation

Early Retirement Benefit Calculation Example

You are eligible to elect an early retirement benefit as early as age 55 if you have earned five years of vesting service. Early retirement benefits are reduced 5 percent for each year you receive your benefit before your normal retirement date. So, if you retired at age 55, your benefit would be reduced by 50 percent.

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.

This benefit would then be reduced by 5 percent for each year you receive your benefit prior to age 65.

Example
Pat is retiring at age 55. Pat has 19 years of credited service, all with Trinity Health. Pat's final average compensation at retirement is $2,500 and ½ of the 5-year average of the Social Security wage base is $3,350.

Benefit calculation under new Pension Plan:

1.0% x $2,500 x 19 =

$475

Number of years retiring early

10 years

100% - (10 years x 5%)

= 50%


To determine the benefit after the early retirement reduction, multiply the monthly benefit by 50 percent. This gives Pat a monthly benefit of $237.50.

For more detailed calculations see:

Benefit Calculation - Former Mercy Plan
Benefit Calculation - Former HC (less than 75 points)
Benefit Calculation - Former HC (75 points or more)


Early Retirement Accrued Benefit Calculation for Former Mercy Plan

If you were participating in a former Mercy Pension Plan and had an accrued benefit as of December 31, 2001, your accrued benefit would be included in your pension benefit.

When calculating your early retirement pension benefit that includes an accrued benefit, four factors must be considered:

  • Your accrued benefit under the Trinity Health Pension Plan formula
  • Your accrued benefit as of December 31, 2001 from former Mercy plan
  • Your pay adjustment factor, equal to the ratio of your current average compensation over your average compensation of December 31, 2001.
  • The reduction amount for each year you receive the benefit before your normal retirement date.

Example
Kelly is retiring at age 62 on July 1, 2005. She has 19 years of credited service as of December 31, 2001 , and an additional 3.55 years of credited service after December 31, 2001. Kelly's monthly final average compensation in 2001 was $2,700. Her final average compensation at retirement is $3,000. One-half of the 5-year average of the Social Security wage base is $3,350. Her accrued benefit as of December 31, 2001 was $543.40.

Step 1: Determine accrued benefit under the Trinity Health Pension Plan formula

1.0% x $3,000 x 3.55=

$106.50


Step 2: Determine the pay adjustment factor
The Pay Adjustment Factor is equal to:

Final average compensation at calculation date (7/1/05)

$3,000

=1.111

Final average compensation at 12/31/01

$2,700


Step 3: Multiply the accrued pension benefit as of 12/31/01 under the former plan by the pay adjustment factor

The accrued benefit as of December 31, 2001 was $543.40. To update this accrued benefit for increases in the final average compensation that occur after January 1, 2002, you need to multiply this benefit by the pay adjustment factor.

$543.40 x 1.111 = $603.72


Step 4: Compute the total pension benefit before reduction

New Accrued Benefit

$ 106.50

12/31/01 Accrued Benefit under former Plan
(adjusted for future compensation increases)

+ $603.72

Total Monthly Pension Benefit

= $710.22


Step 5: Calculate the reduction of the pension benefit

Determine the number of years the benefit is received before the normal retirement date of age 65 and multiply by 5%.

3 years until normal retirement x 5% = 15% reduction of benefit


Step 6: Determine total pension benefit

Multiply the amount in Step 5 by the benefit reduction percentage.

$710.22 x 85% = $603.69

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Early Retirement Accrued Benefit Calculation for Former Holy Cross
(less than 75 points)

If you were participating in a Holy Cross Pension Plan and had a prior pension benefit as of December 31, 2001, your prior pension benefit would be included in your pension benefit under the Trinity Health Pension Plan.

When calculating your early retirement pension benefit that includes a prior pension benefit, four factors must be considered:

  • Your accrued pension benefit under the new formula
  • Your accrued pension benefit as of December 31, 2001 from the Holy Cross plan
  • Your pay adjustment factor.
  • The reduction amount for each year you receive the benefit before your normal retirement date.

Example
Sharon is retiring at age 60 on July 1, 2005. Sharon has 10 years of credited service as of December 31, 2001, and an additional 3.55 years of credited service after December 31, 2001. Sharon's monthly final average compensation in 2001 was $2,700. Her final average compensation at retirement is $3,000. One-half of the 5-year average of the Social Security wage base is $3,350 in 2005. Her accrued pension benefit as of December 31, 2001 was $318.09.

Step 1: Determine accrued benefit under the Trinity Health Pension Plan formula
1.0% x $3,000 x 3.55= $106.50

Step 2: Determine the pay adjustment factor
The Pay Adjustment Factor is equal to:
Final average compensation at calculation date (7/1/05) $3,000 =1.111
Final average compensation at 12/31/01 $2,700

Step 3: Multiply the prior accrued benefit by the pay adjustment factor
The accrued benefit as of December 31, 2001 was $318.09. To update this accrued benefit for increases in the final average compensation that occur after January 1, 2001, you need to multiply this benefit by the pay adjustment factor.
$318.09 x 1.111 = $353.40

Step 4: Compute the Total Pension Benefit before reduction
New Accrued Benefit $ 106.50
12/31/01 Accrued Benefit under former Plan
(adjusted for future compensation increases)
+ $353.40
Total Monthly Pension Benefit = $459.90

Step 5: Calculate the reduction of the pension benefit
Determine the number of years the benefit is received before the normal retirement date of age 65 and multiply by 5%.
5 years until normal retirement x 5% = 25% reduction of benefit

Step 6: Determine total pension benefit
Multiply the amount in Step 5 by the benefit reduction percentage
$459.90 x 75% = $344.93

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Early Retirement Accrued Benefit Calculation for Former Holy Cross
(75 points or greater)

If you were participating in a former HC Pension Plan and had a prior pension benefit as of December 31, 2001, your prior pension benefit would be included in your Trinity Health Pension Plan benefit. You would also be eligible for the special early retirement feature (75 points) on your prior pension benefit.

When calculating your pension benefit that includes an accrued benefit, seven factors must be considered:

  • Your accrued pension benefit under the Trinity Health Pension Plan formula
  • Your accrued pension benefit as of December 31, 2001 from former Holy Cross plans
  • Your pay adjustment factor, equal to the ratio of your current average compensation over your average compensation at December 31, 2001
  • The reduction amount for each year you receive the benefit before your normal retirement date
  • The "base" portion of your accrued benefit as of December 31, 2001 from the former HC plan,
    eligible for unreduced early retirement benefits
  • The "excess" portion of your accrued benefit as of December 31, 2001 from the former HC plan that is not eligible for unreduced benefits.

Your benefit would equal the greater of the early retirement reduction benefit under the Trinity Health Pension Plan formula or the early retirement reduction under the HC grandfathered formula.

Example
Whitney is retiring at age 55 on July 1, 2005. Whitney has 17 years of credited service as of 12/31/01, and an additional 3.55 years of credited service after December 31, 2001. Whitney's monthly final average compensation in 2001 was $3,000 and in 2005 it is $3,500. One-half of the 5-year average of the Social Security wage base is $3,350 in 2005. Her pension benefit as of December 31, 2001 was $626.43.

Step 1: Determine accrued benefit under the Trinity Health Pension Plan formula
1.0% x $3,350 x 3.55= $118.93
1.5% x ($3,500 - $3,350) x 3.55 = + $7.99
Total Monthly Benefit = $126.92

Step 2: Determine the pay adjustment factor
The Pay Adjustment Factor is equal to:
Final average compensation at calculation date (7/1/05) $3,500 =1.167
Final average compensation at 12/31/01 $3,000

Step 3: Multiply the accrued pension benefit as of 12/31/01 by the pay adjustment factor
The prior accrued benefit was $626.43. To update the prior accrued benefit for increases in the final average compensation that occur after January 1, 2002, you need to multiply the prior benefit by the pay adjustment factor.
$626.43 x 1.167 = $731.04

Step 4: Subtract base portion of your Holy Cross accrued benefit from the total benefit
The total benefit is both the benefit earned under the Trinity Health Pension Plan formula and the prior pension benefit from the HC plan $857.96. ($731.04 + $126.92 ) The base portion of the former HC accrued benefit is $535.50. (1.05% x 3,000 x 17).
$857.96 - $535.50 = $322.46
= remainder of your accrued benefit that is reduced for early retirement

Step 5: Calculate the reduction of the pension benefit
Determine the number of years the benefit is received before the normal retirement date of age 65 and multiply by 5%.
10 years until normal retirement x 5% = 50% reduction of benefit

Step 6: Determine total pension benefit (new formula)
Multiply the remainder (amount in Step 4) by the benefit reduction percentage and add the unreduced former Holy Cross benefit.
Remainder Subject to 5% Per Year Reduction ($322.46 x 50%) $161.23
75 Points Unreduced Portion + $535.50
Total Early Retirement Benefit = $696.73

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