Pension Plan Summary Plan Description
5.3 General Rules for Determining Accrued Benefit
The amount of your monthly benefit depends on your Accrued Benefit, the benefit option you select (Article 7 in this booklet), and the time you begin your pension (Article 8). Your Accrued Benefit amount depends on the years of Pension Credit you have earned when you retire (see Section 5.1) and the value attributable to each year of Pension Credit (explained in this section).
As explained previously, benefits accrued under the Motor Shop or Neon Sign Agreements are not discussed in this booklet because those agreements are no longer effective. If you have accrued benefits under either of these agreements and would like a summary of the rules that apply to them, please contact the Plan Office.
Generally, the amount of a Participant's annual Accrued Benefit is the sum of the value of each year of Pension Credit earned by the Participant. The value of a year of Pension Credit depends on the year in which the Pension Credit was earned and when the Participant incurred a Separation from Service. Fractional years of Pension Credit are recognized monthly. A "Separation from Service" is incurred on the last day of any three consecutive calendar year periods during which the Participant had zero hours of Credited Service.
Separation from Service On or Before December 31, 1982
For a Participant who incurred a Separation from Service on or before December 31, 1982, the monthly value of the Participant's year of Pension Credit is determined in accordance with the following Table I:
Separation from Service On or After December 31, 1983 (Does Not Meet 3,000 Hour Rule)
For a Participant who did not incur a Separation from Service on or before December 31, 1982, and who does not work at least 3,000 hours of Covered Employment on or after December 31, 1980, the monthly value of the Participant's Year of Pension Credit is determined in accordance with the following Table II:
Pension Credit of $230 Automatically Reduced if Certain Plan Funding Levels Not Maintained
The Pension Credit value of $230.00 for any Plan Year 2024 through 2027 is reduced to $180.00 if the Plan's funded percentage, determined as of the first day of the preceding Plan Year, falls to less than 90%, the funding rate per hour of service falls to less than $12.02, or if the Plan enters Endangered or Critical status as defined in the Pension Protection Act of 2006. Should Pension Credit value be reduced to $180.00, it will be prospectively restored to $230.00 as of the first day of the first Plan Year that begins with the Plan's funded percentage exceeding 95% and the funding rate per hour of service no less than $12.02, provided the Plan has not entered Endangered or Critical status. The Plan's funded percentage is based on the Plan's market value of assets, a 7.5% assumed rate of return for the Plan, and certain other actuarial factors set forth in the Plan. Should the Plan enter Endangered or Critical status on or before January 1, 2026, the $230.00 Pension Credit value reduces prospectively to $180 effective as of the first day of the following Plan Year. A benefit earned at the $230 level cannot be reduced by this funding rule - any reduction back to the $180 accrual level applies only for future benefit accruals.
Reduced Accrual Rate After 2023. During 2022, and due to a general downturn in the financial markets, the Plan's funded percentage fell below 90%. As a result, the Plan's Pension Credit Value (i.e., the annual accrual rate) for 2024 reverts back to $180.00. This reversion does not affect the $230.00 annual accrual rate for 2021 through 2023.
Separation from Service After December 31, 1982 (Meets 3,000 Hour Rule)
For a Participant who did not Separate from Service before January 1, 1983, and who worked 3,000 hours of Covered Employment after December 31, 1980, the value of Pension Credit is determined in accordance with Table III below, based on the benefit factor in effect as of the date of any separation.
Example: If you retired on July 1, 2007, and you earned at least 3,000 hours of Pension Credit after December 31, 2002, then the annual value of your Pension Credit will be $175. If you retired on April 1, 2014, and you earned at least 3,000 hours of Pension Credit after December 31, 2009, then the annual value of your Pension Credit will be $180.
Regardless of when you commence your pension, the value of your Years of Pension Credit depends on the latest date you worked at least 3,000 hours, and whether you incurred a Separation from Service.
Example: As a final example, if you incurred a Separation from Service on December 31, 1992, and earned at least 3,000 hours after December 31, 1986, but not after December 31, 1987, the value of your Pension Credit earned before your Separation from Service will be $90.
Although the value of a Year of Pension Credit after 2020 and through 2023 is $230, any increase of a Year of Pension Credit by reason of having earned the 3,000 hours as described in this section is limited to $180. No amount of hours of service earned during any period of employment will cause a Year of Pension Credit earned before 2021 to be increased to an amount greater than $180.
Return to Covered Employment after Separation from Service
Generally, if you return to Covered Employment after a Separation from Service, you may earn additional Pension Credit at the rate set forth in Table II above, but only the value of Pension Credit you earned before your Separation from Service will equal the amount provided in Table III as of the date of your separation, subject to the 3,000 hour requirement. Pension Credit earned before your Separation from Service will not be enhanced under Table III regardless of the number of hours you earn after your Separation from Service.
There is one exception to this Separation from Service rule described above: if you incurred a Separation from Service before 1987, then returned to Covered Employment and earned at least 3,000 hours of Pension Credit between January 1, 1987, and December 31, 1991, your Pension Credit for your pre-Separation from Service period may increase under Table III, up to $90, as if you had not incurred the Separation from Service.