Frequently Asked Questions
Q. | Can the option I elect at the time I begin receiving my benefit be changed at a later date? |
A. |
The option you elect at retirement may not be revoked or changed unless:
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Q. | Is there a required date upon which I must start to receive my pension benefit? |
A. | Yes. Your benefit must go into pay status no later than your “Required Beginning Date.” This is April 1 of the calendar year following the one in which you reach age 72 (or the date you stop working under the Plan, if later). Under federal law, you may be subject to tax penalties if your benefit does not start on or before your Required Beginning Date. For this reason (and others), it is important that you make sure Retirement Services always has your latest contact information. [Section VI(F)] |
Q. | Can my Retirement Benefits increase after retirement? |
A. | Regardless of the monthly payment option you choose, your benefit includes either COLA (Cost of Living Adjustment) or is paid as a Level Benefit. |
Q. | What is a Cost of Living Adjustment (COLA) Benefit? |
A. | The standard form of payment has a 3% cost of living adjustment provision. Under this payment form, your Retirement Benefit will increase 3% on each May 1 (or a fraction of 3% if you have been retired less than a full year at the time of the increase). [Section 5.5(1)] |
Q. | What is a Level Benefit? |
A. | In lieu of the standard form of payment with a 3% cost of living adjustment provision, you may elect to receive the benefit as increased level monthly income. If you make this election, your benefit will initially be higher than if it were subject to annual increases, but it will remain constant unless benefits are increased for all retirees as a result of a Plan amendment on a special one-time-only basis. [Section 5.5(2)] |
Q. | How is the amount of my monthly Retirement Benefit affected by the payment form I select? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A. |
The amount of your benefit is adjusted for different payment forms to reflect the different expected total payouts associated with different payment forms. Payment forms are considered “actuarially equivalent,” based on standard actuarial factors specified in the Shops Plan (meaning the total value of benefits over your lifetime is expected to be the same). As an example, suppose you retired at age 62 on May 1, 2010, with an earned monthly benefit of $1,000. This amount, determined from the Plan’s benefit tables based on your Hours of Service each Plan Year, is payable in the Five Years Certain & Life payment form, subject to the annual COLA. Suppose further that you are married and your spouse also was age 62 when you retired. The following table shows your monthly benefit under all available payment options:
Suppose you selected the Five Years Certain & Life payment form. The following table shows the monthly benefit payable to you over the next 10 years on a COLA basis and on a level basis (assuming you live through this period and there are no future increases in benefits payable to retirees).
[Section IX(I)] |
Q. | Is there a Death Benefit payable after I begin my retirement? |
A. |
Generally, there are no "Death Benefits" available after you begin your retirement. However, if you begin Early Retirement and then return to work, benefits earned after Early Retirement and prior to the beginning of your second (Supplemental) Pension will be payable in the form of a Death Benefit. [Section 4.7] After you begin your retirement, additional benefits may be payable upon your death in one of the following ways:
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