Pension Plan Summary Plan Description
8.4 Early Pension – Timing and Amount
You may begin your pension on or after attaining age 55, but before Normal Retirement Age, if you have ceased working in Covered Employment, and you have earned at least 10 years of Pension Credit since any prior Permanent Break-in-Service.
Reduced Early Pension. In general, your Early Pension monthly amount is reduced from the monthly amount of your Accrued Benefit to account for the fact that your payments begin earlier and are expected to be paid for a longer period. You may calculate the monthly amount of your Early Pension by reducing your monthly Accrued Benefit by .5% for each month that your Early Pension begins earlier than your Normal Retirement Age. Additional special rules are discussed below in this section that may show that you qualify for a higher monthly Early Pension amount.
Unreduced Early Pension (Rule of 85). If the sum of your age and Pension Credit equals at least 85 (the "Rule of 85") and you have earned at least 3,000 hours of Pension Credit since 1999 and 1,000 hours of Pension Credit during the 36 months immediately preceding your pension start date, you are eligible for an unreduced monthly Early Pension that is equal to your monthly Accrued Benefit. (Early Pensions commencing before January 1, 2000, had additional Rule of 85 requirements not discussed in this booklet.)
Reduced/Unreduced Early Pension From Age 64 (No Rule of 85). You are eligible for an unreduced Early Pension if the sum of your age and Pension Credit do not equal at least 85, but you have attained age 64 and have earned at least 300, but less than 1,000, hours of Pension Credit during the 36-month period ending on your pension start date. If you meet these requirements, except you have not yet attained age 64,your montly Early Pension is calculated by reducing your monthly Accrued Benefit by .5% for each month that your Early Pension begins earlier than your attainment of age 64.
Unreduced Early Pension From Age 62 (No Rule of 85). You are eligible for an unreduced Early Pension if the sum of your age and Pension Credit do not equal at least 85, but you have attained age 62, earned at least 3,000 hours of Pension Credit since 1991, and earned 1,000 hours of Pension Credit during the 36 months immediately preceding your pension start date. If you meet these requirements, except you have not yet attained age 62, your monthly Early Pension is calculated by reducing your monthly Accrued Benefit by .5% for each month that your Early Pension begins earlier than your attainment of age 62.
Example. Sam, age 55, has earned 45,000 hours of Pension Credit as of July 27, 2014, more than 3,000 of which were worked after 2009. As explained in Section 5.1, Sam's hours of Pension Credit are the equivalent of 30 years of Pension Credit (i.e., 45,000 ÷ 1,500). His monthly Accrued Benefit under Section 5.2 is $5,400 (i.e., $180 x 30). Because Sam satisfies the Rule of 85 (since his age and years of Pension Credit equal 85), Sam may commence his unreduced Early Pension at age 55 at $5,400 per month.
Example. Assume the same facts for Sam as above, except that Sam instead earned only 43,500 hours of Pension Credit (29 years of Pension Credit), and at least 1,000 of those hours were earned in the 36-month period preceding Sam attaining age 55. Sam's monthly Accrued Benefit would be $5,220 (i.e., $180 x 29). However, because Sam would have been one year short of satisfying the rule of 85, Sam's benefit must be reduced by .5% for each month that his pension begins before attaining age 62. If Sam begins his pension at age 55, his pension will be reduced by 42% (i.e., .5% x 84 months) for a monthly pension benefit beginning at age 55 of $3,028 (i.e., $5,220 - $2,192). If Sam had worked another 1,500 hours over one more year, he could have begun his pension at age 56 with a monthly benefit of $5,400 (calculated the same as at age 55), which would be about 78% higher than beginning his pension at age 55.