Health & Welfare and Pension Funds
of Philadelphia and Vicinity

Amount of Benefits

The starting point for determining the amount of your Normal Retirement Pension, Early Retirement Pension or Termination Pension is the Plan's benefit formula. This benefit formula yields a monthly pension benefit payable beginning at or after your Normal Retirement Age in the Plan's "normal form" - monthly payments for your lifetime with a 60-month period certain (except for Basis A, B & C shown on Table 1A below). If your pension begins to be paid before your Normal Retirement Age (and you have less than 30 years of Vesting Service), it will be reduced (as described below) to reflect its early commencement. If you select a different payment form - for example, a joint and survivor pension with your spouse - your monthly pension amount will be adjusted so that it is the actuarial equivalent of a pension payable in the normal form. Available benefit options are discussed in Section VII.

The Plan's Benefit Formula

The starting point for determining the amount of your Normal Retirement Pension, Early Retirement Pension or Termination Pension is the Plan's benefit formula. This benefit formula yields a monthly pension benefit payable beginning at or after your Normal Retirement Age in the Plan's "normal form" - monthly payments for your lifetime with a 60-month period certain (except for Basis A, B & C shown on Table 1A below). If your pension begins to be paid before your Normal Retirement Age (and you have less than 30 years of Vesting Service or less than 25 years of Benefit Service), it will be reduced (as described below) to reflect its early commencement. If you select a different payment form - for example, a joint and survivor pension with your spouse - your monthly pension amount will be adjusted so that it is the actuarial equivalent of a pension payable in the normal form. Available benefit options are discussed in Section VII.

A. The "Regular" Benefit Formula

The "regular" benefit formula consists of two parts. You earn benefits under the first part of the formula up until your "Future Service Date." Thereafter, you earn benefits under the second part of the formula. Subject to a couple of special rules that are described below, your monthly benefit is the sum of :

Part 1: Your credited years of Benefit Service up until your Future Service Date, multiplied by your Monthly Benefit Rate as determined from Table 1A (see below) opposite your applicable Daily Contribution Rate; and

Part 2: For each year of Covered Employment on and after your Future Service Date, a benefit equal to 2.25% of the total contributions made or required to be made on your behalf during any such calendar year through December 31, 2004 in which you have at least 750 Hours of Service. For example, if your Employer contributes a total of $5,500 on your behalf for the year, the monthly benefit at normal retirement you earn with respect to such year is $123.75 ($5,500 times .0225 equals $123.75).

Your benefit under Part 1 cannot, however, exceed the maximum monthly benefit indicated on Table 1A opposite your applicable Daily Contribution Rate.

To understand how this two-part formula works, you need to know the meaning of the following terms.

(1) Future Service Date. Your "Future Service Date" is January 1 of the first year during which your applicable Daily Contribution Rate equals or exceeds $15.00 for at least 750 Hours of Service during that Plan Year. However, your Future Service Date cannot be earlier than January 1, 1987. If your Daily Contribution Rate for 1987 was at least $15.00, your accrued benefit for 1987 is equal to your Benefit Service for such year multiplied by that year's Monthly Future Service Benefit Rate as determined from Table 1B (see below). For 1988 and later years following your Future Service Date, and provided your Daily Contribution Rate remains at $15.00 or above, monthly benefits are earned at the rate described above - 2.25 percent of the total contributions made or required to be made on your behalf for the year, provided that you earned at least 750 Hours of Service.

(2) Daily Contribution Rate. Your Daily Contribution Rate for a year must be at least $15.00 in order for you to begin to earn benefits under the second part of the benefit formula. Your applicable Daily Contribution Rate for a calendar year will be the last rate at which one or more Covered Employers made contributions on your behalf, under a collective Bargaining Agreement, to the Plan for at least 45 days. However, if your employer increased its daily contribution rate to the Plan within any year to a Basis more than one level above the Basis in effect immediately prior to the increase (see Tables 1A and 1B), then your applicable Daily Contribution Rate may be limited in accordance with a special rule which is intended to ensure the actuarial soundness of the Plan. Please see the Plan Administrator for details if you believe this special rule may affect you.

What happens if your Daily Contribution Rate should, after your Future Service Date, decrease to less than $15.00? In that event, your monthly benefit will be equal to the sum of (i) your benefit determined under the Plan's two-part benefit formula as of the date immediately before the date of decrease, and (ii) your benefit determined in accordance with part one of the formula based only on any additional Benefit Service credited to you after the date of decrease. Total years of Benefit Service cannot, however, exceed the maximum number of years of Benefit Service recognized for benefit purposes with respect to your applicable Basis immediately before the date of decrease. However, the maximum number of years of Benefit Service recognized for benefit accrual purposes with respect to Bases after Basis P (see Table 1B) is the sum of the maximum years recognized with respect to your applicable Basis immediately before your Future Service Date plus the Benefit Service credited to you between your Future Service Date and the date of decrease.

Here are Tables 1A and 1B, which you'll need to help determine your benefit under the Plan's regular benefit formula. Please note that the maximum benefit for Bases K, L and M applies only if you begin to receive your pension at or after age 65. The maximum benefit payable if you retire earlier is described at Table 2, below.

TABLE 1A

*These maximum Accrued Benefits are applicable only when benefit commencement occurs on or after age 65. For the maximum Accrued Retirement Benefits applicable for earlier benefit commencement, see Table 2.

Note: The amounts shown above do not reflect any reductions that may be applicable for early retirement pursuant to Section C of this Article.

TABLE 1B

Note: The amounts shown in Tables 1A and 1B above do not reflect any reductions which may be applicable for early retirement.

TABLE 2 
MAXIMUM ACCRUED RETIREMENT BENEFITS FOR BASES K, L AND M

Attained Age and Minimum Years of Benefit Service at Benefit Commencement Payable During First 60Months After Retirement Payable After First 60 Months After Retirement 

Note: The amounts shown above do not reflect any reduction that may be applicable for early retirement.

Here is an example of how a member's benefit will be calculated under the regular benefit formula:

EXAMPLE: A member has earned 35 years of Benefit Service as of December 31, 1986. His applicable Daily Contribution Rate as of that date was $14.60 (Basis P). He worked a full benefit year in 1987 with a Daily Contribution Rate of $15.00 (Basis Q). He continued to work after January 1, 1988 under a Collective Bargaining Agreement requiring daily contributions to the Fund in excess of $15.00. His work time after January 1, 1988 always exceeded 750 hours in every calendar year. His regular benefit would be calculated as follows:

Service Prior to 1/1/87 
(30 Year Maximum at $29.00 per benefit Year)                 $ 870.00

1987 Future Service                                                           60.00

Multiplier Service (1/1/88 - Present)
 (Contributions x 2.25%)                                                   957.42

Total Monthly Benefit                                                   $1,887.42

 

Benefit Service Earned on and After January 1, 2005

Beginning with Covered Service earned on and after January 1, 2005, those participants whose Daily Contribution Rate as of December 31, 2004 was at a future service level (a contribution rate of $15 per day or greater) will accrue benefits with a multiplier percentage of 1.35% (rather than the existing 2.25%) calculated using the lower of (i) the contribution rate of his/her Employer in effect as of December 31, 2004 or (ii) the contribution rate in effect on and after January 1, 2005.

Those participants whose Daily Contribution Rate as of December 31, 2004 was less than $15.00 per day will accrue benefits with reference to the lower of (i) the contribution rate of his/her Employer in effect as of December 31, 2004 or (ii) the contribution rate in effect on and after January 1, 2005.

 

B. Early Retirement Under the Plan's Regular Benefit Formula
    (For Benefit Service earned prior to January 1, 2005)

Your pension under the Plan's Regular Benefit Formula assumes that you retire on or after your Normal Retirement Age. This is the date you attain age 65 or, if later, the fifth anniversary of the date you began participation in the Plan. If you retire or leave Covered Employment before your Normal Retirement Age, you can (if you have enough service for your benefit to be vested) receive a reduced monthly pension beginning as early as age 50 based on the Plan's regular benefit formula. This reduced monthly benefit reflects the probability that, because you are retiring early, your monthly benefit will likely be paid over a longer period of time. If you have at least 30 years of Vesting Service or at least 25 years of Benefit Service, there is no reduction in your monthly pension even if you retire early.

If you have at least 20 years of Benefit Service and have attained age 50 while in Covered Employment, you can retire as early as age 57 with an unreduced pension. Use the following table to determine the percentage of your regular pension benefit payable if you retire before your Normal Retirement Age.

ATTAINED AGE IN COMPLETED YEARS AND MONTHS ON BENEFIT COMMENCEMENT DATE (ERF1)

EXAMPLE: A member has worked in Covered Employment until age 55 and two months and earned 20.6 years of benefit service. Because he has not yet reached age 57 (but has more than 20 years of benefit service), his pension benefit is reduced by 11%; he would get 89%. If he waits to commence receiving his monthly benefit until age 57, no reduction for early retirement would be made.

If you have less than 20 years of Benefit Service (or have less than 30 years of Vesting Service and leave Covered Employment before age 50), use the following table to determine the percentage of your regular pension benefit payable if you retire before your Normal Retirement Age.

ATTAINED AGE IN COMPLETED YEARS AND MONTHS
 ON BENEFIT COMMENCEMENT DATE
(ERF2)

Important Note: The above-described Early Retirement reductions apply only to your pension payable under the Plan's regular benefit formula. If you qualify for one of the Plan's Alternative Minimum Benefits (described below), the amount of your pension is based on your age at the time you retire and is not reduced further by the tables set forth above.

Example: A member has worked in covered employment until age 48 and six months and earned 25 years of benefit service. At age 53, he files an application for early retirement benefits. Because he did not work in covered employment after his 50th birthday, his early retirement reduction factor is measured from age 65. His pension benefit would be reduced by 69%. He would get 31% of what he would get if he waits until age 65 to commence benefits

Another member works in covered employment until age 53 and earns 19½ years of benefit service. He retires and applies for benefits at age 56. His benefit is reduced by 60%. He would get 40% of what he would get if he waits until age 65 to commence benefits..