RETIREMENT PLAN CHI. Catholic Health Initiatives Retirement Plan Highlights. 01/ Catholic Health Initiatives PT90312

Transcription

1 CHI RETIREMENT PLAN Catholic Health Initiatives Retirement Plan Highlights 01/ Catholic Health Initiatives PT90312

2 At no cost to you, your employer provides the Catholic Health Initiatives Retirement Plan to replace a portion of your income when you retire. The purpose of this brochure is to help you understand the Catholic Health Initiatives Retirement Plan and the retirement process. Overview Here s an overview of how the Catholic Health Initiatives Retirement Plan works. You ll find more information on the following pages. As an eligible employee, you automatically participate in the plan on the January 1 after you ve been paid for at least 1,000 hours of service in a calendar year. For each year you are paid for at least 1,000 hours of service in a calendar year, Catholic Health Initiatives will contribute an Annual Retirement Credit to your account. The amount of the Annual Retirement Credit is based on your pay and your years of contribution service. Catholic Health Initiatives also contributes interest to your account, calculated on your retirement account balance. The interest credited to your account is based on the change in the Consumer Price Index (CPI) as of the 12-month period ending the previous October 31, plus three percent. After five years of at least 1,000 hours of service per year, you will be a vested participant and eligible for a retirement plan benefit, based on your retirement account balance, when you terminate your employment or retire. Benefits are payable as early as age 55 and you ll have several payment options to choose from. While actively employed, you ll receive a statement each year showing the growth of your account and the annual interest rate. If you leave Catholic Health Initiatives, you may receive a statement upon request. Catholic Health Initiatives RETIREMENT PLAN 2

3 Plan Participation Eligibility You become a plan participant on the January 1 following at least 1,000 hours of service in a calendar year. Hours of service include the following: Regular hours worked Military duty Jury duty Holidays Illness Layoff Overtime Incapacity Severance Vacation Authorized leaves of absence (both paid and unpaid) Vesting Service Vesting service determines your right to receive a benefit under the plan. It is counted in years. If you complete five years of vesting service, you ll be entitled to receive a retirement plan benefit. You won t be eligible for a benefit if you leave Catholic Health Initiatives with less than five years of vesting service. However, after meeting participation requirements, you will be automatically vested in the plan if employed by Catholic Health Initiatives when you reach age 65, become disabled or die, even if you have less than five years of vesting service. Choosing a Beneficiary Your beneficiary will receive your retirement account balance if you die before receiving payments. If you are not married, you can name any person as your beneficiary. If you don t name one, your beneficiary will automatically be your group term life insurance beneficiary, your children, your parents, or your estate, in that order. If you are married, your spouse is automatically your beneficiary. You can name a different beneficiary, but only if your spouse provides a written, notarized agreement. If you are married and do not complete a beneficiary form, your account will be paid to your spouse or group term life insurance beneficiary, your children, your parents, or your estate, in that order. To find out how to name a beneficiary, see the For More Information section. Hours of Service Credit Paid hours of service (i.e., time worked or paid leave) and unpaid time (i.e., for authorized unpaid leaves of absence) for a pay period will be credited to the calendar year in which the payday for the pay period falls. For example, if you work an hour in late December 2007, but are paid for that hour in a paycheck issued in early January 2008, that hour of service will be credited to 2008, not Catholic Health Initiatives RETIREMENT PLAN 3

4 How Your Account Grows Annual Retirement Credits In each calendar year that you are credited with at least 1,000 hours of service, a contribution will be credited to your retirement plan account. You will receive a contribution in the year you leave (if you are over age 55), become disabled or die, regardless of hours of paid service. The amount of this contribution will be based on your years of contribution service and your pay, as shown below: Years of Contribution Service Annual Retirement Credits 1 to 5 years 5% of pay 6 to 10 years 6% of pay 11 to 15 years 7% of pay 16 to 20 years 8% of pay 21 to 25 years 9% of pay 26 or more years 10% of pay Your contribution service, as defined in Section 5.1 of the plan document, is usually the same as your vesting service, but will sometimes be less. Additional Retirement Credits Your account may receive additional retirement credits based on your level of pay. The retirement plan is designed to work with Social Security. Social Security benefits replace a greater portion of pay for workers at lower pay levels; as your pay increases, the portion of pay replaced by Social Security benefits decreases. Additional retirement credits offset this decrease. The additional credits are tied to the Social Security Wage Base, which is the amount of your pay subject to Social Security taxes. The Wage Base is adjusted on an annual basis. There are two levels of additional retirement credits: If your pay is greater than... You will receive additional retirement credits equal to the Social Security Wage Base 2% of pay above 1 2 the Social Security Wage Base and and The Social Security Wage Base 3% of pay above the Social Security Wage Base How Pay is Defined The plan generally defines your pay as including your W-2 earnings, except taxable benefits and cash in place of benefits. For higher paid employees, the internal revenue service limits the amount of compensation that can be used to calculate the annual contribution. Catholic Health Initiatives RETIREMENT PLAN 4

5 Interest Credit In addition to the Annual Retirement Credit, you will receive an annual interest credit based on the change in the Consumer Price Index (CPI) as of the previous October 31, plus three percent. Interest will be calculated on your retirement account balance as of January 1, prior to the addition of the Annual Retirement Credit. The interest credit helps protect your future retirement benefits from inflation. Keeping Track of Your Account While actively employed, you will receive a statement each year showing the Annual Retirement Credit and interest credit added to your account. Your statement will also include the change in the CPI as of October 31 and the current Social Security Wage Base. These annual statements can help you keep your financial plans on track. If your employment terminates, you may receive a statement upon request. Example The following illustrates how the annual interest credit and the Annual Retirement Credit are calculated for two different employees. Each employee has seven years of contribution service. Each employee has an opening account balance of $4,000. The Social Security Wage Base is $102,000. The percentage change in the CPI is two percent. Karen Pat Opening Account Balance $4,000 $4,000 Interest Credit (CPI + 3% = 5.0%) $200 $200 Pay $40,000 $55,000 x.06 x.06 Annual Retirement Credit $2,400 $3,300 Additional Retirement Credits Credit over 1 2 Social Security Wage Base $0 $55,000-51,000 $4,000 x.02 $80 Annual Retirement Credit $2,400 $3,380 Closing Account Balance $6,600 $7,580 Note: This example is for illustrative purposes only. Catholic Health Initiatives RETIREMENT PLAN 5

6 When Benefits are Paid Pension estimates are available any time through the resources described in the For More Information section. Although the plan s normal retirement age is 65, you may begin to receive benefits as early as age 55 if you have at least five years of vesting service and are no longer working. Or, if you are still working, you may postpone retirement beyond age 65. Normal Retirement Normal retirement plan benefits typically begin on the first day of the month on or after your 65th birthday. In-Service Retirement If you are still working at age 65, you may elect to receive an in-service distribution of your retirement plan benefits. Any benefits you earn after receiving this in-service distribution will be paid to you when you leave employment. Early Retirement Early retirement benefits may begin any time after you reach age 55, as long as you have completed five years of vesting service and have completely terminated your employment status. However, if you decide to begin receiving a monthly pension before age 65, your monthly benefit will be reduced because it will be paid over a longer period of time. If you wish, you may choose to receive your account balance as a single lump sum. Eligibility for Benefits Prior to Age 55 There are several ways in which you would be entitled to plan benefits prior to age 55: If you terminate employment with five years of vesting service and your total account balance is below $5,000. If you become disabled. If you die. If you are a participant from a prior plan that grandfathered a lump sum option prior to age 55, you may be eligible for a portion of your account balance prior to age 55 when you terminate your employment. Catholic Health Initiatives RETIREMENT PLAN 6

7 Age Required Minimum Distributions If you have terminated your employment, you must begin receiving your plan benefits by the April 1 following the calendar year in which you turn age Payment Methods The normal form of payment for a married employee is a 50 percent Joint and Survivor Annuity. The normal form of payment for an unmarried employee is a Single Life Annuity. You may choose any of the following payment methods. If you are married and wish to choose an option other than a Joint and Survivor Annuity, your spouse must agree to your choice in writing. You ll receive detailed information on your payment options when you re near retirement. Your choices include the following: Lump Sum Payment. Under this option, you can receive your retirement benefits in one lump sum payment. You will automatically receive a lump sum payment if your account balance is $1,000 or less. If your lump sum is between $1,001 and $5,000, you may choose to receive a lump sum payment or defer your benefit. If your lump sum is greater than $5,000, you must wait until at least age 55 to receive your benefit. Single Life Annuity. This option provides monthly benefits for your lifetime only. Payments stop at your death and no benefits continue to a beneficiary. Qualified Joint and Survivor Annuity (50 percent, 75 percent or 100 percent). This option pays a reduced monthly benefit for the rest of your life. Should you die, your spouse will receive 50 percent, 75 percent or 100 percent of the benefit you received (depending on your choice) for the rest of his/her life. Your benefit is reduced because it is expected to cover two lifetimes: yours and your spouse s. Life with Guaranteed Payments for 5, 10 or 15 Years. Under any of these options, your retirement benefit will be paid in monthly payments that continue for your life with this guarantee: if you die before you receive your guaranteed number of payments, your beneficiary will receive any remaining monthly payments until the total number of guaranteed payments has been made. If you die after you receive your guaranteed number of payments, no benefits will be paid to your beneficiary. Five or Ten Years Certain. Under either of these options, your retirement benefit will be paid to you in monthly payments beginning at your retirement and continuing for five or ten years, depending on your choice. At the end of the five- or ten-year period, no further payments will be made. If you die before the five- or ten-year period ends, your beneficiary will receive the remaining payments. Catholic Health Initiatives RETIREMENT PLAN 7

8 If You Become Disabled or Die Before Retirement The Catholic Health Initiatives Retirement Plan also provides a benefit to you or your beneficiary should you become disabled or die before you retire. If you become permanently disabled as defined by Social Security, you will immediately become vested and will be able to receive your account balance in a single lump sum or any other available option under the plan. You also have the option to leave your money in the plan and have your account earn interest credits until you begin to receive payments. If you have at least five years of vesting service when you become disabled, your account will accrue both interest and Annual Retirement Credits until you begin to receive your retirement benefit, turn age 65, or your disability ends, whichever comes first. Your Annual Retirement Credit will be based on your vesting service and your pay in the year you became disabled or the prior year, whichever is greater. Should you die before retirement, your beneficiary will receive your account balance in a single lump sum. If your beneficiary is your spouse, he/she will have an additional option of receiving monthly payments over his/her lifetime. Qualified Domestic Relations Order (QDRO) Domestic relations orders, pertinent documents and requests should be addressed to: QDRO Consultants Co Pearl Road Medina, OH Attn: Catholic Health Initiatives QDRO Compliance Team Phone: Fax: Catholic Health Initiatives RETIREMENT PLAN 8

9 When Planning to Retire Under the Catholic Health Initiatives Retirement Plan Things to Consider Prior to the Start of Retirement What is your anticipated retirement date? Would you like to take payments of the plan benefit immediately upon retirement, or defer the start of payments to a future date? To begin payment on a specific date, you must make an application for benefits 45 to 90 days prior to the desired date. You must begin to receive your plan benefit by the April 1 following the calendar year you turn age if you have terminated employment. If you want to designate a beneficiary, collect and confirm the needed information, which includes the beneficiary s name, relationship to you, Social Security number and date of birth. Run at least one benefit projection using your anticipated dates of retirement and benefit commencement. Include information about any likely beneficiary. With this benefit projection, consider possible payment options in light of your entire financial retirement picture. Lump sum payments may be taken as cash, which will be subject to income tax withholding, or directly rolled over into an IRA or other qualified plan, which will not be subject to withholding. If you are considering a rollover, contact your financial institution prior to initiating a distribution from the plan to ensure the financial institution can accept a rollover and to obtain instructions. For annuity options, consider the various forms of payment, survivor provisions and taxation. Understand the timing of your payment. If you are considering a lump sum payment option, plan to receive the distribution three to four months after your date of retirement and the submission of your pension election authorization statement. This delay is needed to ensure that all information to be used in calculating the lump sum is received. If you are considering an annuity (monthly) payment option, plan to receive the first payment one to two months after your date of retirement. If additional pay information is received after payments have commenced, your benefit will be recalculated and adjusted. Catholic Health Initiatives RETIREMENT PLAN 9

10 The Retirement Process The following steps can be completed by accessing the Internet services described in the For More Information section; or, if you don t have Internet access, by contacting an HR/Payroll Connection Support Center retirement specialist. Initiate retirement. You will need to specify your date of retirement, beneficiary information and the date you would like your benefit to begin. Your date of retirement should be no more than 90 days before the date you would like your benefit to begin. Select options. You will receive a retirement kit that explains all options for forms of payment, tax information and other general information. Select the options you want, including a form of payment, rollover and tax withholding. Authorize your selections. You will receive a Pension Election Confirmation Statement for review and a Pension Election Authorization Statement that you must sign, date and return. If you are married, your spouse may be required to sign the Pension Election Authorization Statement in the presence of a Notary Public. For More Information For additional information, visit HR/Payroll Connection, your online resource for benefits, payroll and employment information. Access HR/Payroll Connection through Inside CHI, Catholic Health Initiatives intranet, at home.catholichealth.net. If you do not have access to HR/Payroll Connection, or are a former employee and do not have access to Inside CHI, access your benefits via the Your Benefits Resources Web site at Please note you will need your user ID and password to access your account. This helps ensure the security of your personal data. If you forget your password, you may reset it via the Internet or the HR/Payroll Connection Support Center. If you do not have access to a computer or if you have questions, contact the HR/Payroll Connection Support Center toll-free at Representatives are available between 7 a.m. and 7 p.m. Central Time, Monday through Friday. Note The Catholic Health Initiatives Retirement Plan is governed by the terms of a formal plan document. This booklet only provides general highlights your benefit is governed by the plan document, and in the case of any dispute between the booklet and the plan document, the plan document will govern. Catholic Health Initiatives RETIREMENT PLAN 10