LACERA Los Angeles County Employees Retirement Association

Transcription

1 LACERA Los Angeles County Employees Retirement Association KEY CONTACTS LACERA Los Angeles County Employees Retirement Association (626) FAX lacera.com Great West (Deferred Compensation Plans: 401(k), 457 Horizons, Pension Savings for Temp Employee) Key Talk or Glendale Office 655 N. Central, Glendale, CA countyla.com Employee Benefits Hotline (County) (213) dhr.lacounty.info CIGNA Optional Group Life Insurance (continuation) Options and Choices MetLife Group Variable Universal Life Insurance (continuation) Flex and Megaflex COBRA (County Health Insurance Plan Continuation) (213) Long-Term Disability and Survivor Benefits (County) (213) (213) Sedgwick sedgwickcms.com/calabasas Long-Term Care Insurance CALPERS N. Central #1400, Glendale, CA calpers.ca.gov Medicare medicare.gov Social Security Administration ssa.gov The closest SSA office to LACERA is located at 104 N. Mentor Avenue in Pasadena Southeast corner of Mentor and Union (2 blocks south on Mentor from LACERA) April 2011

2 LACERA Los Angeles County Employees Retirement Association April 2011

3 LACERA Los Angeles County Employees Retirement Association PENSIONABLE AND NON-PENSIONABLE CAFETERIA PLANS If you were hired on or before 12/31/95, you may be eligible to include a portion of the County s cafeteria plan contribution as pensionable earnings. CAFETERIA PLAN HIRED PENSIONABLE AMOUNT* CHOICES (Represented) Pensionable On or before 12/31/95 Capped at $244 Non-pensionable On or after 1/1/96 $0 OPTIONS (Represented) Pensionable On or before 12/31/95 Capped at $244 Non-pensionable On or after 1/1/96 $0 FLEX (Non-Reps) Pensionable On or before 12/31/94 Capped at $442 OR % of salary at 12/31/94, whichever is greater. Non-pensionable On or after 1/1/95 $0 MEGAFLEX (Non-Reps) Pensionable On or before 12/31/94 Capped at $442 OR % of salary at 12/31/94, whichever is greater. Pensionable In 1995 Capped at $244 Non-pensionable On or after 1/1/96 $0 Add the pensionable amount shown on the chart above to your final average compensation (Retirement Calculator) or gross monthly salary (Transfer Calculator or ARC Calculator). Please contact the Employee Benefits Hotline at (213) to verify your cafeteria plan and the pensionable portion as of 12/31/94. The amount of the County contribution paid to employees changes periodically, and the portion that is pensionable varies according to your cafeteria plan, your hire date, and your retirement plan (Megaflex only). *Special rules may apply if your final compensation period included any time prior to January 1, April 2011

4 Who is Eligible Maximum Buyback When Generally Paid Non-MegaFlex Sheriff Deputies/Custody Assistants/Probation Officers/Beach Lifeguards/ Public Defender Investigators/DA Investigators hired before February hour Firefighters Non-MegaFlex Participants (except 56-hour Firefighters SICK BUYBACK Overstated Buybacks in Final Compensation Issues 5 days (40 hours) 3 days (24 hours) July or August January or February The FAC period may only include 2 sick buybacks. Amongst those 2, only 64 hours may be included in the FAC. If, for example, a member sells 40 hours in August, 0 in January, and 40 in July, one of the 40 hours will be reduced to 24 so as not to exceed the 64 hour limit. 1 1/2 shifts (36 hours) July or August The FAC period may only include 2 sick buybacks 1 1/2 shifts (36 hours) January or February (72 hour max) 3 days (24 hours) July or August The FAC period may only include 2 sick buybacks 3 days (24 hours) January or February (48 hour max) MegaFlex Participants Not eligible - - Non-MegaFlex Participants (except 56-hour Firefighters) VACATION BUYBACK 20 days (160 hours) January or February 56-hour Firefighters 10 shifts (240 hours) January or February The FAC period may only include 1 vacation buyback and a maximum of 160 hours. The FAC period may only include 1 vacation buyback and a maximum of 240 hours. MegaFlex Participants Not eligible hour Firefighters (including MegaFlex Firefighters) Non-MegaFlex Participants (except 56-hour Firefighters) HOLIDAY BUYBACK 5 1/2 shifts (132 hours) 11 days (88 hours) January or February Unusual for anyone other than a Firefighter to reach the maximum 132 hours maximum MegaFlex Participants Not eligible - - Only available to MegaFlex Participants NON-ELECTIVE LEAVE 10 days (80 hours) January or February 80 hours maximum -

5 LACERA Los Angeles County Employees Retirement Association TAX Considerations: Consult your tax advisors before you act Monthly Before-Tax Payroll Deductions that can lower your taxable income: Plan contributions (A, B, C, D): Pre-determined contribution percentage based on entry age General member: 30-year cancellation, if pre-03/07/1973 membership date Safety member: 30-year cancellation E to D transfer Contribution percentage based on entry age or prospective transfer age Payments on service credit purchase and plan transfer contracts (pre-tax): The shorter the contract period, the higher the monthly payment amount Deferred Compensation Plan contributions (457 Horizons, 401(k)) through Great- West: You decide the contribution percentage and may change it any time: Maximum per year -- $17,000 (2012) If 50 and older $22,500 (2012) Catch-up provision -- $34,000 (2012) Horizons only The limits above for Horizons include the County match. No more regular contributions after retirement. Termination Pay is Taxable For information regarding strategies for deferring tax on termination pay, call Great-West (Glendale Office) at Consult with professional advisors regarding legal, tax, and/or medical matters: LACERA does not offer legal, tax, or medical advice. December 2011

6 LACERA Los Angeles County Employees Retirement Association SOCIAL SECURITY If you paid into Social Security prior to becoming a member of LACERA, you should contact the Social Security Administration to find out if their records are accurate and up to date. We also suggest you find out what you can expect from Social Security and how this source of income will fit into your retirement plans. The County withdrew from the Federal Social Security program in December LACERA Rules: Plan A, B, C, and D (General) LACERA retirement allowances will be slightly reduced by a fixed dollar amount for each year of service that was covered by Social Security while employed by the County prior to Plan E (General) As a member of Plan E, a percentage of your estimated Social Security benefit will be subtracted from your retirement allowance, based on the total number of years and months of County service covered by Social Security while employed by the County prior to If you retire at or after age 62, you may voluntarily provide evidence of your actual Social Security benefit to LACERA within 6 months after retirement. LACERA will use the actual benefit to recompute your retirement allowance. Otherwise, LACERA will use the actuarial tables to compute your Social Security benefit offset and your retirement allowance. Government Pension Rules: (GPO and WEP) If you worked in a job that was not covered under Social Security, e.g., some federal, state, or local government employment, the pension you receive based on that work may reduce your Social Security benefits. Your benefit can be reduced under one of two provisions. Government Pension Offset The Government Pension Offset (GPO) affects spouses, widows, and widowers. Under the GPO, if you receive a LACERA pension (based on work when you did not pay Social Security taxes), your Social Security spouse s, widow s, or widower s benefits may be reduced by an amount equal to two-thirds of your LACERA pension. Windfall Elimination Provision The Windfall Elimination Provision (WEP) reduces the Social Security benefit for retired and disabled workers receiving government pensions from employment not covered by Social Security. Basically, the Social Security Administration uses a different (less favorable) formula to calculate a worker s benefit under the WEP than it does to calculate the benefit of a worker who is not affected by the WEP. The normal Social Security benefit formula separates a worker s average monthly earnings into three segments, and multiplies each by a different percentage. The WEP modifies the percentage by which the first segment is multiplied. This results in you receiving a lower Social Security benefit than you would have received were you not entitled to a LACERA pension. The WEP formula includes a sliding scale based on the length of your Social Security-covered employment. If you have 30 or more years of substantial earnings under Social Security, you are fully exempt from the WEP. For more information, visit the Online Calculator (WEP Version) at ssa.gov. April 2011

7 SOCIAL SECURITY PLAN A, B, C, D The County of Los Angeles withdrew its employees from the federal Social Security program in December Your LACERA retirement allowance will be reduced by a fixed dollar amount for each year of service that was covered by Social Security while employed by the County prior to Example: Plan A members retiring at age 60 with 10 years of Social Security coverage as a County employee would have their retirement allowance reduced by $28.50 based on the chart. (10 times $2.85 = $28.50) Retirement Allowance Reduction Amounts For Members In Plans A, B, C, & D Covered By Social Security Age at Reduction per YOS* Retirement Plan A Plan B Plan C Plan D 50 $1.72 $1.45 $1.38 $ SOCIAL SECURITY - PLAN E The County of Los Angeles withdrew its employees from the federal Social Security program in December As a member of Plan E, a percentage of your estimated Social Security benefit will be subtracted from your retirement allowance, based on the total number of years and months of County service covered by Social Security. If you retire after age 62, you may voluntarily provide evidence of your actual Social Security benefit to LACERA within 6 months after retirement. LACERA will use the actual benefit to recompute your retirement allowance. Otherwise, LACERA will use the actuarial tables to compute your Social Security benefit offset and your retirement allowance. Consult with professional advisors regarding legal, tax, and/or medical matters: LACERA does not offer legal, tax, or medical advice. *Note: YOS means years of service covered by Social Security as a County employee.

8 LACERA Los Angeles County Employees Retirement Association Medicare 2012 Part B Premium Amounts for Persons with Higher Income Levels Most Medicare beneficiaries will pay a standard premium of $99.90 (single party) or $ (two parties) for Part B in Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes above $85,000 or ($170,000 or more for joint filers) are responsible for a larger portion of the estimated total cost of Part B benefit coverage. Social Security will use the income reported two years ago on your IRS income tax return to determine your premium (if unavailable, SSA will use income from three years ago). For example, the income reported on your 2010 tax return will be used to determine your monthly Part B premium in If your income has decreased since 2010, you can request to have the income from a more recent tax year used to determine your premium; however, you must meet certain criteria. Should I sign up for Medicare Part A and B if I am still working? Even if you keep working after you turn 65, you should sign up for Medicare Part A. If you have health coverage through your employer or union, Part A may still help pay some of the costs not covered by your group health plan. Call the Social Security Administration at to sign up. However, you may want to wait to sign up for Medicare Part B if you or your spouse are working and have group health coverage through your or your spouse s employer or union. You would have to pay the monthly Medicare Part B premium, and the Medicare Part B benefits may be of limited value to you as long as the group health plan is the primary payer of your medical bills. I want to add Part B to my Medicare. When can I do that? You can sign up for Medicare Part B: 1) When you first enroll in Medicare (your Initial Enrollment Period). Your Initial Enrollment Period starts three months before you turn age 65 and lasts for seven months. 2) January 1 - March 31 of each year (your General Enrollment Period). If you enroll in Part B during a General Enrollment Period, it will be effective July 1 of the year in which you apply. Your Medicare Part B premium may go up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it. 3) If you didn t take Medicare Part B when you were first eligible because you or your spouse were working and had group health plan coverage through your or your spouse s employer or union, you can sign up for Medicare Part B during a Special Enrollment Period. You can sign up: anytime you are still covered by the employer or union group health plan through your or your spouse s current or active employment, or during the eight months following the month the employer or union group health plan coverage ends, or when the employment ends (whichever is first). December 2011

9 The standard Part B premium for 2012 is $ If you are single and filed an individual tax return, or married and filed a joint tax return, the following chart will apply: Modified Adjusted Gross Income (MAGI) Individuals with a MAGI of $85,000 or less Married couples with a MAGI of $170,000 or less Individuals with a MAGI above $85,000 up to $107,000 Married couples with a MAGI above $170,000 up to $214,000 Individuals with a MAGI above $107,000 up to $160,000 Married couples with a MAGI above $214,000 up to $320,000 Individuals with a MAGI above $160,000 up to $214,000 Married couples with a MAGI above $320,000 up to $428,000 Individuals with a MAGI above $214,000 Married couples with a MAGI above $428,000 Part B Monthly Premium 2012 standard premium=$99.90 Standard premium + $40.00 Standard premium + $99.90 Standard premium + $ Standard premium + $ If you are married and lived with your spouse at some time during the taxable year, but filed a separate tax return, the following chart will apply: Modified Adjusted Gross Income (MAGI) Individuals with a MAGI of $85,000 or less Individuals with a MAGI above $85,000 up to $129,000 Part B Monthly Premium 2012 standard premium=$99.90 Standard premium + $ Individuals with a MAGI above $129,000 Standard premium + $ This material was created by Medicare and is reprinted from SSA Publication No (available on socialsecurity.gov) for the convenience of LACERA members. LACERA does not administrate Medicare. For questions, call Medicare ( ).

10 LACERA Los Angeles County Employees Retirement Association Eligibility Year Maximum Monthly Amount Your Benefit May Be Reduced Because Of The Windfall Elimination Provision (WEP)* 20 or less Years of Substantial Earnings $178.0 $160.2 $142.4 $124.6 $106.8 $89.0 $71.2 $53.4 $35.6 $17.8 $ For More Information Visit socialsecurity.gov/gpo-wep/ for more Windfall Elimination Provision information. You ll find information on: How WEP affects your benefit in the fact sheet Windfall Elimination Provision ( ). How Social Security figures your retirement benefit in the fact sheet Your Retirement Benefit: How It Is Figured ( ), Cost-of-living adjustments for individual years in The History of Automatic Cost-of-Living Adjustments. Consult with professional advisors regarding legal, tax, and/or medical matters; LACERA does not offer legal, tax, or medical advice. *Important: The maximum amount may be overstated. The WEP reduction is limited to one-half of your pension from non-covered employment. December 2011

11 Windfall Elimination Provision Your Social Security retirement or disability benefits may be reduced If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency or an employer in another country, the pension you get based on that work may reduce your Social Security benefits. The Windfall Elimination Provision affects how the amount of your retirement or disability benefit is calculated if you receive a pension from work where Social Security taxes were not taken out of your pay. A modified formula is used to calculate your benefit amount, resulting in a lower Social Security benefit than you otherwise would receive. When your benefits may be affected The Windfall Elimination Provision primarily affects you if you earned a pension in any job where you did not pay Social Security taxes and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit. For example, this provision affects Social Security benefits when any part of a person s federal service after 1956 is covered under the Civil Service Retirement System (CSRS). However, federal service where Social Security taxes are withheld (Federal Employees Retirement System) will not reduce your Social Security benefit amounts. The Windfall Elimination Provision may apply if: You reached 62 after 1985; or You became disabled after 1985; and You first became eligible for a monthly pension based on work where you did not pay Social Security taxes after 1985, even if you are still working. Why a different formula is used Social Security benefits are intended to replace only a percentage of a worker s pre-retirement earnings. The way Social Security benefit amounts are figured, lower-paid workers get a higher return than highly paid workers. For example, lower-paid workers could get a Social Security benefit that equals about 55 percent of their pre-retirement earnings. The average replacement rate for highly paid workers is about 25 percent. Before 1983, people who worked mainly in a job not covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job where they did not pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage. How does it work? Social Security benefits are based on the worker s average monthly earnings adjusted for inflation. We separate your average earnings into three amounts and multiply the amounts using three factors. For example, for a worker who turns 62 in 2011, the first $749 of average monthly earnings is multiplied by 90 percent; the next $3,768 by 32 percent; and the remainder by 15 percent. The sum of the three amounts equals the total monthly payment amount. The 90 percent factor is reduced in the modified formula and phased in for workers who reached age 62 or became disabled between 1986 and For those who reach 62 or became disabled in 1990 or later, the 90 percent factor is reduced to 40 percent. There are exceptions to this rule. For example, the 90 percent factor is not reduced if you have 30 or more years of substantial earnings in a job where you paid Social Security taxes. The table on page one lists the amount of substantial earnings for each year.

12 The table on the next page shows the percentage used depending on the number of years of substantial earnings. If you have 21 to 29 years of substantial earnings, the 90 percent factor is reduced to between 45 and 85 percent. To see the maximum amount your benefit could be reduced, visit socialsecurity.gov/retire2/wep-chart.htm. Some exceptions... The Windfall Elimination Provision does not apply if: You are a federal worker first hired after December 31, 1983; You were employed on December 31, 1983, by a nonprofit organization that did not withhold Social Security taxes from your pay at first, but then began withholding Social Security taxes from your pay; Your only pension is based on railroad employment; The only work you did where you did not pay Social Security taxes was before 1957; or You have 30 or more years of substantial earnings under Social Security. The Windfall Elimination Provision does not apply to survivors benefits. However, benefits may be reduced for widows or widowers because of another provision of the law. Ask for Government Pension Offset (Publication No ).... and a guarantee If you get a relatively low pension, you are protected. The reduction in your Social Security benefit cannot be more than one-half of the amount of your pension that is based on earnings after 1956 on which you did not pay Social Security taxes. Contacting Social Security Our website is a valuable resource for information about all of Social Security s programs. There are a number of things you can do online. In addition to using our website, you can call us toll-free at We treat all calls confidentially. We can answer specific questions from 7 a.m. to 7 p.m., Monday through Friday. We can provide information by automated phone service 24 hours a day. (You can use our automated response system to tell us a new address or request a replacement Medicare card.) If you are deaf or hard of hearing, you may call our TTY number, We also want to make sure you receive accurate and courteous service. That is why we have a second Social Security representative monitor some telephone calls. This material was created by the Social Security Administration (SSA) and is reprinted from socialsecurity.gov for the convenience of LACERA members. LACERA does not administrate the Windfall Elimination Provision. For questions, call SSA at Consult with professional advisors regarding legal, tax, and/or medical matters; LACERA does not offer legal, tax, or medical advice.

13 LACERA Los Angeles County Employees Retirement Association RETIREMENT ALLOWANCE OPTIONS & ESTIMATES The Retirement Option you choose at the time of retirement determines the survivor death benefit. All Options are available to all Plan members (A, B, C, D and E), unless otherwise indicated. Estimates are based on the highest average compensation to date and do not take into account any future salary increases between now and your retirement date. You should therefore focus on the percentages, not the dollar amounts, at this time. Unmodified The Unmodified Option is the most popular, since it offers the highest possible benefit over your lifetime. It pays you the full amount of the monthly benefit to which you are entitled based on your age at retirement, amount of service credit, and final compensation. (The Unmodified Option exhausts the contributions of a contributory member rather quickly, but still provides a lifelong allowance.) Under this Option, if your eligible surviving spouse or domestic partner or minor child dies before you, you may change your beneficiary after retirement.* However, upon your death, your new beneficiary would only receive a $5,000 lump-sum death/burial benefit, along with any remaining portion of your accumulated contributions. (You may name a different beneficiary to receive the $5,000 lump-sum death/burial benefit. See Death/Burial Benefit section for details.) Unmodified+Plus This Option limits the payment of a continuing allowance to an eligible spouse, domestic partner, or minor child(ren). Survivor payments stop upon the death of your survivor. You cannot change your beneficiary after retirement. If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. Plan A, B, C, or D Under this customizable Option, you can designate the percentage of your monthly allowance between 66 and 100 percent that your eligible surviving spouse, domestic partner, or minor child(ren) will receive upon your death.* To fund your survivor s allowance, your monthly allowance is reduced during your lifetime. The reduction is calculated using an actuarial equivalent to cover the cost difference between 66 and 100 percent. There is no lump-sum distribution of any remaining contributions provided to your survivor. Plan E Under Unmodified+Plus in Plan E, you can designate your survivor to receive between 56 and 100 percent of your monthly allowance. The reduction to your allowance during your lifetime is calculated to cover the cost difference between 56 and 100 percent. Service-connected Disability (SCD) Upon the death of member receiving an SCD allowance, LACERA pays a monthly allowance to the eligible survivor. Certain requirements and restrictions apply. Other Retirement Options You may customize your retirement allowance by electing one of the numbered Retirement Options: Option 1 (not available under Plan E), 2, 3, or 4. These Options allow you to reduce your retirement allowance during your lifetime to provide continuing survivor benefits to one or more named beneficiaries upon your *Minor child eligibility applies only in situations where there is no surviving spouse or domestic partner; additional restrictions apply. April 2011

14 death. Named beneficiaries may include anyone with an insurable interest in your life.* Payments stop upon the death of your named beneficiary(ies). Option 1: This is a lump-sum benefit under which you receive a slightly reduced Unmodified Retirement Allowance during your lifetime. If you die before receiving the contributions you paid into the fund, the balance of your accumulated contributions is paid in a lump sum to your named beneficiary or estate. (On average, contributions are depleted over 7-10 years.) Only Option 1 allows full flexibility to change your beneficiary designation after you retire. This option is not available to Plan E members. If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. However, you may name another beneficiary to receive the Option 1 lump-sum payment. This option does not provide a continuing survivor allowance. Option 2: If you elect Option 2, you will receive a reduced Unmodified Retirement Allowance during your lifetime. The reduction will be calculated based on your age at retirement and the age of your beneficiary. Upon your death, your named beneficiary will receive 100 percent of your reduced allowance. If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary s portion of your monthly allowance. Option 3: This Option pays you a reduced Unmodified Retirement Allowance during your lifetime; upon your death your named beneficiary receives 50 percent of your reduced allowance as a monthly continuance. Both your age at retirement and the age of your beneficiary are used to calculate the amount of your reduced allowance. If your beneficiary dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary s portion of your monthly allowance. Option 4: Perhaps the most flexible of the Retirement Options, Option 4 allows you to name one or more beneficiaries to receive a fixed percentage of the reduced Unmodified Retirement Allowance you receive during your lifetime. If you prefer, you may designate a set dollar amount, rather than a fixed percentage, as a monthly continuance for one or more of your beneficiaries. The reduction to your allowance is calculated using your age at retirement and the age of your beneficiaries. If one of your beneficiaries dies before you, the reduction to your retirement allowance remains in effect. You cannot name another beneficiary to receive the previous beneficiary s portion of your monthly allowance. *Person with Insurable Interest: According to California law, every person has an insurable interest in the life and health of: Himself [herself] Any person on whom he [or she] depends wholly or in part for education or support Any person under a legal obligation to him [her] for: payment of money property or services of which death or illness might delay or prevent the performance Any person upon whose life any estate or interest vested in him [her] depends

15 Required Documents You Must Submit When you apply for retirement, you must submit your completed: Retirement Benefit Estimate and Election to Retire form LACERA Beneficiary Designation form W-4P/DE-4P tax withholding form Depending on your personal circumstances and the Retirement Option you elect, you may be also required to submit the following additional documents: Your original certified marriage certificate or Certificate of Registered Domestic Partnership Your beneficiary s original certified birth certificate (for Unmodified+Plus or Options 2, 3, or 4) Your dependent child s original certified birth certificate if he/she will be covered under your LACERA-administered health insurance Changing Your Mind after Retirement If you wish to change your Retirement Option, you may do so before your first retirement check has been paid. A timely request must be made in writing. Thereafter, you will not be able to change your Retirement Option. Pension Advance Option The Pension Advance Option is designed to equalize a member s LACERA income prior to age 62 with the combined LACERA and Social Security income the member will receive after age 62. Under this option LACERA adds a percentage of the member s Social Security benefit (based on the estimate that appears on the member s Social Security Statement) to the member s LACERA retirement allowance until he or she reaches age 62. At 62, the full Social Security estimate is subtracted from the allowance. These figures appear on your Retirement Benefit Estimate and Election Form. You may apply for Social Security 90 days prior to your 62nd birthday. Important Note: To elect the Pension Advance Option, you must present your Social Security Statement when you retire. Due to differences between estimated and actual Social Security benefit amounts and other reductions that may apply under federal law, the combined income members receive under this option is often less than they received prior to age 62. Eligibility Requirements for Pension Advance Option Service retirement prior to age 62 Submit a Social Security statement of benefits to verify eligibility Elect one of the following: Unmodified Option Option 1 If you are considering the Pension Advance Option, we recommend you call to consult with a LACERA Retirement Benefits Specialist prior to making your decision. Consult with professional advisors regarding legal, tax, and/or medical matters; LACERA does not offer legal, tax, or medical advice.

16 PENSION ADVANCE OPTION $3,500 $3,000 + $500 = $3,500 BENEFIT $3,300 $3,000 $2,800 Pension Advance $2,800 + $500 = $3,300 Unmodified Option $2, AGE Unmodified Option = $3,000 Pension Advance before age 62 = $3,300 Pension Advance after age 62 = $2,800 Social Security at age 62 = $500

17 Year Substantial earnings Year Substantial earnings $ , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,325 Years of substantial earnings Percentage 30 or more 90 percent percent percent percent percent percent percent percent percent percent 20 or less 40 percent Source: Reflects latest figures available as of December 27, 2011.