NHRMC recently distributed pension statements to vested employees, and some have expressed questions and concerns over the value that is represented in the statement.
Employees may see lower values than in previous years because we are using a different methodology this year by showing the current value vs. projected values.
As such, the current statement gave the participant’s benefit as of 08/01/2019, as well as the life annuity and lump sum amounts if they left on 08/01/2019 but deferred benefits until either age 55 or 62 or 65.
Previous statements may have listed higher amounts because they included projections around what the employee would receive if the participant remained employed by NHRMC until the current pension plan until retirement dates of ages 55, 62 and 65. This projection meant that the participant had earned more credited years of service, an important figure in calculating your benefit.
- Let’s look at a 60-year-old full-time employee with 12 years of service. Their current estimate reflects what their benefit would be and at age 62 and 65 with that same 12 years of credited service. This 2019 statement shows money that has already been earned.
- Prior years’ statements would show a pension value with 12 years of credited service at age 60, then would have assumed they worked 2 more years giving them 14 years of credited service at age 62, and then added another 3 years of service giving them 17 years of credits service at age 65. This dramatically changes the benefit amount, but is only correct if they work those additional years at their current FTE and rate. These were assumptions to give employees estimates of what their pension benefit might be if they continued to work at their current level until ages 62 and 65.
Nothing has changed about our pension plan. The money our plan participants have earned is secure.
Please ask your manager or call Human Resources if you need clarification about the pension program at NHRMC.
Employees who plan to retire within the next two years are encouraged to make a personal pension appointment so they can make the very best decision to maximize their benefits. Call Katie Marino at 667-5330 to schedule an appointment.