Pbgc priority levels
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PBGC Priority Levels PowerPoint PPT Presentation


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PBGC Priority Levels. Priority 1 – Mandatory Contributions – Not applicable here Priority 2 – Voluntary Contributions – Not applicable here Priority 3 – Anyone who is or could have retired within the last 3 years (would be anyone over age 53 since 50 is earliest retirement age)

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PBGC Priority Levels

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Pbgc priority levels

PBGC Priority Levels

  • Priority 1 – Mandatory Contributions – Not applicable here

  • Priority 2 – Voluntary Contributions – Not applicable here

  • Priority 3 – Anyone who is or could have retired within the last 3 years (would be anyone over age 53 since 50 is earliest retirement age)

  • Priority 4 – Anyone under age 53.

  • Priority 5 & 6 are any other benefits due after 1 – 4 are paid

P1 and P2

P3

P4

P5 and P6


Plan termination examples

Current Plan Accrual

Pilot A – age 59 (1/1/03)

Service – 25 years (60% of FAE – 2.4% x 25)

FAE $15,000 mo.

Accrued Benefit: $9,000 per month at age 60

Plan Termination Accrual at date of plan termination (assuming 1/1/03)

Age 56 (59 – 3 years)

Service 22 years (25 – 3)= 52.8% of FAE

FAE at 1/1/00 (3 years prior) $12,000

Priority 3 Benefit - $5,575 per month no matter when it’s taken

Plan Termination Examples


Plan termination examples1

Current Plan Accrual

Pilot B – age 57 (1/1/03)

Service – 20 years (48% of FAE – 2.4% x 20)

FAE $15,000 mo.

Accrued Benefit: $7,200 per month at age 60

Plan Termination Accrual at date of plan termination (assuming 1/1/03)

Age 54 (57 – 3 years)

Service 17 years (20 – 3)= 40.8% of FAE

FAE at 1/1/00 (3 years prior) $12,000

Priority 3 Benefit - $3,867.84 per month no matter when it’s taken

Plan Termination Examples


Plan termination examples2

Current Plan Accrual

Pilot C – age 55 (1/1/03)

Service – 17 years (40.8% of FAE – 2.4% x 17)

FAE $15,000 mo.

Accrued Benefit: $6,120 per month at age 60

Plan Termination Accrual at date of plan termination (assuming 1/1/03)

Age 52 (55 – 3 years)

Service 14 years (17 – 3)= 33.5% of FAE

FAE at 1/1/00 (3 years prior) $12,000

Priority 3 Benefit - $2,693 per month no matter when it’s taken.

Plan Termination Examples


Plan termination examples3

Current Plan Accrual

Pilot D – age 50 (1/1/03)

Service – 15 years (36% of FAE – 2.4% x 17)

FAE $15,000 mo.

Accrued Benefit: $5,400 per month at age 60

Plan Termination Accrual at date of plan termination (assuming 1/1/03)

Age 47 (50 – 3 years)

Service 12 years (15 – 3)= 28.8% of FAE

FAE at 1/1/00 (3 years prior) $12,000 ($3,456 accrued)

Priority 4 Benefit - $2,382 per month at age 60, $1,649 at 55, $1,282 at 50 – you decide when you take it.

Plan Termination Examples


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