Co-op Retirement Plan Basics 11/01/2006

Slideshow Transcript

1. Slide 1: CO-OP RETIREMENT PLAN Retirement Security since 1946
2. Slide 2: It’s a pleasure to meet with the employees of Kanza Cooperative Assn. Greg Runyan Senior Pension Administrator United Benefits Group
3. Slide 3: Retirement Plans….. ial n: oc ty: pla S ri rst 75 cu Fi 8 Se 935 1 1 …..are a great idea !
4. Slide 4: You and I are the fortunate ones, because…. Only half of all working Americans are covered by a private pension plan
5. Slide 5: WHAT IS THE CO-OP RETIREMENT PLAN? A cooperative, multiple-employer, defined-benefit, contributory pension plan sponsored by United Benefits Group. Collectively maintained by 440 local cooperatives; 35,000 participants; $1.1 billion Created in 1946 by Farmland Ind.; became separate plan in 1986; severed ties with Farmland in 2002 Governed by a five-person Retirement Committee, all co-op managers
6. Slide 6: CO-OP RETIREMENT PLAN – PARTICIPATING EMPLOYERS
7. Slide 7: What is a DEFINED- BENEFIT PLAN? •Main idea: Income Replacement •Your benefit is defined by a formula •You receive a lifetime monthly benefit •Employees make no investment decisions •No risk to the employee, because your benefit is not dependent on investment performance •Backed by PBGC Insurance
8. Slide 8: SINCE WHEN? KANZA COOPERATIVE ASSN. January 1, 1972 PRATT EQUITY DILLWYN ZENITH CO-OP GRAIN CO. EXCHANGE GRAIN & May 1, 1966 January 1, 1966 SUPPLY April 1, 1979 STAFFORD CO-OP April 1, 1982
9. Slide 9: HOW DO YOU EARN BENEFITS IN THIS PLAN? 1. Time 2. Wages 3. Annual Accrual Rate
10. Slide 10: TIME: Creditable Service You earn one month of Creditable Service for each month you participate in the Plan and make contributions.
11. Slide 11: WAGES: Final Average Wage Average of the highest 4 annual wages from your last 10 years of employment. If you have less than 10 annual wages….
12. Slide 12: ANNUAL ACCRUAL RATE: How much of your FAW will be replaced by each year of Creditable Service? 1.75% - For all Creditable Service prior to October 1, 2003 1.25% - For all Creditable Service after October 1, 2003 Will it be 1.25% forever?
13. Slide 13: VESTING: (Ownership) You are always fully vested in your own personal contributions and interest. When you become “vested”, your entire benefit belongs to you. Until 5 years……..0% vested 5 years……………100% vested
14. Slide 14: HOW DO YOU QUALIFY FOR RETIREMENT BENEFITS? 1. Must be vested 2. Must terminate employment after reaching age 55 Or, you must have 85 points.
15. Slide 15: EARLY RETIREMENT REDUCTION SCHEDULE: AGE % OF ACCR. BENEFIT PAID 55………………………….72% 56………………………….76% 57………………………….80% 58………………………….84% 59………………………….88% 60………………………….92% 61………………………….96% 62………………………..100%
16. Slide 16: RULE OF If your age plus Creditable Service equals 85, you can retire immediately with 100% of your Accrued Benefit.
17. Slide 17: RETIREMENT CO-OP RETIREMENT PLAN PAYMENT Month 00 Plan Participant 1,000.00 One thousand and 00/100------------ OPTIONS Trustee Bank 1. Individual Member Benefit 2. 10-year Guaranteed Benefit 3. Level Income Plan 4. 50% Joint Annuity 5. 66.6% Joint Annuity 6. 100% Joint Annuity
18. Slide 18: WHAT HAPPENS IF I DON’T MAKE IT TO RETIREMENT AGE? 3 Things Could Happen: 1. Terminate employment before age 55. 2. Become totally disabled. 3. Death.
19. Slide 19: EARLY DEFERRED ANNUITY REDUCTION SCHEDULE: Age % of Accr. Benefit Paid 55…………………37.9% 72% 56…………………41.4% 76% 57…………………45.1% 80% 58…………………54.5% 84% 59…………………54.5% 88% 60…………………60.0% 92% 61…………………66.1% 96% 62…………………73.0% 100% 63…………………80.7% 100% 64…………………89.3% 100% 65……………….100.0% 100%
20. Slide 20: WHAT HAPPENS IF I DON’T MAKE IT TO RETIREMENT AGE? 3 Things Could Happen: 1. Terminate employment before age 55. 2. Become totally disabled. 3. Death.
21. Slide 21: HOW IS THE PLAN DOING?