If an Employee wishes to retire before meeting the age requirement for the Regular Pension (see page 23), he or she may retire on an Early Retirement Pension as early as age 55 if he or she meets the service requirements. Monthly payments for early retirement will be lower depending on the Employee’s age when he or she retires and the amount of Pension Credit he or she has at that time.

Eligibility

Upon application and retirement, an Employee or former Employee will be eligible for an Early Retirement Pension if he or she meets all of the following requirements:

  1. He or she is at least age 55.
  1. He or she has at least 10 years of Pension Credit without a Permanent Break in Covered Employment, or, if he or she has at least one Hour for Benefit Accrual on or after January 1, 1990, he or she has at least 5 years of Pension Credit.
  1. He or she has earned at least one year of Future Service Credit

With an Early Retirement Pension, the Employee will receive less than 100% of the Regular Pension payment because he or she is retiring at an earlier age and, therefore, it is likely he or she will be paid a pension for a longer period of time.

The amount of the reduction depends on the Employee’s age when his or her pension becomes effective and, for Pensions that became effective before January 1, 1999, on how much Pension Credit the Employee has.

For Early Retirement Pensions that become effective on and after January 1, 2015, the reduction is ½ of 1% for each month by which the Employee is younger than Normal Retirement Age when the Pension becomes effective. However in no event will the benefit be less than the accrued benefit on or before December 31, 2014 reduced by ½ of 1% for each month by which the Employee is younger than age 62 when the Pension becomes effective.

For Early Retirement Pensions that become effective on or after January 1, 1999, but before January 1, 2015, the reduction is equal to 1/2 of 1 % for each month by which the Employee is younger than age 62 when the Pension became effective. All Pension Credits are reduced in the same manner, unlike the method used for pensions effective on and after January 1, 2015.

For Early Retirement Pensions that become effective before January 1, 1999, the reduction was determined as follows:

  • If the Employee didnot have an Hour for Benefit Accrual on or after January 1, 1994, then the reduction was equal to ½ of 1% for each month by which he or she was younger than age 65 when the Pension became effective.
  • If the Employeedid have an Hour for Benefit Accrual on or after January 1, 1994, and had fewer than 30 years of Pension Credit, then the reduction was equal to ½ of 1% for each month by which he or she was younger than age 63 when the Pension became effective.
  • If the Employeedid have an Hour for Benefit Accrual on or after January 1, 1994, and had 30 or more years of Pension Credit, then the reduction was equal to ½ of 1 % for each month by which he or she was younger than age 62 when the Pension became effective.

To determine what the monthly payments will be with an Early Retirement Pension, the first step is to figure out what the amount would be if the Employee were age 65 and retiring on a Regular Pension with the same amount of credit he or she has now.

The second step is to determine the percentage adjustment to the Regular Pension amount, based upon the Employee’s age at retirement and the other requirements explained above.

To determine what the monthly payment will be, multiply the amount he or she would receive as Regular Pension by the percentage that corresponds to his or her age and service at the time his or her pension becomes effective.

For example: An unmarried Employee is retiring effective January 1, 2016. The value of his or her benefit accrued before January 1, 2015 is $200, and he or she accrued $50 in 2015. He or she would be eligible for a Regular Pension of $250 per month at age 65, but he or she decides to retire at age 59. At age 59 years and zero months, he or she will be 72 months younger than age 65 (his or her Normal Retirement Date). Therefore the applicable reduction is:

 72 months x .5% per month = 36%

100% – 36% = 64%

The monthly amount of the Early Retirement Pension will be 64% of the monthly amount that would be payable if the retiree had attained age 65. Multiplying $250.00 (the monthly benefit at 65) by 64% yields a product of $160.00.

However, remember, that the Participant cannot receive less than the benefit accrued before January 1, 2015 reduced from age 62. Here, is the applicable reduction:

 36 months x .5% per month = 18%

100% – 18% = 82%

The minimum benefit will be 82% of the monthly amount that would be payable if the retiree had attained age 65 for benefits accrued before January 1, 2015 ($200). Multiplying $200 by 82% yields a product of $164. Since $160 is smaller than $164, the lifetime monthly pension payment for this Early Retirement Pensioner is $164.

If you have any questions about how the age reduction was (or will be) calculated for an Early Retirement Pension, you should contact the Trust Fund Office.