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BRLFLIER
Thinking about Retirement ?
The purpose of this article is to highlight quirks in the current Heritage Boeing retirement plan that can affect your retirement pay by perhaps $100 per year.
Are you within a few years of retirement? Do you plan to retire this year ? Are you trying to compare the current plan to the proposed changes? The following information may help you to understand the current plan, and prompt you to ask questions about the new plan.
This information is from Boeing plan documents, and my own and others requests for recalculation of pension benefits. Details can be found on my web site at http://www.halcyon.com/dshuper/ Check the links labeled DENIAL APPEAL FINAL ANSWER
Regardless of your age, Boeing is required to answer one personal written request annually. The rules and regulations are complex. To get reliable answers that apply to your situation, you must write the company, ask the right questions, and request the right documents. Referenced documents are listed at the end of this article.
There are three Plan documents of interest. A 1980 Memo [3] describes a Boeing administrative decision about sick leave hours. The Summary Plan Description (SPD) [1] is the booklet given to all eligible employees, most recently in November 1997. The Plan Document (PD )[2] and Memo [3] can be obtained by specific request. Simply requesting all pertinent plan documents will not get you the memo. (SPEEA does not have a company furnished copy of the 1980 memo ).
Here is an example for Howard Hourly or Edna Exempt. Both have Final Average Earnings (F.A.E.) of $50,000 [4], and a Pension of $22,500 based on exactly 30.000 years of credited service (CS ) on their planned retirement date. Both Howard and Edna have 170 hours of unused vacation time ( includes hours accrued but unawarded ), and 120 hours of unreserved Sick Leave. Boeing calculates to the nearest one thousandth of a year. See if you can derive the following explanations from your SPD [1].
A. What additional CS do they get for unused Sick Leave hours?
Although both will be paid for some of their unused sick leave hours, NO credited service is given for any paid or unpaid sick leave hours. This appears to be in conflict with the PD [2]( para. 1.28(b) However, see Memo [3]. A further convoluted explanation is in the FINAL ANSWER link on my website.
B. Is October, November or December a good month to retire?
Generally, no. Both Howard and Edna will get NO further credited service when their employment hours plus unused vacation hours equals 2000 hours in the calendar year they retire [2]( para 1.19 ). Howard counts all paid hours including overtime. With no overtime in the year of retirement, Howard gets no CS for work in December. If Howard works enough overtime in the calendar year of his retirement, he can reach the 2000 hour limit in mid- October. Edna does NOT get credit for overtime. Edna counts time as 45 hours per week or any portion of a week. Edna will not get any additional credited service by working past the middle of October.
C. Retire at beginning or end of the month? Monday or Friday?
If either works at least one hour in a calendar month, the whole month is included in the F. A. E. calculation and worth about $37/year [2](para 1.27). If Edna retires on a Friday, she gets an extra week of credited service, worth about $17/year [2](para 1.28 h). Note: Vacation time paid after the retirement date does not change F.A.E. calculations.
D. What additional CS do they get for unused (includes accrued but unawarded )vacation time?
Except as described in B above, ALL unused vacation time can count as additional credited service. For 170 hours of vacation, Edna gets 0.11250 years CS, about $84/year. Howard only gets .08000 years CS, about $64/year. Why? For Edna, vacation hours are converted to weeks at 40 hours/week, rounded up, and reconverted to hours at the rate of 45 hours/week. For everybody, partial year credit is equal to hours divided by 2000.
A judicious choice of retirement dates can make a difference of $101 per year for Howard, and $138 for Edna. Are these small amounts important?
The average retirement pay in 1996 for all 62,194 Boeing retirees and survivors was $10,694 per year. The average retirement pay in 1996 for 16,429 retirees between the ages of 55 and 64 was $16,672. Compare this to 7000 retires over age 79 who currently receive an average $5000/ year.
Since 1989, Boeing has not increased pensions. The average annual CPI increase for the last 20 years has been 5.1%, meaning a decrease of 50% in relative value in 14 years. Since 1913, the average annual CPI increase has been 3.5%, equivalent to a 50% decrease every 20 years.
Please support efforts for "COLA THIS CENTURY" , you will be helping yourselves.
I'll try to answer questions or provide further details via e-mail.
Donald W Shuper dshuper@halcyon.com.
References:
[1] SPD 1996-97 version. Almost identical to the previous 1993 version.
[2] PD Plan Document . The latest version is 56 pages,effective Jan 1, 1996.File 001_BOEW22A_96.doc.
There is a significant change in Hour of Service definitions and limits in this version compared to the previous 1994 version.
[3] Memo January 8, 1980. 1-9503-4-5670 S. A. Smith to Phil Corwin Subject: Unreserved Sick Leave Hours Paid to Eligible Employees at Retirement.
(Copy available on my web site)
[4] FAE baseline Pension = 0.15 times 30.000 CS times F.A.E
Months Annualpay Product
12 47623 571478
18 49057 883028
12 50578 606935
18 52142 938559
Total F.A.E.
60 50000 3000000
Pension = 22500
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