1 mta defined benefit pension plan for employees of metro - north railroad

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MTA MTA Defined Benefit Pension Defined Benefit Pension

PlanPlanFor Employees of Metro - North RailroadFor Employees of Metro - North Railroad

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ContributionsContributions

Represented MNR Represented MNR mustmust contribute to contribute to the plan for a period of 10 years. the plan for a period of 10 years. Employees contribute 3% of gross Employees contribute 3% of gross wages.wages.

Managers may have to contribute to Managers may have to contribute to the DB Plan. There is a calculation done the DB Plan. There is a calculation done yearly by the agency based on salary. yearly by the agency based on salary.

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ContributionsContributions

Contributions are made on a pre-tax basis Contributions are made on a pre-tax basis which reduces your taxable salary and which reduces your taxable salary and increases your take home pay.increases your take home pay.

You may not take a out a loan or borrow You may not take a out a loan or borrow against your contributions.against your contributions.

If you terminate prior to vesting your If you terminate prior to vesting your contributions with interest will be returned contributions with interest will be returned to you.to you.

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Credited ServiceCredited Service A full year of credited service consists of A full year of credited service consists of

2,080 hours or 260 compensated days. 2,080 hours or 260 compensated days. ““95%” rule (on the payroll for a minimum 95%” rule (on the payroll for a minimum

of 1,976 hours in a year, employee will of 1,976 hours in a year, employee will receive one full year’s service credit). receive one full year’s service credit).

If employee is paid for less than 1,976 If employee is paid for less than 1,976 hours in a year, credit will be given for a hours in a year, credit will be given for a fraction of the year by dividing the fraction of the year by dividing the number of hours by 2,080.number of hours by 2,080.

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Credited ServiceCredited Service Employees are “vested” with 5 or Employees are “vested” with 5 or

more years of Credited Service.more years of Credited Service. Service credit is not given for leaves Service credit is not given for leaves

of absence without pay or for any of absence without pay or for any period of time during which the period of time during which the employee did not receive wages employee did not receive wages from MNR or LIRR (other than for from MNR or LIRR (other than for military service).military service).

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Summary

Total Credited Service

13.35

From Date To Date Reg. Hours Adj. Hours Total Hours YTD HoursCredited Service

Rounded Credited Service

1 9/1/2008 9/30/2008 0 0 0 1280 0.61 0.65

2 8/1/2008 8/31/2008 0 40 40 1280 0.61 0.61

3 7/1/2008 7/31/2008 48 120 168 1240 0.59 0.59

4 6/1/2008 6/30/2008 152 48 200 1072 0.51 0.51

5 5/1/2008 5/31/2008 144 32 176 872 0.41 0.41

6 4/1/2008 4/30/2008 176 0 176 696 0.33 0.33

7 3/1/2008 3/31/2008 136 32 168 520 0.25 0.25

8 2/1/2008 2/29/2008 160 8 168 352 0.16 0.16

9 1/1/2008 1/31/2008 176 8 184 184 0.08 0.08

10 12/1/2007 12/31/2007 168 0 168 1960 0.94 0.95

11 11/1/2007 11/30/2007 176 0 176 1792 0.86 0.86

12 10/1/2007 10/31/2007 184 0 184 1616 0.77 0.77

13 9/1/2007 9/30/2007 160 0 160 1432 0.68 0.68

14 8/1/2007 8/31/2007 104 80 184 1272 0.61 0.61

15 7/1/2007 7/31/2007 176 0 176 1088 0.52 0.52

16 6/1/2007 6/30/2007 168 0 168 912 0.43 0.43

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22 12/1/2006 12/31/2006 0 8 8 1756 0.84 0.85

23 11/1/2006 11/30/2006 20 72 92 1748 0.84 0.84

24 10/1/2006 10/31/2006 24 168 192 1656 0.79 0.79

25 9/1/2006 9/30/2006 72 0 72 1464 0.7 0.7

26 8/1/2006 8/31/2006 184 0 184 1392 0.66 0.66

27 7/1/2006 7/31/2006 160 8 168 1208 0.58 0.58

28 6/1/2006 6/30/2006 176 0 176 1040 0.5 0.5

29 5/1/2006 5/31/2006 176 8 184 864 0.41 0.41

30 4/1/2006 4/30/2006 160 0 160 680 0.32 0.32

17 5/1/2007 5/31/2007 136 8 144 744 0.35 0.35

18 4/1/2007 4/30/2007 120 8 128 600 0.28 0.28

19 3/1/2007 3/31/2007 152 8 160 472 0.22 0.22

20 2/1/2007 2/28/2007 136 0 136 312 0.15 0.15

21 1/1/2007 1/31/2007 152 24 176 176 0.08 0.08

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MilitaryMilitary Service Service

Employees may be eligible to receive service Employees may be eligible to receive service credit for time served during specific military credit for time served during specific military conflicts :conflicts :• Must have been honorably discharged (DD-214)Must have been honorably discharged (DD-214)• Must have at least five years of credited service in Must have at least five years of credited service in

the Retirement System at the time you apply for the Retirement System at the time you apply for your military service credit.your military service credit.

• Must not have received credit for this service in Must not have received credit for this service in any other public retirement system in New York any other public retirement system in New York City or New York State. City or New York State.

• Must apply to purchase credit for military service Must apply to purchase credit for military service prior to retirement.prior to retirement.

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Military Service CreditMilitary Service Credit The cost to purchase military service The cost to purchase military service

is 3% of your salary for the 12 months is 3% of your salary for the 12 months preceding your application for each preceding your application for each year of eligible service (up to 3).year of eligible service (up to 3).

Methods to purchase military service:Methods to purchase military service:

• Direct rollover from 457 PlanDirect rollover from 457 Plan or 401k or 401k PlanPlan

• Lump sum paymentLump sum payment• After-tax payroll deductions for up to 3 After-tax payroll deductions for up to 3

yearsyears

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Prior Credited ServicePrior Credited Service Employees must have at least 2 years of Employees must have at least 2 years of

credited service in the MTA Defined credited service in the MTA Defined Benefit Pension Plan to receive prior non-Benefit Pension Plan to receive prior non-vested service credit and at least 3 years vested service credit and at least 3 years to receive prior vested service credit. to receive prior vested service credit.

In some cases, you will be able to In some cases, you will be able to purchase purchase non-vested credited servicenon-vested credited service and/or receive credit for and/or receive credit for vested servicevested service from another retirement system or an from another retirement system or an affiliated MTA agency, which can be used affiliated MTA agency, which can be used to increase credited service.to increase credited service.

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Prior Credited ServicePrior Credited Service The vested benefit received from the The vested benefit received from the

other retirement plan will be deducted other retirement plan will be deducted from the MTA Defined Plan benefit at the from the MTA Defined Plan benefit at the time you retire. (Note, benefit time you retire. (Note, benefit commencement date must be coordinated commencement date must be coordinated with other retirement system.with other retirement system.

If you think that you may have applicable If you think that you may have applicable prior service, you must complete an prior service, you must complete an application and submit it with back up application and submit it with back up documentation to the MTA Pension Officedocumentation to the MTA Pension Office..

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Eligible Retirement SystemsEligible Retirement Systems

Any MTA AgencyAny MTA Agency New York State Retirement Systems:New York State Retirement Systems:

NYSLERS, Police and Fire NYSLERS, Police and Fire New York City Retirement Systems: New York City Retirement Systems:

NYCERS, NYCTRS, NYCBERS, Police NYCERS, NYCTRS, NYCBERS, Police and Fireand Fire

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Retirement EligibilityRetirement Eligibility

MNR employees are eligible to receive MNR employees are eligible to receive an unreduced pension when they satisfy an unreduced pension when they satisfy one of the following:one of the following:

• Age 60 and 5 or more years of DB Age 60 and 5 or more years of DB Plan credited service Plan credited service

• Age 55 and at least 30 years of DB Age 55 and at least 30 years of DB Plan credited servicePlan credited service

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Early Retirement EligibilityEarly Retirement Eligibility

Employees with 10 or more years of credited service, Employees with 10 or more years of credited service, may apply for a reduced retirement benefit between may apply for a reduced retirement benefit between the ages of 55 and 60. The reduction is permanent, the ages of 55 and 60. The reduction is permanent, and the percent of benefit payable upon early and the percent of benefit payable upon early retirement depends upon your age:retirement depends upon your age:

Age atAge at Percent of Percent of Normal Normal RetirementRetirement Retirement PayableRetirement Payable

60 100% 60 100% 59 97%59 97% 58 94%58 94% 57 91%57 91% 56 88%56 88% 55 85%55 85%

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Term Vested Plan members who separate from active service Plan members who separate from active service

with 10 or more years of credited service, may with 10 or more years of credited service, may apply for a reduced retirement benefit between the apply for a reduced retirement benefit between the ages of 55 and 62. The reduction is permanent, ages of 55 and 62. The reduction is permanent, and the percent of benefit payable upon benefit and the percent of benefit payable upon benefit commencement depends upon your age:commencement depends upon your age:

Age atAge at Percent of Normal Percent of Normal

CommencementCommencement Retirement PayableRetirement Payable 62 100%62 100% 61 94%61 94% 60 88%60 88% 59 85%59 85% 58 82%58 82% 57 79%57 79% 56 76%56 76% 55 73%55 73%

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Final Average Final Average CompensationCompensation

Final average salary is the average of the Final average salary is the average of the highest three consecutive years in the 10 highest three consecutive years in the 10 years prior to retirement. years prior to retirement.

Payment for unused vacation not to Payment for unused vacation not to exceed 30 days will be included in your exceed 30 days will be included in your FAS if last three years’ earnings are used FAS if last three years’ earnings are used to determine FAS. to determine FAS.

Earnings in any year included in the period Earnings in any year included in the period cannot exceed the average of the previous cannot exceed the average of the previous two years by more than 10 percent. Any two years by more than 10 percent. Any amount in excess of this will be excluded.amount in excess of this will be excluded.

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Plan Benefit FormulaPlan Benefit Formula Less than 20 years of credited serviceLess than 20 years of credited service

1.67% X Credited Service X FAS1.67% X Credited Service X FAS 20 up to 30 years of credited service20 up to 30 years of credited service

2.0% X Credited Service X FAS2.0% X Credited Service X FAS More than 30 years of credited serviceMore than 30 years of credited service

2.0% X 30 years of credited service X 2.0% X 30 years of credited service X FASFAS

plusplus

1.5% X credited service for years >30 1.5% X credited service for years >30 X FASX FAS

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Plan Benefit FormulaPlan Benefit Formula Number of YearsNumber of Years Benefits as a Benefits as a Of Credited ServiceOf Credited Service Percentage of your Percentage of your

FASFAS 1818 = 30% = 30% 1919 = 32% = 32% 2020 = 40% = 40% 2222 = 44% = 44% 2525 = 50% = 50% 3030 = 60% = 60% 3232 = 63% = 63% 3535 = 67½% = 67½%

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Plan Benefit FormulaPlan Benefit Formula MTA DB Plan Pension will be offset by MTA DB Plan Pension will be offset by

100% of Railroad Retirement Tier II 100% of Railroad Retirement Tier II benefit earned while an employee of benefit earned while an employee of MNRMNR

The Tier II Offset will be effective The Tier II Offset will be effective when the RRB Annuity becomes when the RRB Annuity becomes payable (regardless of age).payable (regardless of age).

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Benefit CalculationBenefit Calculation 33 years of credited service at age 58 33 years of credited service at age 58

RetirementRetirement

Benefit for the period from age 58 to age 60 Benefit for the period from age 58 to age 60 $90,000 - $90,000 - Final Average SalaryFinal Average Salary

x 2% - x 2% - Service Fraction up to 30 yearsService Fraction up to 30 years

x 30 x 30 - - Years of Credited Service up to 30 yearsYears of Credited Service up to 30 years

$54,000 - $54,000 - Annual BenefitAnnual Benefit PlusPlus$90,000 - $90,000 - Final Average SalaryFinal Average Salary

x 1.5% - x 1.5% - Service Fraction over 30 YearsService Fraction over 30 Years

x 3 x 3 - - Years of Credited Service greater than 30Years of Credited Service greater than 30 yearsyears

$ 4,050 - $ 4,050 - Annual BenefitAnnual Benefit

$58,050 - $58,050 - Total Annual Benefit Before Tier II OffsetTotal Annual Benefit Before Tier II Offset

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Benefit CalculationBenefit Calculation

33 years of credited service at age 58 33 years of credited service at age 58 RetirementRetirement

Benefit at age 60 when Tier II is payableBenefit at age 60 when Tier II is payable$58,050 - Annual Benefit$58,050 - Annual Benefit

- 15,000- 15,000 - Projected Tier II (MNR Service Only) - Projected Tier II (MNR Service Only)

$43,050 - Annual MTA Benefit After Tier II Offset$43,050 - Annual MTA Benefit After Tier II Offset

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Benefit for the period from age 58 to age 62Benefit for the period from age 58 to age 62

$90,000 - Final Average Salary$90,000 - Final Average Salaryx 2% - Service Fraction up to 30 yearsx 2% - Service Fraction up to 30 years

x 20 x 20 - Years of Credited Service up to 30 - Years of Credited Service up to 30 yearsyears

$36,000 - Annual Benefit$36,000 - Annual Benefit

x .94 x .94 - Early Retirement Factor - Early Retirement Factor

$33,840 - Annual MTA Benefit$33,840 - Annual MTA Benefit

Before Tier II OffsetBefore Tier II Offset

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Benefit at age 62 when Tier II is Benefit at age 62 when Tier II is payablepayable


- 6,400- 6,400 - Projected Tier II (MNR/LIRR - Projected Tier II (MNR/LIRR Service)Service)

$27,440 - Annual MTA Benefit After Tier II $27,440 - Annual MTA Benefit After Tier II OffsetOffset

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Benefit CalculationBenefit Calculation Less than 20 years of credited service at Less than 20 years of credited service at

age 58age 58

Benefit at age 58Benefit at age 58

$90,000 - Final Average Salary$90,000 - Final Average Salary

x 1.67% - Service fraction up to 20 Yearsx 1.67% - Service fraction up to 20 Years

x 19.0 x 19.0 - Years of Credited Service with MNR- Years of Credited Service with MNR


x .94 x .94 - Early Retirement Factor - Early Retirement Factor

$26,843 - Annual MTA Benefit$26,843 - Annual MTA Benefit

Before Tier II OffsetBefore Tier II Offset

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Benefit CalculationBenefit Calculation

Less than 20 years of credited service at Less than 20 years of credited service at age 58 age 58

Benefit at age 62 when Tier II is Benefit at age 62 when Tier II is payablepayable

$26,843 - Annual MTA Benefit $26,843 - Annual MTA Benefit

- 6,100 - 6,100 - Projected Tier II (MNR Service Only)- Projected Tier II (MNR Service Only)

$20,743 - Annual MTA Benefit After Tier II $20,743 - Annual MTA Benefit After Tier II OffsetOffset

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Distribution OptionsDistribution Options

Life AnnuityLife Annuity - Under this option, you will receive - Under this option, you will receive a monthly benefit for your lifetime. No a monthly benefit for your lifetime. No payment will be made after your death. payment will be made after your death.

100% Joint and Survivor Annuity100% Joint and Survivor Annuity - Under this - Under this option, you will receive a reduced allowance option, you will receive a reduced allowance for your lifetime. Upon your death, your joint for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal annuitant will receive a monthly benefit equal to 100% of your benefit for the remainder of to 100% of your benefit for the remainder of his/her lifetime.his/her lifetime.

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Distribution OptionsDistribution Options75% Joint and Survivor Annuity – 75% Joint and Survivor Annuity – You will receive a You will receive a

reduced allowance for your lifetime. Upon your death, reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to your joint annuitant will receive a monthly benefit equal to 75% of your benefit for the remainder of his/her lifetime.75% of your benefit for the remainder of his/her lifetime.

50% Joint and Survivor Annuity - 50% Joint and Survivor Annuity - You will receive a You will receive a reduced allowance for your lifetime. Upon your death, reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to your joint annuitant will receive a monthly benefit equal to 50% of your benefit for the remainder of her/his lifetime.50% of your benefit for the remainder of her/his lifetime.

25% Joint and Survivor Annuity - 25% Joint and Survivor Annuity - You will receive a You will receive a reduced allowance for your lifetime. Upon your death, reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to your joint annuitant will receive a monthly benefit equal to 25% of your benefit for the remainder of her/his lifetime.25% of your benefit for the remainder of her/his lifetime.

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Distribution OptionsDistribution Options

Five Year Certain OptionFive Year Certain Option - You receive a - You receive a reduced pension paid for your lifetime. If you reduced pension paid for your lifetime. If you die within 5 years after your Benefit die within 5 years after your Benefit Commencement Date (BCD), your pension Commencement Date (BCD), your pension continues to be paid to your beneficiary or continues to be paid to your beneficiary or beneficiaries until the 5th anniversary of your beneficiaries until the 5th anniversary of your BCD, on which date pension payments cease.BCD, on which date pension payments cease.

Ten Year Certain Option – Ten Year Certain Option – You receive a You receive a reduced pension paid for your lifetime. If you reduced pension paid for your lifetime. If you die within 10 years after your BCD, your die within 10 years after your BCD, your pension continues to be paid to your pension continues to be paid to your beneficiary or beneficiaries until the 10th beneficiary or beneficiaries until the 10th anniversary of your BCD, on which date anniversary of your BCD, on which date pension payments cease.pension payments cease.

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Pension PaymentsPension Payments

Pension payments may be EFT—that Pension payments may be EFT—that is, your monthly pension benefit can is, your monthly pension benefit can be electronically deposited into your be electronically deposited into your bank account.bank account.

Annual audit of pensioner payroll is Annual audit of pensioner payroll is conducted. Affidavits will be sent and conducted. Affidavits will be sent and must be completed, notarized, and must be completed, notarized, and returned to confirm that pensioner is returned to confirm that pensioner is receiving monthly pension paymentsreceiving monthly pension payments

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Ordinary Death Benefit Ordinary Death Benefit (Active Employees)(Active Employees)

One year < than two years = 1 X SalaryOne year < than two years = 1 X Salary Two years < than three years = 2 X SalaryTwo years < than three years = 2 X Salary Three or more years of service = 3 X SalaryThree or more years of service = 3 X Salary After age 60, the death benefit is reduced by 4% per year After age 60, the death benefit is reduced by 4% per year

until age 70: until age 70: AgeAge Amount of Benefit Amount of Benefit

otherwise payableotherwise payable 61 96%61 96%

62 92%62 92% 63 88%63 88% 64 84%64 84% 65 80% 65 80% 66 76%66 76% 67 72%67 72% 68 68%68 68% 69 64%69 64% 70 or older 60% 70 or older 60%

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Accidental Death Benefit Accidental Death Benefit (Active Employees)(Active Employees)

For death resulting from an on-the-job injury - AFor death resulting from an on-the-job injury - A

monthly benefit paid equal to 50% of monthly benefit paid equal to 50% of employee’s last 12 months of earnings employee’s last 12 months of earnings

divided by 12divided by 12

OrOr

One-time lump sum payment, depending on One-time lump sum payment, depending on employee’s credited service, of 1, 2, or 3 employee’s credited service, of 1, 2, or 3

times employee’s last 12 months of earnings.times employee’s last 12 months of earnings.

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Retiree Death Benefit Retiree Death Benefit

First Year - 50% of the pre-retirement amountFirst Year - 50% of the pre-retirement amount

Second Year - 25% of the pre-retirement Second Year - 25% of the pre-retirement amountamount

Third Year and thereafter - 10% of the benefit Third Year and thereafter - 10% of the benefit payable at age 60 or at retirement if prior to payable at age 60 or at retirement if prior to age 60.age 60.

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Death Benefit - VestedDeath Benefit - Vested If you leave the railroad with 10 or more years of credited If you leave the railroad with 10 or more years of credited

pension service, you will be entitled to a “Vested Death pension service, you will be entitled to a “Vested Death Benefit.”Benefit.”

The Vested Death Benefit will be 50% of three times your The Vested Death Benefit will be 50% of three times your annual salary at the time you terminated your employment.annual salary at the time you terminated your employment.

The Vested Death Benefit will remain in effect until the vested The Vested Death Benefit will remain in effect until the vested participant starts to receive a monthly benefit at age 62 and at participant starts to receive a monthly benefit at age 62 and at that time the retiree death benefit would be applicable.that time the retiree death benefit would be applicable.

If a vested participant dies prior to being eligible for a monthly If a vested participant dies prior to being eligible for a monthly benefit, the beneficiary will only receive a lump sum benefit.benefit, the beneficiary will only receive a lump sum benefit.

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The Plan provides a level of protection should you The Plan provides a level of protection should you become permanently disabled. You are eligible to become permanently disabled. You are eligible to receive a disability retirement at any age if you receive a disability retirement at any age if you meet both of the following conditions:meet both of the following conditions: You have 10 or more years of credited service. You have 10 or more years of credited service.

There is no minimum period of service if the There is no minimum period of service if the disability is the result of a service related disability is the result of a service related accident.accident.

The Medical Board finds you are permanently The Medical Board finds you are permanently incapacitated and you can no longer perform the incapacitated and you can no longer perform the duties of your job.duties of your job.

Disability RetirementDisability Retirement

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Disability RetirementDisability RetirementIf your application for disability benefits is If your application for disability benefits is approved:approved: And if you have 20 or more years of credited And if you have 20 or more years of credited

service, your benefit will be calculated as a service, your benefit will be calculated as a normal service retirement (2% of final average normal service retirement (2% of final average salary).salary).

If you retire with less than 20 years of credited If you retire with less than 20 years of credited service, your benefit will be equal to one-third service, your benefit will be equal to one-third of your final average compensation.of your final average compensation.

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DisabilityDisability Retirement Retirement

In the event your ordinary disability retirement In the event your ordinary disability retirement application is denied by the MTA DB Plan Medical application is denied by the MTA DB Plan Medical Board and you have attained age 55, you may file Board and you have attained age 55, you may file for a permanently reduced early retirement for a permanently reduced early retirement benefit.benefit.

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This presentation provides only a brief This presentation provides only a brief summary of certain information regarding summary of certain information regarding the MTA Defined Benefit Pension Plan. In the MTA Defined Benefit Pension Plan. In

the case of any conflict between this the case of any conflict between this presentation and the documents presentation and the documents governing the MTA DB Plan, the governing the MTA DB Plan, the

documents shall govern.documents shall govern.

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Thank you for taking the time to attend Thank you for taking the time to attend this presentation. We at the MTA DB Plan this presentation. We at the MTA DB Plan

hope that you were provided with new hope that you were provided with new insight into your pension plan. Our insight into your pension plan. Our

commitment is to ensure that all MTA DB commitment is to ensure that all MTA DB Plan participants have the information Plan participants have the information required to make the best decision on required to make the best decision on

financial matters that will have a lifetime financial matters that will have a lifetime impact.impact.

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For additional information:For additional information:MTA Pension OfficeMTA Pension Office

212-437-0730 212-437-0730

[email protected]

Fax 212-437-0920 Fax 212-437-0920

mailto:[email protected]

1 mta defined benefit pension plan for employees of metro - north railroad

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