Pratt & Whitney: Major Pension Improvements


Pratt & Whitney



CAW/Pratt & Whitney Canada Report
Bargaining Report
December 1998

Major Pension Improvements

One Basic Pension Level

The salary scale used to determine the Basic pension benefit rate has been eliminated.

$45 Basic Pension Benefit

The basic pension benefit level increases by a total of $7 per month per year of credited service over the life of the agreement: $4.50 effective March 1999, $1.50 effective March 2000 and $1.00 effective March 2001.

Current Basic Pension benefit: $36, $37, $38

Basic Benefit:
Effective March 1999 $42.50 regardless of earnings
Effective March 2000 $44.00
Effective March 2001 $45.00

Special Early Retirement Program

Your committee has been successful in negotiating two Special Early Retirement windows to encourage older, more senior members to retire. One special early retirement window will be offered in 1999 and another in the year 2000.

Age 58 Eligibility

The special early retirement program will be open for members who will attain age 58 with 10 or more years of continuous service by the end of the window period. Members must indicate their intention to retire before June 1 of each year and must retire between July 1 and December 31 of that year.

Full $45 Basic Benefit and $540 Supplement

Members retiring under the Special Early Retirement Program will receive the full $45 Basic benefit level upon retirement under the window, as well as a $540 per month Supplementary pension regardless of a member’s years of service. The supplement is payable from date of retirement (as early as age 58) until age 65.

In addition, members retiring under the window will receive a special lump sum payment of $3000 in order to offset the cost of continuing their health care and group insurance benefits.

The following examples show the estimated monthly pension benefits that will be payable to members with no spouse who elect to retire under one of the early retirement windows, including QPP and Old Age Pension benefits.

Example 1.

A member who retires under the Special Early Retirement Program at age 60 with 30 years of credited service will receive the following estimated monthly pension benefit from age 60 to age 65:

Basic Benefit $45 x 30 years =
Supplement
Early QPP
TOTAL PENSION

$1350/month
$ 540/month
$ 521/month *
$2411/month

Starting at age 65, he or she will receive the following monthly amounts:

Basic Benefit
Early QPP
Old Age Security
TOTAL PENSION
$1350/month
$ 521/month *
$ 410/month **
$2281/month

Example 2.

A member who retires under the Special Early Retirement Program at age 58 with 25 years of credited service will receive the following estimated monthly pension benefit to age 60:

Basic Benefit ($45 x 25 years)
less early retirement reduction
(4.8% x 2 years)
Total Basic Benefit
Supplement
TOTAL PENSION

Pension startnig at age 60:

Basic Benefit
Supplement
Early QPP
TOTAL PENSION

Pension starting at age 65:

Basic Benefit
Early QPP
Old Age Security
TOTAL PENSION
$1125/month
-$ 108/month

$1017/month
$ 540/month
$1557/month




$1017/month
$ 540/month
$ 521/month
$2078/month



$1017/month
$ 521/month
$ 410/month
$1948/month

* Assumes the member is entitled to a maximum QPP benefit. The 1998 QPP benefit amount is used. In both examples, it is assumed the member elects to take early QPP as soon as they turn 60. If this is not the case the amount of QPP will change. The amount of QPP is payable for the life of the member and is indexed annually.

** The Old Age Security benefit payable as of December 1998. The OAS benefit is indexed quarterly, so the OAS payable after December 1998 and into the future may be slightly higher.



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