I found some data and will try to paste it in here:
Pilot Retirement Program
Calculating Benefits
A Plan Benefits
The Company calculates monthly benefits from the A Plan when a pilot retires (early or normal), terminates employment, or dies. Pension benefits are based on Final Average Pay, Credited Service and the A Plan formula that provides the greater benefit amount.
Depending on the type of benefit a pilot or Beneficiary receives, there are several steps to calculate a benefit from the A Plan:
• Determine Final Average Pay (see explanation on page 6) and Credited Service.
• Calculate the benefit using both formulas (see below).
• Reduce the benefit, as applicable, for: • Early Retirement
• A Qualified Domestic Relations Order (QDRO) or federal tax levy
• Apply conversion factors for the optional form of payment, if applicable.
• Calculate the spouse's portion of the benefit, if applicable.
A Plan Benefit Formulas
The A Plan uses two formulas to calculate a pilot's Retirement benefit:
• Final Average Benefit Formula, and
• Minimum Benefit Formula.
Benefits are calculated using both formulas. A pilot's pension will be based on the formula that provides the pilot (or Beneficiary) the greater amount of benefits.
Final Average Benefit Formula
The annual Final Average Benefit Formula is:
2.5% x Final Average Pay
Multiplied by
Years of Credited Service minus One Year
Minimum Benefit Formula
The Company also uses the Minimum Benefit Formula to calculate benefits from the A Plan. The Minimum Benefit Formula is an annual amount computed as follows:
$1,500
Multiplied by
Years of Credited Service minus One Year
Pilots who retire prior to April 1, 1991 are eligible for a Minimum Benefit at a different rate as described below.
• Pilots hired before November 1, 1983, who retired between November 1, 1981 and April 1, 1991, have a rate of $1,131.96.
• Pilots hired on or after November 1, 1983, who retired prior to April 1, 1991, have a rate of $565.98.
• All pilots retiring on or after April 1, 1991 have a rate of $1,500.00.
Exceptions on Years of Credited Service Used to Compute Retirement Benefits
• One year of Credited Service is not deducted for: • Former AirCal pilots who were participants in the AirCal Pension Plan and entered the Program as a result of the 1987 AirCal merger, and
• Pilots who transferred from another work group with at least 12 months of service and immediately entered the Program.
• Years of Credited Service used to compute the Minimum Benefit under the A Plan include years during which the pilot received pay from the Company, and years on certain leaves of absence including union leave, Military Leave, emergency leave, paid leave or Overage Leave. In computing the Minimum Benefit at normal or Early Retirement, Credited Service does not include any other unpaid time, including unpaid sick leave or Disability Retirement.
The example below calculates the benefit under each formula using the Final Average Pay example on page 9.
Final Average Benefit Formula Minimum Benefit Formula
Final Average Pay $87,641.67
x 2.5%
--------------------------------------------------------------------------------
$ 2,191.04 $ 1,500.00
Years of Credited Service x 29.000 (30.000 - one year) x 29.000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Annual Benefit 63,540.16 43,500.00
÷12 ÷12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Monthly Benefit $ 5,295.01 (Single Life Annuity) $ 3,625.00
Captain Smith would receive a pension benefit calculated under the Final Average Benefit Formula since it is greater than the benefit computed under the Minimum Benefit Formula.
Retirement Benefit Adjustments
Benefits under the Program may be adjusted to compensate for certain events such as a Qualified Domestic Relations Order (QDRO), Early Retirement, or selection of an optional form of payment. This section describes these adjustments and how they affect the benefit amount.
Benefit Reductions
Certain events cause a reduction in the benefits received by the Program participant. The following are two specific events that result in a reduction of the pension benefit payable to the retiring pilot.
Qualified Domestic Relations Order (QDRO)
Since a Qualified Domestic Relations Order awards a portion of a pilot's benefits to an alternate payee (generally, a former spouse), the pension benefits that the pilot receives are reduced by the amount of the benefit awarded to the alternate payee (see page 45).
Early Retirement
Benefits under the A Plan are reduced if a pilot retires prior to Normal Retirement Date (see page 20 for details). B Plan benefits are reduced for Early Retirement only if the retiring pilot chooses an Annuity form of payment.
Optional Forms of Payment
Under the A Plan, the monthly benefit for a pilot who selects any optional form of payment, is adjusted based on an actuarial factor for that form of payment (see page 34 and following for more information).
Effect of Basic Accumulation on A Plan Pension Benefits
At Retirement, pilots who select the Single Life Annuity form of payment are to receive Annuity payments at least equal to the Basic Accumulation at their Retirement date. The Beneficiary of a pilot who dies following Retirement and has not received Annuity payments totaling the Basic Accumulation, will receive a lump sum payment of the difference between the Basic Accumulation minus the sum of the Single Life Annuity payments made. (See page 52 for definition of Basic Accumulation.)
Under the A Plan, a benefit paid in any form other than a Single Life Annuity must be actuarially equal to the Single Life Annuity, including the Modified Cash Refund Period feature described above (See page 54 for a definition of Modified Cash Refund Period). The A Plan's actuary has developed factors which the Company uses to take this feature into account when calculating an optional form of payment under the A Plan.
Calculating a Spouse's Benefit
The death benefit payable to the spouse is calculated only when the pilot dies. Refer to the chart on page 25 to see which death benefit a surviving spouse may be eligible to receive.
Recalculating A Plan Benefits for Profit Sharing Awards
The Company gives pilots a Profit Sharing Award for every year it reaches a certain adjusted return on investment. The Company calculates and pays the Profit Sharing Award to pilots after the end of the year, usually in March. All pilots who received Pensionable Pay in the profitable year get the award.
When the Company grants Profit Sharing Awards, it must recalculate A Plan benefits for pilots who retire in that year. The A Plan benefit is recalculated, according to the original type of Retirement (normal, early with 120 days notice, or early with less than 120 days notice), to include the Profit Sharing Award in the final year's pay. Although no additional service is earned for the award, the A Plan credits Pensionable Pay that is made based on the additional Compensation. The additional Compensation is treated as if it had been paid in the year of Retirement.
Because the awards are usually granted in March, a retired pilot may qualify for up to two Profit Sharing Awards after Retirement. For example, a pilot who retired on February 1, 1997, would be entitled to a Profit Sharing Award for 1996. That award would be granted around March of 1997. At that time, the A Plan would recalculate the pilot's benefit.
In addition, the pilot would be entitled to an award for 1997 since the pilot received Pensionable Pay for part of that year. That award would be paid around March 1998. Again, the A Plan must recalculate the pilot's benefits.
If a pilot receives an optional form of payment, the A Plan uses the appropriate factors in the recalculation. The monthly benefit is recalculated based on the pilot's age on the original Retirement date. The new benefit is retroactive to the effective date of the grant (April 1), not to the original Retirement date.
Pilots who received their original benefit as a lump sum payment will receive the new benefit as a lump sum. The amount of the benefit is the difference between the original lump sum payment and the recalculated lump sum payment.
B Plan Benefits
Benefits from the B Plan are based on the total Units in a pilot's account and the Unit value. A pilot's B Plan account includes Units from:
• Company contributions
• Optional Contributions, and
• Annual Unit increases.
Converting Contributions to Units
Company contributions and Optional Contributions accumulate in the B Plan trust fund. Every December 31, all contributions that were made during that Plan Year are converted to Units using the Year-end Audited Unit Value for the immediately preceding Plan Year.
6% Annual Unit Increase
Each December 31, Units that were in the B Plan at the beginning of the Plan Year and not paid out during the year are increased by 6%. Units credited for contributions made during the year are not increased by 6% until the following year. The increase in Units may not increase the value of a pilot's B Plan account.
Unit Values
The value of a Unit is measured in dollars and fluctuates with the changes in the value of the B Plan trust fund. The B Plan uses two values: a Year-end Audited Unit Value and an Adjusted Unit Value. The Year-end Audited Unit Value is determined as of December 31 of each Plan Year and includes a 6% annual increase in Units (see 6% Annual Unit increase above for more information). The Year-end Audited Unit Value is used to:
• Convert Company and Optional Contributions made during the following Plan Year to Units
• Determine Annuity payments for the period beginning April 1 through September 30 of each Plan Year
The Year-end Audited Unit Value is determined as of December 31 each year and is available as of March 31 of the following year. It is calculated according to the following formula:
The total market value of the trust fund as of December 31
Divided by
The total number of Units in the trust fund as of December 31
The Adjusted Unit Value is calculated as of the end of every month, and reflects B Plan investment performance from the applicable Year-end Audited Unit Value. It is used primarily to determine the amount of lump sums. In addition, the July 31 Adjusted Unit Value is used to determine Annuity payments for the period October 1 through March 31.
Adjusted Unit Values for January and February of any year are measured against the Year-end Audited Unit Value for the second previous Plan Year due to the unavailability of the Year-end Audited Unit Value until the following March 31st. For example, the Adjusted Unit Value for February 28, 1999, is measured against the Year-end Audited Unit Value as of December 31, 1997, not December 31, 1998.
Please note: There are two December 31 Unit values (a Year-end Audited Unit Value and an Adjusted Unit Value) published each Plan Year. As stated above, each Unit value serves a different purpose.
Calculating Lump Sums
There are two types of lump sum calculations:
• Lump sum of the pilot's total Units, and
• Lump sum of the pilot's Optional Units.
Total Lump Sum
A pilot's total lump sum equals the total number of Units in a pilot's account multiplied by the Adjusted Unit Value in effect for the calculation. The Adjusted Unit Value used to determine a lump sum depends on the type of calculation:
• Retirement
• Termination, or
• Death
Lump Sum of Optional Units
Pilots may receive a lump sum payment of their Optional Units at any time. This lump sum equals the number of Optional Units in the pilot's account multiplied by the Adjusted Unit Value in effect. If a pilot receives a lump sum of his Optional Units while an active employee, the B Plan uses the Adjusted Unit Value in effect at the end of the month in which Pension Benefits and Retiree Services received the pilot's request form.
If a lump sum of Optional Units is requested as a result of Retirement or death, refer to the appropriate sections in this booklet for more information.
Monthly Benefits
Instead of receiving a lump sum a pilot can choose a monthly benefit. A monthly benefit from the B Plan is calculated when a pilot retires or dies. A pilot's accrued benefit is the total number of Units in the pilot's account on any given date.
There are several steps to calculate a monthly benefit:
• Convert the total Units to monthly benefit Units.
• Calculate the optional form of payment, if applicable.
• Calculate the spouse's portion of the benefit, if applicable.
• Calculate the dollar amount of the monthly benefit.
Converting Total Units to Monthly Benefit Units
To convert total Units to monthly benefit Units, the B Plan uses the following method:
• Sum the following components: 1. The Units in the pilot's account as of the previous December 31
2. The Units added due to the annual 6% increase (Pilots retiring with a B Plan Annuity receive a prorated share of the 6% increase for each month in their Retirement year that precedes their Retirement date.)
3. The Units added by converting contributions made in the year benefits begin.
• Divide the sum by an actuarial factor based on the pilot's age in years and months when benefits begin, to get the number of annual benefit Units.
• Divide the annual benefit Units by 12 to get the number of monthly benefit Units.
If a pilot selects an optional form of payment, the B Plan uses the appropriate factors to calculate the monthly benefit. (See page 34 for more information on optional forms of payment.)
Calculating the Amount of the Monthly Benefit
The actual dollar amount payable as a monthly benefit equals the number of monthly benefit Units multiplied by the appropriate Unit value. (See page 15 for more information.)
B Plan Calculation Example
Suppose you plan to retire at age 60 on July 1. Your personal summary statement for the prior calendar year showed that you have 15,715.514 Units in your account. Total Company contributions for the current year equal 9,900.00. You made no Optional Contributions to the B Plan. The following calculation illustrates how a Single Life Annuity benefit is determined in this situation:
Company Total
1. Units as of prior December 31 15,715.514 15,715.514
2. Accumulation factor¹ to July 1 (retirement date) 1.030
3. Accumulated Units as of benefit commencement date (Line 1 times Line 2) 16,186.979 16,186.979
4. Contributions January 1 to July 1 9,900.00 9,900.00
5. Year-End Audited Unit Value as of December 31: $100.00
6. New Units (Line 4 divided by Line 5) 99.000 99.000
7. Total Units - July 1 (Line 3 plus Line 6) 16,285.979 16,285.979
8. Conversion factor for age 60² (See Table page 21) 11.47894
9. Annual benefit Units (Line 7 divided by Line 8) 1,418.770
10. Monthly benefit Units (Line 9 divided by 12) 118.231
11. Monthly benefit in dollars³ (Line 10 times Line 5) $11,823.10
¹ The annual accumulation factor is 6 percent. This accumulation factor is prorated according to the number of months prior to the Benefit Commencement Date in the year. In this example, the factor is equal to one plus 6/12 of .06, or 1.030.
² Use age in years and months on date benefit payment commences.
³ Amount changes April 1 and October 1 to reflect investment performance of B Plan assets.
Although the number of monthly benefit Units stays the same, the Unit value used to calculate the monthly payment changes twice a year.
If monthly benefits are paid... The Unit value used is...
Between April 1 and September 30 The Year-end Audited Unit Value in effect at the time of the payment
Between October 1 and March 31 The Adjusted Unit Value for the previous July 31
The new Unit value takes effect on April 1 and October 1 of each year.
Calculating a Spouse's Benefit
The benefit payable to the spouse is calculated only for death benefits. Refer to the chart on page 25 to see which death benefit a surviving spouse may be eligible to receive. The death benefit options are described on pages 26-31.
Treatment of Profit Sharing Award under the B Plan
In years when the Company pays Profit Sharing Awards, the Company contribution to the B Fund is based on the amount of the award. The contribution is treated as a Company contribution in the year it is paid to the B Plan and not the year it was earned.
Retired pilots will also receive an amount equal to the Company contributions to the B Plan. Such amount will be paid by the Company. Since it is paid by the Company and not the B Plan, it is not eligible for rollover or any other special tax treatment.
Pilot Retirement Program
Calculating Benefits
A Plan Benefits
The Company calculates monthly benefits from the A Plan when a pilot retires (early or normal), terminates employment, or dies. Pension benefits are based on Final Average Pay, Credited Service and the A Plan formula that provides the greater benefit amount.
Depending on the type of benefit a pilot or Beneficiary receives, there are several steps to calculate a benefit from the A Plan:
• Determine Final Average Pay (see explanation on page 6) and Credited Service.
• Calculate the benefit using both formulas (see below).
• Reduce the benefit, as applicable, for: • Early Retirement
• A Qualified Domestic Relations Order (QDRO) or federal tax levy
• Apply conversion factors for the optional form of payment, if applicable.
• Calculate the spouse's portion of the benefit, if applicable.
A Plan Benefit Formulas
The A Plan uses two formulas to calculate a pilot's Retirement benefit:
• Final Average Benefit Formula, and
• Minimum Benefit Formula.
Benefits are calculated using both formulas. A pilot's pension will be based on the formula that provides the pilot (or Beneficiary) the greater amount of benefits.
Final Average Benefit Formula
The annual Final Average Benefit Formula is:
2.5% x Final Average Pay
Multiplied by
Years of Credited Service minus One Year
Minimum Benefit Formula
The Company also uses the Minimum Benefit Formula to calculate benefits from the A Plan. The Minimum Benefit Formula is an annual amount computed as follows:
$1,500
Multiplied by
Years of Credited Service minus One Year
Pilots who retire prior to April 1, 1991 are eligible for a Minimum Benefit at a different rate as described below.
• Pilots hired before November 1, 1983, who retired between November 1, 1981 and April 1, 1991, have a rate of $1,131.96.
• Pilots hired on or after November 1, 1983, who retired prior to April 1, 1991, have a rate of $565.98.
• All pilots retiring on or after April 1, 1991 have a rate of $1,500.00.
Exceptions on Years of Credited Service Used to Compute Retirement Benefits
• One year of Credited Service is not deducted for: • Former AirCal pilots who were participants in the AirCal Pension Plan and entered the Program as a result of the 1987 AirCal merger, and
• Pilots who transferred from another work group with at least 12 months of service and immediately entered the Program.
• Years of Credited Service used to compute the Minimum Benefit under the A Plan include years during which the pilot received pay from the Company, and years on certain leaves of absence including union leave, Military Leave, emergency leave, paid leave or Overage Leave. In computing the Minimum Benefit at normal or Early Retirement, Credited Service does not include any other unpaid time, including unpaid sick leave or Disability Retirement.
The example below calculates the benefit under each formula using the Final Average Pay example on page 9.
Final Average Benefit Formula Minimum Benefit Formula
Final Average Pay $87,641.67
x 2.5%
--------------------------------------------------------------------------------
$ 2,191.04 $ 1,500.00
Years of Credited Service x 29.000 (30.000 - one year) x 29.000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Annual Benefit 63,540.16 43,500.00
÷12 ÷12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Monthly Benefit $ 5,295.01 (Single Life Annuity) $ 3,625.00
Captain Smith would receive a pension benefit calculated under the Final Average Benefit Formula since it is greater than the benefit computed under the Minimum Benefit Formula.
Retirement Benefit Adjustments
Benefits under the Program may be adjusted to compensate for certain events such as a Qualified Domestic Relations Order (QDRO), Early Retirement, or selection of an optional form of payment. This section describes these adjustments and how they affect the benefit amount.
Benefit Reductions
Certain events cause a reduction in the benefits received by the Program participant. The following are two specific events that result in a reduction of the pension benefit payable to the retiring pilot.
Qualified Domestic Relations Order (QDRO)
Since a Qualified Domestic Relations Order awards a portion of a pilot's benefits to an alternate payee (generally, a former spouse), the pension benefits that the pilot receives are reduced by the amount of the benefit awarded to the alternate payee (see page 45).
Early Retirement
Benefits under the A Plan are reduced if a pilot retires prior to Normal Retirement Date (see page 20 for details). B Plan benefits are reduced for Early Retirement only if the retiring pilot chooses an Annuity form of payment.
Optional Forms of Payment
Under the A Plan, the monthly benefit for a pilot who selects any optional form of payment, is adjusted based on an actuarial factor for that form of payment (see page 34 and following for more information).
Effect of Basic Accumulation on A Plan Pension Benefits
At Retirement, pilots who select the Single Life Annuity form of payment are to receive Annuity payments at least equal to the Basic Accumulation at their Retirement date. The Beneficiary of a pilot who dies following Retirement and has not received Annuity payments totaling the Basic Accumulation, will receive a lump sum payment of the difference between the Basic Accumulation minus the sum of the Single Life Annuity payments made. (See page 52 for definition of Basic Accumulation.)
Under the A Plan, a benefit paid in any form other than a Single Life Annuity must be actuarially equal to the Single Life Annuity, including the Modified Cash Refund Period feature described above (See page 54 for a definition of Modified Cash Refund Period). The A Plan's actuary has developed factors which the Company uses to take this feature into account when calculating an optional form of payment under the A Plan.
Calculating a Spouse's Benefit
The death benefit payable to the spouse is calculated only when the pilot dies. Refer to the chart on page 25 to see which death benefit a surviving spouse may be eligible to receive.
Recalculating A Plan Benefits for Profit Sharing Awards
The Company gives pilots a Profit Sharing Award for every year it reaches a certain adjusted return on investment. The Company calculates and pays the Profit Sharing Award to pilots after the end of the year, usually in March. All pilots who received Pensionable Pay in the profitable year get the award.
When the Company grants Profit Sharing Awards, it must recalculate A Plan benefits for pilots who retire in that year. The A Plan benefit is recalculated, according to the original type of Retirement (normal, early with 120 days notice, or early with less than 120 days notice), to include the Profit Sharing Award in the final year's pay. Although no additional service is earned for the award, the A Plan credits Pensionable Pay that is made based on the additional Compensation. The additional Compensation is treated as if it had been paid in the year of Retirement.
Because the awards are usually granted in March, a retired pilot may qualify for up to two Profit Sharing Awards after Retirement. For example, a pilot who retired on February 1, 1997, would be entitled to a Profit Sharing Award for 1996. That award would be granted around March of 1997. At that time, the A Plan would recalculate the pilot's benefit.
In addition, the pilot would be entitled to an award for 1997 since the pilot received Pensionable Pay for part of that year. That award would be paid around March 1998. Again, the A Plan must recalculate the pilot's benefits.
If a pilot receives an optional form of payment, the A Plan uses the appropriate factors in the recalculation. The monthly benefit is recalculated based on the pilot's age on the original Retirement date. The new benefit is retroactive to the effective date of the grant (April 1), not to the original Retirement date.
Pilots who received their original benefit as a lump sum payment will receive the new benefit as a lump sum. The amount of the benefit is the difference between the original lump sum payment and the recalculated lump sum payment.
B Plan Benefits
Benefits from the B Plan are based on the total Units in a pilot's account and the Unit value. A pilot's B Plan account includes Units from:
• Company contributions
• Optional Contributions, and
• Annual Unit increases.
Converting Contributions to Units
Company contributions and Optional Contributions accumulate in the B Plan trust fund. Every December 31, all contributions that were made during that Plan Year are converted to Units using the Year-end Audited Unit Value for the immediately preceding Plan Year.
6% Annual Unit Increase
Each December 31, Units that were in the B Plan at the beginning of the Plan Year and not paid out during the year are increased by 6%. Units credited for contributions made during the year are not increased by 6% until the following year. The increase in Units may not increase the value of a pilot's B Plan account.
Unit Values
The value of a Unit is measured in dollars and fluctuates with the changes in the value of the B Plan trust fund. The B Plan uses two values: a Year-end Audited Unit Value and an Adjusted Unit Value. The Year-end Audited Unit Value is determined as of December 31 of each Plan Year and includes a 6% annual increase in Units (see 6% Annual Unit increase above for more information). The Year-end Audited Unit Value is used to:
• Convert Company and Optional Contributions made during the following Plan Year to Units
• Determine Annuity payments for the period beginning April 1 through September 30 of each Plan Year
The Year-end Audited Unit Value is determined as of December 31 each year and is available as of March 31 of the following year. It is calculated according to the following formula:
The total market value of the trust fund as of December 31
Divided by
The total number of Units in the trust fund as of December 31
The Adjusted Unit Value is calculated as of the end of every month, and reflects B Plan investment performance from the applicable Year-end Audited Unit Value. It is used primarily to determine the amount of lump sums. In addition, the July 31 Adjusted Unit Value is used to determine Annuity payments for the period October 1 through March 31.
Adjusted Unit Values for January and February of any year are measured against the Year-end Audited Unit Value for the second previous Plan Year due to the unavailability of the Year-end Audited Unit Value until the following March 31st. For example, the Adjusted Unit Value for February 28, 1999, is measured against the Year-end Audited Unit Value as of December 31, 1997, not December 31, 1998.
Please note: There are two December 31 Unit values (a Year-end Audited Unit Value and an Adjusted Unit Value) published each Plan Year. As stated above, each Unit value serves a different purpose.
Calculating Lump Sums
There are two types of lump sum calculations:
• Lump sum of the pilot's total Units, and
• Lump sum of the pilot's Optional Units.
Total Lump Sum
A pilot's total lump sum equals the total number of Units in a pilot's account multiplied by the Adjusted Unit Value in effect for the calculation. The Adjusted Unit Value used to determine a lump sum depends on the type of calculation:
• Retirement
• Termination, or
• Death
Lump Sum of Optional Units
Pilots may receive a lump sum payment of their Optional Units at any time. This lump sum equals the number of Optional Units in the pilot's account multiplied by the Adjusted Unit Value in effect. If a pilot receives a lump sum of his Optional Units while an active employee, the B Plan uses the Adjusted Unit Value in effect at the end of the month in which Pension Benefits and Retiree Services received the pilot's request form.
If a lump sum of Optional Units is requested as a result of Retirement or death, refer to the appropriate sections in this booklet for more information.
Monthly Benefits
Instead of receiving a lump sum a pilot can choose a monthly benefit. A monthly benefit from the B Plan is calculated when a pilot retires or dies. A pilot's accrued benefit is the total number of Units in the pilot's account on any given date.
There are several steps to calculate a monthly benefit:
• Convert the total Units to monthly benefit Units.
• Calculate the optional form of payment, if applicable.
• Calculate the spouse's portion of the benefit, if applicable.
• Calculate the dollar amount of the monthly benefit.
Converting Total Units to Monthly Benefit Units
To convert total Units to monthly benefit Units, the B Plan uses the following method:
• Sum the following components: 1. The Units in the pilot's account as of the previous December 31
2. The Units added due to the annual 6% increase (Pilots retiring with a B Plan Annuity receive a prorated share of the 6% increase for each month in their Retirement year that precedes their Retirement date.)
3. The Units added by converting contributions made in the year benefits begin.
• Divide the sum by an actuarial factor based on the pilot's age in years and months when benefits begin, to get the number of annual benefit Units.
• Divide the annual benefit Units by 12 to get the number of monthly benefit Units.
If a pilot selects an optional form of payment, the B Plan uses the appropriate factors to calculate the monthly benefit. (See page 34 for more information on optional forms of payment.)
Calculating the Amount of the Monthly Benefit
The actual dollar amount payable as a monthly benefit equals the number of monthly benefit Units multiplied by the appropriate Unit value. (See page 15 for more information.)
B Plan Calculation Example
Suppose you plan to retire at age 60 on July 1. Your personal summary statement for the prior calendar year showed that you have 15,715.514 Units in your account. Total Company contributions for the current year equal 9,900.00. You made no Optional Contributions to the B Plan. The following calculation illustrates how a Single Life Annuity benefit is determined in this situation:
Company Total
1. Units as of prior December 31 15,715.514 15,715.514
2. Accumulation factor¹ to July 1 (retirement date) 1.030
3. Accumulated Units as of benefit commencement date (Line 1 times Line 2) 16,186.979 16,186.979
4. Contributions January 1 to July 1 9,900.00 9,900.00
5. Year-End Audited Unit Value as of December 31: $100.00
6. New Units (Line 4 divided by Line 5) 99.000 99.000
7. Total Units - July 1 (Line 3 plus Line 6) 16,285.979 16,285.979
8. Conversion factor for age 60² (See Table page 21) 11.47894
9. Annual benefit Units (Line 7 divided by Line 8) 1,418.770
10. Monthly benefit Units (Line 9 divided by 12) 118.231
11. Monthly benefit in dollars³ (Line 10 times Line 5) $11,823.10
¹ The annual accumulation factor is 6 percent. This accumulation factor is prorated according to the number of months prior to the Benefit Commencement Date in the year. In this example, the factor is equal to one plus 6/12 of .06, or 1.030.
² Use age in years and months on date benefit payment commences.
³ Amount changes April 1 and October 1 to reflect investment performance of B Plan assets.
Although the number of monthly benefit Units stays the same, the Unit value used to calculate the monthly payment changes twice a year.
If monthly benefits are paid... The Unit value used is...
Between April 1 and September 30 The Year-end Audited Unit Value in effect at the time of the payment
Between October 1 and March 31 The Adjusted Unit Value for the previous July 31
The new Unit value takes effect on April 1 and October 1 of each year.
Calculating a Spouse's Benefit
The benefit payable to the spouse is calculated only for death benefits. Refer to the chart on page 25 to see which death benefit a surviving spouse may be eligible to receive. The death benefit options are described on pages 26-31.
Treatment of Profit Sharing Award under the B Plan
In years when the Company pays Profit Sharing Awards, the Company contribution to the B Fund is based on the amount of the award. The contribution is treated as a Company contribution in the year it is paid to the B Plan and not the year it was earned.
Retired pilots will also receive an amount equal to the Company contributions to the B Plan. Such amount will be paid by the Company. Since it is paid by the Company and not the B Plan, it is not eligible for rollover or any other special tax treatment.