We have received several calls regarding the interest rates used in the Pension Calculation of some members scheduled to leave with the Incentive Offer on the  12/30/2010 Off Payroll Date.  Confusion over the last day of employment and the Pension Commencement Dates could cost you a significant amount of money in the Cash Out Option.

You may recall the Incentive Offer provided for the use of the best interest rate and applicable mortality table between the first quarter (March) 2010 and the quarter in which the members elected pension commencement date occurs.  Members who wish to elect a Pension Lump Sum Cash-Out, accordingly to the Contract, must select either:

(i) the day following the associate's separation from service, or

(ii) the first day of any month following separation from service

What that means in plain english is anyone leaving at the end of this month will have their last day on the payroll as December 29, 2010.  For those electing the Pension Cash Out Option, it means in order to receive the most favorable interest rate you must use December 30, 2010 as your Pension Commencement Date.  December 30, 2010 is the day following your separation.

This date would provide for the 4th quarter 2010 Pension GATT rate of 3.80%.  A member who uses the Pension Commencement Date of December 31, 2010 or January 1, 2011 or later will be given the 1st quarter 2011 Pension GATT rate of 4.19.  Understanding that as the interest rate increases the cash out amounts decrease, you can see why it is important to make the correct pension commencement date selection.

If you have made a mistake selecting your Pension Commencement Date, you only have until December 29, 2010 to elect another date.  No changes will be made after December 29, 2010.  There are 167 technicians and 24 MA's who are scheduled to leave the payroll next week.  In Local 2108 there are 27 technicians and 13 M.A.'s

For those who are cashing out your pension, please make certain you have chosen the correct pension commencement date in order to receive the more favorable interest rate.

March 2010 Interest Rate - 4.31%

Current Quarter Interest Rate - 3.80%

1st Quarter 2011Interest Rate - 4.19%