Retirement Services Defined Benefit Pension Plan

Highlights of the Defined Benefit Pension Plan

  • Offer for non-uniformed and uniformed employees, as well as Act 600 plans.
  • Qualified plan eligible for Act 205 state aid funding after three years
  • Low Administrative Fees
  • Pension plan quotes customized to assist townships determine the cost and benefits of offering a pension plan.
  • Completion of actuarial valuation reports including individual accrued benefit calculations
  • Preparation of Minimum Municipal Obligation Forms
  • Preparation of Act 205 Forms
  • Completion of Requests for Audit Information
  • Monthly benefit payments
  • Quarterly investment reports
  • Assistance by the investment professionals at Summit Financial Corporation in the decision-making process of investing plan assets

Examples of calculation of estimated monthly benefit

1. Benefit is 1%

Age 65 with 5 years of service
Vesting is 5 years
Earnings averaged over final 36 months of employment
Benefit = 1% of Average Monthly Earnings times Years of Service
Employee has 15 years of service
Salaries for final 36 months of employment – ($28,000 + $27,000 + $26,000 = $81,000)

Benefit Formula –

$81,000/36 months = $2,250.00 (Average Monthly Salary)
x__ 1% (Plan Benefit)
$22.50
x __15 (Years of Service)
$337.50 Estimated Monthly Benefit at Retirement Age

2. Benefit is 1 ¼%

Age 65 with 5 years of service
Vesting is 5 years
Earnings averaged over final 36 months of employment
Benefit = 1 1/4% of Average Monthly Earnings times Years of Service
Employee has 15 years of service
Salaries for final 36 months of employment – ($28,000 + $27,000 +$26,000 = $81,000)

Benefit Formula –

$81,000/36 months = $2,250.00 (Average Monthly Salary)
x__1 1/4% (Plan Benefit)
$ 28.13
x___ 15 (Years of Service)
$421.95 Estimated Monthly Benefit at Retirement Age