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