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PBGC Priority Levels

PBGC Priority Levels. Priority 1 – Mandatory Contributions – Not applicable here Priority 2 – Voluntary Contributions – Not applicable here Priority 3 – Anyone who is or could have retired within the last 3 years (would be anyone over age 53 since 50 is earliest retirement age)

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PBGC Priority Levels

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  1. PBGC Priority Levels • Priority 1 – Mandatory Contributions – Not applicable here • Priority 2 – Voluntary Contributions – Not applicable here • Priority 3 – Anyone who is or could have retired within the last 3 years (would be anyone over age 53 since 50 is earliest retirement age) • Priority 4 – Anyone under age 53. • Priority 5 & 6 are any other benefits due after 1 – 4 are paid P1 and P2 P3 P4 P5 and P6

  2. Current Plan Accrual Pilot A – age 59 (1/1/03) Service – 25 years (60% of FAE – 2.4% x 25) FAE $15,000 mo. Accrued Benefit: $9,000 per month at age 60 Plan Termination Accrual at date of plan termination (assuming 1/1/03) Age 56 (59 – 3 years) Service 22 years (25 – 3)= 52.8% of FAE FAE at 1/1/00 (3 years prior) $12,000 Priority 3 Benefit - $5,575 per month no matter when it’s taken Plan Termination Examples

  3. Current Plan Accrual Pilot B – age 57 (1/1/03) Service – 20 years (48% of FAE – 2.4% x 20) FAE $15,000 mo. Accrued Benefit: $7,200 per month at age 60 Plan Termination Accrual at date of plan termination (assuming 1/1/03) Age 54 (57 – 3 years) Service 17 years (20 – 3)= 40.8% of FAE FAE at 1/1/00 (3 years prior) $12,000 Priority 3 Benefit - $3,867.84 per month no matter when it’s taken Plan Termination Examples

  4. Current Plan Accrual Pilot C – age 55 (1/1/03) Service – 17 years (40.8% of FAE – 2.4% x 17) FAE $15,000 mo. Accrued Benefit: $6,120 per month at age 60 Plan Termination Accrual at date of plan termination (assuming 1/1/03) Age 52 (55 – 3 years) Service 14 years (17 – 3)= 33.5% of FAE FAE at 1/1/00 (3 years prior) $12,000 Priority 3 Benefit - $2,693 per month no matter when it’s taken. Plan Termination Examples

  5. Current Plan Accrual Pilot D – age 50 (1/1/03) Service – 15 years (36% of FAE – 2.4% x 17) FAE $15,000 mo. Accrued Benefit: $5,400 per month at age 60 Plan Termination Accrual at date of plan termination (assuming 1/1/03) Age 47 (50 – 3 years) Service 12 years (15 – 3)= 28.8% of FAE FAE at 1/1/00 (3 years prior) $12,000 ($3,456 accrued) Priority 4 Benefit - $2,382 per month at age 60, $1,649 at 55, $1,282 at 50 – you decide when you take it. Plan Termination Examples

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