MTA Defined Benefit Pension Plan

1. MTA Defined Benefit Pension Plan For Employees of Metro - North Railroad

2. Contributions • Represented MNR must contribute to the plan for a period of 10 years. Employees contribute 3% of gross wages. • Managers may have to contribute to the DB Plan. There is a calculation done yearly by the agency based on salary.

3. Contributions • Contributions are made on a pre-tax basis which reduces your taxable salary and increases your take home pay. • You may not take a out a loan or borrow against your contributions. • If you terminate prior to vesting your contributions with interest will be returned to you.

4. Credited Service • A full year of credited service consists of 2,080 hours or 260 compensated days. • “95%” rule (on the payroll for a minimum of 1,976 hours in a year, employee will receive one full year’s service credit). • If employee is paid for less than 1,976 hours in a year, credit will be given for a fraction of the year by dividing the number of hours by 2,080.

5. Credited Service • Employees are “vested” with 5 or more years of Credited Service. • Service credit is not given for leaves of absence without pay or for any period of time during which the employee did not receive wages from MNR or LIRR (other than for military service).

8. Military Service • Employees may be eligible to receive service credit for time served during specific military conflicts : • Must have been honorably discharged (DD-214) • Must have at least five years of credited service in the Retirement System at the time you apply for your military service credit. • Must not have received credit for this service in any other public retirement system in New York City or New York State. • Must apply to purchase credit for military service prior to retirement.

9. Military Service Credit • The cost to purchase military service is 3% of your salary for the 12 months preceding your application for each year of eligible service (up to 3). • Methods to purchase military service: • Direct rollover from 457 Planor 401k Plan • Lump sum payment • After-tax payroll deductions for up to 3 years

10. Prior Credited Service • Employees must have at least 2 years of credited service in the MTA Defined Benefit Pension Plan to receive prior non-vested service credit and at least 3 years to receive prior vested service credit. • In some cases, you will be able to purchase non-vested credited service and/or receive credit for vested service from another retirement system or an affiliated MTA agency, which can be used to increase credited service.

11. Prior Credited Service • The vested benefit received from the other retirement plan will be deducted from the MTA Defined Plan benefit at the time you retire. (Note, benefit commencement date must be coordinated with other retirement system. • If you think that you may have applicable prior service, you must complete an application and submit it with back up documentation to the MTA Pension Office.

12. Eligible Retirement Systems • Any MTA Agency • New York State Retirement Systems: NYSLERS, Police and Fire • New York City Retirement Systems: NYCERS, NYCTRS, NYCBERS, Police and Fire

13. Retirement Eligibility • MNR employees are eligible to receive an unreduced pension when they satisfy one of the following: • Age 60 and 5 or more years of DB Plan credited service • Age 55 and at least 30 years of DB Plan credited service

14. Early Retirement Eligibility • Employees with 10 or more years of credited service, may apply for a reduced retirement benefit between the ages of 55 and 60. The reduction is permanent, and the percent of benefit payable upon early retirement depends upon your age: Age atPercent of Normal RetirementRetirement Payable 60 100% 59 97% 58 94% 57 91% 56 88% 55 85%

15. Term Vested • Plan members who separate from active service with 10 or more years of credited service, may apply for a reduced retirement benefit between the ages of 55 and 62. The reduction is permanent, and the percent of benefit payable upon benefit commencement depends upon your age: Age atPercent of Normal CommencementRetirement Payable 62 100% 61 94% 60 88% 59 85% 58 82% 57 79% 56 76% 55 73%

16. Final Average Compensation • Final average salary is the average of the highest three consecutive years in the 10 years prior to retirement. • Payment for unused vacation not to exceed 30 days will be included in your FAS if last three years’ earnings are used to determine FAS. • Earnings in any year included in the period cannot exceed the average of the previous two years by more than 10 percent. Any amount in excess of this will be excluded.

17. Plan Benefit Formula • Less than 20 years of credited service 1.67% X Credited Service X FAS • 20 up to 30 years of credited service 2.0% X Credited Service X FAS • More than 30 years of credited service 2.0% X 30 years of credited service X FAS plus 1.5% X credited service for years >30 X FAS

18. Plan Benefit Formula Number of Years Benefits as a Of Credited Service Percentage of your FAS 18 = 30% 19 = 32% 20 = 40% 22 = 44% 25 = 50% 30 = 60% 32 = 63% 35 = 67½% 1.67% 2% 2% + 1.5%

19. Plan Benefit Formula • MTA DB Plan Pension will be offset by 100% of Railroad Retirement Tier II benefit earned while an employee of MNR • The Tier II Offset will be effective when the RRB Annuity becomes payable (regardless of age).

20. Benefit Calculation • 33 years of credited service at age 58 Retirement Benefit for the period from age 58 to age 60 $90,000 - Final Average Salary x 2% - Service Fraction up to 30 years x 30 - Years of Credited Service up to 30 years $54,000 - Annual BenefitPlus $90,000 - Final Average Salary x 1.5% - Service Fraction over 30 Years x 3 - Years of Credited Service greater than 30years $ 4,050 - Annual Benefit $58,050 - Total Annual Benefit Before Tier II Offset

21. Benefit Calculation • 33 years of credited service at age 58 Retirement Benefit at age 60 when Tier II is payable $58,050 - Annual Benefit - 15,000 - Projected Tier II (MNR Service Only) $43,050 - Annual MTA Benefit After Tier II Offset

22. Benefit Calculation • 20 years of credited service at age 58 Retirement Benefit for the period from age 58 to age 62 $90,000 - Final Average Salary x 2% - Service Fraction up to 30 years x 20 - Years of Credited Service up to 30 years $36,000 - Annual Benefit x .94 - Early Retirement Factor $33,840 - Annual MTA Benefit Before Tier II Offset

23. Benefit Calculation • 20 years of credited service at age 58 Retirement Benefit at age 62 when Tier II is payable $33,840 - Annual Benefit - 6,400 - Projected Tier II (MNR/LIRR Service) $27,440 - Annual MTA Benefit After Tier II Offset

24. Benefit Calculation • Less than 20 years of credited service at age 58 Benefit at age 58 $90,000 - Final Average Salary x 1.67% - Service fraction up to 20 Years x 19.0 - Years of Credited Service with MNR $28,557 - Annual Benefit x .94 - Early Retirement Factor $26,843 - Annual MTA Benefit Before Tier II Offset

25. Benefit Calculation • Less than 20 years of credited service at age 58 Benefit at age 62 when Tier II is payable $26,843 - Annual MTA Benefit - 6,100 - Projected Tier II (MNR Service Only) $20,743 - Annual MTA Benefit After Tier II Offset

26. Distribution Options Life Annuity - Under this option, you will receive a monthly benefit for your lifetime. No payment will be made after your death. 100% Joint and Survivor Annuity - Under this option, you will receive a reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to 100% of your benefit for the remainder of his/her lifetime.

27. Distribution Options 75% Joint and Survivor Annuity – You will receive a reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to 75% of your benefit for the remainder of his/her lifetime. 50% Joint and Survivor Annuity - You will receive a reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to 50% of your benefit for the remainder of her/his lifetime. 25% Joint and Survivor Annuity - You will receive a reduced allowance for your lifetime. Upon your death, your joint annuitant will receive a monthly benefit equal to 25% of your benefit for the remainder of her/his lifetime.

28. Distribution Options Five Year Certain Option - You receive a reduced pension paid for your lifetime. If you die within 5 years after your Benefit Commencement Date (BCD), your pension continues to be paid to your beneficiary or beneficiaries until the 5th anniversary of your BCD, on which date pension payments cease. Ten Year Certain Option – You receive a reduced pension paid for your lifetime. If you die within 10 years after your BCD, your pension continues to be paid to your beneficiary or beneficiaries until the 10th anniversary of your BCD, on which date pension payments cease.

29. Pension Payments • Pension payments may be EFT—that is, your monthly pension benefit can be electronically deposited into your bank account. • Annual audit of pensioner payroll is conducted. Affidavits will be sent and must be completed, notarized, and returned to confirm that pensioner is receiving monthly pension payments

30. Ordinary Death Benefit (Active Employees) • One year < than two years = 1 X Salary • Two years < than three years = 2 X Salary • Three or more years of service = 3 X Salary • After age 60, the death benefit is reduced by 4% per year until age 70: AgeAmount of Benefit otherwise payable 61 96% 62 92% 63 88% 64 84% 65 80% 66 76% 67 72% 68 68% 69 64% 70 or older 60%

31. Accidental Death Benefit (Active Employees) For death resulting from an on-the-job injury - A monthly benefit paid equal to 50% of employee’s last 12 months of earnings divided by 12 Or One-time lump sum payment, depending on employee’s credited service, of 1, 2, or 3 times employee’s last 12 months of earnings.

32. Retiree Death Benefit • First Year - 50% of the pre-retirement amount • Second Year - 25% of the pre-retirement amount • Third Year and thereafter - 10% of the benefit payable at age 60 or at retirement if prior to age 60.

33. Death Benefit - Vested • If you leave the railroad with 10 or more years of credited pension service, you will be entitled to a “Vested Death Benefit.” • The Vested Death Benefit will be 50% of three times your annual salary at the time you terminated your employment. • The Vested Death Benefit will remain in effect until the vested participant starts to receive a monthly benefit at age 62 and at that time the retiree death benefit would be applicable. • If a vested participant dies prior to being eligible for a monthly benefit, the beneficiary will only receive a lump sum benefit.

34. Disability Retirement The Plan provides a level of protection should you become permanently disabled. You are eligible to receive a disability retirement at any age if you meet both of the following conditions: • You have 10 or more years of credited service. There is no minimum period of service if the disability is the result of a service related accident. • The Medical Board finds you are permanently incapacitated and you can no longer perform the duties of your job.

35. Disability Retirement If your application for disability benefits is approved: • And if you have 20 or more years of credited service, your benefit will be calculated as a normal service retirement (2% of final average salary). • If you retire with less than 20 years of credited service, your benefit will be equal to one-third of your final average compensation.

36. Disability Retirement In the event your ordinary disability retirement application is denied by the MTA DB Plan Medical Board and you have attained age 55, you may file for a permanently reduced early retirement benefit.

37. This presentation provides only a brief summary of certain information regarding the MTA Defined Benefit Pension Plan. In the case of any conflict between this presentation and the documents governing the MTA DB Plan, the documents shall govern.

38. Thank you Thank you Thank you for taking the time to attend this presentation. We at the MTA DB Plan hope that you were provided with new insight into your pension plan. Our commitment is to ensure that all MTA DB Plan participants have the information required to make the best decision on financial matters that will have a lifetime impact. Thank you Thank you

39. INFORMATION For additional information:MTA Pension Office 212-437-0730 mtadbplan@mtabsc.org Fax 212-437-0920