Board of Trustees Continues Its Efforts to Further Strengthen the Basic Plan
Changes Announced to Basic Plan Accrual Rates for New Participants
Over the past several years, the Board of Trustees has made incremental changes to ensure the continued strength of the Basic Plan and its ability to pay promised benefits well into the future, including diverting previously negotiated pension contribution increases to the Basic Plan. To further ensure the strength of the Basic Plan, the Trustees recently approved a change to the Basic Plan benefit accrual rate for participants who begin participating in the Pension Plans on or after January 1, 2020.
If you are a new participant commencing participation in the Basic Plan on or after January 1, 2020 and become vested under the 5-year vesting rule, your benefits will accrue at 93% of the accrual rate that was in effect prior to January 1, 2020. Once you reach 10-year vesting, accruals for all years will phase-in over the following 5 years, reaching 100% of the previous rates after 15 years. The accrual rate will increase in accordance with the total number of Credited Service Months (CSMs) earned, as described in the following chart:
| Total Number of Credited Service Months | Benefit Accrual Rate |
|---|---|
| Less than or equal to 131 CSMs | 93.0% of old rate |
| 132 – 143 CSMs | 94.4% of old rate |
| 144 – 155 CSMs | 95.8% of old rate |
| 156 – 167 CSMs | 97.2% of old rate |
| 168 – 179 CSMs | 98.6% of old rate |
| 180 or more CSMs | 100% of old rate |
Under the schedule shown above, you will accrue pension benefits at 93% of the old accrual rate until you earn 132 CSMs, at which point your accrual rate will increase by 1.4% for each additional 12 CSMs earned until eventually reaching 100% of the old accrual rate after earning 180 CSMs.
If you commenced participation before January 1, 2020, your benefits will remain unchanged. You will continue to accrue Basic Plan benefits at the accrual rate in effect prior to the change.
