The proposed reduction includes an across-the-board 15.5% reduction of the multipliers used to calculate benefits for contributions earned before January 1, 2010 (when the age-65 multiplier was higher than $1.00). There is no change to the multipliers for contributions earned on or after January 1, 2010 – the $1.00 multiplier is not being reduced. (Click here for an explanation on the FAQ page of what the multiplier is and how used to determine your monthly benefit.)
Before 2004, the multiplier was set at $4.65 for retirements at age 65, the Plan's normal retirement age. Over the following six years, the Trustees lowered the multiplier four times, ending at the current level of $1.00 for covered employment on or after January 1, 2010. So, the multiplier varies based on the time period in which contributions were earned and the age of the participant at the pension effective date.
The following chart shows a "before" and "after" column for each benefit period. The "before" column shows the current multipliers at each retirement age. The "after" column shows the multiplier at each retirement age under the Trustees' proposed reductions. The numbers in both the "before" and "after" columns already reflect the elimination of any early retirement subsidy (as described in the section above).
Monthly benefits for those already receiving their pension will be recalculated using the new multipliers for the retiree's age as of the date they began receiving their benefit (their Pension Effective Date) and the form of payment they chose at that time.
After considering the history of benefit reductions and the importance of the support of active participants, the Trustees concluded that the $1.00 multiplier payable at age 65 as the Regular Pension Benefit is the core promise of the Plan and that it should be protected, given that those who earned or are earning benefits at the $1.00 multiplier have already experienced significant reductions relative to others in the Plan and do not have subsidies available to them.
Keep in mind, participants who have only earned contributions in the Plan on and after January 1, 2010 are not affected by this part of the benefit reduction. For participants who earned contributions both before and after January 1, 2010, only the portion of the benefit earned during Benefit Periods A through D is subject to the 15.5% reduction in the multipliers.