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Workers & Retirees

Your plan's two benefit formulas - Pellet Hourly

Your plan has 2 benefit formulas:

  • The regular formula is based on your average earnings and your years of service;
  • The minimum formula is based on a benefit rate and your years of service.

Following your plan, we calculated your benefit under both formulas and used the one that produced the highest benefit, then applied the limits set by law.

Using the plan formula that gives you the highest benefit will always result in the highest benefit payable from the PBGC.

For example, if your benefit under the 1994 Agreement was $1000 using the regular formula, and $1200 using the minimum formula, we used $1200. On 8/1/1999, the plan increased the regular formula, but not the minimum formula. If your regular formula increased to $1500, then your benefit increased $300, from $1200 to $1500. PBGC guarantees 60% of the $300 ($1500-$1200) increase, so your PBGC benefit is $1200 + $180 ($300 x 60%) = $1380.

If we used the regular formula for both the 1994 and 1999 benefits, you would receive $1000 + 60% x ($1500 - $1000) = $1300. As you can see, using the formula that produces the largest benefit for each pension agreement results in the highest benefit payable from the PBGC.