The Bank Benefit Structure
About the Bank Benefit Structure
Estimate of Your Retirement Benefits
The Federal Reserve provides you with another tool
to help you plan for your retirement--an estimate of your
retirement benefits. The estimate includes benefits you will receive
- the Retirement Plan,
- the Thrift Plan, or
- Social Security (as projected by the Social
Security Administration using certain assumptions).
It also reflects your eligibility for continued coverage
under your health and life insurance programs.
The estimate is calculated in the same way as your
actual retirement benefits. However, you can make certain assumptions,
including the following:
- Future salary rates
- Future Thrift Plan contributions
- Future Thrift Plan earnings
Estimates can be produced through Benefits Express
IRS Limits on Pension Benefits
From time to time, the Internal Revenue Service (IRS)
establishes certain maximum limits on pension payments. They affect
only those employees with very high pension benefits. The IRS limits
the compensation the Retirement Plan can use to calculate benefits
- $150,000, indexed to the consumer price index
(CPI) increases in multiples of $10,000 ($230,000 for 2008), for
employees who began participating in the Plan after 1995, or
- $200,000, indexed to CPI increases in multiples
of $5,000 ($345,000 for 2008), for employees who began participating
in the Plan before 1996.
The IRS also places an annual limit on how much the
Plan can pay a retiree.
The Federal Reserve has established a nonqualified
Retirement Benefit Equalization Plan (BEP). Together, the Retirement
Plan and BEP will pay retirees the amount that they would have received
from the Retirement Plan if not for IRS compensation and pension
If your pension amount is more than the IRS limits,
you will receive an explanation of these rules with your retirement
The Plan also provides that your normal retirement
pension allowance can't be more than 80 percent of your final average
salary. If it is, your Plan benefit will be reduced and the reduction
will not be restored by the nonqualified BEP.
Assignment of Benefits
Except as required by applicable law (such as payment
of a federal income tax levy), benefits provided under the Plan
are not subject to sale, assignment, alienation, attachment, garnishment,
pledge, bankruptcy, or any other form of transfer.
However, your Plan benefit can become subject to
a property or other financial settlement in case of a divorce. The
court may then issue a Qualified Domestic Relations Order (QDRO),
which could award a portion of your benefit to someone other than
you or your designated beneficiary. A QDRO is a court order related
to divorce or separation, which provides child support, alimony,
or marital property rights to your former spouse, your child, or
another dependent. Contact Benefits Express if this situation applies
to you, and they can arrange to send you or your attorney a model
form of a QDRO.
Pension Benefit Guaranty Corporation
Plan is not covered by the Employee Retirement Income Security Act
of 1974 (ERISA), so the Pension Benefit Guaranty Corporation (PBGC)
does not insure your benefits under the Retirement Plan.
If the Plan Ends
If the Retirement Plan is modified, suspended, or
terminated, you have a permanent vested right to the accrued benefit
you have earned up to that time.