A union of Honeywell & Alliant Tech systems Employees

9422 Ulysses St NE Suite 130 Blaine, MN 55434

Pension Examples

The minimum requirement for early retirement is 55 years old and 15 years seniority.

You are eligible for full retirement at age 60 if you are an active employee and have 85 points (age + years of service).

The Honeywell pension benefit is $68.50 per month per year of service.

The Alliant Techsystems benefit is $47.50 per month per year of service.

1.) If you retire at 55 with 85 points your pension is reduced by 18% from age 55 to 60 (.3 x 60 months you retire early). If you don't have 85 points it is reduced by 36% from 55 to 65. (.3 x 120 months).

Example: 30 yrs x $68.50 = $2055.00 - 369.90 (18%) = 1685.10 per month pension

2.) The income level concept is: When you income level you get (your pension amount - .3%/mo reduction for early retirement) + ( your estimated social security at full retirement - .4%/mo reduction for early retirement) from the time you retire till your full retirement age 65 or 66. When you collect social security at 65 or 66 your pension portion is reduced by the full social security amount so your total (pension + social security) is the same as it was from age 55 to 65 or 66. It stays at this level for the rest of your life.

3.) Double dipping happens when you set it up as you did in #2 but draw early from social security at age 62 (rather than 65 or 66). Then you get your level income from Honeywell + your reduced social security from the government till age 65 or 66. This added income (the double dip) is generally an extra $25-55k over 3 or 4 years. At 65 your income leveling from Honeywell will go down to the same amount as in #2, but your social security will be less because you reduced it by drawing at 62 rather than 65. That reduction is .555% per month till age 65.

4.) Income leveling to age 66 was negotiated during the 1998 contract negotiations. Leveling to 66 results in a little less per month than leveling to 65 but you get an extra 12 months of double dipping. That is why most people go for it.

(These examples use the Honeywell $68.50 pension number).

Here's a "Life Only" option example: (Life Only means that when the member dies the pension ends). A member retires at age 60 with 35 years seniority. Their pension is $2397.50/mo. Their estimated social security is $1400 @ 66.

Income leveling at 60:
$2397.50 pension
+996.80 social security estimate (1400 - 72mo x .4%)
$3394.30/mo

At age 62 if the member double dips:
$3394.30 income leveling
+1027.04 actual social security drawn at 62 ($1400 - 48mo x .555%)
_____ ________

$4421.34/mo
At age 66 after double dipping from 62:
$3394.30 income leveling
-1400 social security
______

$1994.30 pension from Honeywell
+1027.04 actual social security drawn at 62 (see above)
______

$3021.34/mo

So if you double dipped you would accumulate an extra $49,297.92 from age 62-66.

But by double dipping your monthly income would drop by $372.96/mo (3394.30 - 3021.34) after your 66th birthday.

It will take almost 12 years (the member will be 77) for the loss of 372.96/mo to equal the double dip amount of $49,297.92.

So if you live past 77 you may be better off by not double dipping.

It depends on how long you live.