Most Popular Pension Options
Which of the NASI Pension Fund optional forms of benefits are commonly chosen is very dependent on whether the retiring sprinkler fitter is married.
For Unmarried Individuals
The most common form of benefit is the 100 payment guarantee. This is the automatic form of pension benefit for unmarried individuals and will pay the retiree a monthly pension benefit for the rest of his life. It has the added benefit that in the (unlikely) event that the retiree does not survive to receive at least 100 monthly pension benefit payments, the retiree’s beneficiary will receive the remainder of 100 payments. You can see the amount that would be payable to you based on your current pension credits by using the NASI Pension Fund’s Pension Estimator.
The second most popular NASI Pension Fund option is the Split-Level Option – Age 62. The Split Level Option provides a higher monthly benefit payment under Early Retirement until your Social Security becomes effective at age 62 (or 65 under another version of this option). At age 62 or 65, depending upon the option you elect, the benefit is reduced. This form of pension is payable only during your lifetime and will terminate at your death. This option is not as popular as it once was. This trend is attributable to the existence of larger SIS Pension accounts that permit early retirees to supplement their monthly NASI Pension Fund benefit using money from their SIS Pension Fund account. For more information about how to use your SIS Pension Fund money to supplement your Early retirement income, follow this link.
For Married Individuals
The most popular options for married individuals are the 66 2/3% Joint and Survivor Option and the 75% Joint and Survivor Option. Both of these pension options will pay the retiree a monthly pension benefit for the rest of his life and then in the event his spouse survives him, will pay the specified fraction (66 2/3% or 75%) of the monthly benefit to his wife. You can see the amount that would be payable to you and to your surviving spouse based on your current pension credits by using the NASI Pension Fund’s Pension Estimator.
Once the 66 2/3% and the 75% Joint and Survivor options became available under the NASI Pension Plan, they quickly overtook the 50% Husband and Wife Pension as the most popular options. From the Pension Fund’s point of view, it does not matter which of these three options a retiree and his spouse chooses – the pension plan believes to cost of each of these three benefits to be equivalent. This works out to be true because as you increase the portion of the benefit that would be payable to the survivor, the monthly amount payable during the life of the participant is reduced.
So, how do you decide which to choose? You should consider how much it costs for two people to live together compared to how much it will cost when there is only one of you. Some expenses will remain the same (like your mortgage or rent, your real estate taxes, heating and cooling costs) and other expense will be lower (like food and clothing). It will cost less money for one person to live than it does for two, but it will cost more than half as much for one person to live than it did for two. If your spouse’s sole sources of income are Social Security and your pensions, that fact argues for the 66 2/3% or the 75% Joint and Survivor options. If there are other sources of retirement income, like you spouse’s own pension, that argues toward the 50% Husband and Wife benefit. Remember that so long as your surviving spouse continues to receive a monthly benefit from the NASI Pension Fund, she can keep the medical coverage available from the NASI Welfare Fund.
Tell me about other benefit options available under the NASI Pension Plan.
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