MMC Benefits Handbook
Plan Benefit Formula for Benefit Accrued prior to January 1, 2006
Your Marsh & McLennan Companies Retirement Plan includes a benefit, if any, that you accrued prior to January 1, 2006, if any, is determined using a formula based on your Final Average Salary, length of Benefit Service and the Plan's benefit accrual percentage. The Final Average Salary is your highest consecutive 60-month average of Eligible Monthly Pay earned while you are a participant. It is not necessarily your consecutive 60 month average just prior to the end of your employment. The formula to determine your annual benefit is as follows:
  • For each month of the first 360 months (30 years) of Benefit Service: 1.6% of your Final Average Salary prior to January 1, 2006 multiplied by your years and months of Benefit Service before 2006 up to a maximum of 360 months (30 years);
+PLUS (if applicable)
  • For each month of Benefit Service beyond 360 months (30 years): 1.0% of your Final Average Salary prior to January 1, 2006 multiplied by your years and months of Benefit Service before 2006 in excess of 360 months (30 years);
-MINUS
  • For the first 420 months (35 years) of Benefit Service: 0.4% multiplied by your Covered Compensation (or Final Average Salary, if less) prior to January 1, 2006 multiplied by your years and months of Benefit Service before 2006 up to 420 months (35 years).
See "What Pay Counts" for more information about Eligible Monthly Pay.
Example – Teresa, a participant whose benefit was entirely accrued prior to January 1, 2006
Teresa was born on January 1, 1955, was hired by the Company on July 1, 1999, and terminated employment with the Company on December 31, 2005.
  • Teresa had 78 months (6 years and 6 months) of both Benefit Service and Vesting Service as of December 31, 2005. Therefore, she is vested in her accrued retirement benefit.
  • Teresa's Eligible Monthly Salary during the period from 7/1/1999 through 12/31/2005 was as follows:
Time Period
Number
of Months
Eligible
Monthly Salary
Total Pay
in Period
7/1/1999 – 2/28/2001
20
$5,000.00
$100,000
3/1/2001 – 2/28/2003
24
$5,416.67
$130,000
3/1/2003 – 2/28/2005
24
$5,833.33
$140,000
3/1/2005 – 12/31/2005
10
$6,250.00
$62,500
Total for 60-month period from 1/1/2001 – 12/31/2005
   
$342,500
Teresa's annual Covered Compensation for 2005 was $78,228. Her Final Average Salary is the average over the highest consecutive 60 months (5 years): $342,500 / 5 = $68,500.
Benefit earned:
1.6% times Final Average Salary ($68,500) times 6.5 years = $7,124.00
Minus
0.4% of the lesser of Final Average Salary ($68,500) or Covered Compensation as of 12/31/2005 ($78,228) times 6.5 years = $1,781.00
$7,124.00 minus $1,781.00 equals $5,343.00
Accrued Retirement benefit from Marsh & McLennan Companies Retirement Plan:
$5,343.00 per year ($445.25 per month), assuming for this example that payment begins once Teresa attains age 65 in the form of a single life annuity