MMC Benefits Handbook
Accrued Benefit Credited Both Before and After January 1, 2006
If you had periods of eligible service both before and after January 1, 2006, your SRP benefit will consist of two parts: a SRP benefit accrued as of December 31, 2005 and a SRP benefit accrued on or after January 1, 2006 and before January 1, 2017.
The SRP benefit accrued as of December 31, 2005 will be calculated under the SRP formula in effect prior to January 1, 2006 and will be based solely on your Benefit Service and your Final Average Salary as of December 31, 2005. See "Plan Benefit Formula for Benefit Accrued prior to January 1, 2006" for details.
The SRP benefit accrued on or after January 1, 2006 and before January 1, 2017 will be calculated under the SRP formula in effect on or after January 1, 2006 and will be based on your Eligible Monthly Pay and the Plan's benefit accrual percentage for each month that you are eligible. See "Plan Benefit Formula for Benefit Accrued on or after January 1, 2006 and before January 1, 2017" for details.
Example – Jeanne – a participant whose benefit was accrued both before and after January 1, 2006
Jeanne was born on January 1, 1955, was hired by the Company on July 1, 1999, and terminated employment with the Company on December 31, 2006. Jeanne accrued a Retirement Plan benefit, BEP benefit and a SRP benefit both before 2006 and after 2005. Therefore, Jeanne will ultimately receive a SRP benefit calculated with respect to each of those periods of accrued benefits.
  • Jeanne had 90 months (7 years and 6 months) of both Benefit Service and Vesting Service as of December 31, 2006. Therefore, she was vested in her accrued retirement benefits.
  • Jeanne's Eligible Monthly Salary during the period from 7/1/1999 through 12/31/2005 was as follows:
Time Period
Unlimited Eligible
Monthly Salary
IRC-limited Eligible Monthly Salary
Unlimited Salary in Period
IRC-limited Salary in Period
7/1/1999 – 2/28/2001
$16,666.67
$16,666.67
$333,333
$333,333
3/1/2001 – 2/28/2003
$17,500.00
$16,666.67
$420,000
$400,000
3/1/2003 – 12/31/2003
$19,166.67
$16,666.67
$191,667
$166,667
1/1/2004 – 12/31/2004
$19,166.67
$17,083.33
$230,000
$205,000
1/1/2005 – 2/28/2005
$19,166.67
$17,500.00
$38,333
$35,000
3/1/2005 – 12/31/2005
$20,833.33
$17,500.00
$208,333
$175,000
Total for high 60-month period from 1/1/2001 – 12/31/2005
   
$1,121,667
$1,015,000
  • Jeanne's highest 60 consecutive months of Eligible Monthly Salary for purposes of her benefit accrued through December 31, 2005 were from 1/1/2001 through 12/31/2005. She earned $1,121,667 during that period. Under IRC limits, the maximum amount of annual compensation that could be considered for this period was $1,015,000.
  • Jeanne's unlimited Final Average Salary for purposes of her benefit accrued through December 31, 2005 is her average annual salary over her highest-paid consecutive 60 months (5 years): $1,121,667/ 5 = $224,333.
  • Jeanne's IRC-limited Final Average Salary for purposes of her benefit accrued through December 31, 2005 is her average annual salary over her highest-paid consecutive 60 months (5 years), subject to IRC limits: $1,015,000 / 5 = $203,000.
  • Jeanne's annual estimated Social Security PIA for 2005 was $23,028; and for 2006 it was $24,072 ($2,006.00 per month).
  • Jeanne's Eligible Monthly Pay (used to determine her benefit for the Retirement Plan formula in effect in 2006 and later years) for the period from January 2006 through December 2006 was as follows:
Time Period
Unlimited Eligible
Monthly Pay
IRC-Limited
Eligible Monthly Pay
Social Security PIA Amount (Monthly)
1/1/2006 – 12/31/2006
$20,833.33
$18,333.33
$2,006.00
Jeanne's Retirement Plan and BEP benefits are as follows:
  • Retirement Plan benefit before 2006:
$19,078.07 ($1,589.84 per month)
  • BEP benefit before 2006:
$2,218.67 ($184.89 per month)
  • Retirement Plan benefit after 2006:
$3,198.93 ($266.58 per month)
  • BEP benefit after 2006:
$480.00 ($40.00 per month)
How SRP benefit before January 1, 2006 is calculated:
Retirement Plan Benefit: $19,078.07
BEP Benefit: $2,218.67
SRP Benefit Accrued before January 1, 2006:
2.0% times unlimited Final Average Salary ($224,333) times 6.5 years = $29,163.29
Minus
4.0% times annual Social Security PIA ($23,028) times 6.5 years = $5,987.28
Equals $23,176.01 (initial SRP formula benefit, before offsets of BEP and Retirement Plan benefits)
Minus
BEP benefit: $2,218.67
Minus
Retirement Plan benefit: $19,078.07
Equals SRP benefit of $1,879.27 Accrued before January 1, 2006
How SRP benefit on or after January 1, 2006 is calculated:
Retirement Plan Benefit: $3,198.93
BEP Benefit: $480.00
SRP Benefit Accrued on or after January 1, 2006:
2.0% times $20,833.33/month times 12 months = $5,000.00
Minus
4.0% times $2,006.00/month times 12 months = $962.88
Equals $4,037.12 (initial SRP formula benefit, before offsets of BEP and Retirement Plan benefits)
Minus
BEP benefit: $480
Minus
Retirement Plan benefit: $3,198.93
Equals SRP Benefit of $358.19 Accrued on or After January 1, 2006
Accrued Retirement benefit from the SRP:
$2,698.67 ($1,879.27 accrued before January 1, 2006 + $358.19 accrued on or after January 1, 2006 = $2,237.46) per year, or $186.46 per month, assuming for this example that payment begins once Jeanne attains age 65 in the form of a single life annuity