This information describes the general benefit provisions. The amount of your annuity under the BUPERS Retirement Plan is based on your highest consecutive three years of salary and years of service at the time of retirement. During the first two years of retirement, you will probably receive more in retirement plan benefits than you paid into the plan while you were working as a NAF/BUPERS employee. Annuity payments will continue for the rest of your life.

If you have any questions after reading this information, contact your benefit representative.

• are a regular full time or regular part time NAF employee scheduled to work at least 20 hours a week and at least five months a year; and
• work in the United States, or a U.S. citizen working overseas.

New hires are eligible to participate in the retirement plan after they have been employed for 1 continuous year. Deductions for employee contributions will begin after completion of this one-year waiting period. If you were hired on or after January 1, 1989 and enroll within 31 days after becoming eligible, you will receive, at no cost, credit for one year of plan service.

If you do not enroll in the plan when you first become eligible, you can enroll later. If you enroll after the initial eligibility period, you cannot make up contributions or get service credit for the time prior to enrollment.

• BUPERS Service - used to determine when you can receive a pension
• Plan Service - used to calculate your pension benefit
• Fully vested - 5 years of continuous service in a DOD NAFI position
  

Years of service with any other DOD Non-Appropriated Funds Instrumentality (NAFI), if you transferred after February, 1983 and started work with BUPERS within 90 days

• Unused sick leave (if you retire with an immediate annuity)
• Up to five years of absence for active duty in the armed forces, U.S. Coast Guard, or U.S. Public Health Service if you returned to NAF employment within the time specified by law

If you ever leave NAF employment and withdraw your plan contributions, you will lose the plan service related to that money. If you return to active BUPERS employment as a regular employee, you are eligible to buy back your plan service. Notify your benefits representative within 31 days after you return to work, and repay the contributions you withdrew (plus interest) within 12 months after you were hired.

In some cases, you can leave active BUPERS employment without having a break in service:

• You are on an approved leave of absence for up to 12 months, and return to NAF employment at the end of the leave;
• You are absent for active duty in the armed forces, U.S. Coast Guard, or U.S. Public Health Service, and return to active NAF employment within the time specified by law;
• You are absent due to illness, injury or pregnancy, a reduction in force, or the transfer of a member of your family who is on active duty in the armed forces and you return to active NAF employment within 12 months after your absence starts; or
• You were absent from work between March 8, 1972 and January 1, 1976 because you were transferred from a Navy Exchange activity to a BUPERS activity.

You will not earn BUPERS service for any of the periods of absence listed above. However, you will not have a break-in-service if you return to active BUPERS employment and repay any retirement plan benefits received - plus interest- within 12 months after you return to work.

You will never lose the money you contribute to the BUPERS Plan. If you leave before becoming fully vested, you will have the option to withdraw your plan contributions including interest, or leaving your contributions in the Plan, if you are fully vested. Contact your benefits representative to obtain Notice of Termination of Employment form (RP-6) to make your selection.

To stop your plan contributions, complete the Election to Discontinue Active Participation form (RP-5). You may not withdraw your money as long as you are eligible to participate in the plan. If you cancel your enrollment, you will not be allowed to resume contributing for one year.

Normal Retirement

• at age 62 or older, with at least five years of BUPERS service
• at age 60 with 20 years of BUPERS service
• age 55 with 30 years of BUPERS service
  

If you retire early, your BUPERS pension will be calculated the same way as normal retirement, with one exception. The chart below will explain.

Special early retirement benefits are reduced by one-sixth of a percent for each month retirement before age 55.

• Years and months of plan service,
• Highest three consecutive years average earnings, and
• The amount of your Social Security pension.

These factors are explained below.

• Old Plan Service - your years of plan participation as of September 1, 1974, the date the new formula went into effect
• New Plan Service - your plan participation since September 1, 1974
  

The formula used to determine your pension would vary, depending on the amount of your plan service. If you were a participant prior to September 1, 1974, your benefit will also be calculated based on the provisions of the Plan in effect as of that date.

BUPERS will estimate your Social Security amount if you are younger than age 62 when you retire. However, if you get the actual amount from Social Security, BUPERS will use that amount to calculate your pension. Using the actual amount usually increases the amount of your pension benefit.

Social Security Offset

BUPERS will complete your retirement without the Social Security offset until age 62. At age 62, your retirement will be reduced and the offset will apply.

However, you can request an estimate of your pension by giving a request to your benefits representative. You will receive an estimate of the amount you will receive under the option you elect. If you would like to compare the impact of two options, you may ask for two estimates. All estimate requests must go through your benefits representative. You will need to allow 6 weeks to receive your estimate.

Regardless of which payment option you choose, your beneficiary will receive any remaining value of your plan contributions including interest upon your death.

Upon retirement you would receive 90% of your regular pension each month. Upon your death, your widow or widower will begin to receive a monthly pension equal to 55% of your regular pension benefit. Payments will continue for your spouses lifetime unless he or she remarries before age 60.

If your spouse dies before you, but after your pension has begun, your monthly payment will revert back to 100% and will remain at that level for the remainder of your life.

• Enrolled in the retirement plan.
• Have at least 18 months of service,
• Have been married for a year or more, and
• Named your spouse as the sole beneficiary.

The amount of the pre-retirement spousal benefit will depend on your age upon death.

• If you die after age 60, the spousal benefit will be 55% of the full pension you earned up to the date of death.
• If you die before age 60, the spousal benefit will first be calculated as it is for death after age 60 and the minimum benefit will be calculated under the regular plan formula using the total plan service you would have had if you lived to age 60. The minimum benefit can be as much as 22% of your higher three average earnings. Your spouse will receive 55% of the greater of the two amounts. This benefit will be reduced by any Social Security benefit he or she may be entitled.

If your disability lasts longer than 12 months, you will have a break-in-service. If you return to work, you will be able to rejoin the Plan immediately.

You can choose to receive your full benefit starting at age 62 or a reduced pension beginning as early as age 52. If you elect a deferred pension and die before payments begin, your beneficiary will receive a lump sum benefit equal to your contributions including interest. The Plan will not pay a monthly pension to your beneficiary.

You can also elect to get a refund of your contributions, including interest will be paid in a lump sum. In this case you will not be eligible for a monthly benefit at a later date.

All applications must be made in writing. Notify your benefits representative to will help you apply for your pension benefit. The BUPERS Plan Administrator will write to you to confirm the amount of your monthly benefit.

• For each of the first 10 years of plan service:
• 1% of the first $3,600 or your highest three consecutive average earnings
  Plus
  1.5% of your high three average earnings in excess of $3,600
  Plus
• For each year of plan service in excess of 10:
  1.25% of the first $3,600 of your high three average earnings
  Plus
  2% of your high three average earnings in excess of $3,600

Part II: Plan service on or after September 1, 1974

• If you have more than 10 years of plan service before 9/1/74:
• 2% of your high three average earnings for each year of service after 9/1/74
• If you have between 5 and 10 years of plan service before 9/1/74
• 1.75% of your high three average earnings for each years after 9/1/74 until you have a total of 10
  Plus
• 2% of your high three average earnings for each year after that
• If you have fewer than 5 years of plan service before 9/1/74:
• 1.5% of your Social Security pension for each year of plan service between September 1,1974 and August 31, 1979
  Plus
• 2% of your average earnings for each year after that
  · Regardless of your plan service before 9/1/74, subtract from your benefit amount:

       Minus

• 1.5% of your Social Security pension for each year of plan service between September 1, 1974 and August 31, 1979
  Plus
  2.5% of your Social Security pension for each year of plan service after August 31, 1979

Minimum Benefit Formula

• In no event will your benefit ever be less than the minimum benefit formula shown below:

       .5% of your average earnings
       Times
       Years and months of plan service

Retiree coverage will be the same as that provided to active employees, and will change if the active coverage changes. It will continue as long as you pay the required premium. Medicare becomes primary when you reach age 65.

• Has been in the Life Insurance Plan for five consecutive years
• Is age 52 or older when retired from BUPERS service
• Is getting a monthly pension form the BUPERS Retirement Plan

The amounts of your retiree life insurance coverage will depend on when you retire as an active BUPERS employee and how long you are in the plan immediately for retirement.

• If you have been in the Plan for at least 15 years and you retire at age 62 or older, your retiree life insurance coverage will continue in full until you are age 66. After that, will be reduced 25% a year until it equals 25% of the original amount.
• ·If you have been in the Plan at least 5 years and you retire at age 52 or later, your retiree life insurance coverage will equal 25% of the amount you have just before you retire subject to a $5,000 minimum and a $10,000 maximum.
• If you defer you annuity benefits until a later date, you will not be eligible for retired life insurance coverage.

BUPERS WILL PROVIDE THIS COVERAGE AT NO COST TO THE RETIREE.