Your pension benefit is calculated under three different formulas: Regular, Alternate, and Minimum.  The formula that gives you the largest benefit will be used.

All of the formulas are based in part on:

• your average straight-time monthly earnings - the average of your highest earnings for three years during the last 10 years just before you retire (for a discussion of how these earnings are calculated, continue reading)
• your Company Service - including all your years and completed months of service - with each completed month counting as 1/12 of a year.

Regular Formula

The Regular formula provides a monthly benefit of:

• 1.4% of your average straight-time monthly earnings times your years and months of Company Service.

Alternate Formula
The Alternate formula provides a monthly benefit of:

• 1.767% of your average straight-time monthly earnings times your years and months of Company Service minus 50% of your monthly Primary Social Security Benefit.

Under this formula, no more than 50% of your Primary Social Security Benefit will be used to offset your earnings.  If you provide the Company with complete Social Security Administration records of your covered earnings within six months of your retirement date, the Company will use a Social Security benefit based on actual earnings rather than an estimated earnings history if it provides a higher benefit.  Otherwise, the Company will use your estimated earnings history.

When you retire, your Primary Social Security Benefit for purposes of this formula is the benefit you would be eligible to receive at your retirement age or age 62, if later.  This benefit is based on the Social Security laws in effect on the date you retire.

Minimum Formula
The Minimum formula provides a monthly benefit of:

• $5 for each of your first 10 years of Company Service plus $7 for each of the 11th through 20th years of service, plus $9 for each year in excess of 20 years of service, plus 10% of your average straight-time monthly earnings (if you have less than eight years of Company Service, this will be reduced 1% a year for each year less than eight) plus $18.

Pension Benefit Formulas
Formula	Provides Monthly Benefit of …
Regular	1.4% of your average straight-time monthly earnings times your years and months of Company Service.
Alternate	1.767% of your average straight-time monthly earnings times your years and months of Company Service minus 50% of your monthly Primary Social Security Benefit.
Minimum	$5 for each of your first 10 years of Company Service plus $7 for each of the 11th through 20th years of service plus $9 for each year in excess of 20 years of service, plus 10% of your average straight-time monthly earnings (if you have less than eight years of Company Service, this will be reduced 1% a year for each year less than eight) plus $18.

Reduced Benefits
If you retire before you are entitled to a full pension, your monthly benefit is reduced.  The amount of reduction is based on your age and service.  For example, if you are age 55 and have 27 years of service, you will receive 85% of your full benefit.

For a table of the reduction factors, see Table 1 at the end of this section.

The three formulas used to calculate full pensions are also used to calculate reduced pensions.  The one which produces the largest benefit will be the one used.  In the regular and minimum formulas, the reduction factor is applied after calculating the total benefit.  In the alternate formula, the reduction factor is applied before subtracting the Primary Social Security Benefit.

If you retire before you are eligible for a full pension, you may postpone starting your pension and thus lessen or eliminate the reduction.  In the example above, if you retire at age 55 with 27 years of service but postpone starting your pension until age 58, you will receive a full pension because your 27 years of service and your age will then total 85.  You can add years to your age after you terminate employment only if you were eligible for early retirement when you terminated employment.

Any reduction for early retirement is in addition to the reduction that may be made to your plan benefit if you elect to provide continuing plan benefits to your spouse, dependent children, or dependent parents after your death, as discussed on the following pages.  See Tables 3, 4, and 5 at the end of this section for survivor reduction factors.

Examples of Estimated Monthly Pension Income at Age 65
Average Straight-Time Monthly Earnings	Years of Service at Retirement
	20	25	30	35	40
$2,000	$560	$700	$840	$980	1,120
$3,000	840	1,050	1,260	1,470	1,680
$4,000	1,120	1,400	1,680	1,960	2,240
$5,000	1,400	1,750	2,100	2,450	2,800
$6,000	1,680	2,100	2,520	2,940	3,360
The above amounts were calculated under the Regular formula.  However, the relationship of average earnings and Social Security benefits at the time you retire might result in the Alternate formula producing a higher benefit than shown in some of the above examples.  In such a case, the actual benefit will be greater than that shown in the above table, since the highest benefit produced by any of the three formulas is the one used.