Retirement Benefits
PENSIONS
Because of the dramatic improvement in the pension benefit formula, combined with wage raises averaging 57%, retirement benefits will nearly double by the end of the contract.
Pensions increase dramatically because of the higher multiplier and the raises. The tables below compare the pensions of employees in common job classifications with 30 and 20 years of service prior to settlement, at settlement and in the final year of the contract. The typical increase is about 94%.
Tiered Rates
For employees retiring on or after January 21, 2002, the multiplier will be calculated at the tiered rate below.
We won an increase in the tier definition which reflects the across-the-board raises that will occur during the life of the contract. This means that more of our wages will be included in the tier with the highest multiplier. In the final year of the contract, the tiers will be:
How pensions are calculated
When we retire, our pensions are calculated by a formula that includes
What is a multiplier?
A multiplier is a percentage of wages. It is a key number in determining what the annual pension will be. For instance, if the multiplier is 1%, then that percent of our yearly wages, times the number of years worked, equals the annual pension benefit.
So, if someone’s salary is $30,000, then a 1% multiplier will give a pension of $300 per year of service. If that person worked for 20 years, the pension benefit will be $300 x 20 years = $6,000. If they worked for 30 years, their pension will be $9,000.
Yale’s old multiplier was typically 1.08%. On the eve of the strike, the administration offered to raise that to 1.25%. After the strike, we won an average pension multiplier of 1.48%!
What are Tiers?
There are actually several multipliers, called "tiers." The first $30,000 of salary has the largest multiplier. Wages over that—up to $55,000—have a smaller multiplier. And anything over $55,000 has an even smaller multiplier.
Special Highlights from the Contract
New! Early Retirement
Early retirement with no penalty is now available at age 60 with 25 years of service.
New! Pay for sick leave at retirement
Employees who retire now will be paid in cash 25% of their accumulated sick time. The 75% balance will be applied toward years of service for retirement.
Employees retiring in 2008 or later will be paid in cash 50% of their accumulated sick time. The 50% balance will be applied toward years of service for retirement.
Sick leave cash at retirement
A Local 34 member in Labor Grade C, who retires in February next year at the maximum salary with 100 days of accumulated sick leave, would get $3,770.64 ($20.11 an hour x 7.5 hours per day x 25 days), plus an additional 75 days (about 2.5 months) of pension credit.
If that same worker retires in February of 2008, also with 100 days of accumulated sick leave, she or he would get $9,082.50 ($24.22 an hour x 7.5 hours per day x 50 days), plus an additional 50 days of pension credit.
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