| Note: | For information about working with the federal CSRS and FERS retirement plans, click here. |
The following prompts appear for defined benefit retirement plans:
Additional Funds
Enter additional funds to be added to the Final Average Salary. This may include items such as unused sick leave or unused vacation time. See the plan handbook for specific information.
Additional YOS
Enter additional years of service for the retirement plan. This may include military service creditable under the plan.
Spouses DOB
This prompt will display in the Client's Retirement Plan tab if the illustration does not include the spouse.
| Note: | Clearing the spouse's date of birth will remove the survivor benefit options for the defined benefit plan. |
Customized Cost of Living Adjustments
This group of prompts will be displayed for defined benefit plans that do not have specific COLA options configured in the retirement system.
| Warning: | The COLA configuration may have a significant impact on additional savings required for a successful retirement. A incorrectly configured COLA can result in a significant difference of under-funding or over funding retirement. |
Override internally configured COLA
Check this box to override the internally configured COLA.
Increase method
There are three methods to configure the DB plan's COLA:
Tied to inflation: Select this to tie the COLA to the retirement inflation rate (entered in the "Retirement Income" tab). Limits on the COLA can be configured below.
Compounded Fixed Rate: Select this if the COLA is a fixed compounded rate. The COLA is entered below and can occur irregularly (e.g. every other year) .
Simple Fixed Rate: Select this if the COLA is a simple COLA (not compounded). The COLA is entered below and can occur irregularly (e.g. every other year) .
Increase Frequency
Select the frequency the COLA occurs: Every Year, Every Other Year or Every Third Year.
Percent of inflation
This prompt is available if the Increase method is Tied to inflation. Enter the percent of inflation that the COLA matches.
Maximum COLA
This prompt is available if the Increase method is Tied to inflation. Enter the maximum COLA rate.
Fixed COLA rate
This prompt is available if the Increase method is either of the fixed methods. Enter the fixed compounding or simple (as selected) COLA rate.
Divorce Reduction Method
This allows for configuring a reduction to the pension due to a divorce. The options are:
None: No reduction occurs.
Percent: The method for reducing the pension is by a percentage. A new Percent Reduction prompt will be displayed. Enter the percent the pension is to be reduced. For example, a 25% reduction for a $1,000 benefit would result in a $750 payment for the client.
Dollars per Month: Enter the monthly dollar value to reduce the annuity for the client. A new Monthly Dollar Reduction prompt will be displayed. Enter the monthly reduction to the annuity.
