Annuity Features

Annuity Features

The plan includes two special features designed to enhance your annuity benefit: an advanced earnings assumption and a limit in the drop of the annuity payout value in any one year. Following is a description of each of these features:

• Advanced Earnings Assumption
  To moderate the annual changes in your monthly payment, your annuity check will include not only a return of principal but also a 4% earnings assumption, regardless of the rate actually being earned at the time your payments are made.
  MMBB assumes the investments in the Annuity Fund will earn 4% a year during your retirement years. The number of annuity units credited to you includes the portion of your Retirement Plan account that you converted to an annuity plus the 4% advanced earnings assumption. Any investment experience in excess of the 4% assumption in a given year in retirement will result in an increase in your annuity payments for the following year. On the other hand, if the investment experience of the annuity pool is less than 4%, the following year’s annuity payments will be less than the current year’s level.
• Limit on Annuity Payout Reductions
  Recognizing that a substantial drop in earnings for any one year could create a financial hardship for many retired members, the decline in the annuity payout value in any one year is limited, regardless of investment results. During the first year of a market decline, the payout value will not decline by more than 5%. If a significant market decline continues into a second (or more) year and investment performance does not close the gap between the actual value of a unit in the annuity fund and the payout value, MMBB limits the decline in the payout value in that second year to 10%.