How are benefits being affected in the short-term?
If you are vested when you retire or leave WHOI, you currently receive the greater of your retirement benefit calculated under a defined benefit annuity formula or a benefit based on your minimum cash balance account. Under the current plan, your benefit under the defined benefit annuity formula grows annually with service (up to a maximum of 35 years) and the increase in your Final Average Compensation (FAC). Under the short-term strategy, your benefit under the defined benefit annuity formula will still increase with service but FAC will be frozen as of December 31, 2004, subject to a one-time increase at the rate of 4.5% during 2005. Below is the current plan formula, as well as the effect on the benefit formula after the change. Your defined benefit annuity formula as it appears in the Summary Plan Description (SPD) equals: • 2% of your final average compensation (FAC) for each year of credited service, up to 25 years, plus • 1% of your FAC for each year of credited service over 25
