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What is the HSHS Pension Plan? What is my cost for the plan?
  • The HSHS Pension Plan applies to colleagues hired prior to July 1, 2014 and is a defined benefit pension plan that provides you with a source of regular income during retirement.
  • You will be eligible to receive a pension benefit if you have at least five years of credited service when you retire or terminate employment, and you are at least age 55 and your employment ends.
  • The HSHS Pension Plan is free. There is no cost to you. Your employer makes all the contributions necessary to provide your retirement benefits.
What is the HSHS Pension Cash Balance Plan?
The HSHS Pension Cash Balance Plan applies to colleagues hired or rehired on or after July 1, 2014.
  • The Cash Balance Plan is funded entirely by HSHS.
  • The Cash Balance Plan grows steadily throughout your career with HSHS and forms the foundation of the retirement income you build.
  • It rewards your service with higher contributions as your years of service increase.
If you leave employment with HSHS:
  • You can take your vested Cash Balance Benefit with you as a single payment (lump sum).
  • Or, you can delay payment until a later date.
  • You can also elect to receive your benefit as a monthly lifetime annuity starting at any time (at any age) following your termination of employment.
What is the HSHS Pension Cash Balance Plan based on?
Your Cash Balance Plan benefit will be expressed in the form of a cash balance account, showing your benefit as a lump sum dollar amount as it grows. The account will grow each year through two types of contributions from HSHS:
  1. Contribution credits equal to 3% to 7% of your eligible pay, depending on your years of service (credits increase as your service increases). Eligible pay is the pay shown on your W-2 statement plus any pre-tax contributions you make for benefits, including the 403(b) plan; subject to IRS limits, $280,000 in 2019.
  2. Interest credits based on the 10-year Treasury rate (reset annually), with a minimum of 3% and a maximum of 6%.
Contribution Credits + Interest Credits = Your Account Balance
What is the HSHS pension benefit based on?
Your pension benefit is based on three factors:
  • Credited Service - Your credited service is the number of calendar years in which you are paid for 1,000 hours of service. This corresponds to the wages reported annually on your W-2 form. You receive partial years of credited service for your first and last calendar years of employment if you have not earned the full 1,000 hours.
  • Final Average Pay - This is the average of your earnings for the five highest-paid consecutive completed calendar years of service within the last 15 completed calendar years of service. Your earnings are your W-2 earnings, plus any salary reduction contributions to the 403b retirement savings plan and any pre-tax deductions to the HSHS Flexplan.
  • Excess Pay - Excess pay is the portion of your final average pay that exceeds 30% of the Social Security taxable wage base in the previous calendar year.
Is my pension benefit safe?
Yes! Your pension benefit is safe.
  • Hospital Sisters Health System has several checks and balances in place to safeguard your accrued pension benefit.
  • Each year your employer deposits funds into a pension plan trust account to cover the pension benefits that have accrued for its employees during the year.
  • Each year independent auditors check the books to be sure the funds have been deposited and are being safeguarded.
  • HSHS also has pension actuaries who tell us how much money must be deposited each year to provide the benefits that have been accrued and promised.
How do I qualify for the HSHS Pension Cash Balance Plan?
  • You earn a year of service for both vesting and benefit accrual purposes for each year you are paid for at least 1,000 hours. This includes PTO and short term disability.
  • You qualify to receive a benefit from the HSHS Pension Cash Balance Plan (i.e., you are fully vested) after you have completed three years of credited service.
What is a contribution credit?
  • A contribution credit is a percentage of your eligible pay and is the amount HSHS adds to your cash balance account for each calendar year in which you are paid for at least 1,000 hours.
  • Your contribution credit percentage depends on your years of service as of the end of the current year.
The following chart shows how contribution credit percentages for each year are determined based on your service as of December 31 of the current year.

If your years of service are…

Your contribution credit provided by HSHS will be…

       1-5

                     3% of pay

       6-10

                     4% of pay

     11-15

                     5% of pay

     16-20 

                     6% of pay

       21+

                     7% of pay

How is the HSHS pension benefit paid?
There are two basic forms of HSHS pension benefit payment, depending on your marital status:
  1. If you are single, the basic form of payment is a monthly income for life, with no survivor benefits.
  2. If you are married, the basic payment method is a Qualified Joint and Survivor Annuity. Under this form, you will receive a reduced monthly benefit for life. After your death, your spouse will receive benefits for life equal to half the amount you were receiving. Married persons can also elect the basic benefit for single persons if they have spousal consent.
If you do not want one of the basic forms of payment, you may choose one of the optional methods. If you are married, your spouse must consent to your selecting an optional form of payment. His or her consent must be in writing and be witnessed by a notary public. Options available to you are:
  • A monthly income for life, with guaranteed payments up to 10 years. Any guaranteed payments remaining at your death will be paid to your beneficiary. If no guaranteed payments remain, there will be no survivor benefit.
  • A joint and survivor annuity that pays you a reduced monthly income for life, with either 50 percent, 75 percent, or 100 percent of that amount continuing to your spouse or other designated beneficiary after your death.
 
How do I start my HSHS pension? When should I apply for my HSHS pension?
If you are an active colleague within Hospital Sisters Health System at the time you wish to retire:
  •  Please contact the Colleague Service Center at 855-394-4747 to initiate your pension start request.
  • You will also need to notify your manager and local HR department of your intent to retire at least 2 weeks (if hourly) or 4 weeks (if salary) prior to ending employment.
The HSHS Benefits Department will calculate your pension benefit and send you a personalized pension election form to elect your monthly pension benefit once final payroll has been completed.

Pension payments are issued the first business day of each month with the exception of the first payment, which depends on when the pension election forms are returned to HSHS. Retroactive payments are issued at the end of the corresponding month. Direct deposit is required for all pension distributions.

Note: If you are planning on returning to work for an HSHS Affiliate, you cannot be rehired until two full pay periods have passed from your employment termination date. If you are rehired at an HSHS Affiliate, you must work less than 1,000 hours per year (including PTO) or HSHS is required to suspend you pension benefit per Plan rules.

If you are no longer employed at HSHS at the time you wish to retire, please contact the HSHS Colleague Service Center to get the process started.
When can I receive my Cash Balance Benefit?
  • If you are vested with three years of vesting service, you may receive your benefit when you terminate employment with HSHS.
  • Your Cash Balance Benefit can be paid as:
                    - A lump sum distribution of your account balance, or
                    - An equivalent monthly benefit, based on your account balance.
  • To receive your benefit as a lump sum, your spouse’s written consent is required.
  • You can also delay distribution to a later date.
  • To avoid taxes and penalties on a distribution, you can roll over your benefit to an Individual Retirement Account (IRA) or another qualified employer plan that allows rollovers.