Cash Balance Pension (hired/rehired after 7/1/2014)

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, $275,000 in 2018.
  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
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

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.