Defined Benefit Pension (hired prior to 7/1/2014)

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 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 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.