How Your Benefit is Calculated

Your retirement benefit is equal to the value in your Cash Balance Account. Throughout your career at A&B, A&B will apply to your Cash Balance Account two types of credits at the end of each calendar year…

  • A Pay Credit, which is equal to 5% of your compensation – your compensation includes your base pay, overtime and annual one-year bonuses*; and,

  • An Interest Credit, which will be based on 10-year U.S. Treasury Rates.**

* For purposes of plans such as the Retirement Plan, compensation is subject to IRS limits. For 2009, the compensation limit is $245,000.

** Interest Credits are calculated as the arithmetic average of the month-end 10-year Treasury Constant Maturities rate for the months of August, September and October of the prior calendar year.

The sum of the Pay and Interest Credits applied to your Cash Balance Account throughout your employment with A&B equals your retirement benefit.

If you leave A&B mid-year, A&B will apply to your Cash Balance Account a Pay Credit equal to 5% of your compensation earned up through your last day of employment. Interest Credits will be prorated for a partial year if you receive your distribution on a date other than December 31st.

When Do You Begin Receiving Credits?

You become eligible to participate in the Retirement Plan after you have completed one year of service. Pay Credits are generally credited to your account on the last day of the year so you will receive your first Pay Credit on December 31st following the date you complete one year of service.

For example: If your first day of employment with A&B was January 1, 2008, you will…

  • Become eligible for the Retirement Plan on January 1, 2009, and

  • Receive your first Pay Credit on December 31, 2009.

This first Pay Credit will be based on your earnings from your date of hire (5% of the compensation earned from January 1, 2008 to December 31, 2009). All subsequent pay credits will be based on your earnings during a single year.

To earn an Interest Credit, you must have a balance as of the January 1st of the calendar year for which this credit is applied. Therefore, in the example described above, you would receive your first Interest Credit on December 31, 2010.

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How Your Benefit Grows… Year after Year

Over the years that you work at A&B and remain eligible for the Retirement Plan, your Cash Balance Account will continue to grow. Here’s how…

  • You will continue to receive Pay Credits for as long as you work for A&B and remain eligible to participate in the Retirement Plan

Plus

  • The amount of your annual Pay Credit will increase as your salary increases

Plus

  • Interest Credits will be applied each year to ever-larger Cash Balance Account balances, resulting in increased gains each year with no risk of investment losses.

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