Excluding employees of MTA, MIT, MGDS and employees of MIL hired after 12/31/2005
The A&B Retirement Plan for Salaried Employees (the "Retirement Plan") is designed to help provide you and your family with a reliable source of future income. The Retirement Plan generally pays a benefit to you when you retire from A&B or any of its participating companies*.
A&B pays the full cost of the Retirement Plan.
You earn a Retirement Plan benefit in the form of Pay and Interest Credits, which are applied to your Cash Balance Account. This section of your Handbook describes these Credits, and the other provisions of the Retirement Plan.
Note that the Retirement Plan described here applies to salaried, non-bargaining employees hired or rehired by A&B or any of its participating companies on or after January 1, 2008. It also applies to salaried, non-bargaining employees who transfer on or after January 1, 2008 from an employee group (either of A&B or of any participating company) that was not covered by the Retirement Plan to an employee group that is covered by the Retirement Plan.
* Participating companies are listed under Plan Sponsor
Vesting is the process by which you earn the right to receive a retirement benefit under the Retirement Plan. You become vested in the Retirement Plan after three years of service with A&B, beginning with your hire date. Thus, if you leave A&B after three years of service you will have earned the right to receive a pension benefit – either when you reach retirement age or earlier.
Your years of service are generally the sum of all months of service. In some circumstances, the months of service do not need to be consecutive months; conversely, if you have not been working for A&B for an extended period of time, you may lose your months of service from your previous period of employment.
The benefit to which you will be entitled will be based on the Pay and Interest Credits that have accrued to your Cash Balance Account, as explained under How Your Benefit Is Calculated.
You also will become vested in the Retirement Plan if you reach age 65 while a Plan participant, even if you have less than three years of service.
Back to TopIf you leave A&B and are later rehired, you will have a "break in service," unless you are rehired within 12 months. The impact a break in service will have on your vesting and/or benefits will vary, depending on whether you are vested when the break occurs, as explained below.
If you are not yet vested in the Retirement Plan, but have at least one year of service, and you are reemployed after less than five years, you will become a participant when you are rehired and your pre-break service will be restored.
If you have a break in service of five years or more, you will lose the vesting service you had earned before the break, and you must wait one year before your participation in the Retirement Plan resumes.
If you have a break in service and are vested when you leave A&B, you generally will not lose any benefits by leaving A&B and then returning. You will resume participation in the Retirement Plan immediately when you are rehired.
If you take an approved leave of absence, your service will be deemed to continue during the leave, provided you return to work for A&B at the end of the approved leave. Otherwise, your service will be deemed to end on the...
Date your employment ends for any reason, or
First anniversary of the date you were first actually absent from service
... whichever occurs first.
There is, however, one exception to this provision: If you are absent from work due to a parental leave*, you will have a break in service only if you do not return to active service within two years after your service ended.
* For the purposes of this provision, a parental leave is one for which you are absent due to pregnancy, the birth of a child, the placement of a child with you in connection with the adoption of that child, or caring for a child immediately following the child's birth or adoption.
If you transfer from one A&B company to another , your credited vesting service will be transferred to your new plan. If you were already a participant in the plan sponsored by your previous A&B employer, you will immediately become a participant in the plan sponsored by your new A&B employer. If your new A&B employer is not a sponsor under the Retirement Plan, you will not accrue future Pay Credits – but your accrued benefits will remain in your Cash Balance Account and be credited with Interest Credits.
If you are absent due to service in the uniformed services of the U.S., the period of your absence guaranteed by Federal law will count as service for the purposes of the Retirement Plan, provided you...
Are eligible to participate in the Retirement Plan, and
Return to work for the Company before your veteran's reemployment rights end.
If you are currently receiving benefit payments from the Retirement Plan, and you complete at least 40 hours of service with A&B or any of its affiliated companies in any calendar month, the Plan Administrator will suspend payment of your retirement benefits. If you are reemployed in covered employment, you will earn Pay Credits and Interest Credits for the period of time that you are reemployed. (See How Your Benefit Is Calculated for more details.) Your pre- and post-reemployment benefits will resume when your retirement resumes and you file an application with the administrator.
Back to TopThe Retirement Plan is intended to provide you with continuing income when you retire – whether you had continued working for A&B up until your retirement, or had left A&B years earlier and worked for another employer. The points below outline when and how you can access your Retirement Plan benefit.
For information regarding the amount of benefits you may be eligible to receive, see How Your Benefit Is Calculated. For information regarding forms of payment, see How Benefit Payments Are Made.
You are eligible to begin receiving the full value of your Cash Balance Account upon your normal retirement date (age 65). Benefits will begin the first day of the month following (or coincident with) the day you retire. As explained under How Benefit Payments Are Made you can elect to receive your Retirement Plan benefit in the form of an annuity (a monthly payment) or a lump sum payment.
Back to TopYou may elect early retirement under the Retirement Plan if you...
Are age 55 or older,
Have completed at least five years of service with A&B and/or one of its participating companies, and
File a written request for benefits with the Plan Administrator.
Electing early retirement does not affect the value of your benefit. You may choose to begin receiving the full value of your Cash Balance Account once you qualify for early retirement – and choose to receive your benefit in the form of an annuity (a monthly payment) or a lump sum payment.
Back to TopYou may also choose to continue working beyond your normal retirement date and defer your retirement. If you do, you will not receive benefits until the later of…
The date of your actual retirement, or
April 1 following the year in which you reach age 70½
However, if you own more than 5% of A&B stock, you must begin receiving benefit payments no later than April 1 following the year in which you reach age 70½, even if you are still working.
Because you earn (accrue) a retirement benefit during your years of employment, and become vested in that accrued benefit after three years, you are entitled to a benefit even if you leave A&B before you retire.
If you are vested when you leave A&B and you are not yet retiring you can receive a lump sum payment equal to the value of your Cash Balance Account. You also have the option, if your Cash Balance Account value exceeds $5,000 and you are married, to elect an immediate 50% or 75% Joint and Survivor Annuity with your spouse as contingent annuitant. Either way, the benefit you receive – either in the form of a lump sum payout or annuity payments will be taxed upon receipt.
However, if at the time you leave A&B you want to defer paying taxes on your benefit, you have two options: You can…
Still take a lump sum payout, but roll the amount over into another retirement plan, such as an Individual Retirement Account (IRA), or another employer’s plan*; or
Leave your Retirement Plan benefit in the Retirement Plan – you will continue to receive Interest Credits, as described below, which will be applied to your Cash Balance Account until the time you begin receiving benefits.
However, if you leave A&B before you have three years of service, you will lose your right to any benefit.
* In order to roll your Retirement Plan Cash Balance Account into another employer’s plan, the provisions of that plan must be such that it can accept rollovers from this type of plan.
If you die before you retire and your beneficiary is…
Your spouse, he or she will receive the value of your Cash Balance Account in the form of a Single Life Annuity, unless he or she elects to receive a lump sum payment. (However, if the value of the Cash Balance Account does not exceed $5,000, your spouse will automatically receive the value as an immediate lump sum payment.) Your spouse may elect to receive his or her benefit at any time following your death. If your spouse does not make a specific election, he or she will receive the benefit upon what would have been your Normal Retirement Date.
Someone other than your spouse, your beneficiary must receive the value of your Cash Balance Account as an immediate lump sum payment.
See Designating Your Retirement Plan Beneficiary for more information.
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.
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.
Back to TopOver 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.
Unlike some retirement plans, with this Retirement Plan, you can choose when and how you would like to receive your retirement benefit.
As explained under When You May Receive Retirement Benefits, you can choose to access your Cash Balance Account any time after you leave A&B, as long as you are vested. However, the Retirement Plan is intended to provide you with a source of income during your retirement years.
Once you choose to begin receiving your Retirement Plan benefit, you may choose to receive payment in the form of a…
Lump sum payout* – as long as you are single or receive your spouse’s notarized consent; or,
Monthly payout – known as an annuity; there are varying forms as described below.
For information pertaining to taxes that may apply, see Taxes under More About the Retirement Plan.
* If when you leave A&B, the value of your Retirement Plan Cash Balance Account (and any other retirement benefits from the Retirement Plan for previous periods of employment) is $5,000 or less, you will automatically receive a lump sum payout at that time.
Under the Retirement Plan, you may choose the form of payment you prefer – the payment forms are summarized in the following chart. However, if you are married there is a “default” form. If you are married, your payment must be in the form of either Options 2, 3 or 4 (as shown in the chart), with your spouse as contingent annuitant. If you want to receive another form of payment, you must elect otherwise and obtain your spouse’s written consent to a payment form that does not provide a survivor annuity to him or her.
When choosing your payment type, you should keep in mind the following: If you elect a…
Form other than a Single Life Annuity or Lump Sum Payment (Options 1 or 5), your monthly payment amount will be actuarially reduced so as to provide for continuing payments to your spouse or contingent annuitant (your beneficiary) after your death.
Lump sum payout (Option 5), the entire value of your Cash Balance Account will become taxable the year in which you received the payout (unless you roll it over into another retirement plan such as an IRA or another employer’s plan). In contrast, if you elect one of the annuity options, you will be taxed only on the value of the payments you received each tax year. See Taxes under More About the Retirement Plan for more details.
| Name | Description | ||
|---|---|---|---|
|
Option 1 |
Single Life Annuity |
Provides a monthly payment throughout your lifetime; benefits end upon your death |
|
|
Option 2 |
100% Joint and Survivor Annuity |
Provides a monthly payment throughout your lifetime and, in the event of your death, these payments to your spouse (or contingent annuitant) until his or her death |
|
|
Option 3 |
50% Joint and Survivor Annuity |
Provides a monthly payment throughout your lifetime and, in the event of your death, continuing payments equal to 50% of your monthly benefit will be made to your spouse (or contingent annuitant) until his or her death |
|
|
Option 4 |
75% Joint and Survivor Annuity |
Provides a monthly payment throughout your lifetime and, in the event of your death, continuing payments equal to 75% of your monthly benefit will be made to your spouse (or contingent annuitant) until his or her death |
|
|
Option 5 |
Lump Sum |
A single (lump sum) payment equal to the value of your Cash Balance Account at the time you receive your payment. |
|
The following information pertains specifically to the Retirement Plan. Additional information regarding all of the plans that comprise the A&B Retirement and Investment Program can be found under Putting It All Together.... In addition, information pertaining to all of your A&B benefits and the rights guaranteed you under Federal law can be found under Your Rights Under Federal Law.
Any benefit payments you receive from the Retirement Plan attributable to A&B’s contributions will be considered ordinary taxable income to you at the time you receive them. Therefore, as explained previously under Forms of Payment, if you elect a lump sum payout, you will be taxed on the full value of your Retirement Plan benefit unless you elect to defer taxes by rolling over your benefit into another employer’s plan (if the plan accepts such rollovers) or an IRA. (See If You Leave A&B Before Retirement Age for more details on rolling over your benefit payment.)
You should consult a qualified tax advisor or the IRS to determine the exact consequences of any distribution you receive. Also, please keep in mind that taxation regulations differ from state to state. Again, you may want to consult a qualified tax advisor or your state tax office.
Back to TopIt’s important that you designate a beneficiary to your Retirement Plan benefit. Your beneficiary is the individual(s) who receives your retirement benefit in the event you die after you are vested but before receiving this benefit.
If you are…
Married, your beneficiary is automatically your spouse; or,
Single, your beneficiary may be your domestic partner, a child or children, or other individual. If you do not designate a beneficiary, your beneficiary will automatically be your surviving children (in equal shares) or, if none, your estate.
At the time you begin receiving your Retirement Plan benefit, you can elect a Joint and Survivor Annuity form and change this designation to elect another individual as your contingent annuitant. This is the individual who, if you elect any of the Joint and Survivor Annuity payment options, will continue to receive all or a percentage of your monthly benefit after your death.
Again, if you are married, your contingent annuitant is automatically your spouse unless your spouse consents to changing this designation. If you are not married, you can name anyone to be your contingent annuitant, but IRS regulations may limit your ability to elect Options 2 or 4 if your contingent annuitant is an individual other than a spouse and he or she is significantly younger than you.
Back to TopAlexander & Baldwin, Inc. is the Plan Administrator, and is responsible for the day-to-day administration and operation of the Retirement Plan. The Plan Administrator will interpret Retirement Plan provisions, establish rules and regulations, and review any claims for benefits filed by participants and beneficiaries. The Plan Administrator also maintains records of all plan transactions.
Back to TopGenerally, you may not assign or transfer your right to receive benefits under the Retirement Plan, nor may you use your right to benefits as collateral for any loan. Similarly, your benefits are not subject to any creditors' claims or to attachment by legal process (other than federal tax levies and judgments).
Retirement Plan benefits, however, may be applied to the satisfaction of child support and alimony claims in accordance with a Qualified Domestic Relations Order (QDRO). The QDRO must relate to child support, alimony payment or marital property rights. The Plan Administrator will notify you if a QDRO relating to your benefits is received, along with the procedures for determining and processing the order.
Back to TopThe Internal Revenue Code (IRC) limits the amount of compensation that may be used to calculate your benefit as well as the annual benefit payable under the Retirement Plan. The limitations in 2009 are $245,000 for compensation and $195,000 for annual pension benefits. These amounts are subject to change from year to year; you may contact your local Human Resources representative to find out the current year's maximums.
Back to TopTo receive benefits from the Retirement Plan, you must file a written application with the Plan Administrator. The Plan Administrator will provide you with the appropriate forms at least 30 days before you become entitled to your benefits.
You may file your application for benefits (including your election of the form of payment) as early as 90 days before your retirement date, but generally not later than 30 days before your benefit would commence. If your notification to the Plan Administrator of your retirement date and application for benefits is less than 30 days, you must sign a form stating that you agree to waive the 30-day notice period from the Plan Administrator.
Note: To ensure timely notification of benefit eligibility, you should notify the Plan Administrator any time your address changes.
For information regarding how to appeal a decision with regard to your retirement benefit amount, refer to Claim Procedures.
Back to TopYour pension benefits under the Retirement Plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a Federal insurance agency. If the Retirement Plan terminates (ends) without enough money to pay all benefits, the PBGC will step in to pay pension benefits. In such situations, most people receive all of the pension benefits they would have received under their pension plan, but some people may lose certain benefits.
The PBGC guarantee generally covers...
Normal and early retirement benefits,
Disability benefits, if you become disabled before the plan terminates; and,
Certain benefits for survivors.
The PBGC guarantee generally does not cover...
Benefits greater than the maximum guaranteed amount set by law for the year in which the plan terminates
Some or all of benefit increases and new benefits based on plan provisions that have been in place fewer than five years at the time the plan terminates
Benefits that are not vested because you have not worked long enough for the Company to be vested
Benefits for which you have not met all of the requirements at the time the plan terminates
Certain early retirement payments (such as supplemental benefits that end when you become eligible for Social Security) that result in a monthly early retirement benefit greater than your monthly benefit at the plan's normal retirement age
Non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay, and severance pay; this also includes any benefits payable under a 401(k) or profit sharing plan, such as the A&B Individual Deferred Compensation (IDC) and Profit Sharing Retirement (PSR) Plans.
Even if certain of your pension plan benefits are not guaranteed, you still may receive some of those benefits from the PBGC, depending on two factors: how much money your plan has and how much the PBGC collects from employers.
For more information about the PBGC and the benefits it guarantees, contact the A&B Human Resources Department at 808-525-6611 (822 Bishop Street, Honolulu, HI 96813) or contact the PBGC at:
PBGC Technical Assistance Division, 1200 K Street N.W., Suite 930 Washington D.C. 20005-4026; 202-326-4000. (TTY/TDD users may call the Federal relay service toll-free number at 800-877-8339 and ask to be connected to the PBGC's number.)
Additional information about the PBGC's pension insurance program is available through the PBGC's website at www.pbgc.gov.
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