Payment Options > Equated Plan

This plan pays you a higher pension until you are age 62, and then your monthly pension is permanently reduced. You might choose to receive the equated plan if you want your overall income to remain fairly even both before and after social security begins. 

So that your income (pension only) before age 62 is close to your combined income (pension and social security) after age 62, the increased pension before age 62 is based on a portion of your projected social security benefit. When you apply for your pension, you provide us with an estimate of your age 62 social security benefit. Request this from the Social Security Administration at www.ssa.gov/mystatement, or (800) 772-1213. 

Because calculating your "before and after" pension involves so many variables, it's not possible to provide tables and worksheets here. However, our online benefit estimator will do it for you simply and quickly. Obtain your social security estimate as noted above, and plug in your numbers.

The equated plan can be confusing. It is important to have a full understanding of it, because you can't change your mind after your retirement effective date. 

As you can see in the illustration below, under the equated plan your pension amount drops at age 62.

When to choose the equated plan.

CONSIDER the equated plan if: 

• You believe you would be money ahead by investing the pension "advanced" to you before age 62.
• You want to receive as much income as you can as soon you can because your life expectancy is uncertain.
• You prefer having a relatively even income throughout your retirement.

DON'T choose the equated plan if:

• You don't want your pension permanently reduced at age 62.
• You like the idea of having more monthly income when social security begins.
• You don't want the higher pre-62 income to put you in a higher tax bracket. 
• You expect to live longer than the life expectancy tables say, and you believe that the permanent reduction will end up costing you money.   

Additional notes on the equated plan.

• Your pension is reduced at age 62 regardless of when you actually begin receiving your social security and regardless of how much it actually is.
• If you are age 61 or older as of your retirement effective date, you can't choose the equated plan. 
• If you are eligible for a disability retirement, you can't choose the equated plan.
• The equated plan has no bearing on postretirement increases, so MIP retirees will get the standard 3 percent increase that is based on the initial pension amount calculated before the advance.
• Your pension payment reduction under the equated plan takes effect the month after your 62nd birthday. If your birthday falls on the 1st or 2nd of the month, your pension is reduced the month in which you turn 62.