Cigna Pension and Savings plan info.
Cigna Pension Plan Fact Sheet.
If you were hired before 1989 your pension is calculated using formula A as described below. If you were hired after 1989 only formula B is used.
Pension benefits under both formulas are based on years of credited service and eligible earnings.
“Credited service” is generally limited to an employee’s period of service with a CIGNA company while that Company participates in the CIGNA Pension Plan. An employee receives credit for one year of credited service for any calendar year in which he or she is credited with at least 1,000 hours of service.
“Eligible earnings” includes base salary and annual incentive—but not payments under any long-term incentive compensation plans.
Part A. Part A provides an annual retirement benefit stated in terms of a single life annuity payable at age 65. That annual benefit equals:
the employee’s years of credited service (up to a maximum of 30 years);
Multiplied by
2% of the higher of the employee’s average annual eligible earnings over (a) the final 36 months of service, or (b) the three consecutive calendar years with the highest eligible earnings;
Minus
an offset equal to approximately half of the employee’s annual Social Security benefits.
Part A benefits are generally payable only in annuity form as early as age 55. An actuarial reduction applies if benefit payments begin before age 65. Part A benefits become 100% vested upon a participant’s completion of five years of vesting service.
On December 10, 2007 the People Resources Committee of the Board of Directors authorized the amendment of Part A of the CIGNA Pension Plan. The amendment is to freeze the current formula in two phases. The first phase will freeze credited service as of March 31, 2008 and the second phase will freeze a participant’s eligible earnings as of December 31, 2009.
Beginning April 1, 2008 the plan will provide a new formula with the retirement benefit stated as a lump sum hypothetical account balance. That account balance equals the sum of (1) the employee’s accumulated annual benefit credits, and (2) quarterly interest credits.
For each year that an employee earns a year of credited service, the employee’s account receives annual benefit credits. Annual benefit credits are a percentage of eligible earnings as follows: 8% for the remainder of 2008, 9% for 2009 and 10% for 2010 and later; however, after employees have earned 30 years of credited service, the percentage is 3%.
On the last day of each calendar quarter until an employee’s benefit is paid, the employee’s account also receives interest credits, which are based on the return on five-year U.S. Treasury Constant Maturity Notes.
The hypothetical account balance is payable as early as an employee’s termination of employment. Payments may be made in annuity form or lump sum, at the employee’s election.
For Employees hired after 1989
Part B. Part B provides a retirement benefit stated as a lump sum hypothetical account balance. That account balance equals the sum of (1) the employee’s accumulated annual benefit credits, and (2) quarterly interest credits.
For each year that an employee is credited with a year of credited service, the employee’s account receives annual benefit credits. Annual benefit credits range from 3% to 8.5% of eligible earnings, based on the employee’s age and accumulated years of credited service.
On the last day of each calendar quarter until an employee’s benefit is paid, the employee’s account also receives interest credits, which are based on the return on five-year U.S. Treasury Constant Maturity Notes.
Part B benefits are payable as early as an employee’s termination of employment. Payments may be made in annuity form or lump sum, at the employee’s election.
As of January 1, 2008, an employee must have at least three years of vesting service to be 100% vested with a right to a Part B pension benefit. “Vesting service” is service with any CIGNA company, whether or not it participates in the CIGNA Pension Plan.
