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Defined Benefit Pension Plan
Frequently Asked Questions - Defined Benefit

Exactly what is a Defined Benefit Pension Plan?

A Defined Benefit Pension Plan is a retirement benefit plan. It is designed to provide a monetary "benefit" or "pension" to participants when they retirement. The amount of the benefit is "defined" by a formula based on your compensation and your years of service.

Can I make contributions to the Pension Plan?

No. Unlike a 401(k) Plan where you can make contributions, your employer is responsible for making contributions to or ‘funding’ the Pension Plan.

What if my employer goes bankrupt?

Every SBERA Defined Benefit Pension Plan is insured by the Pension Benefit Guarantee Corporation "PBGC"). Your employer pays premiums to the PBGC to insure your Pension Plan - it’s similar to paying premiums to the FDIC to insure depositors’ accounts.

How are the contributions my employer makes invested?

The SBERA Investment Committee and our outside consultants, NEPC, follow the guidelines in the Investment Policy Statement for investing the assets of the Pension Plan. Currently, there is approximately $735 million in the Pension Plan of which just over 50% is invested in stocks. The remaining assets are invested in bonds, Global Asset Allocation and Hedge Funds.

How are the investments in the Pension Plan performing?

As of December 31, 2016 the trailing one year return is 4.0%. Over the past thirty-five years the Plan has earned approximately 9.6%.

Can my employer decide to stop offering this benefit?

Legally, your employer can amend or terminate the Pension Plan as long as certain rules are followed. These rules include giving you proper notification that the Plan is being "materially modified" or "terminated". Your employer, however, cannot ever take away any benefit that you have already earned (your "vested benefit").

When can I get my benefit?

Most Pension Plans consider age sixty-five the "normal" retirement age, but some Plans allow you to start receiving your benefit earlier if certain conditions are met (length of service, etc.). You should know, however, that if you start taking your benefit earlier than normal retirement age the amount will be reduced. Some Plans allow you to keep working and not start taking your benefit until age 70. For details about your Plan, speak to your Human Resources Department or consult your Summary Plan Description ("SPD").

How can I get my benefit?

There are usually several options, the most common of which are a "lump sum" or an annuity. For details about your specific Plan, speak to your Human Resources Department or consult your Summary Plan Description ("SPD").

How do I keep track of my benefit?

SBERA provides you with an annual "Statement of Benefits". This statement is normally produced six - eight weeks after the end of each Plan Year (October 31). You should carefully review the statement and inform your Human Resources Department or SBERA if you feel any of the information provided is incomplete or incorrect.

How do I get more information about my Defined Benefit Pension Plan?

You can read the Summary Plan Description, talk to your Human Resources Department or call SBERA whenever you have questions or need more information.

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