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From the R&I Committee - 12/16/15
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From the R&I Committee - 12/16/15

 

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Change of the Normal Retirement Age for the FedEx Corporation Employees’ Pension Plan
The Company sent out a notice on December 10, 2015 regarding changing the Normal Retirement Age for the FedEx Corporation Employees’ Pension Plan (Pension Plan) from age 60 to the IRS “safe harbor” of age 62. This change will go into effect on February 1, 2016.

Why are they making this change?
The Company must make this change to ensure that the Pension Plan complies with the IRS requirement that its normal retirement age not be “earlier than the earliest retirement age that is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed.”  Failure to comply with this requirement could lead the IRS to revoke the tax-exempt status of our Pension Plan.

Will this change affect my benefit?

  • If you plan to begin receiving your Pension Plan benefit immediately after you retire, this change does not affect your benefit, regardless of your age at retirement.
  • This change does not affect early retirement reductions or early retirement payment calculations. If you retire prior to age 60, your Pension Plan benefit will be reduced from age 60 to your early retirement date, as is currently the case.
  • If you retire between age 60 and age 62 and defer commencement of your pension, your total pension benefit will not be reduced, but a portion may be paid from the nonqualified pension plans.
  • If you retire at or after age 62, this change does not affect your Pension Plan benefit.

This change will only affect that portion of a retiring pilot’s Pension Plan benefit that is accrued after January 31, 2016, and only if all of the following conditions are met:

  • You must accrue pension benefits after January 31, 2016;
  • Your employment with FedEx must end before you reach age 62; and
  • You must choose to defer receipt of your pension payments until at least one month after age 60 or at least one month after the date your employment ends, if later.

If you meet all of these conditions and are therefore affected by this change, FedEx will replace any benefits that cannot be paid under the qualified Pension Plan due to this change through nonqualified benefits paid under the Federal Express Corporation Non-Qualified Pension Plan for Pilots and the Federal Express Corporation Non-Qualified §415 Excess Pension Plan for Pilots.  You will receive a lump sum cash payment to make up for any shortfall in your qualified benefits.

You will be receiving a mandatory notice further explaining the change from the Company in the near future.  Your first stop for questions should be to contact the FedEx Retirement Service Center at 1.855.604.6221 Monday through Friday, from 8:00 a.m. to 6:00 p.m., Central Time.  If they can’t address your issues, please contact the FDX MEC Benefits Specialists at 901.752.8749.
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