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[[logo]] PAA [[/logo]] Bulletin


No. 57 - 1 - 1 - 2               January 21, 1957

PERSONNEL INFORMATION BULLETIN No. 1

TO: ALL COOPERATIVE RETIREMENT INCOME PLAN PARTICIPANTS-LAD

SUBJECT: COOPERATIVE RETIREMENT INCOME PLAN - CONTINGENT ANNUITANT

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As you know, Normal Retirement Ages under the Cooperative Retirement Income Plan are: for women and flight personnel, age 60; for men in ground duty, age 65.

You also know that the Plan is likely to pay a lot more in income than you could ever possibly buy for the same amount of money under some other arrangement. But it is pretty hard to talk specific dollar amounts in this Plan. You may continue your contributions all the way to age 65, or you may not--you might retire early or something. Because of the variable factors, it is pretty hard to give exact dollar figures for each case, and sometimes it is hard to see just what the effect of the various options might be.

For instance, it always has been possible for a member to elect an option that would pay him a smaller amount of retirement income for his lifetime after retirement in order to continue payment of a retirement income to another person for that person's lifetime after the death of the member. By naming such a person, the member sets up a "Contingent Annuitant" to share in his benefits even after his death. Naturally, the member's benefit is less because the underwriter guarantees to pay money to two people for the balance of their natural days. The amount of the reduction in the member's annual benefit is determined by the amount he wants continued to the second party, that is, the same amount as the reduced amount he will receive (100% option), two-thirds of what his reduced benefit will be (66-2/3% option), or half of what his reduced benefit will be (50% option).

Several years ago the underwriters, through the good offices of Pan American, liberalized this Contingent Annuitant Option. The Plan provided then, as it does now, that any member could elect to retire within 10 years of Normal Retirement Age - age 50 for women and flight personnel and age 55 for men in ground duty. This is known as Early Optional Retirement.

This election, too, reduces the amount of annual retirement income a member receives--because the underwriters start paying retirement income sooner than they normally would do, and they do not receive contributions from the member and from Pan American for those years between Early Optional Retirement and the Normal Retirement Date.


PAN AMERICAN WORLD AIRWAYS

[left margin]] FORM 9210-0145 [[/left margin]]