Viewing page 30 of 102

This transcription has been completed. Contact us with corrections.

-9-

Miscellaneous Notes

(1) This plan does not provide for a cash value during the life of the insured. In other words, it cannot be used for a combination savings and insurance plan.

(2) The insured may retire voluntarily any time after he attains the age of 50 but his retirement annuity will be reduced by one-one hundred eightieth (1/180th) for each month that he is less than age 60. In retiring voluntarily, of course, he disqualifies himself to receive occupational disability benefits which would be much higher than the retirement annuity at an age less than 60. It ordinarily would not be financially advantageous to retire voluntarily and if you did, your annuity would be somewhat reduced at any age less than 60.

(3) The figures computed here are purely for a hypothetical situation which presupposes that a copilot will reach a salary of $6600/yr. The $6600 a year figure is not possible on many airlines. If the insured should remain a copilot for 15 years at a top salary of $6600/yr., his insurance benefits would be much affected. For instance, in Table II, his retirement at age 6 at the end of 15 years would then be $104.00 per month and at age 50 would be $34.67 per month. However, if he worked 20 years as copilot his retirement at 60 would automatically go to $200.00 per month. What a great number of 15-year copilots would do to the cost of the Plan is problematical. The cost to the copilot would be correspondingly reduced. 

(4) Although full credit is given for military service, the index year for computing retroactive benefits would be 1948, and the salary used would be the 1948 airline salary. Thus, if an individual has 5 years of credit for military service and two years with the airline and his 1948 airline salary was $3600 per year, he would receive credit for seven years service at $3600 per year. Since all benefits are computed from the average annual salary, it will take him many years at a relatively high salary to raise his average. For example, if he remained a copilot for another three years, he would then have ten years of service for retirement purposes but his average salary as computed for the ten-year period would be about $350.00 per month. This would give him a retirement at age 60 of about $45.00 per month as compared to the $93.30 per month for the man with ten years of service in Table III. 

(5) "No annuity shall be paid with respect to any month in which an individual in receipt of an annuity hereunder shall render compensated service to an employer or to the last person by whom he was employed prior to the data on which the annuity began to accrue." Under this provision, a pilot who retires on an annuity for any reason, must sever his employment with his airline and, in addition, must sever any other employment connection that he may have. However, he may engage in business or other employment not with an air carrier or his last employer without disqualifying himself for his annuity payments.

(6) If a pilot dies and leaves a wife and two children, both of whom are less than 21 years of age and unmarried, his family shall receive one and three-fourths times his Insurance Amount until the children reach 21.