Money Talks

NIPSCO union employees, as you get closer to retirement, here is what you'll need to know about your Final Average Payout Pension, commonly referred to as the Traditional Pension Plan. If you've been hired before June 2004, you're likely on the Traditional Pension plan.

There are three essential parts of figuring out your pension payout. These three parts are your years of service, age, and pay class.

*Keep in mind the rule of 85 matters when it comes to retirement under this plan. The rule is that your age plus years of service must equal or be greater than 85 for unreduced retirement benefits.

Below is a possible pension payout calculation for an employee who is in the D pay class. With 32 years at NIPSCO.

It is also important to know that there are options for pension distribution. Here you have 4 options:

-Single Life Annuity: This example is exactly that; it is the full pension payout portion that you will receive each month. If you are unmarried, this is the payout that you will receive. If you are married, you may select this option as well; however, it is required that your spouse sign off on this before selecting this option.

-50% Pop-up Annuity: This is one of the options that you have as a married individual. Your pension benefit will be reduced; however, it will ensure that your spouse will receive a monthly pension payout in the case that you pass first.

-75% Pop-up Annuity: This is similar to the 50%, however, in this case, your benefit is reduced even further, but your spousal benefit increases.

-100% Pop-up Annuity: This, like the previous two examples are also reduced even further. What is interesting in this case is that your pension payout while alive will be exactly the same amount as your spouse would receive if you passed first.

Decisions like this are crucial to consider before retiring. If you are married, it's important for you to speak with your spouse first to decide which option to take. NIPSCO's retirement department will pre-fill this information and make all of the required calculations to get your pension options available for you to select. This process takes roughly 3 months, so begin planning early. This way you can head into retirement with confidence.