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WHAT ARE MY RETIREMENT OPTIONS?

Planning for retirement shouldn't wait until we are 65. Generally, a retirement plan could include a single employer defined benefit pension, a multi-employer defined contribution pension, a 401(K) savings plan, individual retirement accounts (IRAs), or some combination of the above.

WHAT IS A SINGLE-EMPLOYER DEFINED BENEFIT PENSION?

Many Alcoa employees in the US have defined benefit pensions. Each employee receives a specific monthly amount of money when they retire, for as long as they live. Alcoa sets aside money to cover current and future pensions, administered by the company.

WHAT IS A DEFINED BENEFIT PENSION MULTIPLIER?

The pension multiplier is used to calculate a monthly pension benefit, based on the number of years you have worked for Alcoa. For Union members, this multiplier would be negotiated into their contract and can only be changed through negotiations.

For example, a person retiring after 30 years with a $50 multiplier would receive a $1,500 monthly pension from Alcoa.

WHAT IS A MULTI-EMPLOYER DEFINED BENEFIT PENSION?

The Steelworkers Pension Trust is an example of a multi-employer pension fund. An employer contributes a set amount into the fund, as negotiated by the Union, and benefits are guaranteed based on the amount of contributions made on behalf of the employee.

The Steelworkers Pension Trust is administered by an independent, joint labor-management Board of Trustees. Over $1.1 billion in assets are invested by 10 different money-management firms. Over 560 employers contribute into this fund which covers over 61,000 current employees and retirees.

CAN I RETIRE BEFORE I'M AGE 65?

Although most Union members at Alcoa have early retirement options, many other Alcoa employees do not.

WHAT IS "30 AND OUT"?

With a "30 and out" retirement option, you could retire after 30 years of service at Alcoa and collect your full pension, regardless of age. Most USW members at Alcoa have the "30 and out" retirement option in their Union contract.

IS MY PENSION GUARANTEED?

Defined benefit pensions, such as those negotiated by the USW, are regulated and guaranteed by the federal government. 401(K) savings plans, such as the one Enron employees had, are not guaranteed.

WILL MY HEALTH CARE BE COVERED AFTER I RETIRE?

Most USW retirees from Alcoa currently enjoy fully paid health insurance after retirement as negotiated by the Union. With the rapidly increasing costs of health insurance, having coverage after retirement should be a major concern for anyone.

WHAT IS A 401(K) SAVINGS PLAN?

A 401(K) savings plan is an investment account administered by a third-party broker. The 401(K) either gains or loses money based on the investments made by the broker. In the last few years, 401(K) accounts on average have lost a significant amount of money.

WILL MY 401(K) PROVIDE ENOUGH SAVINGS FOR MY RETIREMENT?

Probably not. Because the stock market is so unpredictable, there is no guarantee on your rate of return and the ultimate value of your savings when you retire. The main danger of relying solely on 401(K) savings for retirement is that it can be spent too quickly. Imagine retiring at 65 and running out of money in your 401(K) when you are 70 or 75 - how will you support yourself until the age of 80 or 85?