Understanding Benefit Eligibility

A pension plan typically defines a number of different retirement types: reduced and unreduced early retirement, normal retirement, and others, and a plan may have ancillary benefits for disability or death. Each of these benefits has its own eligibility requirements, often age and service requirements for retirement and proof of status for ancillary benefits.

There are two reasons to have a pension system determine the benefits for which an employee is eligible:

• The benefit type may impact the calculation of benefits.

  For example, if a death benefit provides 100 percent vesting and a benefit that is 50 percent of the normal retirement benefit, the system must know when it is calculating a death benefit.

• Calculation results are always tied to a single assumed benefit commencement date.

  You can use the benefit eligibility results to see what type of retirement is associated with that benefit commencement date.

  You set up a function result for each retirement or ancillary benefit that your plan includes. The benefit eligibility function evaluates the eligibility requirements.