Retirement Overview for TRW Heritage Employees - Benefits Online

Retirement Overview

Today’s Topics
• Retirement Plan Overview
• Pension Estimates
– Benefits OnLine
• Applying for Retirement
• Additional Benefit Plans
• Resources
• Questions
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Retirement Plan Overview
for TRW Heritage Employees

Northrop Grumman
Pension Program
• Effective 7/1/03 most historical pension plans were
amended to incorporate a cash balance feature.
―
―
Effective 1/1/04 for Norden Systems Retirement
Plan and Newport News Shipbuilding Inc.
Retirement Plan
Effective 1/1/05 for TRW Salaried Pension Plan
• Your benefit at retirement may consist of up to 3 parts
depending on your historical plan (if any) and when you
became eligible to participate.
– Part A: the historical benefit earned prior to the Program
effective date
– Parts B or C: transition benefits
– Part D: the benefit earned under the cash balance feature
only
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Vesting Requirements
• Vesting means you have earned a non-forfeitable
right to your Pension benefit.
• Once you are vested, you will be eligible for a
Pension benefit even if you leave the company
prior to retirement age.
• Employees who terminate on or after January 1,
2008 are vested after completing 3 years of
vesting service
– you accrue one year of vesting service for each
year you work and are paid for 1000 or more
hours
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• Normal Retirement
When can you retire
The later of:
– Age 65, or
– Your age on the earlier of fifth anniversary of your
participation in the Plan and the date you complete 3 years
of vesting service
– Effective the first day of the month coincident with or next
following your normal retirement age, as described above
• Early Retirement
– Age 55 with 10 or more years of vesting service
– Effective the first day of any month coincident with or
following the date you become eligible
• Historical pension plans may have different eligibility
dates
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TRW Heritage Retirement Benefits
Part A
Part B
5-Year Transition
Benefit
Part D
Your benefit
under your
historical
plan
formula
through
12/31/04
Your benefit
under the
cash balance
formula
beginning
01/01/10
Your benefit based on a
+
formula similar to the
+ =
one under your historical
plan from
01/01/05 – 12/31/09
or
Whichever is greater
Part C
5-Year Transition Benefit
Your benefit under
the cash balance
formula from
01/01/05 – 12/31/09
Your
pension
benefit
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Retirement Eligibility
• TRW Heritage Pension Benefit (Parts A & B)
If you are at least age 55 and have at least 10 years of
vesting service, you can immediately commence your pension
benefit using early retirement factors
If you leave the company before reaching age 55 and have at least 5
years of vesting service, you can commence your pension benefit as
early as age 55 using deferred vested factors
• Northrop Grumman Pension Benefit (Parts C & D)
If you are at least age 55 and have at least 10 years of
vesting service, you can immediately commence your pension
benefit using early retirement factors
If you leave the company before reaching age 55 and have at least
10 years of vesting service, you can commence your pension benefit
as early as age 55 using deferred vested factors
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Early Retirement Factors – TRW Parts A & B
Age
Retire at or after age 55 with 10 or
more years of service
Hire Date Hire Date Between
Prior to to 1/1/2000 and
1/1/2000 12/31/2004
Terminate before age
55 with 5 years of
service or retire at or
after age 55 with 5 but
less than 10 years of service
65 100.0% 100.0% 100.0%
64 100.0% 100.0% 93.3%
63 100.0% 100.0% 86.7%
62 100.0% 100.0% 80.0%
61 100.0% 95.0% 73.3%
60 100.0% 90.0% 66.7%
59 96.0% 85.0% 62.8%
58 92.0% 80.0% 58.6%
57 88.0% 75.0% 54.8%
56 84.0% 70.0% 51.3%
55 80.0% 65.0% 48.1%
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Payment Options
• Parts A, greater of B or C and D
― Single Life Annuity
― 50%, 75%, 100% Joint & Survivor with contingent
annuitant
― 10 years certain and continuous
― Age 62 level income with single life annuity or 50%, 75%
or 100% joint and survivor
• Part A only
— Lump sum if lump sum requirements are met at
termination:
– Must initiate commencement of benefits prior to the end of
service accrual (the month of termination)
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TRW Heritage –
Part A Lump Sum Option and the PPA
• For retirements effective 1/1/2010 and after the new
interest rate and mortality tables prescribed by the
Pension Protection Act (PPA) will be phased in for lump
sum distributions
• Northrop Grumman PPA Phase-In
30 Year
Treasury
Rate
Corporate
Bond Yield
Rate
2009 and before 100% 0%
2010 40% 60%
2011 20% 80%
2012 and later 0% 100%
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Pension Estimates

Benefits OnLine Home Page
You can
log into
your My
Benefits
Access
page
here
http://benefits.northropgrumman.com
Accessible via the Internet
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My Benefits Access - Pension Estimates
From the drop down
Menu on the home
page select
“Estimate
Retirement Income”
Next, enter
your
retirement
assumptions
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My Benefits Access
Pension Estimates - Results
To see your pension payment options select “forms of payment”
Save your estimate for future reference.
You can compare estimates you run with different
assumptions
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Pension Estimates - Forms of Payment
Historical with Transition Benefit (Part B or C) example
Historical
(Part A)
benefit
Transition
(better of
part B or
C) benefit
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Part A – Lump Sum Option
Forms of
payment
for the
Historical
(Part A)
benefit
Lump
Sum
option
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Pension Estimates - Forms of Payment
Cash Balance Benefit (Part D) example
Cash
balance
(part D)
benefit
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Applying for Retirement

Requesting Your Retirement Kit
• Request your retirement kit at least 2 months, (but no more
than 90 days), prior to your retirement date, by calling the
NGBC or by logging in to My Benefits Access
― For example, if retiring on May 5th and commencing your
pension on June 1st, you would need to initiate your
retirement no later than April 1 st
• Your Retirement Specialist will review your “next steps” with
you
• You will need to provide the following information:
— Date of retirement
— Date you want to commence your pension (1st of month)
— Spouse and/or Beneficiary information:
• Name
• Relationship
• Date of birth &
• SSN
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Retirement Kit Contents
Your retirement kit contains the following:
• Pension Disclosure Notice or Starting Your Pension Benefit
• Pension Calculation Statement
• Pension Options Descriptions
• Pension Options Worksheet
• Payment Delivery and Withholding Worksheet
• Notice of Rights
• Relative Value Notice
You should read all materials in your kit thoroughly.
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Making Your Pension Elections
• Follow instructions in the kit and make pension elections by:
– Calling the NGBC or
– Logging in to My Benefits Access (MBA)
• After making your elections, you will receive an Election
Confirmation Statement and a Pension Election Authorization
Form. Review the Confirmation statement carefully.
• If Confirmation Statement accurately reflects your elections,
sign and return the Pension Election Authorization Form by
the deadline reflected on the Confirmation Statement.
• Once pension elections have been made they are irrevocable
22

Additional Benefit Plans

Retiree Medical – Heritage Eligibility
• Eligibility for Heritage retiree medical was frozen as of
6/30/2003
- 1/1/2004 for Newport News
- 1/1/2005 for TRW
• If you were hired prior to the freeze date, you may be
eligible for a subsidized Heritage plan. You must contact
the Northrop Grumman Benefits Center (NGBC) to
determine your eligibility.
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Retiree Medical – Access Only Eligibility
• If you were hired after the freeze date, or your heritage
company did not offer a retiree medical plan, you are
eligible for Access Only Retiree Medical coverage if you
meet the following requirements:
– At least age 55 with a minimum of 10 Years of
Service
– At least age 65 with a minimum of 5 Years of Service
• Access Only offers the same medical plan options but
the costs are not subsidized by Northrop Grumman
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Benefits Continuation under the
Consolidated Omnibus Reconciliation Act
(COBRA)
• Benefits coverage under COBRA, if elected, continues for a maximum of 18
months (extensions are available under certain circumstances)
– Medical coverage under COBRA automatically ceases if the employee or
spouse becomes eligible for Medicare after the date of COBRA election
• Your 18 month COBRA eligibility period begins on the first of the month
following your last day worked
• You may elect benefits continuation under COBRA only for those health
plan options that were in effect on the day before your benefits terminated
– You may continue some or all of your active benefits under COBRA
• COBRA is available for eligible dependents covered as of your last day of
work
26

Medicare Eligible Participants
• If you and/or a dependent are Medicare eligible
(because you are 65 or under 65 and disabled),
you MUST enroll in Medicare Part B as soon as
your active employment ends.
– Claims will be processed as though Medicare has paid
primary
– Failure to enroll in Medicare B as soon as active
employment ends may also result in an SSA/Medicare
imposed penalty on all future Medicare B premiums
– Visit www.medicare.gov for more information about
Medicare
• COBRA coverage is not considered active employer
coverage and therefore is secondary to Medicare.
27

Enrollment
• If you are immediately eligible for retiree medical you may:
– Immediately elect retiree medical
– Defer coverage until after the COBRA period
– Defer retiree medical indefinitely
• If you want to enroll for Retiree Medical you must contact the
NGBC to request a Retiree Medical kit
– Kit will include your plan options, costs for each option and
enrollment instructions
• Dental and/or vision can be continued through COBRA even
after you commence retiree medical.
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Northrop Grumman Savings Plan
• You are 100% vested and entitled to the full value of your account,
which includes your contributions, company matching contributions
and all earnings.
• Retirement Account Contributions (for eligible employees
hired/acquired after 6/30/08) will become 100% vested after 3 years
of service.
• If your account balance exceeds $1,000, and your retirement date
has been recorded in the system, you may:
- Receive payment of your entire account balance (lump-sum distribution)
- Receive payment of a portion of your account balance (partial distribution)
- Leave your money in the NG Savings Plan and delay taking a
distribution as late as age 70½
- Roll over your account balance to an employer’s qualified plan or an IRA
• If your account balance is $1,000 or less, you will automatically
receive a lump-sum distribution 60 days following the recording of
your retirement date in the system.
– You may elect to roll over the distribution to an IRA or other qualified
account if requested prior to the scheduled force-out date.
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Northrop Grumman Savings Plan – Taxes
• If you elect to receive a distribution, your tax-deferred contributions,
company matching contributions and all investment earnings are taxed as
ordinary income. Unless you elect to directly roll over your account balance
to an IRA or other qualified plan, current law requires:
- 20% Federal Income Tax withholding on the taxable portion of the
distribution
- May be subject to an additional 10% Federal penalty
- State penalties may also apply in some cases
• Your Savings Plan account will not be assessed a 10% Federal Penalty Tax if:
- You are age 55 or older and elect early retirement
- You are 59½ years of age or older
- You roll over your distribution to an IRA or another employer’s qualified plan
within 60 days of the date you receive it
– Review the Northrop Grumman Savings Plan Summary Plan Description
(SPD) accessible at Benefits OnLine for more details
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Resources

Social Security
A reduced social security benefit is available as early as age 62.
Or, you can wait to receive your full Social Security benefit (based
on year you were born).
Apply 3 months before benefit is to begin.
• To apply for your Social
Security benefits:
– Via the web at
www.ssa.gov
– By telephone 1-800-772-
1213
– In person at your local
Social Security office
When You Can Receive
Your Full Social Security
Benefit
Age at Which You Are
Eligible to Receive
Year of
Your Full Social
Your Birth
Security Benefit
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 -1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 ad 10 months
1960 and later 67
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Benefits OnLine Home Page
You can
log into
your My
Benefits
Access
page
here
http://benefits.northropgrumman.com
Accessible via the Internet
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Northrop Grumman Benefits Center (NGBC)
A call center staffed by knowledgeable representatives
Available Monday through Friday
(excluding holidays)
9:00 a.m. to 6:00 p.m. ET
Call
1-800-894-4194
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Questions
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