EXPLANATION OF TERMS
Annuity
An annuity is an annual income in a specified amount. It is the same thing as a pension.
Army & Air Force Motion Picture Service (AAFMPS)
Credited Civilian Service under the AAFMPS plan will be treated as though it were AAFES service, provided you became an employee of AAFES at the time of the merger of AAFMPS with AAFES or within 90 days thereafter.
Contingent Annuity
If you terminate employment and are vested, you may choose to provide a Contingent Annuity instead of the regular lifetime pension for just yourself. Under a Contingent Annuity, you receive a reduced pension during your lifetime, and upon your death a person you name (your "contingent Annuitant") starts receiving a pension, which continues for his/her remaining lifetime. The reduction in your pension depends on the age difference between you and your Contingent Annuitant, and on the amount of pension you want your Contingent Annuitant to receive. You can name anyone you wish as a Contingent Annuitant. If your Contingent Annuitant dies before your pension begins, your may cancel your election, or make a new election. If your Contingent Annuitant dies after your pension begins, but before your death, you will continue to receive a reduced pension, but no benefits will be payable beyond your lifetime, except under the Lump Sum Death Benefit provisions described on page 26.
Creditable Military Service
In determining your Credited Service, up to 5 years of active honorable U.S. military service will be counted, with these two exceptions:
- Active military service of 20 years or more will not be counted, because you are entitled to separate retirement income for such service.
- Two-week reserve duty (annual training), or other periods where you are on Active Duty Training (ADT) or Inactive Duty Training (IDT), count as though you had remained on the job.
Creditable Prior Bookstore Service
If you transferred to AAFES when it took over operational control of a bookstore activity, you receive credit under this plan for prior service with Army Bookstores as a regular full-time NAFI civilian employee (under the same rules as for AAFES employees) if that service was credited for retirement under the NAFI Retirement Plan for Bookstore Employees.
Creditable Prior NAFI Service
If you received credit for regular full-time service as a civilian employee under the retirement plan of another Department of Defense Nonappropriated fund Instrumentality (NAFI) and you transferred to AAFES at the time it took over operational control of the NAFI activity in which you were involved, or if you lost a NAFI job through a reduction in force and were hired by AAFES within 90 days after termination, then your service credit under the NAFI plan will count as Credited Civilian Service under the AAFES plan in the same manner as for AAFES employees. There will be an offset to your AAFES pension regardless of whether you receive a NAFI pension for NAFI service credited under the AAFES Retirement Plan, or if you withdrew contribution from a NAFI retirement Plan.
Credited Service
This is the service that counts in determining the amount of your pension. It includes Credited Civilian Service plus Military Service plus unused sick leave. See page 2 for details.
Credited Civilian Service
- This is the service that counts in determining whether you have completed the requirement for receiving a pension. It includes all your service as an AAFES Retirement Plan participant, plus certain other periods. See pages 6 through 10 for details.
- Any period you are granted "leave without pay" by AAFES during a period of active honorable U.S. military service will be considered to be continuous AAFES civilian employment provided you return to work within the required time period. Such service is not counted, therefore, as part of the 5 years of Creditable Military Service.
Interest
Interest is credited on your contributions at the rate of 2% per annum up to December 31, 1966 and at 3% per annum after that.
Involuntary Early Retirement
Involuntary Early Retirement requires Involuntary Termination of Employment and one of the following:
25 years of Credited Civilian Service, or
Age 50 and 20 years of Credited Civilian Service.
See page 9 for details.
Involuntary Termination Of Employment
An Involuntary Termination occurs when:
- The termination is against your will and without your consent, for a reason other than cause (charges of misconduct or delinquency),
or
- In event of termination which results from your refusal to accept a demotion, or from declination of a transfer to another position or location not within reasonable commuting distance. The involuntary termination will be deemed to occur when you resign after receipt of notice of the demotion or transfer, even though the resignation is effective prior to the effective date of the demotion or transfer,
or
- Your resignation is accepted by the designated authority in response to an official announcement that a segment of the workforce, of which you are part, must be reduced.
Lump Sum Death Benefit
A refund of all or a portion of your contributions with interest will be made if, following payment of all benefits due you and your survivors in the form of monthly income, such benefits have not, in total, equaled the amount of your contributions with interest. For example, if your contribution with interest totaled $3,000 and payments of income benefits under the plan to you and your survivors totaled $2,000, a refund of $1,000 would be due. See page 22 for further details.
Normal Retirement
Normal Retirement under the Plan requires that you have 5 years of Credited Civilian Service and reach age 62. Retirement at this date is not mandatory. See page 7 for details.
Optional Early Retirement
Optional Early Retirement under the Plan must be approved by AAFES and requires that you have 5 years of Credited Civilian Service and reach age 52. See page 8 for details.
Panamanian AAFES Service
As a result of the Panama Canal Treaty effective October 1, 1979, non-U.S. citizens in Panama are covered by Panamanian Social Security and not the AAFES Retirement Plan. However, if a Panamanian AAFES employee had at least 20 years of Credited Civilian Service as of 1 October 1979, and left his/her contributions in the Retirement plan, he/she may elect Voluntary Early Retirement when the age requirements of 55 or 60 are met. The pension payable in such case will be determined as of October 1, 1979, and will include the lesser of unused sick leave and vacation leave accrued on 1 October 1979, or on the date of retirement.
Permanent Annuity
Under the Retirement Plan, this refers to the portion of your pension that is payable after the Social Security offset. If you retire before age 62, you receive both a Permanent Annuity, and a Temporary Annuity that lasts just until age 62.
Totally and Permanently Disabled
"Totally and Permanently Disabled" as applied to you means "the inability of the Employee to engage in any and every gainful occupation in which he or she might reasonably be expected to engage with due regard to the Employee's education, training, experience, or prior economic status"., provided that you shall not be deemed to be Totally and Permanently Disabled for the purpose of the Plan if the disease or injury which caused the disability is the result of vicious habits, intemperance, or willful misconduct on your part within the 5 year period immediately prior to becoming disabled.
When you retire with a disability benefit and are no longer Totally and Permanently Disabled, the administrative actions to be taken will be those established by the Personnel Division and incorporated in existing administrative policies.
Vesting or Vested Benefit
Vesting is the process by which a plan participant earns a permanent right to receive a pension benefit See the description of vested benefits in paragraph 3 on page 10.
Temporary Annuity
Under the AAFES Retirement Plan, this refers to the portion of your pension that is payable only until the date the Social Security offset begins. The Temporary Annuity is not a vested benefit.
Voluntary Early Retirement
Voluntary early retirement under the plan requires that you voluntarily leave your job and that you meet one of the following requirements:
- Age 55 and 30 years of Credited Civilian Service
or
- Age 60 and 20 years of Credited Civilian Service.
See page 7 for details.
Workers' Compensation
There is a limit on the amount of income you can receive under the AAFES Retirement Plan and Workers' Compensation in combination. This limit applies if you receive a monthly income from Workers' Compensation for an occupational injury or disease connected with your employment with AAFES, and at the same time receive a pension from the AAFES Retirement Plan. Lump sum settlement from Workers' Compensation are not applied in Computing the limit.
To see how the limit works, suppose your are disabled by an accident on the job at age 60 after 30 years of service, and that your average earnings are $10,000 for the last three years. Your pension benefit under the formula before the Social Security offset would be $5,625 a year (see example below). If you are receiving a Workers' Compensation benefit of $4,800 a year, your total income before the Social Security offset would be $10,425, but the Retirement Plan limits you to 90% of your High-3 Average Compensation, or $9000. Because $4,800 is payable from Workers' Compensation, only $4,200 is needed from the Plan to bring you to the $9,000 limit. Therefore, your AAFES pension before the Social Security offset will be reduced to $4,200.