By Elvin Bailey
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Elvin Bailey
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I have consistently advised persons to come in to Social Security and obtain their contribution statement. It should be done at least once a year every year. Treat it as your birthday card from us to you! So today, on my birthday, I went for mine. Here is what it told me.
First, it said “Contribution Statement for the period…”. This reminds of the time that I started working and or contributing to the Fund, and takes me through all the times that I worked and contributed. Some full years had 53 contributions and some had 52 and one had 44. They explained that the 52 and 53 had to do with the number of Mondays in the year and I sent them looking for my other 8 or 9 contributions for the short year. They found them.
The next thing the statement informed me of is my 6 figure, unique Social Security number. No arguments from me there.
Then they told me that I live in a place I never heard of. Typographical error at the time that I was registered, but if I didn’t correct it, that is where they would have sent my notice for retirement in the next 2 years when I reach 62. I might never have received my pension. O Lord!
Next it told me all who I worked for and whether they were fair to me in paying up my dues plus theirs regularly. And then it reminded me of the paltry sum that they were paying me for all that donkey work that I did, and how much was removed in deductions. One thing I noticed – I didn’t see any evidence of the three weeks that I was out sick and couldn’t work. I seem to have been credited with contributions. So, being honest – some say stupid – I told them about it. They explained that even though I was sick, they still give me contribution credit for the sick time. Really? How nice!
When I went through the sheets, I was also able to get an idea of what my three best years of the last 15 looked like. I have to go ask the boss for a raise to see if I can improve my prospects!
And then, on page 4 – I have been working a long time - it told me how many contributions I have in total. This is important because it determines what percentage of the applicable insured wages I would collect when it is time to collect. Remember that these are most useful in counts of 50 in order to make an impact on your pension rights. For the first 500 contributions, you earn 30%. For every 50 contributions thereafter up to 1,000, you earn 2 percent per 50 for an additional 20% on your pension and for every 50 contributions after 1000, and up to 1,750, you earn an additional 1% for another 10% on your pension. Grand total for pension is 60% and you require a minimum working period of 33? years in order to achieve this.
If you have already collected your statement, then I can discuss the pension formula and how it works. First, your annual wage is considered and the best three of the last 15 are taken to get an average. To determine your best three, the staff looks at whether you received short term benefits and how much and whether that benefit, converted to a month’s wage would be better than normal. If it is, that is the one that is used. Then the total of the three years is divided by 3 (not by 15) to determine the average. Then the earned credit is applied to obtain an annual figure. This annual amount is then divided by 12 to determine your monthly pension. Then it is pro-rated for the month in which your birthday falls so that you receive the appropriate amount.
For example, if your best three years of earnings were $24,000.00, $24,500.00 and $36,785.00 (remember overtime is included in your wages), then the total is $85,285.00 and your average annual salary is $28,428.33. If your contribution credit is 718, you earn 38% of this (30% for the first 500 contributions and 218 divided by 50 –throw away the remainder: as long as there is a remainder it does not count- multiplied by 2). Therefore, your annual pension will be $10,802.77 and your monthly cheque, preferably deposited to your bank account, will be $900.23. If your birthday falls on the 16th of the month, then for your birthmonth, you will receive payment for the remaining days (14 days if it is a 30 day month; 15 days for a 31 day month). Therefore, you will get either $420.11 or $435.60. [Go ahead, back-check it!]. This is the most generous way of calculating pensions.
I will continue next week. You have one week therefore, to get your statement. School ‘call een’ next weekend. So do your homework and come prepared for more lessons.
