Top Pension Questions for  Johnson & Johnson Employees 

These are the most frequently asked questions for Johnson & Johnson employees from our weekly webinars.

1. Question:

   What are the key factors that determine the eligibility of an employee for the Consolidated Retirement Plan of Johnson & Johnson, and how does the Company define "Credited Service" in the context of this eligibility? Additionally, what specific steps must a new employee take to become a member of the Plan, and how does this process differ for employees hired after December 31, 2014? Understanding these criteria helps employees navigate their pension options effectively.

   Answer:

   Eligibility for Consolidated Retirement Plan: Employees of Johnson & Johnson are eligible for the Consolidated Retirement Plan if they are full-time or certain non-union hourly employees in the U.S. (excluding Puerto Rico) and are at least age 21 with one year of service. "Credited Service" is defined as the years and months of an employee’s service starting from the first of the month on or after their date of hire or their 21st birthday. New employees automatically become members of the Plan the first of the month after one year of service, provided they are age 21 or older.

2. Question:

   How does the Final Average Earnings Formula work in calculating retirement benefits under the Consolidated Retirement Plan of Johnson & Johnson? Specifically, what elements of compensation are included in the calculation, and how might changes in salary or employment status impact an employee's pension benefits over time? A comprehensive analysis of this formula is essential for employees planning their financial future.

   Answer:

   Final Average Earnings Formula: The Final Average Earnings formula calculates retirement benefits based on the employee's Plan Earnings, their years of service, and their entitled Social Security benefits. The formula considers the highest average of annual earnings during the last ten years of employment. Changes in salary or employment status can impact the pension benefits, as these directly affect the Plan Earnings and the calculation period for the average earnings.

3. Question:

   Can you explain the different forms of payment available to retirees under the Consolidated Retirement Plan of Johnson & Johnson? How do options like the Life Annuity, Joint & Survivor Annuity, and Level Income options differ in terms of benefits for retirees and their beneficiaries? Employees need to be aware of these nuances when considering their retirement income strategies.

   Answer:

   Forms of Payment Available: Retirees can choose from several payment options, including a Life Annuity, Joint & Survivor Annuity, and Level Income options. Each option offers different benefits for retirees and their beneficiaries. The choice affects how benefits are received and the amount paid during the retiree’s lifetime and to their beneficiaries after death.

4. Question:

   What are the implications of taking early retirement under the Consolidated Retirement Plan of Johnson & Johnson, specifically regarding age and potential reduction of benefits? In which situations can eligible employees access their retirement benefits, and what are the consequences of opting for early retirement compared to waiting until the normal retirement age? This understanding is critical for employees evaluating their timeline for retirement.

   Answer:

   Early Retirement Implications: Early retirement options are available from age 55, with benefits potentially reduced to account for the longer payment period. Employees can access their retirement benefits early under certain conditions, but this usually results in a lower monthly benefit compared to waiting until the normal retirement age.

5. Question:

   How does Johnson & Johnson support the availability of pension benefits under the Employee Retirement Income Security Act (ERISA)? Discuss the role of the Pension Benefit Guaranty Corporation (PBGC) in managing these benefits and what employers are required to do to maintain compliance with these legal standards. This information is vital for understanding one's retirement benefits.

   Answer:

   Benefit Availability under ERISA: Johnson & Johnson’s retirement benefits, including pensions, are structured under the Employee Retirement Income Security Act (ERISA), with the Pension Benefit Guaranty Corporation (PBGC) managing these benefits. The company must follow certain standards and financial obligations to maintain compliance with these laws.

6. Question:

   In what ways does participating in the Fixed Interest Annuity (FIA) program differ from receiving benefits through the Retirement Value Pension Formula for Johnson & Johnson employees? What eligibility criteria and payment structures are unique to the FIA program, and how might this affect the retirement planning of employees who contributed prior to January 1, 1976? This distinction is crucial for employees when choosing their retirement benefits path.

   Answer:

   Fixed Interest Annuity (FIA) Program Differences: The FIA program is distinct from the Retirement Value Pension Formula and is applicable to employees who contributed to the plan prior to January 1, 1976. The eligibility criteria and benefits calculation for the FIA program consider different factors than the newer pension formula, affecting how retirement benefits are calculated and disbursed.

7. Question:

   What options do employees have if they terminate employment with Johnson & Johnson before becoming eligible for full retirement benefits? Specifically, how do the Plan's provisions regarding "Breaks in Service" and vesting work together to affect an employee's accrued benefits? Understanding these concepts can help employees make informed decisions if considering early job changes.

   Answer:

   Options for Terminated Employees: Employees who terminate before becoming eligible for full benefits may still be entitled to certain benefits if they have at least five years of vesting service. The plan’s provisions on "Breaks in Service" and vesting affect how an employee’s accrued benefits are treated upon reemployment or if they consider early job changes.

8. Question:

   How can employees estimate their retirement benefits using the tools provided by Johnson & Johnson, and what factors should be taken into account when using such estimates? Furthermore, how does the company encourage employees to plan for their retirement in a way that reflects realistic expectations based on personal career trajectories? Knowledge of these resources is key for successful financial planning.

   Answer:

   Estimating Retirement Benefits: Employees can estimate their retirement benefits using tools provided by Johnson & Johnson, which consider various factors like age at retirement, years of service, and salary history. The company encourages realistic planning by allowing employees to model different retirement scenarios.

9. Question:

   In the event of an employee's death prior to vesting, what survivor benefits are offered under the Consolidated Retirement Plan of Johnson & Johnson? How do the eligibility criteria for these benefits differ depending on the status of the employee's spouse or partner, and what are the potential repercussions of these regulations for surviving family members? This information is significant for employees who wish to understand the support available for their family’s future.

   Answer:

   Survivor Benefits: In the event of an employee's death prior to vesting, the plan outlines specific survivor benefits depending on the employee’s marital status and other criteria at the time of death. These benefits provide financial support for the surviving spouse or partner under defined conditions.

10. Question:

    How can employees contact Johnson & Johnson for additional information regarding their retirement benefits? Specify the various channels available, including online resources and direct communication options, and how these can assist employees in navigating complex retirement-related questions effectively. Having accessible contact information can significantly impact an employee’s ability to manage their retirement planning efficiently.

    Answer:

    Contacting Johnson & Johnson for Benefit Information: Employees can contact the Johnson & Johnson Benefit Service Center for detailed information and assistance with their retirement plans. Various contact methods are available, including phone, internet, and mail, catering to different needs and preferences for accessing retirement plan information.