16. UNDER WHAT CIRCUMSTANCES MAY A GRACE PERIOD AFFECT MY RIGHT TO RECEIVE AN UNREDUCED EARLY RETIREMENT BENEFIT?

You can receive an unreduced early retirement benefit if you meet the eligibility requirements for that benefit and have not completed a "grace period". A grace period is defined as working less than 375 Covered Hours in each of two consecutive Plan Years. However, if you do complete a grace period, there are two ways in which your benefit would be reduced:

1. A reduction of 0.4% for each month between your early retirement date and your normal retirement date will be applied to your benefit. For example, if you retire at age 55 and a grace period applies before becoming eligible for retirement, the reduction would be 48% (120 months x 0.4% per month).
   
   The reduction applies only to benefits earned prior to the completion of the grace period. The reduction will not be eliminated even if you return to Covered Employment after the grace period.
   


2. The benefits earned for service completed before the grace period will be "frozen" and will not increase even if you later return to Covered Employment.
   
   A grace period will not be incurred if you were unable to work because you were disabled. In addition, you will not incur a grace period for any period of time you were a signatory contractor to an IBEW collective bargaining agreement.