Under the cash balance formula, your benefit is based on your pay earned throughout your career and your points (equal to your age and years of service). Your cash balance benefit accrues at a steady pace throughout your entire career, providing a greater benefit the longer you stay with the company.

Under the SPP formula, your benefit is based on your average final earnings (during the last years of your career) and your total years of service. This type of plan provides a greater benefit if you stay with the company for a long period of time.

Yes, you will be eligible to receive a lump sum payment of your SPP benefit for service through December 31, 2004 (your Part A benefit) if you meet the following SPP requirements at the time you retire:

• You are at least age 55 with five or more years of service
• You retire from active service
• You elect to receive the lump sum payment immediately preceding your termination date while you're accruing benefit service.

No, there are currently no cost-of-living adjustments available for the cash balance formula.

Yes. If you are married and you die before receiving your benefits, the Program will provide your vested cash balance formula benefit to your spouse at your retirement eligibility date (at least age 55 with 10 or more years of service or age 65 with five years of service). The amount of your spouse's benefit will be based on the 100% joint and survivor annuity payment option, and benefits will continue to accrue interest credits up to the time payments begin.

If you are not vested at the time of your death, or if you are not married when you die, the Program pays no survivor benefit.

Note: Part A benefits continue to provide pre-retirement death benefits based on the 50% joint and survivor annuity option.

The "rule of 9" or "factor of 9" refers to the enhanced early retirement subsidy available under the Northrop Grumman Pension Program, which allows eligible participants with at least 10 years of service to receive an unreduced pension benefit as early as age 55.

If you are an active SPP participant as of December 31, 2004, you are eligible to receive the enhanced early retirement subsidy when you retire early from Northrop Grumman (and are at least age 55 with 10 or more years of service). Your monthly annuity will be calculated using the factor of 9 as follows:

Keep in mind that the "Rule of 9" applies only to the cash balance benefit. It does not affect your SPP benefit (Part A or Part B).

No. The Northrop Grumman Pension Program is designed to provide part of your income during retirement on a monthly basis. Therefore, it is payable as a monthly annuity only at or after the plan’s early and normal retirement ages.

Yes. If you leave Northrop Grumman at age 55 or older with 10 or more years of service, you are eligible for an early retirement subsidy for your cash balance benefit. In addition, if you are a heritage TRW pension plan active participant as of December 31, 2004, you may be eligible for an enhanced early retirement subsidy, called the "Rule of 9" (see the question above, What does "Rule of 9" mean?).