Attached files
file | filename |
---|---|
10-K - 10-K - STERLING CHEMICALS INC | h79888e10vk.htm |
EX-23.1 - EX-23.1 - STERLING CHEMICALS INC | h79888exv23w1.htm |
EX-32.2 - EX-32.2 - STERLING CHEMICALS INC | h79888exv32w2.htm |
EX-21.1 - EX-21.1 - STERLING CHEMICALS INC | h79888exv21w1.htm |
EX-31.2 - EX-31.2 - STERLING CHEMICALS INC | h79888exv31w2.htm |
EX-31.1 - EX-31.1 - STERLING CHEMICALS INC | h79888exv31w1.htm |
EX-10.16 - EX-10.16 - STERLING CHEMICALS INC | h79888exv10w16.htm |
EX-10.19.C - EX-10.19.C - STERLING CHEMICALS INC | h79888exv10w19wc.htm |
EX-32.1 - EX-32.1 - STERLING CHEMICALS INC | h79888exv32w1.htm |
Pension Plan
Salaried Pension Plan
PREAMBLE |
1 | |||
ARTICLE I |
2 | |||
DEFINITIONS |
2 | |||
1.1 Plan Definitions |
2 | |||
1.2 Construction |
16 | |||
ARTICLE II |
17 | |||
HOURS OF SERVICE |
17 | |||
2.1 Crediting of Hours of Service |
17 | |||
2.2 Hours of Service Equivalencies |
19 | |||
2.3 Determination of Non-Duty Hours of Service |
19 | |||
2.4 Allocation of Hours of Service to Service Computation Periods |
20 | |||
2.5 Department of Labor Rules |
21 | |||
ARTICLE III |
22 | |||
SERVICE & CREDITED SERVICE |
22 | |||
3.1 Service |
22 | |||
3.2 Credited Service |
23 | |||
3.3 Transfers |
24 | |||
3.4 Retirement or Termination and Reemployment |
25 | |||
3.5 Finality of Determinations |
27 | |||
ARTICLE IV |
28 | |||
ELIGIBILITY FOR PARTICIPATION |
28 | |||
4.1 Participation |
28 | |||
4.2 Termination of Participation |
28 | |||
4.3 Finality of Determinations |
28 | |||
ARTICLE V |
29 | |||
NORMAL RETIREMENT |
29 | |||
5.1 Eligibility |
29 | |||
5.2 Amount |
29 | |||
5.3 401(a)(17) Fresh Start Adjustments |
31 | |||
5.4 Special Calculation For Participants Who Transferred From
The Prior Salaried or
Hourly Plan |
32 | |||
5.5 Special Calculation For Participants Who Transferred From
A Canadian
Affiliate |
32 | |||
5.6 Adjustment to Normal Retirement Benefit for Employment
After Normal Retirement
Date |
33 |
-i-
5.7 Payment |
33 | |||
ARTICLE VI |
34 | |||
EARLY RETIREMENT |
34 | |||
6.1 Eligibility |
34 | |||
6.2 Amount |
34 | |||
6.3 Early Retirement Supplement |
36 | |||
6.4 Payment |
36 | |||
ARTICLE VII |
37 | |||
VESTED RIGHTS |
37 | |||
7.1 Vesting |
37 | |||
7.2 Eligibility for Deferred Vested Retirement Benefit |
37 | |||
7.3 Amount of Deferred Vested Retirement Benefit |
37 | |||
7.4 Payment |
38 | |||
7.5 Election of Former Vesting Schedule |
38 | |||
ARTICLE VIII |
39 | |||
DISABILITY |
39 | |||
8.1 Eligibility for Disability Accruals |
39 | |||
8.2 Disability Retirement |
39 | |||
8.3 Disability Accrual |
40 | |||
ARTICLE IX |
41 | |||
FORMS OF PAYMENT |
41 | |||
9.1 Normal Form of Payment |
41 | |||
9.2 Optional Forms of Payment |
42 | |||
9.3 Designation of Beneficiary and Beneficiary in Absence of Designated Beneficiary |
45 | |||
9.4 Notice Regarding Forms of Payment |
46 | |||
9.5 Election Period |
47 | |||
9.6 Spousal Consent Requirements |
47 | |||
9.7 Death Prior to Annuity Starting Date |
48 | |||
9.8 Effect of Reemployment on Form of Payment |
48 | |||
ARTICLE X |
49 | |||
SURVIVOR BENEFITS |
49 | |||
10.1 Eligibility for Qualified Preretirement Survivor Annuity |
49 | |||
10.2 Amount of Qualified Preretirement Survivor Annuity |
49 | |||
10.3 Payment of Qualified Preretirement Survivor Annuity |
50 | |||
ARTICLE XI |
51 |
-ii-
GENERAL PROVISIONS & LIMITATIONS REGARDING BENEFITS |
51 | |||
11.1 Suspension of Benefits for Rehired Retired Participants |
51 | |||
11.2 Exception to Suspension of Benefits Rule |
51 | |||
11.3 Non-Alienation of Retirement Rights or Benefits |
51 | |||
11.4 Payment of Benefits to Others |
51 | |||
11.5 Payment of Small Benefits; Deemed Cashout |
52 | |||
11.6 Direct Rollovers |
52 | |||
11.7 Limitations on Commencement |
54 | |||
11.8 Minimum Required Distributions |
54 | |||
11.9 Offset to Accrual After Normal Retirement Date |
60 | |||
11.10 Limitations based on funded status |
60 | |||
ARTICLE XII |
62 | |||
MAXIMUM RETIREMENT BENEFITS |
62 | |||
12.1 definitions |
62 | |||
12.2 Maximum Limitation on Annual Benefits |
70 | |||
12.3 Grandfather Prior Benefits |
70 | |||
12.4 Frozen Benefits |
70 | |||
12.5 Manner of Reduction |
71 | |||
ARTICLE XIII |
72 | |||
PENSION FUND |
72 | |||
13.1 Pension Fund |
72 | |||
13.2 Contributions by the Employers |
72 | |||
13.3 Expenses of the Plan |
72 | |||
13.4 No Reversion |
72 | |||
13.5 Forfeitures Not to Increase Benefits |
73 | |||
13.6 Change of Funding Medium |
73 | |||
ARTICLE XIV |
74 | |||
ADMINISTRATION |
74 | |||
14.1 Authority of the Sponsor |
74 | |||
14.2 Action of the Sponsor |
74 | |||
14.3 Claims Review Procedure |
75 | |||
14.4 Qualified Domestic Relations Orders |
76 | |||
14.5 Indemnification |
76 | |||
14.6 Actions Binding |
76 | |||
ARTICLE XV |
77 | |||
ADOPTION BY OTHER ENTITIES |
77 | |||
15.1 Adoption by Affiliated Companies |
77 | |||
15.2 Effective Plan Provisions |
77 |
-iii-
ARTICLE XVI |
78 | |||
AMENDMENT & TERMINATION OF PLAN |
78 | |||
16.1 Sponsors Right of Amendment |
78 | |||
16.2 Termination of the Plan |
78 | |||
16.3 Adjustment of Allocation |
80 | |||
16.4 Assets Insufficient for Allocation |
80 | |||
16.5 Assets Insufficient for Allocation Under Paragraph (c) of Section 16.2 |
80 | |||
16.6 Allocations Resulting in Discrimination |
80 | |||
16.7 Residual Assets |
81 | |||
16.8 Meanings of Terms |
81 | |||
16.9 Payments by the Funding Agent |
81 | |||
16.10 Residual Assets Distributable to the Employers |
81 | |||
16.11 Withdrawal of an Employer |
81 | |||
ARTICLE XVII |
83 | |||
MISCELLANEOUS |
83 | |||
17.1 No Commitment as to Employment |
83 | |||
17.2 Claims of Other Persons |
83 | |||
17.3 Governing Law |
83 | |||
17.4 Nonforfeitability of Benefits Upon Termination or Partial Termination |
83 | |||
17.5 Merger, Consolidation, or Transfer of Plan Assets |
83 | |||
17.6 Funding Agreement |
84 | |||
17.7 Benefit Offsets for Overpayments |
84 | |||
17.8 Internal Revenue Requirements |
84 | |||
17.9 Overall Permitted Disparity Limits |
85 | |||
17.10 Veterans Reemployment Rights |
86 | |||
17.11 Location of Payee Unknown |
86 | |||
ARTICLE XVIII |
87 | |||
TOP-HEAVY PROVISIONS |
87 | |||
18.1 Top-Heavy Plan Definitions |
87 | |||
18.2 Applicability of Top-Heavy Plan Provisions |
89 | |||
18.3 Top-Heavy Vesting |
89 | |||
18.4 Minimum Top-Heavy Benefit |
90 |
-iv-
-1-
1.1 | Plan Definitions |
A Participants Accrued Benefit as of any date means the portion of his monthly normal retirement benefit accrued as of that date determined as provided in Article V, based on his years of Credited Service and the benefit formula or rate in effect on that date; provided, however, that effective December 31, 2004 for Salaried Participants and July 1, 2007 for Hourly Participants, a Participants Accrued Benefit means his benefit accrued as of December 31, 2004 and July 1, 2007, respectively, as determined under the terms of the Salaried Plan and the Hourly Plan in effect on that date. | ||
The Actuarial Equivalent of a value means the actuarial equivalent determined using the 1971 Towers, Perrin, Forster & Crosby Forecast Mortality Table with ages set back one year for Participants and ages set back five years for Beneficiaries and an interest rate of seven percent, except that in determining present value for purposes of a single sum payment, the following factors shall be used: (i) the table prescribed by the Secretary of the Treasury, which shall be based on the prevailing commissioners standard table, described in Code Section 807(d)(5)(A), used to determine reserves for group annuity contracts issued on the date as of which present value is being determined (without regard to any other subparagraph of Code Section 807(d)(5)) and (ii) the annual rate of interest on 30-year Treasury securities for the second calendar month preceding the Plan Year in which the distribution is made. For any single sum payment with an Annuity Starting Date on or after December 31, 2002, the applicable mortality table is the table specified in Revenue Ruling 2001-62. | ||
Notwithstanding the foregoing, for distributions made prior to October 1, 2000, for purposes of determining present value, the following factors were applicable: (i) the mortality rates used by the Pension Benefit Guaranty Corporation for terminating single-employer plans and (ii) the PBGC interest rate. For any distribution made on or after October 1, 2000, but before December 27, 2002 for a Salaried Participant or before February 22, 2003 for an Hourly Participant, present value was determined using the factors in this paragraph or the immediately preceding paragraph, whichever provided a greater benefit. | ||
For purposes of this section, the PBGC interest rate means the immediate and deferred rates, as applicable, utilized by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination as in effect at the beginning of the Plan Year in which present value is being determined. |
-2-
For a Participant who has reached Normal Retirement Date at the time present value is being determined, the present value of his Accrued Benefit shall be calculated based on the immediate annuity payable to the Participant as of his Annuity Starting Date. For a Participant who has not yet reached Normal Retirement Date at the time present value is being determined, the present value of his Accrued Benefit shall be calculated based on a deferred annuity payable commencing at Normal Retirement Date. For purposes of this paragraph, immediate and deferred annuities will be in the normal form applicable to unmarried Participants under Section 9.1 of the Plan. | ||
Notwithstanding the foregoing, effective for Plan Years beginning December 1, 2008 or after, for determining the value of single sum distributions, the Applicable Interest Rate shall be determined as set forth in Notice 2007-81, Rev. Rule 2007-67 and/or other subsequent guidance issued under the requirements of the PPA, namely, the applicable interest rate under Section 417(e)(3)(c) of the Code (commonly referred to as the Corporate Bond Rate), which is the adjusted first, second and third segment rates applied under rules similar to the rules of Section 430(h)(2)(c) of the Code (determined without regard to the 24-month average provided under Section 430(h)(D)(i) of the Code and applying the five-year transition phase-in rule of Section 417(e)(3)(ii) of the Code), determined each Plan Year using the interest rates in effect for the second full calendar month immediately preceding the first day of the Plan Year containing the benefit commencement date. Notwithstanding the foregoing, effective for Plan Years beginning December 1, 2008 or after, the Applicable Mortality Table for determining the value of lump sum distributions shall be determined as set forth in Rev. Rul. 2007-67 and/or other subsequent guidance issued under the requirements of the PPA. | ||
The Actuary means an independent actuary selected by the Sponsor, who is an enrolled actuary as defined in Code Section 7701(a)(35), or a firm or corporation of actuaries having such a person on its staff, which person, firm, or corporation is to serve as the actuarial consultant for the Plan. | ||
The Administrator means the Sponsor unless the Sponsor designates another person or persons to act as such. | ||
An Affiliated Company means any corporation or business, other than an Employer, which would be aggregated with an Employer for a relevant purpose under Code Section 414. | ||
A Participants, or Beneficiarys, if the Participant has died, Annuity Starting Date means the first day of the first period for which an amount is paid as an annuity or, in the case of a single sum payment, the first day on which all events have occurred which entitle the Participant, or his Beneficiary, if applicable, to such benefit. | ||
If a Participant whose Annuity Starting Date has occurred is reemployed by an Employer or an Affiliated Company resulting in a suspension of benefits in accordance with the provisions of Section 11.1, for purposes of determining the form of payment of such |
-3-
Participants benefit upon his subsequent retirement, such prior Annuity Starting Date shall apply to benefits accrued prior to the Participants reemployment. Such prior Annuity Starting Date shall also apply to benefits accrued following the Participants reemployment if such prior Annuity Starting Date occurred on or after the Participants Normal Retirement Date. Such prior Annuity Starting Date shall not apply to benefits accrued following the Participants reemployment if such prior Annuity Starting Date occurred prior to the Participants Normal Retirement Date. | ||
A Salaried Participants Average Monthly Earnings means the greater of the average of: |
(1) | his monthly Earnings during the 36 months immediately preceding the earlier of: |
(i) | the date the Salaried Participants employment terminates (or the Participants period of employment, if shorter); or | ||
(ii) | January 1, 2005; or |
(2) | his highest average Earnings received for any three consecutive calendar years during the five consecutive calendar years immediately preceding the earlier of: |
(i) | the calendar year during which the Salaried Participants employment terminates, or; | ||
(ii) | January 1, 2005. |
If a Salaried Participant has no Earnings during one or more of the 36 months described above, the average shall be determined based on the last 36 months during which he has Earnings. | ||
Average Monthly Earnings shall be determined assuming that Earnings for any month during which a Participant receives disability income from any Employer-sponsored welfare plan shall equal the Salaried Participants base salary for the calendar month immediately preceding the calendar month in which his disability commenced. | ||
If a Salaried Participants base salary has been reduced because of a decline in his physical or mental capacity to continue his former assignment, or because he was transferred to a position of reduced responsibilities or his assignment was abolished or its responsibilities curtailed, the Salaried Participants base salary will be used, as if it had not been reduced. | ||
Notwithstanding any other provision of the Plan to the contrary, Earnings for employment after January 1, 2005 shall not be included in determining a Salaried Participants Average Monthly Earnings. |
-4-
A Participants Beneficiary means any beneficiary who is entitled to receive a benefit under the Plan upon the death of the Participant. Notwithstanding the foregoing, effective for Plan Years beginning December 1, 2008, a Participants Beneficiary shall also mean a trust within the meaning of Code Section 401(a)(9)(E). | ||
A Break in Service with respect to any Employee means any Service Computation Period during which he completes fewer than 501 Hours of Service, except that no Employee shall incur a Break in Service solely by reason of temporary absence from work not exceeding 12 months resulting from illness, layoff, or other cause if authorized in advance by an Employer pursuant to its uniform leave policy, if his employment is not otherwise terminated during the period of such absence. | ||
The Code means the Internal Revenue Code of 1986, as amended from time to time. Reference to a Code section shall include (i) such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section and (ii) all rulings, regulations, notices, announcements, and other pronouncements issued by the U.S. Treasury Department, the Internal Revenue Service, and any court of competent jurisdiction that relate to such section. | ||
A Participants Covered Compensation means the average, without indexing, of the taxable wage bases under Section 230 of the Social Security Act in effect for each calendar year during the 35-year period ending on the last day of the calendar year in which the employee attains (or will attain) Social Security retirement age, as determined under Code Section 415(b)(8). In determining a Participants Covered Compensation, the following shall apply: |
(1) | For calendar years within the 35-year period, the taxable wage base in effect for future calendar years shall be assumed to be the same as the taxable wage base in effect as of the beginning of the Plan Year in which the determination is being made. | ||
(2) | For calendar years after the 35-year period ends, a Participants Covered Compensation means his Covered Compensation for the Plan Year in which the 35-year period ends. | ||
(3) | For calendar years before the 35-year period begins, a Participants Covered Compensation means the taxable wage base in effect as of the beginning of the Plan Year in which the determination is being made. |
A Participants Covered Compensation shall be adjusted each Plan Year. | ||
A Participants Covered Compensation for purposes of calculating his retirement benefit under the Plan shall be his Covered Compensation determined as of the date his retirement benefit is being calculated or, if earlier, as of the date the Participant ceased to accrue benefits under the Plan. |
-5-
A Participants Credited Service means his period of service for purposes of determining the amount of any benefit for which he is eligible under the Plan, as computed in accordance with the provisions of Article III. | ||
Designated Non-U.S. Citizen Foreign Service Employee means a person employed by a Subsidiary who satisfies all of the following requirements: |
(1) | He is not a Citizen or Resident (as defined in Code Section 7701(b)) of the United States of America; and | ||
(2) | He is not covered by or participating in any funded plan of deferred compensation maintained or otherwise provided by any party other than the Employer and its subsidiaries with respect to the remuneration paid to him by such Foreign Subsidiary or Foreign Operating Subsidiary; and | ||
(3) | He is on international assignment from the Employer and is employed at a location outside the United States; and | ||
(4) | He has been designated by the Employer or its delegate as a Designated Non-U.S. Citizen Foreign Service Employee. |
Notwithstanding the foregoing, the Employer or its delegate may preclude participation or impose such terms, conditions and restrictions on the participation of a Designated Non-U.S. Citizen Foreign Service Employee as the Employer or its delegate, in the exercise of its sole discretion, deems necessary or desirable in order to comply with U.S. or foreign law (including, but not limited to, tax reporting and withholding, securities registration or currency law requirements imposed by law or treaty) as it affects the Designated Non-U.S. Citizen Foreign Service Employee, the Employer, the Sponsor, the trustee or any agent of the foregoing. | ||
A Participant is Disabled if the Participant meets the eligibility requirements in Section 8.1. | ||
Disability Accrual means the benefit described in Section 8.3 that applies to a Participant who is Disabled and is receiving payments from the LTD Plan. | ||
Disability Retirement Benefit means the benefit described in Section 8.2 that applies to a Participant who is Disabled and is not receiving payments from the LTD Plan. | ||
Early Retirement Date |
(a) | For a Salaried Participant means the following: |
-6-
(1) | for a Salaried Participant who elects to commence payments while he continues in employment with his Employer or an Affiliated Company, as permitted under Section 6.1 of the Plan, the first day of the month following the later of (a) the month in which he meets the eligibility requirements to receive early retirement benefits while continuing employment with his Employer or an Affiliated Company under Section 6.1 or (b) the month in which he makes written application for an early retirement benefit; or | ||
(2) | for a Salaried Participant who does not elect to commence payments while he continues in employment with his Employer or an Affiliated Company, the first day of the month following the later of the month in which he retires after meeting the eligibility requirements in Section 6.1 or the month in which he makes written application for an early retirement benefit, but not, in either case, later than his Normal Retirement Date. |
(b) | For an Hourly Participant means the following: |
(1) | for an Hourly Participant who elects to commence payments while his employment continues, as permitted under Section 6.1 of the Plan, the first day of the month following the latest of (i) the month in which he meets the eligibility requirements in Section 6.1, (ii) the month in which he attains age 62, or (iii) the month in which he makes written application for an early retirement benefit; or | ||
(2) | for an Hourly Participant who does not elect to commence payments while his employment continues, the first day of the month following the later of the month in which he retires after meeting the eligibility requirements in Section 6.1 or the month in which he makes written application for an early retirement benefit, but not later than his Normal Retirement Date. |
The Earnings of a Salaried Participant for any Earnings Computation Period means all compensation from the Employer including shift differential pay, overtime pay, holiday pay, sick leave pay, fire brigade pay, military summer encampment pay, and incentive pay. Incentive pay for this purpose shall mean additional compensation, which may be paid on an annual or more frequent basis, and which is computed under a formula directly reflecting the performance of a Salaried Participant or group of Salaried Participants, but shall not include any award made under the Employers incentive plan nor any distributions made from the incentive plan or profit sharing plan. Notwithstanding the foregoing, Earnings include any amount that would have been included in the foregoing description, but for the Salaried Participants election to defer payment of such amount under Code Section 124, 402(e)(3), 401(h)(1)(B), 403(b) or 457(b) and, effective for Plan Years beginning on and after January 1, 2001, Earnings shall also include any amount that is not included in the Salaried Participants taxable gross income pursuant to Code Section 132(f). |
-7-
Earnings shall exclude bonuses, commissions, amounts paid under any incentive plans in the future, amounts paid by the Employer for insurance or other welfare plans or benefits, pay in lieu of vacations, strike pay received prior to May 2, 2004, and additional earnings or other forms of compensation in excess of a Salaried Participants normal salary that is received by a Salaried Participant on or after May 2, 2004 for services provided during a strike or lockout. | ||
In no event, however, shall the Earnings of a Salaried Participant taken into account under the Plan for any 12 consecutive Earnings Computation Periods (the limitation period) exceed (1) $200,000 for limitation periods beginning before January 1, 1994, or (2) $150,000 for limitation periods beginning on or after January 1, 1994. Notwithstanding the foregoing, for any Salaried Participant who is credited with at least one Hour of Service on or after January 1, 2002, the annual Earnings of such Salaried Participant taken into account in determining benefit accruals for any Plan Year beginning after December 31, 2001 shall not exceed $200,000. For purposes of determining benefit accruals in a Plan Year beginning after December 31, 2001, Earnings for any prior determination period shall be limited to $200,000. | ||
The limitations set forth in the preceding paragraph shall be subject to adjustment annually as provided in Code Section 401(a)(17)(B) and Code Section 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for limitation periods beginning in such calendar year. | ||
An Earnings Computation Period means each calendar month. | ||
An Employee means (i) any employee on the payroll of an Employer who is characterized or treated by the Employer as a common law employee; or (ii) any person who is designated by the Employer as a U.S. Foreign Service Employee or a Designated Non-U.S. Citizen Foreign Service Employee. Any employee who becomes an Employee as a result of reclassification by the Employer as a common law employee shall become an Employee effective as of the date of such reclassification. | ||
Notwithstanding the foregoing, the term Employee shall not include the following: |
(1) | any nonresident alien who does not receive United States source income; | ||
(2) | any person other than an Hourly Participant, covered by a collective bargaining agreement between employee representatives and the Employer, unless the collective bargaining agreement specifically provides for participation in the Plan; | ||
(3) | any temporary worker who is engaged through or employed by a temporary or leasing agency; or |
-8-
(4) | any leased employee or any person who is an independent contractor or who is employed by another company while providing services to the Employer. |
For purposes of the Plan with respect to the provisions of Code Sections 401(a)(3), (4), (7) and (16), and 408(k), 410, 411, 415 and 416, any leased employee, other than an excludable leased employee, shall be treated as an employee of an Employer or any other Affiliated Company; provided, however, that no leased employee shall become an Employee or shall accrue a benefit hereunder based on service as a leased employee. | ||
A leased employee means any person who performs services for an Employer or an Affiliated Company (the recipient) (other than an employee of the recipient) pursuant to an agreement between the recipient and any other person (the leasing organization) on a substantially full-time basis for a period of at least one year, provided that such services are performed under the primary direction or control of the recipient. An excludable leased employee means any leased employee of the recipient who is covered by a money purchase pension plan maintained by the leasing organization which provides for (i) a nonintegrated employer contribution on behalf of each Participant in the plan equal to at least ten percent of compensation, (ii) full and immediate vesting, and (iii) immediate participation by employees of the leasing organization (other than employees who perform substantially all of their services for the leasing organization or whose compensation from the leasing organization in each plan year during the four-year period ending with the plan year is less than $1,000); provided, however, that leased employees do not constitute more than 20 percent of the recipients nonhighly compensated work force. For purposes of this Section, contributions or benefits provided to a leased employee by the leasing organization that are attributable to services performed for the recipient shall be treated as provided by the recipient. | ||
An Employer means the Sponsor and any entity which has adopted the Plan as may be provided under Article XV. | ||
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a section of ERISA shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section. | ||
An Hourly Participants Final Average Pay means the sum of his Average Base Pay, Average Overtime Pay, and Average Shift Premium for the Averaging Period described in (1) or (2) below, whichever provides the greater dollar amount: |
(1) | the last 36 calendar months during which he has Base Pay immediately preceding the earlier of: |
(i) | the date the Hourly Participants employment terminates (or the Hourly Participants period of employment, if shorter); or |
-9-
(ii) | July 1, 2007; or |
(2) | his highest three calendar years during the five consecutive calendar years immediately preceding the earlier of: |
(i) | the calendar year during which the Hourly Participants employment terminates, or; | ||
(ii) | January 1, 2007. |
For purposes of this Section, the following terms have the following meanings: |
(3) | An Hourly Participants Average Base Pay means his average Base Pay on the last day of each month during the applicable Averaging Period multiplied by 2,080. | ||
(4) | An Hourly Participants Average Overtime Pay means his Base Pay multiplied by the average number of overtime hours worked by all Employees at the location at which the Hourly Participant is employed during the applicable Averaging Period. For this purpose, overtime hours are considered worked during the month in which an Employee is paid for such hours. | ||
(5) | An Hourly Participants Average Shift Premium means his total shift premium paid for regularly scheduled hours during the applicable Averaging Period divided by 3. For this purpose, shift premium pay is considered attributable to hours worked during the month in which the shift premium is paid. | ||
(6) | Base Pay means an Hourly Participants regular, base, straight time rate of hourly compensation, exclusive of any premium. If on the last day of a month an Hourly Participant is receiving only accident or sickness pay or disability income from a welfare plan maintained by his Employer, his Base Pay for the month shall be equal to his Base Pay on his last day worked. If during an Averaging Period an Hourly Participant is voluntarily or involuntarily transferred to a different job resulting in a reduction in his Base Pay, the Hourly Participants Base Pay for each month following the transfer will be equal to the greater of (i) his Base Pay immediately preceding the transfer or (ii) his Base Pay for any subsequent month during the Averaging Period. |
In no event, shall the pay of an Hourly Participant taken into account for purposes of determining Final Average Pay hereunder for any 12-consecutive-month period (the limitation period) exceed (1) $200,000 for limitation periods beginning before January 1, 1994, or (2) $150,000 for limitation periods beginning on or after January 1, 1994. Notwithstanding the foregoing, for any Hourly Participant who is credited with at least one Hour of Service on or after January 1, 2002, the pay of such Hourly Participant taken into account in determining Final Average Pay for any limitation period beginning after |
-10-
December 31, 2001 shall not exceed $200,000. For purposes of determining Final Average Pay in a Plan Year beginning after December 31, 2001, pay for any prior limitation period shall be limited to $200,000. | ||
The limitations set forth in the preceding paragraph shall be subject to adjustment annually as provided in Code Section 401(a)(17)(B) and Code Section 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for limitation periods beginning in such calendar year. | ||
Notwithstanding any other provision of the Plan to the contrary, pay for employment after July 1, 2007 shall not be included in determining an Hourly Participants Final Average Pay. | ||
Foreign Operating Subsidiary means a domestic corporation which is a Subsidiary and which satisfies the following requirements: |
(1) | 80 percent or more of its outstanding voting stock is owned by an Employer; and | ||
(2) | Except as provided below, as of the close of its taxable year which ends on or before the close of the most recent fiscal year of the Employer described in item (1) above, 95 percent or more of its gross income for the immediately preceding three year period (or for the entire immediately preceding period of its existence if it had not been in existence for three years as of such date) was derived from sources without the United States of America (determined by the Employer in a manner consistent with Code Sections 861 through 864); and | ||
(3) | Except as provided below, 90 percent or more of its gross income for the period described in item (2) above was derived from the active conduct of a trade or business; and | ||
(4) | If for the period described in item (2) above such Subsidiary had no gross income, the provisions of items (2) and (3) above shall be considered to be satisfied if the Employer determined that it is reasonable to anticipate that such provisions will be satisfied with respect to the period ending on the close of the first taxable year of such Subsidiary ending after the last day of the period described in item (2) above. |
Foreign Subsidiary means a foreign corporation or entity in which the Employer owns (directly or through one or more entities) not less than 10 percent of the voting stock, in the case of a corporation, or not less than 10 percent of the profits, in the case of any other entity. | ||
The Funding Agent means the person or persons which at the time shall be designated, qualified, and acting under the Funding Agreement and shall include (i) any trustee for a trust established pursuant to the Funding Agreement, (ii) any insurance company that |
-11-
issues an annuity or insurance contract pursuant to the Funding Agreement, or (iii) any person holding assets in a custodial account pursuant to the Funding Agreement. The Sponsor may designate a person or persons other than the Funding Agent to perform any responsibilities of the Funding Agent under the Plan, other than trustee responsibilities as defined in ERISA Section 405(c)(3), and the Funding Agent shall not be liable for the performance of such person in carrying out such responsibilities except as otherwise provided by ERISA. The term Funding Agent shall include any delegate of the Funding Agent as may be provided in the Funding Agreement. | ||
The Funding Agreement means the agreement entered into between the Sponsor and the Funding Agent relating to the holding, investment, and reinvestment of the assets of the Plan, together with all amendments thereto, and shall include any agreement establishing a trust, a custodial account, an annuity contract, or an insurance contract (other than a life, health or accident, property, casualty, or liability insurance contract) for the investment of assets; provided, however, that any custodial account or contract established hereunder meets the requirements of Code Section 401(f). | ||
A Highly Compensated Employee means any Employee or former Employee who is a highly compensated active employee or a highly compensated former employee as defined hereunder. | ||
A highly compensated active employee includes any Employee who performs services for an Employer or any Affiliated Company during the Plan Year and who (i) was a five percent owner at any time during the Plan Year or the look back year or (ii) received compensation from the Employers and Affiliated Companies during the look back year in excess of $80,000 (subject to adjustment annually at the same time and in the same manner as under Code Section 415(d)). The dollar amount in (ii) shall be pro-rated for any Plan Year of fewer than 12 months. | ||
A highly compensated former employee includes any Employee who (i) separated from service from an Employer and all Affiliated Companies (or is deemed to have separated from service from an Employer and all Affiliated Companies) prior to the Plan Year, (ii) performed no services for an Employer or any Affiliated Company during the Plan Year, and (iii) for either the separation year or any Plan Year ending on or after the date the Employee attains age 55, was a highly compensated active employee, as determined under the rules in effect under Code Section 414(q) for such year. | ||
The determination of who is a Highly Compensated Employee hereunder shall be made in accordance with the provisions of Code Section 414(q) and regulations issued thereunder. | ||
For purposes of this definition, the following terms have the following meanings: |
(1) | An employees compensation means 415 compensation as defined in Section 12.1 |
-12-
(2) | The look back year means the 12-month period immediately preceding the Plan Year. |
An Hour of Service with respect to any Employee means an hour which is determined and credited as such in accordance with the provisions of Article II. | ||
Hourly Participant means an individual who participated in the Hourly Plan immediately prior to the merger of the Hourly Plan with and into the Plan. Notwithstanding any provision of the Plan to the contrary, all rights and obligations of an Hourly Participant as of the merger into the Plan shall be determined in accordance with the terms of the Hourly Plan in effect at the time immediately preceding the Plan merger. Nothing in the Plan is intended in any way to expand or reduce the rights Hourly Participants enjoyed under the terms and conditions of the Hourly Plan. | ||
LTD Plan means the Employers long-term disability plan. | ||
A Participants Normal Retirement Date for purposes of benefit eligibility means the following: |
(1) | For a Salaried Participant, the later of (i) the date on which he attains age 65 or (ii) the fifth anniversary of the date he commenced participation in the Plan and, for all other purposes, the first day of the month immediately following such date. | ||
(2) | For an Hourly Participant, the later of (i) the date on which he attains age 65 or (ii) the earlier of (A) the date he completes 5 years of Service or (B) the fifth anniversary of the date he commenced participation in the Plan. For all other purposes, Normal Retirement Date means the first day of the month immediately following such date. |
A Participant means any person who becomes eligible to participate in the Plan in accordance with the provisions of Article IV and who retains an Accrued Benefit under the Plan. | ||
The Pension Fund means the fund or funds maintained under the Funding Agreement for purposes of accumulating contributions made by the Employers and paying benefits under the Plan. | ||
The Plan means this Sterling Chemicals, Inc. Amended and Restated Pension Plan, with all amendments, modifications, and supplements hereafter made. This instrument amends, restates and merges the Salaried Plan and the Hourly Plan, each originally effective August 1, 1986. Wherever the context permits or requires, the Plan shall include such predecessor Salaried Plan and Hourly Plan. | ||
A Plan Year on and after January 1, 2004 means the 12-consecutive-month period ending each December 31. The Plan Year that began on October 1, 2003 ended on |
-13-
December 31, 2003. Prior to October 1, 2003, the Plan Year meant the 12-consecutive-month period ending each September 30. The first Plan Year began on August 1, 1986 and ended on September 30, 1986. | ||
Prior Albright & Wilson Participant means each employee of an Employer as of August 21, 1992 who was previously an employee of Albright & Wilson based in the United States and was a participant in the Tenneco, Inc. Retirement Plan during such employment with Albright & Wilson. | ||
Prior Monsanto Participant means each employee of an Employer as of September 30, 1986 for a Salaried Participant and August 1, 1986 for an Hourly Participant who was previously an employee of the Monsanto Company (whether or not just prior to formation of the Employer) and was a participant in the Monsanto Company Salaried Employees Pension Plan or the Monsanto Company Hourly Paid Employees Pension Plan during such employment with the Monsanto Company. | ||
A Qualified Joint and Survivor Annuity is an immediate annuity payable to the Participant for his life with a survivor benefit payable upon the death of the Participant to the Participants Spouse (determined as of his Annuity Starting Date) for the remainder of such Spouses lifetime. The amount of the survivor benefit payable under a Qualified Joint and Survivor Annuity shall be equal to at least 50 percent of the amount the Participant was receiving on his date of death. | ||
A Qualified Preretirement Survivor Annuity is an annuity payable to the surviving Spouse of a Participant for such Spouses life as provided in Article X. | ||
Salaried Participant means an individual who participated in the Salaried Plan immediately prior to the merger of the Hourly Plan with and into the Plan. Notwithstanding any provision of the Plan to the contrary, all rights and obligations of a Salaried Participant as of the merger into the Plan shall be determined in accordance with the terms of the Salaried Plan in effect at the time immediately preceding the Plan merger. Nothing in the Plan is intended in any way to expand or reduce the rights Salaried Participants enjoyed under the terms and conditions of the Salaried Plan. | ||
A Participants Service means his period of service for purposes of determining his eligibility for a benefit under the Plan, as computed in accordance with the provisions of Article III. | ||
A Service Computation Period means the period used for determining an Employees years of Service and years of Credited Service. | ||
The Service Computation Period for determining a Salaried Participants years of Service is the Plan Year. The Service Computation Period for determining an Hourly Participants years of Service is the following: (i) prior to January 1, 1996, the 12-consecutive-month period ending each September 30; (ii) the period beginning October 1, |
-14-
1995 and ending September 30, 1996; and (iii) beginning January 1, 1996, the calendar year. |
The Service Computation Period for determining a Salaried Participants years of Credited Service is the Plan Year. The Service Computation Period for determining an Hourly Participants years of Credited Service is the following: (i) prior to October 1, 1996, the 12-consecutive-month period ending each September 30; (ii) the period beginning October 1, 1996 and ending December 31, 1996; and (iii) beginning January 1, 1997, the calendar year. | ||
The Sponsor means Sterling Chemicals, Inc., and any successor thereto. | ||
A Participants Spouse means the person who is the Participants lawful spouse under Federal law without regard to the law of any state or territory. | ||
The Union means the Texas City, Texas Metal Trades Council, AFL-CIO | ||
Standard Work Week for a Salaried Participant means 40 hours per week. | ||
Standard Work Year for a Salaried Participant means 2080 hours per calendar year. | ||
Subsidiary means any subsidiary, as defined below, or affiliate of the Employer, 80 percent of the stock of which is controlled by the Employer by application of Code Sections 414(b) and 1563(a). | ||
For purposes of the preceding paragraph, a subsidiary means any subsidiary or affiliate of the Employer not described in the paragraph above which would be so described if the figure 51 were replaced for the figure 80 in the preceding paragraph; provided, however, that only for purposes of exclusion of persons on international assignment from foreign operations of a domestic subsidiary, 20 shall be substituted for 51 in this paragraph. | ||
U.S. Citizen Foreign Service Employee means a person employed by a Foreign Subsidiary or a Foreign Operating Subsidiary who satisfies all of the following requirements: |
(1) | He is a Citizen or Resident (as defined in Code Section 7701(b)) of the United States of America; and | ||
(2) | He is not covered by or participating in any funded plan of deferred compensation maintained or otherwise provided by any party other than the Employer (or where the requisite stock ownership of a Foreign Subsidiary or a Foreign Operating Subsidiary is owned by another Employer, such other Employer) with respect to the remuneration paid to him by such Foreign Subsidiary or Foreign Operating Subsidiary; and |
-15-
(3) | If he is an employee of a Foreign Subsidiary, the Employer (or where the requisite stock ownership of a Foreign Subsidiary or a Foreign Operating Subsidiary is owned by another Employer, such other Employer) has entered into an agreement with the Secretary of the Treasury or his delegate under Code Section 3121(l) which applies to the Foreign Subsidiary of which he is an employee; and | ||
(4) | He is on international assignment from the Employer (or where the requisite stock ownership of a Foreign Subsidiary or a Foreign Operating Subsidiary is owned by another Employer, such other Employer). |
Notwithstanding the foregoing, the Employer or its delegate may preclude participation or impose such terms, conditions and restrictions on the participation of a U.S. Citizen Foreign Service Employee as the Employer or its delegate, in the exercise of its sole discretion, deems necessary or desirable in order to comply with U.S. or foreign law (including, but not limited to, tax reporting and withholding, securities registration or currency law requirements imposed by law or treaty) as it affects the U.S. Citizen Foreign Service Employee, the Employer, any Foreign Subsidiary, any Foreign Operating Subsidiary, the Sponsor, the trustee or any agent of the foregoing. |
1.2 | Construction |
-16-
2.1 | Crediting of Hours of Service |
(a) | Each hour for which he is paid, or entitled to payment, for the performance of duties for an Employer as an Employee; provided, however, that hours paid for at a premium rate shall be treated as straight-time hours. | |
(b) | Each hour for which he is paid, or entitled to payment, by an Employer on account of a period of time during which no duties as an Employee are performed (irrespective of whether he remains an Employee) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence, up to a maximum of eight hours per day and 40 hours per week; provided, however, that no more than 501 Hours of Service shall be credited to an Employee on account of any single continuous period during which he performs no duties (whether or not such period occurs in a single Service Computation Period); provided, further, that no Hours of Service shall be credited for payment which is made or due under a program maintained solely for the purpose of complying with applicable Workers Compensation, unemployment compensation, or disability insurance laws; and provided, further, that no Hours of Service shall be credited to an Employee for payment which is made or due solely as reimbursement for medical or medically related expenses incurred by him. | |
(c) | Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer; provided, however, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods of employment or absence from employment described in any other paragraph of this Section shall be subject to the limitations set forth therein and, if applicable, in Section 2.3 and Section 2.4. | |
(d) | Each hour for which he would have been scheduled to work for an Employer during the period of time that he is absent from work because of service with the armed forces of the United States, up to a maximum of eight hours per day and 40 hours per week, but only if he is eligible for reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 and he returns to work with an Employer within the period during which he retains such reemployment rights. | |
(e) | Each hour, determined as provided herein, for which he would have been scheduled to work for an Employer during the period of time that he is absent from work because of disability for which he is eligible for or receiving disability benefits under the LTD Plan. For purposes of this paragraph, an eligible Participant shall be credited with 95 Hours of |
-17-
Service for each half month, or 190 Hours of Service for each full month, during which he is eligible for or receives benefits under the LTD Plan. | ||
(f) | Solely for purposes of determining his Service under the Plan, each hour for which Salaried Participant would have been scheduled to work for an Employer during the period of time that he is absent from work because of an approved leave of absence of no more than two years, provided that he returns to work at the end of such leave. | |
(g) | Solely for purposes of determining his Service under the Plan, each hour for which Salaried Participant would have been scheduled to work for an Employer during the period of time that he is absent from work because of an approved leave of absence or such shorter period as may be specified by the Employer. | |
(h) | Each hour for which an Hourly Participant would have been scheduled to work for an Employer during the period of time that he is absent from work on leave approved by the Employer in order to conduct business on behalf of the Union. | |
(i) | Solely for purposes of determining his Service under the Plan, each hour for which a Salaried Participant would have been scheduled to work for an Employer during the period of time that he is absent from work because of temporary layoff, provided that he returns to active employment when recalled. | |
(j) | Each hour for which an Hourly Participant would have been scheduled to work for an Employer during the first 12 months of any absence from work because of temporary layoff. | |
(k) | For an Hourly Participant each hour, determined as provided herein, during the first 12 months of any absence from work because of non-occupational illness or disability that is not yet determined to be a long-term disability for which he is eligible for disability benefits under the LTD Plan. For purposes of this paragraph, an eligible Hourly Participant shall be credited with 95 Hours of Service for each half month, or 190 Hours of Service for each full month, during which he is absent because of such illness or disability. | |
(l) | For an Hourly Participant, each hour, determined as provided herein, during the period of time that he is absent from work because of occupational illness or disability that is not yet determined to be a long-term disability for which he is eligible for disability benefits under the LTD Plan. For purposes of this paragraph, an eligible Hourly Participant shall be credited with 95 Hours of Service for each half month, or 190 Hours of Service for each full month, during which he is absent because of such illness or disability. | |
(m) | Solely for purposes of determining whether he has incurred a Break in Service, each hour for which he would have been scheduled to work for an Employer during the period of time that he is absent from work because of the birth of a child, pregnancy, the adoption of a child, or the caring for a child for the period beginning following the birth or |
-18-
adoption of such child, up to a maximum of eight hours per day and 40 hours per week so that, when added to Hours of Service credited under any other paragraph of this Section, he shall be credited with not fewer than 501 total Hours of Service under the Plan for the Service Computation Period in which his absence commenced or the immediately following Service Computation Period; provided, however, that he shall be credited with Hours of Service under this paragraph for the Service Computation Period in which his absence from employment commenced only if necessary to prevent a Break in Service; and provided, further, that he shall be credited with Hours of Service under this paragraph for the Service Computation Period immediately following the Service Computation Period in which his absence from employment commenced only if he is not credited with Hours of Service under this paragraph for the Service Computation Period in which his absence from employment commenced. | ||
(n) | Solely for purposes of determining whether he has incurred a Break in Service, each hour for which he would be scheduled to work for an Employer during the period of time that he is absent from work on an approved leave of absence pursuant to the Family and Medical Leave Act of 1993; provided, however, that Hours of Service shall not be credited to an Employee under this paragraph if the Employee fails to return to employment with an Employer following such leave. |
2.2 | Hours of Service Equivalencies |
2.3 | Determination of Non-Duty Hours of Service |
(a) | In the case of a payment made or due which is calculated on the basis of units of time, such as hours, days, weeks, or months, the number of Hours of Service to be credited shall be the number of regularly scheduled working hours included in the units of time on the basis of which the payment is calculated. |
-19-
(b) | In the case of a payment made or due which is not calculated on the basis of units of time, the number of Hours of Service to be credited shall be equal to the amount of the payment divided by the Employees most recent hourly rate of compensation immediately prior to the period to which the payment relates. | |
(c) | Notwithstanding the provisions of paragraphs (a) and (b), no Employee shall be credited on account of a period during which no duties are performed with a number of Hours of Service that is greater than the number of regularly scheduled working hours during such period. | |
(d) | If an Employee is without a regular work schedule, the number of regularly scheduled working hours shall mean the average number of hours worked by Employees in the same job classification during the period to which the payment relates, or if there are no other Employees in the same job classification, the average number of hours worked by the Employee during an equivalent, representative period. |
2.4 | Allocation of Hours of Service to Service Computation Periods |
(a) | Hours of Service described in paragraph (a) of Section 2.1 shall be allocated to the Service Computation Period in which the duties are performed. | |
(b) | Hours of Service credited to an Employee for a period during which an Employee performs no duties shall be allocated as follows: |
(1) | Hours of Service credited to an Employee on account of a payment which is calculated on the basis of units of time, such as hours, days, weeks, or months, shall be allocated to the Service Computation Period or Periods in which the period during which no duties are performed occurs, beginning with the first unit of time to which the payment relates. | ||
(2) | Hours of Service credited to an Employee on account of a payment which is not calculated on the basis of units of time shall be allocated to the Service Computation Period or Periods in which the period during which no duties are performed occurs, or, if such period extends beyond one Service Computation |
-20-
Period, such Hours of Service shall be allocated equally between the first two such Service Computation Periods. | |||
(3) | Hours of Service credited to an Employee for a period of absence during which the Employee performs no duties and for which no payment is due from his Employer shall be allocated to the Service Computation Period or Periods during which such absence occurred. | ||
(4) | Hours of Service credited to an Employee because of an award or agreement for back pay shall be allocated to the Service Computation Period or Periods to which the award or agreement for back pay pertains, rather than to the Service Computation Period in which the award, agreement, or payment is made. |
2.5 | Department of Labor Rules |
-21-
3.1 | Service |
(a) | With respect to a Salaried Participant, for periods on and after October 1, 1993, with the exception of the period described in item (c) below, he shall be credited with a year of Service for each Service Computation Period for which he is credited with at least 1,000 Hours of Service; provided, however, that if he is credited with fewer than 1,000 Hours of Service for a Service Computation Period, he shall be credited with a partial year of Service in the ratio that his Hours of Service for the Service Computation Period bears to the greater of: |
(1) | 1,000 Hours of Service; or | ||
(2) | the Hours of Service in the Participants Standard Work Year. |
(b) | With respect to an Hourly Participant, for periods on and after October 1, 1993, with the exception of the period described in item (c) below, he shall be credited with a year of Service for each Service Computation Period for which he is credited with at least 1,000 Hours of Service; provided, however, that if he is credited with fewer than 1,000 Hours of Service for a Service Computation Period, he shall be credited with a partial year of Service in the ratio that his Hours of Service for the Service Computation Period bears to 1,000. | |
(c) | An Employee who is credited with at least 1,000 Hours of Service in the Service Computation Period that began on October 1, 1995 and ended on September 30, 1996 and in the Service Computation Period that began on January 1, 1996, shall be credited with a year of Service for each such Service Computation Period. | |
(d) | A Participant who meets the requirements of Section 8.1, entitled Eligibility for Disability Accruals who has not elected to cease payments under the LTD Plan and receive retirement benefits under the Plan in accordance with Section 8.1 will continue to accrue Service while eligible for benefits under the Employers LTD Plan, in accordance with Section 8.2. | |
(e) | For periods prior to October 1, 1993, Service was credited in accordance with the provisions of the Plan as constituted prior to such date. | |
(f) | For Prior Monsanto Participants, Service is credited on August 1, 1986 in an amount that is not less than the Service credited to the Participant under the Monsanto Company |
-22-
Salaried Employees Pension Plan and/or the Monsanto Company Hourly Paid Employees Pension Plan as of August 1, 1986. | ||
(g) | For Prior Albright & Wilson Participants, Service is credited on August 1, 1992 in an amount that is not less than the Service credited to the Participant under the Tenneco, Inc. Retirement Plan as of August 1, 1992. | |
(h) | For Participants who were employees of Cytec Industries, Inc., who became employees of Sterling Fibers, Inc. on January 31, 1997, Service is credited on January 31, 1997 in an amount that is not less than the Service credited to the Participant under the Cytec Salaried and Nonbargaining Employees Retirement Plan as of January 31, 1997. |
3.2 | Credited Service |
(a) | For periods on and after October 1, 1993, subject to any limitations set forth in Article V, with the exception of the period described in item (b) below, he shall be credited with a year of Credited Service for each Service Computation Period for which he is credited with at least (1) the number of Hours of Service in the Salaried Participants Standard Work Year (not less than 1,000 Hours of Service) or (2) 2,080 Hours of Service as an Hourly Participant. | |
If (1) the Hourly Participant is credited with fewer than 2,080 Hours of Service or (2) the Salaried Participant is credited with fewer than the number of Hours of Service in the Salaried Participants Standard Work Year for a Service Computation Period, he shall be credited with a partial year of Credited Service in the ratio that his Hours of Service for the Service Computation Period bears to 2,080 for such Hourly Participant or the number of Hours of Service in the Participants Standard Work Year for such Salaried Participant. | ||
(b) | For the Service Computation Period that began on October 1, 1995 and ended on December 31, 1996 for a Salaried Participant or December 31, 1995 for an Hourly Participant, a Participant shall be credited with a fractional year of Credited Service for such Service Computation Period in the ratio that his Hours of Service for the Service Computation Period bears to the number of Hours of Service in the Salaried Participants Standard Work Year or 2080 for such Hourly Participant. |
-23-
(c) | A Participant who meets the requirements of Section 8.1, entitled Eligibility for Disability Accruals who has not elected to cease payments under the LTD Plan and receive retirement benefits under the Plan in accordance with Section 8.1 will continue to accrue Credited Service while eligible for benefits under the Employers LTD Plan, in accordance with Section 8.2, at the rate of 190 Hours of Service per month. | |
(d) | Effective on and after November 1, 1998, a Salaried Participant who is involuntarily terminated (other than for cause) as part of a formal reduction in force or layoff program, who is between the ages of 54 and 55 at the time of such involuntary termination will continue to accrue Credited Service until he reaches age 55, at the rate of 190 Hours of Service per month; provided no duplication of benefits exist due to any other credit given for such period. | |
(e) | For periods prior to October 1, 1993, Service was credited in accordance with the provisions of the Plan as constituted prior to such date. | |
(f) | For Prior Monsanto Participants, Credited Service is credited on August 1, 1986 in an amount that is not less than the Credited Service credited to the Participant under the Monsanto Company Salaried Employees Pension Plan and/or the Monsanto Company Hourly Paid Employees Pension Plan as of August 1, 1986. | |
(g) | For Prior Albright & Wilson Participants, Credited Service is credited on August 1, 1992 in an amount that is not less than the Credited Service credited to the Participant under the Tenneco, Inc. Retirement Plan as of August 1, 1992. | |
(h) | For Participants who were employees of Cytec Industries, Inc., who became employees of Sterling Fibers, Inc. on January 31, 1997, no Credited Service is granted prior to January 31, 1997. |
3.3 | Transfers |
(a) | Any person who transfers or retransfers to employment with an Employer as an Employee directly from other employment (i) with an Employer in a capacity other than as an Employee or (ii), for a Salaried Participant, with any other Affiliated Company, shall be credited with Service and, for an Hourly Participant, Credited Service, for such other employment as if such other employment were employment with an Employer as an Employee. | |
(b) | Any person who transfers from employment with an Employer as an Employee directly to other employment (i) with an Employer in a capacity other than as an Employee or (ii), for a Salaried Participant, with any other Affiliated Company, shall be deemed by |
-24-
such transfer not to lose his Service or Credited Service, and shall be deemed not to retire or otherwise terminate his employment as an Employee until such time as he is no longer in the employment of an Employer or, for a Salaried Participant, any other Affiliated Company, at which time he shall become entitled to benefits if he is otherwise eligible therefore under the provisions of the Plan and shall receive credit for Service and, for an Hourly Participant, Credited Service for such other employment as if such other employment were employment with an Employer as an Employee. | ||
(c) | For an Hourly Participant, any person who transfers or retransfers to employment with an Employer as an Employee directly from other employment with any other Affiliated Company, shall be credited with Service, but not Credited Service, for such other employment as if such other employment were employment with an Employer as an Employee. | |
(d) | For an Hourly Participant, any person who transfers from employment with an Employer as an Employee directly to employment with any other Affiliated Company, shall be deemed by such transfer not to lose his Service or Credited Service; provided, however, that up to the time he is no longer in the employment of any other Affiliated Company, he shall receive credit for Service, but not for Credited Service, for such other employment as if such other employment were employment with an Employer as an Employee. |
3.4 | Retirement or Termination and Reemployment |
(a) | he is reemployed before incurring a Break in Service; or | |
(b) | he is reemployed following a Break in Service and he satisfies the requirements of (1) or (2) below, as applicable: |
(1) | he was eligible for any retirement benefit at the time of his previous retirement or other termination of employment and he satisfies any one of the following: |
-25-
(i) | he completes a year of Service following his return to employment; or | ||
(ii) | his Break in Service was due to layoff and he is reemployed following such layoff; or | ||
(iii) | his Break in Service was due to Disability and the Participant was eligible for benefits under the Employers LTD Plan, as described in Section 8.1, and upon cessation of the LTD Plan benefits, the Participant returns to active employment with the Employer as an Employee. |
(2) | he terminated his employment before satisfying the conditions of eligibility for any retirement benefit under the Plan and he satisfies any one of the following: |
(i) | he completes a year of Service following reemployment and either (A) the aggregate number of his years of Service (not including any years of Service not required to be aggregated because of previous Breaks in Service) is greater than the number of his consecutive one-year Breaks in Service or (B) the number of his consecutive one-year Breaks in Service is less than five; or | ||
(ii) | for an Hourly Participant, his Break in Service was due to layoff and he is reemployed within the 3-year period following commencement of such layoff; or | ||
(iii) | his Break in Service was due to Disability and the Participant was eligible for benefits under the Employers LTD Plan, as described in Section 8.1, and upon cessation of the LTD Plan benefits, the Participant returns to active employment with the Employer as an Employee; or | ||
(iv) | for an Hourly Participant, he completes 10 years of Service following reemployment. |
-26-
3.5 | Finality of Determinations |
-27-
4.1 | Participation |
4.2 | Termination of Participation |
4.3 | Finality of Determinations |
-28-
5.1 | Eligibility |
5.2 | Amount |
(a) | An eligible Salaried Participants monthly normal retirement benefit shall be equal to (1) or (2), whichever is applicable; provided, however, that if (3) applies to such Salaried Participant and such Salaried Participants monthly normal retirement benefit would be higher under (3), then such Salaried Participants monthly normal retirement benefit shall be equal to (3): |
(1) | For any Salaried Participant who is a Prior Monsanto Participant, employed by Monsanto prior to April 1, 1986: |
1.4 percent of the Salaried Participants Average Monthly Earnings multiplied by his number of years and partial years of Credited Service at retirement. |
(2) | For all other Salaried Participants, the sum of (i) and (ii): |
(i) | 1.2 percent of the Salaried Participants Average Monthly Earnings multiplied by his number of years and partial years of Credited Service at retirement plus | ||
(ii) | If the Salaried Participant retires or otherwise terminates employment on or after April 1, 1999, 0.45 percent of the Salaried Participants Average Monthly Earnings in excess of Covered Compensation multiplied by his number of years and partial years of Credited Service at retirement not in excess of 35 years. |
(3) | For any Salaried Participant hired prior to June 1, 1996, a minimum benefit equal to the following: |
(i) | If the Salaried Participant retires or otherwise terminates employment prior to January 1, 1991, $30 multiplied by his years and partial years of Credited Service. |
-29-
(ii) | If the Salaried Participant retires or otherwise terminates employment on or after January 1, 1991, $35 multiplied by his years and partial years of Credited Service. |
Notwithstanding anything to the contrary contained above, a Salaried Participants monthly normal retirement benefit determined above will be offset by such Salaried Participants vested Accrued Benefit payable under the Monsanto Company Salaried Employees Pension Plan, the Monsanto Company Hourly Paid Employees Pension Plan or the Tenneco, Inc. Retirement Plan, if any. | ||
In no event will a reduction in a Salaried Participants Average Monthly Earnings reduce the normal retirement benefit payable to him below the amount that would have been payable to him under the same form of payment had he retired prior to his Normal Retirement Date when eligible for an early retirement benefit. | ||
(b) | Effective for Hourly Participants whose employment with an Employer ceases on or after December 31, 1998, an eligible Hourly Participants monthly normal retirement benefit shall be equal to the product of the applicable dollar amount, determined from the chart below based on the Hourly Participants Final Average Pay, multiplied by the Hourly Participants number of years and partial years of Credited Service at retirement. |
Final Average Pay |
Applicable Dollar Amount | |||
Less than $35,500 |
$ | 35 | ||
At least $35,500, but less than $36,500 |
$ | 36 | ||
At least $36,500, but less than $37,500 |
$ | 37 | ||
At least $37,500, but less than $38,500 |
$ | 38 | ||
At least $38,500, but less than $39,500 |
$ | 39 | ||
At least $39,500, but less than $40,500 |
$ | 40 | ||
At least $40,500, but less than $41,500 |
$ | 41 | ||
At least $41,500, but less than $42,500 |
$ | 42 | ||
At least $42,500, but less than $43,500 |
$ | 43 | ||
At least $43,500, but less than $44,500 |
$ | 44 | ||
At least $44,500, but less than $45,500 |
$ | 45 |
-30-
Final Average Pay |
Applicable Dollar Amount | |||
At least $45,500, but less than $46,500 |
$ | 46 | ||
At least $46,500, but less than $47,500 |
$ | 47 | ||
At least $47,500, but less than $48,500 |
$ | 48 | ||
At least $48,500, but less than $49,500 |
$ | 49 | ||
At least $49,500, but less than $50,500 |
$ | 50 | ||
At least $50,500, but less than $51,500 |
$ | 51 | ||
At least $51,500, but less than $52,500 |
$ | 52 | ||
At least $52,500, but less than $53,500 |
$ | 53 | ||
At least $53,500, but less than $54,500 |
$ | 54 | ||
At least $54,500, but less than $55,500 |
$ | 55 | ||
At least $55,500, but less than $56,500 |
$ | 56 | ||
At least $56,500, but less than $57,500 |
$ | 57 | ||
At least $57,500, but less than $58,500 |
$ | 58 | ||
At least $58,500, but less than $59,500 |
$ | 59 | ||
$59,500 or more |
$ | 60 |
Notwithstanding anything to the contrary contained above, an Hourly Participants monthly normal retirement benefit determined above will be offset by such Hourly Participants vested Accrued Benefit payable under the Monsanto Company Salaried Employees Pension Plan or the Monsanto Company Hourly Paid Employees Pension Plan, if any. | ||
In no event will a reduction in an Hourly Participants Final Average Pay reduce the normal retirement benefit payable to him below the amount that would have been payable to him under the same form of payment had he retired prior to his Normal Retirement Date when eligible for an early retirement benefit. |
5.3 | 401(a)(17) Fresh Start Adjustments |
-31-
5.4 | Special Calculation For Participants Who Transferred From The Prior Salaried Plan or Hourly Plan |
(a) | the Accrued Benefit under the Plan as an Hourly Participant or Salaried Participant, whichever was his resulting status after the transfer, calculated using the total years and partial years of Credited Service under both plans; or |
(b) | The sum of (1) and (2): |
(1) | The Accrued Benefit while a Participant in his prior Salaried Plan or Hourly Plan as appropriate, calculated using only the Credited Service earned under that plan, plus | ||
(2) | The Accrued Benefit payable to him from the subsequent Salaried Plan or Hourly Plan as appropriate, calculated using only the Credited Service earned under that subsequent Salaried Plan or Hourly Plan, and the formula in effect in that subsequent Salaried Plan or Hourly Plan at the time he ceased to be a Participant in that subsequent Salaried Plan or Hourly Plan. |
5.5 | Special Calculation For Participants Who Transferred From A Canadian Affiliate |
(a) | the Accrued Benefit under the Plan as a Salaried Participant, calculated using the total years and partial years of Credited Service under both plans; or |
-32-
(b) | The sum of (1) and (2): |
(1) | The Accrued Benefit under the Plan as a Salaried Participant, calculated using only the Credited Service earned under the Plan, plus | ||
(2) | The Accrued Benefit payable to him from the Canadian plan, calculated using only the Credited Service earned under the Canadian plan, and the formula in effect in the Canadian plan at the time he ceased to be a participant in the Canadian plan. |
5.6 | Adjustment to Normal Retirement Benefit for Employment After Normal Retirement Date |
(a) | For the period beginning on the Participants Normal Retirement Date and ending on the April 1 of the calendar year following the calendar year in which he reaches age 70 1/2, his benefit shall be the greater of (1) or (2): |
(1) | the Participants Accrued Benefit as of the date such benefit is being determined (taking into account that benefits under the Plan are frozen effective January 1, 2005 for Salaried Participants and July 1, 2007 for Hourly Participants); or | ||
(2) | the Participants Accrued Benefit as of his Normal Retirement Date (taking into account that benefits under the Plan are frozen effective January 1, 2005 for Salaried Participants and July 1, 2007 for Hourly Participants), increased, using the Actuarial Equivalent as of his Annuity Starting Date (but no later than the April 1 following the calendar year in which the Participant attains age 70 1/2). |
(b) | For the period beginning on the April 1 of the calendar year following the calendar year in which he reaches age 70 1/2, the Participants monthly retirement benefit shall be adjusted as set forth in Section 11.8. |
5.7 | Payment |
-33-
6.1 | Eligibility |
6.2 | Amount |
(a) | Salaried Participants | |
Notwithstanding the above, a Salaried Participant, the sum of whose age plus years of Service equals at least 70 on his last day of employment prior to the reduction in force announced by means of an official letter in September, 2005 from the Employer to the Salaried Participants affected by such reduction in force, is entitled at any time after attaining age 55, to commence payment of his benefit on an Early Retirement Date, without application of the early retirement reduction described below in this Section. | ||
A Salaried Participant (i) who is at least 50 years of age as of November 9, 2004, (ii) who is involuntarily terminated other than for cause during the period beginning on November 9, 2004 and ending on December 31, 2004, and (iii) who executes a release of claims in connection with his pension benefit under the Plan, may, at any time after attaining 55 years of age, commence payment of his benefit on an Early Retirement Date, without application of the early retirement reduction described below in this Section. | ||
An eligible Salaried Participants monthly early retirement benefit shall be equal to his vested Accrued Benefit on his Early Retirement Date; provided, however, that the amount of such benefit shall be adjusted as provided below: |
-34-
(1) | Except as otherwise provided in Section 6.1 or in paragraph (2) below, the amount of such benefit shall be reduced by 1/4 of one percent for each full calendar month by which his Annuity Starting Date precedes his Normal Retirement Date. | ||
(2) | If the sum of a Salaried Participants age and years of Service equals or exceeds 80 on his Early Retirement Date and his Early Retirement Date is on or after April 1, 1999, the reduction in the preceding paragraph will not be applied to Section 5.2(a)(1) and 5.2(a)(2)(i) ; provided the Salaried Participant meets one of the following requirements: |
(i) | the Salaried Participant attains the age of 55 prior to termination of employment with the Employer and all Affiliated Companies or the Salaried Participant is electing to commence his early retirement benefit under Section 6.1 while still actively employed by his Employer or an Affiliated Company ; or | ||
(ii) | the Salaried Participant earned Credited Service after he became a Salaried Participant in the Plan and his termination of employment is a result of a reduction in workforce and, after his involuntary termination, the sum of his age and years of Service reaches or exceeds 80. |
If an eligible Salaried Participant elects to receive his early retirement benefit while continuing to be employed by his Employer or an Affiliated Company, as permitted under Section 6.1, the amount of the benefit payable to the Salaried Participant shall be determined in accordance with the provisions of this Section based upon the Salaried Participants age and years of Service as of his Early Retirement Date. The amount of such benefit shall not be adjusted during the term of the Salaried Participants employment. | ||
A Salaried Participants vested interest in his Accrued Benefit shall be determined in accordance with the schedule provided in Section 7.1. | ||
(b) | Hourly Participants | |
An eligible Hourly Participants monthly early retirement benefit shall be equal to his vested Accrued Benefit on his Early Retirement Date; provided, however, that the amount of such benefit shall be adjusted as provided below: |
(1) | Except as otherwise provided in paragraphs (2) and (3) below, the amount of such benefit shall be reduced by 1/4 of one percent for each full calendar month by which his Annuity Starting Date precedes his Normal Retirement Date. | ||
(2) | If an Hourly Participant attains the age 55 prior to the termination of his employment with the Employer and the sum of an Hourly Participants |
-35-
age and years of Service equals or exceeds 80 as of the first day of the month next following the month in which his employment terminates, the reduction in clause (1) above will not apply on his Early Retirement Date. | |||
(3) | If an Hourly Participant is between the ages of 54 and 65 and is involuntarily terminated by an Employer, other than for cause, as part of the formal reduction in force or layoff program during the first calendar quarter of 2010, such Hourly Participant will continue to receive Service credit until he attains the age of 55 and. if at the time such Hourly Participant attains the age of 55, the sum of such Hourly Participants age and years of Service equals or exceeds 80, the reduction in clause (1) above will not apply on his Early Retirement Date. |
If an eligible Hourly Participant elects to receive his early retirement benefit while continuing in active employment, as permitted under Section 6.1, the amount of the benefit payable to the Hourly Participant shall be determined in accordance with the provisions of this Section based upon the Hourly Participants age and years of Service as of his Early Retirement Date. The amount of such benefit shall not be adjusted during the term of the Hourly Participants employment. | ||
An Hourly Participants vested interest in his Accrued Benefit shall be determined in accordance with the schedule provided in Section 7.1. |
6.3 | Early Retirement Supplement |
6.4 | Payment |
-36-
(a) | employed by an Employer or an Affiliated Company on his Normal Retirement Date, regardless of whether he has completed the number of years of Service required under the schedule for 100 percent vesting; or | |
(b) | a Salaried Participant who terminated employment with Sterling Fibers, Inc. between September 18, 2000 and May 20, 2001; or | |
(c) | a Salaried Participant on the active payroll of Sterling Fibers, Inc., Sterling Pulp Chemicals US, Inc. or Sterling Pulp Chemicals Inc. on the date such Subsidiaries on December 19, 2002 and ceased to be Subsidiaries of the Employer. |
Years of Service | Vested Interest | |||
less than five |
0 | % | ||
five or more |
100 | % |
7.2 | Eligibility for Deferred Vested Retirement Benefit |
7.3 | Amount of Deferred Vested Retirement Benefit |
-37-
7.4 | Payment |
7.5 | Election of Former Vesting Schedule |
-38-
8.1 | Eligibility for Disability Accruals |
8.2 | Disability Retirement | |
(a) | Salaried Participants |
(1) | Disability Retirement Eligibility | ||
Each Salaried Participant who meets the requirements of Section 8.1 and who has met one of the following requirements is eligible to elect payment of a Disability Retirement Benefit: |
(i) | the Salaried Participant has elected in writing, in accordance with procedures established under the LTD Plan, not to receive any payments from the LTD Plan; or | ||
(ii) | the Salaried Participant has elected to stop payments he is receiving from the LTD Plan, in order to receive Disability Retirement Benefit, instead. |
(2) | Disability Retirement Amount |
(i) | An eligible Salaried Participants monthly Disability Retirement Benefit shall be equal to his Accrued Benefit on the date his Disability Retirement Benefit commences, taking into account any Credited Service credited to the Salaried Participant for any period prior to his Normal Retirement Date during which he is receiving benefits under the LTD Plan prior to the cessation of LTD payments, adjusted actuarially for early retirement and, if applicable, form of payment. | ||
(ii) | In addition to the amount payable under item (i), a supplement will be paid to the Salaried Participant starting on the Annuity Starting Date of his disability retirement and ending on the first day of the month following the earliest of the date he ceases to be Disabled, his Normal Retirement Date or his date of death. The amount of the supplement will be the amount his |
-39-
Accrued Benefit was reduced due to actuarial adjustment for early retirement and, if applicable, form of payment. |
(3) | Disability Retirement Payment | ||
A monthly Disability Retirement Benefit shall be paid to an eligible Salaried Participant commencing as of the first day of the month following the later of: |
(i) | the month in which he terminates employment; or | ||
(ii) | the last calendar month in which benefits under the LTD Plan are payable. |
(b) | Hourly Participants | |
Each Hourly Participant who meets the requirements of Section 8.1 is considered to be Disabled and is eligible to accrue additional Service and Credited Service while receiving payments from the LTD Plan in accordance with the provisions of Sections 3.1 and 3.2 provided the Hourly Participant has been credited with at least two and one-half years of Credited Service at the time he becomes eligible for payments under the LTD Plan. | ||
An Hourly Participant who is receiving LTD Plan payments may elect to cease such payments prior to his Normal Retirement Date and receive an early retirement or deferred vested retirement benefit in accordance with the provisions of Article VI or VII, provided he meets the eligibility requirements thereunder at the time of the election. |
8.3 | Disability Accrual |
(a) | the first day of the month after he ceases to meet the requirements of Section 8.1; | |
(b) | the first day of the month after he elects, in writing, to cease his LTD Plan payments in order to elect retirement benefits under the Plan; | |
(c) | the date of his death; | |
(d) | his Normal Retirement Date; or | |
(e) | for an Hourly Participant, for purposes of further accruals of Credited Service only, July 1, 2007. |
-40-
9.1 | Normal Form of Payment |
(a) | A Participant who is not married on his Annuity Starting Date shall receive such benefit in the form of a single life annuity. Such Participant shall receive a monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. | |
(b) | A Participant who is married on his Annuity Starting Date shall receive such benefit in the form of a 50 percent Qualified Joint and Survivor Annuity. Such Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Spouse survives him, then commencing with the month following the month in which the Participants death occurs, his Spouse shall receive a monthly benefit for his remaining lifetime equal to one-half of the reduced amount payable during the Participants lifetime, the last payment being for the month in which the Spouses death occurs. A married Participant may elect to increase the survivor benefit payable to his Spouse under the Qualified Joint and Survivor Annuity to 100 percent or 75 percent of the reduced amount payable during the Participants lifetime. Any such election must be made during the election period described in Section 9.5. | |
The reduced monthly payments to be made to the Participant under this paragraph shall be in an amount which, on the date of commencement thereof, is the Actuarial Equivalent of the monthly benefit otherwise payable to the Participant under the form of payment described in paragraph (a). |
-41-
9.2 | Optional Forms of Payment |
(a) | Single Life Annuity. The Participant shall receive a monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. | |
(b) | 100% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
(c) | 75% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to three- |
-42-
quarters of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | ||
(d) | 50% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to one-half of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
(e) | 25% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to one-quarter of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
(f) | Pop-Up 100% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
If the Beneficiarys death occurs prior to the death of the Participant, then commencing with the month following the month in which the Beneficiarys death occurs, the Participant shall receive an increase in the amount of his monthly benefit for the remainder of his remaining lifetime equal to the amount that would be payable under a Single Life Annuity, the last monthly payment being for the month in which the Participants death occurs. | ||
(g) | Pop-Up 75% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to three-quarters of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
If the Beneficiarys death occurs prior to the death of the Participant, then commencing with the month following the month in which the Beneficiarys death occurs, the Participant shall receive an increase in the amount of his monthly benefit for the |
-43-
remainder of his remaining lifetime equal to the amount that would be payable under a Single Life Annuity, the last monthly payment being for the month in which the Participants death occurs. | ||
(h) | Pop-Up 50% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to one-half of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
If the Beneficiarys death occurs prior to the death of the Participant, then commencing with the month following the month in which the Beneficiarys death occurs, the Participant shall receive an increase in the amount of his monthly benefit for the remainder of his remaining lifetime equal to the amount that would be payable under a Single Life Annuity, the last monthly payment being for the month in which the Participants death occurs. | ||
(i) | Pop-Up 25% Joint and Survivor Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants Beneficiary survives him, then commencing with the month following the month in which the Participants death occurs, his Beneficiary shall receive a monthly benefit for his remaining lifetime equal to one-quarter of the reduced amount payable during the Participants lifetime, the last monthly payment being for the month in which the Beneficiarys death occurs. | |
If the Beneficiarys death occurs prior to the death of the Participant, then commencing with the month following the month in which the Beneficiarys death occurs, the Participant shall receive an increase in the amount of his monthly benefit for the remainder of his remaining lifetime equal to the amount that would be payable under a Single Life Annuity, the last monthly payment being for the month in which the Participants death occurs. | ||
(j) | Ten-Year Certain and Life Annuity. The Participant shall receive a reduced monthly retirement benefit payable for his lifetime, the last monthly payment being for the month in which his death occurs. If the Participants death occurs prior to the end of the ten-year period commencing with his Annuity Starting Date, his Beneficiary shall receive a continued monthly benefit equal to such reduced amount for the remainder of such ten-year period. If the Participants Beneficiary dies after becoming eligible to receive a benefit hereunder, but prior to the end of the ten-year period, the unpaid monthly benefit shall be paid to the Beneficiary designated by the Participant to receive payment in such event or, if none, in accordance with the provisions of Section 9.3. If the Participants Beneficiary dies while the Participant is living and before 120 payments have been made, the Participant may name another Beneficiary. |
-44-
(k) | Social Security Adjustment Annuity. The Participant shall receive an increased monthly retirement benefit prior to a specified date, which shall be the first day of the month following the date the Participant reaches age 62 or age 65, as elected by the Participant, and a reduced monthly retirement benefit thereafter, so that the adjusted benefit, when combined with the Primary Insurance Benefits under the Federal Social Security Act expected to become payable as of such specified date, will produce, as nearly as practicable, a level monthly income, the last monthly payment being for the month in which the Participants death occurs. | |
The Participant may elect the Social Security Adjustment Annuity in conjunction with the Single Life Annuity optional form of payment, one of the Joint and Survivor Annuity optional forms of payment or in conjunction with Ten-Year Certain and Life Annuity optional form of payment. The Participants shall receive a reduced monthly retirement benefit in accordance with the Joint and Survivor or Certain and Life Annuity option, in addition to the adjustment for Social Security described in the previous paragraph. | ||
The Social Security Adjustment Annuity is not available in conjunction with any of the Pop-Up Joint and Survivor optional forms of payment. |
9.3 | Designation of Beneficiary and Beneficiary in Absence of Designated Beneficiary |
-45-
9.4 | Notice Regarding Forms of Payment |
(a) | of his right to consider his form of payment election for a period of at least 30 days following his receipt of the explanation; | |
(b) | the Participant, after receiving the explanation, affirmatively elects an early Annuity Starting Date, with his Spouses written consent, if necessary; | |
(c) | the Participants Annuity Starting Date occurs after the date the explanation is provided to him; | |
(d) | the election period described in Section 9.5 does not end until the later of his Annuity Starting Date or the expiration of the seven-day period beginning the day after the date the explanation is provided to him; and | |
(e) | actual payment of the Participants retirement benefit does not begin to the Participant before such revocation period ends. |
-46-
9.5 | Election Period |
9.6 | Spousal Consent Requirements |
(a) | the Spouse cannot be located, | |
(b) | the Participant is legally separated or has been abandoned within the meaning of local law, and the Participant has a court order to that effect, or | |
(c) | other circumstances set forth in Code Section 401(a)(11) and regulations issued thereunder. |
-47-
9.7 | Death Prior to Annuity Starting Date |
9.8 | Effect of Reemployment on Form of Payment |
-48-
10.1 | Eligibility for Qualified Preretirement Survivor Annuity |
(a) | the Participant has a Spouse; and | |
(b) | the Participant has a vested Accrued Benefit. |
10.2 | Amount of Qualified Preretirement Survivor Annuity |
(a) | separated from service on the earlier of his actual separation from service date or his date of death; and | |
(b) | survived to the date as of which payment of the Qualified Preretirement Survivor Annuity to his surviving Spouse commences; and | |
(c) | elected to commence retirement benefits as of the date described in paragraph (b) above in the form of a 50 percent Qualified Joint and Survivor Annuity; and | |
(d) | died on his Annuity Starting Date. |
-49-
10.3 | Payment of Qualified Preretirement Survivor Annuity |
(a) | if the Participant dies (1) while employed by the Employer and after (i) completing at least 20 years of Service or (ii) completing at least 5 years of Service and reaching age 50 or (2) (i) for a Salaried Participant, if he meets the requirements for Disability Accrual under Section 8.3, the month after reaching age 55, or (ii) for an Hourly Participant, while receiving benefits under the LTD Plan and after competing at least 10 years of Service, the month in which the Participant dies; or | |
(b) | if the Participant does not satisfy the requirements of (a), the later of (1) the month in which the Participant dies or (2) the month in which the Participant would have attained earliest retirement age (as defined herein) under the Plan. |
-50-
11.1 | Suspension of Benefits for Rehired Retired Participants |
11.2 | Exception to Suspension of Benefits Rule |
11.3 | Non-Alienation of Retirement Rights or Benefits |
11.4 | Payment of Benefits to Others |
-51-
11.5 | Payment of Small Benefits; Deemed Cashout |
11.6 | Direct Rollovers |
-52-
(a) | An eligible retirement plan means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), a qualified trust described in Code Section 401(a) that accepts rollovers, an annuity contract described in Code Section 403(b), or an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from the Plan. | ||
Effective with respect to distributions made on and after January 1, 2008, an eligible retirement plan shall include a Roth IRA described in Section 408A of the Code. | |||
Effective for distributions made on or after December 1, 2008: (A) An eligible retirement plan shall include an individual retirement plan described in clause (i) or (ii) of Section 402(c)(8)(B) of the Code with respect to an eligible rollover distribution to an individual who is the Beneficiary of a deceased Participant (but who is not the Participants surviving Spouse or former Spouse); and (B) a distribution to an individual who is the Beneficiary of a deceased Participant (but who is not the Participants surviving Spouse or former Spouse) shall be treated as an eligible rollover distribution if the distribution is transferred via trustee-to-trustee transfer to an individual retirement plan described in clause (i) or (ii) of Section 402(c)(8)(B) of the Code. | |||
(b) | An eligible rollover distribution means any distribution of all or any portion of a Participants Accrued Benefit or a distribution of all or any portion of a survivor benefit under Article X; provided, however, that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or life expectancy of the qualified distributee or the joint lives or joint life expectancies of the qualified distributee and the qualified distributees designated beneficiary, or for a specified period of ten years or more; and any distribution to the extent such distribution is required under Code Section 401(a)(9). | ||
(c) | A qualified distributee means a Participant, his surviving Spouse, his Spouse or former Spouse who is an alternate payee under a qualified domestic relations order, as defined in Code Section 414(p). Effective for distributions made on or after December 1, 2008, qualified distributee also means a Beneficiary of a deceased Participant (other than a Participants surviving Spouse or former Spouse). If a qualified distributee is a trust, the Plan may make a direct rollover to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) on behalf of the trust, provided the trust satisfies the requirements to be a designated beneficiary within the meaning of Code Section 401(a)(9)(E). |
-53-
11.7 | Limitations on Commencement |
(a) | the 60th day after the end of the Plan Year in which occurs the Participants Normal Retirement Date, the tenth anniversary of the date on which he first became a Participant, or the Participants retirement or other termination of employment, whichever is latest; or | |
(b) | his Required Beginning Date. |
11.8 | Minimum Required Distributions |
(a) | Precedence and Effective Date. The requirements of this Section 11.8 shall apply to any distribution of a Participants interest and will take precedence over any inconsistent provisions of the Plan. Unless otherwise specified, the provisions of this Section apply to calendar years beginning after December 31, 2002. | |
(b) | Minimum Distribution Requirements. |
(1) | General Rules. |
(i) | Effective Date. Notwithstanding anything herein to the contrary, the provisions of this Section 11.8(b) will apply for purposes of determining required minimum distributions under the Plan for calendar years beginning with the 2003 calendar year. | ||
(ii) | Precedence. The requirements of this Section 11.8(b) will take precedence over any inconsistent provisions of the Plan. | ||
(iii) | Requirements of Treasury Regulations Incorporated. All distributions |
-54-
required under this Section 11.8(b) will be determined and made in accordance with the Treasury regulations under Code Section 401(a)(9). | |||
(iv) | TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section 11.8(b), other than Section 11.8(b)(1)(iii), distributions may be made under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to section 242(b)(2) of TEFRA. |
(2) | Time and Manner of Distribution. |
(i) | Required Beginning Date. A Participants entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participants Required Beginning Date. | ||
(ii) | Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participants entire interest will be distributed, or begin to be distributed, no later than as follows: |
(A) | If the Participants surviving Spouse is the Participants sole designated Beneficiary, then, except as provided in Section 11.8(b)(7), distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 701/2, if later. | ||
(B) | If the Participants surviving Spouse is not the Participants sole designated Beneficiary, then, except as provided in Section 11.8(b)(7), distributions to the designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. | ||
(C) | If there is no designated Beneficiary as of September 30 of the year following the year of the Participants death, the Participants entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participants death. | ||
(D) | If the Participants surviving Spouse is the Participants sole designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 11.8(b)(2)(ii), other than paragraph (A), will apply as if the surviving Spouse were the Participant. |
For purposes of this Section 11.8(b)(2)(ii) and Section 11.8(b)(5), distributions are considered to begin on the Participants Required |
-55-
Beginning Date (or, if Section 11.8(b)(2)(ii)(D) applies, the date distributions are required to begin to the surviving Spouse under Section 11.8(b)(2)(ii)(A)). If annuity payments irrevocably commence to the Participant before the Participants Required Beginning Date (or to the Participants surviving Spouse before the date distributions are required to begin to the surviving Spouse under Section 11.8(b)(2)(ii)(A)), the date distributions are considered to begin is the date distributions actually commence. |
(iii) | Form of Distribution. Unless the Participants interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first distribution calendar year distributions will be made in accordance with paragraphs (3), (4) and (5) of this Section 11.8(b). If the Participants interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury regulations. Any part of the Participants interest which is in the form of an individual account described in Code Section 414(k) will be distributed in a manner satisfying the requirements of Code Section 401(a)(9) and the Treasury regulations that apply to individual accounts. |
(3) | Determination of Amount to be Distributed Each Year. |
(i) | General Annuity Requirements. If the Participants interest is paid in the form of annuity distributions under the Plan, payments under the annuity will satisfy the following requirements: |
(A) | the annuity distributions will be paid in periodic payments made at intervals not longer than one year; | ||
(B) | the distribution period will be over a life (or lives) or over a period certain not longer than the period described in paragraph (4) or (5) of this Section 11.8(b); | ||
(C) | once payments have begun over a period certain, the period certain will not be changed even if the period certain is shorter than the maximum permitted; | ||
(D) | payments will either be nonincreasing or increase only as follows: |
(I) | by an annual percentage increase that does not exceed the annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics; | ||
(II) | to the extent of the reduction in the amount of the |
-56-
Participants payments to provide for a survivor benefit upon death, but only if the Beneficiary whose life was being used to determine the distribution period described in paragraph (4) of Section 11.8(b) dies or is no longer the Participants Beneficiary pursuant to a qualified domestic relations order within the meaning of Code Section 414(p); |
(III) | to provide cash refunds of employee contributions upon the Participants death; or | ||
(IV) | to pay increased benefits that result from a Plan amendment. |
(ii) | Amount Required to be Distributed by Required Beginning Date. The amount that must be distributed on or before the Participants Required Beginning Date (or, if the Participant dies before distributions begin, the date distributions are required to begin under Section 11.8(b)(2)(ii)(A) or (B)) is the payment that is required for one payment interval. The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year. Payment intervals are the periods for which payments are received, e.g., bi-monthly, monthly, semi-annually, or annually. All of the Participants benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Participants Required Beginning Date. | ||
(iii) | Additional Accruals After First Distribution Calendar Year. Any additional benefits accruing to the Participant in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues. |
(4) | Requirements For Annuity Distributions That Commence During Participants Lifetime. |
(i) | Joint Life Annuities Where the Beneficiary Is Not the Participants Spouse. If the Participants interest is being distributed in the form of a joint and survivor annuity for the joint lives of the Participant and a non-spouse Beneficiary, annuity payments to be made on or after the Participants Required Beginning Date to the designated Beneficiary after the Participants death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the Participant using the table set forth in Q&A-2 of section 1.401(a)(9)-6 of the Treasury regulations. If the form of distribution combines a joint and survivor annuity for the joint lives of the |
-57-
Participant and a nonspouse Beneficiary and a period certain annuity, the requirement in the preceding sentence will apply to annuity payments to be made to the designated Beneficiary after the expiration of the period certain. |
(ii) | Period Certain Annuities. Unless the Participants Spouse is the sole designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the Participants lifetime may not exceed the applicable distribution period for the Participant under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations for the calendar year that contains the annuity starting date. If the annuity starting date precedes the year in which the Participant reaches age 70, the applicable distribution period for the Participant is the distribution period for age 70 under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations plus the excess of 70 over the age of the Participant as of the Participants birthday in the year that contains the annuity starting date. If the Participants Spouse is the Participants sole designated Beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the Participants applicable distribution period, as determined under this paragraph (B), or the joint life and last survivor expectancy of the Participant and the Participants Spouse as determined under the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the Participants and Spouses attained ages as of the Participants and Spouses birthdays in the calendar year that contains the annuity starting date. |
(5) | Requirements For Minimum Distributions Where Participant Dies Before Date Distributions Begin. |
(i) | Participant Survived by Designated Beneficiary. Except as provided in Section 11.8(b)(7), if the Participant dies before the date distribution of his interest begins and there is a designated Beneficiary, the Participants entire interest will be distributed, beginning no later than the time described in Section 11.8(b)(2)(ii)(A) or (B), over the life of the designated Beneficiary or over a period certain not exceeding: |
(A) | unless the annuity starting date is before the first distribution calendar year, the life expectancy of the designated Beneficiary determined using the Beneficiarys age as of the Beneficiarys birthday in the calendar year immediately following the calendar year of the Participants death; or |
(B) | if the annuity starting date is before the first distribution calendar year, the life expectancy of the designated Beneficiary determined using the Beneficiarys age as of the Beneficiarys |
-58-
birthday in the calendar year that contains the annuity starting date. |
(ii) | No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated Beneficiary as of September 30 of the year following the year of the Participants death, distribution of the Participants entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participants death. | ||
(iii) | Death of Surviving Spouse Before Distributions to Surviving Spouse Begin. If the Participant dies before the date distribution of his interest begins, the Participants surviving Spouse is the Participants sole designated Beneficiary, and the surviving Spouse dies before distributions to the surviving Spouse begin, this paragraph (5) will apply as if the surviving Spouse were the Participant, except that the time by which distributions must begin will be determined without regard to Section 11.8(b)(2)(ii)(A). |
(6) | Definitions. |
(i) | Designated Beneficiary. The individual who is designated as the Beneficiary under Section 1.1 of the Plan and is the designated beneficiary under Code Section 401(a)(9) and section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations. | ||
(ii) | Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participants death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participants Required Beginning Date. For distributions beginning after the Participants death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to Section 11.8(b)(2)(ii). | ||
(iii) | Life expectancy. Life expectancy as computed by use of the Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations. | ||
(iv) | Required Beginning Date. The Required Beginning Date of a Participant is the first day of April of the calendar year following the later of the calendar year in which the Participant attains age 70-1/2 or retires except that benefit distributions to a 5-percent owner must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 701/2. The required beginning date of a Participant is April 1 of the calendar year. |
(7) | Special Rules. If a Participant dies before distributions begin and there is a designated Beneficiary, distribution to the designated Beneficiary is not required |
-59-
to begin by the date specified in Section 11.8(b)(2)(ii), but the Participants entire interest will be distributed to the designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participants death. If the Participants surviving Spouse is the Participants sole designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to either the Participant or the surviving Spouse begin, this paragraph will apply as if the surviving Spouse were the Participant. This paragraph will apply to all distributions. |
(c) | Required Distributions. Notwithstanding any other provision of the Plan, a Participant may only receive a benefit that meets the distribution requirements of Section 401(a)(9) of the Code, which provisions are hereby incorporated into the Plan by reference. | |
(d) | Calculation of Life Expectancies. Life expectancies of Participants and Beneficiaries under this Section 11.8 shall not be subject to recalculation. |
(a) | Funding Percentage Less Than 60 Percent. In any case in which the Plans AFTAP for a Plan Year is less than 60%: |
(1) | The Plan shall not make any Prohibited Payment with an Annuity Starting Date on or after the Applicable Section 436 Measurement Date; and |
(b) | Bankruptcy. The Plan shall not make any Prohibited Payment with an Annuity Starting Date during any period in which the plan sponsor is a debtor in a case under title 11 of the United States Code or any similar Federal or state law, provided that this Section 11.10(b) shall not apply on or after the date on which an enrolled actuary certifies that the Plans AFTAP is not less than 100%. |
(c) | Funding Percentage Between 60 and 80 Percent. In any case in which the Plans AFTAP for a Plan Year is at least 60% but less than 80%, the Plan shall not make any Prohibited Payment with an Annuity Starting Date after the Applicable Section 436 Measurement Date to the extent the amount of such payment exceeds the lesser of: |
-60-
(1) | 50% of the amount of the payment that could be made without regard to this Section 11.10; or | ||
(2) | The present value of the maximum guarantee with respect to the Participant under ERISA Section 4022 (determined under guidance prescribed by the Pension Benefit Guaranty Corporation using the Applicable Interest Rate and Applicable Mortality Table); |
provided that only one Prohibited Payment meeting the requirements of this Section 11.10(c) may be made with respect to any Participant during any period of consecutive Plan Years to which a limitation under Section 11.10(a), Section 11.10(b), or this Section 11.10(c) applies. For purposes of this Section 11.10(c), a Participant and his Beneficiary (or alternate payee under a Qualified Domestic Relations Order) shall be treated as one Participant in accordance with Code Section 436(d)(3)(B)(ii) and regulations thereunder. | ||
(d) | Definitions. The following definitions shall apply for purposes of the Plan: |
(1) | AFTAP shall mean the Plans adjusted funding target attainment percentage determined under Code Section 436(j)(2). | ||
(2) | Applicable Section 436 Measurement Date shall mean the applicable Section 436 measurement date within the meaning of proposed regulations under Code Section 436 or any successor thereto. | ||
(3) | Prohibited Payment shall mean: |
(i) | any payment in excess of the monthly amount paid under a single life annuity to a Participant or Beneficiary whose Annuity Starting Date occurs during any period in which a limitation described in Section 11.10(a) or (b) is in effect; | ||
(ii) | any payment for the purchase of an irrevocable commitment from an insurer to pay benefits; or | ||
(iii) | any other payment specified under applicable Treasury regulations issued under Code Section 436; |
provided however, the term Prohibited Payment shall not include any benefit which under Code Section 411(a)(11) may be immediately distributed without the consent of the Participant. |
(e) | Applicable Rules. This Section 11.10 shall be applied in accordance with Code Section 436 and regulations promulgated thereunder. |
-61-
(a) | An affiliated employer means any corporation or business, other than an Employer, which would be aggregated with an Employer for a relevant purpose under Code Section 414 as modified by Code Section 415(h). | |
(b) | A Participants aggregate annual retirement benefit means the sum of his annual retirement benefit under the Plan and his annual retirement benefit, if any, under any and all other defined benefit plans (whether or not terminated) maintained by an Employer, any affiliated employer, or a predecessor employer that are required to be aggregated with the Plan in accordance with the provisions of Treasury Regulations Section 1.415(f)-1. | |
For purposes of applying the defined benefit compensation limitation, a Participants aggregate annual retirement benefit shall exclude any benefits accrued by the Participant under a multiemployer plan. For purposes of applying the defined benefit dollar limitation, a Participants aggregate annual retirement benefit shall exclude benefits accrued by the Participant under a multiemployer plan, except to the extent such benefits are provided by the Employer (or an affiliated employer). | ||
(c) | A Participants annual retirement benefit means the amount of retirement benefit attributable to Employer contributions which is payable to him annually under the Plan adjusted to the actuarially equivalent straight life annuity form using the factors prescribed in the following paragraphs if such benefit is to be paid in a manner other than to the Participant for his life only. A Participants annual retirement benefit includes Social Security supplements described in Code Section 411(a)(9) and benefits transferred from another defined benefit plan, other than transfers of distributable benefits pursuant to Treasury Regulations Section 1.411(d)-4, Q&A-3(c), but shall not include benefits attributable to a Participants employee contributions. |
For purposes of determining a Participants annual retirement benefit, the following shall apply: |
(1) | If payment is to be made in a form other than to the Participant for his life only, and such form is not subject to the requirements of Code Section 417(e)(3), the actuarially equivalent straight life annuity shall be determined in accordance with the provisions of subparagraph (A) or (B) below, as applicable. |
(i) | For limitation years beginning before July 1, 2007, the annual amount of straight life annuity commencing on the same Annuity Starting Date with the same actuarial present value as the Participants form of payment |
-62-
computed using the following factors, whichever produces the greater amount: (I) the interest rate and mortality table otherwise used under the Plan for purposes of determining Actuarial Equivalence of optional forms not subject to the requirements of Code Section 417(e)(3) or (II) the applicable mortality table and 5 percent. |
(ii) | For limitation years beginning on and after July 1, 2007, the greater of (I) the annual amount of straight life annuity, if any, payable to the Participant under the Plan commencing at the same Annuity Starting Date as the Participants form of payment or (II) the annual amount of straight life annuity commencing at the same Annuity Starting Date that has the same actuarially equivalent present value as the Participants form of payment computed using the applicable mortality table and an interest rate of 5 percent. |
(2) | If payment is to be made to the Participant in a form that is subject to the requirements of Code Section 417(e)(3), the actuarially equivalent straight life annuity form shall be: |
(i) | For distributions with an Annuity Starting Date in the 2004 or 2005 Plan Year, the annual amount of straight life annuity commencing on the same Annuity Starting Date that has the same actuarially equivalent present value as the Participants form of payment determined using the following, whichever provides the greater annual amount: (I) the mortality table and interest rate otherwise used under the Plan for purposes of determining Actuarial Equivalence of such optional form or (II) the applicable mortality table and an interest rate of 5.5 percent; provided, however, that for distributions with an Annuity Starting Date on or after the first day of the 2004 Plan Year and before January 1, 2005 , use of the interest rate specified in clause (II) shall not reduce the benefit payable to the Participant below the amount determined using the applicable interest rate in effect as of the last day of the last Plan Year beginning before January 1, 2004. For purposes of this subparagraph (A), the applicable interest rate means the annual rate of interest on 30-year Treasury securities for the second calendar month preceding the Plan Year in which the Annuity Starting Date occurs. | ||
(ii) | For distributions with an Annuity Starting Date after the 2005 Plan Year, the annual amount of straight life annuity commencing on the same Annuity Starting Date that has the same actuarially equivalent present value as the Participants form of payment determined using the following, whichever provides the greatest annual amount: (I) the mortality table and interest rate otherwise used under the Plan for purposes of determining Actuarial Equivalence of such optional form; (II) the applicable mortality table and an interest rate of 5.5 percent; or (III) the applicable mortality table and the 417(e) interest rate determined as of |
-63-
the second calendar month preceding the Plan Year in which the distribution is made, divided by 1.05. For purposes of this subparagraph (B), the 417(e) interest rate means the following: (1) prior to the Plan Year beginning in 2008, the applicable interest rate described in subparagraph (A) above and (2) for Plan Years beginning on and after January 1, 2008, the adjusted first, second and third segment rates applied under Code Section 430(h)(2)(C), computed without regard to a 24 month average; provided, however, that for Plan Years beginning in 2008, 2009, 2010, and 2011, such rate shall be blended with the applicable interest rate described in subparagraph (A) above, as provided in Code Section 417(e)(3)(D)(ii) and (iii). |
(3) | A form of payment is not subject to the requirements of Code Section 417(e)(3) if the form of payment is either (A) a nondecreasing annuity (other than a straight life annuity) payable for a period not less than the life of the Participant (or in the case of a Qualified Preretirement Survivor Annuity, the life of the Participants Spouse) or (B) an annuity that decreases during the life of the Participant merely because of (I) the death of the Participants Beneficiary under a joint and survivor annuity, but only if the reduction is not below 50 percent of the benefit payable before the death of the Beneficiary or (II) cessation or reduction of Social Security supplements or qualified disability payments, as defined in Code Section 411(a)(9). | ||
(4) | No actuarial adjustment shall be made hereunder for (A) survivor benefits payable to a surviving Spouse under a Qualified Joint and Survivor Annuity to the extent such benefits would not be payable if the Participants benefit were paid in another form, (B) benefits that are not directly related to retirement benefits (such as qualified disability benefits, preretirement incidental death benefits, and post-retirement medical benefits), or (C) the inclusion in the form of payment of an automatic benefit increase feature, provided that (I) the form of payment is not subject to Code Section 417(e)(3) and would otherwise satisfy the limitations of this Article and (II) the Plan provides that the amount payable under the form of payment in any limitation year shall not exceed the limits of this Article applicable as of the Annuity Starting Date, increased in subsequent years pursuant to Code Section 415(d). For purposes of clause (C), an automatic benefit increase feature is included in a form of payment if the form of payment provides for automatic, periodic increases to benefits paid in that form. | ||
(5) | If a Participant has or will have distributions commencing at more than one Annuity Starting Date, the annual retirement benefit shall be determined as of each Annuity Starting Date (and shall satisfy the limitations of this Article as of each such date), actuarially adjusting for past and future distributions of benefits commencing as of other Annuity Starting Dates. For purposes of this paragraph (v), the determination of whether a new Annuity Starting Date has occurred shall be made without regard to Treasury Regulations Section 1.401(a)-20, Q&A 10(d), but with regard to Treasury Regulations Sections 1.415(b)-1(b)(1)(iii)(B) and (C). |
-64-
(d) | The applicable mortality table means the following: (i) prior to the first day of the first Plan Year beginning on or after January 1, 2008, the table prescribed by the Secretary of the Treasury, which is the table specified in Revenue Ruling 2001-62 and (ii) on and after the first day of the first Plan Year beginning on or after January 1, 2008, the applicable Code Section 417(e)(3) mortality table. | |
(e) | Defined benefit plan and defined contribution plan have the meanings given such terms in Code Section 415(k). | |
(f) | Defined benefit compensation limitation means 100 percent of a Participants average 415 compensation for his high three consecutive calendar years of service. In the case of a Participant who has fewer than 10 years of service with the employer, the defined benefit compensation limitation shall be multiplied by a fraction, (i) the numerator of which is the number of years (or part thereof, but not less than one) of service with the employer and (ii) the denominator of which is 10. For purposes of this subsection, a Participant is credited with a year of service (computed to fractional years) for each Service Computation Period for which he is credited with the number of Hours of Service required to accrue Credited Service under the terms of the Plan, taking into account service with the Employers, any affiliated employer, or a predecessor employer. | |
(g) | Defined benefit dollar limitation means $160,000, as adjusted , effective January 1 of each year, under Code Section 415(d) in such manner as the Secretary of the Treasury shall prescribe, and payable in the form of a straight life annuity. A limitation adjusted under Code Section 415(d) will apply to limitation years ending with or within the calendar year for which the adjustment applies. A Participants annual retirement benefit shall not be adjusted to reflect increases in the defined benefit dollar limitation effective for limitation years beginning after the limitation year in which his termination occurred. | |
The defined benefit dollar limitation shall be adjusted as follows: |
(1) | If the Participant has fewer than 10 years of participation in the Plan, the defined benefit dollar limitation shall be multiplied by a fraction, (i) the numerator of which is the number of years (or part thereof, but not less than one) of participation in the plan and (ii) the denominator of which is 10. For purposes of this paragraph, a Participant is credited with a year of participation (computed to fractional years) for each Service Computation Period (as defined for purposes of crediting Credited Service) for which he is credited with a year (or fraction of a year) of Credited Service, provided that (A) he is included as a Participant under the eligibility provisions of the Plan for at least one day of such Service Computation Period and (B) the Plan is established no later than the last day of such Service Computation Period. No more than one year of participation shall be credited for a Service Computation Period. |
-65-
(2) | If the benefit of a Participant begins prior to age 62, the defined benefit dollar limitation applicable to the Participant at such earlier age is an annual benefit payable in the form of a straight life annuity beginning at the Participants Annuity Starting Date that is: |
(i) | For limitation years beginning before July 1, 2007, the actuarial equivalent of the defined benefit dollar limitation (adjusted under (i) above, if required) determined using the following factors, whichever produces the lesser annual amount: (I) the interest rate and mortality table (or other tabular factor) specified in Section 6.2 or 7.3, as applicable, for adjusting benefits for early commencement or (II) the applicable mortality table and an interest rate of 5 percent. | ||
(ii) | For limitation years beginning on or after July 1, 2007, the following, as applicable: |
(A) | If the plan does not provide an immediately commencing straight life annuity commencing at both age 62 and the Participants age at his Annuity Starting Date, the actuarial equivalent of the defined benefit dollar limitation (adjusted under (i) above, if required) determined using the applicable mortality table (expressing the Participants age based on completed calendar months as of the Annuity Starting Date) and an interest rate of 5 percent. | ||
(B) | If the plan does provide an immediately commencing straight life annuity commencing at both age 62 and the Participants age at his Annuity Starting Date, the lesser of: (a) the amount determined under (I) above or (b) the defined benefit dollar limitation (adjusted under (i) above, if required ) multiplied by the ratio of the annual amount of the immediately commencing straight life annuity under the Plan at the Participants Annuity Starting Date to the annual amount of the immediately commencing straight life annuity under the Plan at age 62, both determined without applying the limitations of this Article. |
Any decrease in the defined benefit dollar limitation determined in accordance with this paragraph (ii) shall not reflect a mortality decrement if benefits are not forfeited upon the death of the Participant. If any benefits are forfeited upon death, the full mortality decrement is taken into account. For this purpose, no forfeiture is treated as occuring upon the Participants death if the Plan does not charge Participants for providing Qualified Preretirement Survivor Annuity coverage. |
(3) | If the benefit of a Participant begins after the Participant attains age 65, the defined benefit dollar limitation applicable to the Participant at the later age is |
-66-
an annual benefit payable in the form of a straight life annuity beginning at the Annuity Starting Date that is: |
(i) | For limitation years beginning before July 1, 2007, the actuarial equivalent of the defined benefit dollar limitation (adjusted under (i) above, if required) determined using the following factors, whichever provides the lesser amount: (I) the interest rate and mortality table (or other tabular factor) used under the Plan to determine Actuarial Equivalence for purposes of delayed retirement or (II) the applicable mortality table and an interest rate of 5 percent. | ||
(ii) | For limitation years beginning on or after July 1, 2007, the following, as applicable: |
(A) | If the plan does not provide an immediately commencing straight life annuity commencing at both age 65 and the Participants age at his Annuity Starting Date, the actuarial equivalent of the defined benefit dollar limitation (adjusted under (i) above, if required) determined using the applicable mortality table (expressing the Participants age based on completed calendar months as of the Annuity Starting Date) and an interest rate of 5 percent. |
(B) | If the plan does provide an immediately commencing straight life annuity commencing at both age 65 and the Participants age at his Annuity Starting Date, the lesser of: (a) the amount determined under (A) above or (b) the defined benefit dollar limitation (adjusted under (i) above, if required ) multiplied by the ratio of the annual amount of the adjusted immediately commencing straight life annuity under the Plan at the Participants Annuity Starting Date to the annual amount of the adjusted immediately commencing straight life annuity under the Plan at age 65, both determined without applying the limitations of this Article. The adjusted immediately commencing straight life annuity at the Participants Annuity Starting Date is the annual amount of such annuity payable to the Participant computed disregarding accruals after age 65, but including actuarial adjustments even if those adjustments are used to offset accruals and the adjusted immediately commencing straight life annuity under the Plan at age 65 is the annual amount of such annuity that would be payable to a hypothetical Participant who is age 65 and has the same Accrued Benefit as the Participant. |
Any adjustment to the defined benefit dollar limitation determined in accordance with this paragraph (iii) shall not reflect a mortality decrement if benefits are not forfeited upon the death of the Participant. If any benefits are forfeited upon death, the full mortality decrement is taken into account. For this |
-67-
purpose, no forfeiture is treated as occuring upon the Participants death if the Plan does not charge Participants for providing Qualified Preretirement Survivor Annuity coverage. |
(h) | An employee contribution means any employee after-tax contribution contributed by a Participant under any qualified plan of an Employer or an affiliated employer, including mandatory employee contributions, as defined in Code Section 411(c)(2)(C). |
(i) | A Participants 415 compensation with respect to a calendar year means the following: the Participants remuneration for services, including (A) his wages, salaries, fees for professional service, and all other amounts received (without regard to whether such amounts are paid in cash) for personal services actually rendered in the course of employment with an Employer or an affiliated employer paid to him for such period, to the extent the amounts would have been received and includable in gross income, including, but not limited to, commissions paid to salesperson, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan described in Treasury Regulations Section 1.62-2(c) or (B) in case of a Participant who is an employee within the meaning of Code Section 401(c)(1), the Participants earned income, as described in Code Section 401(c)(2) and regulations issued thereunder, but excluding (i) contributions (other than elective contributions described in Code Section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) made on behalf of the Participant by an Employer or an affiliated employer to a plan of deferred compensation (including a simplified employee pension described in Code Section 408(k) or a simple retirement account described in Code Section 408(p)), whether or not qualified, to the extent that, before application of the limitations of Code Section 415 to such plan, the contributions are not includable in the gross income of the Participant for the taxable year in which contributed, (ii) any distributions from a plan of deferred compensation, whether or not qualified, (except amounts received pursuant to an unfunded non-qualified plan in the year such amounts are includable in the gross income of the Participant), (iii) amounts realized from the exercise of a non-qualified option or when restricted stock or other property held by the Participant either becomes freely transferable or is no longer subject to substantial risk of forfeiture, (iv) amounts received from the sale, exchange or other disposition of stock acquired under a qualified stock option, (v) any other amounts that receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includable in the gross income of the Participant and are not salary reduction amounts that are described in Code Section 125), and (vi) other items that are similar to the items listed in (i) through (v) above. | |
415 compensation includes (i) any elective deferral, as defined in Code Section 402(g)(3) and (ii) any amount contributed or deferred by the Employer at the Participants election which is not includable in the Participants gross income by reason of Code Section 125, 132(f)(4), or 457. |
-68-
If a Participant has a severance from employment (as defined in Treasury Regulations Section 1.415(a)-1(f)(5)) with the Employer and all affiliated employers, 415 compensation does not include amounts received by the Participant following such severance from employment except amounts paid before the later of (a) the close of the limitation year in which the Participants employment terminates or (b) within 2 1/2 months of such severance if such amounts: |
| would otherwise have been paid to the Participant in the course of his employment and are regular compensation for services during the Participants regular working hours, compensation for services outside the Participants regular working hours (such as overtime or shift differential pay), commissions, bonuses, or other similar compensation | ||
| are payments for accrued bona fide sick, vacation or other leave, but only if the Participant would have been able to use such leave if his employment had continued and such amounts would have been includable in 415 compensation if his employment had continued | ||
| are received by the Participant pursuant to a non-qualified, unfunded deferred compensation plan, but only if the Participant would have received such payments at the same time if he had continued in employment and only to the extent the payments are includable in the Participants gross income |
For purposes of this subsection, a Participant will not be considered to have incurred a severance from employment if his new employer continues to maintain the plan with respect to such Participant. | ||
Notwithstanding the foregoing, effective for years beginning after December 31, 2008, amounts paid by an Employer or an affiliated employer to a Participant who is not performing services for the Employer or affiliated employer due to qualified military service (within the meaning of Code Section 414(u)(1)) shall be included as 415 compensation to the extent such amounts do not exceed the amounts the Participant would have received if he had continued in employment with the Employer or affiliated employer. | ||
In no event, however, shall the compensation of a Participant taken into account under the Plan for any calendar year exceed the Code Section 401(a)(17) limit in effect for such calendar year ($225,000 for the calendar year beginning in 2007, subject to adjustment annually as provided in Code Section 401(a)(17)(B) and Code Section 415(d)). Effective for calendar years beginning on and after July 1, 2007, the limit described in this paragraph shall be applied annually to 415 compensation earned in such calendar year and 415 compensation for a calendar year shall not increase as a result of an increase in the Code Section 401(a)(17) limit applicable to a future calendar year. | ||
To be included in a Participants 415 compensation for a particular calendar year, an amount must have been received by the Participant (or would have been received, but for |
-69-
the Participants election under Code Section 125, 132(f)(4), 401(k), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i), or 457) within such calendar year. |
(j) | The limitation year means the calendar year. | |
(k) | A predecessor employer means (1) any former employer with respect to which an Employer or affiliated employer maintains a plan that provides benefits that the Participant accrued while performing services for such other employer or (2) a former entity that antedates an Employer or an affiliated employer if under the facts and circumstances the Employer or affiliated employer constitutes a continuation of all or a part of the trade or business of the former entity. |
(a) | The aggregate annual retirement benefit payable for a limitation year under any available form of payment does not exceed $10,000 multiplied by a fraction, the numerator of which is the Participants number of years of service (as defined above with respect to the defined benefit compensation limitation), not to exceed 10 years of service, and the denominator of which is 10; and | |
(b) | The Employers, all affiliated employers, and any predecessor employer have not at any time maintained a separate defined contribution plan in which the Participant participated. |
-70-
If the limitations contained in this Article are nevertheless exceeded with respect to a Participant for any limitation year, correction shall be made in accordance with the Employee Plans Compliance Resolution System, as set forth in Revenue Procedure 2006-27, or any superseding guidance.
-71-
(a) | the residual amounts specified in Article XVI may be returned to the Employers; | |
(b) | any contributions which are made under a mistake of fact may be returned to the Employers within one year after the contributions were made; | |
(c) | any contributions made for years during which the Funding Agreement and Plan were not initially qualified under Code Sections 401 and 501(a) may be returned to the Employers |
-72-
within one year after the date of denial of initial qualification, but only if an application for determination was filed within the period of time prescribed under ERISA Section 403(c)(2)(B); and |
(d) | any contributions, which are not, in whole or in part, deductible under Code Section 404 for the year for which they were made, may to the extent such contributions were not so deductible, be returned to the Employers within one year after the disallowance of the deduction. |
-73-
(a) | allocate any of the powers, authority, or responsibilities for the operation and administration of the Plan (other than trustee responsibilities as defined in ERISA Section 405(c)(3)) among named fiduciaries; and | |
(b) | designate a person or persons other than a named fiduciary to carry out any of such powers, authority, or responsibilities; |
-74-
(a) | the date on which the claimants request was filed with the Administrator; provided that the date on which the claimants request for review was in fact filed with the Administrator shall control in the event that the date of the actual filing is later than the date stated by the claimant pursuant to this paragraph; and | |
(b) | the specific portions of the denial of his claim which the claimant requests the Administrator to review; and | |
(c) | a statement by the claimant setting forth the basis upon which he believes the Administrator should reverse its previous denial of his claim for benefits and accept his claim as made; and | |
(d) | any written material (offered as exhibits) which the claimant desires the Administrator to examine in its consideration of his position as stated pursuant to paragraph (c) of this Section. |
-75-
-76-
-77-
(a) | In the case of benefits payable as an annuity, |
(1) | in the case of the benefit of a Participant or Beneficiary which was in pay status as of the beginning of the three-year period ending on the termination date of the Plan, to each such benefit, based on the provisions of the Plan (as in effect during |
-78-
the five-year period ending on such date) under which such benefit would be the least; and |
(2) | in the case of a Participants or Beneficiarys benefit (other than a benefit described in subparagraph (1) of this paragraph) which would have been in pay status as of the beginning of such three-year period if the Participant had retired prior to the beginning of such three-year period and if his benefits had commenced (in the normal form of annuity under the Plan) as of the beginning of such period, to each such benefit based on the provisions of the Plan (as in effect during the five-year period ending on such date) under which such benefit would be the least. |
For purposes of subparagraph (1) of this paragraph, the lowest benefit in pay status during a three-year period shall be considered the three-year benefit in pay status for such period. | ||
(b) | Next, |
(1) | to all other benefits, if any, of individuals under the Plan guaranteed under Title IV of ERISA (determined without regard to ERISA Section 4022B(a)); and | ||
(2) | to the additional benefits, if any, which would be determined under subparagraph (1) of this paragraph if ERISA Section 4022(b)(5) did not apply. |
For purposes of this paragraph, ERISA Section 4021 shall be applied without regard to subsection (c) thereof. | ||
(c) | Next, to all nonforfeitable benefits under the Plan. | |
(d) | Last, to all other benefits under the Plan. |
-79-
(a) | If this Section applies, except as provided in paragraph (b), the assets shall be allocated to the benefits of individuals described in paragraph (c) of Section 16.2 on the basis of the benefits of individuals which would have been described in such paragraph under the Plan as in effect at the beginning of the five-year period ending on the date of termination of the Plan. | |
(b) | If the assets available for allocation under paragraph (a) of this Section are sufficient to satisfy in full the benefits described in such paragraph (without regard to this paragraph (b)), then for purposes of paragraph (a), benefits of individuals described in such paragraph shall be determined on the basis of the Plan as amended by the most recent Plan amendment effective during such five-year period under which the assets available for allocation are sufficient to satisfy in full the benefits of individuals described in paragraph (a), and any assets remaining to be allocated under such paragraph (a) on the basis of the Plan as amended by the next succeeding Plan amendment effective during such period. |
-80-
(a) | all liabilities of the Plan to Participants and their beneficiaries have been satisfied; and | |
(b) | the distribution does not contravene any provision of law. |
-81-
-82-
-83-
(a) | If the error is an underpayment to the Participant or Beneficiary, the Plan Administrator will instruct the Trustee to make up any underpayment to the Participant or his Beneficiary (plus interest), as appropriate, either in a lump sum or by adjusting future monthly payments. | |
(b) | If the error is an overpayment to the Participant or Beneficiary, the Plan Administrator will instruct the Trustee to deduct or collect such overpayment from the Participant or his Beneficiary (without interest), as appropriate, either in a lump sum or by adjusting future monthly payments. The Plan Administrator may determine not to collect certain overpayments either because it deems in its sole discretion the cost of recovery to exceed the amount of overpayment or it deems in its sole discretion that collection would be an extreme hardship on the Participant or Beneficiary. |
(a) | If the Plan is terminated, the benefit of any Highly Compensated Employee shall be limited to a benefit that is nondiscriminatory under Code Section 401(a)(4). |
-84-
(b) | The annual payments in any one year to any of the 25 Highly Compensated Employees with the greatest compensation (hereinafter referred to as a restricted employee) in the current or any prior year shall not exceed an amount equal to the payments that would be made on behalf of the restricted employee under (1) a straight life annuity that is the Actuarial Equivalent of the restricted employees Accrued Benefit and other benefits to which the restricted employee is entitled under the Plan (other than a Social Security supplement), and (2) the amount of the payments the restricted employee is entitled to receive under a Social Security supplement. For purposes of this paragraph, benefit includes, among other benefits, loans in excess of the amounts set forth in Code Section 72(p)(2)(A), any periodic income, any withdrawal values payable to a living employee, and any death benefits not provided for by insurance on the restricted employees life. The foregoing provisions of this paragraph shall not apply, however, if: |
(1) | After payment to a restricted employee of all benefits payable to the restricted employee under the Plan, the value of Plan assets equals or exceeds 110 percent of the value of current liabilities as defined in Code Section 412(l)(7) (or any successor provision thereto) (each value being determined as of the same date in accordance with applicable Treasury Regulations); | ||
(2) | The value of the benefits payable under the Plan to or for a restricted employee is less than one percent of the value of current liabilities before distribution; or | ||
(3) | The value of benefits payable under the Plan to or for a restricted employee does not exceed the amount described in Code Section 411(a)(11)(A). |
-85-
-86-
(a) | The compensation of an Employee means compensation as defined in Code Section 415 and regulations issued thereunder. In no event, however, shall the compensation of a Participant taken into account under the Plan for any Plan Year exceed (1) $200,000 for Plan Years beginning prior to January 1, 1994, or (2) $150,000 for Plan Years beginning on or after January 1, 1994. The limitations set forth in the preceding sentence shall be subject to adjustment annually as provided in Code Section 401(a)(17)(B) and Code Section 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for Plan Years beginning in such calendar year. | |
(b) | The determination date with respect to any Plan Year means the last day of the immediately preceding Plan Year. | |
(c) | A key employee means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the determination date was an officer of an Employer or an Affiliated Company having annual compensation greater than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning after December 31, 2002), a five-percent owner of an Employer or an Affiliated Company, or a one-percent owner of an Employer or an Affiliated Company having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Code Section 415(c)(3). The determination of who is a key employee will be made in accordance with Code Section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder. | |
(d) | A non-key employee means any Employee who is not a key employee. | |
(e) | A permissive aggregation group means those plans included in an Employers required aggregation group together with any other plan or plans of the Employer or an Affiliated Company so long as the entire group of plans would continue to meet the requirements of Code Sections 401(a)(4) and 410. | |
(f) | A required aggregation group means the group of tax-qualified plans maintained by an Employer or an Affiliated Company consisting of each plan in which a key employee participates and each other plan which enables a plan in which a key employee participates to meet the requirements of Code Section 401(a)(4) or Code Section 410, |
-87-
including any plan that terminated within the five-year period ending on the relevant determination date. |
(g) | A super top-heavy group with respect to a particular Plan Year means a required or permissive aggregation group that, as of the determination date, would qualify as a top-heavy group under the definition in paragraph (j) of this Section with 90 percent substituted for 60 percent each place where 60 percent appears in the definition. | |
(h) | A super top-heavy plan with respect to a particular Plan Year means a plan that, as of the determination date, would qualify as a top-heavy plan under the definition in paragraph (k) of this Section with 90 percent substituted for 60 percent each place where 60 percent appears in such definition. A plan is also a super top-heavy plan if it is part of a super top-heavy group. | |
(i) | The testing period means the period of consecutive years of service, not in excess of five, during which an Employee has the greatest aggregate compensation from his Employer, excluding, however, any year which ends in a Plan Year beginning prior to January 1, 1984, as well as any Plan Year which begins after the close of the last Plan Year in which the Plan was a top-heavy plan. | |
(j) | A top-heavy group with respect to a particular Plan Year means a required or permissive aggregation group if the sum, as of the determination date, of the present value of the cumulative accrued benefits for key employees under all defined benefit plans included in such group and the aggregate of the account balances of key employees under all defined contribution plans included in such group exceeds 60 percent of a similar sum determined for all employees covered by the plans included in such group. | |
(k) | A top-heavy plan with respect to a particular Plan Year means (i) in the case of a defined benefit plan, a plan for which, as of the determination date, the present value of the cumulative accrued benefits under the plan (within the meaning of Code Section 416(g) and the regulations and rulings thereunder) for key employees exceeds 60 percent of the present value of the cumulative accrued benefits under the plan for all employees, with the present value of the cumulative accrued benefits to be determined under the accrual method uniformly used under all plans maintained by his Employer or, if no such method exists, under the slowest accrual method permitted under the fractional accrual rate of Code Section 411(b)(1)(c), (ii) in the case of a defined contribution plan, a plan for which, as of the determination date, the aggregate of the accounts (within the meaning of Code Section 416(g) and the regulations and rulings thereunder) of key employees exceeds 60 percent of the aggregate of the accounts of all Participants covered under the plan, with the accounts valued as of the most recent valuation date coinciding with or preceding the determination date, and (iii) any plan included in a required aggregation group that is a top-heavy group. Notwithstanding the foregoing, if a plan is included in a required or permissive aggregation group which is not a top-heavy group, such plan shall not be a top-heavy plan. For purposes of this Article, the present value of the cumulative accrued benefits under the Plan shall be determined as of the date Plan |
-88-
costs for minimum funding purposes are computed, and shall be calculated using the actuarial assumptions otherwise employed under the Plan for actuarial valuations, except that the same actuarial assumptions shall be used for all plans within a required or permissive aggregation group. The present values of accrued benefits and the amounts of account balances of an Employee as of the determination date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the one-year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting five-year period for one-year period. The accrued benefits and accounts of any individual who has not performed services for an Employer or an Affiliated Company during the one-year period ending on the determination date shall not be taken into account. |
Years of Service | Vested Interest | |
less than 2 |
0% | |
2, but less than 3 |
20% | |
3, but less than 4 |
40% | |
4, but less than 5 |
60% | |
5, but less than 6 |
80% | |
6 or more |
100% |
-89-
(a) | Two percent multiplied by his years of Service; or | |
(b) | 20 percent. |
-90-
Sterling Chemicals, Inc. | ||||||
By: /s/ Kenneth M. Hale | ||||||
Printed Name: Kenneth M. Hale | ||||||
Title: SVP and General Counsel | ||||||
Sterling Chemicals, Inc. |
-91-