Amendment No. 3
To
The Consolidated Edison
Retirement Plan for
Management Employees
______________________________________
Dated as of June 1, 1997
Pursuant to resolutions adopted by the Board of Trustees of
Consolidated Edison Company of New York, Inc. at a meeting duly called and
held on July 23, 1996, the undersigned hereby approves the amendments set
forth below to The Consolidated Edison Retirement Plan for Management
Employees, as heretofore amended by Amendments Nos 1 and 2 thereto:
1. Effective January 1, 1997, Paragraph 2 A is amended by the addition of
the following new definitions at the end thereof:
"The following definitions shall be effective January 1, 1997:
"Adjusted Section 417(e)-Interest Rate-The rate of interest used in
conjunction with the Section 417(e) Interest Rate in the calculation of
the present value of benefits, to take account of prospective Cost of
Living Adjustments, pursuant to Paragraph 24 C. It shall be determined by:
(i) dividing the Section 417(e) Interest Rate, as determined for a
Participant's Annuity Starting Date, by 100;
(ii) adding 1.0000 to the amount determined in clause(i);
(iii) dividing the amount determined in clause(ii) by the lesser of:
(A) the sum of:
(I) 0.9694, plus
(II) the product of 0.7194 and the amount determined in
clause(i), or
(B) 1.0300;
(iv) subtracting 1.0000 from the amount determined in clause(iii); and
(v) multiplying the amount determined in clause(iv) by 100;
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provided, however, that in no event shall the Adjusted Section 417(e)
Interest Rate exceed the Section 417(e) Interest Rate, as of any date
of determination.
"Consolidated RPA 94 Lump Sum Conversion Factors-The table of actuarial
factors used to convert an immediate or deferred annuity into an
actuarially equivalent lump sum. Such factors shall be based on the
Section 417(e) Mortality Table and shall take into account the
Section 417(e) Interest Rate for the period prior to a Participant's
Normal Retirement Date and the Adjusted Section 417(e) Interest Rate
for the period subsequent to the Participant's Normal Retirement Date.
The enrolled actuary shall provide to the Plan Administrator tables of
the Consolidated RPA 94 Lump Sum Conversion Factors determined on the
basis of the Section 417(e) Interest Rate in effect in each Lookback
Month."
"Section 417(e) Interest Rate-The annual rate of interest on 30-year
Treasury securities for the third month prior to the month that
includes a Participant's Annuity Starting Date. For the purposes of
regulations promulgated under Section 417(e) of the Code, the calendar
month shall be deemed the "Stability Period" and the third month prior
to the month that includes a Participant's Annuity Starting Date shall
be deemed the "Lookback Month."
"Section 417(e) Mortality Table-The mortality table prescribed by the
Secretary of the Treasury, pursuant to Section 417(e)(3)(A)(ii)(I) of
the Code, as in effect for the Stability Period that includes a
Participant's Annuity Starting Date."
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2. Effective December 1, 1996, Paragraph 6 is amended by deleting from the
caption thereof the phrase "OPTIONAL TEN YEAR CERTAIN PENSION" and by
inserting in lieu thereof the new phrase "OPTIONAL TWELVE YEAR CERTAIN
PENSION AND LEVEL INCOME PENSION".
3. Effective December 1, 1996, Paragraph 6 A is amended by deleting from the
second sentence the phrase "Optional Ten Year Certain Pension provided
below" and by inserting in lieu thereof the new phrase "Optional Twelve
Year Certain Pension provided under Paragraph 6 E or Paragraph 6 F, or the
Optional Joint and 100% Surviving Spouse Annuity under Paragraph 6 G".
4. Effective December 1, 1996, Paragraphs 6 D, 6 E, and 6 F are amended (i)
by deleting from the caption of each such paragraph the phrase "Optional
Ten Year Certain Pension" and inserting in lieu thereof the new phrase
"Optional Twelve Year Certain Pension"; (ii) by deleting the phrase "ten
year certain" in each place that it appears and inserting in lieu thereof
the new phrase "twelve year certain"; (iii) by deleting the phrase "one
hundred twenty" in each place that it appears and inserting in lieu
thereof the new phrase "one hundred forty-four"; (iv) by deleting the
number "120" in each place that it appears and inserting in lieu thereof
the new number "144"; and (v) by deleting the phrase "ten years" in each
place that it appears and inserting in lieu thereof the new phrase "twelve
years".
5. Effective December 1, 1996, Paragraph 6 is amended by adding at the end
thereof the following new Paragraphs 6 G and 6 H.
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"G. Optional Joint and 100% Surviving Spouse Annuity
"(i) A Participant who is married may elect to receive his
Pension in the form of a Joint and 100% Spouse Annuity
and may further elect that the Joint and 100% Surviving
Spouse Annuity include a Pop-Up Feature. Such election
must be made not less than 30 days nor more than 90 days
prior to the Participant's Annuity Starting Date and
must be in writing on a form furnished by and filed with
the Plan Administrator.
"(ii) If a Participant elects the Joint and 100% Surviving
Spouse Annuity, but does not elect the Pop-Up Feature,
then the amount payable for the life of the Participant
shall be equal to the Pension otherwise payable to the
Participant, in the absence of an election under this
paragraph, reduced by the appropriate factor in Table G,
and the Participant's surviving spouse shall receive for
life a surviving spouse annuity equal to the amount
payable to the Participant.
"(iii)If a Participant elects the Joint and 100%
Surviving Spouse Annuity and further elects the
inclusion of the Pop-Up Feature, then the amount payable
to the Participant during the period that the
Participant and his spouse are both alive shall be the
Pension otherwise payable to the Participant, in the
absence of an election under this paragraph, reduced by
the appropriate factor in Table H; the amount payable to
the Participant during any period subsequent to the
death of his spouse
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shall be equal to the Pension
otherwise payable to the Participant in the absence of
an election under this paragraph; and the Participant's
surviving spouse shall receive for life a surviving
spouse annuity equal to the amount payable to the
Participant during the period that the Participant and
his spouse were both alive."
"H. Level Income Option
"(i) A Participant who is eligible to commence receipt of a
pension and whose Annuity Starting Date precedes his
attainment of the age at which he is eligible to receive
unreduced Social Security benefits may elect to receive
his Pension under the Level Income Option and may
further elect as a Leveling Month, for purposes of
subparagraph (ii), either the month following the month
in which he attains age 62 or the earliest month for
which he is eligible to receive unreduced Social
Security benefits. The election of the Level Income
Option may be made in addition to an election under
Paragraph 6 D, 6 E, 6 F, or 6 G. Such election must be
made not less than 30 days nor more than 90 days prior
to the Participant's Annuity Starting Date and must be
in writing on a form furnished by and filed with the
Plan Administrator.
"(ii) If a Participant elects the Level Income Option, the
amount payable to the Participant during the period
commencing with his Annuity Starting Date and ending
with the month prior to the Leveling Month shall be
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increased and the amount payable during the period
commencing with the Leveling Month and ending in the
month of the Participant's death shall be decreased from
the Pension otherwise payable to the Participant, based
on factors specified in Table I. The present value of
the benefits payable under the Level Income Option shall
be equal to the present value of the Pension otherwise
payable to the Participant, determined on the actuarial
bases specified in Table I.
"(iii) The amounts payable under the Level Income Option
shall be determined on the basis of an estimate of the
Social Security benefit that the Participant would be
eligible to commence to receive in the Leveling Month so
that the amount payable for the month next preceding the
Leveling Month shall be approximately equal to the sum
of the amount payable for the Leveling Month plus the
estimated Social Security benefit commencing in the
Leveling Month, without taking into account any
prospective Cost of Living Adjustment pursuant to
Paragraph 24 C.
"(iv) The amount payable to the Participant under the Level
Income Option shall not be adjusted after the
Participant's Annuity Starting Date, and prior to the
Leveling Month, regardless of any difference between the
estimate taken into account in the determination thereof
and the Social Security benefits actually paid to or
payable to the Participant and regardless of whether the
Participant elects to commence to receive
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Social Security benefits in any month other than the
Leveling Month.Commencing in the Leveling Month, the amount
payable to a Participant shall be reduced by an amount
equal to the product of (1) the estimated Social
Security benefit taken into account for purposes of
Paragraph 6 H(ii) and (2) a fraction, the numerator of
which shall be the amount payable to the Participant in
the month next preceding the Leveling Month, taking into
account any Cost of Living Adjustments pursuant to
Paragraph 24 C, and the denominator of which shall be
the amount determined to be payable as of the
Participant's Annuity Starting Date, in accordance with
Paragraph 6 H(ii).
"(v) In the event that a Participant who elects to receive
his Pension under the Level Income Option has also made
an election under Paragraph 6 D, 6 E, 6 F, or 6 G, then
the amount of Pension taken into account in the
determination under Paragraph 6 H(ii) shall be the
amount payable to the Participant after giving effect to
his election under Paragraph 6 D, 6 E, 6 F, or 6 G, as
applicable. In such event, the Participant's election
to receive his Pension under the Level Income Option
shall have no effect on the amount payable to his
surviving spouse or beneficiary under any other election
he has made. In the event that the amount payable to a
Participant who has elected to receive his Pension under
the Level Income Option and also made an election under
Paragraph 6 G(iii) is increased on account of the death
of his spouse,
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the amount of such increase shall be
disregarded for purposes of Paragraph 6 H(iv)."
6. Effective July 1, 1996, Paragraph 8 D(ii) is amended by deleting from the
first sentence the comma (,) and all that follows the phrase "Management
Plan", by inserting in lieu thereof a period (.), and by inserting
immediately after the first sentence, as so amended, the following new
sentence:
"No portion of such period shall constitute Service for accrual or
computation of benefits under the Management Plan, except that with
respect to leaves for maternity or paternity reasons granted after July 1,
1996 the first six (6) months of absence from work shall constitute
Service for accrual and computation of benefits; provided that the
Participant returns to active employment for a period equal to the lesser
of the leave or six (6) months."
7. Effective January 1, 1997, Paragraph 10 B is amended by deleting the
second sentence and by inserting in lieu thereof the following two new
sentences:
"In the event that a pension, deferred pension, or annuity shall have a
present value of $3,500 or less, such present value shall be paid in a
single lump sum to the Participant or surviving spouse, in lieu of the
pension, deferred pension, or annuity otherwise payable. Effective
January 1, 1997, the calculation of the present value of a pension,
deferred pension, or annuity, for the purpose of the foregoing sentence,
shall be made on the basis of the Consolidated RPA 94 Lump Sum Conversion
Factor for the Participant"s age, as in effect for the month in which
payment is to be made; provided, however, that the resulting amount shall
not be less than the present value of the annual pension determined in
accordance with
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Paragraph 10 A, taking into account only the Participant's
employment and Annual Basic Straight-Time Compensation prior to January 1,
1997, calculated on the basis of the lump sum factors set forth in Table B
and the Participant"s age as of the date of determination."
8. Effective January 1, 1997, Paragraph 10 B(5)(ii) is amended in its
entirety to read as follows:
"(ii) Effective January 1, 1997, a surviving spouse entitled under
Paragraph 6 B(ii) to receive a preretirement survivor benefit shall
receive an immediate lump sum payment equal to fifty percent (50%) of the
Cash-Out, determined in accordance with Paragraph 10 B(9)(a), that the
deceased would have received, if he had terminated employment and elected
a Cash-Out on the date of his death. If the lump sum amount determined in
accordance with the foregoing sentence exceeds $3,500, it shall not be
paid unless the surviving spouse consents to such payment in writing, on a
form provided by the Plan Administrator. If the consent of the surviving
spouse is required for the payment of a lump sum amount and the surviving
spouse does not consent to such payment, then he or she shall receive an
annuity. Unless the surviving spouse elects otherwise, such annuity shall
commence on the first day of the month following the Participant's death
and the amount thereof shall determined by dividing the lump sum amount
payable to the surviving spouse, in accordance with the first sentence of
this subparagraph, by an annuity conversion factor determined on the basis
of the Section 417(e) Mortality Table, the Adjusted Section 417(e)
Interest Rate and the surviving spouse's age as of the month of
determination. If the surviving spouse elects to defer the commencement
of such annuity, the amount thereof shall be increased so that the
deferred annuity commencing on the date elected by the surviving spouse is
of equivalent actuarial value to the immediate
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annuity otherwise payable, on the basis of the Section 417(e) Mortality
Table and the Section 417(e) Interest Rate."
9. Effective January 1, 1997, Paragraph 10 B(9) is amended in its entirety
to read as follows:
"(a) The Cash-Out is a lump sum payment representing the present
value of the deferred pension payable to the Participant at
Normal Retirement Date. Effective January 1, 1997, the
amount of a Cash-Out will be the greater of (i) the product
of the deferred pension amount determined in accordance
with Paragraph 10 B(7) and the Consolidated RPA 94 Lump Sum
Conversion Factor, as in effect for the Participant's
Annuity Starting Date, for the Participant s age in such
month, or (ii) the product of the deferred pension amount
determined in accordance with Paragraph 10 B(7), taking
into account only the Participant's employment and Annual
Basic Straight-Time Compensation prior to January 1, 1997,
and the factor in Table B for the Participant's age as of
his Annuity Starting Date. For the purpose of the
foregoing sentence, a Participant's age in any month shall
be his age on the birthday nearer in time to the first of
such month."
" (b) In lieu of the Cash-Out, the Participant may receive an
immediate annuity, commencing in the month in which the
Cash-Out would otherwise have been payable. The amount of
such immediate annuity shall be the greater of (i) the
amount determined by dividing the Cash-Out, computed in
accordance with Paragraph 10 B(9)(a)(i), by an annuity
conversion factor
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determined on the basis of the
Section 417(e) Mortality Table, the Adjusted Section 417(e)
Interest Rate, and the Participant's age as of the month of
determination; or (ii) the product of the deferred pension
amount determined for the purpose of
Paragraph 10 B(9)(a)(ii) and a reduction factor for early
commencement based on the same mortality and interest
assumptions used for Table B and the Participant's age as
of the month of determination."
10.Effective December 1, 1996, the caption "Ten Year Certain Optional
Pension" for Paragraph 10 B(10) is deleted and in lieu thereof the caption
"Optional Twelve Year Certain Pension and Level Income Pension" is
inserted and Paragraph 10 B(10) is amended in its entirety to read as
follows:
"(i) The Pension payable to a Participant who elects an optional
form of Pension pursuant to Paragraph 6 D, 6 E, 6 F, or 6 G
shall be the Pension determined by the appropriate subsection
of Paragraph 10 B above, multiplied by the appropriate factor
in Table C, D, G, or H, as applicable. In the case of Table
C, the factor shall correspond to the Participant's age at his
Annuity Starting Date. In the case of Tables D, G, and H, the
factor shall correspond to the ages of the Participant and the
Participant's spouse as of the Participant's Annuity Starting
Date.
"(ii) The Pension payable to a Participant who has elected
the Level Income Option pursuant to Paragraph 6 H shall be the
Pension determined by the appropriate
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subsection of Paragraph
10 B above, then adjusted in accordance with Paragraph 10
B(10)(i), if applicable, and then further adjusted as follows:
(A) For the period commencing with the Participant's Annuity
Starting Date and ending with the month prior to the Leveling
Month, by adding an amount equal to the product of:
(I) the Participant's estimated Social Security benefit, and
(II) a fraction, the numerator of which is the factor in Table I
corresponding to the Participant's age at his
Annuity Starting Date and the denominator of which is the
factor in Table I corresponding to the Participant's age in
the Leveling Month,
provided, however, that if the product of item (I) and
item (II) is less than the excess, if any, of the
Participant's estimated Social Security benefit over his
Pension as determined prior to any adjustment under this
clause (A), then there shall be substituted for such product
an amount equal to the product of:
(III) the Pension payable to the Participant at his Annuity
Starting Date prior to any adjustment under this clause (A),
and
(IV) a fraction, the numerator of which is the factor in
Table I corresponding to the Participant's age at his Annuity
Starting Date and the denominator of which is the excess of
(x) the factor in Table I corresponding to the Participant's
age in the Leveling Month over (y) the factor in Table I
corresponding to the Participant's age at his Annuity Starting
Date.
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(B) For the period commencing with the Leveling Month, by
subtracting from the Pension amount, as adjusted in accordance
with clause (A), the amount of the Participant's estimated
Social Security benefit, provided, however, that the resulting
amount shall not be less than zero.
For the purpose of this subparagraph, the term "estimated
Social Security benefit" shall refer to the Social
Security benefit expected to be payable to the
Participant, commencing in the Leveling Month, determined on
the basis of the Social Security Act as in effect on the
Participant's Annuity Starting Date, taking into account the
Participant's actual earnings during his period of employment
with the Company, estimating his earnings for years prior to
his employment with the Company by discounting his earnings in
his first year of employment with the Company by the national
average earnings factors developed by the Social Security
Administration, and assuming that he will have no earnings
subsequent to his Annuity Starting Date. The term Leveling
Month shall refer to the month elected by the Participant in
accordance with Paragraph 6 H(i)."
11.Effective January 1, 1997, Paragraph 11 A is amended by deleting the
paragraph that begins with the phrase "Actuarial equivalent ..." and by
inserting in lieu thereof the following new paragraph:
"Effective January 1, 1997, for the purpose of this Paragraph, actuarial
equivalence shall be determined on the basis of the Section 417(e)
Mortality Table and an interest rate of 5%, except that the actuarial
equivalent of a benefit payable in the form of a lump sum shall be
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determined on the basis of the Section 417(e) Mortality Table and the
Section 417(e) Interest Rate."
12.Effective December 1, 1996, Paragraph 12 A(1) is amended by deleting
the period (.) at the end of the third paragraph and by inserting in lieu
thereof the new phrase ", or in accordance with the provisions of
Paragraph 6 H, as applicable to a Participant who has elected the Level
Income Option."
13. Effective January 1, 1997, Paragraph 24 G is deleted in its entirety.
14.Effective December 1, 1996, Table C and Table D are amended by deleting
from the caption of each such table the phrase "10 Year Certain" and by
inserting in lieu thereof the new phrase "12 Year Certain ".
15.Effective December 1, 1996, the Plan is amended by appending at the end
thereof new Tables G, H, and I, as attached hereto.
IN WITNESS WHEREOF, the undersigned has subscribed his name to this
instrument this ____ day of _______, 1997.
____________________________
Richard P. Cowie
Vice President-Employee Relations
Consolidated Edison Company
of New York, Inc.
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