Exhibit 10(a)79
FIRST AMENDMENT TO
THE SOUTHERN COMPANY
PENSION PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted The Southern Company Pension Plan, as amended and
restated (the "Plan"), effective January 1, 1997; and
WHEREAS, the Company wishes to amend the Plan to merge the Employees'
Retirement Plan of Savannah Electric and Power Company as amended and restated
effective January 1, 1997 and to make other miscellaneous and technical changes;
and
WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan
to amend the Plan at any time.
NOW, THEREFORE, effective January 1, 1998, the Company hereby amends
the Plan as follows:
1.
Section 1.1 is amended by deleting it in its entirety and replacing it
with the following:
"Accrued Retirement Income" means with respect to any Employee
at any particular date, the Retirement Income, determined
pursuant to Section 5.1 as may be modified by Article XV or
XVII, commencing on his Normal Retirement Date which would be
payable to such Employee in the form of a single life annuity
on the basis of his Accredited Service to the date as of which
the computation of Retirement Income is made.
2.
Section 1.16 is amended by adding to the end thereof the following:
Notwithstanding the preceding, "Employee" shall not mean any
person who is classified by an Employing Company as an
independent contractor or a temporary employee (unless such
temporary employee is grandfathered pursuant to Section 2.6 of
the Plan and 3.07 of the SEPCO Plan) regardless of whether
such classification is in error.
3.
Section 4.2(e) is amended by deleting it in its entirety and replacing
it with the following:
Notwithstanding the above, the maximum number of years of
Accredited Service with respect to any Employee participating
in the Plan shall not exceed forty-three (43), except with
respect to Employees eligible under Section 15.1 whose
Accredited Service shall not be limited to any maximum number
where their benefit is calculated under Section 15.2.
4.
Section 4.4 shall be amended by adding the following new paragraph to
the end thereof:
(f) Notwithstanding any other provisions of this
Section 4.4, any Employee who (1) has an initial date of
disability on or after January 1, 1998, and (2) is not covered
by the terms of a collective bargaining agreement or (3) is
covered by the terms of a collective bargaining agreement but
where the bargaining unit representative and an Employing
Company have mutually agreed to this provision, shall be
ineligible for a Disability Leave under this Section 4.4 or
such Employee's Disability Leave shall terminate if the
Employee has already become eligible if such Employee accepts
a benefit under an Employing Company's "career transition
plan" or such other severance plan or agreement where such
other plan or agreement stipulates that the Employee is
ineligible or ceases to be on Disability Leave under this
Plan.
5.
The second paragraph of Section 5.2 is amended by deleting it in its
entirety and replacing it with the following:
Any provisions of this Article V to the contrary
notwithstanding, Retirement Income determined in accordance
with this Article V with respect to an Employee who retires on
his Normal Retirement Date or Deferred Retirement Date shall
not be less than the Retirement Income which would have been
payable with respect to such Employee commencing on an earlier
Retirement Date which would have resulted in the greatest
Retirement Income if such Retirement Income had been payable
in the same form as his Retirement Income commencing on his
Normal Retirement Date or Deferred Retirement Date.
6.
Section 6.1(c)(1) is amended by deleting it in its entirety and
replacing it with the following:
(1) Affiliated Employer contributions under Code
Section 402(g)(3) and any amount contributed by an Employing
Company on behalf of an Employer under any Code Section 125
and 457 arrangement prior to January 1, 1998 which are not
included in the Employee's gross income for the taxable year
in which contributed or Affiliated Employer contributions
under a simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
7.
The first sentence of Section 8.4(a) is deleted in its entirety and
replaced with the following:
(a) Notwithstanding any other provision of this Plan,
if the present value of Accrued Retirement Income of an
Employee whose service terminates for any reason other than
transfer to an Affiliated Employer or retirement under Article
III is not more than $3,500 for distributions prior to January
1, 1998 or is not more than $5,000 for distributions on or
after January 1, 1998 (or such greater amount as permitted by
the regulations prescribed by the Secretary of the Treasury),
the present value of the Employee's Accrued Retirement Income
shall be paid in a lump sum, in cash, to such terminated
Employee.
8.
Section 14.2 shall be amended to add to the end of the third paragraph
thereof the following:
In addition, the Retirement Board and Trustee shall permit
alienation, assignment or other attachment where otherwise
permitted under Code Section 401(a)(13).
9.
Section 15.2(d) shall be deleted in its entirety and replaced with the
following:
(a) Notwithstanding paragraphs (a) and (b) above,
Retirement Income determined with respect to an Employee who
retires on his Normal Retirement Date or Deferred Retirement
Date shall not be less than the Retirement Income which would
have been payable with respect to such Employee commencing on
his earlier Retirement Date had (1) the Employee retired on
his earlier Retirement Date which would have resulted in the
greatest Retirement Income and (2) such Retirement Income
commencing on such earlier Retirement Date been payable in the
same form as his Retirement Income commencing on his Normal
Retirement Date or Deferred Retirement Date.
10.
Section 16.1 shall be deleted in its entirety and replaced with the
following:
Article XVI
Special Provisions Concerning Certain Employees
of Southern Energy, Inc.
16.1 Eligibility and Recognition of Service for
Former Employees.
(a) Former Scott Paper Company Employees. Effective
January 1, 1995, notwithstanding any other provision of the
Plan to the contrary, with respect to a former, non-collective
bargaining unit employee of Scott Paper Company who was
employed by Southern Electric International, Inc. as of
December 17, 1994 as set forth on Schedule 2.1 of the Employee
Transition Agreement entered into by and among Mobile Energy
Services Company, Inc., Southern Electric International, Inc.
and Scott Paper Company (hereinafter referred to in this
Section 16.1(a) as the "Scott Scheduled Employee"),
(1) Such Scott Scheduled Employee shall be
eligible to participate in the Plan effective January
1, 1995.
(2) Such Scott Scheduled Employee, if and
when he attains his Early Retirement Date, Normal
Retirement Date, or Deferred Retirement Date, or
terminates service for any other reason subject to
the requirements of Section 8.1 or 8.2, shall be
entitled to receive Retirement Income based on both
his Accredited Service with an Employing Company and
the service accrued under the Scott Paper Company
Pension Plan for Salaried Employees (the "Scott
Salaried Plan") which shall be treated as if
Accredited Service under this Plan. To calculate such
Scott Scheduled Employee's Retirement Income, the
Scott Scheduled Employee's Accrued Retirement Income,
as determined in accordance with Section 5.1, shall
first be reduced by the Employee's accrued benefit in
the Scott Salaried Plan, determined as if he retired
from Scott Paper Company at his normal retirement
age, as that term is defined in the Scott Salaried
Plan on December 17, 1994. Thereafter, such
Employee's Retirement Income shall be subject to
applicable reductions, if any, in accordance with
Article V, Section 8.1 and Section 8.2, as
appropriate.
(3) For purposes of calculating such Scott
Scheduled Employee's Social Security Offset under
Section 5.4, the Social Security Offset shall be
determined by using the actual salary history of the
Scott Scheduled Employee during his employment with
any Affiliated Employer, and Scott Paper Company. If
the actual salary history is not available from Scott
Paper Company, such history shall be estimated in
accordance with Section 5.4.
(4) For vesting purposes, such Scott
Scheduled Employee shall be entitled to receive
Vesting Years of Service as provided in Section 1.41
and, in addition, shall be entitled to vesting
service equal to the sum of the years of vesting
service accrued under each defined benefit pension
plan maintained by Scott Paper Company in which such
Scott Scheduled Employee participated.
(b) Former Commonwealth Edison of Indiana Employees.
Effective January 1, 1998, notwithstanding any other provision
of the Plan to the contrary, with respect to a former employee
of Commonwealth Edison of Indiana ("ComEd") who was employed
by Southern Energy, Inc. as set forth on a schedule of
employees acknowledged by the Retirement Board (hereinafter
referred to in this Section 16.1(b) as "ComEd Scheduled
Employee"),
(1) Such ComEd Scheduled Employee shall be
eligible to participate in the Plan effective January
1, 1998.
(2) Such ComEd Scheduled Employee, if and
when he attains his Early Retirement Date, Normal
Retirement Date, or Deferred Retirement Date, or
terminates service for any other reason subject to
the requirements of Section 8.1 or 8.2, shall be
entitled to receive Retirement Income based on both
his Accredited Service with an Employing Company and
the service accrued under the Commonwealth Edison
Company of Indiana Service Annuity System Plan (the
"ComEd Plan") which shall be treated as if Accredited
Service under this Plan. To calculate such ComEd
Scheduled Employee's Retirement Income, the ComEd
Scheduled Employee's Accrued Retirement Income, as
determined in accordance with Section 5.1, shall
first be reduced by the Employee's accrued benefit in
the ComEd Plan, determined as if he retired from
ComEd at his normal retirement age, as that term is
defined in the ComEd Plan on December 31, 1997.
Thereafter, such Employee's Retirement Income shall
be subject to applicable reductions, if any, in
accordance with Article V, Section 8.1 and Section
8.2, as appropriate.
(3) For purposes of calculating such ComEd
Scheduled Employee's Social Security Offset under
Section 5.4, the Social Security Offset shall be
determined by using the actual salary history of the
ComEd Scheduled Employee during his employment with
any Affiliated Employer, and ComEd. If the actual
salary history is not available from ComEd, such
history shall be estimated in accordance with Section
5.4.
(4) For vesting purposes, such ComEd
Scheduled Employee shall be entitled to receive
Vesting Years of Service as provided in Section 1.41
and, in addition, shall be entitled to vesting
service equal to the sum of the years of vesting
service accrued under the ComEd Plan.
11.
The Plan shall be amended to add Article XVII as set forth below:
Article XVII
17.1 Definition of Terms Used in this Article XVII
and the SEPCO Schedule.
(a) "SEPCO" shall mean Savannah Electric and Power
Company.
(b) "SEPCO Plan" shall mean the Employees' Retirement
Plan of Savannah Electric and Power Company, as amended and
restated January 1, 1997.
(c) "SEPCO Schedule" shall mean the Schedule attached
to the Plan and made apart thereof containing the provisions
of the SEPCO Plan as merged into the Plan effective January 1,
1998 which shall apply to SEPCO Employees and Covered SEPCO
Employees.
(d) "SEPCO Employee" shall mean an Employee as
defined in the SEPCO Plan having an Hour of Service under the
SEPCO Plan on or after January 1, 1997. This shall include
persons represented by a collective bargaining agent where
such agent and SEPCO have mutually agreed to participate in
the Plan. This shall not include employees who are hired or
rehired at SEPCO after December 31, 1997, rescind a waiver of
participation under Section 3.8 of the SEPCO Plan or SEPCO
Schedule on or after January 1, 1998 that was in effect on
December 31, 1997, or are Covered SEPCO Employees.
(e) "Covered SEPCO Employee" shall mean an Employee
as defined in the SEPCO Plan having an Hour of Service under
the Plan on or after January 1, 1998 who is represented by a
collective bargaining agent where such agent and SEPCO have
not mutually agreed to participate in the Plan but have agreed
to participate in the SEPCO Schedule.
17.2 Covered SEPCO Employees. On and after January 1,
1998, Covered SEPCO Employees shall be subject to and receive
an Allowance in accordance with the provisions set forth in
the SEPCO Schedule.
17.3 SEPCO Employees Eligibility in the New Pension
Program
(a) The following SEPCO Employees shall be subject to
this Section 17.3 of the Plan:
(1) SEPCO Employees who are actively
employed by SEPCO on January 1, 1997 but who will not
attain their fortieth (40th) birthday on or before
January 1, 2002, or
(2) SEPCO Employees who are not members of
an eligible class of SEPCO Employees on or after
January 1, 1997 and have not previously participated
in the SEPCO Plan.
(b) The monthly Retirement Income payable as a single
life annuity to a SEPCO Employee (or his Provisional Payee)
who retires from the service of SEPCO or another Employing
Company at his Normal Retirement Date or Deferred Retirement
Date (before adjustment for a Provisional Payee designation,
if any) after January 1, 1997, subject to the limitations in
Article VI, shall be the greater of (1) and (2) below:
(1) 1.0% of his Average Monthly Earnings
multiplied by his years (and fraction of a year) of
Accredited Service, without application of the
limitation described in Section 4.2(e), to his Normal
Retirement Date or Deferred Retirement Date; or
(2) $25 multiplied by his years (and
fraction of a year) of Accredited Service, without
application of the limitation described in Section
4.2(e), to his Normal Retirement Date or Deferred
Retirement Date.
(c) Notwithstanding paragraph (b) above, if the
Allowance of a SEPCO Employee determined under the SEPCO
Schedule as of the earlier of his retirement or termination of
employment with SEPCO or December 31, 2001 would be greater,
such SEPCO Employee shall be entitled when eligible to receive
payments such greater Allowance upon his retirement or
termination of employment with SEPCO or another Employing
Company.
(d) Notwithstanding paragraphs (b) and (c) above,
Retirement Income or Allowance, as the case may be, determined
with respect to a SEPCO Employee under this Article XVII who
retires on his Normal Retirement Date or Deferred Retirement
Date shall not be less than the Retirement Income or Allowance
which would have been payable with respect to such SEPCO
Employee commencing on his earlier Retirement Date had (1) the
SEPCO Employee retired on his earlier Retirement Date which
would have resulted in the greatest Retirement Income and (2)
such Retirement Income or Allowance commencing on such earlier
Retirement Date been payable in the same form as his
Retirement Income or Allowance commencing on his Normal
Retirement Date or Deferred Retirement Date.
(e) With respect to SEPCO Employees described in this
Section 17.1 who retire before their Normal Retirement Date,
the monthly amount of Retirement Income provided in paragraph
(b) above shall be reduced in accordance with Section 5.5.
17.4 SEPCO Employees Not Described in 17.2 or 17.3.
SEPCO Employees not described in Section 17.2 or 17.3 above
shall be eligible for a benefit under the Plan as described in
this Section 17.4 notwithstanding any other provision of the
Plan or SEPCO Schedule to the contrary.
(a) A SEPCO Employee shall be eligible to participate
in the Plan and receive Retirement Income thereunder as
determined under the Plan's terms and this Article XVII.
Notwithstanding the preceding sentence, if such SEPCO
Employee's Allowance determined as of the earlier of his
retirement or termination of employment with SEPCO or December
31, 2001 would be greater, such SEPCO Employee shall be
entitled when eligible to commence payments such greater
Allowance upon his retirement or termination of employment
with SEPCO or another Employing Company.
(b) Notwithstanding paragraph (a) above, only with
respect to SEPCO Employees who have attained age fifty (50)
and have ten (10) Years of Credited Service or who have
attained age 55 on or before January 1, 1997, such SEPCO
Employees shall be entitled to receive the greater of their
Allowance or Retirement Income upon retirement.
17.5 Special Transition Rules. Notwithstanding any
other provisions in the Plan to the contrary, SEPCO Employees
who participate in the Plan shall be subject to the following
transition rules.
(a) In determining the greater benefit as required
under Sections 17.3 and 17.4, the form of payment and any
early retirement reductions with respect to the payment of
Retirement Income as set forth in Articles V and VII of the
Plan and of an Allowance as set forth in Articles 5 and 7 of
the SEPCO Schedule shall be considered. For purposes of making
the preceding determination, (1) the applicable Allowance
shall first be converted to a monthly payment, and (2) the
Retirement Annuities described in Article 2 of the SEPCO
Schedule shall be taken into account consistent with Section
5.01 of the SEPCO Schedule.
(b) With respect to eligibility to participate in the
Plan, all SEPCO Employees employed by SEPCO on December 31,
1997 who are not already eligible to participate in the Plan
shall be immediately eligible to participate in the Plan.
(c) SEPCO Employees eligible to participate in the
SEPCO Plan on December 31, 1997 shall have their Vesting Year
of Service determined as if their anniversary date of hire is
January 1. All SEPCO Employees who participate in the Plan
shall be credited with Vesting Years of Service based upon the
terms of the Plan for periods of service on and after January
1, 1998, and based upon the Continuous Service such SEPCO
Employees accrued under the SEPCO Plan prior to January 1,
1998.
(d) (1) For periods of service on and after January
1, 1998, Accredited Service for SEPCO Employees shall
be determined in accordance with the Plan.
(2) For periods of service on and after
January 1, 1998, with respect to any Allowance a
SEPCO Employee may be entitled to under the SEPCO
Schedule, such Allowance shall be determined using
Accredited Service in place of Credited Service.
(3) For periods of service prior to January
1, 1998, the Credited Service of a SEPCO Employee
shall be used to determine such SEPCO Employee's
Allowance and Retirement Income accrued prior to
January 1, 1998.
(4) When calculating a SEPCO Employee's
Retirement Income, the maximum amount of Accredited
Service and Credited Service that will be considered
is forty-three (43).
(e) For purposes of calculating Retirement Income for
a SEPCO Employee, Compensation determined under the SEPCO Plan
excluding unused accrued vacation shall be used in place of
Earnings for periods of service prior to January 1, 1998.
(f) The Normal Retirement Date of a SEPCO Employee
shall always be determined in accordance with the SEPCO Plan
prior to January 1, 1998 and the SEPCO Schedule on and after
January 1, 1998.
(g) (1) A SEPCO Employee may retire if he has either
attained age fifty-five (55) or attained age fifty
(50) and has at least ten (10) Years of Accredited
Service as determined under this Article XVII. A
SEPCO Employee who retires because he has attained
age fifty (50) and has ten (10) Years of Accredited
Service may not commence receipt of his Retirement
Income or Allowance until on or after January 1,
1998.
(2) A SEPCO Employee that retires under
paragraph (1) above having at least ten (10) Years of
Accredited Service shall be entitled to the greater
of his (A) Retirement Income determined under Section
5.5 (excluding the third paragraph thereof) and this
Article XVII or (B) Allowance determined under this
Article XVII and in addition applying a reduction of
one-third of one percent ([GRAPHIC OMITTED]%) for
each calendar month by which the commencement date
precedes the first day of the month following any
such Employee's attainment of his fifty-fifth (55th)
birthday.
(3) A SEPCO Employee that retires or
terminates under paragraph (1) above having less than
ten (10) Years of Accredited Service shall be
entitled to the greater of his (A) Retirement Income
determined under Section 8.2 (without regard to the
ten (10) Years of Accredited Service requirement) and
this Article XVII or (B) Allowance determined under
this Article XVII.
(h) On and after January 1, 1998, the Provisional
Payees of SEPCO Employees shall only be entitled to benefits
as provided in Article VII of the Plan.
(i) With respect to the accrual of Retirement Income
or an Allowance during a period of total disability, SEPCO
Employees incurring a disability on and after January 1, 1998
shall only be subject to the provisions of Section 4.4 of the
Plan.
(j) (1) The options for payment described in Sections
7.1(c) and (d) and Sections 7.6(c) and (d) may be elected by
SEPCO Employees who retire or terminate on or after January 1,
1998.
(2) Notwithstanding Section 17.3, SEPCO
Employees who terminate or retire in 1997 and
commence receipt of an Allowance shall not be
eligible to change the form of benefit elected under
the SEPCO Plan even if such SEPCO Employees are
entitled to receive Retirement Income under this
Article XVII.
(3) Notwithstanding Section 7.07(a)(Option
ii) of the SEPCO Schedule, SEPCO Employees shall not
be eligible to elect a 75% joint and survivor
annuity.
(k) SEPCO Employees may elect in accordance with the
SEPCO Schedule to have their benefit, whether paid as
Retirement Income or an Allowance, adjusted to take into
account their old-age insurance benefit under Title II of the
Social Security Act. In the event that a SEPCO Employee's
Retirement Income is greater than his Allowance under Section
17.3 or 17.4, the old age insurance benefit used to compute
such Retirement Income shall be used to determine the amount
payable under Section 5.04 of the SEPCO Schedule.
(l) Notwithstanding anything in this Article XVII to
the contrary, the Accrued Benefit of any SEPCO Employee shall
not be less than the Accrued Benefit such SEPCO Employee
derived under the SEPCO Plan as of the earlier of retirement,
termination or December 31, 1997.
17.6 Transfers of SEPCO Employees.
(a) With respect to a transfer of employment from an
Employing Company other than SEPCO to SEPCO, (1) occurring
prior to January 1, 1998, the person will be treated as a
SEPCO Employee under this Article XVII or (2) occurring on or
after January 1, 1998, the person will be treated as an
Employee under the terms of the Plan.
(b) With respect to a transfer of employment from
SEPCO to an Employing Company, (1) occurring prior to January
1, 1997, the person will be treated like an Employee under
Sections 4.6(a), (c) and (d) of the Plan provided that any
Retirement Income or Allowance payable to the Employee shall
be determined in accordance with Section 17.5(a), (g), (j) and
(k) or (2) occurring on or after January 1, 1997, the person
will be treated as a SEPCO Employee under this Article XVII.
17.7 Application of Plan to SEPCO Employees. To the
extent not inconsistent with the provisions of this Article
XVII, all the provisions of the Plan are applicable to SEPCO
Employees and Covered SEPCO Employees.
12.
The Plan shall be amended to add the SEPCO Schedule as set forth below:
SEPCO SCHEDULE
Effective January 1, 1998
TABLE OF CONTENTS
Page No.
ARTICLE 1 DEFINITIONS..............................13
ARTICLE 2 RETIREMENT ANNUITIES PURCHASED
UNDER GROUP ANNUITY CONTRACT AND CHANGE
OF FUNDING...............................19
ARTICLE 3 MEMBERSHIP...............................19
ARTICLE 4 SERVICE..................................21
4.01 Continuous Service.......................21
4.02 Credited Service.........................21
4.03 Breaks in Service........................22
4.04 Disabled Members.........................23
4.05 Service with Certain Other
Employers................................24
ARTICLE 5 BENEFITS.................................24
5.01 Normal and Late Retirement...............25
5.02 Early Retirement.........................27
5.03 Termination of Employment................27
5.04 Adjustment of Retirement Allowance
for Social Security
Benefits.................................28
5.05 Restoration of Retired Member or
Former Member to Service.................28
5.06 Additional Monthly Benefit...............31
5.07 Written Application......................33
ARTICLE 6 LIMITATIONS ON BENEFITS..................33
6.01 Maximum Benefits.........................33
ARTICLE 7 DISTRIBUTION OF BENEFITS.................37
7.01 Surviving Spouse Benefit.................37
7.02 Qualified Joint and Survivor
Annuity..................................38
7.03 Qualified Preretirement Survivor
Annuity..................................38
7.04 Definitions..............................41
7.05 Notice Requirements......................42
7.06 Transitional Rules.......................43
7.07 Alternative Forms of Distribution........43
7.08 Cash-Out of Annuity Benefits.............45
7.09 Commencement of Benefits.................46
7.10 Requirement for Direct Rollovers.........46
ARTICLE 8 RETIREE MEDICAL BENEFITS.................46
8.01 Definitions..............................46
8.02 Medical benefits.........................50
8.03 Termination of coverage..................50
8.04 Contributions or Qualified
Transfers to fund medical benefits.......51
8.05 Pensioned Employee Contributions.........52
8.06 Amendment of Article 8...................52
8.07 Termination of Article 8.................53
8.08 Reversion of Assets upon
Termination..............................53
Effective January 1, 1998, the Employees' Retirement
Plan of Savannah Electric and Power Company, as amended and
restated effective January 1, 1997, (the "SEPCO Plan") is
merged into The Southern Company Pension Plan. The SEPCO Plan
as merged is now set forth as the "SEPCO Schedule" and
incorporated into The Southern Company Pension Plan. This
SEPCO Schedule must be read in conjunction with and is limited
by Article XVII of the Plan.
ARTICLE 1 - DEFINITIONS
The foregoing definitions will be applicable to the
provisions of this SEPCO Schedule only, unless otherwise
expressly indicated. Defined terms in this Schedule shall also
be set forth in Articles I and XVII of the Plan.
1.01 "Accrued Benefit" shall mean the amount of retirement
Allowance computed at a specific date, in accordance
with Article 5 of the SEPCO Schedule, based on
Compensation and Credited Service to such date.
1.02 "Affiliated Company" shall mean Affiliated Employer
as defined in the Plan.
1.03 "Allowance" shall mean payments made in accordance
with Article 5 and Article 7 of the SEPCO Schedule.
1.04 "Annuity Starting Date" shall mean the first day of
the first period for which an amount is paid as an
annuity or in any other form.
1.05 "Board of Directors" shall mean the Board of
Directors of Southern Company Services, Inc..
1.06 "Break in Service" shall mean a period which
constitutes a break in an Employee's Continuous
Service, as provided in Section 4.03 of the SEPCO
Schedule.
1.07 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.08 "Company" shall mean for purposes of this SEPCO
Schedule only Savannah Electric and Power Company or
any successor by merger, purchase or otherwise.
1.09 "Compensation" shall mean the actual remuneration
paid to an employee for services rendered to the
Company, determined prior to any pre-tax
contributions under a "qualified cash or deferred
arrangement" (as defined under Code ss. 401(k) and
its applicable regulations) or under a "cafeteria
plan" (as defined under Code ss. 125 and its
applicable regulations), including payments made
under any short term disability plan maintained by
the Company which shall equal the rate of
Compensation of the Member at the time of disability,
but excluding any bonuses, pay for overtime,
compensation deferred under any deferred compensation
plan or arrangement, separation pay, imputed income
and relocation pay, and excluding the Company's cost
for any public or private employee benefit plan,
including this Plan and SEPCO Schedule, under rules
uniformly applicable to all employees similarly
situated, provided further, effective as of January
1, 1989, any workers' compensation received by an
employee shall be excluded from "compensation" for
purposes of determining his benefit under the SEPCO
Schedule.
For purposes of this Section 1.09, actual
remuneration means regular straight time pay,
straight time differential pay, substitution straight
time pay, substitution flat rate pay, earned vacation
pay and the difference between military pay and
regular straight time pay a Member would have been
paid if such Member had been working for the Company.
Notwithstanding the foregoing, effective as of
January 1, 1989, compensation taken into account for
any purpose under the SEPCO Schedule shall not exceed
$200,000 per year, provided that the imposition of
the limit on compensation shall not reduce a Member's
Accrued Benefit below the amount of Accrued Benefit
determined as of December 31, 1988. As of January 1
of each calendar year on and after January 1, 1990,
the applicable limitation as determined by the
Commissioner of the Internal Revenue Service for that
calendar year shall become effective as the maximum
compensation to be taken into account for SEPCO
Schedule purposes for that calendar year in lieu of
the $200,000 limitation set forth in the preceding
sentence.
In addition to other applicable limitations set forth
in the SEPCO Schedule, and notwithstanding any other
provision of the SEPCO Schedule to the contrary, for
Plan Years beginning on or after January 1, 1994, the
annual compensation of each Employee taken into
account under the SEPCO Schedule shall not exceed the
Omnibus Budget Reconciliation Act of 1993 ("OBRA
'93") annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in
accordance with Code ss. 401(a) (17) (B). The cost of
living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over
which compensation is determined (determination
period) beginning in such calendar year. If a
determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which
is the number of months in the determination period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this SEPCO Schedule to the
limitation under Code ss. 401(a) (17) shall mean the
OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is
taken into account in determining an Employee's
benefits accruing in the current Plan Year, the
compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this
purpose, for determination periods beginning on or
after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.10 "Computation Year" shall mean the calendar year.
1.11 "Continuous Service" shall mean service recognized
for purposes of determining eligibility for
membership in the Plan and SEPCO Schedule and
eligibility for certain benefits under the SEPCO
Schedule, determined as provided in Section 4.01 of
the SEPCO Schedule.
1.12 "Credited Service" shall mean service recognized for
purposes of computing the amount of any benefit under
the SEPCO Schedule, determined as provided in Section
4.02 of the SEPCO Schedule.
1.13 "Effective Date of the SEPCO Plan" as amended, shall
mean April 1, 1959. The "Amendment and Restatement
Effective Date" shall mean January 1, 1997.
1.14 "Employee" shall mean any person regularly employed
by the Company who receives regular stated salary, or
wages paid directly by the Company as (a) a regular
full-time employee, (b) a regular part-time employee,
(c) a cooperative education employee or (d) a
temporary employee paid directly or indirectly by the
Company. Notwithstanding the preceding sentence, on
and after January 1, 1998, "Employee" shall be
limited to Covered SEPCO Employees as defined in
Article XVII of the Plan. For purposes of this
Section 1.14, temporary employee means a full-time or
part-time employee who provides services to the
Company for a stated period of time after which
period such employee will be terminated from
employment. The term Employee shall also include
Leased Employees within the meaning of Code ss.
414(n) (2). Notwithstanding the foregoing, if such
Leased Employees constitute less than twenty percent
(20%) of the Employer's non-highly compensated
workforce within the meaning of Code ss.
414(n)(5)(C)(ii), the term Employee shall not include
those Leased Employees covered under the SEPCO
Schedule described in Code ss. 414(n)(5). The term
Employee for participation purposes shall not include
any individual who is classified by the Company as an
independent contractor or temporary employee (unless
with respect to a temporary employee who is
grandfathered under this SEPCO Schedule) regardless
of whether such classification is in error.
1.15 "Equivalent Actuarial Value" shall mean equivalent
value when computed at 6 per centum per annum on the
basis of the 1971 Group Annuity Mortality Table
(Male) for Members, and 1971 Group Annuity Mortality
Table (Female) for contingent annuitants under
optional forms of Allowances.
1.16 "Fund" shall mean the "Trust" as defined in the Plan.
1.17 "Group Annuity Contract" shall mean Group Annuity
Contract No. AC 766 issued by The Equitable Life
Assurance Society of the United States to Savannah
Electric and Power Company.
1.18 "Hour of Service" means, with respect to any
applicable computation period:
(a) each hour for which the Employee is paid or
entitled to payment for the performance of
duties for the Company or an Affiliated
Company;
(b) each hour for which an Employee is paid or
entitled to payment by the Company or an
Affiliated Company on account of a period
during which no duties are performed,
whether or not the employment relationship
has terminated, due to vacation, holiday,
illness, incapacity (including disability),
layoff, jury duty, military duty or leave of
absence, but not more than 501 hours for any
single continuous period;
(c) each hour for which back pay, irrespective
of mitigation of damages, is either awarded
or agreed to by the Company or an Affiliated
Company, excluding any hour credited under
(a) or (b), which shall be credited to the
computation period or periods to which the
award, agreement or payment pertains, rather
than to the computation period in which the
award, agreement or payment is made; and
(d) solely for purposes of determining whether
an Employee has incurred a Break in Service
under the SEPCO Schedule, each hour for
which an Employee would normally be credited
under Paragraphs (a) or (b) above during a
period of Parental Leave but not more than
501 hours for any single continuous period.
However, the number of hours credited to an
Employee under this Paragraph (d) during the
computation period in which the Parental
Leave began, when added to the hours
credited to an Employee under Paragraphs (a)
through (c) above during that computation
period, shall not exceed 501. If the number
of hours credited under this Paragraph (d)
for the computation period in which the
Parental Leave began is zero, the provisions
of this Paragraph (d) shall apply as though
the Parental Leave began in the immediately
following computation period.
No hours shall be credited on account of any period
during which the Employee performs no duties and
receives payment solely for the purpose of complying
with unemployment compensation, workers' compensation
or disability insurance laws. The Hours of Service
credited shall be determined as required by Title 29
of the Code of Federal Regulations, ss.ss.
2530.200b-2(b) and (c).
1.19 "Leased Employee" means any person as so defined in
Code ss. 414(n). In the case of a person who is a
Leased Employee immediately before or after a period
of service as an Employee, the entire period during
which he has performed services for the Company as a
Leased Employee shall be counted as Continuous
Service for purposes of determining eligibility for
participation and vesting, to the extent such service
would be recognized with respect to other employees
under the SEPCO Schedule; however, he shall not, by
reason of that status, be eligible to become a Member
of the Plan.
1.20 "Member" shall mean any person included in the
membership of the Plan pursuant to the SEPCO Schedule
as provided in Article 3 of the SEPCO Schedule.
1.21 "Normal Retirement Date" shall mean the first day of
the calendar month next following the 65th
anniversary of an Employee's birth.
1.22 "Parental Leave" means a period in which the Employee
is absent from work because of the pregnancy of the
Employee, the birth of a child of the Employee or the
placement of a child with the Employee in connection
with adoption proceedings, or for purposes of caring
for that child for a period beginning immediately
following such birth or placement.
1.23 "Plan" shall mean The Southern Company Pension Plan
as amended and restated January 1, 1997.
1.24 "Plan Year" shall mean the 12-month period from
January 1 to December 31.
1.25 "Qualified Joint and Survivor Annuity" shall mean an
annuity of Equivalent Actuarial Value to the
Allowance otherwise payable, providing for a reduced
Allowance payable to the Member during his life, and
after his death providing that one-half of that
reduced Allowance will continue to be paid during the
life of, and to, the spouse to whom he was married at
his Annuity Starting Date.
1.26 "Qualified Preretirement Survivor Annuity" shall mean
annuity for the life of a Surviving Spouse calculated
in accordance with Section 7.03 of the SEPCO
Schedule.
1.27 "Retirement Annuity" shall mean the amount of the
annuity purchased under the Group Annuity Contract as
provided by that Contract at actual retirement date,
at or after the attainment of age 65, prior to any
conversion to a contingent annuity.
1.28 "Retirement Committee" shall mean the Retirement
Board as defined in the Plan.
1.29 "Social Security Benefit" shall mean the annual
primary old-age insurance benefit which the Member is
entitled to receive under Title II of the Social
Security Act as in effect on the date he retires or
otherwise terminates employment, or would be entitled
to receive if he did not disqualify himself by
receiving the same by entering into covered
employment or otherwise. In the case of early
retirement, the Social Security Benefit shall be
computed on the assumption that he will receive no
income after early retirement and before age 65 which
would be treated as wages for purposes of the Social
Security Act. In the case of vested retirement, the
Social Security Benefit shall be computed on the
assumption that he will continue to receive
compensation until age 65 which would be treated as
wages for purposes of the Social Security Act at the
same rate as in effect on his termination of service.
In computing any Social Security Benefit, no wage
index adjustment or cost-of-living adjustment shall
be assumed with respect to any period after the end
of the calendar year before the year in which the
Member retires or terminates service. The Member's
Social Security Benefit shall be determined on the
basis of the Employee's actual earnings, where
available from Company records, in conjunction with a
salary increase assumption based on the actual yearly
change in national average wages as determined by the
Social Security Administration for all other years
prior to retirement or other termination of
employment with the Company where actual earnings are
not so available. If, within three months after the
later of the date of retirement or other termination
of employment or the date on which a Member is
notified of the Allowance to which he is entitled,
the Member provides documentation as to his actual
earnings history with respect to those prior years,
his Allowance shall be redetermined using the actual
earnings history, if the recalculation would result
in an increased benefit. Any adjustment to Allowance
payments shall be made retroactively.
1.30 The term "Spouse or Surviving Spouse" shall mean the
spouse or surviving spouse of a Member, provided that
a former Spouse will be treated as the spouse or
surviving spouse and a current spouse will not be
treated as the spouse or surviving spouse to the
extent provided under a qualified domestic relations
order as described in Code ss. 414(p).
1.31 "Suspendible Month" means a month in which the Member
completes at least 40 hours of service with the
Company.
1.32 "Trustee" shall mean the Trustee as defined in the
Plan.
ARTICLE 2 - RETIREMENT ANNUITIES PURCHASED UNDER
GROUP ANNUITY CONTRACT AND CHANGE OF FUNDING
All Retirement Annuities payable under the SEPCO Plan
as in effect prior to April 1, 1959 with respect to service
thereunder prior to such date, have been purchased from The
Equitable Life Assurance Society of the United States pursuant
to the terms of Group Annuity Contract No. AC 766.
Effective as of April 1, 1959, the purchase of
Retirement Annuities under the Group Annuity Contract was
discontinued in accordance with the terms and provisions of
such Contract. Subject to the provisions of the SEPCO
Schedule, with respect to service under the SEPCO Plan from
and after April 1, 1959, and as a supplement to the Retirement
Annuities purchased under the Group Annuity Contract for
service prior to April 1, 1959, retirement Allowances will be
provided as described in the SEPCO Plan, this SEPCO Schedule
or the Plan, as the case may be. Such retirement Allowances or
Retirement Income will be in addition to Retirement Annuities
purchased as described in the preceding paragraph with respect
to services prior to April 1, 1959.
The rights of Members of the Retirement Annuities
purchased for them under the Group Annuity Contract with
respect to service prior to April 1, 1959 will not be
adversely affected by the discontinuance of such purchases and
such Retirement Annuities will be payable by The Equitable
Life Assurance Society of the United States in accordance with
the terms, conditions and provisions of the Group Annuity
Contract.
ARTICLE 3 - MEMBERSHIP
3.01 Every Employee in Company service on January 1, 1997,
who was a Member on December 31, 1996, shall continue
to be a Member of the SEPCO Plan or Plan, as the case
may be, on and after January 1, 1997, provided he
remains eligible under the terms of the SEPCO Plan or
SEPCO Schedule, as the case may be.
3.02 Subject to Article XVII of the Plan, every other
Employee on January 1, 1997, and every person
becoming an Employee after that date shall become a
Member of the SEPCO Plan or Plan, as the case may be,
on the first day of the calendar month, beginning
with January 1, 1997, coincident with or next
following (i) the date he completes one year of
Continuous Service or (ii) the 21st anniversary of
his birth, whichever is later. For this purpose, a
year of Continuous Service shall be a 12-month period
during which an Employee completes at least 1,000
hours commencing with the date of employment, or if
in such period he has not completed at least 1,000
hours, commencing with the first day of the
Computation Year after the date of his employment. If
an Employee has incurred a one-year Break in Service
prior to becoming eligible for membership, any
Continuous Service prior to the break shall be
disregarded in determining eligibility for membership
unless he shall complete at least one year of
Continuous Service following the Break in Service;
provided that an Employee's Continuous Service prior
to the break shall not be recognized for purposes of
determining his eligibility for membership if his
consecutive number of one-year Breaks in Service
equal or exceed the greater of (i) five or (ii) his
aggregate years of Continuous Service prior to the
Break in Service.
3.03 An Employee who is represented by a collective
bargaining agent may participate in the Plan and
SEPCO Schedule if the representative(s) of his
bargaining unit and the Company mutually agree to
participation in the Plan and SEPCO Schedule provided
such participation is consistent with such agreement.
3.04 An Employee's membership in the Plan shall terminate
only if he dies or his employment with the Company
terminates other than by reason of retirement or
termination with vested benefits. Membership shall be
continued during a period while on leave of absence
from service without pay approved by the Company, but
no benefit credit shall be allowed with respect to
such period unless credit is allowed for service in
the Armed Forces of the United States as provided in
Section 4.03(c) of the SEPCO Schedule. Membership
shall be continued during a period of disability for
which Continuous Service is granted as provided in
Section 4.04 of the SEPCO Schedule.
3.05 In the event a Member ceases to participate because
he enters an ineligible class under Article III and
becomes ineligible to participate, but has not
incurred a break in service under Section 4.03(a) of
the SEPCO Schedule, such Employee will participate as
of the first day of the month coinciding with or next
following his return to an eligible class of
Employees. If such Employee incurs a break in service
under Section 4.03(a) of the SEPCO Schedule,
eligibility will be determined under Section 3.02 of
the SEPCO Schedule. In the event an Employee who is
not in an eligible class to participate enters an
eligible class, such Employee will participate as of
the first day of the month coinciding with or next
following his employment if he has satisfied Section
3.02 of the SEPCO Schedule and would have otherwise
previously been eligible to participate in the Plan
pursuant to the SEPCO Schedule.
3.06 Subject to Section 3.05 of the SEPCO Schedule, if an
Employee's membership in the Plan terminates and he
again becomes an Employee, he shall be considered a
new Employee for all purposes of the Plan, except as
provided in Section 5.05 of the SEPCO Schedule.
3.07 Notwithstanding any other provision of this Article
3, Leased Employees shall not be eligible to
participate. In addition, temporary employees as
defined in Section 1.14 of the SEPCO Schedule who
were not participating in the SEPCO Plan as temporary
employees prior to October 13, 1994, shall not be
eligible to participate in the Plan.
3.08 An Employee may, subject to the approval of the
Retirement Committee, elect voluntarily not to
participate in the Plan. The election not to
participate must be communicated in writing and
acknowledged by the Retirement Committee (or its
delegee) and shall be effective on the date set forth
in such written waiver.
ARTICLE 4 - SERVICE
4.01 Continuous Service
(a) Effective January 1, 1997, except as
hereinafter provided, all service performed
as an Employee of the Company or an
Affiliated Company shall be Continuous
Service for SEPCO Plan and SEPCO Schedule
purposes. If an Employee completes at least
1,000 Hours of Service in any Computation
Year, he shall receive credit for a full
year of Continuous Service. If an Employee
completes fewer than 1,000 Hours of Service
in any Computation Year, no Continuous
Service shall be recognized for such
Computation Year.
(b) Any person employed by the Company on
December 31, 1996 shall receive Continuous
Service for service performed before that
date equal to the Credited Service
recognized through December 31, 1996 under
the SEPCO Plan.
4.02 Credited Service
(a) Credited Service shall be calculated based
on Periods of Service.
A "Period of Service" shall mean twelve (12)
month periods of employment as a Member, or
fractions thereof, running from the date
that a Member commences participation under
the SEPCO Plan or SEPCO Schedule, as the
case may be, and terminates on his first
severance from service date. A severance
from service shall occur as of the earlier
of the date a Member quits, retires, is
discharged or dies, or the first anniversary
of absence for any other reason. Thereafter,
subject to 4.03(b), if a Member becomes
reemployed, his Period of Service for each
subsequent period shall commence with the
reemployment commencement date, which is the
first date following a one year period of
severance on which a Member performs an Hour
of Service and shall terminate on his next
severance from service.
In the case of an Employee who transfers
from a class of employees whose service is
determined on the basis of Hours of Service
to a class of employees whose service is
determined under this Paragraph (a), such
Employee shall receive credit for a Period
of Service consisting of (i) a number of
years equal to the number of years of
service credited to the Employee before the
computation period during which the transfer
occurs and (ii) the greater of (1) the
Period of Service that would be credited to
the Employee under this Paragraph (a) during
the entire computation period in which the
transfer occurs or (2) the service taken
into account under the Hours of Service
method as of the date of the transfer.
In addition, the Employee shall receive
credit for Periods of Service subsequent to
the transfer commencing on the day after the
last day of the computation period in which
the transfer occurs.
In the case of an Employee who transfers
from a class of employees whose service is
determined pursuant to this Paragraph (a) to
a class of employees whose service is
determined on the basis of Hours of Service
(i) the Employee shall receive credit, as of
the date of transfer, for the numbers of
Years of Service equal to the number of one
year Periods of Service credited to the
Employee as of the date of the transfer and
(ii) the Employee shall receive credit in
the computation period which includes the
date of the transfer, for a number of Hours
of Service determined by applying the
equivalency set forth in 29 C.F.R. ss.
2530.200b-3(e)(l)(i) to any fractional part
of a year credited to the Employee under
this Section as of the date of the transfer.
4.03 Breaks in Service
(a) There shall be a Break in Service of one
year for any Computation Year after the year
in which a person first becomes employed
during which he does not complete more than
500 Hours of Service. If an Employee
terminates his service with the Company and
is reemployed after incurring a Break in
Service, his service before the Break in
Service shall be excluded from his
Continuous Service, except as provided in
Section 5.05 of the SEPCO Schedule.
(b) For purposes of calculating Credited Service
only, there shall be a one year Period of
Severance if during the 12 consecutive month
period after a severance from service date,
as defined in Section 4.02(a) of the SEPCO
Schedule the Employee fails to perform an
Hour of Service. If an Employee terminates
his service with the Company and is
reemployed after incurring a one year Period
of Severance, his service before the Period
of Severance shall be excluded unless he
thereafter completes a one year Period of
Service. In the case of a non-vested member,
the Period of Service accrued prior to a one
year Period of Severance shall not be taken
into account if at such time the consecutive
Period of Severance equals or exceeds the
greater of 5 or the number of one year
Periods of Service, whether or not
consecutive.
(c) Notwithstanding any provision of the SEPCO
Schedule to the contrary, contributions,
benefits and service credit with respect to
qualified military service will be provided
in accordance with Code ss. 414(u).
4.04 Disabled Members
If a Member is eligible for and continuously
receiving disability benefits under the long-term disability
plan provided by the Company, he shall continue to be a Member
and shall continue to accrue service until he retires in the
same amount and manner as though he had continued in the
active employment of the Company and he shall be deemed to
receive Compensation during such period based upon his rate of
Compensation at the time of disability. In the event that a
Member no longer qualifies for benefits under the long-term
disability plan before his Normal Retirement Date and he does
not resume active employment with the Company, he shall be
eligible to receive a vested retirement Allowance as provided
in Section 5.03 of the SEPCO Schedule or to retire on an early
retirement Allowance as provided in Section 5.02 of the SEPCO
Schedule, if otherwise eligible for such Allowance as of the
date of such disqualification. In either case, the Allowance
shall be computed on the basis of his Compensation and
Credited Service at the date of such disqualification. In the
event that a Member does not qualify for disability benefits
under the Social Security Act, the Allowance accrued under
Section 5.01(c)(i)(A) of the SEPCO Schedule for purposes of
this Section 4.04 for Credited Service during such period of
nonqualification shall be increased by 5/6 per centum of the
part of each year's Compensation which is not in excess of
$3,600 per annum.
4.05 Service with Certain Other Employers
(a) An Employee hired prior to November 9, 1989,
who becomes a Member and continues as a
Member without a break in membership, shall
receive Continuous Service and Credited
Service for all service not otherwise
recognized, in the employ of another
electric utility company or a company or
corporation furnishing advisory or
consulting service to the Company, provided
that such service would be recognized if it
had been rendered to the Company and
provided that any benefit payable under the
Plan on account of such service, so
recognized, shall be reduced by the amount
of benefit provided under the pension or
retirement plan of such other company with
respect to the same period. The Retirement
Committee shall calculate such service based
on actual employment records where
available, but if such records are not
available, the Retirement Committee shall
request that the Employee obtain information
from the Social Security Administration
which documents the Employee's Social
Security eligible compensation or from such
other entity as the Retirement Committee
deems appropriate. Based on such documents,
the Retirement Committee shall calculate the
Employee's service and Compensation for
purposes of this Section 4.05. In the event
no such documentation can be obtained, the
Retirement Committee shall make its best
effort to estimate such service and
Compensation.
(b) An Employee hired on or after November 9,
1989, who becomes a Member and continues as
a Member without a break in membership,
shall receive Continuous Service and
Credited Service for all service not
otherwise recognized, in the employ of an
Affiliated Company, provided that such
service would be recognized if it had been
rendered to the Company and provided that
any benefit payable under the Plan on
account of such service, so recognized shall
be reduced by the amount of benefit provided
under the pension or retirement plan of such
other Affiliated Company with respect to the
same period.
ARTICLE 5 - BENEFITS
5.01 Normal and Late Retirement
(a) The right of a Member to his normal
retirement Allowance shall be
non-forfeitable upon attaining age 65. A
Member may retire from service on a normal
retirement Allowance upon reaching his
Normal Retirement Date or he may postpone
his retirement and remain in service after
his Normal Retirement Date. During any such
deferment the Member shall be retired from
service on a normal retirement Allowance on
the first day of the calendar month next
following receipt by the Retirement
Committee of written application therefor
made by the Member.
(b) Subject to the provisions of Section 5.01(e)
below, the annual normal retirement
Allowance payable upon retirement on the
Normal Retirement Date shall be computed
pursuant to Paragraphs (c) and (d) below.
The annual retirement Allowance payable upon
retirement after a Member's Normal
Retirement Date shall be equal to (i) the
amount determined in accordance with
Paragraphs (c) and (d) below, based on the
Member's Credited Service and average annual
Compensation as of his late retirement date
or, if greater, (ii) the amount of Allowance
to which the Member would have been entitled
under Paragraphs (c) and (d) below as of his
Normal Retirement Date increased by an
amount of Equivalent Actuarial Value to the
monthly payments which would have been
payable with respect to each month during
the postponement period which is not a
Suspendible Month, with any such monthly
payment amount determined as if the Member
had retired as of the first day of the Plan
Year during which payment would have been
made or, if later, his Normal Retirement
Date.
(c) The normal retirement Allowance shall be
computed as an annuity payable for the life
of the Member and shall consist of:
(i) For service credited while a Member
on or after April 1, 1969, an
Allowance equal to 1-1/6 per centum
of the part of each year's
Compensation which is not in excess
of $3,600 per annum plus 2 per
centum of the part of such
Compensation in excess of $3,600 per
annum; and
(ii) For service credited between the
effective date of the SEPCO Plan and
March 31, 1969, an Allowance equal
to 1 per centum of the part of each
year's Compensation which is not in
excess of $3,000 per annum plus 2
per centum of the part of such
Compensation in excess of $3,000 per
annum; and
(iii) For service credited prior to the
Effective Date of the SEPCO Plan,
an Allowance which, when added to
his Retirement Annuity, shall be
equal to 1 per centum of the part
of the Member's average annual
Compensation for the three calendar
years (1956, 1957 and 1958) which
is not in excess of $3,000 plus 1
1/2per centum of the part of such
Compensation in excess of $3,000,
multiplied by the number of years
of his Credited Service to the
Effective Date of the SEPCO Plan.
(d) The benefit determined in Paragraph (c)
above, when added to a Member's Retirement
Annuity, if any, shall not be less than:
(i) 1-2/3 per centum of his average
annual Compensation, multiplied by
his years of Credited Service not
in excess of 36 years, reduced by
(ii) 1 1/2 per centum of his primary
Social Security Benefit multiplied
by his years of Credited Service,
the product not to exceed 50 per
centum of his primary Social
Security Benefit, where average
annual Compensation is calculated
during the 36 highest consecutive
months within the 120 months
preceding retirement.
(iii) Effective January 1, 1994 for
purposes of determining a Member's
average annual Compensation under
this paragraph (d), the
determination of the 36 highest
consecutive months within the 120
months preceding retirement shall
only include those months in which
the Member receives Compensation.
(e) If the Member is married on his Annuity
Starting Date and if he has not elected an
optional form of benefit as provided in
Section 7.07 of the SEPCO Schedule, the
retirement Allowance shall be payable in the
form of a Qualified Joint and Survivor
Annuity.
(f) Notwithstanding any other provision of the
SEPCO Schedule, each Member's normal
retirement Allowance is the greater of
(i) the sum of:
(A) the normal retirement Allowance
determined under this Section 5.01
as of December 31, 1993, plus
(B) the normal retirement Allowance
determined under this Section 5.01
based on Credited Service and
Compensation after December 31,
1993 (with Credited Service used in
this paragraph (f) (i) (B) being
added to the Credited Service used
in paragraph (f) (i) (A) for
purposes of determining whether
paragraph (d) (i) 36-year limit and
(d) (ii) 50 per centum offset limit
have been exceeded); or
(ii) the normal retirement Allowance
determined under this Section 5.01
as applied to all Credited Service
and Compensation.
5.02 Early Retirement
(a) A Member who has not reached his Normal
Retirement Date but who has reached the 55th
anniversary of his birth shall be retired
from service on an early retirement
Allowance on the first day of the calendar
month next following receipt by the
Retirement Committee of written application
thereof or made by the Member.
(b) At the time of retirement the Member may
elect to receive either (i) a deferred early
retirement Allowance commencing on the
Member's Normal Retirement Date which shall
be computed as a normal retirement
Allowance, in accordance with Section
5.01(b) of the SEPCO Schedule, on the basis
of his Compensation and Credited Service at
the time of early retirement or (ii) an
immediate early retirement Allowance
beginning on the first day of any month
before his Normal Retirement Date which
shall be computed in accordance with
Sections 5.01(c) and (d) of the SEPCO
Schedule and shall be reduced by 1/12 of 5%
for each month by which the date the
Member's early retirement Allowance begins
precedes age 62.
(c) If the Member is married on the date his
retirement Allowance commences, the early
retirement Allowance shall be computed on
the same basis as in Paragraph (b) above, in
accordance with Section 5.01(e) of the SEPCO
Schedule.
5.03 Termination of Employment
(a) A Member shall be 100% vested in, and have a
non-forfeitable right to, his Accrued
Benefit upon completion of five years of
Continuous Service since the first day of
the Computation Period in which the 18th
anniversary of his birth occurs. If the
Member's employment with the Company is
subsequently terminated for reasons other
than retirement or death, he shall be
eligible for a vested Allowance upon
application therefor. If a Member's
employment with the Company terminates
before completion of five (5) years of
Continuous Service or before becoming
eligible for an early retirement or normal
retirement Allowance, such Member's Accrued
Benefit shall be forfeited upon termination
of employment subject to restoration under
Section 5.05 of the SEPCO Schedule.
(b) The vested Allowance shall be a deferred
Allowance commencing on the former Member's
Normal Retirement Date and shall be
determined by computing a normal retirement
Allowance, in accordance with Section 5.01
of the SEPCO Schedule, on the basis of his
Compensation and Credited Service at his
date of termination and the benefit formula
in effect on that date.
(c) Instead of deferring his Allowance to his
Normal Retirement Date, the Member can elect
to receive a reduced Allowance commencing on
the first day of any month next following
his attainment of age 55 but prior to his
Normal Retirement Date. The reduction shall
be 1/12 of 5% for each month by which his
Annuity Starting Date precedes his Normal
Retirement Date, provided that such
reduction shall be made prior to the
application of the maximum limitation
provided under Article 6 of the SEPCO
Schedule and such reduced Allowance shall be
subject to such limitation.
5.04 Adjustment of Retirement Allowance for Social
Security Benefits
When an Allowance commences prior to the attainment
of age 65, the Member may elect to convert the Allowance
otherwise payable to him into an Allowance of Equivalent
Actuarial Value of such amount that, with his Retirement
Annuity, if any, and his old-age insurance benefit under Title
II of the Social Security Act, he will receive, so far as
possible, the same amount each year before and after such
benefit commences.
5.05 Restoration of Retired Member or Former Member to
Service
(a) If a Member in receipt of an Allowance is
restored to service as an Employee on or
after his Normal Retirement Date, the
following shall apply, except with respect
to temporary employees:
(i) His Allowance shall be suspended
for each month during the period of
restoration which is a Suspendible
Month.
(ii) Upon the death of the Member during
the period of restoration, any
Allowance that would have been
payable to his surviving Spouse had
he not been restored to service
shall be payable or, alternatively,
any payments under optional benefit,
if one has been elected and becomes
effective, shall begin.
(iii) Upon later retirement, payment of
the Member's Allowance shall resume
no later than, the third month after
the latest Suspendible Month during
the period of restoration, and shall
be adjusted, if necessary, in
compliance with Title 29 of the Code
of Federal Regulations, ss.
2530.203-3 in a consistent and
nondiscriminatory manner.
(b) If a Member in receipt of an Allowance is
restored to service as an Employee before
his Normal Retirement Date, the following
shall apply, except with respect to
temporary employees:
(i) His Allowance shall cease and any
election of an optional benefit in
effect shall be void.
(ii) Any Continuous and credited Service
to which he was entitled when he
retired or terminated service shall
be restored to him.
(iii) Upon later retirement or
termination, his Allowance shall be
based on the benefit formula then in
effect and his Compensation and
Credited Service before and after
the period when he was not in the
service of the Company, reduced by
an amount of Equivalent Actuarial
Value to the benefits, if any, he
received before the date of his
restoration to service.
(iv) The part of the Member's Allowance
upon later retirement payable with
respect to Credited Service rendered
before his previous retirement or
termination of service shall never
be less than the amount of his
previous Allowance modified to
reflect any option in effect on his
later retirement.
(c) If a Member not in receipt of an Allowance
or a former Member is restored to service
without having had a Break in Service, his
Continuous Service shall be determined as
provided in Section 4.01 of the SEPCO
Schedule, and, if applicable, he shall again
become a Member as of his date of
restoration to service.
(d) If a vested Member not in receipt of an
Allowance or a former Member who received a
lump sum settlement in lieu of his Allowance
is restored to service with the Company
after having had a Break in Service, the
following shall apply:
(i) Upon completion of one year of
Continuous Service following the
Break in Service, the Continuous
Service to which he was previously
entitled shall be restored to him,
and, if applicable, he shall again
become a Member as of his date of
restoration to service.
(ii) If a Member has received a
distribution of his Allowance and
the Member is restored to service
with the Company, the Member shall
have the right to restore his or
her Accrued Benefit to the extent
forfeited upon the repayment to the
Plan of the full amount of the
distribution plus interest,
compounded annually from the date
of distribution at the rate
determined for purposes of Codess.
411(c)(2)(C). Such repayment must
be made before the earlier of five
(5) years after the first date on
which the Member is subsequently
reemployed by the Company, or the
date the Member incurs five (5)
consecutive one year Breaks in
Service following the date of
distribution.
If a Member has been deemed to
receive a distribution under the
Plan, and the Member is restored to
service with the Company, upon the
reemployment of such Member, the
Accrued Benefit will be restored to
the amount of such Accrued Benefit
on the date of deemed distribution.
(iii) Upon later termination or retirement
of a Member whose previous Credited
Service has been restored under this
Paragraph (d), his Allowance shall
be based on the benefit formula then
in effect and his Compensation and
Credited Service before and after
the period when he was not in the
service of the Company.
(e) If any other former Member is restored to
service with the Company after having had a
Break in Service, the following shall apply:
(i) Upon completion of one year of
Continuous Service following the
Break in Service, he shall again
become a Member as of his date of
restoration to service.
(ii) Upon becoming a Member in
accordance with (i) above, the
Continuous Service to which he was
previously entitled shall be
restored to him, if the total
number of consecutive one-year
Breaks in Service does not equal or
exceed the greater of (a) five, or
(b) the total number of years of
his Continuous Service before the
Break in Service, determined at the
time of the Break in Service,
excluding any Continuous Service
disregarded under this Paragraph
(e) by reason of any earlier Break
in Service.
(iii) Any Credited Service to which the
Member was entitled at the time of
his termination of service which is
included in the Continuous Service
so restored shall be restored to
him.
(iv) Upon later termination or retirement
of a Member whose previous Credited
Service has been restored under this
Paragraph (e), his Allowance, if
any, shall be based on the benefit
formula then in effect and his
Compensation and Credited Service
before and after the period when he
was not in the service the Company.
5.06 Additional Monthly Benefit
(a) In addition to other benefits provided in
this Article 5, the following monthly
benefits are payable as a life annuity to
eligible Members as defined in Paragraph (b)
or (c) below, as applicable.
The "additional monthly amount" is
calculated as (i) a percentage of the
Member's first $300 of monthly Allowance set
forth below, multiplied by (ii) the number
of years the Member was retired (A) prior to
January 1, 1990, and (B) prior to January 1,
1995 but after January 1, 1990, as
applicable in any event, for both the
additional monthly amount effective June 1,
1991 and June 1, 1996, the minimum
additional monthly amount to be added to a
Member's Allowance shall equal $25.00 per
month.
Effective June 1, 1991, the percentage
increases and the years of retirement for
which they are applicable are as follows:
Percentage
Years of Increase for
Retirement all Prior Years
as of 1/1/90
Less than 5 3.75%
5 to 10 4.0%
10 to 15 4.5%
15 or more 5.0%
Effective June 1, 1996, the percentage
increases and the years of retirement for
which they are applicable are as follows:
Percentage
Increase for
Years of Each Year of
Retirement Retirement
as of 1/1/95 Since 1/1/90
Less than 5 3.5%
5 to 9 4.0%
10 to 14 4.5%
15 or more 5.0%
(b) Members eligible for the additional monthly
amount made effective as of June 1, 1991 are
those retired Members who retired directly
from active status on or before June 1,
1991.
(c) Members eligible for the additional monthly
amount made effective June 1, 1996 are those
Members who retired directly from active
status before January 1, 1994.
(d) If an adjustment of retirement Allowance for
Social Security benefits option was elected
pursuant to Section 5.04 of the SEPCO
Schedule, the additional monthly benefit
shall be calculated on the Allowance before
such adjustment.
(e) Upon the death of a Member eligible for an
additional monthly amount, such amount shall
be paid to the Member's Spouse regardless of
the method of distribution elected by a
Member. With regard to the additional
monthly amount made effective June 1, 1996,
it shall be determined (i) based on the
Allowance being paid as of June 1, 1996, or
(ii) if no allowance is being paid but the
Member's Spouse is receiving an additional
monthly amount in accordance with the
preceding sentence, based on the amount such
Spouse is receiving as of June 1, 1996.
5.07 Written Application
Each Member, before any benefit shall be payable to
him or his account under the Plan, shall file with the
Retirement Committee such information as it shall require to
establish his rights and benefits.
ARTICLE 6 - LIMITATIONS ON BENEFITS
6.01 Maximum Benefits
(a) The maximum annual retirement Allowance
payable to a Member under the SEPCO
Schedule, when added to any retirement
Allowance attributable to contributions of
the Company or an Affiliated Company
provided to the Member under any other
qualified defined benefit plan, shall be
equal to the lesser of (1) $90,000, as
adjusted under Code Section 415(d), or (2)
the Member's average annual remuneration
during the three consecutive calendar years
in his Credited Service as a Member
affording the highest such average, or
during all of the years in his Credited
Service as a Member, if less than three
years, subject to the following adjustments:
(i) If the Member has not been a Member
under the SEPCO Plan and SEPCO
Schedule for at least 10 years, the
maximum annual retirement Allowance
in clause (1) above shall be
multiplied by the ratio which the
number of years of his membership
in the Plan bears to 10. This
adjustment shall be applied
separately to the amount of the
Member's retirement Allowance
resulting from each change in the
benefit structure of the Plan, with
the number of the years of
membership in the Plan being
measured from the effective date of
each such change.
(ii) If the Member has not completed 10
years of Continuous Service, the
maximum annual retirement Allowance
in clause (2) above shall be
multiplied by the ratio which the
number of years of his Continuous
Service bears to 10.
(iii) If the retirement Allowance begins
before the Member's social security
retirement age (as defined below),
but on or after his 62nd birthday,
the maximum retirement Allowance in
clause (1) above shall be reduced
by 5/9 of 1% for each of the first
36 months plus 5/12 of 1% for each
additional month by which the
Member is younger than the social
security retirement age at the date
his retirement Allowance begins. If
the retirement Allowance begins
before the Member's 62nd birthday,
the maximum retirement Allowance in
clause (1) above shall be of
Equivalent Actuarial Value to the
maximum benefit payable to age 62
as determined in accordance with
the preceding sentence.
(iv) If the retirement Allowance begins
after the Member's social security
retirement age (as defined below),
the maximum retirement Allowance in
clause (1) above shall be of
Equivalent Actuarial Value, based on
an interest rate of 5% per year in
lieu of the interest rate otherwise
used in the determination of
Equivalent Actuarial Value, to that
maximum benefit payable at the
social security retirement age.
(v) If the Member's retirement Allowance
is payable as a joint and survivor
Allowance with his Spouse as the
contingent annuitant, the
modification of the retirement
Allowance for that form of payment
shall be made before the application
of the maximum limitation, and, as
so modified, shall be subject to the
limitation.
(b) As of January 1 of each calendar year on or
after January 1, 1988, the dollar limitation
as determined by the Commissioner of
Internal Revenue for that calendar year
shall become effective as the maximum
permissible dollar amount of retirement
Allowances payable under the Plan and SEPCO
Schedule during that calendar year,
including retirement Allowances payable to
Members who retired prior to that calendar
year, in lieu of the dollar amount in (1) of
Paragraph (a) above.
(c) For limitation years beginning before
January 1, 2000, in the case of a Member who
is also a Member of a defined contribution
plan of the Company or an Affiliated
Company, his maximum benefit limitation
shall not exceed an adjusted limitation
computed as follows:
(i) Determine the defined contribution
fraction.
(ii) Subtract the result of (i) from
1.0.
(iii) Multiply the dollar amount in (1)
of Paragraph (a) above by 1.25.
(iv) Multiply the amount described in
(2) of Paragraph (a) above by 1.4.
(v) Multiply the lesser of the result of
(iii) or the result of (iv) by the
result of (ii) to determine the
adjusted maximum benefit limitation
applicable to a Member.
(d) For purposes of this Section:
(i) the defined contribution fraction
for a Member who is a Member of one
or more defined contribution plans
of the Company or an Affiliated
Company shall be a fraction the
numerator of which is the sum of the
following:
(A) the Company's and
Affiliated Companies'
contributions credited to
the Member's accounts under
the defined contribution
plan or plans.
(B) with respect to calendar
years beginning before
1987, the lesser of the
part of the Member's
contributions in excess of
6% of his Compensation or
one-half of his total
contributions to such plan
or plans, and with respect
to calendar years beginning
after 1986, all Member's
contributions to such plan
or plans, and
(C) any forfeitures allocated
to his accounts under such
plan or plans, but reduced
by any amount permitted by
regulations promulgated by
the Commissioner of
Internal Revenue; and the
denominator of which is the
lesser of the following
amounts determined for each
year of the Member's
Continuous Service.
(D) 1.25 multiplied by the
maximum dollar amount
allowed by law for that
year; or
(E) 1.4 multiplied by 25% of
the Member's remuneration
for that year.
At the direction of the
Retirement Committee, the
portion of the denominator
of that fraction with
respect to calendar years
before 1983 shall be
computed as the denominator
for 1982, as determined
under the law as then in
effect, multiplied by a
fraction of the numerator
of which is the lesser of:
(F) $51,875, or
(G) 1.4 multiplied by 25% of
the Member's remuneration
for 1981; and the
denominator of which is
the
lesser of:
(H) $41,500, or
(I) 25% of the Member's
remuneration for 1981;
(ii) a defined contribution plan means a
pension plan which provides for an
individual account for each Member
and for benefits based solely upon
the amount contributed to the
Member's account, and any income,
expenses, gains and losses, and any
forfeitures of accounts of other
Members which may be allocated to
that Member's accounts, subject to
(iii) below; and
(iii) a defined benefit plan means any
pension plan which is not a defined
contribution plan; however, in the
case of a defined benefit which is
based partly on the balance of the
separate account of a Member, that
plan shall be treated as a defined
contribution plan to the extent
benefits are based on the separate
account of a Member and as a
defined benefit plan with respect
to remaining portion of the
benefits under the plan.
(iv) the term "remuneration" with
respect to any Member shall mean
the wages, salaries and other
amounts paid in respect of such
Member by the Company or an
Affiliated Company for personal
services actually rendered, and
shall include, but not by way of
limitation, bonuses, overtime
payments, commissions and, for
limitation years beginning on and
after January 1, 1998, any elective
deferrals as defined in Code
Section 402(g)(3) and any amount
contributed by an Employer on
behalf of the Employee under any
Code Section 125 or 457
arrangement, and shall exclude
other deferred compensation, stock
options and other distributions
which receive special tax benefits
under the Code; and
(v) the term "social security retirement
age" shall mean age 65 with respect
to a Member who was born before
January 1, 1938; age 66 with respect
to a Member who was born after
December 1, 1937 and before December
1, 1955; and age 67 with respect to
a Member who was born after December
31, 1954.
(e) Notwithstanding the preceding paragraphs of
this Section, a Member's annual retirement
Allowance payable under this SEPCO Schedule,
prior to any reduction required by operation
of Paragraph (c) above, shall in no event be
less than:
(i) the benefit that the Member had
accrued under the SEPCO Plan as of
the end of the Plan Year beginning
in 1982, with no changes in the
terms and conditions of the SEPCO
Plan on or after July 1, 1982 taken
into account in determining that
benefit, or
(ii) the benefit that the Member had
accrued under the SEPCO Plan as of
the end of the Plan Year beginning
in 1986, with no changes in the
terms and conditions of the SEPCO
Plan on or after May 5, 1986 taken
into account in determining that
benefit.
(f) Notwithstanding any provisions contained
herein to the contrary, in the event that,
for limitation years beginning before
January 1, 2000, a Member participates in a
defined contribution plan or defined benefit
plan required to be aggregated with this
Plan under Code Section 415(g) and the
combined benefits with respect to a Member
exceed the limitations contained in Code
Section 415(e), corrective adjustments shall
be as provided under Article VI of the Plan.
(g) Notwithstanding anything contained in this
Article of the SEPCO Schedule to the
contrary, the limitations, adjustments and
other requirements prescribed in this
Article shall at all times comply with the
provisions of Code ss. 415 and the
regulations thereunder, the terms of which
are specifically incorporated herein by
reference.
ARTICLE 7 - DISTRIBUTION OF BENEFITS
7.01 Surviving Spouse Benefit
On and after August 23, 1984, if a married Member:
(a) dies in active service prior to his Annuity
Starting Date after having met the
requirements for an Allowance, or
(b) dies after retiring on any Allowance or
after terminating service on or after August
23, 1984, with entitlement to a vested
Allowance, but in either case before his
Annuity Starting Date, or
(c) dies after he is credited with at least one
Hour of Service with the Company on or after
August 23, 1984 but prior to his Annuity
Starting Date, there shall be payable to his
Surviving Spouse a Qualified Preretirement
Survivor Annuity as provided in Section 7.03
below.
7.02 Qualified Joint and Survivor Annuity
Provided an optional form of benefit as set forth in
Section 7.07 below is not elected pursuant to a Qualified
Election within the 90-day period ending on the Annuity
Starting Date, a married Member's Accrued Benefit will be paid
in the form of a Qualified Joint and Survivor Annuity and an
unmarried Member's Accrued Benefit will be paid in the form of
an annuity for his lifetime.
7.03 Qualified Preretirement Survivor Annuity
(a) Provided that a Member and his or her Spouse
have been married throughout the one-year
period ending on his or her date of death
and provided an optional form of benefit as
set forth in Section 7.07 below has not been
elected by a Member eligible to waive the
Qualified Preretirement Survivor Annuity
within the Election Period pursuant to a
Qualified Election, if a Participant dies
before the Annuity Starting Date, the
Member's Accrued Benefit shall be payable as
an annuity for the life of the Surviving
Spouse in accordance with this Section 7.03.
(b) The Qualified Preretirement Survivor Annuity
shall commence on what would have been the
Member's Normal Retirement Date or, on the
first day of the month following the death
of the Member, if later, and shall cease
with the last monthly payment prior to the
death of the Spouse. However:
(i) if the Member dies in active service
after having met the requirements
for early retirement, after having
completed twenty years of service,
or after retiring early but before
payments commence, the Spouse may
elect to begin receiving payments as
of the first day of the month
following the Member's date of
death; and
(ii) in the case of the death of any
other Member, the Spouse may elect
to begin receiving payments as of
the first day of any month following
what would have been the Member's
Earliest Retirement Age which is his
55th birthday.
(c) Before reduction in accordance with
Paragraph (d) below, the Qualified
Preretirement Survivor Annuity shall be
equal to:
(i) in the case of a Member who dies
while in active service after
having met the requirements for
early retirement, after having
completed twenty years of service,
or after retiring early but before
payments commence, the following
per centum of a normal retirement
Allowance computed as provided in
Section 5.01(c) and 5.01(d) of the
SEPCO Schedule on the basis of the
deceased Member's Compensation and
Credited Service prior to his
death, provided that if the Spouse
was born more than 60 months after
the deceased Member, the Qualified
Preretirement Survivor Annuity so
determined shall be reduced by 1/6
of 1% for each month in excess of
60 by which her date of birth
followed the deceased Member's date
of birth.
Age Member
Would Have Been
At Commencement Per Centum
40 to 45 40%
46 41%
47 42%
48 43%
49 44%
50 45%
51 46%
52 47%
53 48%
54 49%
55 or over 50%
(ii) in the case of any other Member, 50%
of the amount of vested Allowance to
which the Member would have been
entitled at his Normal Retirement
Date, reduced as follows:
- reduction for a 50% joint and
survivor annuity option (based on
the Member's age and his Spouse's
age had the Member survived to the
date benefits commence), and
- reduction to reflect early
commencement, if applicable, of
payments in accordance with Section
5.03(c) of the SEPCO Schedule.
(iii) If within the 90 day period prior
to his Annuity Starting Date a
Member has elected Option (ii)
under Section 7.07 below naming his
spouse as contingent annuitant, the
amount payable to his spouse under
this Section 7.03 as a Qualified
Preretirement Survivor Annuity
shall be the amount that would have
been payable to his spouse under
Option (ii) if such amount is
greater than the amount of the
Qualified Preretirement Survivor
Annuity otherwise payable under
subparagraphs (c)(i) or (c)(ii)
above, as applicable.
(d) The Allowance subsequently payable to a
Member whose Spouse would have been entitled
to a Qualified Preretirement Survivor
Annuity under this Section 7.03 had the
Member's death occurred, or the Qualified
Preretirement Survivor Annuity payable to
his Spouse after his death, whichever is
applicable, shall be reduced by the
applicable percentage shown in the following
table for the period, or periods, that the
provisions of this Section 7.03 are in
effect with respect to the Member. No such
reduction shall be made with respect to:
(i) coverage during active employment,
or
(ii) any period before the commencement
of the election period specified in
Paragraph (e) below.
Annual Reduction for Spouse's coverage
after Retirement or Other Termination
of Service
Age Reduction
Under 35 0%
35 -39 2/10 of 1%
40 -49 3/10 of 1%
50 -54 4/10 of 1%
55 -59 5/10 of 1%
60 and over 1%
(e) The Retirement Committee shall furnish to
each married Member within the one year
period commencing on the date he terminates
service a written explanation in
non-technical language which describes (1)
the terms and conditions of the Qualified
Preretirement Survivor Annuity, (2) the
Member's right to make, and the effect of,
an election to waive the Qualified
Preretirement Survivor Annuity, (3) the
rights of the Member's Spouse and (4) the
right to make, and the effect of, a
revocation of such election.
7.04 Definitions
For purposes of this, Article 7, the following
definitions shall apply:
(a) The term "Election Period" shall mean the
period which begins on the first day of the
Plan Year in which a Member attains age 35
and ends on the date of the Member's death.
If a Member separates from service prior to
the first day of the Plan Year in which age
35 is attained, with respect to the Accrued
Benefit as of the date of separation, the
Election Period shall begin on the date of
separation.
(b) The term "Earliest Retirement Age" shall
mean the earliest date on which, under the
SEPCO Schedule, the Member could elect to
receive retirement benefits.
(c) The term "Qualified Election" shall mean
waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement
Survivor Annuity. Any waiver of a Qualified
Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be
effective unless: (a) the Member's Spouse
consents in writing to the election; (b) the
election designates a contingent annuitant,
which may not be changed without spousal
consent (or the Spouse expressly permits
designations by the Participant without any
further spousal consent); (c) the Spouse's
consent acknowledges the effect of the
election; and (d) the Spouse's consent is
witnessed by a Plan representative
designated by the Retirement Committee or
notary public. Additionally, a Member's
waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the
election designates a form of benefit
payment which may not be changed without
spousal consent (or the Spouse expressly
permits designations by the Member without
any further spousal consent). If it is
established to the satisfaction of a the
Retirement Committee that there is no Spouse
or that the Spouse cannot be located, a
waiver without spousal consent will be
deemed a Qualified Election.
Any consent by a Spouse obtained under this
provision (or establishment that the consent
of a Spouse may not be obtained) shall be
effective only with respect to such Spouse.
A consent that permits designations by the
Member without any requirement of further
consent by such Spouse must acknowledge that
the Spouse has the right to limit consent to
a specific Beneficiary, and a specific form
of benefit where applicable, and that the
Spouse voluntarily elects to relinquish both
of such rights. A revocation of a prior
waiver may be made by a Member without the
consent of the Spouse at any time before the
commencement of benefits. The number of
revocations shall not be limited. No consent
obtained under this provision shall be valid
unless the Member has received notice as
provided in Section 7.05 below.
7.05 Notice Requirements
(a) In the case of a Qualified Joint and
Survivor Annuity or a single life annuity,
the Retirement Committee shall provide, no
less than 30 days and no more than 90 days
prior to the Annuity Starting Date, each
Member with a written explanation of: (1)
the terms and conditions of a Qualified
Joint and Survivor Annuity or single life
annuity; (2) the Member's right to make and
the effect of an election to waive the
Qualified Joint and Survivor Annuity or
single life annuity form of benefit; (3) the
rights of a Member's Spouse; and (4) the
right to make, and the effect of, a
revocation of a previous election to waive
the Qualified Joint and Survivor Annuity or
single life annuity.
(b) In the case of a Qualified Preretirement
Survivor Annuity, the Retirement Committee
shall provide each Member within the
applicable period for such Member a written
explanation of the Qualified Preretirement
Survivor Annuity in such terms and in such
manner as would be comparable to the
explanation provided for meeting the
requirements of Paragraph (a) above
applicable to a Qualified Joint and Survivor
Annuity or a single life annuity.
The applicable period for a Member is
whichever of the following periods ends
last: (1) the period beginning with the
first day of the Plan Year in which the
Member attains age 32 and ending with the
close of the Plan Year preceding the Plan
Year in which the Member attains age 35; (2)
a reasonable period ending after the
individual becomes a Member; (3) a
reasonable period ending after the Member's
Qualified Preretirement Survivor Annuity
ceases to be fully subsidized; (4) a
reasonable period ending after this Article
first applies to the Member. Notwithstanding
the foregoing, notice must be provided
within a reasonable period ending after
separation from service in the case of a
Member who separates from service before
attaining age 35.
For purposes of applying the preceding
paragraph, a reasonable period ending after
the enumerated events described in (2), (3)
and (4) is the end of the two-year period
beginning one year prior to the date the
applicable event occurs, and ending one year
after that date. In the case of a Member who
separates from service before the Plan Year
in which age 35 is attained, notice shall be
provided within the two-year period
beginning one year prior to separation and
ending one year after separation. If such a
Member thereafter returns to employment with
the employer, the applicable period for such
Member shall be redetermined.
7.06 Transitional Rules
Any living Member not receiving benefits on August
23, 1984, who would otherwise not receive the benefits
prescribed by the previous Sections of this Article must be
given the opportunity to elect to have the prior Sections of
this Article apply if such Member is credited with at least
one Hour of Service under this SEPCO Schedule or SEPCO Plan in
a Plan Year beginning on or after January 1, 1976, and such
Member is entitled to a vested Allowance.
7.07 Alternative Forms of Distribution
(a) Any Member may, subject to the election
procedures applicable to Qualified Joint and
Survivor Annuities and Qualified
Preretirement Survivor Annuities, elect to
convert his retirement Allowance into an
optional benefit of Equivalent Actuarial
Value determined as of the Annuity Starting
Date, in accordance with one of the options
named
below:
Option (i) a retirement Allowance
payable for the Member's
life, with no Allowance payable
after his death; or
Option (ii) a modified retirement
Allowance payable during
the Member's life with the
provision that after his
death either a 50%, 75% or
a 100% joint and survivor
annuity shall be paid
during the life of, and to,
the contingent annuitant
nominated by him.
(b) The election of an optional form of benefit
shall become effective as follows:
(i) If the Member retired on his Normal
Retirement Date, or if he retires on
an early retirement Allowance or a
vested retirement Allowance deferred
to commence on his Normal Retirement
Date, the election shall become
effective on his Normal Retirement
Date.
(ii) If the Member retires on an early
retirement Allowance commencing
prior to his Normal Retirement Date,
the election shall become effective
on the due date of the first monthly
installment.
(iii) If the Member continues in service
as an Employee after his Normal
Retirement Date and the notice of
his election is received by the
Retirement Committee prior to his
Normal Retirement Date, election
shall become effective on his
Normal Retirement Date, or if the
notice of the election is received
by the Retirement Committee after
the Member's Normal Retirement
Date, the election shall become
effective on the date it is
received by the Retirement
Committee. In the event of the
death of a Member in service as an
Employee on or after his Normal
Retirement Date and after his
election has become effective,
payments of the benefit under the
option shall commence on the first
day of the month next following the
month of death if the contingent
annuitant designated under the
option is then living; or, upon the
retirement of such a Member, the
amount under the option shall be
payable to the Member, but no
payments shall commence or accrue
to him until the date of
retirement.
7.08 Cash-Out of Annuity Benefits
(a) Although Allowances shall normally be
payable in monthly installments, a lump sum
payment of Equivalent Actuarial Value shall
be made in lieu thereof if the present value
of a Member's Allowance upon termination of
employment is less than or equal to $3,500
(and if the present value of such Member's
Allowance never exceeded $3,500) for
distributions before January 1, 1998, or if
the present value of a Member's Allowance
upon termination of employment is less than
or equal to $5,000 (and if the present value
of such Member's Allowance never exceeded
$5,000) for distributions on or after
January 1, 1998. The lump sum payment shall
be made as soon as practicable on or after
the date the Member terminates employment.
Notwithstanding the foregoing, if the
present value of the Member's vested
Allowance is zero, the Member shall be
deemed to have received a distribution of
such Member's Accrued Benefit.
(b) This Section 7.08(b) shall apply to all
distributions from the Plan pursuant to the
SEPCO Schedule and from annuity contracts
purchased to provide benefits other than
distributions described in Section
1.417-1T(e)(3) of the income tax regulations
issued under the Retirement Equity Act of
1984. For purposes of determining whether
the present value of (A) a Member's vested
accrued benefit; (B) a qualified joint and
survivor annuity, within the meaning of
Section 417(b) of the Code; or (C) a
qualified preretirement survivor annuity
within the meaning of Section 417(c)(1) of
the Code exceeds $3,500 for distributions
before January 1, 1998, or $5,000 for
distributions on or after January 1, 1998,
the present value of such benefits or
annuities shall be calculated by using an
interest rate no greater than the Applicable
Interest Rate and in no event shall the
present value of any such benefit or annuity
determined under this Section 7.08(b) be
less than the present value of such benefits
or annuities determined using the Applicable
Interest Rate. "Applicable Interest Rate"
for this purpose shall be calculated by
using the annual rate of interest on 30-year
Treasury securities for the month of
November in the Plan Year which precedes the
Plan Year in which such present value is
determined and by using the prevailing
commissioners' standard table used to
determine reserves for group annuity
contracts as in effect on the date as of
which the present value is being determined.
In no event shall the amount of any benefit
or annuity determined under this Section
7.08(b) exceed the maximum benefit permitted
under Section 415 of the Code.
7.09 Commencement of Benefits
An Allowance under this SEPCO Schedule shall be paid
in accordance with Section 5.9 of the Plan.
7.10 Requirement for Direct Rollovers
An Allowance paid in a lump sum shall be subject to
Section 8.7 of the Plan.
ARTICLE 8 - RETIREE MEDICAL BENEFITS
8.01 Definitions.
The following words and phraseology as used herein
shall have the following meanings unless a different meaning
is plainly required by the context:
(a) "Pensioned Employee" means effective
September 15, 1993, a Member who retires and
is receiving a distribution from the SEPCO
Plan pursuant to Sections 5.01 and 5.02 of
the SEPCO Schedule or a retired Member who
is entitled to receive a distribution under
the Plan pursuant to Sections 5.01 or 5.02
of the SEPCO Schedule after retirement will
be eligible for reimbursement or payment of
covered medical expenses, as hereinafter
described, provided the Member (1) was
covered by the Georgia Power Company Medical
Benefits Plan immediately before retirement;
(2) is not eligible as a spouse or dependent
or otherwise for coverage under the Georgia
Power Company Medical Benefits Plan; and (3)
continues to satisfy the eligibility
requirements applicable to retired employees
as set forth in the provisions of the
Georgia Power Company Medical Benefits Plan,
which is attached hereto as Exhibit A and
incorporated herein by reference and may be
changed in accordance with the terms of the
Georgia Power Company Medical Benefits Plan.
Notwithstanding the foregoing, a former
employee who was a "key employee" as defined
in the Plan on the date of his retirement
shall not be eligible to receive any
benefits under this Article 8.
(b) "Dependents" means the spouses and
dependents of retired Members who are
eligible for reimbursement or payment of
covered medical expenses pursuant to
paragraph (a) and who were covered under the
Georgia Power Company Medical Benefits Plan
immediately prior to the Member's retirement
are also eligible for reimbursement or
payment of covered medical expenses to the
extent, if any, provided in the Georgia
Power Company Medical Benefits Plan, a copy
of which is attached as Exhibit A.
Notwithstanding the foregoing, a spouse or
dependent who is eligible for coverage under
the "active employee" portion of the Georgia
Power Company Medical Benefits Plan shall
not be eligible for reimbursement of medical
expenses or payment of premiums hereunder.
(c) "Qualified Transfer" means a transfer of
Excess Pension Assets of the Plan to a
Health Benefits Account after December 31,
1990, but before December 31, 2000, which
satisfies the requirements set forth in
paragraphs (1) through (6) below.
(1) No more than 1 transfer per Plan
Year may be treated as a Qualified
Transfer.
(2) The amount of Excess Pension Assets
which may be transferred in a
Qualified Transfer shall not exceed
a reasonable estimate of the amount
the Company will pay (directly or
through reimbursement) out of the
Health Benefits Accounts for
Qualified Current Retiree Health
Liabilities during the Plan Year of
the transfer.
(3)(A) Any assets transferred to a
Health Benefits Account in a
Qualified Transfer (and any income
allocated thereto) shall only be
used to pay Qualified Current
Retiree Health Liabilities (whether
directly or through reimbursement).
(B) Any assets transferred to a Health
Benefits Account in a Qualified
Transfer (and any income allocable
thereto) which are not used as
provided in Section 8.01(c)(3)(A)
above shall be transferred from the
Health Benefits Account back to the
Plan.
(C) For purposes of this Section
8.01(c)(3), any amount transferred
from a Health Benefits Account
shall be treated as paid first out
of the assets and income described
in Section 8.01(c) (3)(A) above.
(4) The Accrued Benefit of any Pensioned
Employee or Dependent under the
SEPCO Schedule shall become
nonforfeitable in the same manner
which would be required if the Plan
had terminated immediately before
the Qualified Transfer (or in the
case of a Pensioned Employee who
terminated service during the 1 year
period ending on the date of the
Qualified Transfer, immediately
before such termination).
(5) Effective for Qualified Transfers
occurring on or before December 8,
1994, the Applicable Company Cost
for each Plan Year during the Cost
Maintenance Period shall not be less
than the higher of the Applicable
Company Cost for each of the two
Plan Years immediately preceding the
Plan Year of the Qualified Transfer.
Effective for Qualified Transfers
occurring after December 8, 1994,
the medical benefits plan set forth
in Exhibit A shall provide that the
Applicable Health Benefits provided
by the Company during each Plan Year
during the Benefit Maintenance
Period shall be substantially the
same as the Applicable Health
Benefits provided by the Company
during the Plan Year immediately
preceding the Plan Year of the
Qualified Transfer. Notwithstanding
any other provision to the contrary
in this Section 8.01(c)(5), the
Company may elect at any time during
the Plan Year to have this Section
8.01(c)(5) applied separately with
respect to Pensioned Employees
eligible for benefits under Title
XVIII of the Social Security Act and
with respect to Pensioned Employees
which are not so eligible.
(6) For purposes of this Section
8.01(c), the following words and
phraseology shall have the following
meanings unless a different meaning
is plainly required by the context:
(A) "Applicable Company Cost" means,
with respect to any Plan Year, the
amount determined by dividing
(i) the Qualified Current Retiree
Health Liabilities of the Company
for such Plan Year determined (I)
without regard to any reduction
under Section 8.01(c)(6)(G), and
(II) in the case of a Plan Year in
which there was no Qualified
Transfer in the same manner as if
there had been such a transfer at
the end of the Plan Year, by
(ii) the number of individuals to whom
coverage for Applicable Health
Benefits was provided during such
Plan Year.
(B) "Applicable Health Benefits" means
health benefits or coverage which
are provided to Pensioned Employees
who immediately before the
Qualified Transfer are eligible to
receive such benefits and their
Dependents.
(C) "Benefit Maintenance Period" means
the period of five (5) Plan Years
beginning with the Plan Year in
which the Qualified Transfers
occurs.
(D) "Cost Maintenance Period" means the
period of five (5) Plan Years
beginning with the taxable year in
which the Qualified Transfer
occurs. If a Plan Year is in two
(2) or more overlapping Cost
Maintenance periods, this Section
8.01(c)(6)(D) shall be applied by
taking into account the highest
Applicable Company Cost required to
be provided under Section
8.01(c)(6)(A) above for such Plan
Year.
(E) "Excess Pension Assets" means the
excess, if any, of
(i) the amount determined under Code
Section 412(c)(7)(A)(ii), over
(ii) the greater of: (I) the amount
determined under Code Section
412(c)(7)(A)(i), or (II) 125
percent of current liability (as
defined in Code Section
412(c)(7)(B)).
The determination under
this paragraph shall be
made as of the most recent
valuation date of the Plan
preceding the Qualified
Transfer.
(F) "Health Benefits Account" means an
account established and maintained
under Code Section 401(h).
(G) "Qualified Current Retiree Health
Liabilities" means, with respect to
any Plan Year, the aggregate
amounts, including administrative
expenses, which would have been
allowable as a deduction to the
Company for payment of Applicable
Health Benefits provided during the
Plan Year assuming such Applicable
Health Benefits were provided
directly by the Company and the
Company used the cash receipts and
disbursements method of accounting.
For purposes of the preceding
sentence, the rule of Code Section
419(c)(3)(B) shall apply.
Effective for Qualified
Transfers occurring on or
before December 8, 1994,
the amount determined in
the paragraph above shall
be reduced by any amount
previously contributed to a
Health Benefits Account or
welfare benefit fund, as
defined in Code Section
419(e)(1), to pay for the
Qualified Current Retiree
Health Liabilities.
Effective for Qualified
Transfers occurring after
December 8, 1994, the
amount determined under the
preceding paragraph shall
be reduced by the amount
which bears the same ratio
to such amount as the value
(as of the close of the
Plan Year preceding the
year of the Qualified
Transfer) of the assets in
all Health Benefits
Accounts or welfare benefit
funds, as defined in Code
Section 419(e)(1), set
aside to pay the Qualified
Current Retiree Health
Liability, bears to the
present value of the
Qualified Current Retiree
Health Liabilities for all
Plan Years determined
without regard to this
paragraph.
(d) "Georgia Power Medical Benefits Plan" means
that Plan or any successor thereto.
8.02 Medical Benefits
Medical benefits under the Plan shall be provided
through the Georgia Power Company Medical Benefits Plan by the
payment of premiums thereunder, or through reimbursement to
the Company for its payment to Pensioned Employees or their
Dependents of medical expenses in accordance with the terms
and conditions of the Georgia Power Company Medical Benefits
Plan attached hereto as Exhibit A. Medical benefits shall be
provided under the Plan only to the extent there are
sufficient funds to provide such benefits. In no event shall
any benefits be paid under the Plan to the extent the same
benefits are payable under any other plan, program or
arrangement of the Company. The Retirement Committee may
establish claims procedures and administrative rules relating
to the provision of medical benefits hereunder to the extent
that the claims procedures and administrative rules under the
applicable group medical plan do not apply.
8.03 Termination of Coverage.
(a) Coverage of any Pensioned Employee shall
cease as follows:
(1) when this Article 8 is amended,
terminated, or discontinued in
accordance with its terms; or
(2) when the Pensioned Employee fails
to make when due any required
contribution; or
(3) as otherwise provided in Exhibit A.
(b) Coverage of any Dependent shall cease as
follows:
(1) when this Article 8 is amended,
terminated, or discontinued in
accordance with its terms; or
(2) when the Pensioned Employee fails
to make when due any required
contribution; or
(3) as otherwise provided in Exhibit A.
8.04 Contributions or Qualified Transfers to Fund Medical Benefits.
(a) Any contributions which the Company deems
necessary to provide the medical benefits
under Article 8 will be made from time to
time by or on behalf of the Company, and
contributions shall be required of the
Pensioned Employees to the Company's medical
benefit plan in amounts determined in the
sole discretion of the Company from time to
time. All Company contributions shall be
made to the Trustee and shall be allocated
to a separate account maintained solely to
fund the medical benefits provided under
this Article 8. The Company shall designate
that portion of any contribution to the plan
allocable to the funding of medical benefits
under this Article 8. In the event that a
Pensioned Employee's interest in an account,
or his Dependents', maintained pursuant to
this Article 8 is forfeited prior to
termination of the plan, the forfeited
amount shall be applied as soon as possible
to reduce Company contributions made under
this Article 8. In no event at any time
prior to the satisfaction of all liabilities
under this Article 8 shall any part of the
corpus or income of such separate account be
used for, or diverted to, purposes other
than for the exclusive purpose of providing
benefits under this Article 8.
The amount of contributions to be made by or
on behalf of the Company for any Plan Year,
if any, shall be reasonable and
ascertainable and shall be determined in
accordance with any generally accepted
actuarial method which is reasonable in view
of the provisions and coverage of this
Article 8, the funding medium, and any other
applicable considerations. However, the
Company is under no obligation to make any
contributions under this Article 8 after
Article 8 is terminated, except to fund
claims for medical expenses incurred prior
to the date of termination.
The medical benefits provided under this
Article 8, when added to any life insurance
protection provided under the Plan, shall be
subordinate to the retirement benefits
provided under the Plan.
Anything in the Plan and SEPCO Schedule to
the contrary notwithstanding, the aggregate
amount of the actual contributions made
pursuant to this Article 8 may not exceed
25% of the total actual contributions to the
Plan for all benefits under the Plan
(exclusive of contributions that may be made
to fund past service credits) on and after
September 15, 1993.
(b) Effective September 15, 1993, the Company
shall have the right, in its sole
discretion, to make a Qualified Transfer of
all or a portion of any Excess Pension
Assets contributed to fund Retirement Income
or Allowance under the Plan to the Health
Benefits Accounts to fund medical benefits
under this Article 8.
8.05 Pensioned Employee Contributions.
It shall be the sole responsibility of the Pensioned
Employee to notify the Company promptly in writing when a
change in the amount of the Pensioned Employee's contribution
is in order because a Dependent has become ineligible for
coverage under this Article 8. No person shall become covered
under this Article 8 for whom the Pensioned Employee has not
made the required contribution. Any contribution paid by a
Pensioned Employee for any person after such person shall have
become ineligible for coverage under this Article 8 shall be
returned upon written request but only provided such written
request by or on behalf of the Pensioned Employee is received
by the Company within ninety (90) days from the date coverage
terminates with respect to such ineligible person.
8.06 Amendment of Article 8.
The Board of Directors reserves the right to amend
Article 8 (including Exhibit A) without the consent of any
Pensioned Employee, or his Dependents, provided, however, that
no amendment of this Article or the Trust shall cancel the
payment or reimbursement of expenses for claims already
incurred by a Pensioned Employee or his Dependent prior to the
date of any amendment, nor shall any such amendment increase
the duties and obligations of the Trustee except with its
consent. This Article 8, as set forth in the SEPCO Schedule,
is not a contract and non-contributory benefits hereunder are
provided gratuitously, without consideration from any
Pensioned Employee or his Dependents. The Board of Directors
makes no promise to continue these benefits in the future and
rights to future benefits will never vest. In particular,
retirement or the fulfillment of the prerequisites for a
retirement benefit pursuant to the terms of the Plan and SEPCO
Schedule or under the terms of any other employee benefit plan
maintained by the Company shall not confer upon any Pensioned
Employee or Dependents any right to continued benefits under
this Article 8.
8.07 Termination of Article 8.
Although it is the intention of the Board of
Directors that this Article shall be continued and the
contribution shall be made regularly thereto each year, the
Board of Directors may terminate this Article 8 or permanently
discontinue contributions at any time in its sole discretion.
This Article 8, as set forth in the SEPCO Schedule, is not a
contract and non-contributory benefits hereunder are provided
gratuitously, without consideration from any Pensioned
Employee or his Dependents. The Board of Directors makes no
promise to continue these benefits in the future and rights to
future benefits will never vest. In particular, retirement or
the fulfillment of the prerequisites for a retirement benefit
pursuant to the terms of the SEPCO Schedule or under the terms
of any other employee benefit Plan maintained by the Company
shall not confer upon any Pensioned Employee or his Dependents
any right to continued benefits under this Article 8.
8.08 Reversion of Assets upon Termination. Upon the
termination of this Article 8 and the satisfaction of all
liabilities under this Article 8, all remaining assets in the
separate account described in this Article 8 shall be returned
to the Company in accordance with the terms of the Fund.
IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officer, has adopted this First Amendment to The Southern Company
Pension Plan this ____ day of _________________, 1997, to be effective as stated
herein.
SOUTHERN COMPANY SERVICES, INC.
By: ____________________________
Title:__________________________
ATTEST:
By: _________________
Title:________________