EXHIBIT 10.9C
MEMORANDUM OF AGREEMENT
Pension Plan & Post-Retirement Health and Life Insurance Plans
MEMORANDUM OF AGREEMENT, made as of March 5, 1999, by and between THE
UNITED ILLUMINATING COMPANY ("the Company") and LOCAL 470-1, UTILITY WORKERS
UNION OF AMERICA, AFL-CIO ("the Union").
WHEREAS, the Company and the Union are parties to a collective
bargaining agreement dated May 16, 1997 (the "1997 Labor Contract"); and
WHEREAS, the 1997 Labor Contract contains certain provisions concerning
The United Illuminating Company Pension Plan (the "Pension Plan"), as well as
certain letter agreements concerning post-retirement health insurance and
post-retirement life insurance benefits; and
WHEREAS, the parties have in good faith negotiated certain changes to
the Pension Plan and to the post-retirement health insurance and life insurance
benefits applicable to existing employees, which changes have been ratified by
the bargaining unit; and
WHEREAS, the Company and the Union now desire to reduce to writing
their agreement concerning the negotiated changes to the Pension Plan and to the
post-retirement health insurance and life insurance benefits applicable to
current employees.
NOW THEREFORE, the parties have agreed, and do hereby agree, as
follows:
1. THE PENSION PLAN. The Company will take such action as may be
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appropriate to amend the Pension Plan and obtain the approval of the U.S.
Treasury Department, for the purpose of effecting the following changes to the
Pension Plan:
(a) BENEFIT FORMULA. The pension benefit formula shall, as of
a participant's normal retirement date, be equal to one and six tenths percent
(1.6%) of the participant's final average compensation multiplied by
participant's total years of benefit service up to and including thirty (30)
years of benefit service; PROVIDED THAT such pension benefit shall not be less
than the participant's accrued benefit determined as of March 31, 1999 (or the
day prior to the Closing Date of the sale of UI's Generation assets to Wisvest
of Connecticut, LLC, if later) and frozen as of said date under the pension
benefit formula in effect immediately prior to the effective date of the current
changes to the Pension Plan.
(b) EARLY RETIREMENT BENEFITS.
(i) UNREDUCED EARLY RETIREMENT BENEFIT - RULE OF 88. Any
participant who is at least fifty-eight (58) years of age at the time
of retirement from active service, and whose combined age and years of
vesting service then equals at least eighty-eight (88), shall be
entitled to a monthly pension benefit following the participant's
actual
retirement equal to the pension the participant would have been
entitled to at normal retirement date, based upon the participant's
accrued benefit at the date of actual retirement, and such benefit
shall not be reduced for early commencement.
(ii) MODIFIED EARLY RETIREMENT BENEFIT - RULE OF 88. Any
participant who retires from active employment on or after age
fifty-five (55) and before age fifty-eight (58), whose combined age and
years of vesting service then equals at least eighty-eight (88), shall
be entitled to a monthly pension before the participant's normal
retirement date, and the amount thereof shall be reduced by
four-twelfths (4/12) of one percent (1%) (i.e., 4% per year) for each
month by which the benefit commencement date precedes the participant's
fifty-eighth (58th) birthday.
(iii) ALL OTHER EARLY RETIREMENTS. Each other participant
retiring from service prior to the participant's normal retirement
date, who is at least fifty-five (55) years of age and who has at least
ten (10) years of vesting service, but who has not satisfied the Rule
of 88 under (i) or (ii) above, may commence monthly pension benefits
any time before the participant's normal retirement date and the amount
thereof shall be reduced by four-twelfths (4/12) of one percent (1%)
(i.e., 4% per year) for each month by which the benefit commencement
date precedes the participant's fifty-eighth (58th) birthday, and by an
additional three-twelfths (3/12) of one percent (1%) (i.e., 3% per
year) for each succeeding month by which the benefit commencement date
precedes the participant's sixty-fifth (65th) birthday.
(c) LUMP-SUM DISTRIBUTION. As soon as administratively practical
following termination of employment, a participant may elect, subject to
applicable spousal consent requirements, to receive the participant's accrued
benefit, otherwise payable upon the participant's normal retirement date, in the
form of an actuarially equivalent lump-sum payment. In order to be eligible for
a lump-sum distribution, a participant who has been laid off by the Company must
no longer have any recall rights.
(d) FINAL AVERAGE COMPENSATION. A participant's "Final Average
Compensation" shall be the average of the participant's annual compensation over
the three (3) highest paid calendar years of employment with the Company,
wherever occurring or, if greater, the average of the participant's monthly
compensation during the final thirty-six (36) months of employment with the
Company.
(e) GRANDFATHER PROVISIONS. The pension benefit for any participant
who, as of December 31, 1999, is (i) at least age fifty-five (55) and is
credited with at least ten (10) years of vesting service, or (ii) has a combined
number of years of vesting service and age equaling at least eighty-eight (88),
shall be the greater of:
(i) the accrued benefit calculated in accordance with the
formula set forth in paragraph 1(a) above, or;
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(ii) the participant's accrued benefit calculated in
accordance with the formula in effect as of December 31, 1998, based upon the
participant's total years of benefit service and average annual compensation as
of the date the participant retires.
(f) SURVIVOR DEATH BENEFITS. Pre-retirement death benefits under the
Pension Plan shall be payable to the participant's spouse, if the participant is
married, unless such spouse has waived his or her right to this survivor annuity
in favor of another beneficiary. If the participant is not married, the
participant may designate another beneficiary.
(g) EFFECTIVE DATE. The effective date of the foregoing changes shall
be January 1, 1999, it being understood that the accrued benefits of
participants other than those grandfathered under paragraph 1(e) shall be
determined as of March 31, 1999, and frozen as of March 31, 1999, in accordance
with the formula in effect as of December 31, 1998.
2. POST-RETIREMENT HEALTH INSURANCE.
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(a) The letter agreement on page 94 of the 1997 Labor Contract,
dated May 16, 1995, from Mr. Albert N. Henricksen to Mr. Gary J. Brooks, shall
be limited to those employees who retired between May 16, 1995 and May 16, 1998,
inclusive.
(b) The letter agreement on page 99 of the 1997 Labor Contract, dated
May 16, 1997, from Mr. Albert N. Henricksen to Mr. Gary J. Brooks, shall be
limited to (i) employees who retired between May 17, 1998 and December 31, 1998,
inclusive; (ii) current employees who had attained age 62 and who had ten years
of service as of December 31, 1999; and (iii) current employees whose combined
age and years of service were equal to at least eighty-eight (88) as of December
31, 1999.
(c) Except as provided in paragraph 2(b) above, the Company will make
available to current employees retiring on or after January 1, 1999 medical and
dental insurance coverage as set forth in the letter agreement attached hereto
as Appendix I.
3. POST-RETIREMENT LIFE INSURANCE.
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(a) Paragraph (b) of the letter agreement on page 92 of the 1997
Labor Contract, dated May 16, 1997, from Mr. Albert N. Henricksen to Mr. Gary J.
Brooks, shall be limited to those employees who retired between May 16, 1997 and
December 31, 1998, inclusive.
(b) The Company will provide fully paid life insurance in the amount of
$14,000 for current full time employees who retire on or after January 1, 1999,
who at the time of retirement are eligible for a subsidized medical benefit in
accordance with the UI Retiree Medical Cost Share Table, attached hereto as
Appendix II, and who at the time of retirement are members of the Group Life
Insurance Plan.
IN WITNESS WHEREOF, the parties have executed this agreement on the
date set forth below:
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LOCAL 470-1, UTILITY WORKERS UNION OF AMERICA, AFL-CIO
By /s/ Diane M. Diedrich Date: 04/01/1999
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Diane M. Diedrich, President, Local 470-1, UWUA, AFL-CIO
THE UNITED ILLUMINATING COMPANY
By /s/ Albert N. Henricksen Date: 04/01/1999
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Albert N. Henricksen, Group Vice President, Support Services
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Appendix I
April 1, 1999
Ms. Diane M. Diedrich
President
Local 470-1 U.W.U.A., AFL-CIO
P.O. Box 1497
New Haven, CT 06506
Dear Ms. Diedrich:
This will replace our prior agreement concerning post-retirement health
insurance benefits, as set forth in my letter dated May 16, 1997, with respect
to retirements occurring on or after January 1, 1999. This letter is written
pursuant to Paragraph 3(c) of our Memorandum of Agreement of even date herewith.
As we have agreed, during the term of our 1997-2002 collective
bargaining agreement, the Company will make available or furnish to retirees who
retire pursuant to the terms of the Company's Pension Plan on or after January
1, 1999, medical and dental coverage under the following conditions:
1. Retirements After Age 55 With 10 Years of Service
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(a) For retirees who at the time of retirement are at least age 55 with at least
ten years of service, but who do not qualify for a subsidized medical benefit
per item 2 below, the Company will make available until age 65 coverage under
plans providing benefits equivalent to the Blue Cross & Blue Shield of
Connecticut BlueCare Plus POS Plan and the Blue Cross & Blue Shield of
Connecticut Dental Plan, Option B applicable to bargaining unit employees, all
at no cost to the Company.
(b) For retirees who at the time of retirement are at least age 55 with at least
ten years of service, but who do not qualify for a subsidized medical benefit
per item 2 below, the Company will make available commencing at age 65 coverage
under a Medicare supplemental plan that will provide with Medicare, if
available, benefits equivalent to the Blue Cross 65 High Option Health Insurance
Plan and Blue Shield 65-Plan 83 Health Insurance Plan at no cost to the Company.
2. Retirements After Age 55 With 30 Years of Service
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(a) For retirees who at the time of retirement are at least age 55 with at least
30 years of service, the Company will make available until age 65 coverage under
a plan providing benefits equivalent to the Blue Cross & Blue Shield of
Connecticut BlueCare Plus POS Plan.
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The retiree's share of the cost of such coverage, on a percentage basis, shall
be based on the retiree's years of service at the time of retirement and the
retiree's age at the time benefits commence, in accordance with the UI Retiree
Medical Cost Share Table. The Company shall pay the remaining cost of the
premiums.
(b) For retirees who at the time of retirement are at least age 55 with at least
30 years of service, the Company will furnish or make available commencing at
age 65 coverage under a Medicare supplemental plan that will provide with
Medicare, if available, benefits equivalent to the Blue Cross 65 High Option
Health Insurance Plan and Blue Shield 65-Plan 83 Health Insurance Plan. The
retiree's share of the cost of such coverage, on a percentage basis, shall be
based on the retiree's years of service at the time of retirement and the
retiree's age at the time benefits commence, in accordance with the UI Retiree
Medical Cost Share Table. The Company shall pay the remaining cost of the
premiums.
(c) For retirees who at the time of retirement are at least age 55 with at least
30 years of service, the Company will make available to such retirees until age
65 coverage under a plan providing benefits equivalent to the Blue Cross & Blue
Shield of Connecticut Dental Plan, Option B applicable to bargaining unit
employees, at no cost to the Company.
3. Retirements After Age 62 With 20 Years of Service
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For retirees who at the time of retirement are at least age 62 with at least 20
years of service, the Company will make available the same health and dental
insurance benefits described in paragraphs 2(a) through 2(c) above on the same
terms and conditions as set forth in paragraphs 2(a) through 2(c) above.
4. Medicare Part B
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(a) For employees employed by the Company as of May 16, 1992, who retire on or
after age 62 with at least 20 years of service, or after attaining age 55 with
30 or more years of service, the Company will provide, commencing with the date
of enrollment and continuing for the lifetime of the retiree, reimbursement on a
monthly basis of a portion of the monthly premium for coverage under Medicare
Part B for the retiree and any enrolled, eligible, dependents based on the
retiree's years of service at the time of retirement and the retiree's age at
the time benefits commence, in accordance with the UI Retiree Medical Cost Share
Table. The additional cost of Medicare Part B coverage, if any, shall be borne
by the retiree and the retiree's dependents, if any, in accordance with the UI
Retiree Medical Cost Share Table.
(b) Employees hired on or after May 16, 1992, shall not be entitled, upon
retirement, to any contribution by the Company for Medicare part B coverage for
themselves or their dependents.
Once a cost share for a retiree is established on a percentage basis
for a retiree under Sections 2 or 3 above, the cost share shall not change.
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The equivalent benefits described in this letter will be made available
or furnished, as the case may be, without regard to a specific carrier or
provider.
The coverages described in this letter shall be made available or
furnished only to a retiree who has the appropriate coverage in effect at the
time of retirement and who is eligible for such coverage under the terms of the
plans or policies. Further, the coverage described above requiring payment by
the retiree will be made available only to a retiree who provides for the
prepayment of the monthly premiums by authorized deduction from the retiree's
pension.
Very truly yours,
/s/ Albert N. Henricksen
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Albert N. Henricksen
Group Vice President
Support Services
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RETIREE COST SHARE PERCENTAGES
S E R V I C E
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
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55 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0
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56 100 100 100 100 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0
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57 100 100 100 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0
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58 100 100 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0
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59 100 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0
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A 60 100 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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G 61 100 100 100 100 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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E 62 100 100 100 100 100 50.0 47.5 45.0 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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63 100 100 100 100 100 47.5 45.0 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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64 100 100 100 100 100 45.0 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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65 100 100 100 100 100 42.5 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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66 100 100 100 100 100 40.0 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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67 100 100 100 100 100 37.5 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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68 100 100 100 100 100 35.0 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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69 100 100 100 100 100 32.5 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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70 100 100 100 100 100 30.0 27.5 25.0 22.5 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0
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