NOTE: THIS TABLE OF CONTENTS IS NOT PART OF THE
CINERGY CORP. NON-UNION EMPLOYEES' PENSION
PLAN; INSTEAD, THIS TABLE OF CONTENTS IS MERELY
FOR CONVENIENCE OF REFERENCE
TABLE OF CONTENTS
Page
INTRODUCTION .................................................................................................1
ARTICLE 1 DEFINITIONS.....................................................................................1
ARTICLE 2 EFFECTIVE DATE OF PLAN.........................................................................32
ARTICLE 3 ELIGIBILITY AND PARTICIPATION..................................................................32
3.1 Date of Participation..........................................................................32
3.2 Intermittent Employees and Temporary Employees.................................................33
3.3 Leased Employees...............................................................................33
3.4 Transfers of Employment........................................................................33
3.5 Transfers of Participants and Plan Assets To and From the Cinergy Corp.
Union Employees' Retirement Income Plan and Cinergy Corp. Union
Employees' Pension Plan........................................................................34
ARTICLE 4 AMOUNT OF LIFE-ONLY PENSION....................................................................36
4.1 Normal Retirement Pension Formula..............................................................36
4.2 Normal Retirement Benefits for Participants in the PSI Plan....................................36
4.3 Normal Retirement Benefits for Participants in the MRP or RIP..................................37
4.4 General Method of Computing Annual Pension for Retirement at Early
Retirement Date................................................................................37
4.5 General Method of Computing Annual Pension for a Terminated Vested
Participant....................................................................................42
4.6 Maximum Pension................................................................................45
4.7 Benefits if Plan Becomes a Top-Heavy Plan......................................................48
ARTICLE 5 SEVERANCE FROM SERVICE-VESTING.................................................................49
5.1 Vesting Requirement............................................................................49
5.2 Severance from Service before Vesting..........................................................50
5.3 Severance from Service after Vesting...........................................................51
ARTICLE 6 SPOUSE'S BENEFIT...............................................................................51
6.1 Determination of Spouse's Benefit..............................................................51
6.2 Method of Payment of Spouse's Benefit..........................................................54
ARTICLE 7 FORMS OF PENSION...............................................................................55
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7.1 Normal Forms of Pension........................................................................55
7.2 Optional Forms of Retirement Income............................................................57
ARTICLE 8 PAYMENT OF PENSION.............................................................................68
8.1 Timing of Payment..............................................................................68
8.2 Method of Payment..............................................................................69
8.3 Small Benefits.................................................................................69
8.4 Facility of Payment............................................................................69
8.5 Benefits for Late Retirees, Reemployed Retirees and Reemployed Terminated
Vested Participants............................................................................70
8.6 Required Payment of Benefits...................................................................71
8.7 Direct Rollovers of Eligible Distributions.....................................................76
ARTICLE 9 RETIREE MEDICAL/DENTAL BENEFITS................................................................76
9.1 Purpose........................................................................................76
9.2 Eligibility....................................................................................77
9.3 Separate Account...............................................................................77
9.4 Impossibility of Diversion Prior To Satisfaction of All Liabilities............................77
9.5 Reversion Upon Satisfaction of All Liabilities.................................................77
9.6 Forfeitures....................................................................................78
9.7 Employer Contributions To The Medical/Dental Benefits Account..................................78
9.8 Medical/Dental Benefits........................................................................78
ARTICLE 10 NONALIENATION OF BENEFITS......................................................................79
ARTICLE 11 ADMINISTRATION.................................................................................79
11.1 Administrator..................................................................................79
11.2 Removal and Replacement of Committee Members...................................................80
11.3 Disqualification and Resignation...............................................................80
11.4 Chairperson, Services, and Counsel.............................................................80
11.5 Meetings.......................................................................................80
11.6 Quorum.........................................................................................81
11.7 Action Without Meeting.........................................................................81
11.8 Notice to Trustee of Changes in Membership.....................................................81
11.9 Correction of Defects..........................................................................81
11.10 Reliance Upon Legal Counsel....................................................................82
11.11 Expenses.......................................................................................82
11.12 Indemnification................................................................................82
11.13 Powers and Duties of Committee.................................................................82
11.14 Matters Specifically Excluded from Jurisdiction................................................84
ARTICLE 12 BENEFIT CLAIMS PROCEDURES......................................................................84
ARTICLE 13 FUNDING POLICY AND METHOD......................................................................85
ARTICLE 14 MISCELLANEOUS..................................................................................86
14.1 No Enlargement of Employee Benefits............................................................86
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14.2 Reemployment...................................................................................86
14.3 Qualified Military Service.....................................................................87
14.4 Notice of Address..............................................................................87
14.5 Data...........................................................................................87
14.6 No Individual Liability........................................................................88
14.7 Participant's Statement of Agreement...........................................................88
14.8 No Diversion of Assets.........................................................................88
14.9 Governing Laws.................................................................................88
14.10 Severability...................................................................................89
14.11 Interpretation and Regulation of Plan..........................................................89
14.12 Communications by Participants.................................................................89
14.13 Headings.......................................................................................89
14.14 Accrued Benefit Not to be Decreased by Amendment...............................................89
ARTICLE 15 TRUSTS AND INSURANCE CONTRACTS.................................................................90
15.1 Trusts and Insurance Contracts.................................................................90
15.2 Irrevocability.................................................................................91
15.3 Sufficiency of Pension Fund....................................................................91
ARTICLE 16 CONTRIBUTIONS..................................................................................92
ARTICLE 17 APPROVAL UNDER INTERNAL REVENUE CODE...........................................................92
ARTICLE 18 TEMPORARY RESTRICTIONS ON BENEFITS.............................................................92
18.1 Temporary Restrictions.........................................................................92
ARTICLE 19 AMENDMENT AND TERMINATION......................................................................94
19.1 Right to Amend or Terminate....................................................................94
19.2 Effect of Termination..........................................................................95
19.3 Merger and Consolidation of Plan...............................................................97
19.4 Post-Change in Control Merger, Consolidation, or Transfer of Pension Plan
Assets or Liabilities..........................................................................97
19.5 General Protection of Benefits in the Event of a Change in Control.............................98
19.6 Post-Change in Control Surplus Reversion.......................................................98
ARTICLE 20 AUTHORIZED TRANSACTION.........................................................................99
ARTICLE 21 PARTICIPATION BY OTHER EMPLOYERS...............................................................99
21.1 Adoption of Plan...............................................................................99
21.2 Withdrawal from Participation.................................................................100
21.3 Cinergy as Agent for Employers................................................................101
ARTICLE 22 CONTINUANCE BY A SUCCESSOR....................................................................101
ARTICLE 23 PROVISIONS RELATING TO TOP-HEAVY PLAN.........................................................102
23.1 Construction of this Section..................................................................102
23.2 Top-Heavy Determination.......................................................................102
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ARTICLE 24 MERGER WITH THE MRP...........................................................................104
24.1 Acceptance of Assets and Liabilities of MRP Trust.............................................104
24.2 Participation of MRP Participants.............................................................104
ARTICLE 25 SPIN OFF OF PSI PLAN..........................................................................105
25.1 Acceptance of Assets and Liabilities of PSI Plan Trust........................................105
25.2 Participation of PSI Plan Participants........................................................105
4
ADOPTED PURSUANT TO RESOLUTIONS OF THE CINERGY
CORP. BOARD OF DIRECTORS DATED DECEMBER 18, 1997
CINERGY CORP. NON-UNION
EMPLOYEES' PENSION PLAN
(As Amended and Restated Effective January 1, 1998)
INTRODUCTION
This Plan is a complete restatement of the MRP, effective January 1, 1998.
Effective January 1, 1998, the MRP is renamed the Cinergy Corp. Non-Union
Employees' Pension Plan. Also, effective as of December 31, 1997, the assets and
liabilities of the PSI Plan attributable to Eligible Employees are merged into
this Plan.
This Plan is maintained for the exclusive benefit of Eligible Employees. The
purpose of the Plan is to provide retirement income for Eligible Employees. The
Plan is designed to satisfy the requirements of Code subsection 401(a) and the
applicable requirements of ERISA
ARTICLE 1
DEFINITIONS
As used in this document, the following words and phrases, when capitalized,
will have the meanings set forth below, unless a different meaning is plainly
required by the context.
1.1 "Absence from Service" means, with respect to each Employee, his
absence from service (with or without pay) with his Employer for any
reason other than a quit, resignation, discharge, retirement, or death,
including, but without limitation because of enumeration, vacation,
holiday, sickness, disability, leave of absence (unless otherwise
required by applicable law), or other layoff. If an Employee is totally
disabled and qualifies for benefits under Cinergy's Long-Term
Disability Plan, the expiration of his Absence from
1
Service will not occur until the later of (a) the date he no longer
qualifies for benefits under Cinergy's Long-Term Disability Plan, or
(b) his Normal Retirement Date, Early Retirement Date, or Actual
Separation Date, whichever is applicable.
1.2 "Accrued Vacation Pay" means, with respect to an Exempt Employee or a
Non-Exempt Employee, the compensation received at his Severance from
Service for unused accrued vacation pursuant to the Employer's
applicable policy.
1.3 "Active Participant" means a Participant for whom benefits are being
accrued under the Plan on the applicable date.
1.4 "Actual Separation Date" means:
(a) with respect to a Participant who either (1) retires on or
after his Normal Retirement Date, or (2) who retires on an
Early Retirement Date, the first day of the calendar month
coincident with or following the date of the Participant's
Severance from Service; or
(b) with respect to a Participant who incurs a Severance from
Service before he reaches age 50 and who is entitled to
benefits determined under the provisions of Section 5.3
(Severance from Service after Vesting), the date of the
Participant's Severance from Service.
1.5 "Actuarial Equivalent" means a benefit having the same actuarially
determined value as the benefit that the Actuarial Equivalent replaces.
The determination of an Actuarial Equivalent will be based on the
following actuarial assumptions, except as provided in Subsection (c)
or (d) below:
2
(a) MORTALITY:
Participants in accordance with the UP-1984 Table, with no
rating of ages; Spouses and Contingent Annuitants in
accordance with the UP-1984 Table, with ages rated down three
years;
(b) INTEREST:
7-1/2% per annum, compounded annually.
(c) With respect to any lump sum payment that may be payable under
the Plan during a Plan Year, the Actuarial Equivalent will be
calculated using the mortality table as prescribed from time
to time by the Secretary of the Treasury (currently the 1983
Group Annuity Mortality Table with a 50/50 mix of males and
females) and an interest rate equal to the annual rate of
interest on 30 year Treasury securities as specified by the
Commissioner of Internal Revenue for the second full calendar
month preceding the first day of the Plan Year.
(d) In the case of a Participant who had an accrued benefit under
the MRP, RIP, or the PSI Plan as of December 31, 1997, and who
has a Severance from Service Date after December 31, 1997, no
benefit determination will produce an amount that is less than
that which would have been produced utilizing both the
actuarial assumptions specified in the MRP, RIP, or the PSI
Plan, whichever is applicable, as in effect on December 31,
1997, and the annual pension accrued as of December 31, 1997,
determined under the provisions of the MRP, the RIP, or the
PSI Plan, whichever is applicable, as then in effect.
1.6 "Additional Separation Date" means, with respect to a Participant who
has an Initial Separation Date and who is later reemployed by an
Employer, the first day of the calendar month coincident with or
following the Participant's next Severance from Service Date.
3
However, if the Participant has multiple Severance from Service Dates
after his Initial Separation Date, then he will have an Additional
Separation Date for each Severance from Service, which will be the
first day of the calendar month coincident with or following the
Participant's applicable Severance from Service Date.
1.7 "Affiliate" means any employer that together with the Employer is under
common control or a member of an affiliated service group as determined
under Code subsections 414(b), (c), (m), and (o). In determining
whether an employer is a member of a controlled group for purposes of
Section 4.6 (Maximum Pension), the rules of Code subsections 414(b) and
(c) will be applied as modified by Code subsection 415(h).
1.8 "Aggregate Account" means, with respect to a Participant who is also
participating in a Qualified Defined Contribution Plan that is included
in an Aggregation Group, the sum of: (a) the Participant's account
balance under the plan as of the Valuation Date; (b) an adjustment for
any contributions due under the plan as of the Determination Date (the
adjustment will be the amount of any contributions actually made after
the Valuation Date but before the Determination Date, except for the
first Plan Year when the adjustment will also reflect the amount of any
contributions made after the Determination Date that are allocated as
of a date in the first Plan Year); and (c) any Plan distributions made
within the Plan Year that includes the Determination Date or within the
four preceding Plan Years. However, in the case of distributions made
after the Valuation Date and prior to the Determination Date,
distributions are not included as distributions for Top-Heavy purposes
to the extent that the distributions are already included in the
Participant's Aggregate Account balance as of the Valuation Date.
1.9 "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group.
4
1.10 "Annual Addition" means, with respect to a Participant for a Plan Year,
the following amounts credited to a Participant's account in any
Qualified Defined Contribution Plan maintained by the Employer or an
Affiliate for the Plan Year: employer contributions, employee
contributions (other than rollover contributions); forfeitures; amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Code paragraph 415(l)(2), that is part of a pension or
annuity plan maintained by the Employer or an Affiliate; and amounts
derived from contributions paid or accrued after March 31, 1984, that
are attributable to post-retirement medical benefits, allocated to the
separate account of a Key Employee, under a welfare benefit fund, as
defined in Code subsection 419(e), maintained by the Employer or an
Affiliate.
1.11 "Annual Pension" means, with respect to a Participant, the amount of
the Participant's pension, expressed as an annual benefit for the
Participant's lifetime.
1.12 "Annual Performance Cash Award" means, with respect to an Employee, the
cash award received by the Employee under the provisions of an
Employer's annual bonus or incentive pay plan or program, including,
but without limitation because of enumeration, the Cinergy Annual
Incentive Plan, the Cinergy Non-Union Employees' Incentive Plan, or any
successor Plan.
1.13 "Annuity Starting Date" means, with respect to a Participant, the first
day of the first period for which a Plan benefit is paid as an annuity
or, in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred that entitle the
Participant to the benefit.
1.14 "Base Salary" means, with respect to an Exempt Employee, the monthly
base salary received as remuneration for services performed for the
relevant period, exclusive of any allowances, premiums, bonuses,
overtime, or other forms or types of compensation.
5
1.15 "Base Wage" means, with respect to a Non-Exempt Employee, the hourly
base rate of pay received as remuneration for services performed for
the relevant period, exclusive of any allowances, premiums, bonuses,
overtime, or other forms or types of compensation, multiplied by his
hours worked during the applicable period.
1.16 "Beneficiary" means, with respect to each Participant, the person or
persons who are to receive benefits under the Plan after the
Participant's death.
1.17 "Board of Directors" means the duly constituted board of directors of
Cinergy on the applicable date.
1.18 "Break in Service" means, with respect to each Regular Employee, a
Period of Severance of at least 12 consecutive months. With respect to
an Intermittent Employee or a Temporary Employee, a "Break in Service"
means a Plan Year during which he completes 500 or fewer Hours of
Service.
1.19 "CG&E" means The Cincinnati Gas & Electric Company, and any related
company that adopted the MRP or the RIP.
1.20 "Change in Control" means any of the following events have occurred:
(a) Any "person" or "group" (within the meaning of subsection
13(d) and paragraph 14(d)(2) of the Securities Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act), directly or indirectly, of
securities of Cinergy (not including in the securities
beneficially owned by such person or group any securities
acquired directly from Cinergy or an Affiliate) representing
50% or more of the combined voting power of Cinergy's then
outstanding securities, excluding any person or group who
becomes such a beneficial owner in connection with a
transaction described in Paragraph (1) of Subsection (b)
below;
6
(b) There is consummated a merger or consolidation of
Cinergy or any direct or indirect subsidiary of Cinergy with
any other corporation, other than (1) a merger or
consolidation that would result in the voting securities of
Cinergy outstanding immediately prior to the merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least 50% of
the combined voting power of the securities of Cinergy or such
surviving entity or any parent thereof outstanding immediately
after the merger or consolidation, or (2) a merger or
consolidation effected to implement a recapitalization of
Cinergy (or similar transaction) in which no person is or
becomes the beneficial owner, directly or indirectly, of
securities of Cinergy (not including in the securities
beneficially owned by such person any securities acquired
directly from Cinergy or its Affiliates other than in
connection with the acquisition by Cinergy or its Affiliates
of a business) representing 25% or more of the combined voting
power of Cinergy's then outstanding securities;
(c) During any period of two consecutive years, individuals who at
the beginning of that period constitute the Board of Directors
and any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election context, including but not limited to a
consent solicitation, relating to the election of directors of
Cinergy) whose appointment or election by the Board of
Directors or nomination for election by Cinergy's shareholders
was approved or recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of that period or whose
appointment, election or nomination for election was
previously so approved or recommended cease for any reason to
constitute a majority of the Board of Directors; or
(d) The shareholders of Cinergy approve a plan of complete
liquidation or dissolution of Cinergy or there is consummated
an agreement for the sale or disposition by Cinergy of all or
substantially all of Cinergy's assets, other than a sale or
disposition by
7
Cinergy of all or substantially all of Cinergy's assets to an
entity, at least 60% of the combined voting power of the
voting securities of which are owned by shareholders of
Cinergy in substantially the same proportions as their
ownership of Cinergy immediately prior to such sale.
1.21 "Cinergy" means Cinergy Corp., a Delaware corporation, and any
corporation that succeeds to its business and adopts the Plan.
1.22 "Claimant" means a person submitting a claim for benefits under the
Plan.
1.23 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and interpretive rulings and regulations.
1.24 "Committee" means the benefits committee established pursuant to
Article 11 (Administration) to serve as Plan administrator.
1.25 "Contingent Annuitant" means, with respect to any Participant electing
a contingent pension option under Section 7.2 (Optional Forms of
Retirement Income), the person designated by the Participant to receive
a contingent pension after the Participant's death.
1.26 "Covered Compensation" means, with respect to a Participant, the
average (without indexing) of the annual Social Security taxable wage
bases under the Social Security Act for each year during the 35
calendar years ending with the last day of the calendar year in which
the Participant reaches his Social Security Retirement Age.
1.27 "Defined Benefit Plan Fraction" means, with respect to an individual
participating in one or more Qualified Defined Benefit Plans for any
calendar year, the fraction, the numerator of which is the individual's
Projected Annual Benefit under the Qualified Defined Benefit Plans
(determined as of the end of the calendar year), and the denominator of
which is the
8
lesser of: (a) the product of 1.25 (1.0 if the Plan is a Top-Heavy
Plan for the particular calendar year) multiplied by the dollar
limitation in effect under Code subparagraph 415(b)(1)(A) for that
calendar year, or (b) the product of 1.4 multiplied by the amount that
may be taken into account under Code subparagraph 415(b)(1)(B) with
respect to the individual under the Qualified Defined Benefit Plans
for the calendar year.
1.28 "Defined Contribution Plan Fraction" means, with respect to an
individual participating in one or more Qualified Defined Contribution
Plans for any calendar year, the fraction, the numerator of which is
the sum of the Annual Additions with respect to the Participant
(determined as of the close of the calendar year), and the denominator
of which is the lesser of the following amounts (determined for that
calendar year and for each prior calendar year of service with the
Employer): (a) the product of 1.25 (1.0 if the Plan is a Top-Heavy Plan
for the particular calendar year) multiplied by the dollar limitation
in effect under Code subparagraph 415(c)(1)(A) for the calendar year
(determined without regard to Code paragraph 415(c)(6)), or (b) the
product of 1.4 multiplied by the amount that may be taken into account
under Code subparagraph 415(c)(1)(B) with respect to that individual
under all Qualified Defined Contribution Plans for the calendar year.
1.29 "Dependent" means any individual who is eligible for coverage under the
Medical/Dental Plan as the "spouse" or "dependent" of an Eligible
Retiree.
1.30 "Determination Date" means, for purposes of determining whether the
Plan is a Top-Heavy Plan for any Plan Year, the last day of the
preceding Plan Year, or, for the first Plan Year, the last day of the
Plan Year.
1.31 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
9
1.32 "Disability Date" means, with respect to a Participant, the date the
Participant is first determined to be totally disabled under Cinergy's
Long Term Disability Plan, as amended from time to time.
1.33 "Distributee" means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving Spouse, and the Employee's or
former Employee's Spouse who is the alternate payee under a Qualified
Domestic Relations Order are Distributees with regard to the interest
of the Spouse or former Spouse.
1.34 "Early Retirement Date" means, with respect to each Participant who has
satisfied the Vesting Requirement, and whose Severance from Service
occurs on or after his 50th birthday but prior to his Normal Retirement
Date, the first day of the calendar month coincident with or following
his Severance from Service.
1.35 "Earnings" means, with respect to any Employee for any period of
reference, the sum of the Employee's: (a) Base Salary or Base Wage, (b)
Overtime Pay, (c) Shift Premiums, (d) Work Schedule Recognition Pay,
(e) Holiday Premiums, (f) Accrued Vacation Pay, (g) Sabbatical Vacation
Pay, (h) Performance Lump Sum Pay, and (i) Annual Performance Cash
Awards. "Earnings" does not include (a) reimbursements or other expense
allowances, (b) fringe benefits (cash and noncash) other than those
named in the preceding sentence, (c) moving and relocation expenses,
(d) deferred compensation, (e) welfare benefits, (f) Long-Term
Performance Awards, (g) Executive Individual Incentive Awards, (h)
other forms of compensation or remuneration that are not specifically
named in the preceding sentence, or (i) any payments received by an
Employee from any Affiliate that is not an Employer.
Notwithstanding the foregoing provisions of this Section, an Employee's
Earnings taken into account for any Plan Year will not exceed $150,000,
as adjusted pursuant to Code paragraph 401(a)(17).
10
1.36 "Eligible Employee" means an Employee other than a Leased Employee or
an Employee whose terms and conditions of employment are governed by a
collective bargaining agreement that does not provide for participation
in this Plan.
1.37 "Eligible Individual" means an Eligible Retiree or a Dependent.
1.38 "Eligible Retiree" means an individual who:
(a) is a Retired Participant who is also eligible to participate
in the Medical/Dental Plan, and
(b) is not a Key Employee at any time during the current Plan Year
and has not been a Key Employee at any time during any
previous Plan Year for which contributions were made for that
individual's benefit to the Medical/Dental Benefits Account.
1.39 "Eligible Retirement Plan" means an individual retirement account
described in Code subsection 408(a), an individual retirement annuity
described in Code subsection 408(b), an annuity plan described in Code
subsection 403(a), or a qualified trust described in Code subsection
401(a), that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to a
surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.40 "Eligible Rollover Distribution" means any distribution of all or a
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's Beneficiary, or for a specified
period of ten years or more; any distribution to the extent that the
distribution is required under Code paragraph 401(a)(9); and the
portion of any
11
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
1.41 "Employee" means any person who is employed by an Employer, other than
as an employee classified by his Employer as a summer laborer or summer
employee, and who receives compensation that the Employer initially
reports on a federal wage and tax statement (Form W-2). For purposes of
crediting Service or Years of Eligibility Service for purposes of
eligibility to participate and vesting and, except as otherwise
provided, for purposes of the rules set out in Section 4.6 (Maximum
Pension) and Article 23 (Provisions Relating to Top-Heavy Plan), the
term "Employee" includes a Leased Employee.
1.42 "Employer" means Cinergy and any Affiliate that, with the consent of
the Board of Directors, elects to participate in the Plan pursuant to
Section 21.1 (Adoption of Plan) and any successor corporation or other
organization or entity that adopts the Plan pursuant to Article 22
(Continuance by a Successor). If any Affiliate withdraws from
participation in the Plan pursuant to Section 21.2 (Withdrawal from
Participation), that Affiliate will cease to be an Employer.
1.43 "Employment Commencement Date" means, with respect to each Employee,
the date as of which the Employee is first entitled to be credited with
an Hour of Service.
1.44 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and interpretive rulings and regulations.
1.45 "Executive Individual Incentive Awards" means, with respect to an
Employee, any cash or stock-based award (other than Annual Performance
Cash Awards) received by a Highly Compensated Participant pursuant to
the terms of any individualized bonus or incentive pay plan or program,
including, but without any limitation because of enumeration, any
retention or signing bonus.
12
1.46 "Exempt Employee" means an Eligible Employee whose pay is customarily
computed on a salaried basis, and whose employment is not subject to
FLSA overtime and record keeping provisions.
1.47 "Final Average Earnings" means the average of the Participant's Section
415 Compensation over the five consecutive years of employment with his
Employer that provide the highest average, excluding compensation in
years before January 1, 1984, and compensation in years after the close
of the last Plan Year in which the Plan is determined to be a Top-Heavy
Plan.
1.48 "FLSA" means the Fair Labor Standards Act of 1938, as amended from time
to time, and interpretive rulings and regulations.
1.49 "Group Annuity Contract" means Group Annuity Contract No. 9599GAC
issued by John Hancock Mutual Life Insurance Company, as amended or
replaced from time to time.
1.50 "Highest Average Earnings" means a Participant's highest average annual
Earnings for any three consecutive calendar years out of his last ten
years of Participation. However, if the Participant completes fewer
than three years of Participation, his Highest Average Earnings will
mean his average annual Earnings for his total years of Participation.
If a Participant is totally disabled and qualifies for benefits under
Cinergy's Long-Term Disability Plan until his Normal Retirement Date,
Early Retirement Date, or Actual Separation Date, whichever is
applicable, his Severance from Service Date will be deemed for purposes
of this section to be his Disability Date. For purposes of this
Section, if a Participant's Severance from Service Date is other than
December 31, the following periods will be treated as a period of three
consecutive calendar years:
(a) His months of Participation in the calendar year that includes
his Severance from Service Date; plus
13
(b) The two (or fewer) full calendar years of Participation prior
to his Severance from Service Date; plus
(c) From the calendar year immediately preceding the period
described in Subsection (b), the lesser of (1) the
Participant's months of Participation in that year, or (2) the
number of months equal to 12 minus the number of months
included pursuant to Subsection (a). A Participant's Earnings
will be deemed to have been earned ratably throughout the
period described in this Subsection (c).
1.51 "Highly Compensated Participant" means a highly compensated active
Employee and a highly compensated former Employee. A highly compensated
active Employee includes any Employee who performs service for the
Employer during the Plan Year and who (a) is a 5% owner for that Plan
Year or was a 5% owner for the prior Plan Year; or (b) for the
preceding Plan Year received compensation from the Employer in excess
of $80,000 (as adjusted pursuant to Code subsection 415(d)). The
Employer does not elect to require that a highly compensated active
Employee must be a member of the Employer's top-paid group for the
preceding Plan Year.
A highly compensated former Employee includes any Employee who
terminated employment (or was deemed to have terminated employment)
prior to the Plan Year, performs no service for the Employer during the
Plan Year, and was a highly compensated active Employee for either the
Plan Year during which he terminated employment or any Plan Year ending
on or after the Employee's 55th birthday.
The determination of who is a Highly Compensated Participant, including
the determination of the number and identity of Employees in the
top-paid group and the compensation that is considered, will be made in
accordance with Code subsection 414(q).
14
1.52 "Holiday Premiums" means, with respect to a Non-Exempt Employee, the
compensation received as a premium for services performed for the
relevant period for working on a holiday recognized by the Employer
pursuant to its applicable policy.
1.53 "Hour of Service" means, with respect to any Employee, any of the
following:
(a) each hour for which he is paid, or entitled to payment, by an
Employer for the performance of duties for that Employer;
(b) each other hour for which back pay, irrespective of mitigation
of damages, has been either awarded to him or agreed to be
paid to him by an Employer;
(c) each other hour for which he is absent from his normal period
of employment with his Employer due to an approved military
leave, maternity leave, paternity leave, adoption leave,
worker's compensation leave, personal leave of six consecutive
months or less, or sick leave of six consecutive months or
less; or a total disability that qualifies him for benefits
under Cinergy's Long-Term Disability Plan; and
(d) each other hour for which he is paid, or entitled to payment,
by an Employer for a period of time during which he does not
perform any duties for that Employer (irrespective of whether
or not his employment relationship with that Employer has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, witness duty,
military duty, or leave of absence.
In computing an Hour of Service, the Plan may use the
equivalencies set forth in paragraph (e) of 29 C.F.R.
Section.2530.200b-3. However, if different equivalencies are
used for different classifications of Employees, then those
classifications must be reasonable and consistently applied.
Each Hour of Service will be credited to the Employee for the
appropriate computation period in accordance with the
15
provisions of paragraphs (b) and (c) of 29 C.F.R.
Section.2530.200b-2, and each Hour of Service, when aggregated
for a particular computation period, will constitute the Hours
of Service credited to the Employee for that computation
period. However, no Employee will be credited under Subsection
(d) either with more than 501 Hours of Service on account of
any single continuous period during which the Employee
performs no duties for an Employer irrespective of whether or
not that period occurs in a single computation period, or with
an hour for which the Employee is paid, or entitled to
payment, by an Employer if that payment is made solely for
the purposes of either reimbursing the Employee for medical
or medically related expenses incurred by the Employee or
complying with applicable worker's compensation, unemployment
compensation, or disability insurance laws. However, the
crediting of Hours of Service for back pay awarded or agreed
to with respect to periods described in Subsection (d) of this
Section will be subject to the same limitations set forth in
the immediately preceding sentence with respect to Subsection
(d).
1.54 "Initial Separation Date" means, with respect to a Participant who is
entitled to benefits under the provisions of Section 5.1 (Vesting
Requirement), Section 5.2 (Severance from Service before Vesting), or
Section 5.3 (Severance from Service after Vesting), the first day of
the calendar month coincident with or following the Participant's
initial Severance from Service Date.
1.55 "Insurance Company" means any insurance company holding any part of the
Pension Fund.
1.56 "Intermittent Employee" means an Eligible Employee who performs
services intermittently from time to time as needed by the Employer and
as mutually agreed by the Employer and the Employee.
16
1.57 "Key Employee" means an Employee or former Employee of an Employer who,
at any time during the determination period, is:
(a) an officer of an Employer having annual Section 415
Compensation from his Employer greater than 50 percent of the
amount in effect under Code subparagraph 415(b)(1)(A) for any
Plan Year;
(b) one of the ten Employees having annual Section 415
Compensation from his Employer of more than the limitation in
effect under Code subparagraph 415(c)(1)(A) and owning (or
considered as owning within the meaning of Code section 318)
the largest interests in the Employer.
(c) the owner (or considered as the owner within the meaning of
Code section 318) either of more than five percent of the
outstanding stock of Cinergy, or stock possessing more than
five percent of the total combined voting power of all stock
of Cinergy; or
(d) the recipient of at least $150,000 in annual Section 415
Compensation from the Employer and who owns (or is considered
as owning within the meaning of Code section 318) either more
than one percent of the outstanding stock of Cinergy or stock
possessing more than one percent of the total combined voting
power of all stock of Cinergy.
However, no more than 50 Employees of an Employer will be deemed to be
officers for any particular Plan Year. Also, the term Key Employee
includes the beneficiaries of a Key Employee. For purposes of
Subsection (b) above, if two Employees have the same interest in the
Employer, the Employee having greater annual Earnings from his Employer
will be treated as having a larger interest. The determination of who
is a Key Employee will be made in accordance with Code paragraph
416(i)(1).
17
1.58 "Leased Employee" means any person who performs services for another
person, the "recipient," but who is not an employee of the recipient,
if (a) the services are provided pursuant to an agreement between the
recipient and any other person, (b) the person has performed the
services for the recipient (or for the recipient and related persons)
on a substantially full-time basis for a period of at least one year,
and (c) the services are performed under the primary direction and
control of the recipient. A Leased Employee will not be considered an
employee of the recipient if:
(a) that employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at
least 10 percent of compensation, as defined in Code
paragraph 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement
that are excludable from the Employee's gross income
under Code section 125, Code paragraph 402(a)(8), or
Code subsections 402(h) or 403(b);
(2) immediate participation;
(3) full and immediate vesting; and
(b) leased employees do not constitute more than 20 percent of the
recipient's non-highly compensated work force.
1.59 "Long-Term Performance Awards" means, with respect to an Employee, the
cash or stock-based award received by the Employee pursuant to the
provisions of an Employer's long-term bonus or incentive pay plan or
program, including, but without limitation because of enumeration, the
Cinergy Performance Shares Plan or the Cinergy 1996 Long-Term Incentive
Compensation Plan.
18
1.60 "Medical/Dental Benefits" means the benefits specified and payable
under Section 9.8 (Medical/Dental Benefits) from the Medical/Dental
Benefits Account.
1.61 "Medical/Dental Benefits Account" means the separate account
established pursuant to Article 9 (Retiree Medical/Dental Benefits) for
contributions to fund benefits payable under Article 9 (Retiree
Medical/Dental Benefits).
1.62 "Medical/Dental Plan" means any plan or program that is established by
the Employer to provide medical or dental insurance coverage or medical
or dental expense reimbursements to Eligible Individuals.
1.63 "MRP" means The Cincinnati Gas & Electric Company Management Retirement
Plan, as in effect immediately prior to January 1, 1998.
1.64 "Non-Exempt Employee" means an Eligible Employee whose pay is
customarily computed on an hourly, weekly, or bi-weekly basis, and
whose employment is subject to FLSA overtime and record keeping
provisions.
1.65 "Nonforfeitable" means, with respect to a Participant's claim for
benefits under the Plan, that the claim is unconditional, legally
enforceable, and not subject to divestment except in accordance with
the Plan's specific provisions, including, but without limitation
because of enumeration, the provisions of Section 15.3 (Sufficiency of
Pension Fund).
1.66 "Normal Retirement Date" means, with respect to each Participant, the
first day of the calendar month coincident with or following his 65th
birthday.
1.67 "Option Effective Date" means a Participant's Actual Separation Date,
unless further extended with respect to a Participant making a timely
election during the applicable election period, in which case the
Option Effective Date will be the first day of the
19
calendar month coincident with or following the last day of the
applicable election period, provided he has timely elected the option
on or before that date.
1.68 "Overtime Pay" means, with respect to an Employee, the compensation
received as remuneration consistent with the requirements of the FLSA,
or for services performed for the relevant period for hours worked
beyond the Employee's regularly scheduled work hours pursuant to the
Employer's applicable policy.
1.69 "Participant" means any Eligible Employee who has met the eligibility
requirements set forth in Article 3 (Eligibility and Participation) and
for whom benefits are to be provided under the Plan.
1.70 "Participation" means, with respect to an Eligible Employee, the period
of time during which he is treated as a Participant in the Plan, the
length of which will be determined as follows:
(a) A Regular Employee will be credited with Participation for the
period of time beginning with the later of (1) January 1,
1998, or (2) his Employment Commencement Date and ending on
his Severance from Service Date.
(b) A Regular Employee will be credited with Participation for any
Period of Credited Severance during which he is a Participant
or former Participant.
(c) An Intermittent Employee or Temporary Employee who has become
a Participant pursuant to Section 3.2 (Intermittent Employees
and Temporary Employees) will be credited, retroactively if
necessary, with Participation beginning on the later of (1)
January 1, 1998, or (2) his Employment Commencement Date. An
Intermittent Employee or Temporary Employee will be credited
with one year of Participation for each Plan Year in which he
completes at least 1,000 Hours of Service. An Intermittent
Employee or Temporary Employee will not be credited
20
with any Participation for any Plan Year in which he completes
less than 1,000 Hours of Service.
(d) If an Intermittent or Temporary Employee becomes a Regular
Employee on a date other than the first day of a Plan Year,
all of his Hours of Service completed during the Plan Year in
which the change in employment status occurred will be
counted. If the Employee completes at least 1,000 Hours of
Service during that Plan Year, he will be credited with one
year of Participation for the Plan Year in which the change
occurred. If the Employee does not complete at least 1,000
Hours of Service during the Plan Year in which the change
occurred, he will be credited with one month of Participation
for each calendar month during that Plan Year in which he is
credited with at least one Hour of Service as a Regular
Employee.
(e) Notwithstanding any other provision of this Plan to the
contrary, an Eligible Employee who accrued "years of
accredited service" (as defined in the MRP and the RIP) under
the MRP or the RIP or "years of participation" (as defined in
the PSI Plan) under the PSI Plan will be credited with years
of Participation under this Plan for the years of accredited
service credited to him under the MRP or the RIP and the years
of participation credited to him under the PSI Plan before
January 1, 1998.
(f) In determining an Eligible Employee's total Participation for
purposes of the Plan, all periods of service that are credited
to the Employee under Subsections (a) through (e) above will
be aggregated. In no event will an Employee be credited more
than once for the same period of Participation. For purposes
of determining a Regular Employee's total Participation, the
Regular Employee will be credited with one month of
Participation for each calendar month in which he is a
Participant in the Plan and is credited with at least one Hour
of Service. A Regular Employee will be credited with one year
of Participation for each 12
21
months of Participation with which he is credited pursuant to
the preceding sentence.
(g) Notwithstanding Subsection (f), if an Eligible Employee is a
Reemployed Retiree or a Reemployed Terminated Vested
Participant, and his "years of participation" (as defined in
the PSI Plan) under the PSI Plan or his "years of accredited
service" (as defined in the MRP or RIP) under the MRP or RIP
were subject to a maximum under the pension formula applicable
to the Eligible Employee at the time he incurred a Severance
from Service, that Eligible Employee's total Participation
when he again incurs a Severance from Service under the Plan
will not exceed the sum of his maximum pre-1998 years and the
Eligible Employee's years of Participation during his period
of reemployment.
1.71 "Pension Fund" or "Fund" means the fund established in consequence of
and for the purposes of the Plan to provide the benefits under the
Plan, including all funds held in all trusts and group annuity
contracts that are being used as funding media for the Plan.
1.72 "Performance Lump Sum Pay" means, with respect to an Exempt Employee or
a Non-Exempt Employee, the compensation received as remuneration based
upon the Employee's performance when the Employer's applicable merit
pay policy would otherwise preclude a performance based increase.
1.73 "Period of Credited Severance" means, with respect to each Regular
Employee who has incurred a Severance from Service, and who, within 12
Months of his Severance from Service Date, performs an Hour of Service,
the Period of Severance commencing on the Regular Employee's Severance
from Service Date and ending on the date thereafter upon which he first
performs an Hour of Service. In the case of a Regular Employee who has
incurred a Severance from Service that occurs during an Absence from
Service by reason of a maternity or paternity absence as defined in
Subsection 1.94(b), the period between
22
the first and second anniversaries of the first day of absence will
not be a Period of Credited Severance.
1.74 "Period of Severance" means, with respect to each Regular Employee, the
period of time commencing on his Severance from Service Date and ending
on the date thereafter upon which he first performs an Hour of Service.
1.75 "Permissive Aggregation Group" means an Aggregation Group that may
include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code paragraph 401(a)(4)
and Code section 410.
1.76 "Plan" means the pension plan known as the "Cinergy Corp. Non-Union
Employees' Pension Plan," as amended, from time to time. As effective
January 1, 1998, this document sets forth the Plan.
1.77 "Plan Year" means the calendar year.
1.78 "Present Value of Accrued Benefits" means, with respect to Top-Heavy
Plan status, the sum of:
(a) the present value of the Plan's accrued benefits using the
1983 Group Annuity Mortality Tables (separate tables for males
and females) and 7-1/2% interest, and
(b) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four preceding Plan
Years. However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, the
distributions are not included as distributions for Top-Heavy
Plan purposes to
23
the extent that the distributions are already included in
the Participant's present value of accrued benefits as of the
Valuation Date.
1.79 "Projected Annual Benefit" means, with respect to any Participant
participating in a Qualified Defined Benefit Plan maintained by an
Employer or an Affiliate, the annual straight life annuity benefit to
which the Participant would be entitled under that Qualified Defined
Benefit Plan based upon the following assumptions:
(a) the Participant will continue as an employee of an Employer
until reaching the Participant's normal retirement age under
the plan (or the Participant's current age if that is later);
(b) the Participant's compensation used to determine benefits
under the plan for the calendar year under consideration will
remain the same until the date the Participant attains the age
described in Paragraph (a); and
(c) all other relevant factors used to determine benefits under
the plan for the calendar year under consideration will remain
constant for all future calendar years.
1.80 "PSI Plan" means the PSI Energy, Inc. Pension Plan, as in effect
immediately prior to January 1, 1998.
1.81 "Qualified Defined Benefit Plan" means any qualified defined benefit
plan as defined in Code subsections 414(j) and 415(k).
1.82 "Qualified Defined Contribution Plan" means any qualified defined
contribution plan as defined in Code subsections 414(i) and 415(k).
1.83 "Qualified Domestic Relations Order" means a qualified domestic
relations order as defined in Code subsection 414(p).
24
1.84 "Reduced Primary Social Security Benefit" means the reduced amount of
primary federal old age insurance benefit estimated by the Committee
that is, or would be, payable or estimated to become payable to a
Participant at his earliest eligibility date. The estimate is based on
the Social Security Act as in effect at the Participant's Option
Effective Date. If a Participant supplies documentation from the Social
Security Administration of his or her actual Reduced Primary Social
Security Benefit at least 60 days before his or her Option Effective
Date, that amount will be used in lieu of the estimate referred to
above. A Reduced Primary Social Security Benefit calculated using
actual documentation will not be recalculated.
1.85 "Reemployed Retiree" means a Participant, other than a Terminated
Vested Participant, who is reemployed by an Employer after his Initial
Separation Date or an Additional Separation Date.
1.86 "Reemployed Terminated Vested Participant" means a Terminated Vested
Participant who is reemployed by an Employer after his Initial
Separation Date or an Additional Separation Date.
1.87 "Reemployment Commencement Date" means, with respect to an Eligible
Employee who incurs a Severance from Service and is later reemployed by
an Employer, the date upon which the Eligible Employee first performs
an Hour of Service after his reemployment.
1.88 "Regular Employee" means an Eligible Employee who is not an
Intermittent Employee or a Temporary Employee.
1.89 "Required Aggregation Group" means an Aggregation Group consisting of
each plan of an Employer, including any terminated plan, in which a Key
Employee has been a Participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and each
other plan of the Employer that enables any plan in which
25
a Key Employee participates to meet the requirements of Code subsection
401(a) or Code section 410.
1.90 "Retired Participant" means a former Participant, other than a
Terminated Vested Participant, while alive on and after his Actual
Separation Date.
1.91 "RIP" means The Cincinnati Gas & Electric Company Retirement Income
Plan, as in effect immediately prior to January 1, 1998.
1.92 "Sabbatical Vacation Pay" means, with respect to an Employee, the
compensation received as remuneration for the weeks of accrued vacation
accumulated pursuant to the Employer's applicable policy for the
purpose of taking an extended vacation beyond the number of weeks of
vacation to which the Employee would normally be entitled.
1.93 "Section 415 Compensation" means an Eligible Employee's earned income,
wages, salaries, and fees for professional services, and other amounts
received for personal services actually rendered in the course of
employment with the Employer (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and
bonuses) and, except as provided in the following sentence, excluding
the following: (a) Employer contributions to a plan of deferred
compensation that are not included in the Employee's gross income for
the taxable year in which contributed or any distributions from a plan
of deferred compensation; (b) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held
by the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; and (c) amounts realized
from the sale, exchange, or other disposition of stock acquired under a
qualified stock option. Notwithstanding the foregoing, Section 415
Compensation will include any elective deferral as defined in Code
paragraph 402(g)(3) and amounts contributed by an Employer pursuant to
a salary reduction agreement that are excludable from the Employee's
gross income under Code section 125 or 457.
26
1.94 "Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and interpretive rulings and regulations.
1.95 "Service" means, with respect to an Eligible Employee, the period of
time during which the employment relationship exists between the
Eligible Employee and the Employer, the length of which is determined
as follows:
(a) A Regular Employee will be credited with Service for the
period of time beginning with his Employment Commencement Date
and ending on his Severance from Service Date.
(b) A Regular Employee will be credited with Service for each
Period of Credited Severance.
(c) An Intermittent Employee or Temporary Employee who has
completed one Year of Eligibility Service will be credited,
retroactively if necessary, with Service beginning on his
Employment Commencement Date. An Intermittent Employee or
Temporary Employee will be credited with one year of Service
for each Plan Year in which he completes at least 1,000 Hours
of Service. An Intermittent Employee or Temporary Employee
will not be credited with any Service for any Plan Year in
which he completes less than 1,000 Hours of Service.
(d) If an Intermittent or Temporary Employee becomes a Regular
Employee on a date other than the first day of a Plan Year,
all of his Hours of Service completed during the Plan Year in
which the change in employment status occurred will be
counted. If the Employee completes at least 1,000 Hours of
Service during that Plan Year, he will be credited with one
year of Service for the Plan Year in which the change
occurred. If the Employee does not complete at least 1,000
Hours of Service during the Plan Year in which the change
occurred, he will be credited
27
with one month of Service for each calendar month during
that Plan Year in which he is credited with at least one
Hour of Service as a Regular Employee.
(e) An Eligible Employee will be credited with Service for any
period of Service with an Affiliate after he has reached age
18, which will be determined as if he had been employed by the
Employer during that period.
(f) Notwithstanding any other provision of the Plan to the
contrary, any Eligible Employee who accrued "years of service"
(as defined in the PSI Plan) under the PSI Plan or "years of
vesting service" (as defined in the MRP or RIP) under the MRP
or the RIP will be credited with Service for the years of
service credited to him under the PSI Plan and the years of
vesting service credited to him under the MRP or RIP before
January 1, 1998.
(g) In determining an Eligible Employee's total Service for
purposes of the Plan, all periods of Service that are credited
to the Employee under Subsections (a) through (f) above will
be aggregated. In no event will an Employee receive credit
more than once for the same period of Service. For purposes of
determining a Regular Employee's total Service, the Regular
Employee will be credited with one month of Service for each
calendar month in which he is credited with at least one Hour
of Service. A Regular Employee will be credited with one year
of Service for each 12 months of Service with which he is
credited pursuant to the preceding sentence.
1.96 "Severance from Service" means, with respect to an Employee:
(a) the date of termination of his employment relationship with
his Employer by reason of a quit, resignation, discharge,
retirement, death, or layoff of the Employee for an indefinite
period of time made without any expectation on the part of the
Employer at the time of layoff to recall the Employee, for
employment
28
with the Employer as an Employee within 12 months from the
date of the commencement of the layoff; or
(b) the first anniversary of the first date of the Employee's
Absence from Service, or, if later, the expiration of an
Absence from Service. Notwithstanding the preceding sentence,
if an Employee has an Absence from Service of more than one
year by reason of a maternity or paternity absence, the
Employee's Severance from Service occurs on the second
anniversary of that absence. For purposes of this Subsection,
an Absence from Service for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of that
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of the child by
that individual, or (4) for purposes of caring for the child
for a period beginning immediately following its birth or
placement.
For purposes of this Subsection, the term "Employer" includes all
Affiliates, and an Employee or former Employee will not be treated as
having incurred a Severance from Service until the employment
relationship between the Employee and all Employers and Affiliates is
terminated.
1.97 "Severance from Service Date" means, with respect to each Employee, the
date of his Severance from Service.
1.98 "Shift Premiums" means, with respect to a Non-Exempt Employee, the
compensation received as a premium for services performed for the
relevant period for working a shift other than the Employer's regular
day shift pursuant to the Employer's applicable policy.
1.99 "Social Security Act" means the federal Social Security Act, 42
U.S.C. Section .301, ET SEQ., as amended from time to time, and
interpretive rulings and regulations.
29
1.100 "Social Security Retirement Age" means respectively (a) age 65 for a
Participant born before January 1, 1938; (b) age 66 for a Participant
born after December 31, 1937, but before January 1, 1955; and (c) age
67 for a Participant born after December 31, 1954.
1.101 "Spouse" means, with respect to any Participant, the Participant's
lawfully married spouse, if any, on the applicable date. The Plan will
not recognize common law marriages or similar arrangements unless
required to do so by federal law. A former Spouse will also be
considered a Spouse to the extent provided under a Qualified Domestic
Relations Order.
1.102 "Super Top-Heavy Plan" means a Qualified Defined Benefit Plan or a
Qualified Defined Contribution Plan described in Section 23.2
(Top-Heavy Determination).
1.103 "Temporary Employee" means an Eligible Employee who is regularly
scheduled to work less than 20 hours per week or to work on a non-fixed
schedule.
1.104 "Terminated Vested Participant" means a Participant who is entitled to
benefits under the provisions of Section 5.3 (Severance from Service
After Vesting).
1.105 "Top-Heavy Group" means an Aggregation Group described in Section 23.2
(Top-Heavy Determination).
1.106 "Top-Heavy Plan" means a Qualified Defined Benefit Plan or a Qualified
Defined Contribution Plan described in Section 23.2 (Top-Heavy
Determination).
1.107 "Top-Heavy Plan Year" means a particular Plan Year for which the Plan
is a Top-Heavy Plan.
1.108 "Trust Fund" means the trust established by the Employer to fund the
Plan.
30
1.109 "Trustee" means the person or entity designated by Cinergy to act as
trustee of any trust forming a part of the Pension Fund.
1.110 "Valuation Date" means, in connection with Article 23 (Provisions
Relating to Top-Heavy Plans), the most recent valuation date for
minimum funding purposes under the Plan that falls within or ends with
the 12 month period ending on the Determination Date.
1.111 "Vesting Requirement" means, with respect to each Participant, the
requirements for the vesting of his accrued benefits under the Plan.
1.112 "Work Schedule Recognition Pay" means, with respect to an Exempt
Employee, the compensation received as remuneration for services
performed for the relevant period for working a shift other than the
Employer's regular day shift pursuant to the Employer's applicable
policy.
1.113 "Year of Eligibility Service" means, with respect to an Intermittent
Employee or a Temporary Employee, a measuring year during which he
completes at least 1,000 Hours of Service. The first measuring year
begins on the later of the Employee's (a) Employment Commencement Date
(or, with respect to any periods after a Severance from Service, his
Reemployment Commencement Date) or (b) his 18th birthday, and
subsequent measuring years will be the Plan Year, beginning with the
first Plan Year that begins after the Employee's Employment
Commencement date (or, if applicable, Reemployment Commencement Date).
If an Intermittent Employee or a Temporary Employee has a Severance
from Service during a measuring year and has a subsequent Reemployment
Commencement Date during that measuring year, then: (a) for purposes of
determining whether the Employee accumulated a Year of Eligibility
Service during the measuring year, the total Hours of Service
accumulated by the Employee during that measuring year both before and
after the Severance from Service will be aggregated, and (b) for
purposes of determining whether the Employee accumulated a Year of
Eligibility Service during the measuring year commencing on his
Reemployment Commencement
31
Date, the total Hours of Service accumulated by the Employee during
that subsequent measuring year will be aggregated.
The uses of singular and masculine words are for practical purposes only and
will be deemed to include the plural and feminine, respectively, unless the
context plainly indicates a distinction. Certain other definitions, as required,
appear in the following Articles of the Plan.
ARTICLE 2
EFFECTIVE DATE OF PLAN
The original effective date of the MRP was January 1, 1990. The effective date
of this Plan restatement is January 1, 1998, as to Cinergy, and will be
effective with respect to any other Employer as of the date that Employer elects
to participate in the Plan pursuant to Section 21.1 (Adoption of Plan).
This Plan restatement applies only to Eligible Employees who are credited with
at least one Hour of Service on or after January 1, 1998. This Plan restatement
will not affect the rights of former Eligible Employees (and their
Beneficiaries) who retired, died, or otherwise terminated their employment with
an Employer prior to January 1, 1998. The rights, if any, of those former
Eligible Employees (and their Beneficiaries), and the amounts of their benefits,
if any, will be governed by the provisions of the PSI Plan, the RIP or the MRP,
whichever is applicable.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.1 DATE OF PARTICIPATION
Each Employee who is an Eligible Employee on January 1, 1998, and who
was participating as of December 31, 1997, in either the MRP, the RIP,
or the PSI Plan, will become a Participant as of January 1, 1998.
Except as provided in Section 3.2
32
(Intermittent Employees and Temporary Employees), each other Eligible
Employee will automatically become a Participant on the latest of
January 1, 1998, his Employment Commencement Date, or the date he
reaches age 18. An Eligible Employee who becomes a Participant,
subsequently incurs a Severance from Service, and is later reemployed
by an Employer will again become a Participant on his Reemployment
Commencement Date.
3.2 INTERMITTENT EMPLOYEES AND TEMPORARY EMPLOYEES
Notwithstanding the provisions in Section 3.1 (Date of Participation),
an Intermittent Employee or a Temporary Employee who was not
participating in either the MRP, the RIP, or the PSI Plan as of
December 31, 1997, will not become a Participant until he has completed
one Year of Eligibility Service. Upon completion of one Year of
Eligibility Service, an Intermittent or Temporary Employee will become
a Participant retroactive to the later of January 1, 1998, or his
Employment Commencement Date.
3.3 LEASED EMPLOYEES
A Leased Employee will be excluded from participation in the Plan.
However, if a Leased Employee is subsequently employed by an Employer
as an Eligible Employee, his time as a Leased Employee of an Employer
will be considered for purposes of determining eligibility under this
Article and vesting under Article 5 (Severance from Service --
Vesting).
3.4 TRANSFERS OF EMPLOYMENT
If a Participant is transferred from one Employer to another or from an
Employer to an Affiliate, he will continue to participate in the Plan
until an event occurs that would have terminated his participation had
he continued in the service of an Employer, except that payments
received by a Participant from any Affiliate that is not an Employer
will not be
33
treated as Earnings for purposes of determining the amount of
retirement benefits to which the Participant will be entitled. Any
period of employment with an Affiliate that is not an Employer will be
taken into account for purposes of determining when an Employee is
eligible to participate in the Plan pursuant to Section 3.2
(Intermittent Employees and Temporary Employees) and for purposes of
determining when a Participant has satisfied the Vesting Requirement.
If a Participant is transferred from an Employer to an Affiliate that
has not elected to participate in the Plan pursuant to Section 21.1
(Adoption of Plan), the Participant's accrued benefit under the Plan as
of the date of the transfer will be preserved. The Participant's
service after the transfer will not be considered in determining the
Participant's years of Participation, but will be considered in
determining the Participant's years of Service.
3.5 TRANSFERS OF PARTICIPANTS AND PLAN ASSETS TO AND FROM THE CINERGY CORP.
UNION EMPLOYEES' RETIREMENT INCOME PLAN AND CINERGY CORP. UNION
EMPLOYEES' PENSION PLAN.
(a) If a Participant in the Plan remains an Employee but becomes
ineligible to participate in the Plan, he will become a
participant in the Cinergy Corp. Union Employees' Retirement
Income Plan or the Cinergy Corp. Union Employees' Pension
Plan, if he is an "eligible employee" as defined in either of
those plans, as of the first day of the month during which his
change in Employee status become effective.
(b) If a participant in the Cinergy Corp. Union Employees'
Retirement Income Plan or the Cinergy Corp. Union Employees'
Pension Plan remains an Employee but becomes ineligible to
participate in his current plan, he will become a Participant
in the Plan, if he is an Eligible Employee, as of the first
day of the month during which his change in Employee status
becomes effective.
34
(c) A transfer of assets between the Plan and the Cinergy Corp.
Union Employees' Retirement Income Plan or the Cinergy Corp.
Union Employees' Pension Plan will follow the requirements of
Code subsection 414(1). The value of the benefits to be
transferred will be based upon the Plan's actuarial valuation
assumptions at the time of the transfer. The actual transfer
of assets will occur as soon as administratively practicable
after the change in the Participant's Employee status.
(d) A Participant who has earned years and/or partial years of
"participation" under the Cinergy Corp. Union Employees'
Retirement Income Plan or the Cinergy Corp. Union Employees'
Pension Plan, and who then becomes a Participant in this Plan,
will be credited under this Plan with his total years of
"participation" earned under the Cinergy Corp. Union
Employees' Retirement Income Plan or the Cinergy Corp. Union
Employees' Pension Plan as if they were earned under this
Plan. A Participant will not be credited with more years of
Participation than he would have earned if the total of all
his years of Participation under the Plan and all his years of
"participation" under the Cinergy Corp. Union Employees'
Retirement Income Plan and the Cinergy Corp. Union Employees'
Pension Plan had been earned solely as a Participant of this
Plan. The benefit paid to a Participant under this Plan will
never be less than the benefit the Participant earned in the
Cinergy Corp. Employees' Retirement Income Plan and/or the
Cinergy Corp. Union Employees' Pension Plan prior to his
change in Employee status.
35
ARTICLE 4
AMOUNT OF LIFE-ONLY PENSION
4.1 NORMAL RETIREMENT PENSION FORMULA
Except as otherwise expressly provided in this Article, a Participant
who retires on or after his Normal Retirement Date will be entitled to
a Nonforfeitable Annual Pension under this Plan equal to the sum of (a)
plus (b), where (a) is equal to:
(1) 1.1 percent of the Participant's Highest Average
Earnings plus
(2) 0.5 percent of the amount by which his Highest
Average Earnings exceed his applicable Covered
Compensation, multiplied by the number of his years
of Participation not in excess of 35;
and (b) is equal to 1.4 percent of the Participant's Highest Average Earnings,
multiplied by the number of his years of Participation in excess of 35.
4.2 NORMAL RETIREMENT BENEFITS FOR PARTICIPANTS IN THE PSI PLAN
The normal retirement Nonforfeitable Annual Pension of a Participant
who was a participant in the PSI Plan as of December 31, 1997, will be
the greater of (a) or (b), where (a) is the Participant's Annual
Pension calculated under Section 4.1 (Normal Retirement Pension
Formula) and (b) is the Participant's annual accrued benefit calculated
under the PSI Plan as of December 31, 1997. The formulas used to
calculate a Participant's annual accrued benefit under the PSI Plan as
in effect on December 31, 1997, are set forth in Addendum A to this
Plan.
36
4.3 NORMAL RETIREMENT BENEFITS FOR PARTICIPANTS IN THE MRP OR RIP
The normal retirement Nonforfeitable Annual Pension of a Participant
who was a participant in the MRP or RIP as of December 31, 1997, will
be the greater of (a) or (b), where (a) is the Participant's Annual
Pension calculated under Section 4.1 (Normal Retirement Pension
Formula) and (b) is the Participant's annual accrued benefit calculated
under the MRP or RIP as of December 31, 1997. The formulas used to
calculate a Participant's annual accrued benefit under the MRP or RIP
as in effect on December 31, 1997, are set forth in Addendum B to this
Plan.
4.4 GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR RETIREMENT AT EARLY
RETIREMENT DATE
(a) Subject to the following provisions of this Section, a
Participant who retires on an Early Retirement Date, will be
entitled to a Nonforfeitable Annual Pension computed under
Section 4.1 (Normal Retirement Pension Formula). The benefits
will begin on the Employee's Normal Retirement Date, or, if
the Employee so elects, at an earlier date on or after his
Early Retirement Date. If the Employee elects to have the
benefit begin before his 62nd birthday, the amount of the
Employee's Nonforfeitable Annual Pension will be multiplied by
the appropriate early payment factor as obtained from the
following table:
37
EARLY PAYMENT EARLY PAYMENT EARLY PAYMENT EARLY PAYMENT EARLY PAYMENT EARLY PAYMENT
PERIOD FACTOR PERIOD FACTOR PERIOD FACTOR
------------- ------------- ------------- ------------- ------------- -------------
YR. MO. YR. MO. YR. MO.
-- -- -- -- -- --
0 0 1.0000 4 0 0.7333 8 0 0.5667
0 1 0.9944 4 1 0.7278 8 1 0.5639
0 2 0.9889 4 2 0.7222 8 2 0.5611
0 3 0.9833 4 3 0.7167 8 3 0.5584
0 4 0.9778 4 4 0.7111 8 4 0.5556
0 5 0.9722 4 5 0.7056 8 5 0.5528
0 6 0.9667 4 6 0.7000 8 6 0.5500
0 7 0.9611 4 7 0.6944 8 7 0.5473
0 8 0.9556 4 8 0.6889 8 8 0.5445
0 9 0.9500 4 9 0.6833 8 9 0.5417
0 10 0.9444 4 10 0.6778 8 10 0.5389
0 11 0.9389 4 11 0.6722 8 11 0.5361
1 0 0.9333 5 0 0.6667 9 0 0.5334
1 1 0.9278 5 1 0.6639 9 1 0.5300
1 2 0.9222 5 2 0.6611 9 2 0.5265
1 3 0.9167 5 3 0.6584 9 3 0.5231
1 4 0.9111 5 4 0.6556 9 4 0.5196
1 5 0.9056 5 5 0.6528 9 5 0.5162
1 6 0.9000 5 6 0.6500 9 6 0.5127
1 7 0.8944 5 7 0.6473 9 7 0.5093
1 8 0.8889 5 8 0.6445 9 8 0.5059
1 9 0.8833 5 9 0.6417 9 9 0.5024
1 10 0.8778 5 10 0.6389 9 10 0.4990
1 11 0.8722 5 11 0.6361 9 11 0.4955
2 0 0.8667 6 0 0.6334 10 0 0.4921
2 1 0.8611 6 1 0.6306 10 1 0.4889
2 2 0.8556 6 2 0.6278 10 2 0.4858
2 3 0.8500 6 3 0.6250 10 3 0.4826
2 4 0.8444 6 4 0.6223 10 4 0.4795
2 5 0.8389 6 5 0.6195 10 5 0.4763
2 6 0.8333 6 6 0.6167 10 6 0.4732
2 7 0.8278 6 7 0.6139 10 7 0.4700
2 8 0.8222 6 8 0.6111 10 8 0.4668
2 9 0.8167 6 9 0.6084 10 9 0.4637
2 10 0.8111 6 10 0.6056 10 10 0.4605
2 11 0.8056 6 11 0.6028 10 11 0.4574
3 0 0.8000 7 0 0.6000 11 0 0.4542
3 1 0.7944 7 1 0.5973 11 1 0.4513
3 2 0.7889 7 2 0.5945 11 2 0.4485
3 3 0.7833 7 3 0.5917 11 3 0.4456
3 4 0.7778 7 4 0.5889 11 4 0.4427
3 5 0.7722 7 5 0.5861 11 5 0.4398
3 6 0.7667 7 6 0.5834 11 6 0.4370
3 7 0.7611 7 7 0.5806 11 7 0.4341
3 8 0.7556 7 8 0.5778 11 8 0.4312
3 9 0.7500 7 9 0.5750 11 9 0.4283
3 10 0.7444 7 10 0.5723 11 10 0.4255
3 11 0.7389 7 11 0.5695 11 11 0.4226
12 0 0.4197
38
In using the above table, the order of required steps is as
follows:
(1) determine the Participant's "early payment period,"
which is the number of whole calendar months by which
the actual commencement of his pension payments
precedes the first day of the calendar month
coincident with or following his 62nd birthday;
(2) use the early payment period as determined in Step
(1) to identify the applicable early payment factor;
and
(3) multiply the applicable early payment factor times
the amount of the Participant's Annual Pension
determined under Section 4.1 (Normal Retirement
Pension Formula).
(b) Notwithstanding any other provision of this Section except
Subsection (e), the early retirement Nonforfeitable Annual
Pension payable to a Participant who (1) was a participant in
the PSI Plan as of December 31, 1997, and (2) became a
participant in the PSI Plan prior to May 1, 1970, will be
computed under Section 4.2 (Normal Retirement Benefits for
Participants in the PSI Plan) and will be reduced by
multiplying the amount of the Participant's Nonforfeitable
Annual Pension by the early payment factor described in
Subsection (a); provided, however, that his early retirement
Nonforfeitable Annual Pension will not be less than the
product of:
(A) the amount computed under PSI Pension Formula 3 (as
described in Addendum A) as of the following date:
(i) December 31, 1989, with respect to an
Employee who is not a Highly Compensated
Participant; or
39
(ii) December 31, 1988, with respect to a Highly
Compensated Participant; and
(B) the early payment factor determined as described in
Subsection (a), except that the early payment period
will be the number of whole calendar months by which
the commencement of the Participant's pension
payments precedes the first day of the calendar month
coincident with or following his 60th birthday.
(c) Notwithstanding any other provision of this Section except
Subsection (e), the early retirement Nonforfeitable Annual
Pension payable to a Participant who (1) was a participant in
the PSI Plan as of December 31, 1997, and (2) became a
participant in the PSI Plan on or after May 1, 1970, will be
computed under Section 4.2 (Normal Retirement Benefits for
Participants in the PSI Plan) and will be reduced by
multiplying the amount of the Participant's Nonforfeitable
Annual Pension by the early payment factor described in
Subsection (a); provided, however, that his early retirement
Nonforfeitable Annual Pension will not be less than the
product of:
(A) the amount computed under PSI Pension Formula 2 (as
described in Addendum A) as of the following date:
(i) December 31, 1989, with respect to an
Employee who is not a Highly Compensated
Participant; or
(ii) December 31, 1988, with respect to a Highly
Compensated Participant; and
(B) the early payment factor determined as described in
Subsection (a).
40
(d) Notwithstanding any other provision of this Section except
Subsection (e), the early retirement Nonforfeitable Annual
Pension payable to a Participant who was a participant in the
MRP or the RIP as of December 31, 1997, will be the greater of
the amounts calculated under (a) and (b) of Section 4.3
(Normal Retirement Benefits for Participants in the MRP or
RIP), after those amounts are reduced as follows:
(1) The Participant's Nonforfeitable Annual Pension
calculated under Section 4.1(Normal Retirement
Pension Formula) will be reduced by multiplying the
amount of the Participant's Annual Pension by the
early payment factor described in Subsection (a).
(2) The Participant's annual accrued benefit calculated
under the MRP or the RIP as of December 31, 1997,
will be reduced by multiplying the Participant's
annual accrued benefit as of December 31, 1997, by
the product of (A) 5/12 of one percent and (B) the
number of whole calendar months by which the actual
commencement of the Participant's pension payments
precedes the first day of the calendar month
coincident with or following the Participant's 60th
birthday.
(e) If, as of his applicable Severance from Service Date, a
Participant has reached age 55, and the sum of his age (in
whole years) attained as of that date and the number of his
years of Service (in whole years) accumulated as of that date
equals or exceeds 85, he will receive a Nonforfeitable Annual
Pension computed under the appropriate early retirement Annual
Pension formula described in this Section, but the amount of
the Participant's pension will not be multiplied by the early
payment factor that otherwise would be applicable.
(f) A Participant who is eligible to terminate employment
voluntarily under the Redeployment Status Opportunity
provisions of the Severance Opportunity Plan
41
for Non-Union Employees of Cinergy Corp., as amended from
time to time, is eligible to receive a Nonforfeitable Annual
Pension computed under the appropriate early retirement Annual
Pension formula described in this Section, but the amount of
the Participant's pension will not be multiplied by the early
payment factor that otherwise would be applicable, provided
that: (1) as of his applicable Severance from Service Date,
the Participant has reached age 50, but not yet reached age
55, (2) he elects under Article 8 (Payment of Pension) to
defer receipt of his pension to at least age 55, and (3) the
sum of his age (in whole years) attained as of the date that
the receipt of the pension under the Plan begins pursuant to
Paragraph (2) and his years of Service (in whole years)
accumulated as of his Severance from Service Date equals or
exceeds 85.
4.5 GENERAL METHOD OF COMPUTING ANNUAL PENSION FOR A TERMINATED VESTED
PARTICIPANT
(a) Subject to the following provisions of this Section, the
amount of Nonforfeitable Annual Pension payable to a former
Participant who is described in Section 5.3 (Severance from
Service After Vesting), and whose Actual Separation Date
occurred on or before his Normal Retirement Date, will be
computed under Section 4.1 (Normal Retirement Pension
Formula). The benefits will begin on the Employee's Normal
Retirement Date or, if the Employee so elects, at an earlier
date on or after his Early Retirement Date. If the Employee
elects to have the benefits begin before his Normal Retirement
Date, the amount of the Employee's Nonforfeitable Annual
Pension will be reduced by five percent for each calendar year
(or .4166 percent for each calendar month) by which the
commencement of his pension payments precedes his Normal
Retirement Date.
(b) Notwithstanding any other provision of this Section, the
terminated vested Nonforfeitable Annual Pension payable to a
Participant who was a participant in the PSI Plan as of
December 31, 1997, will be the greater of the amounts
calculated under (a) and (b) of Section 4.2 (Normal Retirement
Benefits for
42
Participants in the PSI Plan), after those amounts are reduced
for early payment as follows:
(1) The Participant's Annual Pension calculated under
Section 4.1 (Normal Retirement Pension Formula) is
reduced as described in Subsection (a).
(2) If the Participant elects to have his benefit begin
before his Normal Retirement Date, the Participant's
annual accrued benefit under the PSI Plan as of
December 31, 1997, is reduced by multiplying that
annual accrued benefit by the appropriate early
payment factor as obtained from the table in
Subsection 4.4(a) (General Method of Computing Annual
Pension for Retirement at Early Retirement Date).
(c) Notwithstanding any other provisions of this Section, the
terminated vested Nonforfeitable Annual Pension payable to a
Participant who (1) was a participant in the PSI Plan as of
December 31, 1997, and (2) became a participant in the PSI
Plan prior to May 1, 1970, will not be less than the product
of:
(A) The amount computed under PSI Pension Formula 5 (as
set forth in Addendum A) as of the following date:
(i) December 31, 1989, with respect to an
Employee who is not a Highly Compensated
Participant; or
(ii) December 31, 1988, with respect to a Highly
Compensated Participant; and
(B) If the Participant elects to have his benefit begin
before his Normal Retirement Date, the early payment
factor as obtained from the table in Subsection
4.4(a) (General Method of Computing Annual Pension
for
43
Retirement at Early Retirement Date), except that
the early payment period will be the number of whole
calendar months by which the commencement of the
Participant's pension payments precedes the first day
of the calendar month coincident or following his
60th birthday.
(d) Notwithstanding any other provisions of this Section, the
terminated vested Nonforfeitable Annual Pension payable to a
Participant who (1) was a participant in the PSI Plan as of
December 31, 1997, and (2) became a participant in the PSI
Plan on or after May 1, 1970, will not be less than the
product of:
(A) The amount computed under PSI Pension Formula 6 (as
set forth in Addendum A) as of the following date:
(i) December 31, 1989, with respect to an
Employee who is not a Highly Compensated
Participant; or
(ii) December 31, 1988, with respect to a Highly
Compensated Participant; and
(B) If the Participant elects to have his benefit begin
before his Normal Retirement Date, the early payment
factor determined as obtained from the table in
Subsection 4.4(a) (General Method of Computing Annual
Pension for Retirement at Early Retirement Date).
(e) Notwithstanding any other provision of this Section, the
terminated vested Nonforfeitable Annual Pension payable to a
Participant who was a participant in the MRP or the RIP as of
December 31, 1997, will be the greater of the amounts
calculated under (a) or (b) of Section 4.3 (Normal Retirement
Benefits for Participants in the MRP or RIP), after each of
those amounts is reduced by five percent for each calendar
year (or .4166 percent for each calendar month) by
44
which the commencement of the Participant's pension payments
precedes his Normal Retirement Date.
4.6 MAXIMUM PENSION
(a) Each Participant whose Annual Pension as otherwise determined
pursuant to the provisions of this Article and as modified by
the applicable provisions of Section 7.1 (Normal Forms of
Pensions) exceeds $1,000 multiplied by the Employee's years of
Service with the Employer (not exceeding ten), or who has ever
participated in a Qualified Defined Contribution Plan, will in
no event be entitled to an Annual Pension that exceeds the
lesser of:
(1) $90,000 (as adjusted for increases in the limitation
pursuant to Code subsection 415(d)); or
(2) 100 percent of his highest average annual Section 415
Compensation from his Employer for any three
consecutive years of Service; provided, that if he
has fewer than three years of Service, then 100
percent of his highest average annual Section 415
Compensation from his Employer for his total years of
Service will be construed as the limiting amount.
However, if a Participant has fewer than ten years of Participation at
his Normal Retirement Date or Early Retirement Date, whichever is
applicable, then the dollar limitation of Paragraph (1) will be
multiplied by a fraction, the numerator of which is the number of the
Participant's years of Participation (including fractional years of
Participation) and the denominator of which is ten. However, the
maximum benefit will never be reduced to less than 1/10th of the
applicable limitation.
(b) If any benefit under the Plan begins before the Participant's
Social Security Retirement Age, but on or after the
Participant reaches age 62, the determination
45
as to whether the $90,000 limit set forth in Subsection (a)
has been satisfied will be made, in accordance with
regulations prescribed by the Secretary, by reducing the
limitation of Subsection (a). The reduction under the
preceding sentence will be made in the manner as the
Secretary may prescribe that is consistent with the reduction
for old-age insurance benefits commencing before the Social
Security Retirement Age under the Social Security Act. If any
benefit under the Plan begins before the Participant reaches
age 62, the determination as to whether the $90,000 limit
set forth in Subsection (a) has been satisfied will be made,
in accordance with regulations prescribed by the Secretary,
by reducing the limitation of Subsection (a) so that
the limitation (as reduced) equals an Annual Pension
(beginning when the retirement income benefit begins) that
is actuarially equivalent to the reduced $90,000 Annual
Pension beginning at age 62 as determined under this
Subsection.
(c) If any benefit under the Plan begins after the Participant's
Social Security Retirement Age, the determination as to
whether the $90,000 limitation set forth in Subsection (a) has
been satisfied will be made, in accordance with regulations
prescribed by the Secretary, by increasing, if necessary, the
limitation of Subsection (a) so that the limitation (as
increased) equals an Annual Pension (beginning when the
retirement income benefit begins) that is actuarially
equivalent to a $90,000 Annual Pension beginning at the Social
Security Retirement Age.
(d) In general, the maximum annual benefit means a benefit payable
annually in the form of a single life annuity (without
ancillary benefits). If a Participant's pension under the Plan
is payable in any form other than a single life annuity, the
determination as to whether the limitations of this Section
have been satisfied will be made by adjusting the benefit so
that it is the actuarial equivalent of a single life annuity.
For purposes of this Section, any ancillary benefit not
directly related to retirement income benefits, and that
portion of any joint and survivor annuity
46
that constitutes a Qualified Joint and Survivor Annuity under
Subsection 7.1(b) (Normal Forms of Pension), will not be
taken into account.
(e) For benefits commencing in Plan Years beginning on or after
January 1, 1995, and except as provided in this Plan, the
adjustments to the limitations under Subsections (b), (c), and
(d) will be calculated as described in this Subsection. For
purposes of adjusting the limit for an Annual Pension
commencing prior to age 62 under Subsection (b), the $90,000
limitation will be equal to the lesser of the equivalent
$90,000 limitation that is computed using the interest rate
and mortality table (or other tabular factor) specified in the
Plan for equivalence for early retirement benefits, and the
equivalent $90,000 limitation that is computed using a 5
percent interest rate assumption and the mortality table
prescribed from time to time by the Secretary for this
purpose. For purposes of adjusting any form of optional
benefit to a straight life annuity under Subsection (d), the
actuarially equivalent life annuity will be equal to the
greater of the annuity benefit that is computed using the
interest rate and mortality table (or other tabular factor)
specified in the Plan for adjusting benefits in the same form,
and the annuity benefit that is computed using a 5 percent
interest rate assumption and the mortality table prescribed
from time to time by the Secretary for this purpose. For
purposes of adjusting for any form of benefit subject to Code
paragraph 417(e)(3), an interest rate assumption equal to the
annual rate of interest on 30 year Treasury securities for
November of the preceding Plan Year, as specified by the
Commissioner of Internal Revenue, will be substituted for the
5 percent interest rate assumption set forth in the preceding
sentences. For purposes of adjusting the limit under
Subsection (c), the $90,000 limitation for an Annual Pension
beginning after Social Security Retirement Age will be the
lesser of the equivalent $90,000 limitation that is computed
using the interest rate and mortality table (or other tabular
factor) specified in the Plan for equivalence of delayed
retirement benefits, and the equivalent $90,000 limitation
that is computed using a 5 percent interest rate assumption
and the mortality table prescribed from time to time by
47
the Secretary for this purpose. Notwithstanding the preceding
provisions of this Subsection, this Subsection will not apply
to the accrued benefit of any Participant under the Plan as of
December 31, 1997, after applying Code section 415 as in
effect on December 7, 1994, for each possible Annuity Starting
Date and each optional form of benefit under the Plan.
(f) Notwithstanding the foregoing, the maximum annual benefit
payable under this Section will not be less than the actuarial
equivalent of the Participant's single life annuity, accrued
under the Plan, as of December 31, 1997, determined by using
the Plan's actuarial assumptions as in effect on December 31,
1997.
(g) If for any particular Plan Year, a Participant is also
participating in one or more Qualified Defined Contribution
Plans maintained by his Employer, then the sum of the
Participant's aggregate Defined Benefit Plan Fraction and the
Participant's aggregate Defined Contribution Plan Fraction
will not exceed 1.0. If the sum exceeds 1.0, then the Employer
will reduce the Participant's benefits in this Plan so that
the sum equals 1.0. The Participant's maximum Annual Pension
will be determined under the provisions of this Article
without regard to the $10,000 minimum amount referred to in
the first paragraph of this Section. This Subsection will be
repealed, effective January 1, 2000, for any Participant who
is credited with at least one Hour of Service on or after
January 1, 2000.
4.7 BENEFITS IF PLAN BECOMES A TOP-HEAVY PLAN
If the Plan becomes a Top-Heavy Plan, the minimum accrued benefit of
any Participant who was at no time a Key Employee will be equal to two
percent of the Participant's Final Average Earnings multiplied by the
number of Top-Heavy Plan Years in which he completed at least 1,000
Hours of Service, but not more than ten years.
48
If a non-Key Employee participates in the Plan and a Qualified Defined
Contribution Plan included in a Required Aggregation Group that is
Top-Heavy, the minimum benefits will be provided under this Plan.
No increase in addition to the minimum accrued benefit described above
will be made in the event the Plan becomes a Super Top-Heavy Plan.
ARTICLE 5
SEVERANCE FROM SERVICE-VESTING
5.1 VESTING REQUIREMENT
(a) A Participant will satisfy the Vesting Requirement under the
Plan upon his completion of five years of Service and then
will have a Nonforfeitable right to his accrued benefit under
the Plan. A Participant who is an Employee on his Normal
Retirement Date will be deemed to satisfy the Vesting
Requirement as of that date if he has not already satisfied
the Vesting Requirement under the Plan. Notwithstanding the
preceding provisions of this Subsection, the Nonforfeitable
percentage of each Participant's right to his accrued benefit
derived from Employer contributions, because of a change to
the vesting schedule, will be not less than the Participant's
vested percentage, computed under the Plan as of the date
immediately prior to the change, without regard to the change.
Moreover, each Participant whose Nonforfeitable percentage of
his accrued benefit derived from Employer contributions is
determined under an amended vesting schedule, and who has
completed at least three years of Service as of the date of
the amendment may elect, within a reasonable period after the
adoption of the amended vesting schedule, to have the
Nonforfeitable percentage of his accrued benefit derived from
Employer contributions determined without regard to the
amendment if his Nonforfeitable percentage under the Plan as
amended is, at any time, less than the percentage determined
without regard to the amendment.
49
(b) If the Plan becomes a Top-Heavy Plan, the above Vesting
Requirement will not apply. Instead, each Participant's
Accrued Benefit under the Plan will be partially or fully
vested in accordance with the following schedule:
YEARS OF SERVICE PERCENT VESTED
2 20%
3 40%
4 60%
5 or more 100%
In any Plan Year (other than a Top-Heavy Plan Year) that
succeeds one or more Top-Heavy Plan Years the following will
apply:
(1) a Participant with five or more years of Service as
of the beginning of the Plan Year will become 100
percent vested in all his accrued benefits;
(2) a Participant with at least two but less than five
years of Service as of the beginning of the Plan Year
will remain vested in his accrued benefit as of that
date in accordance with the Top-Heavy Vesting
schedule, but will vest in any forfeitable portion
and in any further accruals in accordance with
Subsection (a);
(3) any other Participant will, as of that date, again be
subject to the provisions of Subsection (a) with
respect to all of his accrued benefit.
5.2 SEVERANCE FROM SERVICE BEFORE VESTING
If a Participant incurs a Severance from Service before he has
satisfied the Vesting Requirement and is not reemployed by an Employer,
he will have no further interest in, or right to, any benefits under
the Plan, except as otherwise provided in Section 14.2 (Reemployment).
If upon a Severance from Service, a Participant is zero percent vested
50
in his benefits under the Plan, the vested portion of his Plan benefits
will be deemed distributed to him as of his Severance from Service
Date.
5.3 SEVERANCE FROM SERVICE AFTER VESTING
If a Participant incurs a Severance from Service before his 50th
birthday, but after satisfying the Vesting Requirement, he will be
entitled to receive a pension commencing on his 50th birthday, if he is
then living, or the Participant may elect to begin receiving his
benefit at any time on or after his Early Retirement Date. Subject to
the provisions of Section 4.6 (Maximum Pension) and Article 7 (Forms of
Pension), the amount of Nonforfeitable Annual Pension payable will be
determined pursuant to the provisions of Section 4.5 (General Method of
Computing Annual Pension for a Terminated Vested Participant).
ARTICLE 6
SPOUSE'S BENEFIT
6.1 DETERMINATION OF SPOUSE'S BENEFIT
Upon the death of either (a) an Active Participant who has satisfied
the Vesting Requirement (an "Eligible Active Participant"), or (b) a
former Participant who has satisfied the Vesting Requirement, whose
employment with his Employer terminated before the Participant reached
age 50, and whose pension under the Plan had not yet begun on the date
of his death (an "Eligible Former Participant"), the Participant's
Spouse on the date of his death, if living on the date of the first
installment payable, as set forth below, will be entitled to receive a
pension under the Plan as a Spouse's Benefit. The annual amount of the
Spouse's Benefit will be determined as follows:
(a) If, at the date of his death, the Participant was either an
Eligible Active Participant or an Eligible Former Participant
who had reached age 50, the Spouse's benefit
51
will equal 100 percent of the Annual Pension that the
Participant would have received, commencing on the first
day of the calendar month coincident with or following the
date of his death, if (1) he had retired as of the first day
of the calendar month coincident with or following his death,
thus establishing an Early Retirement Date, (2) the amount
of Annual Pension commencing on the Early Retirement Date
had been determined pursuant to the applicable provisions of
Section 4.4 (General Method of Computing Annual Pension
for Retirement at Early Retirement Date), and (3) his pension
had been payable under the single-life option applicable
to him pursuant to Subsection 7.1(a) (Normal Forms of
Pension). However, subject to Subsection (b), if the
Participant's Spouse is more than eight years younger
than the Participant, the Spouse will receive the actuarial
equivalent of the benefit payable to a Spouse exactly eight
years younger than the Participant, calculated by multiplying
the Annual Pension that the Participant would have received
times the appropriate early payment factor under Subsection
4.4(a) (General Method of Computing Annual Pension for
Retirement at Early Retirement Date) and then multiplying the
resulting product by the appropriate Spouse's benefit factor
as obtained from the following table:
52
PARTICIPANT'S AGE PARTICIPANT'S AGE AT DEATH
LESS SPOUSE'S AGE (IN YEARS) 50-59 60 OR OLDER
8 or less 1.00 1.00
9 .91 .90
10 .82 .81
11 .75 .72
12 .68 .65
13 .62 .59
14 .56 .54
15 .51 .49
16 .47 .44
17 .43 .40
18 .39 .36
19 .36 .33
20 .33 .30
21 .30 .28
22 .28 .26
23 .26 .24
24 .24 .22
25 .22 .20
(b) Notwithstanding Subsection (a), if a Participant who had
reached age 50 at the date of his death was a participant in
the MRP or the RIP as of December 31, 1997, the Spouse's
benefit attributable to the Participant's accrued benefit
under the MRP or the RIP as of December 31, 1997, will be
calculated by multiplying the Participant's annual accrued
benefit under the MRP or the RIP as of December 31, 1997, by
the early payment factor described under Paragraph 4.4(d)(2)
(General Method of Computing Annual Pension for Retirement at
Early Retirement Date), and then multiplying the resulting
product by the MRP/RIP Spousal and Contingent Annuitant
benefit factor as obtained from the table in Addendum C of the
Plan.
(c) If, at the date of his death, the Participant was either an
Eligible Active Participant or an Eligible Former Participant
who, in either case, had not reached age 50, the Spouse's
benefit will equal 100 percent of the Annual Pension that the
Participant would have received commencing on the first day of
the calendar month coincident with or following his 50th
birthday, if (1) his Severance from Service
53
Date, in the case of an Eligible Active Participant, had been
the date of his death, (2) the amount of Annual Pension
(including the appropriate early payment reduction factor) had
been determined pursuant to the applicable provisions of
Section 4.5 (General Method of Computing Annual Pension for
Terminated Vested Participant), (3) he had survived and
elected to begin receiving pension payments on the first day
of the calendar month coincident with or following his 50th
birthday, and (4) his pension had been payable under the 100
percent option applicable to him pursuant to Subsection 7.1(b)
(Normal Forms of Pension).
(d) Notwithstanding Subsection (c), if a Participant who had not
attained age 50 at the date of his death was a participant in
the MRP or the RIP as of December 31, 1997, the Spouse's
benefit attributable to the Participant's accrued benefit
under the MRP or the RIP as of December 31, 1997, will be
calculated by multiplying the Participant's annual accrued
benefit under the MRP or the RIP as of December 31, 1997, by
the early payment factor described under Subsection 4.5(e)
(General Method of Computing Annual Pension for Terminated
Vested Participant) and then multiplying the resulting product
by the MRP/RIP Spousal and Contingent Annuitant benefit factor
as obtained from the table in Addendum C of the Plan.
6.2 METHOD OF PAYMENT OF SPOUSE'S BENEFIT
A Spouse's benefit will be payable in equal monthly installments, each
equal to 1/12th of the Annual Pension as determined pursuant to this
Article. If at the date of his death the Eligible Active Participant or
Eligible Former Participant had reached age 50, the first monthly
installment of the Spouse's benefit will be payable to the
Participant's Spouse on the first day of the calendar month coincident
with or following the date of the Participant's death, if his Spouse is
then living, unless the Spouse elects to defer payment until the date
the Participant would have reached age 62. If at the date of his death
the Participant had not reached age 50, the first monthly installment
will be payable to the
54
Participant's Spouse on the first day of the calendar month coincident
with or following the date the Participant would have reached age 50,
had he survived until that date, if his Spouse is then living, unless
the Spouse elects to defer payment until the date the Participant
would have reached age 65. In either event, subsequent monthly
installments will be payable on the first day of each month and will
cease upon the payment of the installment due on the first day of the
calendar month in which the Spouse dies.
ARTICLE 7
FORMS OF PENSION
7.1 NORMAL FORMS OF PENSION
(a) UNMARRIED PARTICIPANTS
The normal form of pension payable under the Plan to a
Participant who is not married on his Annuity Starting Date
and who does not otherwise elect an optional form of pension
under Section 7.2 (Optional Forms of Retirement Income), will
be a single-life income payable in equal monthly installments
throughout the Participant's lifetime, ceasing with the
installment due on the first day of the calendar month in
which his death occurs. Each monthly installment will equal
1/12th of the Annual Pension as determined pursuant to Article
4 (Amount of Life-Only Pension), or Article 5 (Severance from
Service-Vesting), whichever is applicable to the Participant.
(b) MARRIED PARTICIPANTS
The normal form of pension payable under the Plan to a
Participant who is married on his Annuity Starting Date and
who does not otherwise elect an optional form of pension under
Section 7.2 (Optional Forms of Retirement
55
Income) is a "Qualified Joint and Survivor Annuity," which
will be paid as follows:
(1) To the Participant:
A reduced pension based on the 100 percent option in
equal monthly installments payable on his Annuity
Starting Date and on the first day of each calendar
month thereafter. The reduced amount payable to the
Participant will be the Actuarial Equivalent of the
amount that would otherwise be paid to the
Participant if he were unmarried. Payments will cease
with the installment due on the first day of the
calendar month in which the Participant dies.
If a Participant has an annual accrued benefit under
the MRP or the RIP as of December 31, 1997, the
reduced pension payable to him will not be less than
the Participant's annual accrued benefit under the
MRP or the RIP as of December 31, 1997, multiplied by
the applicable MRP/RIP Spousal and Contingent
Annuitant benefit factor from the table in Addendum C
to the Plan.
(2) To his Spouse:
A pension payable in equal monthly installments, each
monthly installment being equal to 100 percent of the
monthly installment paid to the Participant. The
first installment will be payable on the first day of
the calendar month following the Participant's death,
if the Spouse is then living; subsequent installments
are payable on the first day of each calendar month,
ceasing with the installment due on the first day of
the calendar month in which the Spouse dies. If the
Participant's Spouse predeceases the Participant
after reduced pension payments under this
56
Subsection have begun, payments will be made to the
Participant after the Spouse's death in the form of
an unreduced single life annuity pursuant to
Subsection (a) as of the first day of the month after
the Participant notifies the Committee of the
Spouse's death.
If a Participant who is entitled to benefits under
the provisions of Section 4.4 (General Method of
Computing Annual Pension for Retirement at Early
Retirement Date) dies after his Actual Separation
Date, but prior to the commencement of pension
payments, and if the Participant's Actual Separation
Date is on or after his 50th birthday, under the
normal form of pension applicable to him, his Spouse
will be entitled to receive, commencing on the first
day of the calendar month following the Participant's
death, if the Spouse is then living, a monthly
pension, with each monthly installment equal to the
amount that would have been payable to the Spouse
following the Participant's death pursuant to his
election, or if no election is made, then pursuant to
the provisions of this Paragraph (b)(2), if the
Participant had begun receiving pension benefits on
the first day of the calendar month in which the
Participant died.
7.2 OPTIONAL FORMS OF RETIREMENT INCOME
Subject to the following conditions, a Participant, by making a request
to the Committee or its designee within the election period specified
in this Section, may elect to receive, in lieu of the normal form of
pension applicable to him under Section 7.1 (Normal Forms of Pension),
one of the optional forms of pension specified under this Section (the
"Contingent Pension Option"). Each election must be made by the
Participant in a manner prescribed by the Committee or its designee.
The election of the Contingent Pension Option will take effect at a
specified date, referred to as the "Option Effective Date." The amount
of pension payable under any optional form will be the Actuarial
57
Equivalent of the pension to which the Participant would otherwise be
entitled under the Plan.
At least 30 days but no more than 90 days before a Participant's
Annuity Starting Date, the Committee or its designee will provide the
Participant whose normal form of pension applicable to him is described
in Subsection 7.1(a) (Normal Forms of Pension) with a written
explanation of (a) the terms and conditions of the normal form of
pension benefits applicable to him under Subsection 7.1(a) (Normal
Forms of Pension); (b) the Participant's ability to elect to receive,
in lieu of the normal form of pension applicable to him under
Subsection 7.1(a) (Normal Forms of Pension), an optional form of
pension under this Section; (c) the relative financial effect of the
election on his pension benefits; (d) the availability of additional
information describing the particular financial effect of the election
upon his pension benefit; and (e) the procedures the Participants must
follow to obtain the additional information.
The Committee or its designee will provide each Participant whose
normal form of pension is a Qualified Joint and Survivor Annuity, at
least 30 days but no more than 90 days before the Participant's Annuity
Starting Date, a written explanation of (a) the terms and conditions of
the Qualified Joint and Survivor Annuity, (b) the Participant's right
to make and the effect of an election to waive a Qualified Joint and
Survivor Annuity, (c) the rights of a Participant's Spouse with respect
to the selection of benefit forms, and (d) the right to make and the
effect of a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity. A Participant may elect to waive any
requirement that the Applicable Election Period extend at least 30 days
after the Committee provides the Participant with the written
explanations described in this Section, if the distribution begins more
than seven days after the applicable written explanation is provided.
If the Participant is married, the Participant's Spouse must consent to
the waiver in writing before a notary public or a Plan representative.
58
To be effective, an election to waive the Qualified Joint and Survivor
Annuity must be made in writing during the 90 day period ending on the
Annuity Starting Date and, if the Participant is married, it must be
consented to by the Participant's Spouse. The election must designate a
Beneficiary (or a form of benefits) that may not be changed (except
back to a Qualified Joint and Survivor Annuity) without the Spouse's
consent, unless the Spouse's original consent expressly permits
designations by the Participant without any requirements of further
consent by the Spouse. The Spouse's consent must be given in writing
during the 90 day period ending on the Annuity Starting Date, must
acknowledge the effect of the election and the consent, and must be
witnessed by a Plan representative or notary public. If the Participant
establishes to the satisfaction of a Plan representative that the
Spouse's written consent cannot be obtained because there is no Spouse
or the Spouse cannot be located, the Spouse's consent will be deemed to
have been given. If a Participant is legally separated from his Spouse
or has been abandoned by his Spouse (within the meaning of local law)
and the Participant has a court order to such effect, the Spouse's
consent will not be required unless a Qualified Domestic Relations
Order provides otherwise. Any Spousal consent will be valid only with
respect to the Spouse who signs the consent, or in the event of a
deemed consent, the designated Spouse. If a Participant's Spouse is
legally incompetent to give consent, the Spouse's legal guardian (even
if the guardian is the Participant) may give consent. A Participant may
revoke a prior effective election at any time prior to the receipt of
benefits.
(a) SINGLE-LIFE OPTION
A married Participant whose normal form of pension is a
Qualified Joint and Survivor Annuity may elect, in lieu of all
payments otherwise payable, a single-life pension that
provides payments to the Participant in equal monthly
installments throughout his lifetime, ceasing with the
installment due on the first day of the calendar month in
which the Participant dies. Each monthly installment will be
equal to 1/12th of the Annual Pension as determined pursuant
59
to Article 4 (Amount of Life-Only Pension), Article 5
(Severance from Service-Vesting) or Article 6 (Spouse's
Benefit), whichever is applicable.
(b) CONTINGENT PENSION OPTION
A Participant may elect, in lieu of all payments otherwise
payable on and after the Option Effective Date, the Contingent
Pension Option providing payments as follows:
(1) To the Participant:
A reduced pension beginning on the Option Effective
Date, with subsequent monthly payments payable on the
first day of each subsequent calendar month
throughout his remaining lifetime, terminating with
the payment due on the first day of the calendar
month in which he dies. The reduced amount payable to
the Participant will be determined in accordance with
the Participant's choice of the 100 percent, 66 2/3
percent, or 50 percent option and will be the
Actuarial Equivalent of the amount that would
otherwise be paid to the Participant under the
single-life annuity option applicable to him pursuant
to Subsection 7.2(a) (Optional Forms of Retirement
Income). An option cannot be elected, modified, or
rescinded after the Option Effective Date.
If a Participant has an annual accrued benefit under
the MRP or the RIP as of December 31, 1997, the
reduced pension payable to him will not be less than
the Participant's annual accrued benefit under the
MRP or the RIP as of December 31, 1997, multiplied by
(A) for the 100 percent option, the applicable
MRP/RIP Spousal and Contingent Annuitant Benefit
factor from the table in Addendum C to the Plan, or
(B) for the 50 percent
60
option, the applicable 50 percent Contingent
Annuitant Benefit factor from the table in
Addendum D to the Plan.
(2) To the Contingent Annuitant designated by the
Participant at the time he elects this option:
A contingent pension beginning on the first day of
the calendar month following the calendar month in
which the Participant's death occurs if the
Participant dies on or after the Option Effective
Date, and if the Contingent Annuitant is then living,
with subsequent monthly payments payable on the first
day of each subsequent calendar month throughout the
Contingent Annuitant's remaining lifetime,
terminating with the monthly payment due on the first
day of the calendar month in which the Contingent
Annuitant dies. However, if the Participant had
elected to defer his pension payments, the Contingent
Annuitant may elect, at any time prior to the date
contingent pension payments actually begin, to have
the payments begin after the Participant's death on
the first day of any calendar month coincident with
or prior to the date the Participant had elected to
start receiving his pension payments.
The monthly amount payable to the Contingent
Annuitant will be a specified percentage of the
reduced pension payable under this option to the
Participant, as specified by the Participant. This
percentage will be either 100 percent, 66 2/3
percent, or 50 percent. Notwithstanding the
foregoing, if the Contingent Annuitant is other than
the Participant's Spouse, the Contingent Pension
Option may be elected only if the requirements of 26
C.F.R. Section 1.401(a)(9)-2 are satisfied.
An option will not become effective, and payments will be made
as otherwise provided in the Plan as if this option had never
been elected, if: (a) the Participant
61
is not living on the Option Effective Date, (b) the
Participant does not, within 90 days after his election, and
not later than the Option Effective Date, furnish evidence,
satisfactory to the Committee, of the age of his Contingent
Annuitant, or (c) the Participant elects, prior to the Option
Effective Date, to cancel the option. If the Participant's
Contingent Annuitant predeceases the Participant after the
contingent pension payments have begun, the option will be
canceled and no longer effective, and payments will be made
to the Participant in the form of an unreduced single-life
annuity applicable to him pursuant to Subsection 7.2(a)
(Optional Forms of Retirement Income) as of the first day
of the month after the Participant notifies the Committee
of the Contingent Annuitant's death.
(c) LIFE WITH TEN YEAR CERTAIN OPTION
A Participant may, in lieu of all payments otherwise payable
on and after the Option Effective Date, elect the Life with
Ten Year Certain Option providing payments as follows:
(1) To the Participant:
A reduced pension beginning on the Option Effective
Date with subsequent monthly payments payable on the
first day of each calendar month thereafter for ten
years or throughout his remaining lifetime, whichever
is longer, terminating with the payment due on the
first day of the calendar month after the end of ten
years or in which the Participant dies, whichever is
applicable.
If the Participant elects the Life with Ten Year
Certain Option, the amount of the Participant's
Nonforfeitable annual pension will be determined by
multiplying his Annual Pension by the appropriate
Life with Ten Year Certain Factor as obtained from
the following table:
62
LIFE WITH TEN YEAR CERTAIN FACTORS
----------------------------------
AGE FACTOR AGE FACTOR
--- ------ --- ------
50 .9869 70 .9065
51 .9855 71 .8977
52 .9839 72 .8883
53 .9823 73 .8780
54 .9803 74 .8670
55 .9783 75 .8553
56 .9760 76 .8429
57 .9734 77 .8299
58 .9706 78 .8163
59 .9674 79 .8021
60 .9639 80 .7875
61 .9601 81 .7723
62 .9558 82 .7569
63 .9511 83 .7413
64 .9461 84 .7253
65 .9407 85 .7090
66 .9347 86 .6925
67 .9285 87 .6758
68 .9217 88 .6591
69 .9145 89 .6424
90 .6259
(2) To the Beneficiary designated by the Participant at
the time he elects this option:
If the Participant dies prior to the end of ten years
from the date of his initial pension payment, a
contingent pension payable on the first day of the
calendar month following the calendar month in which
the Participant dies if the Participant's death is on
or after the Option Effective Date and if the
Beneficiary is then living, with subsequent monthly
payments being payable on the first day of each
calendar month for the balance of ten years from the
date of the Participant's Option Effective Date.
63
(d) LIFE ANNUITY LEVEL INCOME OPTION
A Participant who retires prior to reaching age 62 may elect,
in lieu of all payments otherwise payable on and after the
Option Effective Date, the Life Annuity Level Income Option,
which provides payments to the Participant that are adjusted
for the months before and after the Participant is eligible to
receive benefits under the Social Security Act at age 62.
The Participant will receive a reduced pension on the Option
Effective Date, with subsequent monthly payments payable on
the first day of each calendar month thereafter for his
remaining lifetime, terminating with the payment due on the
first day of the calendar month in which his death occurs. The
reduced pension the Participant receives will be calculated as
follows:
(1) Subject to Paragraph (5), the Participant's Annual
Pension will be determined under Article 4 (Amount of
Life-Only Pension), Article 5 (Severance From
Service-Vesting), or Article 6 (Spouse's Benefit),
whichever is applicable.
(2) Subject to Paragraph (5), the Participant's Reduced
Primary Social Security Benefit will be multiplied by
the appropriate Level Income Option factor from the
table in Addendum E to the Plan.
(3) The sum of the amounts determined under Paragraphs
(1) and (2) will equal the Level Income Option
benefit payable to the Participant prior to age 62,
which is the first date he is eligible to begin
receiving Social Security Act benefits.
64
(4) The Level Income Option benefit payable to the
Participant after he reaches age 62 will equal the
amount determined in Paragraph (3), minus the
Participant's Reduced Primary Social Security
Benefit.
(5) If a Participant has an annual accrued benefit under
the MRP or the RIP as of December 31, 1997, the Level
Income Option benefit payable to that Participant
will not be less than the sum of (A) and (B), where
(A) equals the Participant's annual accrued benefit
under the MRP or the RIP as of December 31, 1997, and
(B) equals the Participant's Reduced Primary Social
Security Benefit multiplied by the appropriate
MRP/RIP Level Income Option factor from the table in
Addendum F to the Plan.
(e) 100 PERCENT CONTINGENT ANNUITANT LEVEL INCOME OPTION
A Participant who retires prior to reaching age 62 may, in
lieu of all payments otherwise payable on after the Option
Effective Date, elect the 100 Percent Contingent Annuitant
Level Income Option, which provides payments as follows:
(1) To the Participant:
A reduced pension that is adjusted for the months
before and after the Participant is eligible to
receive benefits under the Social Security Act at age
62. The Participant will receive a reduced pension on
the Option Effective Date, with subsequent monthly
payments payable on the first day of the calendar
month thereafter for his remaining lifetime,
terminating with the payment due on the first day of
the calendar month in which the Participant dies.
The reduced pension the Participant receives under
this option will be calculated as follows:
65
(A) Subject to Subparagraph (F), the
Participant's Annual Pension will be
determined under Article 4 (Amount of
Life-Only Pension), Article 5 (Severance
From Service-Vesting), or Article 6
(Spouse's Benefit), whichever is applicable.
(B) The Participant's Annual Pension will be
converted to a reduced pension based on the
100 percent Contingent Pension Option under
Subsection 7.2(b) (Optional
Forms of Retirement Income).
(C) Subject to Subparagraph (F), the
Participant's Reduced Primary Social
Security Benefit will be multiplied by the
appropriate Level Income Option factor from
the table in Addendum E to the Plan.
(D) The sum of the amounts determined under
Subparagraphs (B) and (C) will equal the
Level Income Option benefit payable to the
Participant prior to age 62, which is the
first date he is eligible to begin receiving
Social Security Act benefits.
(E) The Level Income Option benefit payable to
the Participant after he attains age 62 will
equal the amount determined in Subparagraph
(D), minus the Participant's Reduced Primary
Social Security Benefit.
(F) If a Participant has an annual accrued
benefit under the MRP or the RIP as of
December 31, 1997, the Level Income Option
benefit payable to that Participant will not
be less than the sum of (i) and (ii), where
(i) equals the Participant's annual accrued
benefit under the MRP or RIP as of December
31, 1997, converted to a reduced pension
based on the 100 percent Contingent
Annuitant Pension Option under Subsection
7.2(b) (Optional Forms of Retirement
66
Income), and (ii) equals the Participant's
Reduced Primary Social Security Benefit
multiplied by the appropriate MRP/RIP Level
Income Option factor from the table in
Addendum F to the Plan.
(2) To the Contingent Annuitant:
A contingent pension beginning on the first day of
the calendar month following the calendar month in
which the Participant dies if the Participant dies on
or after the Option Effective Date, and if the
Contingent Annuitant is then living; with subsequent
monthly payments payable on the first day of each
subsequent calendar month throughout the Contingent
Annuitant's remaining lifetime, terminating with the
monthly payment due on the first day of the calendar
month in which the Contingent Annuitant dies.
However, if the Participant had elected to defer his
pension payments, the Contingent Annuitant may elect
at any time prior to the date contingent pension
payments actually begin, to have the payments begin
after the Participant's death on the first day of any
calendar month coincident with or prior to the date
the Participant had elected to start receiving
payments.
The monthly amount payable to the Contingent
Annuitant will equal 100 percent of the reduced
pension that would have been payable under this
option to the Participant.
An option will not become effective, and payments will be made
as otherwise provided in the Plan as if this option had never
been elected, if: (a) the Participant is not living on the
Option Effective Date, (b) the Participant does not, within 90
days after his election, but not later than the Option
Effective Date, furnish evidence, satisfactory to the
Committee, of the age of his Contingent Annuitant, or (c) the
Participant elects, prior to the Option Effective Date, to
cancel the option.
67
If the Participant's Contingent Annuitant predeceases the
Participant after the contingent pension payments have begun,
the option will be canceled and no longer effective, and
payments will be made to the Participant in the form of a
reduced single-life annuity level income option applicable to
him pursuant to Subsection 7.2(d) (Optional Forms of
Retirement Income) as of the first day of the month
after the Participant notifies the Committee of the Contingent
Annuitant's death. An option cannot be elected, modified, or
rescinded after the Option Effective Date.
ARTICLE 8
PAYMENT OF PENSION
8.1 TIMING OF PAYMENT
This Section is subject to the provisions of Section 8.6 (Required
Payment of Benefits).
A Participant who ceases to be an Employee as of his Normal Retirement
Date will begin receiving any pension payable to him under the Plan as
of his Normal Retirement Date. A Participant who continues as an
Employee after his Normal Retirement Date will begin receiving the
pension payable to him under the Plan as of the first day of the
calendar month coincident with or following his Severance from Service.
A Participant who ceases to be an Employee as of an Early Retirement
Date will begin receiving his pension at his Normal Retirement Date
unless he elects to begin receiving his pension on either his Early
Retirement Date or the first day of a calendar month between his Early
Retirement Date and his Normal Retirement Date (the "Deferred Pension
Payment Date"); provided he has made the required election, in a manner
prescribed by the Committee, prior to the date he wants his pension to
begin.
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8.2 METHOD OF PAYMENT
Unless specified elsewhere in the Plan, all pension payments under the
Plan will normally be payable in equal monthly installments, with each
monthly installment equal to 1/12th of the annual amount payable.
Pension payments will be (a) made by check to the order of the
Participant, his Spouse, or his Contingent Annuitant, as applicable,
and mailed to that person's address as it appears on the Employer's
records, or (b) deposited directly into an account of the Participant,
his Spouse, or his Contingent Annuitant, as applicable, maintained by
the recipient at a bank, savings and loan, or other financial
institution, as directed by the recipient.
8.3 SMALL BENEFITS
Notwithstanding the provisions of Sections 6.2 (Method of Payment of
Spouse's Benefit) and 7.2 (Optional Forms of Retirement Income), where
the Actuarial Equivalent present value of a Participant's
Nonforfeitable pension or Spouse's benefit under Section 6.1
(Determination of Spouse's Benefit) does not exceed $5,000, the
Committee or its designee will pay the Nonforfeitable pension or
Spouse's benefit (if applicable) in a single-sum cash payment equal to
the Actuarial Equivalent of the pension or Spouse's benefit otherwise
payable.
8.4 FACILITY OF PAYMENT
If any benefit under the Plan is payable to a person whom the Committee
knows is a minor or otherwise under legal incapacity, the Committee or
its designee may have the payment made to the legal guardian of that
person or to the person or organization as a court of competent
jurisdiction may direct. To the extent permitted by law, any payment
under this Section will be a complete discharge of any liability under
the Plan to that person.
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8.5 BENEFITS FOR LATE RETIREES, REEMPLOYED RETIREES AND REEMPLOYED
TERMINATED VESTED PARTICIPANTS
(a) LATE RETIREES
A Participant may postpone his retirement and continue his
employment with an Employer after his Normal Retirement Date.
If a Participant continues employment after his Normal
Retirement Date, he will continue to accrue years of Service
and years of Participation during this time period up to the
date of his actual retirement. The Participant's benefit will
be calculated under Article 4 (Amount of Life-Only Pension),
Article 5 (Severance From Service-Vesting), or Article 6
(Spouse's Benefit), whichever is applicable, as of his
Severance from Service Date.
(b) SUSPENSION OF RETIREMENT BENEFIT NOTICE FOR PARTICIPANT WHO
CONTINUES EMPLOYMENT AFTER HIS NORMAL RETIREMENT DATE
When a Participant continues in employment with an Employer
beyond his Normal Retirement Date, benefits will not begin
during that continued period of employment unless required
under Section 8.6 (Required Payment of Benefits). The
Participant will be sent a notification described in Section.
2530.203-3(b)(4) of the Department of Labor regulations,
provided that the suspension of benefits notice is limited to
periods of service within the context of Section.
2530.203-3(c) of the Department of Labor regulations.
(c) REEMPLOYED RETIREES AND REEMPLOYED VESTED TERMINATED
PARTICIPANTS
A Reemployed Retiree or Reemployed Vested Terminated
Participant who resumes employment will continue to receive
any pension benefit payments under the Plan to which he is
entitled, and will begin to receive any pension benefit
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payments under the Plan, as if he were not reemployed. When
a Reemployed Retiree or Reemployed Terminated Vested
Participant again incurs a Severance from Service, his
Annual Pension will, subject to all of the provisions of the
Plan, be recalculated by aggregating his years of
Participation and by considering his Earnings during his
period of reemployment; provided, however, that the
Participant's benefits as recalculated will not be less than
the Actuarial Equivalent of his Annual Pension prior to his
reemployment. The Participant's recalculated Annual Pension
will be reduced by the Actuarial Equivalent of the pension
benefits already paid to the Participant. Any pension benefit
payable to a Spouse or Contingent Annuitant will also be based
on the Participant's pension benefit, as so recalculated and
reduced.
(d) QUESTIONS CONCERNING EFFECT ON REEMPLOYMENT
The Plan's benefit claims procedures may be used by an
individual who has questions concerning the effect of
reemployment by his Employer upon his pension benefit
payments.
(e) ADDITIONAL RULES AND PROCEDURES
The Committee is authorized to develop more fully the
provisions of this Section by establishing, from time to time,
various rules and procedures consistent with ERISA, the Code,
and the Plan.
8.6 REQUIRED PAYMENT OF BENEFITS
This Section has been included in the Plan to comply with the
limitations imposed by Code paragraphs 401(a)(9) and 401(a)(14), and it
will not be construed as providing for a form of benefit not otherwise
provided under the Plan. Notwithstanding any provision of this Plan to
the contrary, any distribution under the Plan will be made in
accordance with
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regulations under Code paragraph 401(a)(9), including proposed federal
income tax regulation 1.401(a)(9)-2, and will comply with the following
rules:
(a) Unless a Participant elects otherwise, the payment of his
benefits under the Plan must begin not later than the 60th day
after the end of the Plan Year in which occurs the latest of:
(1) the Participant's 65th birthday; (2) the 10th anniversary
of the Plan Year in which the Participant began participation
in the Plan; or (3) termination of the Participant's
employment with the Employer.
(b) For purposes of this Article, "required beginning date" means
(1) with respect to a Participant who is not a 5 percent owner
as described in Code section 416 and who did not reach age
70 1/2 before January 1, 1997, April 1 of the calendar year
following the later of (A) the calendar year in which the
Participant reaches age 70 1/2, or (B) the calendar year in
which the Participant retires; or (2) with respect to a
Participant who is a 5 percent owner as described in Code
section 416, or any Participant who reached age 70 1/2 before
January 1, 1997, April 1 of the calendar year following the
calendar year in which the Participant reaches age 70 1/2. The
Plan will provide an actuarial increase to a Participant's
interest in the Plan for the period beginning on the April 1
of the calendar year following the calendar year in which the
Participant reaches age 70 1/2 and ending on the date on which
benefits begin after the Participant's retirement in an amount
sufficient to satisfy Code paragraph 401(a)(9). The benefits
payable to the Participant at the end of the period described
in the preceding sentence will be no less than the Actuarial
Equivalent of the benefit that would have been payable to the
Participant as of the April 1 of the calendar year following
the calendar year in which the Participant reached 70 1/2.
(c) Notwithstanding any other provision of this Plan, the entire
interest of each Participant will be distributed either: (1)
in a lump sum payment not later than the required beginning
date, or (2) in a series of payments beginning not later than
the
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required beginning date over the life of the Participant
or over the lives of the Participant and the designated
Beneficiary (or over a period not extending beyond the life
expectancy of the Participant or the life expectancy of the
Participant and a designated Beneficiary). If the
Participant's interest is to be paid in the form of annuity
distributions under the Plan, payments under the annuity will
satisfy the following requirements:
(1) The annuity distributions must be paid in periodic
payments made at intervals not longer than one year.
(2) For purposes of computing the distribution period,
life expectancies or joint and last survivor
expectancies will not be recalculated.
(3) Once payments have begun, the distribution period may
not be lengthened even if that period would be
shorter than the permitted maximum period.
(4) Payments must either be non-increasing or increase
only as follows:
(A) with any percentage increase in a specified
and generally recognized cost-of-living
index;
(B) to the extent of the reduction to the amount
of the Participant's payments to provide for
a survivor benefit upon death, but only if
the Beneficiary or Contingent Annuitant
whose life was being used to determine the
distribution period dies and the payments
continue otherwise over the life of the
Participant;
(C) to provide cash refunds of employee
contributions upon the Participant's death;
or
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(D) because of an increase in benefits under the
Plan.
(5) If the annuity is a life annuity (or a life annuity
with a period certain not exceeding 20 years), the
amount that must be distributed on or before the
Participant's required beginning date (or, in the
case of distributions after the death of the
Participant, the date distributions are required to
begin after the Participant's death) will be the
payment that is required for one payment interval.
The second payment need not be made until the end of
the next payment interval even if that payment
interval ends in the next calendar year. Payment
intervals are the periods for which payments are
received, e.g., bi-monthly, monthly, semi-annually or
annually. If the annuity is a period certain annuity
without a life contingency (or is a life annuity with
a period exceeding 20 years), periodic payments for
each distribution calendar year will be combined and
treated as an annual amount. The amount that must be
distributed by the Participant's required beginning
date (or, in the case of distributions after the
death of the Participant, the date distributions are
required to begin after the Participant's death) is
the annual amount for the first distribution calendar
year. The annual amount for other distribution
calendar years, including the annual amount for the
calendar year in which the Participant's required
beginning date (or the date distributions are
required to begin after the Participant's death)
occurs, must be distributed on or before December 31
of the calendar year for which the distribution is
required.
(d) If (1) the distribution of a Participant's interest has begun
in accordance with Subsection (c), and (2) the Participant
dies before his entire interest has been distributed to him,
the remaining portion of his interest will be distributed at
least as rapidly as under the method of distribution being
used under Subsection (c) as of the date of his death.
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(e) Except as provided in Subsection (f), if a Participant dies
before the distribution of his interest has begun in
accordance with Subsection (c), the Participant's entire
interest will be distributed within five years after his
death.
(f) For purposes of Subsection (c), any portion of a distribution
that is payable to (or for the benefit of) a designated
Beneficiary will be treated as completely distributed on the
date on which distribution began if:
(1) that portion is to be distributed (in accordance with
regulations prescribed by the Secretary) over the
life of the designated Beneficiary (or over a period
not extending beyond the life expectancy of the
Beneficiary), and
(2) distributions begin by the latest of (A) one year
after the date of the Participant's death, (B) any
later date that the Secretary may establish by
regulations, or (C) if the Beneficiary is the
Participant's surviving Spouse, the date on which the
Participant would have attained age 70-1/2.
(g) If the designated Beneficiary is the Participant's surviving
Spouse, and if the surviving Spouse dies before the
distributions to the Spouse begin, Subsections (c), (e), and
(f) will be applied as if the surviving Spouse were the
Participant.
(h) For purposes of Subsection (f), payment will be calculated by
use of the expected return multiples specified in Tables V and
VI of 26 C.F.R. Section.1.72-9. The life expectancy of a
designated Beneficiary will be calculated at the time payment
first commences without further recalculation.
(i) For purposes of Subsections (c), (d), (e), and (f), if any
amounts payable to a child of the Participant becomes payable
to the Participant's surviving Spouse and the child reaches
the age of majority, that amount will be treated as if it had
been paid to the surviving Spouse.
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(j) Unless paid to the surviving Spouse under a Qualified Joint
and Survivor Annuity, the method of distribution selected must
assure that at least 50 percent of the present value of the
amount available for distribution is paid within the
Participant's life expectancy.
(k) If a Participant reaches age 70 1/2 on or after January 1,
1997, but before January 1, 1999, the Plan will deem the
Participant's "required beginning date" to be April 1 of the
calendar year following the calendar year in which the
Participant reaches age 70 1/2 unless the Participant elects,
with his Spouse's consent, to defer commencement of his Plan
benefits until a date no later than April 1 of the calendar
year following the calendar year in which the Participant
retires.
8.7 DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
ARTICLE 9
RETIREE MEDICAL/DENTAL BENEFITS
9.1 PURPOSE
This Article provides for the payment of certain Medical/Dental
Benefits to Eligible Retirees and to their Dependents under the Plan.
The Medical/Dental Benefits described in this Article are intended to
meet the requirements of Code subsection 401(h) and its interpretive
regulations.
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9.2 ELIGIBILITY
Only Eligible Individuals will be eligible to receive Medical/Dental
Benefits (or to have Medical/Dental Benefits paid on their behalf)
under this Article.
9.3 SEPARATE ACCOUNT
A Medical/Dental Benefits Account will be established and maintained
with respect to contributions made to fund the benefits payable under
this Article, which will be kept separate (for recordkeeping purposes
only) from the amounts contributed to the Plan to fund all other
benefits. The funds in the Medical/Dental Benefits Account may be
invested with funds contributed to the Plan to fund other benefits
without identification of which assets of the Plan are allocable to the
Medical/Dental Benefits Account and which are allocable to fund other
benefits. Where the assets are not so allocated, however, the earnings
on the assets will be allocated in a reasonable manner between the
Medical/Dental Benefits Account and the amounts funding other benefits
under the Plan.
9.4 IMPOSSIBILITY OF DIVERSION PRIOR TO SATISFACTION OF ALL LIABILITIES
Prior to the satisfaction of all liabilities under this Article to
provide for the payment of Medical/Dental Benefits, no part of the
corpus or income of the Medical/Dental Benefits Account may be (within
the taxable year or thereafter) used for, or diverted to, any purpose
other than providing Medical/Dental Benefits or paying any reasonable
expenses attributable to the administration of the Medical/Dental
Benefits Account.
9.5 REVERSION UPON SATISFACTION OF ALL LIABILITIES
Notwithstanding the provisions of Section 14.8 (No Diversion of
Assets), any amounts that are contributed to fund Medical/Dental
Benefits and that remain in the Medical/Dental Benefits Account upon
the satisfaction of all liabilities arising out of the
77
operation of this Article are to be returned to Eligible Retirees,
in proportion to their respective total contributions to the
Medical/Dental Benefits Account.
9.6 FORFEITURES
In the event an Eligible Individual's interest in the Medical/Dental
Benefits Account is forfeited prior to termination of the Plan, an
amount equal to the amount of the forfeiture will be applied as soon as
possible to reduce Employer contributions to the Plan to fund the
Medical/Dental Benefits under this Article.
9.7 EMPLOYER CONTRIBUTIONS TO THE MEDICAL/DENTAL BENEFITS ACCOUNT
For each Plan Year, the Employer will contribute to the Medical/Dental
Benefits Account the amount necessary to fund Medical/Dental Benefits,
as determined by the Plan's actuaries, provided that the contributions
mandated by this sentence will be reasonable, and will be reduced (but
not below zero) as required so that the aggregate actual contributions
made to the Medical/Dental Benefits Account will not exceed 25% of the
total aggregate actual contributions (other than any contributions to
fund past service credits) made to the Plan. All contributions to the
Medical/Dental Benefits Account will be paid to the Trustee, who will
hold them in Trust for the payment of Medical/Dental Benefits under
this Article. At the time an Employer makes a contribution to the Plan,
it will designate the portion allocable to the Medical/Dental Benefits
Account.
9.8 MEDICAL/DENTAL BENEFITS
The Medical/Dental Benefits under the Plan will be those benefits
payable to or on behalf of Eligible Individuals in accordance with the
terms of a Medical/Dental Plan.
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ARTICLE 10
NONALIENATION OF BENEFITS
The Pension Fund will not in any manner be liable for, or subject to, the
debts or liabilities of any Participant, Beneficiary, Contingent Annuitant,
or Spouse, or any other person entitled to any benefit. No payee may assign
any payment due him under the Plan. No pension or other benefits at any time
payable from the Pension Fund will be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, attachment, garnishment,
levy, execution, or other legal or equitable process or encumbrance of any
kind. Any attempt to alienate, sell, transfer, assign, or otherwise encumber
any such benefit, whether presently or thereafter payable, will be void.
However, the payment of benefits under the Plan will be made in accordance
with the applicable requirements of any Qualified Domestic Relations Order
entered by a court of competent jurisdiction or a state administrative
agency. The Committee will establish procedures to determine whether the
domestic relations orders are Qualified Domestic Relations Orders and to
administer distributions under Qualified Domestic Relations Orders.
ARTICLE 11
ADMINISTRATION
11.1 ADMINISTRATOR
The Committee will be the administrator of the Plan. The Committee will
consist of the number of members, not fewer than three, that is
specified from time to time by the Board of Directors. All members of
the Committee will be Employees or officers of an Employer. All members
of the Committee will serve without compensation.
79
11.2 REMOVAL AND REPLACEMENT OF COMMITTEE MEMBERS
The members of the Committee will serve at the pleasure of the Board of
Directors and may be removed by the Board of Directors with or without
cause. Any vacancy among the members will be filled by the Board of
Directors.
11.3 DISQUALIFICATION AND RESIGNATION
On the date when a Committee member is neither an Employee nor an
officer of an Employer, he will be disqualified from membership on the
Committee. A member of the Committee may resign by delivering his
written resignation to any other member of the Committee. A resignation
will become effective on the date specified in the instrument of
resignation.
11.4 CHAIRPERSON, SERVICES, AND COUNSEL
The members of the Committee will elect one of their members as
Chairperson and will elect a Secretary, who may be, but need not be,
one of the members of the Committee. Cinergy will provide the
Committee, at Cinergy's expense, with such clerical, accounting,
actuarial, and other services as may be reasonably required by the
Committee in carrying out its responsibilities. The Committee may
employ counsel, who may be, but need not be, counsel to Cinergy.
11.5 MEETINGS
The Committee will hold meetings upon such notice, at the places, and
at the times as the Committee may from time to time determine, but no
less often than quarterly.
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11.6 QUORUM
A majority of the members of the Committee at the time holding office
will constitute a quorum for the transaction of business. All
resolutions and other action taken by the Committee at any meeting will
be by the vote of the majority of the members of the Committee present
at the meeting.
11.7 ACTION WITHOUT MEETING
Any decision, order, direction, or other action, including orders and
directions to the Trustee or Insurance Company, made in writing signed
by a majority of the members of the Committee at the time holding
office will constitute valid and effective action of the Committee,
whether or not the matter to which that decision, order, direction, or
other action pertains had already been acted upon at a duly called and
held meeting of the Committee.
11.8 NOTICE TO TRUSTEE OF CHANGES IN MEMBERSHIP
The Trustee will not be charged with notice of any change in the
membership of the Committee unless and until it has received a
certified copy of the resolution or vote of the Board of Directors
effecting the change.
11.9 CORRECTION OF DEFECTS
The Committee may correct any defect or supply any omission or
reconcile any error or inconsistency in its previous proceedings,
decisions, orders, directions, or other actions in a manner and to such
extent as it will deem advisable to carry out the purposes of the Plan.
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11.10 RELIANCE UPON LEGAL COUNSEL
The members of the Committee, and Cinergy, and Cinergy's officers and
directors, will be entitled to rely upon all opinions given by legal
counsel selected by the Committee.
11.11 EXPENSES
In the performance of its duties, the Committee is authorized to incur
reasonable expenses, including counsel fees. All operating expenses of
the Plan, including insurance premiums payable to the Pension Benefit
Guaranty Corporation, fees for professional services, and technical or
clerical assistance, will be paid from the Pension Fund, to the extent
not paid by the Employer. Investment expenses and any federal, state,
or local taxes that may be levied against the Pension Fund will also be
paid from the Pension Fund.
11.12 INDEMNIFICATION
Cinergy agrees to indemnify and hold harmless each member of the
Committee against any cost, expense, or liability (including any sum
paid in settlement of any claim with the approval of the Board of
Directors) arising out of any act or omission to act as a member of the
Committee, except only acts and omissions representing willful
misconduct, fraud, or lack of good faith.
11.13 POWERS AND DUTIES OF COMMITTEE
Subject to the specific limitations stated in this document, the
Committee will have the following powers, duties, and responsibilities:
(a) to carry out the Plan's general administration;
82
(b) to cause to be prepared all forms necessary or appropriate for
the Plan's administration;
(c) to keep appropriate books and records, including minutes of
the Committee's meetings;
(d) to determine, consistent with the provisions of this document,
the manner in which the Pension Fund will be allocated and
disbursed;
(e) to give directions to the Trustee or Insurance Company as to
the amounts to be disbursed to Participants and others under
the Plan's provisions;
(f) to determine, with discretionary authority and consistent with
the provisions of this document, all questions of the
eligibility, rights, and status of Participants and others
under the Plan;
(g) to exercise all other powers and duties specifically conferred
upon the Committee elsewhere in this document and the Trust
Agreement or Group Annuity Contract;
(h) to exercise all duties and responsibilities imposed by ERISA
upon the Committee as the Plan's administrator;
(i) to interpret, with discretionary authority, the provisions of
the Plan and to resolve, with discretionary authority, all
disputed questions of Plan interpretation and benefit
eligibility;
(j) to employ agents to assist it in performing its administrative
duties; and
(k) to allocate and delegate its fiduciary responsibilities in
accordance with ERISA section 405.
83
The Committee will at all times make similar decisions on similar
questions involving similar circumstances. Subject to the provisions
of ERISA and to the provisions of Article 12 (Benefit Claims
Procedures) relating to claims, all decisions of the Committee made
in good faith on all matters within the scope of its authority under
the provisions of this document will be final and binding upon all
persons.
11.14 MATTERS SPECIFICALLY EXCLUDED FROM JURISDICTION
Notwithstanding any other provision of this document, the Committee
will have no power, duty, or authority with respect to determination of
the amounts to be contributed by the Employer to the Pension Fund or
Trust Fund.
ARTICLE 12
BENEFIT CLAIMS PROCEDURES
Claims for benefits under the Plan will be made in writing to the Committee
or its designee. If a claim for benefits is wholly or partially denied, the
Committee or its designee will notify the Claimant of the claim's denial
within a reasonable period of time not to exceed 90 days after the claim's
receipt, unless special circumstances require an extension of time for
processing, in which case notification will be rendered as soon as possible,
but not later than 180 days after the claim's receipt. If an extension of
time for processing is required, written notice of the extension will be
furnished to the Claimant prior to the termination of the initial 90 day
period. The extension notice will indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to
render final notification. The notice of denial will be written in a manner
calculated to be understood by the Claimant and will set forth (a) the
specific reason or reasons for the denial, (b) a specific reference to the
pertinent Plan provisions on which the denial is based, (c) a description of
any additional material or information necessary for the Claimant to perfect
the claim and an explanation of why that material or information is
necessary, and (d) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review. The Committee or its designee
is authorized to develop more fully
84
the Plan's benefit claims procedures by establishing from time to time,
various rules and procedures consistent with ERISA.
Within 60 days after the Claimant's receipt of written notice of the claim's
denial, the Claimant, or his duly authorized representative, may file a
written request with the Committee requesting a full and fair review of the
denial of the Claimant's claim for benefits. In connection with the
Claimant's appeal of the denial of his claim for benefits, the Claimant may
review pertinent documents in the Committee's possession and may submit
issues and comments in writing. The Committee will make a decision on review
promptly, but not later than the date of the Committee meeting that
immediately follows the receipt of the Claimant's request for review, unless
the request for review is filed within 30 days before the date of that
meeting. In that case, a decision will be made as soon as possible, but not
later than the date of the second Committee meeting following receipt of the
request for review. If special circumstances require a further extension of
time for processing, a decision will be rendered not later than the third
Committee meeting following receipt of the Claimant's request for review. If
an extension of time for review is required because of special circumstances,
written notice of the extension will be sent to the Claimant before the
extension begins. The extension notice will indicate the special
circumstances requiring an extension of time and the date by which the
Committee expects to render the final decision. The decision on review will
be in writing and written in a manner calculated to be understood by the
Claimant, will set forth the specific reason or reasons for the decision, and
will contain a specific reference to the pertinent Plan provisions on which
the decision is based. If the decision on review is not furnished to the
Claimant within 60 days of receipt of the request for review, or within 120
days after its receipt if special circumstances required an extension of
time, the claim will be deemed denied on review.
ARTICLE 13
FUNDING POLICY AND METHOD
Cinergy will establish and carry out a funding policy and method for the Plan
consistent with (a) the Plan's past experience, (b) the Plan's anticipated
experience, (c) the Plan's objectives,
85
(d) the requirements of ERISA, and (e) the requirements of the Code. Cinergy
will (a) communicate the funding policy and method to the Committee, (b)
periodically review the funding policy and method, and (c) document all
action taken with respect to the funding policy and method.
ARTICLE 14
MISCELLANEOUS
14.1 NO ENLARGEMENT OF EMPLOYEE BENEFITS
This Plan is strictly a voluntary undertaking on the part of each
Employer and will not be deemed to constitute a contract between an
Employer and any Employee or to be consideration for, or an inducement
to, or a condition of, the employment of any Employee. Nothing
contained in the Plan will be deemed to give any Employee the right to
be retained in the service of an Employer or to interfere with the
right of the Employer to discharge any Employee at any time. No
Employee, prior to his retirement under conditions of eligibility for
pension benefits or prior to his satisfying the Vesting Requirement
will have any right to, or interest in, any portion of any fund arising
from his Employer's contributions under this Plan or, in any event,
other than as specifically provided in the Plan. No person will have
any right to pension benefits except to the extent provided in the
Plan.
14.2 REEMPLOYMENT
If an Eligible Employee incurs a Severance from Service and is later
reemployed by an Employer, his two (or more) periods of employment
will, subject to all of the provisions of the Plan, be aggregated for
the purpose of determining his Year of Eligibility Service, his years
of Participation, and his years of Service.
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14.3 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits, and service credits with respect to qualified
military service will be provided in accordance with Code subsection
414(u)
14.4 NOTICE OF ADDRESS
Each Participant, Retired Participant, Terminated Vested Participant,
Beneficiary, Contingent Annuitant, and Spouse entitled to benefits
under the Plan must submit to the Committee or its designee his post
office address and each change of post office address. Any
communication, statement, or notice addressed to a person at his latest
post office address filed with the Committee or its designee will, upon
deposit in the United States mail with postage prepaid, be binding upon
that person for all purposes of the Plan, and neither the Insurance
Company, the Committee, nor the Trustee will be obliged to search for,
or to ascertain the whereabouts of, any person.
14.5 DATA
Participants, Retired Participants, Terminated Vested Participants,
Beneficiaries, Contingent Annuitants, and Spouses must furnish to the
Committee, the Insurance Company, and the Trustee any documents,
evidence, or information that the Committee, the Insurance Company, or
the Trustee considers necessary or desirable for the purpose of
administering the Plan, or to protect the Committee, the Insurance
Company, or Trustee; and it will be a condition of the Plan that each
person must furnish this information promptly and sign required
documents before any benefits become payable under the Plan.
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14.6 NO INDIVIDUAL LIABILITY
It is the express purpose and intention of the Plan that, except as
otherwise required by law, no individual liability whatever will attach
to, or be incurred by, the shareholders, officers, or members of the
board of directors of any Employer, or the Committee, or its members,
or any fiduciary designated pursuant to Section 11.13 (Powers and
Duties of Committee), or any representatives appointed by Cinergy under
the Plan, under or by reason of any of the terms or conditions of the
Plan.
14.7 PARTICIPANT'S STATEMENT OF AGREEMENT
Cinergy will have the right, at any time, to require any Participant to
agree in writing to be bound by the Plan's provisions. However, the
absence of an agreement will not relieve any Participant from being
legally bound by the provisions of the Plan.
14.8 NO DIVERSION OF ASSETS
None of the assets of the Pension Fund may be used for, or diverted to,
purposes other than the exclusive benefit of the Participants and their
Beneficiaries. However, nothing in this Section will prohibit the
return to the Employers, in accordance with the provisions of ERISA
subsection 403(c), of a contribution (or a portion of a contribution)
by the Employers to the Pension Fund if the contribution is (a) made by
reason of mistake of fact, (b) conditioned on the initial qualification
of the Plan under Code subsection 401(a), or (c) conditioned upon its
deductibility under Code section 404 and the deduction is not fully
allowed.
14.9 GOVERNING LAWS
The Plan will be construed and administered according to the internal
laws of the State of Ohio to the extent that those laws are not
preempted by federal law.
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14.10 SEVERABILITY
If any part of the Plan is adjudged by a court of competent
jurisdiction to be contrary to the laws governing the Plan, then the
Plan will, in all other respects, be and remain legally effective and
binding to the full extent permissible under the law.
14.11 INTERPRETATION AND REGULATION OF PLAN
Cinergy, by action of the Committee, reserves the right to interpret
and regulate the Plan, by exercise of discretionary authority, and its
interpretation and regulation will be legally effective and binding on
all parties concerned.
14.12 COMMUNICATIONS BY PARTICIPANTS
All communications by Participants and other concerned parties
concerning the Plan will be in writing and directed to the Committee or
its designee.
14.13 HEADINGS
The headings of Articles, Sections, Subsections, Paragraphs or other
parts of the Plan are for convenience of reference only and do not
define, limit, construe, or otherwise affect the contents of this
document.
14.14 ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT
Notwithstanding any other provisions of the Plan to the contrary, no
accrued benefit of a Participant under the Plan will be decreased by an
amendment to the Plan, other than an amendment described in Code
paragraph 412(c)(8) or ERISA section 4281. For purposes of this
Subsection, an amendment to the Plan that has the effect of:
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(a) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in the regulations under
Code paragraph 411(d)(6)), or
(b) eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment,
will be treated as reducing the accrued benefit of a Participant. In
the case of any retirement-type subsidy, the preceding sentence will
apply only with respect to a Participant who satisfies (either before
or after the amendment) the preamendment conditions for the subsidy.
ARTICLE 15
TRUSTS AND INSURANCE CONTRACTS
15.1 TRUSTS AND INSURANCE CONTRACTS
As part of the Plan, the Employers have established a Pension Fund. The
Pension Fund may consist of a trust, or a fund under a group annuity
contract issued by an Insurance Company, or a combination of each.
Benefits may, however, be provided through other trusts or insurance
contracts as Cinergy, in its sole discretion, may establish or cause to
be established or entered into for the purposes of carrying out the
Plan. Cinergy will determine the form and terms of any trust and will
also determine the terms and provisions of any group annuity contract.
Cinergy may also, in its sole discretion, cause any funds held by any
Insurance Company, or any Trust Fund held by any Trustee, for the
purpose of providing benefits under the Plan, to be transferred to any
other Insurance Company, or qualified Trustee, to be held for the same
purpose.
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15.2 IRREVOCABILITY
The Employers will have no right, title, or interest in the Pension
Fund or to the contributions made under the Plan, and no part of the
Pension Fund will revert to the Employers, except that upon termination
of the Plan and after satisfaction or provision for the satisfaction of
all fixed and contingent liabilities or obligations to persons entitled
to benefits upon the termination, any balance remaining in the Pension
Fund will be distributed to the Employers. However, nothing in this
Section will prohibit the return, in accordance with the provisions of
ERISA subsection 403(c), to the Employers of a contribution (or a
portion of a contribution) by the Employers to the Pension Fund if the
contribution is (a) made by reason of mistake of fact, (b) conditioned
on the initial qualification of the Plan under Code subsection 401(a),
or (c) conditioned upon its deductibility under Code section 404 and
the deduction is not fully allowed.
15.3 SUFFICIENCY OF PENSION FUND
The Employer intends the Plan to be a permanent, as distinguished from
a temporary, program. Except as otherwise provided by the Code or
ERISA, however, the Employer will not be under any liability to make
contributions to the Pension Fund. Benefits under the Plan are to be
paid only from the Pension Fund and only to the extent that the Pension
Fund is sufficient for that purpose. Neither Cinergy, nor any of the
officers, employees, members of the Board of Directors, the Committee,
or representatives of Cinergy guarantees in any manner nor, unless
otherwise required by law, will be liable for the payment of benefits
under the Plan. Except as otherwise provided by ERISA, any person
having any claim under, or in connection with, the Plan must look
solely to the Pension Fund for satisfaction.
91
ARTICLE 16
CONTRIBUTIONS
No contributions to the Plan by Participants will be required or permitted under
the Plan.
During the continuance of the Plan and for the purpose of providing the benefits
contemplated under the Plan, the Employer intends to deposit, from time to time,
with the Trustee or with the Insurance Company, sums of money, to be held in the
Pension Fund, which, together with the earnings of the Pension Fund, will be
deemed sufficient to provide the benefits of the Plan and to satisfy the minimum
funding standards set forth in ERISA. All contributions by the Employer to the
Pension Fund are expressly conditioned upon deductibility under Code section
404.
ARTICLE 17
APPROVAL UNDER INTERNAL REVENUE CODE
The Plan as set forth in this document is intended to comply with the
requirements of Code subsection 401(a), so that the income of the Pension Fund
may be exempt from federal income taxes and so that contributions of the
Employers under the Plan may be deductible for federal income tax purposes under
Code section 404. Any modification or amendment of the Plan may be made,
retroactive or otherwise, as necessary or appropriate to establish and maintain
its qualified status under the Code, or to otherwise comply with ERISA.
ARTICLE 18
TEMPORARY RESTRICTIONS ON BENEFITS
18.1 TEMPORARY RESTRICTIONS
(a) Notwithstanding any other provisions of the Plan, the benefit
of any Highly Compensated Participant upon the Plan's
termination will be limited to a benefit that is
nondiscriminatory under Code paragraph 401(a)(4).
92
(b) Upon the Plan's termination, annual payments of Plan benefits
made on behalf of any of the 25 highest paid Employees or
former Employees of the Employer and the Affiliates in a
particular Plan Year will be restricted to an amount equal in
each Plan Year to:
(1) the payments that would be made on behalf of the
Employee under a single life annuity that is the
Actuarial Equivalent of the accrued benefit and other
benefits to which the Employee is entitled under the
Plan (other than a social security supplement), plus
(2) the amount of the payments that the Employee is
entitled to receive under a social security
supplement.
(c) The restrictions of Subsection (b) will not apply to payments
made to an Employee who is one of the 25 highest paid
Employees or former Employees if any one of the following
requirements is satisfied:
(1) After payment to the Employee of all benefits payable
to the Employee under the Plan, the value of the
Plan's assets equals or exceeds 110 percent of the
value of the Plan's current liabilities as defined
under Code paragraph 412(l)(7). The value of Plan
assets and the value of current liabilities for this
purpose must be determined as of the same date;
(2) The value of the benefits payable to the Employee
under the Plan is less than one percent of the value
of the Plan's current liabilities before
distribution, or
(3) The value of the benefits payable to the Employee
does not exceed $5,000.
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ARTICLE 19
AMENDMENT AND TERMINATION
19.1 RIGHT TO AMEND OR TERMINATE
Cinergy reserves the right to modify, alter, amend, revoke or terminate
the Plan and/or any Trust Fund or group annuity contract that may be
established or entered into to effectuate and implement the Plan at any
time. The Board of Directors will generally have the authority to adopt
amendments; however, the Committee or the compensation committee of the
Board of Directors may adopt any amendment to ensure the continued
qualification of the Plan and Pension Fund under Code subsections
401(a) and 501(a), to comply with the provisions of any federal statute
or regulation impacting pension plans, to enhance the delivery of
benefits to Participants and Beneficiaries, to ease Plan
administration, or to respond to the withdrawal of any Employer from
the Plan. Notwithstanding the preceding sentence, no amendment by the
Committee or the compensation committee of the Board of Directors will
substantially increase the cost of the Plan without the Board of
Directors' consent.
The Board of Directors, or any person or persons duly authorized by the
Board of Directors, will also have the right, authority, and power to
terminate the Plan and to discontinue or suspend the payment of
contributions to provide benefits under the Plan (except for the
provision of any agreement which has been entered into between an
Employer and a labor union representing Eligible Employees). However,
no action taken pursuant to this Section will operate to enlarge the
right of Cinergy under Section 15.2 (Irrevocability).
94
19.2 EFFECT OF TERMINATION
If a partial or complete termination of the Plan occurs, all
Participants with respect to whom the Plan is being so terminated will
have a Nonforfeitable right to their benefits accrued under the Plan up
to the date of termination of the Plan to the extent then funded.
Except as otherwise required by ERISA section 4044, Cinergy will direct
the Trustee and/or Insurance Company to segregate the Pension Fund, as
determined by Cinergy to be attributable to the group that is
terminating its participation in the Plan, and to make separate
allocations of the segregated assets among the respective persons
having interests in them. The separate allocations will be made as
follows:
(a) First, either:
(1) in the case of the pension of a Retired Participant,
a Terminated Vested Participant, a Spouse, or a
Contingent Annuitant that began at least three years
prior to the termination date of the Plan, that
portion of the pension that is based on the
provisions of the Plan as in effect at any time
during the five-year period ending on the termination
date, which would result in the least amount, or
(2) in the case of the pension of an Active Participant,
a Participant who has incurred a Severance from
Service, or either a Retired Participant or a
Terminated Vested Participant not included in
Paragraph (1) of this Subsection (a) that three years
prior to the termination date of the Plan would have
began had the Participant then become a Retired
Participant, a Terminated Vested Participant, or the
Participant's Spouse or Contingent Annuitant, that
portion of the pension that is based on the
provisions of the Plan that were in effect at any
time during the five-year period ending on the
termination date, which would result in the least
amount;
95
(b) Second, all other pensions under the Plan that are guaranteed
by the Pension Benefit Guaranty Corporation;
(c) Third, all other pensions with respect to both (1) Retired
Participants, Terminated Vested Participants, Spouses, and
Contingent Annuitants and (2) Active Participants and
Participants who have incurred a Severance from Service who,
as of the date of termination of the Plan, have
completed the Vesting Requirement of the Plan; and
(d) All other pensions under the Plan.
If the balance of the Pension Fund allocable to the
terminating group that is remaining after allocations have
been made with respect to all pensions in a preceding class or
group is insufficient to allocate the full Actuarial
Equivalent of pensions to all persons in the class or group
for which it is then being applied, the balance will be
allocated to each person in the class or group in the
proportion to which the Actuarial Equivalent of the pension
allocable to him pursuant to the class or group bears to the
total Actuarial Equivalent of the pensions so allocable to all
persons in the class or group. However, if the balance is
sufficient to allocate a portion only of the full Actuarial
Equivalent of the pensions set forth in Subsection (c), then
the amounts of pension otherwise provided will be redetermined
based on the provisions of the Plan as in effect five years
prior to the termination date, or, if applicable, as of the
later date as will provide for the allocation of the full
Actuarial Equivalent thereof.
The amounts so allocated will, subject to the rights of the
Insurance Company under the Group Annuity Contract governing
allocations of small annuities, be purchased under the Group
Annuity Contract or other group annuity contract.
96
Any balance remaining in the Pension Fund that is allocable to
the terminating group, and after all allocations have been
made pursuant to the foregoing provisions of this Subsection,
will be allocated to the Employers.
19.3 MERGER AND CONSOLIDATION OF PLAN
In the case of any merger or consolidation with, or transfer of assets
and liabilities to, any other plan, provisions will be made so that
each Participant in the Plan on the date thereof (if the Plan had then
terminated) would receive a benefit immediately after the merger,
consolidation or transfer that is equal to, or greater than, the
benefit he would have been entitled to receive immediately prior to the
merger, consolidation, or transfer if the Plan had then terminated.
19.4 POST-CHANGE IN CONTROL MERGER, CONSOLIDATION, OR TRANSFER OF PENSION
PLAN ASSETS OR LIABILITIES
Notwithstanding the preceding provisions of this Article or any other
provision of this Plan, in the event of any merger or consolidation of
this Plan with another employee benefit plan or any transfer of assets
or liabilities of this Plan to another plan that is effected within
three years following a Change in Control, (a) the accrued benefit of
each Participant who is actively employed by an Employer as of the
effective date of the merger, consolidation, or transfer of assets or
liabilities and with respect to whom liability for the payment of
benefits under the Plan is being merged or consolidated with or
transferred to another plan will become fully vested; (b) the vested
accrued benefit of each Participant, former Participant, and
Beneficiary with respect to whom any liability for the payment of
benefits under the Plan is being merged or consolidated with or
transferred to another plan will be increased in accordance with
Section 19.6 (Post-Change in Control Surplus Reversion) as if the Plan
had terminated immediately prior to any merger, consolidation, or
transfer (and for purposes of calculating the increase, the accrued
benefits of all other Participants, former Participants and their
Beneficiaries will
97
be deemed to have increased in accordance with Section 19.6
(Post-Change in Control Surplus Reversion)); and (c) prior to
consummation of any merger, consolidation, or transfer, the accrued
benefit (as increased, if applicable) of each Participant, former
Participant, and Beneficiary with respect to whom liability for the
payment of benefits under the Plan is being merged or consolidated
with or transferred to another plan will be satisfied by the purchase
of a guaranteed annuity contract from a financially sound insurance
company that represents an irrevocable commitment to satisfy the
accrued benefit (as increased, if applicable) of the person.
Notwithstanding the provisions of Section 19.1 (Right to Amend or
Terminate), the provisions of this Section may not be amended by an
amendment to the Plan effective within three years following a Change
in Control.
19.5 GENERAL PROTECTION OF BENEFITS IN THE EVENT OF A CHANGE IN CONTROL
Notwithstanding any other provisions of this Plan, for a period of
three years following a Change in Control, the provisions of this Plan
may not be amended in any manner that would adversely affect in any way
the computation or amount of or the entitlement to retirement benefits
under the Plan, including, but not limited to, any adverse change in or
to (a) the rate at which benefits accrue or vest, (b) the compensation
recognized under the Plan, or (c) the optional forms of payment
available to a Participant or Beneficiary under the Plan, including the
time of commencement of benefits and any actuarial factors utilized.
Notwithstanding the provisions of Section 19.1 (Right to Amend or
Terminate), the provisions of this Section may not be amended by an
amendment effective within three years following a Change in Control.
19.6 POST-CHANGE IN CONTROL SURPLUS REVERSION
Notwithstanding the preceding provisions of this Article or any other
provision of the Plan, in the event this Plan is terminated within
three years following a Change in Control, the assets of the Plan will
be applied in accordance with the preceding provisions
98
of this Article to satisfy all liabilities to Participants, former
Participants, and their Beneficiaries. If, after satisfaction of the
liabilities, there are assets remaining in the Plan, the balance will
be applied on a pro rata basis based upon final vested benefit to
increase the benefits of the Participants, former Participants, and
their Beneficiaries, subject however, to the applicable legal
limitations on benefits payable from tax qualified plans.
Notwithstanding the provisions of Section 19.1 (Right to Amend or
Terminate), the provisions of this Section may not be amended by an
amendment to the Plan effected within three years following a Change
in Control.
ARTICLE 20
AUTHORIZED TRANSACTION
Cinergy will have the right, authority, and power to transfer some or all of the
assets of the Plan, including contributions and earnings, to a pooled investment
fund of an insurance company qualified to do business in one or more states of
the United States, even though that insurance company might otherwise be a
"party in interest," as that term is defined in ERISA; provided, the insurance
company receives not more than reasonable compensation with respect to the
transaction.
ARTICLE 21
PARTICIPATION BY OTHER EMPLOYERS
21.1 ADOPTION OF PLAN
With Cinergy's consent, any Affiliate may become a participating
Employer under the Plan by (a) taking appropriate action to adopt the
Plan, (b) filing with Cinergy a duly certified copy of the Plan as
adopted by the Affiliate, (c) becoming a party to the trust agreement
establishing the Trust Fund, and (d) executing and delivering documents
and taking any other action as may be necessary or desirable to put the
Plan into effect with respect to it.
99
21.2 WITHDRAWAL FROM PARTICIPATION
Any Employer may, with Cinergy's consent, withdraw from participation
in the Plan at any time by filing with Cinergy a duly certified copy of
a resolution of its board of directors to that effect and giving notice
of its intended withdrawal to Cinergy, the Trustee, and Insurance
Company prior to the effective date of withdrawal. If an Employer
withdraws from the Plan, Cinergy will determine the portion of the
Pension Fund held by the Trustee or Insurance Company that is
applicable to the Participants and former Participants of the
withdrawing Employer and direct the Trustee and Insurance Company to
segregate its portion in a separate trust. The separate trust will be
held and administered as a part of the separate plan of the withdrawn
Employer. The portion of the Pension Fund applicable to the
Participants and former Participants of a particular Employer will be
the sum of:
(a) the total amount of the accrued benefits applicable to the
Participants and former Participants of the withdrawing
Employer, and
(b) an amount that bears the same ratio to the excess, if any, of:
(1) the total of the Pension Fund over
(2) the total amount of the accrued benefits applicable
to the Participants and former Participants of the
withdrawing Employer bears to the total amount of the
accrued benefits applicable to all Participants and
former Participants.
Notwithstanding the preceding sentence, if the total amount of the present value
of the accrued benefits applicable to the Participants and former Participants
of the withdrawing Employer (when combined with the value of any other assets
segregated during that Plan Year) is less than three percent of the total of the
Pension Fund as of at least one day in the Plan Year during which
100
the withdrawal occurs, the portion of the Pension Fund applicable to the
Participants and former Participants of the withdrawing Employer will be
equal to the present value of those Participants' accrued benefits.
21.3 CINERGY AS AGENT FOR EMPLOYERS
Each Affiliate that becomes a participating Employer pursuant to
Section 21.1 (Adoption of Plan) or Article 22 (Continuance by a
Successor) by so doing will be deemed to have appointed Cinergy its
agent to exercise on its behalf all of the powers and authorities
conferred upon Cinergy by the terms of the Plan, including, but not
limited to the power to amend and terminate the Plan. Cinergy's
authority to act as agent will continue unless and until the portion of
the Pension Fund held for the benefit of Employees of the particular
Employer and their Beneficiaries is set aside in a separate trust as
provided in Section 21.2 (Withdrawal from Participation). Each Employer
will, from time to time, upon Cinergy's request, furnish to Cinergy any
data and information as Cinergy requires in the performance of its
duties.
ARTICLE 22
CONTINUANCE BY A SUCCESSOR
If Cinergy or any other Employer is reorganized by way of merger, consolidation,
transfer of assets, or otherwise, so that a corporation, partnership, or person
other than an Employer succeeds to all or substantially all of the Employer's
business, the successor may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the trust agreement. Contributions by
the Employer will be automatically suspended from the effective date of any
reorganization until the date upon which the substitution of the successor
corporation for the Employer under the Plan becomes effective. If, within 90
days following the effective date of any reorganization, the successor does not
elect to become a party to the Plan, or if the Employer adopts a plan of
complete liquidation other than in connection with a reorganization, the Plan
will be automatically terminated with respect to employees of the Employer as of
the
101
close of business on the 90th day following the effective date of
reorganization or as of the close of business on the date of adoption of a
plan of complete liquidation, as the case may be, and Cinergy will direct the
Trustee to distribute the portion of the Trust Fund applicable to that
Employer in the manner provided in Section 21.2 (Withdrawal from
Participation).
ARTICLE 23
PROVISIONS RELATING TO TOP-HEAVY PLAN
23.1 CONSTRUCTION OF THIS SECTION
This Article will be construed in accordance with Code section 416.
23.2 TOP-HEAVY DETERMINATION
For each Plan Year, the Committee will determine whether the Plan is a
Top-Heavy Plan or a Super Top-Heavy Plan.
(a) The Plan constitutes a "Top-Heavy Plan" for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees or (2) the sum of the
Present Value of Accrued Benefits of Key Employees under the
Plan and the Aggregate Accounts of Key Employees under any
Qualified Defined Contribution Plan of an Aggregation Group,
exceeds 60 percent of the Present Value of Accrued Benefits or
the Present Value of Accrued Benefits under the Plan and the
Aggregate Accounts of all Participants under any Qualified
Defined Contribution Plan of an Aggregation Group.
If any Participant is a non-Key Employee for any Plan Year,
but the Participant was a Key Employee for any prior Plan
Year, the Participant's Present Value of Accrued Benefits
and/or Aggregate Account Balance will not be taken into
102
account for purposes of determining whether this Plan is a
Top-Heavy Plan (or whether any Aggregation Group that includes
this Plan is a Top-Heavy Group)
(b) The Plan constitutes a "Super Top-Heavy Plan" for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees or (2) the sum of
the Present Value of Accrued Benefits of Key Employees under
the Plan and the Aggregate Accounts of Key Employees under any
Qualified Defined Contribution Plan of an Aggregation Group,
exceeds 90 percent of the Present Value of Accrued Benefits or
the Present Value of Accrued Benefits under the Plan and the
Aggregate Accounts of all Participants under any Qualified
Defined Contribution Plan of an Aggregation Group.
(c) Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all Qualified Defined Benefit Plans
included in the group, and
(2) the Aggregate Accounts of Key Employees under
Qualified Defined Contribution Plans included in the
group,
exceeds 60 percent of a similar sum determined for all
Participants.
(d) In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top-Heavy Plan if the Permissive Aggregation
Group is a Top-Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top-Heavy Plan if the
Permissive Aggregation Group is not a Top-Heavy Group.
103
(e) In the case of a Required Aggregation Group, each plan in the
group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group.
ARTICLE 24
MERGER WITH THE MRP
24.1 ACCEPTANCE OF ASSETS AND LIABILITIES OF MRP TRUST
As soon as practicable after January 1, 1998 (but not before 30 days
after the required notification has been filed with the Internal
Revenue Service), the Trustee will accept a transfer from the trustee
or funding agent of the MRP of all of the assets and liabilities of the
trust or insurance or annuity contracts through which the MRP is
funded.
24.2 PARTICIPATION OF MRP PARTICIPANTS
Each individual who was a participant in the MRP as of December 31,
1997, will remain a Participant in the Plan on January 1, 1998. Each
participant or former participant in the MRP who as of the date of the
transfer referred to in Section 24.1 (the "Transfer Date") is receiving
benefits under the MRP or has retired or incurred a severance from
service with CG&E and has a right to receive future benefits under the
MRP will be entitled to receive benefits under the Plan as of the
Transfer Date. A beneficiary entitled to benefits under the MRP as of
the Transfer Date will become entitled to benefits under the restated
Plan as of that date. The Annual Pension of a Participant described in
this Section will at no time be less than the Participant's accrued
benefit under the MRP as of the Transfer Date.
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ARTICLE 25
SPIN OFF OF PSI PLAN
25.1 ACCEPTANCE OF ASSETS AND LIABILITIES OF PSI PLAN TRUST
On December 31, 1997, the assets and liabilities attributable to Exempt
Employees and Non-Exempt Employees who were participants in the PSI
Plan as of that date were spun off from the PSI Plan. As soon as
practicable after January 1, 1998 (but not before 30 days after the
required notification has been filed with the Internal Revenue
Service), the Trustee will accept a transfer from the trustee or
funding agent of that spun-off portion of the PSI Plan of all of the
assets and liabilities of the trust or insurance or annuity contracts
through which the spun-off portion of the PSI Plan is funded.
25.2 PARTICIPATION OF PSI PLAN PARTICIPANTS
Each Exempt Employee or Non-Exempt Employee who was a participant in
the PSI Plan as of December 31, 1997, will become a participant in this
Plan on January 1, 1998. Each participant or former participant in the
PSI Plan who as of the date of the transfer referred to in Section 25.1
(the "PSI Transfer Date") is receiving benefits under the PSI Plan or
has retired or incurred a severance from service with PSI and has a
right to receive future benefits under the PSI Plan will become a
Participant as of the PSI Transfer Date. A beneficiary entitled to
benefits under the PSI Plan as of the PSI Transfer Date will instead
become entitled to benefits under this Plan as of that date. The Annual
Pension of a Participant described in this Section will at no time be
less than the Participant's accrued benefit under the PSI Plan as of
the PSI Transfer Date.
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Cinergy Corp. has caused this document to be executed by its duly
authorized officers, effective January 1, 1998.
By:
------------------------------------------
Madeleine W. Ludlow
Vice President and Chief Financial Officer
Dated:
------------------------------------------
APPROVED:
- ---------------------------------
Jerome A. Vennemann
Acting General Counsel
and Assistant Corporate Secretary
Dated:
--------------------------
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ADDENDUM A
Cinergy Corp. Non-Union Employees'
Pension Plan
I. PSI PENSION FORMULAS
The five remaining basic pension formulas used to determine benefits
under the PSI Plan are as follows:
A. PSI NORMAL RETIREMENT PENSION FORMULA 1
The Annual Pension computed under PSI Pension Formula 1 equals
(1) 1.1 percent of the Participant's PSI Highest Average
Earnings, plus (2) 0.5 percent of the amount by which his PSI
Highest Average Earnings exceed his applicable PSI Covered
Compensation, multiplied by the number of his Years of
Participation accrued as of December 31, 1997, up to a maximum
of 35.
B. PSI NORMAL RETIREMENT PENSION FORMULA 2
The Annual Pension computed under PSI Pension Formula 2 equals
the excess of:
(1) 1-2/3 percent of the Participant's PSI Highest
Average Earnings, multiplied by the number of his
Years of Participation not in excess of 30; over
(2) 1-2/3 percent of the Participant's Annual Primary
Social Security Amount that he is expected to be
entitled to receive either at his Normal Retirement
Date or at his Disability Date if his disability
continues to his Normal Retirement Date, in any event
multiplied by the number of his Years of
Participation not in excess of 30.
C. PSI NORMAL RETIREMENT PENSION FORMULA 3
The Annual Pension computed under PSI Pension Formula 3 equals
the excess of:
(1) 2 percent of the Participant's PSI Highest Average
Earnings, multiplied by the number of his Years of
Participation not in excess of 25, over
(2) 2 percent of the Participant's Annual Primary Social
Security Amount that he is expected to be entitled to
receive either upon the attainment of age 62 on the
assumption that he receives no "wages" or
"remuneration," as defined in the Social Security
Act, between
1
December 31, 1989 (December 31, 1988, for a Highly
Compensated Participant), and his attainment of age
62, or if he is still employed by his Employer on or
after his attainment of age 62, as of the earlier of
December 31, 1989 (December 31, 1988, for a Highly
Compensated Participant), or his Normal Retirement
Date, or at his Disability Date if his disability
continues up until the date otherwise determined
under this Paragraph (2), in any event multiplied
by the number of his Years of Participation not in
excess of 25.
D. PSI TERMINATED VESTED PENSION FORMULA 5
The Annual Pension computed under PSI Pension Formula 5 equals
the excess of:
(1) 2 percent of the Participant's PSI Highest Average
Earnings, multiplied by the number of his Years of
Participation not in excess of 25, over
(2) a fraction, the numerator of which is his actual
Years of Participation and the denominator of which
is the Years of Participation he would have
accumulated at his Normal Retirement Date if during
each year after December 31, 1989 (December 31, 1988,
for a Highly Compensated Participant), he had
completed at least 2,000 Hours of Service, of 50
percent of the Participant's Annual Primary Social
Security Amount that he is entitled to receive upon
the attainment of age 60 on the assumption that his
rate of Earnings as of December 31, 1989 (December
31, 1988, for a Highly Compensated Participant), had
continued unchanged until age 60.
E. PSI TERMINATED VESTED PENSION FORMULA 6
The Annual Pension computed under PSI Pension Formula 6 equals
the excess of:
(1) 1-2/3 percent of the Participant's PSI Highest
Average Earnings, multiplied by the number of his
Years of Participation not in excess of 30; over
(2) a fraction, the numerator of which is his actual
Years of Participation and the denominator of which
is the Years of Participation he would have
accumulated at his Normal Retirement Date if during
each year after December 31, 1989 (December 31, 1988,
for a Highly Compensated Participant), he had
completed at least 2,000 Hours of Service, of 50
percent of the Participant's Annual Primary Social
Security Amount that he is entitled to receive upon
the attainment of age 60 on the assumption that his
rate of Earnings as of
2
December 31, 1989 (December 31, 1988, for a Highly
Compensated Participant), had continued unchanged
until age 60.
II. GENERAL METHOD OF COMPUTING ACCRUED BENEFIT UNDER THE PSI PLAN FOR
NORMAL RETIREMENT
(a) Subject to the following provisions of this Section, the
amount of the accrued benefit under the PSI Plan as of
December 31, 1997, of a Participant who was a participant in
the PSI Plan as of December 31, 1997, will be computed under
PSI Pension Formula 1.
(b) Notwithstanding any other provisions of this Section, the
accrued benefit under the PSI Plan as of December 31, 1997, of
a Participant who became a participant in the PSI Plan prior
to May 1, 1970, will not be less than the amount computed
under PSI Pension Formula 3 as of the following date:
(1) December 31, 1989, with respect to an Employee who is
not a Highly Compensated Participant; or
(2) December 31, 1988, with respect to a Highly
Compensated Participant.
(c) Notwithstanding any other provisions of this Section, the
accrued benefit under the PSI Plan as of December 31, 1997, of
a Participant who became a participant in the PSI Plan on or
after May 1, 1970, will not be less than the amount computed
under PSI Pension Formula 2 as of the following date:
(1) December 31, 1989, with respect to an Employee who is
not a Highly Compensated Participant; or
(2) December 31, 1988, with respect to a Highly
Compensated Participant.
III. PSI DEFINITIONS
The capitalized terms will have the meanings set forth in the Plan. In
addition, the following words and phrases have the meanings set forth
in this Addendum:
(a) "Annual Primary Social Security Amount" means, with respect to
a Participant, the annual amount available under the
provisions of Title II of the Social Security Act as in effect
on December 31, 1989 (December 31, 1988, for a Highly
Compensated Participant), determined without regard to
3
any increases in benefit levels, wage base increases, or
changes in the types of benefits that take effect after that
date, but including any recomputation in benefits due solely
to the Participant's "wages" and "remuneration," as defined
in the Social Security Act, in calendar year 1989 or 1988,
whichever is applicable.
(b) "Disability Date" means, with respect to a Participant who
participated in the PSI Plan, the date the Participant is
determined to be totally disabled by reason of a particular
disability under PSI's Long Term Disability Plan, as amended
from time to time.
(c) "Nine Months of Elapsed Time Service" means, with respect to a
Participant who participated in the PSI Plan, the nine
consecutive month period commencing on his Employment
Commencement Date, provided that the Employee does not in that
period incur a Severance from Service that is part of a Break
in Service; or, the nine consecutive month period commencing
on the Employee's Reemployment Commencement Date (or
successive Reemployment Commencement Dates), provided that the
Employee does not in that period incur a Severance from
Service that is part of a Break in Service. If the Employee
does not incur a Severance from Service during the applicable
nine consecutive month period, then the Employee shall be
deemed to have completed Nine Months of Elapsed Time Service
as of the last day of the nine consecutive month period.
(d) "Normal Retirement Date" means, with respect to each
Participant who participated in the PSI Plan, the first day of
the calendar month coincident with or following (a) his 65th
birthday, or (b) the fifth anniversary date of his employment,
whichever is later.
(e) "Participation Commencement Date" means, with respect to an
Employee who was a participant in the PSI Plan prior to
January 1, 1989, the date the Employee became a participant
under the PSI Plan's terms as they existed prior to January 1,
1990, and with respect to an Employee who was not a
participant in the PSI Plan prior to January 1, 1989, the
later of (a) January 1, 1989, or (b) the first day of the
calendar month coincident with or following the date the
Employee first completes Nine Months of Elapsed Time Service
and has attained his 21st birthday; provided that on the later
date he is classified by his Employer as an Employee. If an
Employee has completed Nine Months of Elapsed Time Service and
has attained his 21st birthday, but is not classified by his
Employer as an Employee on the later date, his "Participation
Commencement Date" shall be the first day of the calendar
month coincident with or following the first day after the
later date on which he is classified by his Employer as an
Employee.
(f) "PSI Covered Compensation" means, with respect to a
Participant who participated in the PSI Plan as of December
31, 1997, the average (without indexing) of the annual Social
Security taxable
4
wage bases under the Social Security Act for each year during
the 35 calendar years ending with the last day of the calendar
year in which the Participant attains his Social Security
Retirement Age, but no later than December 31, 1997.
(g) "PSI Highest Average Earnings" means, with respect to a
Participant who participated in the PSI Plan as of December
31, 1997, the Participant's highest average annual Earnings
for any three consecutive calendar years out of the
Participant's 10 or fewer years of participation under the PSI
Plan ending on December 31, 1997. If Earnings for any Plan
Year beginning before January 1, 1994 are taken into account
in determining a Participant's PSI Highest Average Earnings,
the Earnings for that Plan Year will be subject to the
limitation of Code paragraph 401(a)(17) that was in effect for
that Plan Year and the Participant's Nonforfeitable Annual
Pension will not be less than the Participant's accrued
benefit under the PSI Plan as of December 31, 1993.
(h) "Years of Participation" means, with respect to each
Participant who participated in the PSI Plan as of December
31, 1997, the sum of the following whole and fractional years:
(1) with respect to the period prior to January 1, 1976,
the number of years (to the last completed 1/12th
year) of his "participating service" (as defined in
the PSI Plan as in effect on December 31, 1975,
except that the last sentence of Section 1.6 of the
PSI Plan will not apply) as of January 1, 1976; plus
(2) with respect to each Plan Year of his participation
in the PSI Plan on or after January 1, 1976, and
before January 1, 1998 (excluding the Plan Years in
which his Participation Commencement Date and his
Reemployment Commencement Date, if applicable, occur,
to the extent one or both of those dates are on or
after January 1, 1976), one Year of Participation if
he completes at least 2,000 Hours of Service during
that Plan Year; otherwise, a fraction of a Year of
Participation, the numerator of which is the number
of Hours of Service which he completes during a Plan
Year and the denominator of which is 2,000; provided,
however, that if he completes less than 1,000 Hours
of Service during a Plan Year, no portion of a Year
of Participation will be granted; plus
(3) with respect to the Plan Years during which his
Participation Commencement Date and/or his
Reemployment Commencement Date, if applicable, occur,
to the extent one or both of the dates occur on or
after January 1, 1976, and before January 1, 1998,
either one Year of Participation, or, if the month
and day of his Participation Commencement Date or
Reemployment Commencement Date within the Plan Year
is after January 1, a fraction thereof, the numerator
of
5
which is the number of complete calendar months in
that Plan Year during which he is a participant in
the PSI Plan and the denominator of which is 12.
However, if the number of Hours of Service that he
completes as a participant in the PSI Plan during the
respective Plan Year is less than the product of
166-2/3 multiplied by the number of complete calendar
months during which he is a participant in the PSI
Plan in the Plan Year, then the Year of
Participation, or fraction thereof, as otherwise
determined pursuant to this Paragraph (c), will be
multiplied by the ratio of the number of Hours of
Service that he completes as a participant in the PSI
Plan during the Plan Year to 166-2/3 multiplied by
the number of complete calendar months during which
he is a participant in the PSI Plan in the Plan Year.
If the number of Hours of Service that he completes
as a PSI Plan participant during the Plan Year is
less than the product of 83-1/3 multiplied by the
number of complete calendar months during which he is
a PSI Plan participant in the Plan Year, no portion
of a Year of Participation shall be granted.
With respect to any Plan Year wholly or partially included in a
calendar year used to calculate the Participant's PSI Plan Highest
Average Earnings, if the PSI Plan participant fails to complete at
least 2,000 Hours of Service during that Plan Year, then, in lieu of
any fraction of a Year of Participation as otherwise determined under
either Paragraph (b) or Paragraph (c), the PSI Plan participant will be
granted a fraction of a Year of Participation: the numerator of which
is equal to the sum of the number of Hours of Service which the PSI
Plan participant completes as a PSI Plan participant during those
calendar months of the Plan Year that are not included in that calendar
year, and the greater of (A) the number of Hours of Service that the
PSI Plan participant completes during those calendar months of the Plan
Year that are included in such calendar year or (B) the product of
166-2/3 multiplied by the number of calendar months of the Plan Year
that are included in the calendar year; and the denominator of which is
2,000. A PSI Plan participant's Years of Participation will be
adjusted, if necessary, pursuant to Section 4.5 (Special Adjustments)
or Section 4.8 (Benefits Adjustment for Participants Covered by Certain
Programs) of the PSI Plan.
6
ADDENDUM B
Cinergy Corp. Non-Union Employees' Pension Plan
I. MRP NORMAL RETIREMENT FORMULA
A Participant's annual accrued benefit computed under the MRP Normal
Retirement Formula as of December 31, 1997, equals 1.3 percent of the
Participant's MRP Final Average Compensation, plus .35 percent of MRP
Final Average Compensation in excess of MRP Covered Compensation
multiplied times the Participant's Years of Accredited Service to and
including 30 years; plus .1 percent of the Participant's MRP Final
Average Compensation times the Participant's Years of Accredited
Service in excess of 30 years.
II. RIP NORMAL RETIREMENT FORMULA
A Participant's annual accrued benefit computed under the RIP Normal
Retirement Formula as of December 31, 1997, equals 57 percent of the
Participant's RIP Final Average Compensation reduced by one-half of his
or her Primary Social Security Benefit. If the Participant has less
than 30 Years of Accredited Service as of December 31, 1997, the amount
will be further reduced by 1/30 for each full year less than 30 years.
If the Participant has more than 30 Years of Accredited Service as of
December 31, 1997, the amount will be increased by $6.00 for each Year
of Accredited Service over 30 years.
III. MRP AND RIP DEFINITIONS
For purposes of the MRP and RIP formulas, the capitalized terms will
have the meanings set forth in the Plan. In addition, the following
words and phrases will have the meanings set forth in this Addendum:
(a) "CG&E Service" means, with respect to an Employee, the period
of time during which the employment relationship exists
between the Employee and CG&E on or before December 31, 1997,
the length of which is determined as follows:
(1) An Employee will be credited with CG&E Service for
the period of time beginning with his Employment
Commencement Date and ending on December 31, 1997.
(2) An Employee will be credited with CG&E Service for
each Period of Credited Severance occurring on or
before December 31, 1997.
1
(3) An Employee will be credited with CG&E Service for
any period of service with a related company (as
determined under Code subsections 414(b), (c), and
(m)), which will be determined as if he had been
employed by CG&E during that period.
(4) In determining an Employee's total CG&E Service for
purposes of the MRP or RIP, all periods of CG&E
Service that are credited to the Employee under
Paragraphs (1) through (3) above will be aggregated.
In no event will an Employee receive credit more than
once for the same period of CG&E Service. For
purposes of determining an Employee's total CG&E
Service, the Employee will be credited with one month
of CG&E Service for each month during which he is
credited with at least one Hour of Service. Those
total months of CG&E Service will then be rounded up
to the next highest number of whole calendar years.
(b) "DCIP" means The Cincinnati Gas & Electric Company Deferred
Compensation and Investment Plan.
(c) "MRP Covered Compensation" means, with respect to a
Participant who was a participant in the MRP as of December
31, 1997, the average (without indexing) of the annual Social
Security taxable wage bases under the Social Security Act for
each year during the 35 calendar years ending with the last
day of the calendar year in which the Participant attains his
Social Security Retirement Age, but no later than December 31,
1997.
(d) "MRP Final Average Compensation" means, with respect to a
Participant who was a participant in the MRP as of December
31, 1997, the average of the five consecutive calendar years
of compensation as defined in (1) below, that produce the
highest average within the 10 calendar years ending on
December 31, 1997.
(1) For purposes of this definition, "compensation" means
the annual rate of base pay determined on July 1 of
each year prior to 1998. For these purposes, base pay
is the wage or salary assigned to each specific job
title or position. Base pay does not include
overtime, bonuses, severance, or any other special
pay. Base pay, however, shall include deferred
compensation contributions (as that term is defined
under the DCIP and SIP) and will also include any
other elective contribution made by CG&E to a plan
covered by Code section 125, which contribution is
not included in the gross income of the MRP
participant. If compensation for any Plan Year
beginning before January 1, 1994, is taken into
account in determining an MRP participant's MRP Final
Average Compensation, the compensation for that Plan
Year will be subject to the limitation of Code
paragraph
2
401(a)(17) that was in effect for that year and the
Participant's Nonforfeitable Annual Pension will not
be less than the Participant's accrued benefit under
the MRP as of December 31, 1993.
(2) For purposes of this definition, an MRP participant's
base pay will be converted to an annual rate of
compensation using the formula appropriate to the MRP
participant's base pay, as follows:
(A) SEMI-MONTHLY RATE. The annual compensation
for an MRP participant paid on a
semi-monthly basis is 24 times the
participant's July 1 semi-monthly base pay.
(B) MONTHLY RATE. The annual compensation for an
MRP participant paid on a monthly basis is
12 times the participant's July 1 monthly
base pay.
(C) HOURLY RATE. The annual compensation for an
MRP participant paid on an hourly basis is
2,080 times the participant's July 1 hourly
base pay.
(D) WEEKLY RATE. The annual compensation for an
MRP participant paid on a weekly basis is 52
times the participant's weekly base pay.
(3) The compensation of an MRP participant who has no
salary or wage rate on July 1 of a calendar year
because he is on an unpaid leave of absence or
temporary suspension will be calculated using his
latest rate of pay prior to July 1 of that year, if
the MRP participant returns to active employment
before his Severance from Service Date. If the MRP
participant is on unpaid leave or suspension on July
1 of a year, and the participant does not return to
active employment before his Severance from Service
Date, his compensation for that calendar year will be
zero.
(e) "Primary Social Security Benefit" means the primary federal
old age insurance benefit estimated by the Committee that is,
or would be, payable to an RIP participant at age 65 based on
the federal Social Security Act in effect on December 31,
1997.
The Primary Social Security Benefit of an RIP participant who
had not attained age 65 by December 31, 1997, will be
determined by assuming that he continued to receive
compensation after December 31, 1997, at the rate of
compensation in effect immediately prior to that, to age 55,
and zero compensation from age 55 thereafter until age 65.
3
If an RIP participant was hired after 1950, he will be
provided with written notice of his right to supply actual
pre-employment earnings history, or the financial consequences
of failing to supply such history, and that the RIP
participant can obtain his actual earnings history on a
year-by-year basis from the Social Security administration.
If an RIP participant whose pre-CG&E employment earnings
history was estimated supplies documentation from the Social
Security administration of his actual year-by-year earnings
history, the RIP participant's Primary Social Security Benefit
that previously was estimated will be recalculated using
actual pre-CG&E employment earnings. Such documentation must
be supplied no later than 6 months following the later of:
(1) the date of the RIP participant's termination of
employment (by retirement or otherwise), or
(2) the date that the RIP participant is notified of the
benefit to which he is entitled.
(f) "RIP Final Average Compensation" means, with respect to a
Participant who was a participant in the RIP as of December
31, 1997, the average of the four consecutive calendar years
of compensation, as defined in (1) below, that produce the
highest average within the 10 calendar years ending on
December 31, 1997.
(1) For purposes of this definition, "compensation" means
the annual rate of base pay determined on July 1 of
each year prior to 1998. For these purposes, base pay
is the wage or salary assigned to each specific job
title or position. Base pay does not include
overtime, bonuses, severance, or any other special
pay. Base pay, however, will include deferred
compensation contributions (as that term is defined
under the DCIP and SIP) and will also include any
other elective contribution made by CG&E to a plan
covered by Code section 125, which contribution is
not included in the gross income of the RIP
participant. If compensation for any Plan Year
beginning before January 1, 1994, is taken into
account in determining an RIP Participant's RIP Final
Average Compensation, the compensation for that Plan
Year will be subject to the limitation of Code
paragraph 401(a)(17) that was in effect for that year
and the Participant's Nonforfeitable Annual Pension
will not be less than the Participant's accrued
benefit under the RIP as of December 31, 1993.
(2) For purposes of this definition, an RIP participant's
base pay will be converted to an annual rate of
compensation using the formula appropriate to the
participant's base pay, as follows:
4
(A) SEMI-MONTHLY RATE. The annual compensation
for an RIP participant paid on a
semi-monthly basis is 24 times the
participant's July 1 semi-monthly base pay.
(B) MONTHLY RATE. The annual compensation for an
RIP participant paid on a monthly basis is
12 times the participant's July 1 monthly
base pay.
(C) HOURLY RATE. The annual compensation for an
RIP participant paid on an hourly basis is
2,080 times the participant's July 1 hourly
base pay.
(D) WEEKLY RATE. The annual compensation for an
RIP participant paid on a weekly basis is 52
times the participant's weekly base pay.
(3) The compensation of an RIP participant who has no
salary or wage rate on July 1 of a calendar year
because he is on an unpaid leave of absence or
temporary suspension will be calculated using his
latest rate of pay prior to July 1 of that year, if
the RIP participant returns to active employment
before his Severance from Service Date. If the RIP
participant is on unpaid leave or suspension on July
1 of a year, and the participant does not return to
active employment before his Severance from Service
Date, his compensation for that calendar year will be
zero.
(g) "SIP" means The Cincinnati Gas & Electric Company Savings
Incentive Plan.
(h) "Years of Accredited Service" means the number of years equal to the
length of the Employee's CG&E Service on or before December 31, 1997,
during which the Employee is treated as a participant in the MRP or
RIP. The calculation of an Employee's Years of Accredited Service will
begin on the first day of the month during which the Employee became
eligible to participate in the MRP or the RIP.
5
ADDENDUM C
MRP/RIP 100% Spousal and Contingent Annuitant Benefit
NUMBER OF FULL YEARS NUMBER OF FULL YEARS
THE SPOUSE OR THE SPOUSE OR
CONTINGENT ANNUITANT CONTINGENT ANNUITANT
WAS BORN WAS BORN
AFTER THE PARTICIPANT FACTOR AFTER THE PARTICIPANT FACTOR
--------------------- ------ --------------------- ------
0 .911 20 .861
1 .908 21 .859
2 .905 22 .858
3 .902 23 .856
4 .899 24 .855
5 .896 25 .853
6 .893 26 .852
7 .890 27 .851
8 .887 28 .850
9 .885 29 .849
10 .882 30 .848
11 .880 31 .847
12 .877 32 .846
13 .875 33 .845
14 .872 34 .844
15 .870 35 .844
16 .868 36 .843
17 .866 37 .842
18 .864 28 .842
19 .863 39 .841
40 .841
1
NUMBER OF FULL YEARS NUMBER OF FULL YEARS
THE SPOUSE OR THE SPOUSE OR
CONTINGENT ANNUITANT CONTINGENT ANNUITANT
WAS BORN BEFORE WAS BORN BEFORE
THE PRIMARY ANNUITANT FACTOR THE PRIMARY ANNUITANT FACTOR
--------------------- ------ --------------------- ------
0 .911 20 .973
1 .915 21 .975
2 .918 22 .977
3 .922 23 .979
4 .925 24 .981
5 .928 25 .982
6 .932 26 .984
7 .935 27 .985
8 .939 28 .986
9 .942 29 .987
10 .945 30 .988
11 .949
12 .952
13 .955
14 .958
15 .961
16 .963
17 .966
18 .968
19 .971
Morality: 1971 TPF&C Forecast Mortality Table (Employee rate based on
85% male; Contingent Annuitant rate based on 85% female)
Interest: 7.5%
Subsidy: Factors include a 50% subsidy provided by the Company
Effective: January 1, 1984
2
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 RETIREMENT
- ---------------- ----- ----- ----- ----- ---- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ----- ------------
20 .985 .984 .982 .981 .979 .978 .976 .974 .972 .970 .967 .965 .962 .959 .956 .952 20
21 .985 .984 .983 .981 .980 .978 .976 .974 .972 .970 .968 .965 .962 .959 .956 .952 21
22 .985 .984 .983 .982 .980 .979 .977 .975 .973 .971 .968 .966 .963 .960 .957 .953 22
23 .986 .985 .983 .982 .981 .979 .977 .975 .973 .971 .969 .966 .964 .961 .958 .954 23
24 .986 .985 .984 .982 .981 .979 .978 .976 .974 .972 .969 .967 .964 .961 .958 .954 24
25 .987 .985 .984 .983 .981 .980 .978 .976 .974 .972 .970 .968 .965 .962 .959 .955 25
26 .987 .986 .985 .983 .982 .980 .979 .977 .975 .973 .971 .968 .966 .963 .960 .955 26
27 .987 .986 .985 .984 .982 .981 .979 .977 .976 .974 .971 .969 .966 .963 .960 .956 27
28 .988 .987 .985 .984 .983 .981 .980 .978 .976 .974 .972 .970 .967 .964 .961 .957 28
29 .988 .987 .986 .985 .983 .982 .980 .979 .977 .975 .973 .970 .968 .965 .962 .957 29
30 .988 .987 .986 .985 .984 .982 .981 .979 .977 .975 .973 .971 .968 .966 .963 .958 30
31 .989 .988 .987 .986 .984 .983 .981 .980 .978 .976 .974 .972 .969 .967 .964 .959 31
32 .989 .988 .987 .986 .985 .983 .982 .980 .979 .977 .975 .972 .970 .967 .965 .960 32
33 .989 .989 .988 .986 .985 .984 .983 .981 .979 .977 .975 .973 .971 .968 .965 .960 33
34 .990 .989 .988 .987 .986 .984 .983 .982 .980 .978 .976 .974 .972 .969 .966 .961 34
35 .990 .989 .988 .987 .986 .985 .984 .982 .981 .979 .977 .975 .972 .970 .967 .962 35
36 .991 .990 .989 .988 .987 .985 .984 .983 .981 .979 .978 .976 .973 .971 .968 .963 36
37 .991 .990 .989 .988 .987 .986 .985 .983 .982 .980 .978 .976 .974 .972 .969 .964 37
38 .991 .990 .990 .989 .988 .987 .985 .984 .982 .981 .979 .977 .975 .973 .970 .965 38
39 .992 .991 .990 .989 .988 .987 .986 .985 .983 .982 .980 .978 .976 .974 .971 .966 39
1
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 RETIREMENT
40 .992 .991 .990 .990 .989 .988 .986 .985 .984 .982 .981 .979 .977 .974 .972 .967 40
41 .992 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 .979 .978 .975 .973 .968 41
42 .993 .992 .991 .990 .990 .989 .987 .986 .985 .984 .982 .980 .978 .976 .974 .968 42
43 .993 .992 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 .979 .977 .975 .969 43
44 .993 .993 .992 .991 .990 .990 .989 .987 .986 .985 .983 .982 .980 .978 .976 .970 44
45 .994 .993 .992 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 .979 .977 .971 45
46 .994 .993 .993 .992 .991 .990 .990 .989 .987 .986 .985 .983 .982 .980 .978 .972 46
47 .994 .994 .993 .992 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 .979 .973 47
48 .994 .994 .993 .993 .992 .991 .991 .990 .989 .987 .986 .985 .983 .982 .980 .974 48
49 .995 .994 .994 .993 .992 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 .975 49
50 .995 .994 .994 .993 .993 .992 .991 .991 .990 .989 .988 .986 .985 .983 .982 .976 50
51 .995 .995 .994 .994 .993 .993 .992 .991 .990 .989 .988 .987 .986 .984 .983 .977 51
52 .995 .995 .995 .994 .994 .993 .992 .992 .991 .990 .989 .988 .986 .985 .983 .978 52
53 .996 .995 .995 .994 .994 .993 .993 .992 .991 .990 .989 .988 .987 .986 .984 .979 53
54 .996 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990 .989 .988 .986 .985 .980 54
- --------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ------------
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on 85%
female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
2
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------------
55 .996 .996 .995 .995 .995 .994 .994 .993 .992 .991 .991 .990 .988 .987 .986 .981 55
56 .996 .996 .996 .995 .995 .994 .994 .993 .993 .992 .991 .990 .989 .988 .987 .982 56
57 .997 .996 .996 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990 .989 .987 .983 57
58 .997 .996 .996 .996 .995 .995 .995 .994 .994 .993 .992 .991 .990 .989 .988 .984 58
59 .997 .997 .996 .996 .996 .995 .995 .994 .994 .993 .993 .992 .991 .990 .989 .985 59
60 .997 .997 .997 .996 .996 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990 .985 60
61 .997 .997 .997 .997 .996 .996 .996 .995 .995 .994 .994 .993 .992 .991 .990 .986 61
62 .997 .997 .997 .997 .997 .996 .996 .995 .995 .995 .994 .993 .993 .992 .991 .987 62
63 .998 .997 .997 .997 .997 .997 .996 .996 .995 .995 .994 .994 .993 .992 .992 .988 63
64 .998 .998 .997 .997 .997 .997 .996 .996 .996 .995 .995 .994 .994 .993 .992 .989 64
65 .998 .998 .998 .997 .997 .997 .997 .996 .996 .996 .995 .995 .994 .993 .993 .989 65
66 .998 .998 .998 .998 .997 .997 .997 .997 .996 .996 .996 .995 .995 .994 .993 .990 66
67 .998 .998 .998 .998 .998 .997 .997 .997 .997 .996 .996 .995 .995 .994 .994 .991 67
68 .998 .998 .998 .998 .998 .998 .997 .997 .997 .997 .996 .996 .995 .995 .994 .991 68
69 .998 .998 .998 .998 .998 .998 .998 .997 .997 .997 .997 .996 .996 .995 .995 .992 69
70 .999 .998 .998 .998 .998 .998 .998 .998 .997 .997 .997 .996 .996 .996 .995 .992 70
71 .999 .999 .999 .998 .998 .998 .998 .998 .998 .997 .997 .997 .996 .996 .996 .993 71
72 .999 .999 .999 .999 .998 .998 .998 .998 .998 .998 .997 .997 .997 .996 .996 .994 72
73 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .998 .997 .997 .997 .996 .994 73
74 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .997 .997 .997 .997 .995 74
3
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 RETIREMENT
75 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .997 .997 .997 .995 75
76 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .997 .997 .995 76
77 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .997 .996 77
78 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998 .996 78
79 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998 .996 79
80 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998 .997 80
81 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998 .997 81
82 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 .997 82
83 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 83
84 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 84
85 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 85
86 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 86
87 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 87
88 1.000 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998 88
89 1.000 1.000 1.000 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999 89
- --------------- ----- ----- ----- ----- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ------------
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on
85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 40 41 42 43 44 45 46 46 48 49 50 51 52 53 54 55 RETIREMENT
- ---------------- ---- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------- --------------
20 .952 .948 .945 .941 .936 .932 .927 .922 .917 .911 .905 .899 .893 .886 .879 .872 20
4
21 .952 .949 .945 .941 .937 .932 .928 .923 .917 .912 .906 .900 .894 .887 .880 .873 21
22 .953 .949 .946 .942 .937 .933 .928 .923 .918 .912 .907 .901 .894 .888 .881 .873 22
23 .954 .950 .946 .942 .938 .933 .929 .924 .919 .913 .907 .901 .895 .888 .881 .874 23
24 .954 .951 .947 .943 .939 .934 .929 .924 .919 .914 .908 .902 .896 .889 .882 .875 24
25 .955 .951 .947 .943 .939 .935 .930 .925 .920 .914 .909 .903 .896 .890 .883 .876 25
26 .955 .952 .948 .944 .940 .936 .931 .926 .921 .915 .910 .904 .897 .891 .884 .877 26
27 .956 .953 .949 .945 .941 .936 .932 .927 .922 .916 .910 .904 .898 .892 .885 .878 27
28 .957 .953 .950 .946 .941 .937 .932 .928 .922 .917 .911 .905 .899 .893 .886 .878 28
29 .957 .954 .950 .946 .942 .938 .933 .928 .923 .918 .912 .906 .900 .894 .887 .879 29
30 .958 .955 .951 .947 .943 .939 .934 .929 .924 .919 .913 .907 .901 .895 .888 .881 30
31 .959 .955 .952 .948 .944 .940 .935 .930 .925 .920 .914 .908 .902 .896 .889 .882 31
32 .960 .956 .953 .949 .945 .941 .936 .931 .926 .921 .915 .909 .903 .897 .890 .883 32
33 .960 .957 .954 .950 .946 .942 .937 .932 .927 .922 .916 .911 .904 .898 .891 .884 33
34 .961 .958 .954 .951 .947 .943 .938 .933 .928 .923 .918 .912 .906 .899 .893 .885 34
35 .962 .959 .955 .952 .948 .944 .939 .934 .929 .924 .919 .913 .907 .901 .894 .887 35
36 .963 .960 .956 .953 .949 .945 .940 .936 .931 .926 .920 .914 .908 .902 .895 .888 36
37 .964 .961 .957 .954 .950 .946 .941 .937 .932 .927 .921 .916 .910 .903 .897 .890 37
38 .965 .962 .958 .955 .951 .947 .943 .938 .933 .928 .923 .917 .911 .905 .898 .891 38
39 .966 .963 .959 .956 .952 .948 .944 .939 .935 .929 .924 .919 .913 .906 .900 .893 39
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 RETIREMENT
40 .967 .964 .960 .957 .953 .949 .945 .941 .936 .931 .926 .920 .914 .908 .902 .895 40
41 .968 .965 .961 .958 .954 .950 .946 .942 .937 .932 .927 .922 .916 .910 .903 .897 41
42 .968 .966 .963 .959 .956 .952 .948 .943 .939 .934 .929 .923 .918 .912 .905 .898 42
43 .969 .967 .964 .960 .957 .953 .949 .945 .940 .935 .930 .925 .919 .913 .907 .900 43
44 .970 .968 .965 .961 .958 .954 .950 .946 .942 .937 .932 .927 .921 .915 .909 .902 44
45 .971 .969 .966 .963 .959 .956 .952 .948 .943 .939 .934 .929 .923 .917 .911 .904 45
5
46 .972 .970 .967 .964 .961 .957 .953 .949 .945 .940 .935 .930 .925 .919 .913 .907 46
47 .973 .971 .968 .965 .962 .958 .955 .951 .946 .942 .937 .932 .927 .921 .915 .909 47
48 .974 .972 .969 .966 .963 .960 .956 .952 .948 .944 .939 .934 .929 .923 .917 .911 48
49 .975 .973 .970 .968 .964 .961 .958 .954 .950 .945 .941 .936 .931 .925 .920 .913 49
50 .976 .974 .972 .969 .966 .963 .959 .955 .951 .947 .943 .938 .933 .928 .922 .916 50
51 .977 .975 .973 .970 .967 .964 .961 .957 .953 .949 .945 .940 .935 .930 .924 .918 51
52 .978 .976 .974 .971 .968 .965 .962 .959 .955 .951 .947 .942 .937 .932 .926 .921 52
53 .979 .977 .975 .972 .970 .967 .964 .960 .957 .953 .948 .944 .939 .934 .929 .923 53
54 .980 .978 .976 .974 .971 .968 .965 .962 .958 .954 .950 .946 .941 .937 .931 .926 54
- ---------------- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ------- -------------
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on
85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
6
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ --------------
55 .981 .979 .977 .975 .972 .969 .966 .963 .960 .956 .952 .948 .944 .939 .934 .928 55
56 .982 .980 .978 .976 .973 .971 .968 .965 .962 .958 .954 .950 .946 .941 .936 .931 56
57 .983 .981 .979 .977 .975 .972 .969 .966 .963 .960 .956 .952 .948 .943 .939 .933 57
58 .984 .982 .980 .978 .976 .973 .971 .968 .965 .962 .958 .954 .950 .946 .941 .936 58
59 .985 .983 .981 .979 .977 .975 .972 .969 .966 .963 .960 .956 .952 .948 .943 .939 59
60 .985 .984 .982 .980 .978 .976 .974 .971 .968 .965 .962 .958 .954 .950 .946 .941 60
61 .986 .985 .983 .981 .979 .977 .975 .972 .970 .967 .964 .960 .957 .953 .948 .944 61
62 .987 .986 .984 .982 .981 .978 .976 .974 .971 .968 .965 .962 .959 .955 .951 .946 62
63 .988 .987 .985 .983 .982 .980 .978 .975 .973 .970 .967 .964 .961 .957 .953 .949 63
64 .989 .987 .986 .984 .983 .981 .979 .977 .974 .972 .969 .966 .963 .959 .956 .952 64
65 .989 .988 .987 .985 .984 .982 .980 .978 .976 .973 .971 .968 .965 .961 .958 .954 65
66 .990 .989 .988 .986 .985 .983 .981 .979 .977 .975 .972 .970 .967 .964 .960 .957 66
67 .991 .990 .988 .987 .986 .984 .982 .981 .979 .976 .974 .971 .969 .966 .962 .959 67
68 .991 .990 .989 .988 .987 .985 .984 .982 .980 .978 .976 .973 .971 .968 .965 .961 68
69 .992 .991 .990 .989 .988 .986 .985 .983 .981 .979 .977 .975 .972 .970 .967 .964 69
70 .992 .992 .991 .990 .988 .987 .986 .984 .982 .981 .979 .976 .974 .972 .969 .966 70
71 .993 .992 .991 .990 .989 .988 .987 .985 .984 .982 .980 .978 .976 .974 .971 .968 71
72 .994 .993 .992 .991 .990 .989 .988 .986 .985 .983 .981 .980 .978 .975 .973 .970 72
73 .994 .993 .993 .992 .991 .990 .988 .987 .986 .984 .983 .981 .979 .977 .975 .972 73
74 .995 .994 .993 .992 .991 .990 .989 .988 .987 .985 .984 .982 .981 .979 .977 .974 74
7
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 RETIREMENT
75 .995 .994 .994 .993 .992 .991 .990 .989 .988 .987 .985 .984 .982 .980 .978 .976 75
76 .995 .995 .994 .993 .993 .992 .991 .990 .989 .988 .986 .985 .983 .982 .980 .978 76
77 .996 .995 .995 .994 .993 .992 .992 .991 .990 .988 .987 .986 .985 .983 .981 .979 77
78 .996 .996 .995 .994 .994 .993 .992 .991 .990 .989 .988 .987 .986 .984 .983 .981 78
79 .996 .996 .995 .995 .994 .994 .993 .992 .991 .990 .989 .988 .987 .985 .984 .982 79
80 .997 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989 .988 .987 .985 .984 80
81 .997 .997 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989 .988 .986 .985 81
82 .997 .997 .997 .996 .996 .995 .995 .994 .993 .992 .992 .991 .990 .989 .988 .986 82
83 .998 .997 .997 .996 .996 .996 .995 .994 .994 .993 .992 .992 .991 .990 .989 .987 83
84 .998 .997 .997 .997 .996 .996 .995 .995 .994 .994 .993 .992 .991 .991 .990 .989 84
85 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994 .994 .993 .992 .991 .990 .990 85
86 .998 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994 .994 .993 .992 .991 .990 86
87 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993 .993 .992 .991 87
88 .998 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993 .993 .992 88
89 .999 .998 .998 .998 .998 .997 .997 .997 .996 .996 .996 .995 .995 .994 .993 .993 89
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------------
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on
85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
8
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
20 .872 .864 .856 .848 .839 .829 .819 .809 .798 .786 .774 .762 .749 .735 .722 .708 20
21 .873 .865 .857 .849 .839 .830 .820 .810 .799 .787 .775 .762 .749 .736 .722 .708 21
22 .873 .866 .858 .849 .840 .831 .821 .810 .799 .788 .776 .763 .750 .737 .723 .709 22
23 .874 .867 .858 .850 .841 .831 .821 .811 .800 .788 .776 .764 .751 .737 .724 .710 23
24 .875 .867 .859 .851 .842 .832 .822 .812 .801 .789 .777 .765 .752 .738 .725 .711 24
25 .876 .868 .860 .852 .843 .833 .823 .813 .802 .790 .778 .765 .752 .739 .725 .712 25
26 .877 .869 .861 .852 .843 .834 .824 .814 .803 .791 .779 .766 .753 .740 .726 .712 26
27 .878 .870 .862 .853 .844 .835 .825 .815 .804 .792 .780 .767 .754 .741 .727 .713 27
28 .878 .871 .863 .854 .845 .836 .826 .816 .805 .793 .781 .768 .755 .742 .728 .715 28
29 .879 .872 .864 .855 .847 .837 .827 .817 .806 .794 .782 .770 .757 .743 .730 .716 29
30 .881 .873 .865 .857 .848 .838 .828 .818 .807 .795 .783 .771 .758 .744 .731 .717 30
31 .882 .874 .866 .858 .849 .839 .830 .819 .808 .797 .785 .772 .759 .746 .732 .718 31
32 .883 .875 .867 .859 .850 .841 .831 .820 .810 .798 .786 .773 .760 .747 .733 .719 32
33 .884 .877 .869 .860 .851 .842 .832 .822 .811 .799 .787 .775 .762 .748 .735 .721 33
34 .885 .878 .870 .862 .853 .844 .834 .823 .812 .801 .789 .776 .763 .750 .736 .722 34
35 .887 .879 .872 .863 .854 .845 .835 .825 .814 .802 .790 .778 .765 .752 .738 .724 35
36 .888 .881 .873 .865 .856 .847 .837 .826 .816 .804 .792 .780 .767 .753 .740 .726 36
37 .890 .882 .875 .866 .858 .848 .839 .828 .817 .806 .794 .781 .768 .755 .742 .728 37
38 .891 .884 .876 .868 .859 .850 .840 .830 .819 .808 .796 .783 .770 .757 .743 .730 38
39 .893 .886 .878 .870 .861 .852 .842 .832 .821 .810 .798 .785 .772 .759 .746 .732 39
9
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 RETIREMENT
40 .895 .888 .880 .872 .863 .854 .844 .834 .823 .812 .800 .787 .775 .761 .748 .734 40
41 .897 .889 .882 .874 .865 .856 .846 .836 .825 .814 .802 .790 .777 .764 .750 .736 41
42 .898 .891 .884 .876 .867 .858 .848 .838 .828 .816 .804 .792 .779 .766 .752 .739 42
43 .900 .893 .886 .878 .869 .860 .851 .841 .830 .819 .807 .794 .782 .769 .755 .741 43
44 .902 .895 .888 .880 .872 .863 .853 .843 .832 .821 .809 .797 .784 .771 .758 .744 44
45 .904 .897 .890 .882 .874 .865 .856 .846 .835 .824 .812 .800 .787 .774 .761 .747 45
46 .907 .900 .892 .885 .876 .867 .858 .848 .838 .827 .815 .803 .790 .777 .763 .750 46
47 .909 .902 .895 .887 .879 .870 .861 .851 .841 .829 .818 .806 .793 .780 .767 .753 47
48 .911 .904 .897 .890 .881 .873 .864 .854 .843 .832 .821 .809 .796 .783 .770 .756 48
49 .913 .907 .900 .892 .884 .876 .866 .857 .847 .836 .824 .812 .800 .787 .773 .760 49
50 .916 .909 .902 .895 .887 .878 .869 .860 .850 .839 .827 .815 .803 .790 .777 .763 50
51 .918 .912 .905 .898 .890 .881 .872 .863 .853 .842 .831 .819 .807 .794 .781 .767 51
52 .921 .914 .908 .900 .893 .884 .876 .866 .856 .846 .834 .823 .810 .798 .784 .771 52
53 .923 .917 .910 .903 .896 .888 .879 .870 .860 .849 .838 .826 .814 .801 .788 .775 53
54 .926 .920 .913 .906 .899 .891 .882 .873 .863 .853 .842 .830 .818 .806 .793 .779 54
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on 85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
10
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
55 .928 .922 .916 .909 .902 .894 .885 .876 .867 .857 .846 .834 .822 .810 .797 .784 55
56 .931 .925 .919 .912 .905 .897 .889 .880 .871 .860 .850 .838 .826 .814 .801 .788 56
57 .933 .928 .922 .915 .908 .901 .892 .884 .874 .864 .854 .842 .831 .819 .806 .793 57
58 .936 .931 .925 .918 .911 .904 .896 .887 .878 .868 .858 .847 .835 .823 .811 .798 58
59 .939 .933 .928 .921 .915 .907 .900 .891 .882 .873 .862 .851 .840 .828 .816 .803 59
60 .941 .936 .931 .924 .918 .911 .903 .895 .886 .877 .867 .856 .845 .833 .821 .808 60
61 .944 .939 .933 .928 .921 .914 .907 .899 .890 .881 .871 .860 .849 .838 .826 .813 61
62 .946 .942 .936 .931 .925 .918 .911 .903 .894 .885 .876 .865 .854 .843 .831 .819 62
63 .949 .944 .939 .934 .928 .921 .914 .907 .899 .890 .880 .870 .859 .848 .836 .824 63
64 .952 .947 .942 .937 .931 .925 .918 .911 .903 .894 .885 .875 .864 .854 .842 .830 64
65 .954 .950 .945 .940 .935 .929 .922 .915 .907 .899 .890 .880 .870 .859 .848 .836 65
66 .957 .953 .948 .943 .938 .932 .926 .919 .911 .903 .894 .885 .875 .865 .854 .842 66
67 .959 .955 .951 .946 .941 .936 .930 .923 .916 .908 .899 .890 .880 .870 .859 .848 67
68 .961 .958 .954 .949 .944 .939 .933 .927 .920 .912 .904 .895 .886 .876 .865 .854 68
69 .964 .960 .956 .952 .948 .943 .937 .931 .924 .917 .909 .900 .891 .881 .871 .861 69
70 .966 .963 .959 .955 .951 .946 .941 .935 .928 .921 .914 .905 .896 .887 .877 .867 70
71 .968 .965 .962 .958 .954 .949 .944 .939 .932 .926 .918 .910 .902 .893 .883 .873 71
72 .970 .967 .964 .961 .957 .952 .948 .942 .936 .930 .923 .915 .907 .898 .889 .879 72
73 .972 .970 .967 .963 .959 .955 .951 .946 .940 .934 .927 .920 .912 .904 .895 .886 73
74 .974 .972 .969 .966 .962 .958 .954 .949 .944 .938 .932 .925 .917 .909 .901 .892 74
11
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 RETIREMENT
75 .976 .974 .971 .968 .965 .961 .957 .953 .948 .942 .936 .929 .922 .915 .906 .898 75
76 .978 .976 .973 .970 .967 .964 .960 .956 .951 .946 .940 .934 .927 .920 .912 .904 76
77 .979 .977 .975 .973 .970 .966 .963 .959 .954 .950 .944 .938 .932 .925 .917 .909 77
78 .981 .979 .977 .975 .972 .969 .966 .962 .958 .953 .948 .942 .936 .929 .922 .915 78
79 .982 .981 .979 .976 .974 .971 .968 .965 .961 .956 .951 .946 .940 .934 .927 .920 79
80 .984 .982 .980 .978 .976 .973 .971 .967 .964 .960 .955 .950 .944 .938 .932 .925 80
81 .985 .984 .982 .980 .978 .975 .973 .970 .966 .963 .958 .954 .948 .943 .937 .930 81
82 .986 .985 .983 .982 .980 .977 .975 .972 .969 .965 .961 .957 .952 .947 .941 .935 82
83 .987 .986 .985 .983 .981 .979 .977 .974 .972 .968 .965 .960 .956 .951 .946 .940 83
84 .989 .987 .986 .985 .983 .981 .979 .977 .974 .971 .967 .963 .959 .955 .950 .944 84
85 .990 .988 .987 .986 .984 .983 .981 .979 .976 .973 .970 .966 .962 .958 .954 .949 85
86 .990 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972 .969 .965 .961 .957 .952 86
87 .991 .990 .989 .988 .987 .986 .984 .982 .980 .977 .975 .972 .968 .965 .960 .956 87
88 .992 .991 .990 .989 .988 .987 .985 .984 .982 .979 .977 .974 .971 .967 .964 .960 88
89 .993 .992 .991 .990 .989 .988 .987 .985 .983 .981 .979 .976 .973 .970 .967 .963 89
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on 85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
12
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------
20 .708 .694 .679 .665 .650 .634 .619 .602 .586 .569 .553 .537 .521 .505 .490 .475 20
21 .708 .694 .680 .666 .651 .635 .619 .603 .586 .570 .554 .537 .522 .506 .490 .475 21
22 .709 .695 .681 .666 .651 .636 .620 .603 .587 .571 .554 .538 .522 .506 .491 .476 22
23 .710 .696 .681 .667 .652 .637 .621 .604 .588 .571 .555 .539 .523 .507 .492 .477 23
24 .711 .697 .682 .668 .653 .637 .621 .605 .588 .572 .556 .540 .524 .508 .492 .477 24
25 .712 .697 .683 .669 .654 .638 .622 .606 .589 .573 .556 .540 .524 .509 .493 .478 25
26 .712 .698 .684 .670 .655 .639 .623 .607 .590 .574 .557 .541 .525 .509 .494 .479 26
27 .713 .699 .685 .671 .656 .640 .624 .608 .591 .575 .558 .542 .526 .510 .495 .480 27
28 .715 .700 .686 .672 .657 .641 .625 .609 .592 .576 .559 .543 .527 .511 .496 .480 28
29 .716 .702 .687 .673 .658 .642 .626 .610 .593 .577 .560 .544 .528 .512 .497 .481 29
30 .717 .703 .688 .674 .659 .643 .627 .611 .594 .578 .561 .545 .529 .513 .498 .482 30
31 .718 .704 .690 .675 .660 .645 .628 .612 .595 .579 .562 .546 .530 .514 .499 .483 31
32 .719 .705 .691 .676 .661 .646 .630 .613 .597 .580 .564 .547 .531 .515 .500 .485 32
33 .721 .707 .692 .678 .663 .647 .631 .615 .598 .582 .565 .549 .533 .517 .501 .486 33
34 .722 .708 .694 .679 .664 .649 .633 .616 .600 .583 .566 .550 .534 .518 .502 .487 34
35 .724 .710 .696 .681 .666 .650 .634 .618 .601 .585 .568 .552 .535 .520 .504 .488 35
36 .726 .712 .697 .683 .668 .652 .636 .619 .603 .586 .570 .553 .537 .521 .505 .490 36
37 .728 .713 .699 .685 .669 .654 .638 .621 .605 .588 .571 .555 .539 .523 .507 .492 37
38 .730 .715 .701 .686 .671 .656 .640 .623 .606 .590 .573 .557 .541 .525 .509 .493 38
39 .732 .717 .703 .689 .673 .658 .642 .625 .608 .592 .575 .559 .542 .526 .511 .495 39
13
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 RETIREMENT
40 .734 .720 .705 .691 .676 .660 .644 .627 .611 .594 .577 .561 .544 .528 .513 .497 40
41 .736 .722 .708 .693 .678 .662 .646 .630 .613 .596 .579 .563 .547 .531 .515 .499 41
42 .739 .724 .710 .696 .680 .665 .649 .632 .615 .599 .582 .565 .549 .533 .517 .501 42
43 .741 .727 .713 .698 .683 .667 .651 .635 .618 .601 .584 .568 .551 .535 .519 .504 43
44 .744 .730 .715 .701 .686 .670 .654 .637 .621 .604 .587 .570 .554 .538 .522 .506 44
45 .747 .733 .718 .704 .689 .673 .657 .640 .623 .607 .590 .573 .557 .541 .525 .509 45
46 .750 .736 .721 .707 .692 .676 .660 .643 .626 .610 .593 .576 .560 .543 .527 .512 46
47 .753 .739 .725 .710 .695 .679 .663 .647 .630 .613 .596 .579 .563 .547 .530 .515 47
48 .756 .742 .728 .713 .698 .683 .667 .650 .633 .616 .599 .583 .566 .550 .534 .518 48
49 .760 .746 .732 .717 .702 .686 .670 .654 .637 .620 .603 .586 .570 .553 .537 .521 49
50 .763 .749 .735 .721 .706 .690 .674 .657 .640 .624 .607 .590 .573 .557 .541 .525 50
51 .767 .753 .739 .725 .710 .694 .678 .661 .644 .628 .611 .594 .577 .561 .544 .528 51
52 .771 .757 .743 .729 .714 .698 .682 .665 .649 .632 .615 .598 .581 .565 .548 .532 52
53 .775 .761 .747 .733 .718 .703 .686 .670 .653 .636 .619 .602 .585 .569 .553 .537 53
54 .779 .766 .752 .737 .722 .707 .691 .674 .657 .640 .623 .607 .590 .573 .557 .541 54
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ---- ------- --------------
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on 85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
14
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 RETIREMENT
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------
55 .784 .770 .756 .742 .727 .712 .696 .679 .662 .645 .628 .611 .595 .578 .562 .545 55
56 .788 .775 .761 .747 .732 .717 .700 .684 .667 .650 .633 .616 .599 .583 .566 .550 56
57 .793 .779 .766 .752 .737 .722 .706 .689 .672 .655 .638 .621 .605 .588 .571 .555 57
58 .798 .784 .771 .757 .742 .727 .711 .694 .678 .661 .644 .627 .610 .593 .577 .560 58
59 .803 .789 .776 .762 .748 .732 .716 .700 .683 .666 .649 .632 .616 .599 .582 .566 59
60 .808 .795 .781 .768 .753 .738 .722 .706 .689 .672 .655 .638 .621 .605 .588 .572 60
61 .813 .800 .787 .773 .759 .744 .728 .712 .695 .678 .661 .644 .628 .611 .594 .578 61
62 .819 .806 .793 .779 .765 .750 .734 .718 .702 .685 .668 .651 .634 .617 .601 .584 62
63 .824 .812 .799 .785 .771 .756 .741 .725 .708 .691 .675 .658 .641 .624 .607 .591 63
64 .830 .818 .805 .792 .778 .763 .748 .732 .715 .699 .682 .665 .648 .631 .615 .598 64
65 .836 .824 .811 .798 .784 .770 .755 .739 .722 .706 .689 .672 .656 .639 .622 .606 65
66 .842 .830 .818 .805 .791 .777 .762 .746 .730 .713 .697 .680 .663 .647 .630 .614 66
67 .848 .836 .824 .812 .798 .784 .769 .754 .738 .721 .705 .688 .672 .655 .638 .622 67
68 .854 .843 .831 .819 .806 .792 .777 .762 .746 .730 .713 .697 .680 .663 .647 .630 68
69 .861 .849 .838 .826 .813 .799 .785 .770 .754 .738 .722 .705 .689 .672 .656 .639 69
70 .867 .856 .845 .833 .820 .807 .793 .778 .762 .747 .730 .714 .698 .682 .665 .649 70
71 .873 .863 .852 .840 .828 .815 .801 .786 .771 .755 .739 .723 .707 .691 .675 .658 71
72 .879 .869 .859 .847 .835 .823 .809 .795 .780 .764 .749 .733 .717 .701 .684 .668 72
73 .886 .876 .865 .855 .843 .831 .817 .803 .788 .773 .758 .742 .727 .711 .694 .678 73
74 .892 .882 .872 .862 .850 .838 .825 .812 .797 .782 .767 .752 .736 .721 .705 .689 74
15
Addendum D
MRP/RIP 50% Contingent Annuitant Factors
PENSIONER WHOSE RETIREMENT AGE IS:
BENEFICIARY'S BENEFICIARY'S
AGE AT AGE AT
PENSIONER'S PENSIONER'S
RETIREMENT 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 RETIREMENT
75 .898 .889 .879 .869 .858 .846 .834 .820 .806 .792 .777 .762 .746 .731 .715 .699 75
76 .904 .895 .886 .876 .865 .854 .842 .829 .815 .801 .786 .771 .756 .741 .725 .710 76
77 .909 .901 .892 .883 .872 .862 .850 .837 .824 .810 .796 .781 .766 .751 .736 .721 77
78 .915 .907 .898 .889 .880 .869 .858 .845 .832 .819 .805 .791 .776 .762 .747 .731 78
79 .920 .912 .904 .896 .886 .876 .865 .853 .841 .828 .814 .801 .786 .772 .757 .742 79
80 .925 .918 .910 .902 .893 .884 .873 .861 .849 .837 .824 .810 .796 .782 .768 .753 80
81 .930 .923 .916 .908 .900 .891 .880 .869 .858 .846 .833 .820 .807 .793 .779 .764 81
82 .935 .929 .922 .914 .906 .898 .888 .877 .866 .854 .842 .830 .817 .803 .790 .776 82
83 .940 .934 .927 .920 .913 .904 .895 .885 .874 .863 .851 .839 .827 .814 .800 .787 83
84 .944 .939 .932 .926 .919 .911 .902 .892 .882 .871 .860 .849 .836 .824 .811 .798 84
85 .949 .943 .937 .931 .924 .917 .909 .900 .890 .880 .869 .858 .846 .834 .821 .809 85
86 .952 .947 .942 .936 .930 .923 .915 .906 .897 .887 .877 .866 .855 .843 .831 .819 86
87 .956 .951 .946 .941 .935 .928 .921 .913 .904 .895 .885 .875 .864 .853 .841 .829 87
88 .960 .955 .950 .945 .940 .934 .927 .919 .910 .902 .892 .882 .872 .862 .850 .839 88
89 .963 .959 .954 .949 .944 .938 .932 .925 .917 .908 .899 .890 .880 .870 .859 .848 89
- ---------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------ -------------
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
PENSIONER WHOSE RETIREMENT AGE IS:
Mortality: 1971 TPF&C Forecast Mortality Table (Pensioner rate based on
85% male; Beneficiary rate based on 85% female)
Interest Rate: 7.5%
Effective: January 1, 1984
Prepared by: Towers Perrin
16
ADDENDUM E
LEVEL INCOME OPTION -- FACTORS USING UP84 MORTALITY AND 7.5% INTERESt
AGE 0/12 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12
--- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
50 0.30410 0.30651 0.30892 0.31133 0.31374 0.31615 0.31856 0.32097 0.32338 0.32579 0.32820 0.33061
51 0.33302 0.33570 0.33837 0.34105 0.34373 0.34641 0.34908 0.35176 0.35444 0.35712 0.35979 0.36247
52 0.36515 0.36813 0.37111 0.37408 0.37706 0.38004 0.38302 0.38600 0.38898 0.39195 0.39493 0.39791
53 0.40089 0.40421 0.40753 0.41085 0.41417 0.41749 0.42080 0.42412 0.42744 0.43076 0.43408 0.43740
54 0.44072 0.44443 0.44814 0.45185 0.45556 0.45927 0.46297 0.46668 0.47039 0.47410 0.47781 0.48152
55 0.48523 0.48938 0.49353 0.49768 0.50184 0.50599 0.51014 0.51429 0.51844 0.52259 0.52675 0.53090
56 0.53505 0.53971 0.54437 0.54903 0.55369 0.55835 0.56301 0.56767 0.57233 0.57699 0.58165 0.58631
57 0.59097 0.59621 0.60146 0.60670 0.61194 0.61719 0.62243 0.62767 0.63292 0.63816 0.64340 0.64865
58 0.65389 0.65980 0.66572 0.67163 0.67755 0.68346 0.68938 0.69529 0.70121 0.70712 0.71304 0.71895
59 0.72487 0.73156 0.73825 0.74494 0.75164 0.75833 0.76502 0.77171 0.77840 0.78509 0.79179 0.79848
60 0.80517 0.81276 0.82035 0.82795 0.83554 0.84313 0.85072 0.85832 0.86591 0.87350 0.88109 0.88869
61 0.89628 0.90492 0.91357 0.92221 0.93085 0.93950 0.94814 0.95678 0.96543 0.97407 0.98271 0.99136
62 1.00000
Mortality: 1971 TPF&C Forecast Mortality Table (85% male rate, 15%
female rate)
Interest: 7.5%
1
ADDENDUM F
MRP/RIP LEVEL INCOME OPTION FACTORS
AGE 0/12 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12
--- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
50 0.30906 0.31148 0.31390 0.31632 0.31875 0.32117 0.32359 0.32601 0.32843 0.33085 0.33328 0.33570
51 0.33812 0.34080 0.34349 0.34617 0.34886 0.35154 0.35423 0.35691 0.35960 0.36228 0.36497 0.36765
52 0.37034 0.37332 0.37630 0.37929 0.38227 0.38525 0.38823 0.39122 0.39420 0.39718 0.40016 0.40315
53 0.40613 0.40945 0.41277 0.41608 0.41940 0.42272 0.42604 0.42936 0.43268 0.43599 0.43931 0.44263
54 0.44595 0.44965 0.45335 0.45705 0.46075 0.46445 0.46815 0.47186 0.47556 0.47926 0.48296 0.48666
55 0.49036 0.49450 0.49863 0.50277 0.50690 0.51104 0.51517 0.51931 0.52345 0.52758 0.53172 0.53585
56 0.53999 0.54462 0.54926 0.55389 0.55852 0.56316 0.56779 0.57242 0.57706 0.58169 0.58632 0.59096
57 0.59559 0.60079 0.60599 0.61120 0.61640 0.62160 0.62680 0.63201 0.63721 0.64241 0.64761 0.65282
58 0.65802 0.66388 0.66974 0.67560 0.68146 0.68732 0.69317 0.69903 0.70489 0.71075 0.71661 0.72247
59 0.72833 0.73495 0.74157 0.74818 0.75480 0.76142 0.76804 0.77466 0.78128 0.78789 0.79451 0.80113
60 0.80775 0.81525 0.82274 0.83024 0.83774 0.84524 0.85273 0.86023 0.86773 0.87523 0.88272 0.89022
61 0.89772 0.90624 0.91477 0.92329 0.93181 0.94034 0.94886 0.95738 0.96591 0.97443 0.98295 0.99148
62 1.00000
Mortality: 1971 TPF&C Forecast Mortality Table (85% male rate, 15%
female rate)
Interest: 7.5%
1