EXHIBIT 10.13.5
FIFTH AMENDMENT TO
THE CONNECTICUT WATER COMPANY
EMPLOYEES' RETIREMENT PLAN
(as amended and restated as of January 1, 1997, except as otherwise
provided therein)
(EGTRRA AMENDMENT)
SECTION 1. STATEMENT OF INTENT
1. Adoption and effective date of Amendment. This Amendment of the Plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). This Amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed in accordance
with EGTRRA and guidance issued thereunder. Except as otherwise provided, this
Amendment shall be effective as of the first day of the first Plan Year
beginning after December 31, 2001.
2. Supersession of inconsistent provisions. This Amendment shall supersede
the provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this Amendment.
SECTION 2. LIMITATIONS ON BENEFITS
1. Effective date. This Section shall be effective for Limitation Years
ending after December 31, 2001.
2. Effect on Participants. Benefit increases resulting from the increase
in the limitations of Section 415(b) of the Code will be provided to all
Employees participating in the Plan who have one Hour of Service on or after
January 1, 2002.
3. Definitions.
3.1 Defined benefit dollar limitation. The "defined benefit dollar
limitation" is $160,000, as adjusted, effective January 1 of each year, under
Section 415(d) of the Code in such manner as the Secretary shall prescribe, and
payable in the form of a straight life annuity. A limitation as adjusted under
Section 415(d) will apply to Limitation Years ending with or within the calendar
year for which the adjustment applies.
3.2 Maximum permissible benefit: The "maximum permissible benefit"
is the lesser of the defined benefit dollar limitation or the defined benefit
compensation limitation (both adjusted where required, as provided in (a) and,
if applicable, in (b) or (c) below).
(a) If the Participant has fewer than 10 years of participation in
the Plan, the defined benefit dollar limitation shall be multiplied by a
fraction, (i) the numerator of which is the number of years (or part thereof) of
participation in the Plan and (ii) the denominator of which is 10. In the case
of a Participant who has fewer than 10 years of service with the Employer, the
Exhibit 10.13.5
defined benefit compensation limitation shall be multiplied by a fraction, (i)
the numerator of which is the number of years (or part thereof) of service with
the Employer and (ii) the denominator of which is 10.
(b) If the benefit of a Participant begins prior to age 62, the
defined benefit dollar limitation applicable to the Participant at such earlier
age is an annual benefit payable in the form of a straight life annuity
beginning at the earlier age that is the actuarial equivalent of the defined
benefit dollar limitation applicable to the Participant at age 62 (adjusted
under (a) above, if required). The defined benefit dollar limitation applicable
at an age prior to age 62 is determined as the lesser of (i) the actuarial
equivalent (at such age) of the defined benefit dollar limitation computed using
the interest rate and mortality table (or other tabular factor) equivalence for
early retirement benefits, and (ii) the actuarial equivalent (at such age) of
the defined benefit dollar limitation computed using a 5 percent interest rate
and the mortality table referenced in Exhibit I of the Plan. Any decrease in the
defined benefit dollar limitation determined in accordance with this paragraph
(b) shall not reflect a mortality decrement if benefits are not forfeited upon
the death of the Participant.
(c) If the benefit of a Participant begins after the Participant
attains age 65, the defined benefit dollar limitation applicable to the
Participant at the later age is the annual benefit payable in the form of a
straight life annuity beginning at the later age that is actuarially equivalent
to the defined benefit dollar limitation applicable to the Participant at age 65
(adjusted under (a) above, if required). The actuarial equivalent of the defined
benefit dollar limitation applicable at an age after age 65 is determined as the
lesser of (i) the actuarial equivalent (at such age) of the defined benefit
dollar limitation computed using the interest rate and mortality table (or other
tabular factor) specified in the Plan for purposes of determining actuarial
equivalence for delayed retirement benefits, and (ii) the actuarial equivalent
(at such age) of the defined benefit dollar limitation computed using a 5
percent interest rate assumption and the mortality table referenced in Exhibit I
of the Plan.
SECTION 3. INCREASE IN COMPENSATION LIMIT
1. Increase in limit. The Annual Earnings or annual Compensation of each
Participant taken into account in determining benefit accruals in any Plan Year
beginning after December 31, 2001, shall not exceed $200,000. Annual Earnings or
annual Compensation means Earnings or Compensation during the Plan Year or such
other consecutive 12-month period over which Earnings or Compensation is
otherwise determined under the Plan (the determination period). Accruals
relating to periods prior to January 1, 2002, and the amount of Earnings or
Compensation taken into account for periods prior to January 1, 2002, in
determining accruals before and after January 1, 2002, shall be unaffected by
this change.
2. Cost-of-living adjustment. The $200,000 limit on Annual Earnings or
annual Compensation in paragraph 1 shall be adjusted for cost-of-living
increases in accordance with Section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies to Annual
Earnings or annual Compensation for the determination period that begins with or
within such calendar year.
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SECTION 4. MODIFICATION OF TOP-HEAVY RULES
1. Effective date. This Section shall apply for purposes of determining
whether the Plan is a top-heavy plan under Section 416(g) of the Code for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of Section 416(c) of the Code for such years. This
Section amends Article XV of the Plan.
2. Determination of top-heavy status.
2.1 Key employee. Key employee means any Employee or former
Employee (including any deceased employee) who at any time during the Plan Year
that includes the determination date was an officer of the Employer having
annual compensation greater than $130,000 (as adjusted under Section 416(i)(1)
of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner
of the Employer, or a 1-percent owner of the Employer having annual compensation
of more than $150,000. For this purpose, annual compensation means compensation
within the meaning of Section 415(c)(3) of the Code. The determination of who is
a key employee will be made in accordance with Section 416(i)(1) of the Code and
the applicable regulations and other guidance of general applicability issued
thereunder.
2.2 Determination of present values and amounts. This Section 2.2
shall apply for purposes of determining the present values of accrued benefits
and the amounts of account balances of Employees as of the determination date.
2.2.1 Distributions during year ending on the determination date.
The present values of accrued benefits and the amounts of account balances of an
Employee as of the determination date shall be increased by the distributions
made with respect to the Employee under the Plan and any plan aggregated with
the Plan under Section 416(g)(2) of the Code during the 1-year period ending on
the determination date. The preceding sentence shall also apply to distributions
under a terminated plan which, had it not been terminated, would have been
aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case
of a distribution made for a reason other than separation from service, death,
or disability, this provision shall be applied by substituting "5-year period"
for "1-year period."
2.2.2 Employees not performing services during year ending on the
determination date. The accrued benefits and accounts of any individual who has
not performed services for the Employer during the 1-year period ending on the
determination date shall not be taken into account.
3. Minimum benefits. For purposes of satisfying the minimum benefit
requirements of Section 416(c)(1) of the Code and the Plan, in determining years
of service with the Employer, any service with the Employer shall be disregarded
to the extent that such service occurs during a Plan Year when the Plan benefits
(within the meaning of Section 410(b) of the Code) no key employee or former key
employee.
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SECTION 5. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
1. Effective date. This Section shall apply to distributions made after
December 31, 2001.
2. Modification of definition of eligible retirement plan. For purposes of
the direct rollover provisions in Section 10.6 of the Plan, an eligible
retirement plan shall also mean an annuity contract described in Section 403(b)
of the Code and an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from this Plan. The
definition of eligible retirement plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code.
3. Modification of definition of eligible rollover distribution to include
after-tax employee contributions. For purposes of the direct rollover provisions
in Section 10.6 of the Plan, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such
portion may be paid only to an individual retirement account or annuity
described in Section 408(a) or (b) of the Code, or to a qualified defined
contribution plan described in Section 401(a) or 403(a) of the Code that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.
SECTION 6. NEW MORTALITY TABLE
Effective for distributions with annuity starting dates on or after
December 31, 2002, the applicable mortality table used for purposes of adjusting
any benefit or limitations under Section 415(b)(2)(B), (C) or (D) of the
Internal Revenue Code, and the applicable mortality table used for purposes of
satisfying the requirements of Section 417(e) of the Internal Revenue Code, and
referenced in Exhibit I, Appendix C, and Appendix D of the Plan, shall be the
table prescribed in Rev. Rul. 2001-62, and not the table prescribed in Rev. Rul.
95-6.
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EXHIBIT 10.13.5
CERTIFICATE
The undersigned hereby certifies that The Connecticut Water Company
Employees' Retirement Plan, as amended and restated effective as of January 1,
1997, except as otherwise provided therein, was duly amended by the Pension
Trust Committee of the Board of Directors of The Connecticut Water Company by a
Fifth Amendment on , 2002, and the Plan, as so amended, is
in full force and effect.
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