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EXHIBIT 10(b)(12)
AMENDMENT NO. 16
TO THE
UPS RETIREMENT PLAN
(As Amended and Restated January 1, 1976)
WHEREAS, United Parcel Service of America, Inc. and its affiliated
corporations established the UPS Retirement Plan ("Plan") for the benefit of
their eligible employees, in order to provide benefits to those employees upon
their retirement, disability or death, effective as of September 1, 1961; and
WHEREAS, the Plan was amended and restated in its entirety,
replacing all of the provisions of the Plan then in effect, effective as of
January 1, 1976, to comply with the Employee Retirement Income Security Act of
1974 ("ERISA"); and
WHEREAS, the Plan has been amended further since January 1, 1976,
the most recent being Amendment No. 15, executed August 13, 1992; and
WHEREAS, it is desired to amend the Plan further (i) to revise in
their entirety the Plan's disability benefit provisions; and (ii) to provide to
distributees of eligible rollover distributions from this Plan the option of
transferring such distributions directly to another eligible retirement plan;
NOW THEREFORE, pursuant to the authority vested in the Board of
Directors by Section 7.1 of the Plan, the Plan is hereby amended as follows,
effective January 1, 1993:
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1. Section 4.4(a) is amended by adding the words "or Total
Disability" immediately following the words "if (i) his employment is
terminated other than by reason of death. . ."
2. Sections 4.5, 4.6 and 4.7 of the Plan are revised
in their entirety to read as follows:
Section 4.5 Disability Benefit.
(a) Eligibility. Each Participant in this Plan with at
least one Hour of Service as an Employee on or after January 1,
1993, other than a Participant whose terms and conditions of
employment are governed by a collective bargaining agreement
unless said agreement specifically provides for the Disability
Benefit described herein, shall, in the event of his or her
termination of employment by reason of Total Disability following
five (5) or more Years of Service, be eligible for the Disability
Benefit described in this Section 4.5. Any Participant not
described in the preceding sentence whose employment is terminated
by reason of Total Disability after completion of ten (10) or more
Years of Service but prior to his or her Early Retirement Date
shall be eligible for the Supplemental Disability Income Benefit
described in Section 4.7.
(b) In General. In the event that a Participant with five
(5) or more Years of Service terminates employment prior to his or
her Normal Retirement Date by reason of his or her Total
Disability as defined in Section 4.6, he or she may elect to
receive a Disability Benefit in a monthly amount determined under
subsection 5.4(a) commencing on his or her Disability Date and
continuing for his or her Period of Disability as defined in
subsection 4.5(d).
(c) Disability Date. A Participant's Disability Date
shall be the first day of any month following the date which is
six (6) months following the Participant's cessation of work with
an Employer Company as the re-
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sult of Total Disability; provided, however, that a Participant's
Disability Date shall not be earlier than the date on which the
Participant's salary or wage continuation or other temporary
disability benefit from the Employer Company ends.
Notwithstanding the foregoing, the Committee may provide
nondiscriminatory rules by which a Participant's Disability Date
may be prior to six months following the Participant's cessation
of work due to Total Disability, provided that he or she is not
then receiving salary or wage continuation payments or temporary
disability benefits from the Employer Company.
(d) Period of Disability. A Participant's Period of
Disability shall begin on his or her Disability Date and shall end
when any one of the following occurs:
(1) The Participant ceases to be
Totally Disabled or dies;
(2) The Participant attains his or her Normal
Retirement Date;
(3) The Participant begins working in any gainful
occupation for which the Participant is fitted by his or her
education, training or experience, or for which he or she could
reasonably become fitted (work at a rehabilitation program, as
approved by the Committee, will not count as work in any
reasonable occupation);
(4) The Participant is no longer under the care of
a physician; or
(5) The Participant does not furnish to the
Committee upon request the latest proof of his or her continuing
Total Disability, or refuses to be examined by a physician
designated by the Committee for the purpose of determining whether
he or she continues to be Totally Disabled.
(e) Coordination and Transitional Rules.
Notwithstanding any provision of this Plan to the contrary, no
Disability Benefit shall be paid for any period of time during
which the Participant is receiving benefits under any short-term
or long-term disability plan or similar program sponsored by an
Employer Company or to which the Employer
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Company contributes. In the case of a Participant who had, as of
January 1, 1993, been receiving long-term disability benefits
under the UPS Long-Term Disability Plan ("LTD Plan"), he or she
shall, effective as of such date, commence to receive the
Disability Benefit described herein; provided however, (1) that he
or she, at such time and thereafter, remains Totally Disabled and
otherwise eligible for a Disability Benefit from this Plan, and
(2) the amount of the Participant's monthly long-term disability
benefit from the LTD Plan is reduced by the amount of the monthly
Disability Benefit payable for the same time period.
Section 4.6 Total Disability.
(a) In General. A Participant shall be considered Totally
Disabled if he or she is unable to work, as described below, as
the result of a medically-determinable physical or mental
impairment, which requires the Participant to be under the care of
a physician (a "Total Disability"). During the first 24 months
that a Participant is Totally Disabled, he or she will be
considered unable to work if he or she cannot work at the same
type of occupation in which he or she normally engages, provided
that the Participant is unable to work comparable hours performing
alternate work, if available, provided by the Employer Company in
accordance with its employment policies applied on a
non-discriminatory basis to employees similarly situated. After
the first 24 months that a Participant is Totally Disabled, he or
she will be considered to be unable to work only if he or she is
unable to work at any gainful occupation for which the Participant
is fitted by his or her education, training or experience, or for
which he or she could reasonably become fitted.
Notwithstanding the foregoing, a Participant will not be
considered Totally Disabled if, at any time after the first 24
months of Total Disability, it is determined by the Committee that
the Participant's disability is not at that time caused by a
physical impairment which can be demonstrated by clinical and
laboratory diagnosis. A mental or
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nervous condition is not a physical impairment.
(b) Proof of Disability. The Committee shall have the
discretion and authority to determine whether a Participant is or
remains Totally Disabled. For this purpose, the Committee may
require the Participant to submit to an examination by a physician
of the Committee's choosing, and may request any and all medical
records and other pertinent information. Following a
determination of Total Disability, the Committee may periodically
require the Participant to submit proof of continued Total
Disability, and may determine that a Participant is no longer
disabled if he or she fails to comply with this requirement.
Section 4.7 Supplemental Disability Income Benefit for Certain
Participants.
(a) In General. In the case of a Participant who is not
among the class of individuals eligible for the Disability Benefit
described in Section 4.5, he or she shall, in the event that his
or her employment as an Employee is terminated by reason of his or
her Total Disability (as described in subsection (d) below) after
completion of ten (10) or more Years of Service but prior to his
or her Early Retirement Date, receive a monthly Supplemental
Disability Income Benefit as described in this Section 4.7.
Notwithstanding the foregoing, no Supplemental Disability Income
Benefit shall be paid to any Participant for any period of time
during which the Participant is receiving benefits under any
short-term or long-term disability plan or program (including, but
not limited to, the Disability Benefit described at Section 4.5)
sponsored by an Employer Company or to which the Employer Company
contributes.
(b) Amount. The Supplemental Disability Income Benefit
shall consist of a monthly benefit, payable for the period of time
described in subsection (c) below, equal to the amount determined
by multiplying $9.60 ($8.00 in the case of Total Disability
commencing prior to January 1, 1978) by the number of
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years of Benefit Service to a maximum of 25, completed by the
Participant prior to becoming Totally Disabled.
(c) Duration. The Supplemental Disability Income
Benefit shall be paid monthly to the disabled Participant,
commencing on his or her Disability Date and ending as of the
first to occur of the Participant's death, attainment of age 55 or
the month in which his or her Period of Disability ends.
Thereafter, the Participant may apply for and receive an Early or
Normal Retirement Benefit, or Deferred Vested Benefit, the amount
of which shall be calculated based on the Participant's Years of
Benefit Service earned prior to becoming Totally Disabled, but
shall not be reduced on account of the Supplemental Disability
Income Benefit previously payable. Similarly, the surviving
spouse of a Participant who dies while receiving the Supplemental
Disability Income Benefit may receive the Qualified Joint and
Survivor (Husband and Wife) Preretirement Survivor Benefit in
accordance with the terms of Section 5.5 commencing on what would
have been the Participant's Early Retirement Date. In no event
shall a Participant receive simultaneously a Supplemental
Disability Income Benefit and an Early or Normal Retirement
Benefit, or Deferred Vested Benefit.
(d) The terms "Disability Date," "Period of Disability"
and "Total Disability" shall have the same meanings as described
in subsections 4.5(c), 4.5(d) and Section 4.6, respectively,
except that, for Participants who became disabled prior to January
1, 1993, "Total Disability" shall have the same meaning as the
term "total and permanent disability" as defined by Section 4.6
prior to its amendment by Amendment No. 15 to this Plan.
3. Subsection 5.3(a) is amended as follows:
a. The first sentence of paragraph (1) is amended by
deleting the words "Annuity Starting Date of a Participant's Normal or Early
Retirement Benefit, or Deferred Vested Benefit,"
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and by substituting in lieu thereof the words "Annuity Starting Date of a
Participant's Normal or Early Retirement Benefit, Deferred Vested Benefit or
Disability Benefit."
b. A new paragraph (3) is added to read as follows:
(3) Notwithstanding the foregoing, see subsection
5.4(b) for special rules relating to the payment of Disability
Benefits.
4. Subsection 5.3(d) is amended by deleting the words "his or her
vested Normal Retirement Benefit or Deferred Vested Benefit" and by
substituting in lieu thereof the words "his or her vested Normal Retirement
Benefit, Deferred Vested Benefit or Disability Benefit."
5. Section 5.4 is amended in its entirety to read as
follows:
Section 5.4 Disability Benefit.
(a) Amount. The amount of the monthly benefit to
which a Participant is entitled under Section 4.5 because of Total
Disability shall be equal to one-twelfth of the Participant's
Normal Retirement Benefit calculated in accordance with the
applicable benefit formulas under paragraphs (1) or (2) of
subsection 5.2(a) (whichever produces the larger amount), modified
as follows:
(1) The Participant's years of Benefit
Service (defined in subsection 1.1(l) hereof) shall be the greater
of:
(A) the actual number of years of Benefit
Service earned by the Participant as of his or her Disability
Date; or
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(B) the number of years of Benefit Service
indicated in the following table:
Age of Participant
at Disability Date Years of Benefit Service
------------------ ------------------------
50 or younger 15
51 14
52 13
53 12
54 11
55 10
56 9
57 8
58 7
59 6
60 or older 5
(2) There shall be no reduction in the amount of
the Participant's Disability Benefit on account of its
commencement prior to the Participant's Normal Retirement Date.
(b) Form and Duration of Payments.
(1) The Disability Benefit shall be paid in
monthly installments, in the amount described in subsection
5.4(a), beginning as of the Participant's Disability Date. The
last payment of the Participant's Disability Benefit shall be made
as of the first day of the month in which the Participant's Period
of Disability ends.
(2)(A) If the Participant's Period of
Disability ends as the result of his or her attainment of his or
her Normal Retirement Date, the Participant shall thereafter be
able to receive a Normal Retirement Benefit, commencing no earlier
than the first day of the month following the cessation of his or
her Disability Benefit, in an amount determined under subsection
5.2(a) taking into account all Benefit Service which had, pursuant
to subsection 5.4(a), been taken into account in determining the
amount of his or her Disability Benefit.
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(B) If the Participant is married on the
Annuity Starting Date of his or her Normal Retirement Benefit,
such benefit shall be paid in the form of a Qualified Joint and
Survivor (Husband and Wife) Benefit unless the Participant, at any
time within the 90-day period ending on the Annuity Starting Date,
makes an election, in the form prescribed in paragraph 5.3(b)(1),
to waive such payment form in favor of an alternate payment form
available under subsection 5.3(b).
(C) If the Participant is not married on
the Annuity Starting Date of his or her Normal Retirement Benefit,
such benefit shall be paid in the form of a single life annuity,
unless he or she elects, at any time within the 90-day period
ending on the Annuity Starting Date, to receive a reduced monthly
benefit payable in the form of a single life annuity with a
guarantee of 120 monthly payments, as described in paragraph
5.3(a)(2).
(D) If the Participant should die while
Totally Disabled but prior to his or her Disability Date, or else
should die during his or her Period of Disability but prior to the
Annuity Starting Date of his or her Normal Retirement Benefit, his
or her surviving spouse, if any, shall be eligible to receive the
Qualified Joint and Survivor (Husband and Wife) Preretirement
Survivor Benefit in accordance with and commencing at the time
described in Section 5.5; provided however, that the amount of
such benefit shall be calculated based on all years of Benefit
Service which had, pursuant to subsection 5.4(a), been taken into
account in determining the amount of the Participant's Disability
Benefit.
(E) The written explanation described in
subsection 5.3(c) shall be provided to the Participant within 90
days prior to the Annuity Starting Date of the Participant's
Normal Retirement Benefit.
(3)(A) If the Participant's Period of Disability
should end prior to his or her Normal Retirement Date (other than
by reason of death), the Participant may, in
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accordance with the applicable terms of this Plan, thereafter
apply for and receive an Early or Normal Retirement Benefit, or
Deferred Vested Benefit, as the case may be, the amount of which
shall be calculated based on the Participant's actual years of
Benefit Service earned prior to becoming Totally Disabled, but
shall not be reduced on account of the Disability Benefit
previously payable.
(B) Similarly, in the event the Participant
should die following the end of his or her Period of Disability
(and the cessation of his or her Disability Benefit) but prior to
the Annuity Starting Date of his or her Early or Normal Retirement
Benefit or Deferred Vested Benefit, the Participant's surviving
spouse, if any, shall be eligible to receive the Qualified Joint
and Survivor (Husband and Wife) Preretirement Survivor Benefit in
accordance with and commencing at the time described in Section
5.5, the amount of which shall be calculated based on the
Participant's actual years of Benefit Service earned prior to
becoming Totally Disabled, but shall not be reduced on account of
the Disability Benefit previously payable.
(4) In no event shall a Participant receive
simultaneously a Disability Benefit and an Early or Normal
Retirement Benefit, or Deferred Vested Benefit.
6. Section 5.12 is revised in its entirety to read as follows:
Section 5.12 Withholding of Income Tax.
(a) Notification of Withholding of Federal Income Tax.
All Participants and beneficiaries entitled to receive benefits
under the Plan shall be notified of the Plan's obligation to
withhold federal income tax from any benefits payable pursuant to
the terms of the Plan. Such notice shall be in writing, be given
at the times set forth in subsection (b) and contain the
information set forth in subsection (c) of this Section.
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(b) Time of Notice. The notice described in subsection
(a) shall be provided not earlier than six months before such
payment is to be made and not later than the time the Participant
or beneficiary is furnished with his or her claim for benefits
application.
(c) Content of the Notice. The notice required by
subsection (a) shall, at a minimum:
(1) with respect to any distribution which is an
eligible rollover distribution within the meaning of Code Section
3405(c)(3) (other than an eligible rollover distribution of less
than $200 which is exempt from withholding under regulations
prescribed by the Secretary of the Treasury), advise the payee
that there shall be withheld from such distribution an amount
equal to 20 percent thereof (or such other amount as may from time
to time be prescribed by the Code, or the Secretary of the
Treasury or his delegate), unless the payee directs the Committee
to transfer such distribution as a direct rollover to an eligible
retirement plan, within the meaning of Section 5.13 hereof, in
accordance with such procedures as the Committee may prescribe (a
"transfer direction"),
(2) with respect to any distribution which is not
an eligible rollover distribution within the meaning of Code
Section 3405(c)(3):
(A) advise the payee of his or her right to
elect not to have withholding apply to any payment or distribution
and explain the manner in which such election may be made, and
include or indicate the source of any forms necessary to make the
election;
(B) advise the payee of his or her right to
revoke such an election at any time;
(C) advise the payee that any election
remains effective until revoked;
(D) advise the payee that penalties may be
incurred under the estimated tax payment rules if the payee's
payments of estimated
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tax are not adequate and sufficient tax is not withheld from
payments under this Plan; and
(E) advise the payee that the election not
to have federal income tax withheld from benefits is prospective
only and that any election made after a payment or distribution to
the payee is not an election with respect to such payment or
distribution.
(d) Effective Date of Election. Any transfer direction,
election or revocation of any election by a payee shall become
effective immediately upon receipt by the Committee of the
transfer direction, election or revocation. Thereafter, the
Committee shall, unless otherwise provided by applicable law,
regulation or other guidance by the Secretary of the Treasury or
his delegate, instruct the Trustee to withhold federal income tax
in accordance or consistent with the instructions filed by the
payee.
(e) Failure to Make Election.
(1) In the case of an eligible rollover
distribution, if the payee fails to provide the Committee with a
transfer direction, the Committee shall instruct the Trustee to
withhold an amount equal to 20% of the amount of the distribution
(or such other amount as may be from time to time prescribed by
the Code, or the Secretary of the Treasury or his delegate).
(2) In the case of a distribution which is not an
eligible rollover distribution, if the payee fails to provide the
Committee with a withholding certificate, the Committee shall
instruct the Trustee to withhold, in the case of a periodic
distribution, the amount which would be required to be withheld
from such payment if such payment were a payment of wages by an
employer to an employee for the appropriate payroll period,
determined as if the payee were a married person claiming three
withholding allowances. In the case of a nonperiodic
distribution, 10% of the amount of the distribution shall be
withheld.
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(f) Coordination with Internal Revenue Code and
Regulations. Notwithstanding the foregoing, the Committee shall
discharge its withholding and notice obligations in accordance
with the Code and regulations and such other guidance with respect
thereto as may be promulgated from time to time by the Secretary
of the Treasury or his delegate.
7. A new Section 5.13 is added to read as follows:
Section 5.13 Direct Rollover.
(a) With respect to any distribution described in this
Article V which constitutes an eligible rollover distribution
within the meaning of Code Section 401(a)(31)(C), the distributee
thereof shall, in accordance with procedures established by the
Committee, be afforded the opportunity to direct that such
distribution be transferred directly to the trustee of an eligible
retirement plan (a "direct rollover"). For purposes of the
foregoing sentence, an "eligible retirement plan" is (1) a
qualified trust within the meaning of Code Section 402 which is a
defined contribution plan the terms of which permit the acceptance
of rollover distributions, (2) an individual retirement account or
annuity within the meaning of Code Section 408 (other than an
endowment contract), or (3) an annuity plan within the meaning of
Code Section 403(a), which is specified by the distributee in such
form and at such time as the Committee may prescribe.
(b) Notwithstanding the foregoing, if the distributee
elects to have his or her eligible rollover distribution paid in
part to him or her and paid in part as a direct rollover:
(A) The direct rollover must be in an amount of
$500 or more.
(B) A direct rollover to two or more eligible
retirement plans shall not be permitted.
(c) The Committee shall, within a reasonable period of
time prior to making an
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eligible rollover distribution from this Plan, provide a written
explanation to the distributee of the direct rollover option
described above, as well as the provisions under which such
distribution will not be subject to tax if transferred to an
eligible retirement plan within 60 days after the date on which
the distributee received the distribution.
8. Subsection 12.2(d) is amended as follows:
(a) The first sentence of the first paragraph is amended
to read as follows:
"Retired Participant" means, for purposes of this Article XII, an
individual who (i) was a Participant who was actively employed by
an Employer Company until his or her Early, Normal or Postponed
Retirement Date, or until his or her termination of employment
following 10 or more Years of Service by reason of Total
Disability, (ii) in the case of a Participant who first became an
employee on or after January 1, 1989, had at least 10 Years of
Service with an Employer Company and at least one Year of Service
as a Participant in this Plan, (iii) retired from employment with
an Employer Company and was thereupon immediately eligible to
receive an Early or Normal Retirement Benefit, or Disability
Benefit, hereunder.
(b) The third sentence of the penultimate paragraph
thereof is amended to read as follows:
A Participant's retirement from employment with the Employer
Company at or after his or her Early or Normal Retirement Date, or
prior to such date by reason of Total Disability following 10 or
more Years of Service, with the immediate right to receive a
Retirement or Disability Benefit hereunder, or the death of a
Participant following attainment of his or her Early Retirement
Date while still employed by an Employer Company (with, in each
case, the additional requirement that a
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Participant who first became an Employee on or after January 1,
1989 must have completed at least 10 Years of Service with an
Employer Company, at least one of which was as a Participant in
this Plan), are conditions to eligibility for Medical Benefits
under this Article XII.
(c) The present text of subsection 12.2(d) (modified as
hereinabove provided) is designated as paragraph (2), and a new paragraph (2)
is added to read as follows:
(2) A Participant who is a Retired Participant because of his or
her termination of employment by reason of Total Disability shall
cease to be a Retired Participant when his or her Period of
Disability ends. In such event, and subject to Section 12.3 in
the event the Participant's Period of Disability ends by reason of
his or her death, Medical Benefits under this Article XII shall
cease to be paid for claims incurred by the Participant, or his or
her Covered Dependents, on or after the end of the month in which
his or her Period of Disability ends.
In WITNESS WHEREOF, United Parcel Service of America, Inc. based
upon action by its Board of Directors, has caused this Amendment No. 16 to be
executed this day of , 1993.
ATTEST: UNITED PARCEL SERVICE OF
AMERICA, INC.
By:
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Secretary Chairman
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