CARROLLTON FEDERAL BANK
MAIN XXXXXX
000 XXXXX XXXXXX
X. X. XXX 000
XXXXXXXXXX, XXXXXXX 00000
TELEPHONE: (000) 000-0000
FAX: (000) 000-0000
November 3, 1993
President
Financial Institutions Retirement Fund
0 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000-0000
Re: Letter Agreement Regarding Financial Institutions
Retirement Fund Early Retirement Incentive
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Gentlemen:
We understand that the Comprehensive Retirement Program (the "Retirement
Program") of the Financial Institutions Retirement Fund (the "Fund") as
established, effective December 1, 1943 and amended and restated effective
January 1, 1986, continues to be maintained for the exclusive purpose of
allowing eligible savings and loan associations or similar institutions, or any
organization serving the savings and home finance industry (collectively, the
"financial institutions"), to participate in a program for providing retirement
and death benefits to employees of such financial institutions. The Retirement
Program is a plan and trust which has been determined to meet the requirements
for tax-qualification and tax-exemption under Sections 401(a) and 501(a),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code").
All contributions by participating financial institutions to the Fund with
respect to the Retirement Program are invested on a pooled basis and are
available for the payment of benefits under the Fund without allocation to
individual employers or employees.
As part of, and supplemental to, the other benefits offered under the
Retirement Program, a participating financial institution may offer certain of
its employees benefits which are in the nature of a voluntary early retirement
incentive (any such offer is hereafter referred to as an "Early Retirement
Incentive"). Subject to such rules as the Board may prescribe, an eligible
financial institution may offer an Early Retirement Incentive by completing an
Adoption Agreement and electing from a range of specified choices (i.e. as to
benefits and eligibility) structured to meet its individual needs. The choices
offered under the Fund are designed to meet the applicable requirements of the
Age Discrimination in Employment Act of 1967, as amended, the Employee
President
Financial Institutions Retirement Fund
November 3, 1993
Page 2
Retirement Income Security Act of 1974, as amended, the Code, any other
applicable law and any regulations under the foregoing statutes (collectively,
referred to as the "applicable law").
This letter agreement (the "Agreement") is intended to confirm the
understanding and agreement between the Fund and Carrollton Federal Bank, FSB
that Carrollton Federal Bank, FSB will indemnify the Fund as to any pending or
threatened litigation or any claim to the extent permitted under applicable law
which arises out of the offer or failure to offer an Early Retirement Incentive
to its employees. Although Carrollton Federal Bank, FSB understands that the
range of terms from which it can elect to offer an Early Retirement Incentive
are permissible under applicable law, Carrollton Federal Bank, FSB understands
that (i) it is under an obligation to retain outside counsel to determine if its
offer of an Early Retirement Incentive will violate applicable law and (ii) its
offer of any such Early Retirement Incentive and its continued administration
and operation of same will be on a nondiscriminatory basis and not in violation
of applicable law.
1. Carrollton Federal Bank, FSB shall indemnify the Fund and hold it and
each of its officers, directors, principals, and employees (individually an
"Indemnified Party"), harmless against any and all losses, claims, damages or
liabilities, including legal fees and expenses, to which the Fund or any
Indemnified Party may become subject arising in any manner out of or in
connection with an Early Retirement Incentive or the availability thereof,
except that such Indemnified Party shall not be so indemnified if such losses,
claims, damages or liabilities are finally adjudged by a court of competent
jurisdiction to have resulted from its or their gross negligence or willful
misconduct. In addition, Carrollton Federal Bank, FSB waives any rights or
claims it may have against the Fund or any Indemnified Party in connection with
this Agreement, except to the extent such claims are based on the gross
negligence or willful misconduct of the Fund or any Indemnified Party as finally
adjudged by a court of competent jurisdiction. Pursuant to the foregoing
indemnification, Carrollton Federal Bank, FSB will, upon notice, advance or pay
promptly to or on behalf of the Fund and any Indemnified Party, all reasonable
attorneys' fees and other expenses and disbursements as they are incurred.
If the Fund or any Indemnified Party is required to participate in any
legal or other proceeding as a result of an Early Retirement Incentive, then, to
the extent the Fund is not indemnified under the preceding paragraph (other than
by reason of its gross negligence or willful misconduct), Carrollton Federal
Bank, FSB shall reimburse the Fund for any reasonable legal fees and out-of-
pocket expenses incurred to the same extent and in the same manner as specified
hereinabove. Carrollton Federal Bank, FSB also agrees to reimburse any
Indemnified Party for any reasonable legal fees incurred by an Indemnified
Party. Carrollton Federal Bank, FSB shall pay these sums within fifteen (15)
days of being billed; provided, however, that Carrollton Federal Bank, FSB shall
be entitled to prompt reimbursement in the event that the Indemnified Party is
finally adjudged to have acted with gross negligence or willful misconduct.
To the extent the Fund or any Indemnified Party is not reimbursed in the
time and manner described above, such unreimbursed amounts may, in the
discretion of the Board of Directors, be
President
Financial Institutions Retirement Fund
November 3, 1993
Page 3
a charge, to the extent permitted by applicable law, against that portion of the
assets of the Fund attributable to Carrollton Federal Bank, FSB as an
administrative expense pursuant to Article XIV of the Regulations governing the
Retirement Program and may be a charge against Carrollton Federal Bank's
"distributable fund," if any, as determined in accordance with Article XII,
unless and until such expenses are reimbursed to the appropriate Indemnified
Party.
In addition, Carrollton Federal Bank, FSB shall reimburse the Fund for all
reasonable costs including legal fees incurred in enforcing this Agreement,
provided that the Fund is a prevailing party in any such action or proceeding.
2. The individuals executing this Agreement for the parties hereto
represent and warrant that they are authorized to enter into this Agreement.
3. The provisions of this Agreement shall inure to, and be binding upon,
the successors and assigns of the Fund and Carrollton Federal Bank, FSB, except
that Carrollton Federal Bank, FSB shall not assign or in any way delegate its
obligations hereunder to any other party without the express written consent of
the Fund.
4. The rights of the Fund under this Agreement are in addition to any
rights it may have under the terms of the Retirement Program, and the provisions
of this Agreement represent the entire understanding of the parties with respect
to the matters referred to herein and this Agreement supersedes all oral or
written agreements or understandings between the parties concerning the subject
matter of this Agreement.
5. This Agreement may be amended only by a written instrument executed by
the parties.
6. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
President
Financial Institutions Retirement Fund
November 3, 1993
Page 4
7. This Agreement shall be effective upon execution, and governed by and
construed in accordance with the laws of the State of New York.
Very truly yours,
CARROLLTON FEDERAL BANK, FSB
By:/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
President and CEO
AGREED TO AND ACCEPTED
PRESIDENT
FINANCIAL INSTITUTIONS RETIREMENT FUND
By:/s/
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FINANCIAL INSTITUTIONS RETIREMENT FUND
REGULATIONS
governing
THE COMPREHENSIVE RETIREMENT PROGRAM
24th Revision, Effective July 1, 1993
108 Corporate Park Drive . P. O. Box 847 . Xxxxx Xxxxxx, XX 00000
FINANCIAL INSTITUTIONS RETIREMENT FUND
Established December 1, 1943
A non-profit, IRS qualified, tax-exempt, pension plan and trust through which
Federal Home Loan Banks, Savings and Loan Associations and similar institutions,
or any other federally insured financial institutions (including those
organizations serving them) may cooperate in providing for the retirement of
their employees. These Regulations, including the Appendices attached hereto,
contain the governing provisions of the Fund's Comprehensive Retirement Program,
a plan which provides retirement and death benefits. All contributions to the
Fund are commingled, and all assets of the Fund are invested on a pooled basis,
without allocation to individual employers or employees. All amounts payable by
the Fund are a general charge upon all its assets.
TABLE OF CONTENTS
-----------------
ARTICLE I DEFINITIONS........................................................ 1
ARTICLE II PARTICIPATION AND MEMBERSHIP..................................... 10
SECTION 1. EMPLOYER PARTICIPATION................................... 10
SECTION 2. EMPLOYEE MEMBERSHIP...................................... 11
ARTICLE III SERVICE......................................................... 14
SECTION 1. BENEFIT SERVICE.......................................... 14
SECTION 2. VESTING SERVICE.......................................... 15
ARTICLE IV BASIC BENEFITS................................................... 17
SECTION 1. NORMAL RETIREMENT........................................ 17
SECTION 2. EARLY RETIREMENT......................................... 18
SECTION 3. DEATH BENEFITS........................................... 21
SECTION 4. POST-AGE 65 ACCRUALS..................................... 25
ARTICLE V BENEFIT FORMULAS AND ADDITIONAL BENEFITS.......................... 26
SECTION 1. NORMAL RETIREMENT BENEFIT FORMULAS....................... 26
SECTION 2. EARLY RETIREMENT FACTORS................................. 37
SECTION 3. DISABILITY RETIREMENT BENEFIT............................ 38
SECTION 4. ADDITIONAL DEATH BENEFITS................................ 40
SECTION 5. RETIREMENT ADJUSTMENT PAYMENT............................ 41
i
SECTION 6. POST-RETIREMENT SUPPLEMENTS............................. 41
SECTION 7. SUPPLEMENTAL EARLY RETIREMENT WINDOW BENEFIT............ 43
SECTION 8. REDUCTION IN ACCRUAL RATE FOR CERTAIN
EMPLOYEES......................................................... 47
ARTICLE VI OPTIONAL FORMS OF PAYMENT....................................... 48
SECTION 1. OPTIONS................................................. 48
SECTION 2. CONDITIONS OF ELECTION.................................. 49
SECTION 3. PAYMENT OF BENEFITS TO CERTAIN ACTIVE MEMBERS........... 50
ARTICLE VII METHOD OF PAYMENT.............................................. 52
ARTICLE VIII RESTORATION OF A RETIRANT TO SERVICE.......................... 59
ARTICLE IX CONTRIBUTIONS................................................... 60
SECTION 1. ENGAGEMENT OF ACTUARY................................... 60
SECTION 2. SINGLE PLAN............................................. 60
SECTION 3. CONTRIBUTIONS BY EMPLOYERS.............................. 61
SECTION 4. ADMINISTRATIVE EXPENSES................................. 62
SECTION 5. CONTRIBUTIONS BY MEMBERS................................ 62
SECTION 6. CONTRIBUTION REQUIREMENTS FOR BENEFIT
IMPROVEMENTS...................................................... 64
SECTION 7. RETURN OF CONTRIBUTIONS TO EMPLOYER..................... 64
ii
ARTICLE X EFFECTS OF VARIOUS EVENTS ON MEMBERSHIP AND SERVICE............... 66
SECTION 1. TERMINATION OF MEMBERSHIP............................... 66
SECTION 2. REINSTATEMENT OF MEMBERSHIP AND SERVICE................. 66
SECTION 3. INACTIVE MEMBERSHIP..................................... 67
SECTION 4. LEAVES OF ABSENCE....................................... 69
SECTION 5. SERVICE WITH A CONTROLLED CORPORATION................... 71
SECTION 6. UNIFORM APPLICABILITY OF RULES.......................... 71
ARTICLE XI MISCELLANEOUS PROVISIONS........................................ 72
SECTION 1. LIMITATIONS ON BENEFITS REQUIRED BY THE IRC............. 72
SECTION 2. SMALL BENEFITS.......................................... 77
SECTION 3. AMOUNTS PAYABLE TO INCOMPETENTS, MINORS OR
ESTATES........................................................... 78
SECTION 4. NON-ALIENATION OF AMOUNTS PAYABLE....................... 79
SECTION 5. UNCLAIMED BENEFITS...................................... 79
SECTION 6. TOP HEAVY PROVISIONS.................................... 80
SECTION 7. TRANSFER OF ASSETS AND LIABILITIES FROM PRIOR
PLAN.............................................................. 84
ARTICLE XII WITHDRAWAL OF PARTICIPATING EMPLOYER........................... 85
SECTION 1. NOTICE AND EFFECT....................................... 85
SECTION 2. DISTRIBUTABLE FUND...................................... 88
SECTION 3. PAYMENT OF DISTRIBUTABLE FUND........................... 91
iii
SECTION 4. PARTIAL TERMINATION..................................... 93
SECTION 5. TRANSFER TO QUALIFIED SUCCESSOR PLAN.................... 94
SECTION 6. SPECIAL PROCEDURES UPON CONSERVATORSHIP OR
RECEIVERSHIP...................................................... 94
ARTICLE XIII TERMINATION OF THE TRUST...................................... 98
ARTICLE XIV ADMINISTRATION AND MANAGEMENT OF FUND.......................... 102
SECTION 1. ADMINISTRATION.......................................... 102
SECTION 2. DISPUTE RESOLUTION...................................... 105
SECTION 3. MANAGEMENT.............................................. 106
SECTION 4. INFORMATION AND COMMUNICATIONS.......................... 109
ARTICLE XV AMENDMENTS...................................................... 113
ARTICLE XVI INTERPRETATION................................................. 114
SPECIAL EFFECTIVE DATES..................................................... 115
iv
FINANCIAL INSTITUTIONS RETIREMENT FUND
Established December 1, 1943
A non-profit, XXX qualified, tax-exempt, pension plan and trust through which
Federal Home Loan Banks, Savings and Loan Associations and similar institutions,
or any other federally insured financial institutions (including those
organizations serving them) may cooperate in providing for the retirement of
their employees. These Regulations, including the Appendices attached hereto,
contain the governing provisions of the Fund's Comprehensive Retirement Program,
a plan which provides retirement and death benefits. All contributions to the
Fund are commingled, and all assets of the Fund are invested on a pooled basis,
without allocation to individual employers or employees. All amounts payable by
the Fund are a general charge upon all of its assets.
REGULATIONS
As amended to July 1, 1993
ARTICLE I DEFINITIONS
The following words and phrases as used in these Regulations shall have the
following
meanings:
(1) Abbreviations used in the following text shall mean:
IRS U. S. Internal Revenue Service
IRC U.S. Internal Revenue Code of 1986, as amended
ERISA Employee Retirement Income Security Act of 1974, as amended
PBGC Pension Benefit Guaranty Corporation
DOL U. S. Department of Labor
(2) "ACCUMULATED CONTRIBUTIONS" - The amount of benefit standing to the credit
of a Member representing the contributions made by the Member together with
Regular Interest thereon as determined in accordance with ERISA.
(3) "BENEFICIARY" - In accordance with Article IV, Section 3 and applicable
law, the person or persons, other than a Contingent Annuitant, designated
to receive any amount payable upon the death of a Member or Retirant. Such
designation may be made or changed only by the Member or Retirant on a form
provided by, and filed with, the Fund prior to the Member's death. If no
Beneficiary is designated, or if the designated Beneficiary
1
predeceases the Member or Retirant, then (except as provided in Article IV,
Section 3(C) or Article VI, Section 1, Option 2) any such amount payable
shall be paid to the estate of such Member or Retirant upon the Member's or
Retirant's death.
(4) "BENEFIT SERVICE" - The period of Service counted in determining a Member's
benefits as described in Article III.
(5) "BOARD" - The Board of Directors provided for in Article XIV to direct the
operations of the Fund.
(6) "COMMENCEMENT DATE" - The date on which an Employer begins to participate
in the Fund's Comprehensive Retirement Program.
(7) "COMMUTED VALUE" - The present value of a series of future installment
payments discounted at the rate of 7% per annum.
(8) "CONTINGENT ANNUITANT" - A person designated to receive a continuing
allowance under one of the options of, and in accordance with, Article VI
upon the death of a Retirement.
(9) "EFFECTIVE DATE" - Except as otherwise noted herein, the effective date of
the Regulations, as amended and restated, is July 1, 1993.
(10) "EMPLOYEE" - Unless an Employer elects otherwise or as necessary to satisfy
the requirements of IRC Sections 41 O(b) and 401 (a)(26) and the IRS
Regulations thereunder, any person in the Service of an Employer who
receives a Salary. If an individual receives no income from an Employer
other than commissions and such Employer does not elect to include
commissions as Salary under Section (25) of this Article, then such
individual shall not be treated as an Employee for purposes of the
Regulations.
2
(11) "EMPLOYER" - Any institution which has adopted the Regulations and
participates in the Fund, having applied, qualified and been approved in
accordance with Article II, Section 1.
(12) "ENROLLMENT DATE" - The date on which an Employee becomes a Member.
(13) "EQUIVALENT VALUE" - A benefit of equivalent value when computed on the
basis of tables, developed taking into account actuarial assumptions and
interest rates, which tables were last adopted for this purpose by the
Board and specified in Appendix A attached hereto; provided, however, that
the interest rate used to determine the Equivalent Value of a benefit for
purposes of Article Xl, Section 2, shall not be greater than the PBGC
Interest Rate.
(14) "FUND" - The Financial Institutions Retirement Fund (formerly known as
Savings Associations Retirement Fund) consisting of and governed by the
Regulations and Trust which together constitute a tax-qualified employee
retirement benefit plan.
(15) "HOUR OF SERVICE" -
(A) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for an Employer. These hours will be
credited to the Employee for the computation period in which the duties are
performed; and
(B) Each hour for which an Employee is paid, or entitled to payment,
by an Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than 501 Hours of Service will be credited under this Subsection (B) for
any single continuous period (whether or not such period occurs in a single
3
computation period). Hours under this Subsection (B) will be calculated
and credited pursuant to Section 2530.200b-2 of the DOL Regulations which
is incorporated herein by this reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer. The same Hours of
Service will not be credited both under Subsection (A) or (B), as the case
may be, and under this Subsection (C). These hours will be credited to the
Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made.
Hours of Service will be credited for employment with other members of
an affiliated service group (under IRC Section 414(m)), a controlled group
of corporations (under IRC Section 414(b)), or a group of trades or
businesses under common control (under IRC Section 414(c)), of which the
Employer is a member, and any other entity required to be aggregated with
such Employer pursuant to IRC Section 41 4(o).
Hours of Service will also be credited for any individual considered
an Employee for purposes of the Regulations under IRC Section 414(n) or
Section 41 4(o).
(16) "MEMBER" - An Employee enrolled in the membership of the Fund's
Comprehensive Retirement Program as provided in Article II, Section 2.
(17) "PLAN YEAR" - A 12-month period ending June 30.
(18) "PBGC INTEREST RATE" - The interest rate used by the PBGC, as of the date
of distribution, for its purposes of determining the present value of a
lump sum distribution on plan termination.
4
(19) "QUALIFIED DOMESTIC RELATIONS ORDER" - Any judgment, decree or order
(including approval of a property settlement agreement) which has been
determined by the Board to constitute a qualified domestic relations order
within the meaning of Section 414(p)(1) of the IRC. During the pendency of
the Fund's review of a domestic relations order which provides for the
payment of a portion of a Member's retirement benefits to an alternate
payee, such portion shall be placed in a separate account in the Trust.
(20) "REGULAR INTEREST" - Interest at the rate or rates adopted from time to
time by the Board for the purpose of computing interest on the
contributions made by a Member; provided, however, for Plan Years beginning
on or after July 1, 1988 interest compounded annually at the rate of 120
percent of the applicable Federal mid-term rate as in effect under IRC
Section 1274 for the first month of the Plan Year.
(21) "REGULATIONS" - The Regulations of the Fund, as the same may be amended
from time to time.
(22) "RETIRANT" - A former Member who has been retired under Article IV or XII
(including one who terminated with a vested benefit and deferred
commencement of his Retirement Allowance).
(23) "RETIREMENT ALLOWANCE" - The annual lifetime allowance payable to a
Retirement under Articles IV and V.
(24) "RETIREMENT DATE" - The date as of which a Member becomes a Retirant under
Article IV or XII.
(25) "SALARY" - An Employer shall adopt, on a uniform basis for its Members and
in accordance with the applicable provisions of the IRC and IRS
Regulations, one of the following definitions of Salary:
5
(A) (1) Regular, basic salary or wage rate as of January 1 of the
calendar year or the Member's date of employment, if later.
(2) Regular, basic salary or wage rate as of January 1 of the
calendar year or the Member's date of employment, if later, plus
overtime payments earned in the immediately preceding calendar
year.
(3) Regular, basic salary or wage rate as of January 1 of the
calendar year or the Member's date of employment, if later, plus
overtime payments and bonuses earned in the immediately preceding
calendar year.
(4) Salary, as defined in Paragraph (1), (2) or (3) of this
Subsection (A), plus commissions earned in the immediately
preceding calendar year, but not to exceed such amount of
commissions as the Employer shall designate.
(B) (1) Regular, basic salary or wage rate as in effect for each month of
the calendar year.
(2) Regular, basic salary or wage rate as in effect for each month of
the calendar year, plus overtime payments earned in each such
month.
(3) Regular, basic salary or wage rate as in effect for each month of
the calendar year, plus overtime payments and bonuses earned in
each such month.
(4) Salary, as defined in Paragraph (1), (2) or (3) of this
Subsection (B), plus commissions earned in the current calendar
year, but not to exceed such amount of commissions as the
Employer shall designate.
(C) Total taxable compensation as reported on a Member's IRS Form W-2
(exclusive of any compensation deferred from a prior year) for the
calendar year.
6
For purposes of the definition of "Salary" under Subsection (B) or Subsection
(C) of this Article I (25), Salary shall be deemed to be earned uniformly over
each month of Benefit Service during the calendar year.
For purposes of the definition of "Salary," special payments such as deferred
compensation (other than amounts voluntarily deferred by the Member under
Section 401(k) of the IRC), and contributions by the Employer under this or any
other plan (other than before-tax contributions made on behalf of a Member to a
cafeteria plan under Section 125 of the IRC unless the Employer specifically
elects to exclude such contributions) shall be excluded. If an Employer elects
to include commissions in the definition of Salary adopted under this Article I
(25), the amount of commissions to be included shall, at the Employer's option
which shall be uniformly applied, be reduced, but not below zero, to an amount
by which a fixed dollar amount specified by the Employer exceeds the Member's
Salary excluding commissions. Accordingly, if a Member's Salary, excluding
commissions, equals or exceeds the applicable fixed dollar amount, then no
commissions will be included as Salary.
For all purposes of this Article I(25), only a Member's first $200,000 (adjusted
for cost of living in accordance with Section 401(a)(17) of the IRC) of Salary
shall be taken into account. Effective July 1, 1994, "Salary," as otherwise
defined above, shall be limited to a Member's first $150,000 (as adjusted for
cost-of-living and otherwise limited or modified in accordance with Section
401(a)(17) of the IRC and applicable IRS rulings and regulations); provided,
however that a Member's accrued benefit determined in accordance with the
Regulations shall not be less than the accrued benefit of such Member determined
as of June 30, 1994.
7
Subject to the IRC, any definition of "Salary" adopted by an Employer under
Section (25) of this Article I shall be applied to all years of a Member's
Benefit Service; provided, however, if an Employer so elects, the definition of
Salary adopted under this Section (25) shall be applied only to a Member's years
of Benefit Service completed subsequent to the effective date of the Employer's
adoption of such definition of Salary.
(26) "SERVICE" - Employment with an Employer. A period of employment shall
commence or recommence as of the first day the Employee is credited with an
Hour of Service. In accordance with DOL Regulations Section 2530.200b-2(b)
and (c), Service includes (i) periods of vacation, (ii) periods of layoff,
(iii) periods of absence authorized by an employer for sickness, temporary
disability or personal reasons, and (iv) if and to the extent required by
federal law, service in the Armed Forces of the United States. In addition
to the foregoing in this Section (26), Service shall include employment
with other entities required to be aggregated with an Employer under IRC
Section 414(b), (c), (m) or (o) and shall include an individual's
employment with an Employer during the period for which such individual is
not eligible for membership in the Fund's Comprehensive Retirement Program
pursuant to Article 11, Section 2(B).
(27) "SPOUSE" - Except as otherwise provided by a Qualified Domestic Relations
Order, the individual to whom a Member or Retirant was married on the
earlier of (i) the date of his death or (ii) the first date of the period
for which his Retirement Allowance commences.
(28) "TRUST" - The Trust established in respect of the Regulations under the
Declaration of Trust made as of July 15, 1943, as amended, in which the
Regulations are incorporated by reference.
(29) "TRUSTEE" - The Trustee of the Trust.
8
(30) "VESTING SERVICE" - The period of Service counted in determining a Member's
eligibility for early retirement as described in Article III.
(31) The masculine pronoun wherever used shall include the feminine pronoun.
9
ARTICLE II PARTICIPATION AND MEMBERSHIP
SECTION 1. EMPLOYER PARTICIPATION
Any federally insured financial institution or other organization serving it may
apply to the Board for participation in the Fund's Comprehensive Retirement
Program if (A) as of its Commencement Date and in accordance with Section 410(b)
of the IRC and the IRS Regulations (i) the percentage of non-highly compensated
employees who will benefit under the Regulations is at least 70% of the
percentage of highly compensated employees (as defined in Section 414(q) of the
IRC) who will benefit under the Regulations (excluding such employees as are
permitted to be excluded under IRS Regulations), or (ii) the average benefit
percentage test (as defined in Section 410(b)(2) of the IRC and the IRS
Regulations) will be satisfied with respect to the Employer, and (B) as of its
Commencement Date and in accordance with Section 401(a)(26) of the IRC and the
IRS Regulations, at least 50 (or, if a lesser number results, 40%) of the
Employer's Employees will benefit under the Fund. The applicant shall submit
the formal application and all required information, and the Board, in its
discretion, shall decide upon admittance and determine the Commencement Date.
The Board may, in its discretion and at such times as it may determine, require
an affirmative showing by an Employer of its continued compliance with the
requirements of Section 410(b) and Section 401(a)(26) of the IRC and IRS
Regulations. Initial and continued participation shall be subject to continued
compliance with the IRC and IRS Regulations in order that the Fund be maintained
as a trust qualified under Section 401(a) of the IRC. Notwithstanding anything
in this Section 1 to the contrary, any Member of the Fund's Comprehensive
Retirement Program who is transferred to a governmental or quasi-governmental
agency serving the financial industry shall continue as a Member of the Fund's
Comprehensive
10
Retirement Program provided that such Member's employing agency has adopted the
Regulations.
SECTION 2. EMPLOYEE MEMBERSHIP
(A) Every Employee, except as provided in Subsection (B) of this Section 2,
shall be enrolled as a Member of the Fund's Comprehensive Retirement
Program on the latest of:
(1) His Employer's Commencement Date; or
(2) The first day of the month coincident with or next following the date
he is hired by his Employer; or
(3) The first day of the month coincident with or next following the
expiration of any waiting period established with the Fund by his
Employer and made uniformly applicable to its Employees, which period
may not extend beyond the later of his completion of one year of
Service or attainment of age 21. Such waiting period shall be
inapplicable, however, in the cases of restoration and reinstatement
of Service described in Article VIII and Article X, Section 2,
respectively, except for those Employees who have received a complete
distribution of their benefits on account of the withdrawal of their
Employer from participation in the Fund under Article XII or who have
elected to transfer their accrued benefits to a qualified successor
plan on account of such withdrawal from participation in the Fund
under Article XII; or
(4) The first day of the month coincident with or next following the date
he is no longer ineligible under Subsection (B) of this Section; or
11
(5) In the case of an Employer with respect to whom Employees were
excluded from eligibility for membership pursuant to Paragraph (1) of
Subsection (B) of this Section 2, as in effect on June 30, 1988
(Employees hired on or after attainment of age 60 were ineligible), at
such Employer's option, with respect to any Employee who had attained
age 60 prior to being hired and who has an Flour of Service on or
after July 1, 1988 the applicable enrollment date otherwise provided
under this Subsection (A) and determined without regard to Paragraph
(1) of Subsection (B) of this Section 2 as in effect on June 30, 1988.
(B) An Employee shall not be eligible for membership if he is in one of the
following classes for which his Employer has requested, and the Fund has
granted, subject to continuing compliance with applicable provisions of the
IRC and ERISA, exclusion:
(1) Those who are covered by another designated pension plan of their
Employer.
(2) Those who are compensated on an hourly basis - whereby compensation
for each pay period (without regard to paid absences) is determined by
multiplying the hourly wage rate by the actual number of Hours of
Service completed.
(3) Those who are hired under a written agreement which (i) precludes
membership in the Fund and (ii) provides for a specific period of
employment not in excess of one year.
(C) Every Employee, except as provided in Subsection (D) of this Section 2,
shall, as a condition of his employment, agree to become a Member when
eligible and shall be enrolled as a Member by his Employer as of the date
he becomes eligible. However, no person shall under any circumstances
become a Member unless and until his enrollment application is filed with,
and accepted by, the Fund.
12
(D) An Employee who is in Service on his Employer's Commencement Date may elect
not to become a Member by filing with the Fund, within 60 days after he
becomes eligible, written notice of such election wherein he waives all
present and prospective benefits which he would otherwise have as a Member.
An Employee who files such notice shall be excluded from membership upon
receipt by the Fund of such notice. Thereafter, he may become a Member
only if he files an enrollment application within five years of the later
of such Commencement Date or the date he becomes eligible for membership,
and furnishes evidence of good health satisfactory to the Fund.
(E) If, on the date a Member is enrolled, his Employer does not expect him to
complete at least 1,000 Hours of Service in the next 12 consecutive month
period, the Member shall be placed forthwith on inactive membership under
Article X, Section 3.
(F) Membership shall not confer any legal rights upon any Employee or other
person against any Employer, nor shall it interfere with the right of any
Employer to discharge any Employee.
13
ARTICLE III SERVICE
SECTION 1. BENEFIT SERVICE
(A) Benefit Service is the period of Service counted in determining a Member's
benefits (subject to Articles IV and V). It is the sum of Membership
Service and Prior Service.
(B) Membership Service is the years and months of Service rendered by a Member
from his Enrollment Date to the date of termination of his membership,
which date shall be the date immediately preceding his applicable
Retirement Date. Subject to Article X, a Member shall be credited with one
month of Membership Service for each calendar month of enrolled membership
during which an Hour of Service is credited.
(C) Prior Service is the years and months of Service rendered by a Member
through the day preceding his Employer's Commencement Date, for which his
Employer will allow credit on a uniform basis. At the Employer's option
and in a uniform and nondiscriminatory manner, an Employer shall have the
right to count, as Prior Service under this Subsection (C), any period of
Service not otherwise taken into account pursuant to this Article III.
Notwithstanding the foregoing, an Employer may, with the consent of the
Fund, determine as Prior Service of any Employee a period of his continuous
employment with (i) an organization which has been merged or consolidated
with, or substantially all the assets of which have been acquired by, the
Employer and (ii) the Federal Home Loan Bank Board which preceded
employment with such Employer, provided that such determination be
uniformly applicable to all continuing Employees who have been employed by
such organization and enrolled in the membership of the Fund. An Employer
may, upon such terms and conditions as the Fund and the IRS shall approve,
14
provide benefits in respect of any person covered by a prior retirement
plan of the Employer which was qualified under Section 401(a) of the IRC
and in connection therewith transfer funds from such plan to the Fund so
long as such transferred funds are applied so that each Member affected
thereby would receive a benefit immediately after the transfer, if the Fund
then terminated, at least equal to the benefit he would have received upon
the termination of the prior plan immediately before such transfer.
SECTION 2. VESTING SERVICE
For purposes of determining an Employee's eligibility for early retirement and
subject to any adjustment required by Article X, an Employee will receive credit
for the aggregate of all time period(s) commencing with the Employee's first day
of employment or reemployment with an Employer and ending on the date a break in
service begins. The first day of employment or reemployment is the first day
the Employee performs an hour of service. An Employee will also receive credit
for any period of severance of less than 12 consecutive months. Fractional
periods of a year will be expressed in terms of days. For purposes of this
Section 2, hour of service shall mean each hour for which an Employee is paid or
entitled to payment for the performance of duties for an Employer.
Break in service is a period of severance of at least 12 consecutive months.
Period of severance is a continuous period of time during which the Employee is
not employed by an Employer and commences on an Employee's severance from
service date. An Employee's severance from service date is the date the
Employee retires, quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was otherwise first absent from
service.
15
If an Employer is a member of an affiliated service group (under IRC Section
414(m)), a controlled group of corporations (under IRC Section 414(b)), or a
group of trades or businesses under common control (under IRC Section 414(c)),
or any other entity required to be aggregated with the employer pursuant to IRS
Section 414(o), Vesting Service will be credited for any employment for any
period of time for any other member of such group. Vesting Service will also be
credited for any individual required under IRC Section 414(n) or Section 414(o)
to be considered an Employee of an employer aggregated under IRC Section 414(b),
(c), or (m).
16
ARTICLE IV BASIC BENEFITS
All the benefits described in Articles IV and V are provided on a uniform basis
for the Members of an Employer, except as otherwise provided under Article V,
Section 8.
SECTION 1. NORMAL RETIREMENT
(A) Any Member who attains age 65 while in Service shall be fully vested and
retired on his normal retirement date which shall be the first day of the
month coincident with or next following his 65th birthday or, if later, the
date of his termination of employment; except that if he shall have
attained age 65 before his Employer's Commencement Date, then his normal
retirement date shall be such Member's termination of employment.
(B) The annual normal Retirement Allowance payable as of a Member's normal
retirement date shall be determined under the benefit formula elected by
the Employer under Article V, Section 1. In the case of a Member who
retires after attaining age 65, such Member's Retirement Allowance shall be
the greater of (i) the Member's Retirement Allowance based on his years of
Benefit Service as of his Retirement Date, or (ii) the Member's Retirement
Allowance as of the first day of the month coincident with or next
following the later of (x) the Member's attainment of age 65 or (y) the
Member's Employer's Commencement Date, increased by .8% for each month from
such date to his normal retirement date (but not beyond age 70).
(C) In lieu of having his normal Retirement Allowance commence as of his normal
retirement date, a Member may elect to have such allowance commence in an
increased amount as of the first day of any month subsequent to his normal
retirement date but not later than the first day of the month next
following his attainment of age 70. The regular
17
Retirement Allowance of such a Member shall be increased by .8% for each
month of deferral up to a maximum increase of 48%.
SECTION 2. EARLY RETIREMENT
(A) Any Member whose Service is terminated before attainment of age 65 and who
has a nonforfeitable right to all or a portion of the Retirement Allowance
provided by his Employer's contributions may, upon written application
filed with the Fund, be retired as of his early retirement date which shall
be the first day of the month coincident with or next following the date of
such termination.
(B) (i) With respect to the benefit formulas described in Article V, Sections
1(A), 1(B), 1(C), 1(F), 1(i), 1(J), 1(K), 1(L), and 1(M), the annual
early Retirement Allowance payable before age 65 shall be equal to a
percentage of the annual Retirement Allowance otherwise payable as of
the Member's normal retirement date, calculated on the basis of his
Salary (career average, High-5 or High-3, whichever is applicable)
and the Benefit Service as of his early retirement date.
(ii) With respect to the benefit formulas described in Article V, Sections
1(D), 1(E), 1(G), 1(H), 1(N), and 1(O), the annual early Retirement
Allowance payable before age 65 shall be equal to a percentage of the
annual Retirement Allowance otherwise payable as of the Member's
normal retirement date calculated on the basis of his Salary (High-5
or High-3, whichever is applicable) as of his early retirement date
and the Benefit Service he would have completed as of his normal
retirement date. The amount determined under the preceding sentence
shall be multiplied by a fraction, the numerator of which is the
actual years and months of
18
Benefit Service the Member has completed as of his early retirement
date and the denominator of which is the number of years and months
of Benefit Service which the Member would have completed as of his
normal retirement date.
(iii) The percentage applied in Subsection (B)(i) or (B)(ii) of this
Section 2 shall be determined by the Member's Vesting Service at
early retirement from either of the following tables, as adopted by
his Employer:
TABLE 1
-------
Completed Years of Vesting
Vesting Service Percentage
------------------ ----------
Less than 5 0%
5 or more 100%
TABLE II
--------
Completed Years of Vesting
Vesting Service Percentage
------------------ ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
An Employer may change from one vesting table to the other; provided,
however, that if an Employer adopts Table I subsequent to having adopted
Table II, then any Employee who became a Member before the date of adoption
of Table I and has less than 5 years of Vesting Service will continue to be
subject to Table II until such Member has 5 years of Vesting Service. If an
Employer adopts Table II subsequent to having adopted Table 1, then any
Employee who became a Member before the date of adoption of Table 11 and has
less than 5 years of Vesting Service shall be subject to Table 11; but, at
such time as
19
such Member completes 5 years of Vesting Service he will again become
subject to Table 1.
(C) In lieu of having his early Retirement Allowance commence at age 65 under
Subsection (B) of this Section 2, a Member may elect to have such allowance
commence in an increased amount as of the first day of any month subsequent
to his attainment of age 65 but not later than the first day of the month
next following his attainment of age 70. The regular Retirement Allowance
of such a Member shall be increased by .8% for each month of deferral beyond
age 65 up to a maximum increase of 48%.
(D) In lieu of the Retirement Allowance payable at age 65 under Subsection (B)
of this Section 2, a Member may elect to have his early Retirement Allowance
commence in a reduced amount, as of the first day of any month subsequent to
his attainment of age 45, or 55, whichever has been designated on a uniform
basis by his Employer. If a Member so elects, his annual early Retirement
Allowance shall be equal to a percentage of his annual early Retirement
Allowance otherwise payable under Subsection (B) of this Section 2. Such
percentage shall be determined by the Member's age at commencement of his
Retirement Allowance using the Table adopted by his Employer pursuant to
Article V, Section 2.
Notwithstanding anything in this Section 2 to the contrary, an Employer may
elect to provide that any early Retirement Allowance which commences after a
Member's attainment of age 60 or 62, as designated by the Employer in its
election, shall not be reduced because of the commencement of such allowance
before the Member's normal retirement date; provided, however, an Employer
may not elect to provide such an unreduced early Retirement Allowance if the
Employer has elected to provide any of the
20
normal retirement benefit formulas described in Article V, Section 1(E),
(F), (G), (H), (I), (J), (K), (L), (M), (N) or (O).
In the case of an Employer's election pursuant to this Subsection (D) to
provide an unreduced early Retirement Allowance upon a Member's attainment
of age 60 or 62, as designated by the Employer, the early retirement factors
set forth in Appendix E hereto shall apply to the commencement of the
Member's Retirement Allowance prior to the Member's attainment of age 60 or
62, as applicable.
Notwithstanding anything in this Article IV to the contrary, in the case of
a Member who has terminated Service with the Employer with a nonforfeitable
interest in his Retirement Allowance (as determined in accordance with
Article IV, Section 2(B)(iii)) and who is eligible for disability benefits
under the Federal Social Security Act, such Member may elect to commence to
receive his disability retirement benefits under this Section 2 regardless
of the Member's age at such time. In the event of the payment of such
disability retirement benefits as provided in this Subsection (E), such
benefits shall be the Equivalent Value of the disabled Member's early
Retirement Allowance as determined by the Fund in accordance with the IRC,
ERISA and applicable governmental regulations to reflect the early
commencement of the payment thereof.
SECTION 3. DEATH BENEFITS
(A) Subject to the provisions of Subsection (B) of this Section 3, upon the
death of a Member who was eligible for early retirement at the time of his
death and is survived by a Spouse, the Equivalent Value of 120 monthly
installments of his Retirement Allowance, determined as if he had retired as
of the first day of the month during which he died, but
21
not less than his Accumulated Contributions, if any, shall be paid in the
form of a life annuity to such Spouse, as Beneficiary, unless such Spouse
elects a lump sum or an installment form of payment under Subsection (D) of
this Section 3; provided, however, that if such Member's Spouse had
consented in writing to the Member's designation of a different Beneficiary,
such death benefit will be paid to such designated Beneficiary. Any such
non-spousal designation may be revoked by the Member without spousal consent
at any time prior to the Member's death. If a Member eligible for early
retirement at the time of his death is not survived by a Spouse, such death
benefit will be paid to his designated Beneficiary or, if there is no
designated Beneficiary, to the Member's estate. If the Member was not
eligible for early retirement at the time of death, no death benefit other
than the refund of his Accumulated Contributions, if any, shall be payable.
(B) Upon the death of a Member who was eligible for early retirement and who was
survived by a Spouse entitled to receive the death benefit determined under
Subsection (A) of this Section 3 or under Article V, Section 4, whichever is
applicable, such death benefit shall not be less than the Equivalent Value
of one-half of the Option 3 allowance under Article VI, Section 1, as if
such Spouse had been designated Contingent Annuitant.
(C) Upon the death of a Retirant who died before 120 monthly installments of his
Retirement Allowance had been paid and was survived by a Spouse and at the
time of his death no optional form of payment under Article VI was in
effect, the Commuted Value of such unpaid installments shall be paid in a
lump sum to his Spouse as Beneficiary; provided, however, that if such
Retirant's Spouse had consented in writing to the designation of a different
Beneficiary, the death benefit will be paid to such designated Beneficiary.
Any such non-spousal designation may be revoked by the Retirant without
spousal consent at
22
any time prior to the Retirant's death. If a Retirant is not survived by a
Spouse at the time of his death, the death benefit will be paid to his
designated Beneficiary or, if there is no designated Beneficiary, to the
Retirant's estate.
(D) (1) Upon written request filed with the Fund by the Member or Retirant, or
if no such request had been made prior to the time of death, then upon
written application filed by the Beneficiary prior to payment of any
amount on account of the death of the Member or Retirant, the lump sum
payment provided for in Subsection (A), (B) or (C) of this Section 3
may be converted into installments over a period of up to 10 years for
a spousal Beneficiary, or over a period of up to 5 years for a non-
spousal Beneficiary, computed with interest as specified by the Fund,
and should the Beneficiary die before having received all such
installments, the Equivalent Value of the unpaid installments using
such interest rate shall be paid in a lump sum to the Beneficiary's
estate.
(2) If a Member or Retirant dies before distribution of his Retirement
Allowance commences, distribution of the Member's or Retirant's entire
interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Member's death except to the
extent that an election is made to receive distributions in accordance
with (a) or (b) below:
(a) if any portion of the Member's interest is payable to a designated
beneficiary, distributions may be made over the life or over a
period certain not greater than the life expectancy of the
designated beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Member died,
23
(b) if the designated beneficiary is the Member's Surviving Spouse,
the date distributions are required to begin in accordance with
(a) above shall not be earlier than the later of (1) December 31
of the calendar year immediately following the calendar year in
which the Member died and (2) December 31 of the calendar year in
which the Member would have attained age 70 1/2.
If the Member has not made an election pursuant to this Subsection (D) by
the time of his or her death, the Member's designated beneficiary must elect
the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under
this section, or (2) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the Member. If the Member has no
designated beneficiary, or if the designated beneficiary does not elect a
method of distribution, distribution of the Member's entire interest must be
completed by December 31 of the calendar year containing the fifth
anniversary of the Member's death. For purposes of this paragraph (2), if
the Member's or Retirant's Surviving Spouse dies after the Member or
Retirant, but before payments to such Spouse begin, the provisions of this
paragraph (2), with the exception of subparagraph (b) thereof, shall be
applied as if the Surviving Spouse was the Member or Retirant.
Notwithstanding the foregoing, to the extent any Retirement Allowance
provides for payments after a Retirant's death to a beneficiary other than
the Retirant's Spouse, such payments shall be made in accordance with
Section 401(a)(9) of the IRC and the IRS Regulations thereunder.
(E) Special provisions:
(i) If a Member who is eligible for early retirement dies after termination
of Service and prior to his Retirement Date, his death benefit shall be
determined under
24
Subsection (A) of this Section 3, or Article V, Section 4(A), whichever
is applicable. If such a Member dies on or after his Retirement Date,
the death benefit shall be determined under Subsection (B) of this
Section 3 or Article V, Section 4(B), whichever is applicable.
(ii) If a disability Retirant dies within 90 days after his separation from
active employment, his death benefit, if any, shall be determined under
Subsection (A) of this Section 3, or Article V, Section 4(A), whichever
is applicable, and shall be reduced (but not below zero) by the sum of
any retirement payments made.
(F) Upon the death of a Retirant whose Retirement Allowance has commenced, any
death benefit (if paid in installments) shall be distributed to his
Beneficiary at least as rapidly as under the method being used as of the
date of the Retirant's death.
SECTION 4. POST-AGE 65 ACCRUALS
Effective July 1, 1988, an Employee who had attained age 65 prior to July 1,
1988 will continue to accrue benefits in accordance with the Regulations. No
benefits shall accrue with respect to such Employee's Service which occurred
after the employee's attainment of age 65 but prior to July 1, 1988; provided,
however, an Employer may elect to provide benefit accruals with respect to such
pre-July 1, 1988 Service.
25
ARTICLE V BENEFIT FORMULAS AND ADDITIONAL BENEFITS
SECTION 1. NORMAL RETIREMENT BENEFIT FORMULAS
An Employer may provide, on a uniform basis for its Members, one of the
following normal retirement benefit formulas:
(A) Nonintegrated Benefit Formulas
The product of:
(1) An annual accrual rate equal to any rate not less than 1% and not
greater than 3% (determined in .25% increments), as designated by the
Employer, multiplied by
(2) The Member's (a) career average Salary, (b) High-5 Salary or (c) High-3
Salary, as designated by the Employer, multiplied by
(3) The number of years and months of Benefit Service.
(B) Nonintegrated Benefit Formulas with a Benefit Service Cap
The product of:
(1) An annual accrual rate equal to any rate not less than 1% and not
greater than 3% (determined in .25% increments), as designated by the
Employer, multiplied by
(2) The Member's (a) High-5 Salary or (b) High-3 Salary, as designated by
the Employer, multiplied by
(3) The number of years and months of Benefit Service up to a maximum of
25, 30, 35, 40, 45 or 50 years, as designated by the Employer.
26
(C) Partial High-5 or High-3 Salary Benefit Formulas
The greater of (1) or (2):
(1) The product of:
(i) An annual accrual rate equal to any rate not less than 1% and
not greater than 3% (determined in .25% increments), as
designated by the Employer, multiplied by
(ii) The Member's (a) High-5 Salary or (b) High-3 Salary, as
designated by the Employer, multiplied by
(iii) The number of years and months of Benefit Service, multiplied by
(iv) Any percentage less than 100% but equal to or greater than 50%,
as designated by the Employer.
(2) The product of:
(i) An annual accrual rate equal to any rate not less than 1% and
not greater than 3% (determined in .25% increments), as
designated by the Employer under Subsection (C)(1)(i) of this
Section 1, multiplied by
(ii) The Member's career average Salary, multiplied by
(iii) The number of years and months of Benefit Service.
(D) Nonintegrated Fixed Percentage Formulas
The product of:
(1) Any percentage not less than 40% and not greater than 80%, as
designated by the Employer, multiplied by
(2) The Member's (a) High-5 Salary or (b) High-3 Salary, as designated by
the Employer, for each Member who completes a minimum number of years
of Benefit
27
Service equal to 25 or 30 years of Benefit Service as of his normal
retirement date, as designated by the Employer.
If a Member does not complete the required minimum number of years of
Benefit Service as of his normal retirement date, his Retirement Allowance
under this Subsection (D) shall be multiplied by a fraction, the numerator
of which is the number of years and months of Benefit Service completed as
of his normal retirement date and the denominator of which is the required
minimum number of years of Benefit Service.
(E) 1.5% Integrated Benefit Formula With Career Average Minimum
The product of:
(1) 1.0% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the Covered Compensation Level ("CCL"), plus 1.5% of the
Member's High-5 (or High-3) Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service.
In the event a Member has completed more than 35 years of Benefit
Service as of his normal retirement date, the Member's Retirement
Allowance, with respect to such years of Benefit Service in excess of
35, will be equal to 1.5% of the Member's High-5 (or High-3) Salary,
both above and below the CCL. At the Employer's election, with respect
to Benefit Service completed prior to the Employer's adoption of the
integrated benefit formula in this Section 1(E), the Retirement
Allowance computed with respect to such Benefit Service shall be
determined by applying an annual accrual rate of 1.5% of the Member's
High-5 (or High-3) Salary, both above and below the CCL. In no event
will the
28
Member's normal Retirement Allowance computed under this Section 1(E)
be less than the product of:
(a) 1.5%, multiplied by
(b) The Member's career average Salary, multiplied by
(c) The number of years and months of Benefit Service.
(F) 2% Integrated Benefit Formula With Career Average Minimum
The product of:
(1) 1.5% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 2.0% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service.
In the event a Member has completed more than 35 years of Benefit
Service as of the date of his termination of employment, the Member's
Retirement Allowance, with respect to such years of Benefit Service in
excess of 35, will be equal to 2.0% of the Member's High-5 (or High-3)
Salary, both above and below the CCL. At the Employer's election, with
respect to Benefit Service completed prior to the Employer's adoption
of the integrated benefit formula in this Section 1(F), the Retirement
Allowance computed with respect to such Benefit Service shall be
determined by applying an annual accrual rate of 2.0% of the Member's
High-5 (or High-3) Salary, both above and below the CCL. In no event
will the Member's normal Retirement Allowance computed under this
Section 1(F) be less than the product of:
(a) 2.0%, multiplied by
29
(b) The Member's career average Salary, multiplied by
(c) The number of years and months of Benefit Service.
(G) 1.5% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 1.0% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 1.5% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. In the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date, the Member's Retirement Allowance, with respect
to Benefit Service in excess of 35 years, will be equal to 1.5% of the
Member's High-5 (or High-3) Salary, both above and below the CCL. At
the Employer's election, with respect to Benefit Service completed
prior to the Employer's adoption of the integrated benefit formula in
this Section 1(G), the Retirement Allowance computed with respect to
such Benefit Service shall be determined by applying an annual accrual
rate of 1.5% of the Member's High-5 (or High-3) Salary, both above and
below the CCL.
(H) 1.75% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 1.25% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 1.75% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. in the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date,
30
the Member's Retirement Allowance, with respect to Benefit Service in
excess of 35 years, will be equal to 1.75% of the Member's High-5 (or
High-3) Salary, both above and below the CCL. At the Employer's
election, with respect to Benefit Service completed prior to the
Employer's adoption of the integrated benefit formula provided in this
Section 1(H), the Retirement Allowance computed with respect to such
Benefit Service shall be determined by applying an annual accrual rate
of 1.75% of the Member's High-5 (or High-3) Salary, both above and
below the CCL.
(I) 2% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 1.5% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 2.0% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. in the event a
Member has completed more than 35 years of Benefit Service as of the
date of his termination of employment, the Member's Retirement
Allowance, with respect to Benefit Service in excess of 35 years, will
be equal to 2.0% of the Member's High-5 (or High-3) Salary, both above
and below the CCL. At the Employer's election, with respect to Benefit
Service completed prior to the Employer's adoption of the integrated
benefit formula in this Section 1(1), the Retirement Allowance computed
with respect to such Benefit Service shall be determined by applying an
annual accrual rate of 2.0% of the Member's High-5 (or High-3) Salary,
both above and below the CCL.
31
(J) 2.25% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 1.75% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 2.25% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. In the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date, the Member's Retirement Allowance, with respect
to Benefit Service in excess of 35 years will be equal to 2.25% of the
Member's High-5 (or High-3) Salary, both above and below the CCL. At
the Employer's election, with respect to Benefit Service completed
prior to the Employer's adoption of the integrated benefit formula
provided in this Section 1(J), the Retirement Allowance computed with
respect to such Benefit Service shall be determined by applying an
annual accrual rate of 2.25% of the Member's High-5 (or High-3) Salary
both above and below the CCL.
(K) 2.5% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 2.0% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 2.5% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. In the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date, the Member's Retirement Allowance, with respect
to Benefit Service in excess of
32
35 years, will be equal to 2.5% of the Member's High-5 (or High-3)
Salary, both above and below the CCL. At the Employer's election, with
respect to Benefit Service completed prior to the Employer's adoption
of the integrated benefit formula provided in this Section 1(K), the
Retirement Allowance computed with respect to such Benefit Service
shall be determined by applying an annual accrual rate of 2.5% of the
Member's High-5 (or High-3) Salary, both above and below the CCL.
(L) 2.75% Integrated Benefit Formula Without Career Average Minimum
The product of:
(1) 2.25% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 2.75% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. In the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date, the Member's Retirement Allowance, with respect
to Benefit Service in excess of 35 years will be equal to 2.75% of the
Member's High-5 (or High-3) Salary, both above and below the CCL. At
the Employer's election, with respect to Benefit Service completed
prior to the Employer's adoption of the integrated benefit formula
provided in this Section 1(L), the Retirement Allowance computed with
respect to such Benefit Service shall be determined by applying an
annual accrual rate of 2.75% of the Member's High-5 (or High-3) Salary
both above and below the CCL.
(M) 3% Integrated Benefit Formula Without Career Average Minimum
33
The product of:
(1) 2.5% of the Member's High-5 (or High-3, as designated by the Employer)
Salary up to the CCL, plus 3.0% of the Member's High-5 (or High-3)
Salary above the CCL, multiplied by
(2) The number of years and months of Benefit Service. In the event a
Member has completed more than 35 years of Benefit Service as of his
normal retirement date, the Member's Retirement Allowance, with respect
to Benefit Service in excess of 35 years will be equal to 3% of the
Member's High-5 (or High-3) Salary, both above and below the CCL. At
the Employer's election, with respect to Benefit Service completed
prior to the Employer's adoption of the integrated benefit formula
provided in this Section 1(M), the Retirement Allowance computed with
respect to such Benefit Service shall be determined by applying an
annual accrual rate of 3.0% of the Member's High-5 (or High-3) Salary
both above and below the CCL.
(N) Integrated Fixed Percentage Formulas with 25 Years of Benefit Service Cap
The product of:
(1) Any percentage commencing with 25% and not exceeding 62.5% (in
increments of 6.25%), as designated by the Employer, of the Member's
High-5 (or High-3, as designated by the Employer) Salary up to the CCL,
plus
(2) The sum of (i) the percentage designated in paragraph (1) of this
Subsection (N) and (ii) 12.5% multiplied by the Member's High-5 (or
High-3) Salary above the CCL, for each Member who completes 25 years of
Benefit Service as of his normal retirement date.
34
If a Member does not complete 25 years of Benefit Service as of his normal
retirement date, his Retirement Allowance under this Section 1(N) shall be
multiplied by a fraction, the numerator of which is the number of years and
months of Benefit Service completed as of his normal retirement date and the
denominator of which is 25.
(O) Integrated Fixed Percentage Formulas with 30 Years of Benefit Service Cap
The product of:
(1) Any percentage commencing with 30% and not exceeding 75% (in increments
of 7.5%), as designated by the Employer, of the Member's High-5 (or
High-3, as designated by the Employer) Salary up to the CCL, plus
(2) The sum of (i) the percentage designated in paragraph (1) of this
Subsection (O) and (ii) 15% multiplied by the Member's High-5 (or High-
3) Salary above the CCL, for each Member who completes 30 years of
Benefit Service as of his normal retirement date.
If a Member does not complete 30 years of Benefit Service as of his normal
retirement date his Retirement Allowance under this Section 1(O) shall be
multiplied by a fraction, the numerator of which is the number of years and
months of Benefit Service completed as of his normal retirement date and the
denominator of which is 30.
For an Employer which had elected an integrated benefit formula prior to
July 1, 1989, and which elects any of the integrated benefit formulas
described in Xxxxxxxxxx (X), (X), (X), (X), (X), (X), (X), (X), (X), (X) or
(O) of this Section 1, if a Member's Retirement Allowance determined under
the prior integration formula as of June 30, 1989 exceeds the Member's
Retirement Allowance determined under the applicable integration formula
35
described in Xxxxxxxxxx (X), (X), (X), (X), (X), (X), (X), (X), (X), (X) or
(O), then the higher Retirement Allowance will be payable. For purposes of
this Article V, "career average Salary" shall mean the average annual Salary
during Benefit Service. "High-5 Salary" shall mean the average annual
Salary over the 5 consecutive years of highest Salary during Benefit
Service. "High-3 Salary" shall mean the average annual Salary over the 3
consecutive yea's of highest Salary during Benefit Service. For purposes of
Subsections (E), (F), (G), (H), (I), (J), (K), (L), (M), (N), and (O) of
this Section 1 (except as otherwise provided in the following paragraph of
this Section 1), CCL shall mean the average of the taxable wage bases in
effect under Section 230 of the Social Security Act as of the beginning of
each Plan Year included in the 35-year period ending with the last day of
the calendar year preceding the calendar year in which the Member attains
(or will attain) his social security retirement age, as defined in Section
41 5(b)(8) of the IRC. However, commencing with the Plan Year beginning on
July 1, 1995, CCL shall mean the average of the taxable wage bases in effect
under Section 230 of the Social Security Act as of the beginning of each
Plan Year included in the 35-year period ending with the last day of the
calendar year in which the Member attains (or will attain) his social
security retirement age, as defined in Section 415(b)(8) of the IRC.
The taxable wage base for the current Plan Year and any subsequent Plan Year
shall be assumed to be the same as the taxable wage base in effect as of the
beginning of the Plan Year for which the determination is being made. In
addition, a Member's CCL for a Plan Year beginning before the 35-year period
referred to in this paragraph shall be the taxable wage base in effect as of
the beginning of such plan year.
00
Xxx xxxxxxxx xx Xxxxxxxxxxx (X), (X), (X), (X), (X), (X), (X), (X) and (O)
of this Section 1, in lieu of the foregoing definition of CCL, an Employer
may elect, on a uniform basis for its Members, to define CCL as the greater
of $10,000 or one-half of the "covered compensation" (as defined in Section
1.401(1)-1(c)(7) of the IRS Regulations) of an individual who attains his
social security retirement age in the calendar in which the Plan Year
begins.
Notwithstanding anything in this Section 1 to the contrary, in no event may
an Employer's election to provide any of the benefit formulas described in
this Section 1 reduce a Member's accrued benefit below the amount of such
accrued benefit determined as of the day immediately preceding the effective
date for the Employer's election of such a benefit formula under this
Section 1. In addition, a Member's Retirement Allowance determined under
the applicable integration formula described in Xxxxxxxxxx (X), (X), (X),
(X), (X), (X), (X), (X), (X), (X) or (O) shall conform to the cumulative
permitted disparity limit and the annual overall permitted disparity limit
as provided under the IRS Regulations.
SECTION 2. EARLY RETIREMENT FACTORS
(A) An Employer shall adopt, on a uniform basis for its Members, one of the
Early Retirement Factor Tables (with interpolation made to the nearest
month) provided in Appendix E hereto.
(B) If an Employer provides an integrated benefit formula, as described in
Xxxxxxxxxx (X), (X), (X), (X), (x), (X), (X), (X), (X), (X) or (O) of
Section 1 of this Article V, and adopts the early retirement factor table
described in Table l(B) or (C), II(B) or (C) or III(B) or (C) of Appendix E,
then the early retirement factor with respect to a Member's
37
Retirement Allowance attributable to Salary up to the "Covered Compensation
Level," as defined in Section 1 of this Article V, and computed in
accordance with the accrual rate described in Subsection (E)(1), (F)(1),
(G)(1), (H)(1), (1)(1), (J)(1), (K)(1), (L)(1), (M)(1), (N)(1) or (O)(1) of
Section 1 of this Article V (whichever shall apply) but only with respect to
such Salary, shall be the applicable early retirement factor described in
Appendix A.
SECTION 3. DISABILITY RETIREMENT BENEFIT
(A) If an Employer has provided this benefit since its Commencement Date, then
each of its Members --
(i) who is not an inactive Member or is not on a leave of absence, and
for whom contributions have not been discontinued,
(ii) who is separated from active employment by reason of disability after
the earlier of one year of Membership Service or five years of
Benefit Service but before attainment of age 65, and
(iii) who is certified by physicians designated by the Fund to have a
physical or mental impairment which (a) prevents him from doing any
substantial gainful activity for which he is fitted by education,
training or experience, and (b) is expected to last at least 12
months from the date of such separation or to result in death, shall,
upon notice to the Fund within 13 months of such separation date, be
retired as of his disability retirement date which shall be the first
day of the month coincident with or next following the date of such
separation. (Receipt of proof satisfactory to the Fund within 13
months after the date of such separation that the Member is
38
eligible for, or is receiving, disability insurance benefits under
Title II of the Federal Social Security Act will be deemed presumptive
evidence of entitlement to a disability Retirement Allowance under this
Subsection (A).)
If an Employer adopts this benefit subsequent to its Commencement Date, then
it shall be effective for each of its Members, subject to the above
conditions, no earlier than one year after notification to the Fund of its
adoption.
(B) The annual disability Retirement Allowance shall be the normal Retirement
Allowance (determined under Article V, Section 1) on the basis of the
Member's Salary and Benefit Service to his disability retirement date, but
shall not be less than 30% of his average annual Salary over the 5
consecutive years of his highest Salary during his Benefit Service (or
during all the years of his Benefit Service if less than 5). In no event
shall the disability Retirement Allowance exceed the Retirement Allowance
that the disabled Member would have received if he had continued in Service
to his normal retirement date and his Salary at disability had continued to
such date.
(C) The Board may require any disability Retirant who has not attained age 65 to
demonstrate continuing eligibility for disability retirement benefits as
often as once a year. If such a Retirant refuses or cannot demonstrate to
the satisfaction of the Board that he continues to be disabled within the
definition of Subsection (A) of this Section 3, then his disability
allowance shall be discontinued. The disability Retirement's disability
Retirement Allowance will also cease if and when he returns to substantial
gainful activity for which he is fitted by education, training or
experience. In either case, it may be resumed if it is subsequently
determined by the Board that the conditions of Subsection (A) of this
Section 3 are again satisfied.
39
SECTION 4. ADDITIONAL DEATH BENEFITS
(A) In lieu of the basic death benefit, if any, provided under Article IV,
Section 3(A), an Employer may adopt the Additional Active Service Death
Benefit which is payable upon the death of a Member in Service, for whom
contributions have not been discontinued, to his Beneficiary in a lump sum
equal to (i) plus (ii):
(i) 100% of ne Member's last 12 months' Salary, plus an additional 10% of
such Salary for each year of Benefit Service until a maximum of 300% is
attained for 20 or more years of Benefit Service. If death occurs
prior to the completion of one year of Benefit Service, this part of
the benefit shall be 100% of the Member's annual Salary as of his
Enrollment Date if his Salary is determined under Section (25)(A) of
Article I, or his annualized Salary based on all completed months of
Benefit Service prior to death if Salary is determined under Section
(25)(B) or Section (25)(C) of Article I.
(ii) The Member's Accumulated Contributions, if any.
In no event shall such lump sum be less than the lump sum which would have
been payable under either Article IV, Section 3(A) or Article V, Section
4(B), whichever is applicable.
(B) In lieu of the basic death benefit provided under Article IV, Section 3(A),
an Employer (or a successor to such Employer) which was participating in the
Fund as of June 30, 1983 may adopt the "12 Times" Retirement Benefit which
is payable upon the death of a Retirant, who had not elected an optional
form of payment under Article VI, in a lump sum equal to the excess, if any,
of (i) over (ii):
40
(i) An amount equal to 12 times the Retirant's annual allowance immediately
prior to the commencement of his Retirement Allowance, or as of the
first day of the month in which his death occurred if he died before
having received any payment of such allowance.
(ii) The sum of the Retirement Allowance payments he had received, if any.
This benefit shall also be payable upon the death of a Member who was
eligible for early retirement at the time of death in lieu of the
benefit which would have been payable under Article IV, Section 3(A).
SECTION 5. RETIREMENT ADJUSTMENT PAYMENT
(A) An Employer which was participating as of June 30, 1983 may provide this
benefit to those of its Members who (i) were enrolled prior to July 1, 1983
and (ii) retire after attainment of age 55.
(B) The Retirement Adjustment Payment shall be a single lump sum equal to three
monthly installments of his Retirement Allowance (before any optional
modification) determined and payable as of the date his Retirement Allowance
payments commence. If a Retirant, who would otherwise be eligible to
receive such a payment, dies prior to such date, his Retirement Adjustment
Payment shall be determined as though his Retirement Allowance payments had
commenced as of the first day of the month in which his death occurred, and
shall be payable to his Beneficiary.
41
SECTION 6. POST-RETIREMENT SUPPLEMENTS
(A) Annual 1%, 2% or 3% Increment:
Subject to Section 11.1, an Employer may provide an annual increment which
shall be paid to each of its Retirants who has attained age 66 and is
receiving his annual Retirement Allowance. Each annual increment shall be
an amount equal to 1%, 2% or 3%, as the Employer may elect, of the
Retirant's annual Retirement Allowance multiplied by the number of years
from the calendar year in which he attained age 65 to the current year at
the end of which such increment is payable. Upon the Retirant's death, no
further amount shall be payable in respect of this benefit, except that if
he had elected a Contingent Annuitant under Article VI who is alive on the
later of (a) the date of the Retirant's death or (b) the date the Retirant
would have attained age 66, such Contingent Annuitant shall thereafter be
entitled to an annual increment equal to 1%, 2% or 3%, as the case may be,
of the Contingent Annuitant's annual allowance multiplied by the number of
years from the calendar year in which the Retirant had attained age 65 (or
would have attained age 65 if he died prior thereto) to the current year at
the end of which such increment is payable. Upon the Contingent Annuitant's
death, no further amount shall be payable in respect of this benefit.
(B) Single Fixed Percentage Adjustment:
Subject to Section 11.1, an Employer may provide, as of any January 1, a
fixed percentage supplement for each of its then eligible Retirants,
determined under one of the following formulas:
(a) 1% or more of the annual Retirement Allowance for each completed year
of retirement after attainment of the minimum under one of the
following formulas.
42
(b) A single percentage uniformly applicable to all those eligible.
For purposes of this Subsection (B), an eligible Retirant is one who (i) has
retired prior to the effective date of the supplemental benefit described in
this Subsection (B) and (ii) has attained the minimum age specified by his
Employer. Such minimum age may be any age not less than 45 and not greater
than 66, and shall apply uniformly to all Retirants of the Employer. The
supplement shall be paid each January beginning with the effective date
(providing the Retirant has begun receiving his annual allowance) and ending
in the year in which the Retirant dies, except that if he had elected a
Contingent Annuitant under Article VI who is alive on the date of the
Retirant's death, such Contingent Annuitant shall thereafter be entitled to
an annual supplement determined by multiplying the fixed percentage by the
Contingent Annuitant's annual allowance and ending in the year in which the
Contingent Annuitant dies. If the fixed percentage supplement provided for
a Retirant is not paid due to the Retirant's deferral of commencement of
allowance payments, it shall be paid beginning with the January 1 coincident
with or following the date his Retirement Allowance payments commence and
shall be determined by multiplying the fixed percentage provided by the
Employer by the annual Retirement Allowance determined at the time payments
commence.
SECTION 7. SUPPLEMENTAL EARLY RETIREMENT WINDOW BENEFIT
(A) Subject to the provisions of this Section 7 and Section 11.1, an Employer
may provide for each Member who has satisfied the eligibility requirements
specified in Subsection (D) of this Section 7, a supplemental early
retirement window benefit determined pursuant to the formula elected in
Subsection (E) of this Section 7 and payable in accordance with
43
Articles IV and V. Any such supplemental early retirement window benefit
shall not be deemed to be in lieu of any of the other additional benefits
described in this Article V. A Member who does not meet the eligibility
requirements of Subsection (D) of this Section 7 or who does not terminate
employment within the time period described in Subsection (B) of this
Section 7 will not be entitled to any additional benefits pursuant to this
Section 7.
(B) The Employer shall select a time period of not less than 45 days nor more
than 90 days from the effective date of its adoption of the supplemental
early retirement window benefit during which an eligible Member may elect
such benefit. A Member must agree to retire during the period described in
the preceding sentence in order to be eligible for the benefit.
(C) In order for an Employer to provide a supplemental early retirement window
benefit pursuant to this Section 7, the following conditions must be
satisfied:
(1) At least five (5) Members must be eligible for the supplemental early
retirement window benefit during the election.period described in
Subsection (B) of this Section 7;
(2) The Employer must comply with all procedural rules established by the
Fund with regard to the implementation and operation of such
supplemental early retirement window benefit;
(3) The Employer must indemnify the Fund in a manner satisfactory to the
Fund against any and all losses and expenses incurred by the Fund
(including reasonable legal fees) arising out of the Employer's
adoption of the early retirement window benefit; and
44
(4) Any other conditions which the Fund, the IRS or any other governmental
authority might require.
(D) An Employer must establish an eligibility requirement, uniformly applicable
to all of its Employees, which must be satisfied by a Member as of the
effective date of the adoption of the supplemental early retirement window
benefit in order for the Member to be eligible for such benefit. The
eligibility requirement referred to in the preceding sentence can be either:
(i) A minimum age of not less than 45; or
(ii) A minimum total of age and Vesting Service of not less than 70.
Notwithstanding anything in this Subsection (D) of this Section 7 to the
contrary, an Employer may elect to restrict the eligibility for the
supplemental early retirement window benefit under this Section 7 to (i)
those Members who are not highly compensated employees within the meaning of
Section 414(q) of the IRC, (ii) those Members who are not inactive Members,
as described in Article X, Section 3, (iii) those Members employed at a
bona-fide geographical location or in a certain job function or job
classification designated by the Employer, or (iv) those Members who provide
the Employer with a valid waiver of certain legal rights of the Member,
provided that in such case the Employer shall have the sole responsibility
to determine whether any such waiver is valid and enforceable under
applicable law.
(E) Upon the termination of employment of an eligible Member who meets the
eligibility requirements of Subsection (D) of this Section 7 within the
period of time specified in Subsection (B) of this Section 7, the annual
Retirement Allowance otherwise determined
45
under Article IV and this Article V for such Member will be increased by the
difference, if any, that results from determining such benefit based on the
following:
(1) the Benefit Service and Vesting Service credited to the Member as of
his termination date, plus 5 or 10 years, as may be designated by the
Employer in its election of this feature; and/or
(2) the early retirement reduction percentage (if any) based upon the
Member's actual age at commencement of his Retirement Allowance plus 5
or 10 years, as may be designated by the Employer in its election of
this feature; and/or
(3) no early retirement reduction, or a 1.5% or 3% early retirement
reduction percentage for each year the Retirement Allowance commences
before the Member's normal retirement date, as may be designated by the
Employer in its election of this feature. The adoption by an Employer
of any of the features described in this Subsection (E) of this Section
7 shall apply uniformly to all Members employed by such Employer who
meet the eligibility requirements of Subsection (D) of this Section 7.
In no event shall an increase in a Member's Retirement Allowance under
the provisions of this Section 7 be deemed to increase such Member's
Vesting Service or Benefit Service for any other purposes under the
Comprehensive Retirement Program. Notwithstanding the foregoing in
this Subsection (E) of this Section 7, if an Employer has elected to
provide normal retirement benefits on the basis of one of the
integrated benefit formulas described in Xxxxxxxxxx (X), (X), (X), (X),
(X), (X), (X), (X), (X), (X) or (O) of Section 1 of this Article V, the
special early retirement reduction provided in Paragraph (2) of this
Subsection (E) and the elimination of an early retirement reduction
factor
46
provided in Paragraph (3) of this Subsection (E) shall not apply;
provided, however, such Employer may elect to provide any of such early
retirement reductions but only with regard to a Member's benefit which
accrues with respect to the Member's Salary up to the "Covered
Compensation Level," as defined in Section 1 of this Article V.
(F) The Fund reserves the right to deny an Employer the right to adopt the
supplemental early retirement window benefit described in this Section 7 if
it determines, in its sole discretion, that the adoption by such Employer
would result in the provision of benefits that would not satisfy the
requirements of IRC Section 401 (a)(4) (or any applicable IRS Regulations
thereunder) or which would in any other way adversely affect the tax-
qualified status of the Regulations and the tax-exempt status of the Trust
under IRC Sections 401(a) and 501(a), respectively.
SECTION 8. REDUCTION IN ACCRUAL RATE FOR CERTAIN EMPLOYEES
An Employer may elect, on a prospective basis only, to reduce the benefit
accrual rate which shall apply to the calculation of the normal retirement
benefit with respect to certain Members, designated by the Employer, who
constitute "highly compensated employees" (as defined in IRC Section 414(q)),
provided that (i) the Employer certifies to the Fund in writing that such a
reduction in the benefit accrual rate is required by the Office of Thrift
Supervision or such other regulatory authority and (ii) the IRS approves such a
reduction in the benefit accrual rate. If an Employer elects, in accordance
with this Section 8, to reduce the accrual rate of certain Members, the Employer
shall, to the extent a cessation of future benefit accruals is not required,
47
select one of the benefit formulas provided in Article V, Section 1 to apply
with respect to the future accrual of benefits for such Members.
48
ARTICLE VI OPTIONAL FORMS OF PAYMENT
SECTION 1. OPTIONS
Any Member or Retirement may elect, subject to Section 2 of this Article VI, to
convert his regular Retirement Allowance and the death benefit described in
Article IV, Section 3(A) and 3(B) or in Article V, Section 4(B), whichever is
applicable, to a retirement benefit of Equivalent Value under one of the
following options:
Option 1. A larger Retirement Allowance during the Retirant's life, but at his
death all payments shall cease and no further amounts shall be due or
payable.
Option 2. A modified Retirement Allowance to be paid to the Retirant for his
life and, after his death, an allowance at the same rate to be paid
to his Contingent Annuitant (should the latter survive the Retirant)
for life commencing on the first day of the month in which the
Retirant's death occurs. If both the Retirant and his Contingent
Annuitant die before 120 monthly installments have been paid, the
Commuted Value of such unpaid installments shall be paid in a lump
sum to a Beneficiary designated by the Retirant, or, if there is no
designated Beneficiary, to the estate of the survivor of the Retirant
and his Contingent Annuitant (presuming the Retirant to be the
survivor if they die within 24 hours of each other). Upon the death
of the survivor of the Retirant and his Contingent Annuitant after
120 monthly installments have been paid, all payments shall cease and
no further amounts shall be due or payable.
Option 3. A modified Retirement Allowance to be paid to the Retirant for his
life and, after his death, an allowance at one-half the rate to be
paid to his Contingent Annuitant
49
(should the latter survive the Retirant) for life commencing on the
first day of the month in which the Retirant's death occurs. Upon the
death of the survivor of the Retirant and his Contingent Annuitant,
all payments shall cease and no further amounts shall be due or
payable.
Option 4. A revised Retirement Allowance during the Retirant's life with some
other benefit payable upon his death, provided that such benefit be
approved by the Fund and be in compliance with the applicable
provisions of the IRC, including Section 401 (a)(9) thereof.
SECTION 2. CONDITIONS OF ELECTION
(A) The procedure for making an election or revocation with respect to any of
the options described in Section 1 of this Article VI shall be in compliance
with ERISA, the IRC and, as applicable, Section 14.4 and shall be
communicated by the Fund to the retiring Member. Thereafter the retiring
Member shall have 90 days (or such longer period as may be required by
ERISA) within which to make his election or revocation so long as it is
filed with the Fund prior to the date on which his Retirement Allowance
commences.
(B) If a retiring Member or his Contingent Annuitant dies before the date his
Retirement Allowance commences or before the date he receives a lump sum
settlement pursuant to Article VII, the benefit payable shall be the death
benefit under Article IV or Article V, whichever is applicable, provided
that such benefit shall not be less than the death benefit attributable to
the form of payment, including a lump sum, elected or the regular form of
payment, whichever is greater. If a disability Retirant whose allowance has
already
50
commenced dies during the 90 day period following the date of his separation
from active employment, the election of any option shall be inoperative.
(C) No election under Option 2, 3 or 4 of Section 1 of this Article VI may be
made which would result in an allowance to the Retirant of less than 50% of
the Retirement Allowance he would have received under Article VI, Section 1,
Option 1.
SECTION 3. PAYMENT OF BENEFITS TO CERTAIN ACTIVE MEMBERS
(A) An Employer may, at its option, permit each Member who satisfies the
requirements provided in Subsection (B) of this Section 3 to make a one-time
irrevocable election to commence the payment of his Retirement Allowance,
under any of the payment options available to such Member, at any time on or
after April 1 of the calendar year following the calendar year in which the
Member attains age 70 1/2. If a Member elects to commence the payment of
his Retirement Allowance pursuant to this Subsection (A) of this Section 3,
any benefits which accrue under the Fund after the commencement of his
Retirement Allowance shall be deemed to be provided to the extent of the
Equivalent Value of the benefits paid (taking into account only those
payments made in accordance with the applicable normal form of Retirement
Allowance payable under the Regulations) to the Member pursuant to an
election under this Subsection (A); provided, however, in no event shall the
Member's accrued benefit be reduced below such Member's accrued benefit as
of the close of the Plan Year immediately preceding the Plan Year in which
such additional benefits accrue.
(B) A Member shall be eligible to make the election provided in Subsection (A)
of this Section 3 if such Member is not an inactive Member (as described in
Article X, Section 3), had
51
attained age 70 1/2 prior to January 1, 1988 and was not a 5% owner (as
defined in IRC Section 416(i)) at any time during (i) the Plan Year ending
with or within the calendar year in which such Member attained age 66 1/2 or
(ii) any subsequent Plan Year.
52
ARTICLE VII METHOD OF PAYMENT
SECTION 1.
If a Retirant is married at the time his Retirement Allowance commences, his
Retirement Allowance shall be paid as a qualified joint and survivor annuity
with his Spouse as Contingent Annuitant, as described in Article Vl, Section 1,
Option 2 or 3, as designated by the Retirant, unless such Spouse consents in
writing to permit the Retirant to elect a different form of allowance. If a
Retirant is not married at the time his Retirement Allowance commences, his
Retirement Allowance shall be paid as a life annuity unless an optional form of
allowance as described in Article Vl is elected by the Retirant. If an optional
form of allowance as described in Article Vl is not in effect with respect to a
Retirant, his Retirement Allowance shall be paid to him during his life and upon
his death there shall be payable the death benefit, if any, determined in
accordance with Article IV, Section 3(C) or, if adopted by such Retirant's
Employer, Article V, Section 4(B).
SECTION 2.
(A) Unless a proper election is received by the Fund, all Retirement Allowances
shall be payable in substantially equivalent monthly installments commencing
the first day of the month next following the Retirant's attainment of age
70, except that:
(1) A normal or early Retirement Allowance may be payable to a Retirant, by
written election filed with the Fund, as of the first day of any month
next following his Retirement Date, and
(2) An early Retirement Allowance may not be commenced until the first day
of the month next following the Retirant's attainment of age 45 or 55,
whichever has
53
been designated on a uniform basis by his Employer, except as may
otherwise be provided under Section 2(E) of Article IV. Such
installments shall continue during the life of the Retirant (except as
provided otherwise under Article V, Section 3(C)), and the last
installment shall be due the first day of the month in which his death
occurs; except that if optional modification under Article Vl has
become effective the provisions thereof shall apply, and the last
installment payable to a surviving Contingent Annuitant designated
under such Article shall be due the first day of the month in which
such Contingent Annuitant's death occurs.
(B) Notwithstanding the preceding Subsection (A) of this Section 2, a Retirement
Allowance may be converted to a single lump sum payment of the Equivalent
Value of such allowance, if an eligible Retirement as described below so
elects prior to receiving his first monthly retirement payment, in the
following cases:
(a) Where that portion of the regular Retirement Allowance which is
attributable to the Employer's contributions amounts to less than $600
per year on the date such Allowance would otherwise commence; or
(b) Where the Employer has requested, and the Fund has approved, that a
lump sum settlement be available and uniformly applicable upon
attainment of any age between (and including) 45 and 65 as specified by
the Employer (but not earlier than the minimum age specified in Article
IV, Section 2(D) for the commencement of an early Retirement Allowance)
to those of its Retirants who meet the following conditions:
(i) Receipt by the Fund of a statement (in the form prescribed by the
Fund) in which the Retirement shall confirm that he has received
legal and tax advice
54
as to the consequences of receiving a lump sum settlement in
respect of his benefits under the Regulations, and in which his
Employer shall represent that it has received from the Retirant
evidence that such advice was obtained.
(ii) Receipt by the Fund of a consent (in the form prescribed by the
Fund) of the Member's Spouse, if any, that such lump sum
settlement be paid to the Retirant. (In any case where an
Employer adopts this option and subsequently ceases to exist as an
independent entity, the Retirement Committee of the Board may, in
its discretion, substitute itself for such Employer for the
purposes of this Article VII.)
Any lump sum settlement under this Subsection (B) shall be calculated using
an interest rate, determined by the Fund by reference to the last month of a
calendar quarter, which rate shall be the average of the 10 and 20-year U.S.
Treasury Bond annual yields for such month, as reported in the Federal
Reserve Statistical Release (G.13), rounded to the nearest .5%; provided,
however, if the annual yield of 20-year U.S. Treasury Bonds is not
published, such rate shall be the annual yield of 10-year U.S. Treasury
Bonds. In the absence of the Release, the Fund may obtain such annual
yields from any other source it deems appropriate. The rate so determined
shall be applicable to settlements to be paid in the calendar quarter
beginning three months later; provided, however, that in no event shall the
interest rate used to calculate lump sum settlements exceed:
(1) The PBGC Interest Rate if the present value of the lump sum settlement
using the PBGC Interest Rate is less than $25,000, or
55
(2) 120% of the PBGC Interest Rate if the present value of the lump sum
settlement using the PBGC Interest Rate is $25,000 or greater; except
that in no event shall such lump sum settlement computed pursuant to
this Subparagraph (2) be reduced below $25,000.
The settlement will be the present value, calculated on the basis of such
interest rate, of the regular form of allowance which would otherwise be
payable to the Retirant under the Regulations. It will be calculated and
payable as of the date on which payment of the corresponding Retirement
Allowance would otherwise commence, except that no settlement under
Paragraph (b) of this Subsection (B) is payable prior to the age specified
therein.
(C) No Retirement Allowance or lump sum settlement shall be increased on account
of any delay in payment beyond the date specified in this Article VII due to
the Retirant's failure to properly file the application form furnished by
the Fund or to otherwise accept such payment.
SECTION 3.
Notwithstanding anything herein to the contrary, if the Equivalent Value of a
Member's vested benefit is zero, the Member shall be deemed to have received a
distribution of such benefit upon termination of employment with his Employer
and shall immediately forfeit the nonvested portion of his benefit. If a Member
is deemed to receive a distribution pursuant to this Section 3, and the Member
is restored to Service before the date the Member incurs a break in service of
at least 60 consecutive months, then upon the reemployment of such Member, the
Member's
56
Vesting Service and Benefit Service shall be reinstated and his retirement
benefits shall be restored to the amount of such benefits as of the date of the
deemed distribution.
SECTION 4.
This Section 4 applies to distributions made on or after January 1, 1993.
Solely to the extent required under applicable law and IRS Regulations, and
notwithstanding any provision of the Regulations to the contrary that would
otherwise limit a Distributee's election under this Section 4, a Distributee may
elect, at the time and in the manner prescribed by the Board, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover. For purpose
of this Section 4, the following terms shall have the following meanings:
(A) Eligible Rollover Distribution: Solely to the extent required under
applicable law and IRS regulations, an Eligible Rollover Distribution is any
distribution of all or any 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 designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the IRC; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
57
(B) Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in Section 408(a) of the IRC, an individual
retirement annuity described in Section 408(b) of the IRC, an annuity plan
described in Section 403(a) of the IRC, or a qualified trust described in
Section 401 (a) of the IRC 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.
(C) Distributee: A Distributee includes 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 or former spouse who is an alternate
payee under a Qualified Domestic Relations Order are Distributees with
regard to the interest of the Employee or former Employee.
(D) Direct Rollover: A Direct Rollover is a payment by the Fund to the Eligible
Retirement Plan specified by the Distributee.
SECTION 5.
Unless the Member elects otherwise, distribution of his Retirement Allowance
will begin no later than the 60th day after the latest of the close of the Plan
Year in which:
1. the Member attains age 65;
2. occurs the 10th anniversary of the year in which the Member commenced
participation in the Fund; or,
3. the Member terminates Service with his Employer.
58
Notwithstanding the foregoing, the failure of a Member and Spouse to consent to
a distribution before the Member attains age 65 shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to satisfy
this Section 5.
59
ARTICLE VIII RESTORATION OF A RETIRANT TO SERVICE
If a Retirant (or a terminated Member who is eligible for early retirement) is
restored to Service at the rate of 1,000 or more Hours of Service a year, he
shall be re-enrolled as an active Member as of his new employment date. If a
Retirant returns to active membership he may, within six months following (i)
his date of reemployment, or (ii) if such Retirant is first enrolled as an
inactive Member pursuant to Article X, Section 3, his change in status to an
active Member, make an irrevocable election to continue to receive the payment
of his Retirement Allowance or to suspend the payment of his Retirement
Allowance until his subsequent termination of Service or retirement in
accordance with Section 2530.203-3 of the DOL Regulations; provided, however, if
no such election is made, payment of such Member's Retirement Allowance shall
continue in the form of payment previously chosen. Upon subsequent retirement,
(i) his benefit shall be based on his Benefit Service before and after his
previous retirement and his Salary during such service, but shall be reduced by
the Equivalent Value of the benefits provided by the Fund, and (ii) any
Retirement Adjustment Payment for which he is then eligible shall be reduced by
the amount of any such payment made in respect of his previous retirement.
If a Retirant (or terminated Member who is eligible for early retirement) is
restored to Service at the rate of less than 1,000 Hours of Service a year, he
shall be re-enrolled as an inactive Member as of his new employment date. If it
is determined that a Retirant, who was restored to Service at a rate of less
than 1,000 Hours of Service per year, has completed at least 1,000 Hours of
Service in any 12 consecutive month period, measured from the first day of such
restoration to Service and then from each January 1 thereafter, Benefit Service
shall be credited retroactively to the beginning of such period.
60
ARTICLE IX CONTRIBUTIONS
SECTION 1. ENGAGEMENT OF ACTUARY
The Board shall engage an enrolled actuary to (i) recommend the actuarial
funding method and the actuarial assumptions, tables, interest rates and other
factors to be used in determining the cost of participating in the Fund, (ii)
perform an annual actuarial valuation of the liabilities to determine the
minimum contributions required to be made in accordance with such valuation to
avoid an accumulated funding deficiency and the maximum contributions permitted
to be made without exceeding the full funding limitation under the IRC, and
(iii) determine each Employer's allocable share of the aggregate annual
contribution to the Fund which is approved by the Board. The Board may adopt
and modify from time to time any actuarially sound funding method which conforms
with IRC and IRS regulations as the funding method for the Fund.
SECTION 2. SINGLE PLAN
The Fund is a single plan which provides benefits to Members of all Employers
participating in the Fund and their Beneficiaries. It is intended to satisfy
the requirements of IRC Section 413(c) and IRS Regulation Section 1.414(1)-
1(b)(1). Accordingly, all Fund assets are available to pay benefits to all
Members of the Fund and their Beneficiaries.
61
SECTION 3. CONTRIBUTIONS BY EMPLOYERS
(A) Each Employer shall contribute to the Fund the amount determined in
accordance with the annual actuarial valuation of the Fund for such year,
reflecting the benefits provided to its Employees under the Regulations.
The contribution so determined may be proportionally increased as directed
by the Board so that the total of all contributions remitted during the Plan
Year from all participating Employers will not result in a funding
deficiency under IRC Section 412.
(B) In determining each Employer's required contribution to the Fund, the
actuary shall take into account each Employer's normal cost for the benefits
provided to such Employer's Members under the Regulations, an annual
amortization of any unfunded accrued actuarial liabilities and an annual
amortization of actuarial experience gains and losses. In addition, the
actuary may take into account such other factors which it deems relevant to
determine the cost of an Employer's participation in the Fund and which are
otherwise in accordance with IRC Sections 412 and 413(c).
(C) Effective for Plan Years commencing before July 1, 1989, during any period
when the Fund is in full funding, the Board shall advise each Employer which
is precluded from making contributions that would otherwise be required but
for full funding, based on the advice of the actuary, of the amount of the
contributions which would otherwise have been required. The future
contribution requirements of each such Employer shall take into account an
amortization of such unpaid contributions over such period of time and at
such rate of interest as is determined by the Board.
62
SECTION 4. ADMINISTRATIVE EXPENSES
Each Employer shall remit to the Fund annually, or more frequently as determined
by the Board, an amount equal to its share of expenses of administering the
Regulations, as determined by the Board in accordance with Section 1(1) of
Article XIV.
SECTION 5. CONTRIBUTIONS BY MEMBERS
(A) No Member shall contribute to the Fund unless his Employer elects to
participate on a contributory basis thereby reducing its contributions under
Section 3(A) of this Article IX. Each Member whose Employer does
participate on such contributory basis shall contribute a level percentage
of his Salary, as determined by the Board. The Board may modify
contribution rates after any actuarial valuation, but any increase in
contribution rates resulting therefrom shall apply only to Members enrolled
subsequent to such increase.
(B) The Fund shall certify to the Employer the contribution rate applicable to
each of its enrolling Members, and the Employer shall deduct from the
Member's Salary his contribution based on such rate. All contributions of
Members thus deducted shall be transmitted monthly by the Employer to the
Fund and, upon receipt by the Fund, shall be credited to the individual
accounts of the Members. Every Member shall be deemed to agree to the
deductions provided for herein.
(C) A Member's Accumulated Contributions shall be fully vested but payable only
in the form provided in the Regulations and in accordance with the spousal
consent requirements of Article VII, Section 2 and IRC Sections 401(a)(11)
and 417 and the IRS Regulations thereunder. For purposes of this provision,
Accumulated Contributions as of any date may be commuted to a life annuity
commencing on the Member's normal retirement date
63
by multiplying such Accumulated Contributions by an appropriate conversion
factor as determined by the Fund in accordance with ERISA and Section 411
(c)(2) of the IRC.
(D) A person whose membership is terminated for any reason other than by death
or disability retirement shall, upon filing with the Fund the designated
form for giving notice thereof, be entitled to a refund of his Accumulated
Contributions, if any, provided the spousal consent requirements are met as
provided below:
(1) In the case of a person whose membership is terminated by a break in
service (prior to vesting under Article IV), such refund shall be in
lieu of all other benefits otherwise payable on his account. If the
Member's Accumulated Contributions amount to $3,500 or less, such
amounts will be paid in a lump sum upon such termination of Service.
However, if the Member's Accumulated Contributions amount to more than
$3,500, then if the Member does not elect to receive a refund of his
Accumulated Contributions, such contributions shall be paid upon his
attainment of age 65 in a lump sum, provided the Fund receives the
appropriate spousal consent therefor or, otherwise, in the form of a
qualified joint and survivor annuity. If such a terminated Member dies
before withdrawing his Accumulated Contributions, or receiving the
first payment of such annuity, the amount of such Accumulated
Contributions shall be paid to his Beneficiary.
(2) In the case of a person whose membership is terminated upon early or
normal retirement, such refund shall be payable only prior to the
commencement of his Retirement Allowance and shall be in lieu of the
actuarial equivalent of that portion of his retirement benefit which is
attributable to such Accumulated Contributions.
64
The remaining portion of such retirement benefit, if any, shall be
calculated in accordance with ERISA and paid to him as provided in
Article VII.
SECTION 6. CONTRIBUTION REQUIREMENTS FOR BENEFIT IMPROVEMENTS
Notwithstanding anything in the Regulations to the contrary, in the event an
Employer elects a benefit improvement under the Regulations for which
contributions may not be made by an Employer (subject to Section 404 of the IRC)
on a tax-deductible basis, such election shall be effective only to the extent
the Fund determines that such benefit improvement may be adequately funded by
such Employer, and to the extent the Fund actuary determines it necessary (such
determination being performed in a uniform and nondiscriminatory manner), the
Employer satisfies a creditworthiness test (as prescribed by the Fund) and
executes a cash collateral agreement granting the Fund a security interest in
such assets as the Fund may reasonably require.
SECTION 7. RETURN OF CONTRIBUTIONS TO EMPLOYER
(A) The Fund is created for the exclusive benefit of Members, their
Beneficiaries and Contingent Annuitants. Except as provided in Subsections
(B) and (C) of this Section 7, at no time prior to the satisfaction of all
liabilities under the Fund with respect to all Members and Retirants, their
Beneficiaries and Contingent Annuitants shall any contributions to the Fund
by an Employer be returned by the Fund to the Employer.
(B) In the case of a contribution that is made by an Employer by reason of a
mistake of fact as determined by the Board, such Employer may request the
return to it of such
65
contribution, provided such refund is made within one year after the payment
of the contribution.
(C) In the case of a contribution made by an Employer, such contribution shall
be conditioned upon the deductibility of the contribution by the Employer
under Section 404 of the IRC. To the extent the deduction for such
contribution is disallowed, in accordance with IRS Regulations, the Employer
may request the return to it of such contribution, provided such refund is
made within one year after the disallowance of the deduction.
66
ARTICLE X EFFECTS OF VARIOUS EVENTS ON MEMBERSHIP AND SERVICE
SECTION 1. TERMINATION OF MEMBERSHIP
Membership shall cease upon date of retirement, death, break in service, or
withdrawal of the Employer's participation. For purposes of the Regulations, a
"break in service" occurs when a non-vested Member's Service is terminated.
SECTION 2. REINSTATEMENT OF MEMBERSHIP AND SERVICE
If a person whose membership is terminated by a break in service is again
employed by an Employer, he shall be re-enrolled as a Member as of his new
employment date. Further, (i) if his break in service did not exceed 60
consecutive months, then his previous Vesting Service shall be reinstated, and
if such break in service did not exceed 12 consecutive months, he shall also be
credited with Vesting Service for the period of such break; (ii) if his break in
service did exceed 60 consecutive months but did not exceed his previous Vesting
Service, then his previous Vesting Service shall be reinstated; and (iii) if
such Member had no vested interest in his Retirement Allowance, and his break in
service did equal or exceed the greater of (x) 60 consecutive months or (y) his
previous Vesting Service, then upon his reemployment he shall be treated as a
new Employee for all purposes under the Regulations. Upon reinstatement of his
Vesting Service, his previous Benefit Service shall also be reinstated provided
he repays to the Fund, within 5 years of such re-enrollment, the amount of his
Retirement Allowance which had been paid to him together with interest thereon,
at a rate permitted by ERISA, from the date of the original payment of his
Retirement Allowance to the date of repayment.
67
Solely for purposes of determining whether a break in service has occurred, an
individual who has a maternity or paternity absence, as determined by the Fund
in accordance with the IRC and ERISA, that continues beyond the first
anniversary of the first day of absence by reason of a maternity or paternity
absence shall incur a break in service on the date of the second anniversary of
the first day of such maternity or paternity absence; provided, that the
individual timely provides the Fund with such information as it shall require.
For purposes of the Regulations, maternity or paternity absence shall mean an
absence from work by reason of the individual's pregnancy, the birth of the
individual's child or the placement of a child with the individual in connection
with adoption of the child by such individual, or for purposes of caring for a
child for the period immediately following such birth or placement.
In the event a Member is no longer part of an eligible class of Employees and
becomes ineligible to participate but has not incurred a break in service, such
Employee will participate immediately upon returning to an eligible class of
Employees. If such Member incurs a break in service, eligibility will be
determined under the break in service rules of the Regulations.
In the event an Employee who is not part of an eligible class of Employee
becomes a part of an eligible class, such Employee will participate immediately
if such Employee has satisfied the minimum age and service requirements provided
in Section 2.2 and would have otherwise previously become a Member.
SECTION 3. INACTIVE MEMBERSHIP
If an Employer certifies to the Fund that it expects a Member to complete less
than 1,000 Hours of Service in the 12 consecutive month period commencing on his
Enrollment Date (or any January 1 thereafter), he shall be deemed an "inactive
Member." This does not constitute a break
68
in service. During a period of inactive membership (a) Vesting Service shall
accrue, (b) Benefit Service shall not accrue, and (c) no contributions may be
made by such inactive Member. If it is later determined that such Member has
completed, or is expected to complete, at least 1,000 Hours of Service in any
such period, then his regular membership shall be restored, and his Benefit
Service shall be credited retroactively for such period. Inactive membership
shall also be deemed to occur whenever a Member (a) is transferred from regular
membership to a class of employees for which the Employer has requested, and the
Fund has granted, exclusion pursuant to Article II, or to a non-participating
corporation which is a member of a controlled group of corporations of the
Employer (within the meaning of Section 1 563(a) of the IRC) or (b) receives no
income from an Employer other than commissions and such Employer, which
previously included commissions as Salary, elects not to include commissions as
Salary under Article I, Section 25 of the Regulations.
No benefit other than the refund of the Member's Accumulated Contributions, if
any, is payable on account of disability or death incurred during inactive
membership, except that if the Member is eligible for early retirement and dies
during such period, his Beneficiary shall be entitled to the death benefit which
would have been payable under Article IV, Section 3(B) or Article V, Section
4(B), whichever is applicable. Notwithstanding anything to the contrary under
the Regulations, if a Member becomes an "inactive Member," he shall be permitted
to elect to commence the payment of his Retirement Allowance at any time after
his attainment of age 65 while an inactive Member. If an inactive Member has
elected to commence the payment of his Retirement Allowance and, subsequent to
the commencement of such allowance, the Member returns to active membership
status and thus is no longer an inactive Member, such Member may elect to
continue to receive his Retirement Allowance or to suspend the payment of his
69
Retirement Allowance. Any benefits which accrue subsequent to the Member's
return to active Member status shall be deemed to be provided to the extent of
the Equivalent Value of any benefits paid (taking into account only those
payments made in accordance with the applicable normal form of Retirement
Allowance payable under the Regulations) to the Member; provided, however, in no
event shall the Member's accrued benefit be reduced below such Member's accrued
benefit as of the close of the Plan Year immediately preceding the Plan Year in
which such additional benefits accrue.
SECTION 4. LEAVES OF ABSENCE
(A) Service crediting and membership shall continue during any approved leave of
absence, provided that the Employer notifies the Fund of its intention to
grant to a specific Employee or Member, pursuant to the Employer's policy
which is uniformly applicable to all its Employees under similar
circumstances, one of the leaves of absence described in Subsection (B) of
this Section 4, and agrees to notify the Fund at the conclusion thereof.
(B) For purposes of the Regulations, the following are the only types of
approved leaves of absence:
TYPE 1
------
Non-military leave granted to a Member for a period not in excess of one
year during which contributions continue. Under this leave, Benefit Service
continues to accrue and any benefit, except disability retirement, for which
the Member is otherwise eligible may become payable during the period of the
leave. Further, an Employer may elect that this leave be extended beyond
the one-year period to cover a Member who is receiving
70
payments under (i) a disability program of the Employer, or (ii) Title II of
the Federal Social Security Act, but not beyond his normal retirement date.
TYPE 1A
-------
Special military leave granted to a Member who is required to report for
military service pursuant to an involuntary call-up in the reserves. Under
this leave, Benefit Service continues to accrue for the period of such
military service and any benefit, except disability retirement, for which
the Member is otherwise eligible may become payable during the period of the
leave. This special military leave shall terminate upon the earlier to
occur of (i) the Member's reemployment or (ii) 90 days after the Member
completes such military service.
TYPE 2
------
Non-military leave or layoff granted to a Member for a period not in excess
of one year during which no contributions are made. Under this leave,
Vesting Service continues to accrue, but Benefit Service ceases to accrue.
Benefit Service shall recommence upon termination of the leave and
resumption of contributions.
TYPE 3
------
Military or other governmental service leave granted to a Member from which
he returns directly to the Service of an Employer. Under this leave,
Vesting Service continues to accrue, but Benefit Service ceases to accrue.
Benefit Service shall recommence upon termination of the leave. However,
such Benefit Service as did not accrue by reason of the absence may be
credited retroactively to the Member at the election of the Employer on a
uniform basis or as otherwise required by applicable law.
71
No benefit, other than a refund of the Member's Accumulated Contributions,
if any, is payable on account of disability or death incurred during a Type
2 or Type 3 leave under this Subsection (B), except that if the Member is
eligible for early retirement and dies during any leave, his Beneficiary
shall be entitled to the death benefit which would have been payable under
Article IV, Section 3(B) or Article V, Section 4(B), whichever is
applicable. At the termination of any leave, a break in service shall occur
unless the Member is then vested or hired by an Employer.
SECTION 5. SERVICE WITH A CONTROLLED CORPORATION
In determining an Employee's Service for purposes of eligibility for membership
under Article 11 and for vesting under Article IV, all Service with a
corporation which is a member of a controlled group of corporations of the
Employer (within the meaning of Section 1 563(a) of the IRC) shall be taken into
account.
SECTION 6. UNIFORM APPLICABILITY OF RULES
Notwithstanding anything in the Regulations to the contrary, Service credited to
each Employee and Member with respect to membership, vesting and benefits shall
be determined by the Fund on a basis uniformly applicable to each Employee or
Member similarly situated, in accordance with ERISA.
72
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 1. LIMITATIONS ON BENEFITS REQUIRED BY THE IRC
(A) In order that the Fund be maintained as a qualified trust under the IRC, the
benefits payable under the Regulations to or in respect of a Member shall be
subject to the limitations set forth in this Section 1, notwithstanding any
other provision of the Regulations. A Member's benefits to which this
Section 1 is applicable are those attributable to his Employer's
contributions, but excluding to the maximum extent permissible under the IRC
(i) any allowance payable under Article VI to his Spouse as Contingent
Annuitant, and (ii) any benefit which is not directly related to his
Retirement Allowance. All defined benefit plans (whether or not terminated)
of an Employer are to be treated as one defined benefit plan for purposes of
applying the limitations on benefits described in this Section 1.
(B) The benefits to which this Section 1 is applicable may not for any
limitation year (which shall be the calendar year) exceed the actuarial
equivalent (calculated as of the date of commencement of the Member's
Retirement Allowance or his death, if earlier) of an annual single life
annuity payable to the Member in an amount equal to the lesser of:
(i) $90,000 (the "Dollar Limitation"), or
(ii) 100 percent of the Member's High-3 Year Average Compensation (the
"Compensation Limitation"), subject, however, to the following
provisions of this Article XI. For purposes of this Article XI, "High-
3 Year Average Compensation" means a Member's average annual salary for
the three consecutive years of Benefit Service during which his salary
was highest (or for all the years of Benefit Service
73
if less than 3). For purposes of determining a Member's "High-3 Year
Average Compensation" under this Subsection (B), a Member's salary
shall be determined in accordance with Section 1.415-2(d) of the IRS
Regulations.
(C) The limitations on the maximum amount of benefits contained in Subsection
(B) of this Section 1 shall be adjusted as follows:
(1) The Dollar Limitation shall be adjusted annually, for limitation years
beginning after December 31, 1987, for increases in the cost-of-living
on or after October 1, 1986 in accordance with the IRS Regulations.
(2) In the case of a benefit beginning prior to a Member's social security
retirement age, as defined in Section 41 5(b)(8) of the IRC, the Dollar
Limitation applicable to such benefit shall be reduced in accordance
with the IRS Regulations to an amount which is equal to a single life
annuity commencing at the same time which is the actuarial Equivalent
Value of a straight life annuity equal to the Dollar Limitation
commencing at the Member's social security retirement age. The
adjustment referred to in the preceding sentence shall be determined as
follows:
(i) If the annual benefit commences before the Member's social
security retirement age, but on or after age 62, and the Member's
social security retirement age is 65, the dollar limitation for
benefits commencing on or after age 62 is determined by reducing
the defined benefit dollar limitation by 5/9 of one percent for
each month by which benefits commence before the month in which
the Member attains age 65.
(ii) If the annual benefit commences before the Member's social
security retirement age, but on or after age 62, and the Member's
social security
74
retirement age is greater than 65, the dollar limitation for
benefits commencing on or after age 62 is determined by reducing
the defined benefit dollar limitation by 5/9 of one percent for
each of the first 36 months and 5/12 of one percent for each of
the additional months (up to 24 months) by which benefits commence
before the month of the Member's social security retirement age.
(iii)If the annual benefit of a Member commences prior to age 62, the
defined benefit dollar limitation shall be the actuarial
equivalent, determined in accordance with IRC Section 415 and IRS
Regulations, of an annual benefit beginning at age 62, as
determined in (i) or (ii) above, reduced for each month by which
benefits commence before the month in which the Member attains age
62.
(3) In the case of a benefit beginning after the Member's social security
retirement age, the Dollar Limitation shall be increased in accordance
with the IRS Regulations to an amount which is equal to a single life
annuity commencing at the same time which is the Equivalent Value of a
single life annuity equal to the Dollar Limitation commencing at the
social security retirement age. For purposes of Paragraph (2) of this
Subsection (C) and this Paragraph (3), the term "Equivalent Value"
shall have the same meaning as described in Article I, except the
interest rate assumption for purposes of such Paragraph (2) shall not
be less than the greater of the interest rate assumption provided in
the Regulations or five percent (5%), and the interest rate assumption
for the purposes of this Paragraph (3) shall
75
not be greater than the lesser of five percent (5%) or the rate
specified in the Regulations.
(4) Notwithstanding the provisions of Subsection (B) and Paragraphs (1),
(2) and (3) of this Subsection (C), the benefits payable to a Member
from the Fund shall not be deemed to exceed the limitations of such
provisions if (i) the retirement benefits payable with respect to such
Member under the Fund and all other defined benefit plans of his
Employer do not exceed $10,000 for the Plan Year, or for any prior Plan
Year, and (ii) the Employer has not at any time maintained a defined
contribution plan in which the Member participated.
(5) In accordance with the IRC and the Regulations, if the Member has fewer
than 10 years of membership in the Fund, the Dollar Limitation shall be
multiplied by a fraction, the numerator of which is the number of years
(computed to fractional parts of a year) of membership in the Fund, and
the denominator of which is 10. In the event a Member terminated
employment with an Employer prior to August 3, 1992, the Dollar
Limitation applicable to any amendment of the Regulations or election
by the Employer under the Regulations, made on or after May 17, 1989
but before August 3, 1992, which improves benefits thereunder shall be
subject to a separate 10 years of Fund membership requirement based
only on years of Fund membership credited on or after the date of such
amendment to, or election under, the Regulations; provided, however, an
Employer may elect, no later than June 30, 1993, not to have a separate
10 years of Fund membership requirement apply to such benefit
improvement; and provided, further, such election may not apply to any
such benefit improvement provided pursuant to an
76
early retirement window benefit under Article V, Section 7 unless (i)
the amount of the benefit improvement would be provided under a
nonqualified plan providing benefits which otherwise would be payable
under the Fund but for certain legal restrictions, (ii) all such
Members eligible for an early retirement window benefit under Article
V, Section 7 are given notice that the portion of any such benefit
which was restricted under the Fund would be provided through a
nonqualified plan, and (iii) the Employer indemnifies the Board, the
Fund, the employees of the Fund and such other person or persons as may
be designated by the Board in such manner as shall be acceptable to the
Board in its sole discretion. In accordance with the IRC and the IRS
Regulations, if the Member has fewer than 10 years of Service, the
Compensation Limitation shall be multiplied by a fraction, the
numerator of which is the Member's years of Service (computed to
fractional parts of a year) and the denominator of which is 10.
(6) In no event shall Paragraph (5) of this Subsection (C) reduce the
Dollar Limitation and the Compensation Limitation to an amount less
than one-tenth of the applicable limitation (determined without regard
to such Paragraph (5)).
(D) Notwithstanding the foregoing provisions of this Article XI, if a Member
also participates in any defined contribution plan (as defined in Sections
414(i) and 415(k) of the IRC) maintained by the Employer (or any
organization which is required to be aggregated with such Employer under
Section 414(b), (c), (m) or (o) of the IRC), the sum of the Member's
"Defined Benefit Fraction" (as defined in IRC Section 41 5(e)(2)) and the
Member's "Defined Contribution Fraction" (as defined in IRC Section
415(e)(3)) shall not exceed 1.0. If a Member makes contributions to the
Fund the amount of such
77
contributions shall be treated as an annual addition to a qualified defined
contribution plan for purposes of Section 415 of the IRC.
(E) Notwithstanding the foregoing provisions of this Article XI, if the maximum
limitation on Retirement Allowances with respect to any individual who was a
Member prior to July 1, 1987 and whose Retirement Allowance (determined
without regard to any changes in the Regulations after May 5, 1986 and
without regard to cost of living adjustments occurring after May 5, 1986)
exceeds the limitations set forth in Subsection (B) of this Section 1, then,
for purposes of such Subsection (B) and Section 415(b) and (e) of the IRC,
the Dollar Limitation with respect to such Member shall be equal to such
Member's Retirement Allowance as of June 30, 1987; provided that, such
Member's Retirement Allowance did not exceed the maximum limitation as in
effect for all Plan Years commencing prior to July 1, 1987.
(F) The Fund may from time to time adjust or modify the maximum limitations
applicable to a Member's benefits under this Section 1 as may be required or
permitted by the IRC or ERISA prior to the date that payment of any of such
benefits commences.
SECTION 2. SMALL BENEFITS
Following a Retirant's termination of employment, the Fund shall pay a Retirant,
who has not begun to receive his Retirement Allowance, a lump sum equal to the
Equivalent Value of his regular Retirement Allowance if such lump sum does not
exceed $3,500. Such lump sum shall be in lieu of the Retirement Allowance which
otherwise would be payable. If the Equivalent Value of a Member's vested
accrued benefit derived from Employer and Employee contributions exceeds (or at
the time of any prior distribution exceeded) $3,500, and the accrued benefit is
78
immediately distributable, the Member and the Member's Spouse (or where either
the Member or the Spouse has died, the survivor) must consent to any
distribution of such accrued benefit. The consent of the Member and the
Member's Spouse shall be obtained in writing within the 90-day period ending on
the annuity starting date. The annuity starting date is the first day of the
first period for which an amount is paid as an annuity or any other form. The
Fund shall notify the Member and the Member's Spouse of the right to defer any
distribution until the Member's accrued benefit is no longer immediately
distributable. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Fund in a manner that would satisfy the
notice requirements of IRC Section 417 (a) (3), and shall be provided no less
than 30 days and no more than 90 days prior to the annuity starting date.
However, distribution may commence less than 30 days after the notice described
in the preceding sentence is given, provided the distribution is one to which
Sections 401 (a) (11) and 417 of the IRC do not apply, the Fund clearly informs
the Member that the Member has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and the
Member, after receiving the notice, affirmatively elects a distribution.
Notwithstanding the foregoing, only the Member need consent to the commencement
of a distribution in the form of a qualified joint and survivor annuity while
the accrued benefit is immediately distributable. Neither the consent of the
Member nor the Member's Spouse shall be required to the extent that a
distribution is required to satisfy Section 401 (a)(9) or Section 415 of the
IRC.
79
SECTION 3. AMOUNTS PAYABLE TO INCOMPETENTS, MINORS OR ESTATES
If the Fund shall find that any person to whom any amount is payable under the
Regulations is unable to care for his affairs because of illness or accident, or
is a minor, or has died, then any payment due him or his estate (unless a prior
claim therefor has been made by a duly appointed legal representative) may be
paid to his Spouse, relative or any other person deemed by the Board to be a
proper recipient on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Fund
therefor.
SECTION 4. NON-ALIENATION OF AMOUNTS PAYABLE
Except insofar as applicable law may otherwise require, or pursuant to the terms
of a Qualified Domestic Relations Order, no amount payable under the Regulations
shall be subject in any manner to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind,
and any attempt to so alienate shall be void; nor shall the Fund in any manner
be liable for or subject to the debts or liabilities of any persons entitled to
any such amount payable; and further if for any reason any amount payable under
the Regulations would not devolve upon such person entitled thereto, then the
Board, in its discretion, may terminate his interest and hold or apply such
amount for the benefit of such person or his dependents as it may deem proper.
SECTION 5. UNCLAIMED BENEFITS
If the Fund cannot ascertain the whereabouts of any person to whom an amount is
payable under the Regulations, and, if after 5 years from the date such payment
is due, a notice of such payment is mailed to the address of such person, as
last shown on the records of the Fund, and
80
within 3 months after such mailing such person has not filed with the Fund
written claim therefor, the Board may direct that such payment and all remaining
payments and other benefits, if any, otherwise payable on his account be
cancelled and, to the extent permitted by ERISA, be applied to reduce
contributions. Upon cancellation, the Fund shall have no further liability
therefor, provided that any such amount payable shall be reinstated if such
person subsequently makes a valid claim therefor.
SECTION 6. TOP HEAVY PROVISIONS
The provisions of this Section 6 shall apply and supersede all other provisions
in the Regulations inconsistent therewith during each Plan Year with respect to
which the Regulations constitute a top heavy plan for purposes of the IRC.
(A) For purposes of this Section 6, the following terms shall have the meanings
set forth below:
(1) "Affiliate" - Any entity affiliated with any Employer within the
meaning of Section 41 4(b), 41 4(c) or 41 4(m) of the IRC, except that
for purposes of applying the provisions hereof with respect to the
limitation on contributions, Section 41 5(h) of the IRC shall apply.
(2) "Aggregation Group" - The group composed of each qualified retirement
plan of the Employer or an affiliate in which a key employee is a
participant and each other qualified retirement plan of the Employer or
an affiliate which enables a plan of the Employer or an affiliate in
which a key employee is a participant to satisfy Section 401(a)(4) or
410 of the IRC. In addition, the Board may choose to treat any other
qualified retirement plan as a member of the aggregation group if such
81
aggregation group will continue to satisfy Sections 401(a)(4) and 410
of the IRC with such plan being taken into account.
(3) "Determination Date" - the last day of the preceding Plan Year or, in
the case of the first Plan Year, the last day of such Plan Year.
(4) "Key Employee" - A "key employee" as defined in Sections 41 6(i)(1) and
(5) of the IRC and IRS Regulations. For purposes of Section 416 of the
IRC and for determining who is a Key Employee, an Employer which is not
a corporation shall be deemed to have "officers" only for Plan Years
beginning after June 30, 1985. For purposes of determining who is a
key employee, compensation shall mean "compensation" as defined in
Section 1.415-2(d) of the IRS Regulations.
(5) "Top Heavy Ratio" - is a fraction, the numerator of which is the sum of
the present value of accrued benefits of all Key Employees as of the
applicable Determination Date (including any part of any accrued
benefit distributed in the five year period ending on the Determination
Date), and the denominator of which is the sum of the present value of
accrued benefits (including any part of any accrued benefits
distributed in the five year period ending on the Determination Date).
(B) The Regulations will be considered a Top Heavy Plan for any Plan Year if
they are determined to be a Top Heavy Plan as of the last day of the
immediately preceding Plan Year. For purposes of determining whether the
Regulations constitute a Top Heavy Plan, uniform actuarial assumptions which
reflect reasonable mortality experience and reasonable interest rates shall
be used. For purposes of Subsection (E)(1) of this Section 6, the present
value of a Member's Retirement Allowance shall be determined as of the
82
last day of the immediately preceding Plan Year and shall include amounts
distributed to or on behalf of the Member within the four immediately
preceding Plan Years.
(C) For any Plan Year that the Regulations are a Top Heavy Plan, only the first
$200,000 (adjusted annually for years beginning on or after January 1, 1998,
in accordance with IRS regulations) (or, for Plan Years beginning on or
after July 1, 1994, $150,000 (as adjusted for cost-of-living and otherwise
limited or modified in accordance with Section 401(a)(17) of the IRC and
applicable IRS rulings and regulations)) of compensation (as defined in
Section 1.41 5-2(d) of the IRS Regulations) shall be credited to a Member
for purposes of the Regulations.
(D) If the Regulations are a Top Heavy Plan with respect to any Plan Year, the
nonforfeitable percentage of the Retirement Allowance which is derived from
Employer contributions on behalf of each Member who is credited with at
least one Hour of Service on or after the date the Regulations become top
heavy shall not be less than the amount determined in accordance with Table
II set forth in Article IV, Section 2(B)(iii).
(E) (1) Subject to the provisions of Subsection (F) of this Section 6, if the
Regulations constitute a Top Heavy Plan, the Retirement Allowance
derived from Employer contributions for each Member who has completed a
year of Membership Service and who is not a Key Employee shall not, at
such point, be less than the product of (a) such Member's average
Salary, multiplied by the (b) lesser of (i) 2% multiplied by the number
of years (computed to fractional parts of a year) of Membership Service
with the Employer or (ii) 20%. For purposes of the preceding sentence,
years of Membership Service shall not include any year of Membership
Service credited with respect to Plan Years which began prior to
January 1, 1984, or any
83
other year of Membership Service credited with respect to a Plan Year
during which the Regulations did not constitute a Top Heavy Plan.
(2) For purposes of this Subsection (E), average Salary shall mean the
average of a Member's Salary for the period of five consecutive years
of Service (or, if the Member does not have five consecutive years of
Service, his actual number of consecutive years of Service) during
which the Member had the greatest aggregate Salary.
(F) (1) For each Plan Year that the Regulations are a Top Heavy Plan, 1.0 shall
be substituted for 1.25 as the multiplicand of the Dollar Limitation in
determining the denominator of the Defined Benefit Fraction and of the
Defined Contribution Fraction for purposes of Section 41 5(e) of the
IRC.
(2) If, after substituting 90% for 60% wherever the latter appears in
Section 416(9) of the IRC, the Regulations are not determined to be a
Top Heavy Plan, the provisions of Paragraph (1) of this Subsection (F)
shall not be applicable if the Retirement Allowance for each Member who
is not a Key Employee is determined in accordance with Subsection
(E)(1) of this Section 6, substituting 3% for 2% and 30% for 20% in
this Subsection.
(G) The Board shall, to the maximum extent permitted by the IRC and in
accordance with the governmental regulations, apply the provisions of this
Section 6 by taking into account the benefits payable and the contributions
made under the Financial Institutions Thrift Plan or any other qualified
plan maintained by an Employer, to prevent inappropriate omissions or
required duplication of minimum contributions.
84
SECTION 7. TRANSFER OF ASSETS AND LIABILITIES FROM PRIOR PLAN
An Employer which adopts the Fund may, with the approval of the Board and in
accordance with such administrative procedures as the Board may adopt, transfer
the assets and liabilities under a tax-qualified retirement plan maintained by
such Employer (the "prior plan") to the Fund with respect to retirees currently
receiving benefits and participants with deferred vested benefits under the
prior plan. As a condition to the Fund's acceptance of such assets and
liabilities under the prior plan, the Employer shall provide, in a form and
manner acceptable to the Board, (i) an indemnification agreement by the Employer
providing for the indemnification of the Board, the Fund, employees of the Fund
and such other person or persons as may be designated by the Board, (ii) a
representation by the Employer's counsel that, among other things, the prior
plan satisfies the requirements for qualification under the IRC, including, but
not limited to Section 401(a) thereunder, (iii) a transfer agreement executed by
each retiree and, as applicable, deferred vested participant (and, as
applicable, such individual's spouse), and (iv) evidence, satisfactory to the
Board, that the Employer satisfies the appropriate capital requirements under
the Financial Institutions Reform, Recovery and Enforcement Act of 1989 or such
other similar statutory or regulatory requirement.
85
ARTICLE XII WITHDRAWAL OF PARTICIPATING EMPLOYER
SECTION 1. NOTICE AND EFFECT
(A) Any Employer may withdraw from the Fund by giving the Fund written notice
specifying a withdrawal date which shall not be earlier than the first day
of the month coincident with or next following 30 days after such notice is
received by the Fund.
(B) The Fund may require any Employer to withdraw if the Fund determines that
the Employer has failed to pay its contributions, charges or other
assessments made by the Board, or to comply with any other provision of the
Regulations or any other applicable provision of the IRC, ERISA, or the
rulings and regulations promulgated thereunder. The withdrawal date
specified by the Fund shall not be earlier than the first day of the month
coincident with or next following 30 days after it has given the Employer
written notice.
(C) Upon any such Employer withdrawal, contributions shall be made to the
withdrawal date specified in Subsection (A) or (B) of this Section 1,
whichever shall apply. Any unpaid Employer contributions, charges or other
assessments and any unliquidated lump sum costs of the Employer referred to
in Article IX, Section 3 shall become immediately due and payable. Such
unliquidated lump sum costs shall not be subject to any market value
adjustment or withdrawal charge specified in Section 2 of this Article XII.
All such obligations shall constitute a first lien on the Employer's assets
and may be recorded by the Fund in any jurisdiction.
(D) Upon any such Employer withdrawal, the Fund shall notify the IRS and any
other appropriate governmental authority in such manner as applicable law
may require.
86
Subject to any conditions which the IRS or other appropriate governmental
authority may impose, disposition shall be made in accordance with this
Article XII.
(E) In the event of an Employer withdrawal, no amount shall become payable by
the Fund on or after such Employer's withdrawal date to or in respect of any
of its Members (including those on leave of absence and inactive as
described in Article X) except as provided in this Article XII, and no
amount shall be payable to the Employer. To the maximum extent permitted by
ERISA, the rights of all Retirants (including those who become Retirants as
of the withdrawal date in accordance with Subsection (G) of this Section 1)
from the Service of such Employer on or prior to its withdrawal date, and of
Beneficiaries or Contingent Annuitants, who are drawing allowances from the
Fund on account of the death of a former Member or Retirant of such
Employer, shall be unaffected by the withdrawal of such Employer.
(F) If a qualified successor plan of the Employer, as defined below, is in
effect on the withdrawal date, each Employee who is a Member on such date
shall elect by written notice to the Fund either (i) to become an inactive
Member as of that date, in which case his retirement benefit, if any, shall
be based on Salary and Benefit Service to such date, or (ii) to be included
in the computation of the distributable fund under Section 2 of this Article
XII, in which case the amount representing the total present value of the
retirement benefits of all such Members shall be transferred to the
qualified successor plan pursuant to Section 3 of this Article XII. A
Member who is not fully vested in his retirement benefit as of the transfer
date and who elects inactive membership pursuant to this Subsection (F)
shall continue to accrue Vesting Service for continued employment in
accordance with Article X, Section 3. If a Member's retirement benefit
under the
87
qualified successor plan of the Employer later becomes nonforfeitable by
reason of a complete or partial termination, then such inactive Member's
retirement benefit with the Fund will also become nonforfeitable. For
purposes of determining the vested interest of a Member who elects inactive
membership pursuant to this Subsection (F), such Member's retirement
benefits shall become vested in accordance with the Table set forth under
Article IV, Section 2(B)(iii) which had been adopted by his Employer;
provided, however, if the Employer withdrew from the Fund prior to July 1,
1989 with a qualified successor plan and had adopted a vesting schedule
which required 10 years of service for 100% vesting, the retirement benefits
of a Member who elected inactive membership and was still employed by the
Employer as of July 1, 1989 shall become vested in accordance with the
schedule set forth in Table I under Article IV, Section 2(B)(iii).
Notwithstanding the foregoing, if the Employer does not certify to the Fund
that the qualified successor plan provides retirement benefits comparable to
those of the Fund as provided by the Employer under the Regulations, then
each Member's retirement benefit payable under the Fund shall become
nonforfeitable as of the Employer's withdrawal date.
(G) If no qualified successor plan of the Employer, as defined below, is in
effect as of the withdrawal date, (1) the provisions of Sections 2 and 3 of
this Article XII shall not apply, and (2) each Employee who is a Member on
such date will become a Retirant, and his retirement benefit based upon
Salary and Benefit Service to such date shall be nonforfeitable and payable
in accordance with Article IV; provided, however, at the Employer's
irrevocable election, which election must be made by the later of (i) the
date of withdrawal or (ii) 90 days following the receipt of IRS approval
with respect to such provision, and which election shall be effective only
upon receipt of IRS approval, such
88
retirement benefit shall be payable only upon such Employee's termination of
employment.
(H) For purposes of this Article XII, a qualified successor plan is a defined
benefit pension plan established by the withdrawing Employer which (i) has
been determined by the IRS to be a qualified and tax-exempt plan and trust
within the meaning of the IRC, (ii) has provided the Fund with written
certification by its appropriate fiduciaries that in the event of a transfer
to such successor plan of the distributable fund described in Section 2 of
this Article XII, the qualified successor plan shall be fully liable for the
payment of the actuarial equivalent of all normal and early retirement
benefits of the Members of such Employer (who consent to the transfer), had
they elected instead to have become inactive Members as of the withdrawal
date, and that the Fund shall not be liable for the payment of any part of
such benefits, (iii) is intended to be maintained indefinitely and which
will provide continuing benefit accruals at a rate at least equivalent to
any of the benefit formulas available under the Regulations, as certified to
the Fund by the Employer, on behalf of the participants thereunder, and (iv)
meets such other requirements of the IRS, other appropriate governmental
authority or of the Board which may apply.
(I) The benefits of all Members who become inactive Members under this Section 1
will be payable upon termination of their Service with the Employer in
accordance with Article IV. The benefits of the remaining Members will be
included in the computation of the distributable fund under Section 2 of
this Article XII. If no such Members remain, no distributable fund shall be
determined.
89
SECTION 2. DISTRIBUTABLE FUND
(A) In the event of a transfer to a qualified successor plan referred to in
Section 1 of this Article XII, the Fund shall determine, as of the
Employer's withdrawal date, the actuarial liability of the Fund in respect
of the Members who had elected such transfer. The computation of such
liability shall exclude all Retirants and any Employees who became inactive
Members as of the withdrawal date in accordance with Section 1 (F) of this
Article XII. Such actuarial liability shall be computed as follows:
(1) with respect to withdrawal dates occurring during the period commencing on
July 1, 1987 and ending on December 31, 1987, such actuarial liability shall
be computed prospectively as the present value of the Members' normal and
early retirement benefits, on the assumption that such withdrawal did not
occur, less the present value of the future contributions which would
otherwise be payable for such benefits without regard to any possible
suspension of Employer contributions because of reaching the full funding
limitation. This computation shall be based on the annual actuarial
valuation of the Fund which determined the Employer contribution rates in
effect during the calendar year in which the withdrawal is effective; and
(2) with respect to withdrawal dates occurring on or after January 1, 1988, such
actuarial liability shall be computed as the sum of the Member's accrued
actuarial liabilities, with Salary projection, less the present value of any
unfunded accrued actuarial liabilities of the withdrawing Employer, plus the
present value of any credits due the withdrawing Employer. This computation
shall be made as of the withdrawal date based on the annual actuarial
valuation of the Fund which determined the Employer contribution for the
Plan Year in which the withdrawal is effective.
90
(B) The actuarial liability determined under Subsection (A) of this Section 2
shall be reduced as follows:
(1) In the case of an Employer which commenced participation when the market
value of the Fund's assets was equal to or greater than the actuarial value
-- if on the Employer's withdrawal date the percentage of market to
actuarial value is less than 100%, then the reduction shall be the
difference between such percentage and 100%.
(2) In the case of an Employer which commenced participation when the market
value of the Fund's assets was less than the actuarial value -- if on the
Employer's withdrawal date the percentage of market to actuarial value is
less than such percentage at commencement, then the reduction shall be the
relative difference between the percentage at the withdrawal date and the
percentage at the Commencement Date.
For purposes of this Subsection (B), the market and actuarial values of the
Fund's assets as of any date shall exclude the Cash Flow Match Portfolio (a
fixed income portion of the Fund's investments which is not affected, for
purposes of the annual actuarial valuation, by fluctuations in market value) and
shall be those values which have been determined by the Fund and shown on the
Fund's records. The actuarial value of the Fund's assets shall be computed in
accordance with the asset valuation method used in the annual actuarial
valuation of the Fund which determined the Employer contribution requirements in
effect during the Plan Year in which the withdrawal is effective.
(C) A withdrawal charge shall thereafter be deducted as follows:
CHARGE ACTUARIAL LIABILITY
(after application of Subsection (B) above)
3% of first $100,000
2% of second $100,000
1% of excess
91
(D) The amount of the actuarial liability remaining after making the above
adjustments is the "distributable fund" which shall be transferred to the
successor plan in accordance with Section 3 of this Article XII. In no
event will such total transfer be less than the present value of the
retirement benefits payable at age 65, based upon Salary and Benefit Service
to the withdrawal date, of all Members included in such transfer as a result
of their election under Section 1(F) of this Article XII, using for the
purpose of this computation the interest rates used by the PBGC to value
deferred and immediate retirement benefits for terminating plans as of the
withdrawal date.
SECTION 3. PAYMENT OF DISTRIBUTABLE FUND
(A) The portion of the distributable fund representing the present value of each
Member's retirement benefit, as computed in accordance with the second
sentence of Section 2(D) of this Article XII, but not less than 50% of the
distributable fund, plus interest determined as described below from the
withdrawal date to the date of transfer, shall be transferred in a lump sum
to the qualified successor plan as soon as practicable (but no earlier than
30 days) following receipt by the Fund of (a) each Member's written consent
to the transfer and his release of all claims against the Fund arising out
of his membership, (b) the qualified successor plan's favorable
determination letter from the IRS that such plan satisfies the then current
qualification and tax-exemption requirements of the IRC or a representation
from the Employer maintaining such qualified successor plan to the same
effect, and (c) a copy of the Employer's submission to the IRS of the
successor plan's Notice of Transfer (IRS Form 5310) of the distributable
fund. Upon the Fund's receipt of the foregoing, it shall submit to the IRS
notice of the Employer's withdrawal. The
92
remaining amount of the distributable fund, if any, shall be transferred to
the qualified successor plan in approximately equal annual installments over
a period of 3 years with the first payment being made on or about the first
anniversary of the withdrawal date. Interest on all unpaid amounts will be
credited to date of payment, but not less than once a year, based upon the
Three Year Treasury Constant Maturity rate in effect on (a) the withdrawal
date if the withdrawal date is on or after January 1, 1994 or (b) January 1,
1994 if the withdrawal date is prior to January 1, 1994. The Three Year
Constant Maturity Rate in effect on a specific date shall be the rate
published in Federal Reserve Statistical Release (G.13) for the week ending
on the Friday coinciding with or immediately preceding the specific date in
the preceding sentence. In the absence of the Release, the Fund may obtain
such rate from any other source it deems appropriate. In order that the
Fund be maintained as a qualified trust under the IRC, no amount can be
payable on or after the date of termination, within the meaning of the IRC,
of the qualified successor plan.
(B) Notwithstanding anything to the contrary contained herein, upon receipt by
the Fund of a request from a federal governmental entity, as statutory
receiver for a withdrawn Employer (when such request is made after the
initial lump sum transfer of the portion of the distributable fund
representing the present value of each affected Member's Retirement
Allowance as provided for in subsection (A) of this Section 3 and following
payment of the first installment), provided the federal governmental entity
became statutory receiver for the withdrawn Employer following such
Employer's withdrawal from the Fund and establishment of a qualified
successor plan, the Fund may, in its sole discretion and subject to any
conditions provided herein or otherwise, accelerate the transfer of the
93
remaining amount of the distributable fund, if any, to the qualified
successor plan maintained by the Employer for which such governmental entity
acts as receiver. The amount of any such accelerated lump sum payment of
the distributable fund shall be adjusted to reflect the payment of such fund
in advance of the installment payment dates. Any request by a federal
governmental entity, as statutory receiver for a withdrawn Employer, to
accelerate the transfer of the remaining amount of the distributable fund
shall be accompanied by a certification to the effect that such governmental
entity was duly appointed as receiver, citing the statutory authority
therefor, and that such appointment continues in effect as of the date of
the accelerated payment request. Prior to any such accelerated lump sum
payment of the distributable fund, such governmental entity shall indemnify
the Fund, in such form and manner as is acceptable to the Fund, for the full
amount of all reasonable legal fees, costs and expenses (including damages)
which arise from any claims made against the Fund by participants under the
qualified successor plan of the Employer in receivership because of the lump
sum payment by the Fund. If no payments have been made, the participating
Employer will be deemed to have withdrawn from the Fund without a qualified
successor plan, and all Members will become Retirants of the Fund.
SECTION 4. PARTIAL TERMINATION
If any governmental authority or the Fund determines that a partial termination
(within the meaning of the IRC or ERISA) of the Fund has occurred as to any
Employer, then (i) the rights of all its affected Members to their retirement
benefits accrued to the partial termination date shall be nonforfeitable, and
(ii) the provisions of Article XII, which in the opinion of the Fund
94
are necessary for the distribution of its assets, shall apply. To the extent
permitted by ERISA, only an Employer as to which a partial termination of the
Fund has occurred shall be liable to the PBGC for any insufficiency of allocable
amounts.
SECTION 5. TRANSFER TO QUALIFIED SUCCESSOR PLAN
No transfer of assets and liabilities of the Fund to a qualified successor plan
(whether by merger or consolidation with such qualified successor plan or
otherwise) shall be made unless each Member would, if either the Employer's or
Employers' participation in the Fund or such qualified successor plan then
terminated, receive a benefit immediately after such transfer which (after
taking account of any distributions or payments to them as part of the same
transaction) is equal to or greater than the benefit he would have been entitled
to receive immediately before such transfer if the Employer's or Employers'
participation in the Fund had then been terminated. The Fund may also require
appropriate indemnification from the Employer or Employers maintaining such
qualified successor plan before making such a transfer.
SECTION 6. SPECIAL PROCEDURES UPON CONSERVATORSHIP OR RECEIVERSHIP
(A) Notwithstanding anything in the Regulations to the contrary and in
accordance with such administrative procedures, requirements and conditions
as the Board shall adopt, if an Employer participating in the Fund is placed
into conservatorship or receivership by the Resolution Trust Corporation
("RTC") (or such other appropriate governmental authority), the provisions
of this Section 6 shall apply.
(B) (i) If an Employer is placed into conservatorship by RTC, such Employer's
participation in the Fund will continue uninterrupted without any
formal action by
95
RTC or the Employer and retirement benefits will continue to accrue for
its Members.
(ii) If the Employer is placed into receivership by RTC, RTC will have sixty
(60) days (unless within such 60-day period RTC requests an extension
for up to thirty (30) days and the Fund in its sole discretion approves
such request) from the date the Employer was placed into receivership
to reaffirm the Employer's participation in the Fund in which event
benefits shall continue to accrue from the date the Employer was placed
into receivership. Alternatively, RTC may elect to improve benefits as
of the date of receivership in such manner as shall be prescribed by
the Fund, provided in such case the Employer has a sufficient
accounting credit under the Fund to offset the cost of such benefit
improvements. The credit described in the preceding sentence, which
for purposes of this Section 6 shall be referred to as "FECO,"
represents with respect to an Employer an accounting credit entry on
the books and records of the Fund which may be applied solely to offset
an Employer's contribution obligations to the Fund. FECO may not be
transferred by the Fund for an Employer's general corporate use or
otherwise in contravention of applicable law.
(C) If RTC, on behalf of an Employer which is placed in receivership, elects to
improve benefits, such Employer will be deemed to have withdrawn from the
Fund (following the election to improve benefits) without a qualified
successor plan as of the date the Employer was placed into receivership.
Alternatively, if RTC neither reaffirms (within the time prescribed in
Subsection (B) of this Section 6) the participation in the Fund of an
Employer which was placed into receivership nor elects to improve benefits,
the Employer
96
will be deemed to have withdrawn from the Fund without a qualified successor
plan as of the date the Employer was placed into receivership.
(D) If an Employer which has a FECO is placed into conservatorship or
receivership by RTC and such Employer has not withdrawn (or has not been
deemed to withdraw) from the Fund without a qualified successor plan, RTC
may, in accordance with this Subsection (D) and such procedures as may be
adopted by the Board, have the FECO made available under the Fund to another
entity (referred to as an "Acquirer") if such Acquirer, in accordance with
the Regulations, adopts the Fund. The maximum amount of the FECO which RTC
may make available to an Acquirer is a fraction of the "available FECO," the
numerator of which is the PBGC value of the accrued benefits of the
Employees who are transferred to the Acquirer and the denominator of which
is the PBGC value of the accrued benefits of all of the Employees of the
Employer as of the date of the acquisition of such Employer by such
Acquirer, inclusive of those Employees being transferred to the Acquirer.
The "available FECO" is the total FECO attributable to the Employer as of
the date of the acquisition, reduced by the amount of any FECO which could
have been, but was not, made available to any previous Acquirer. The
maximum amount of FECO that may be made available to an Acquirer shall not
be reduced as a result of Employees being terminated by RTC on or after the
date of conservatorship or receivership. If an Acquirer does not elect to
participate in the Fund, there shall be deemed to occur a withdrawal by the
Employer without a qualified successor plan with respect to the Employees
who are transferred to the Acquirer and such Employees shall become 100%
vested in their accrued benefit regardless of their number of years of
Vesting Service. RTC may apply any portion of the FECO remaining after an
acquisition to fund the normal cost or to
97
improve benefits with respect to those Employees who have not been
transferred to the Acquirer and who continue to be employed by the Employer.
The amount of any FECO which could have been, but was not, transferred to
any previous Acquirer will be the first amount to be applied to fund the
normal cost or to improve benefits with respect to those Employees who
continue to be employed by the Employer. Any FECO remaining after the FECO
attributable to an Employer's participation in the Fund is applied, as
provided in this Subsection (D), shall remain in the Fund.
98
ARTICLE XIII TERMINATION OF THE TRUST
(A) The Trust is the sole source of all benefits under the Regulations and shall
continue, unless terminated as herein provided, until all assets of the
Trust are distributed in accordance with the Regulations. The Trust and the
benefit programs embodied in the Regulations may be terminated only upon a
two-thirds vote of the Board and of the then participating Employers, in
which event termination shall be effective on a date specified after at
least 6 months' notice to the Trustee and all members of the Board and
Employers. In the event of such termination, (i) the rights of all Members
to their Retirement Allowances accrued to the date of termination shall
thereupon be nonforfeitable to the extent that such allowances have then
been funded by such amount of assets determined by the Fund to be properly
allocable to such Members' allowances, and (ii) the Board shall direct the
Trustee to liquidate the assets of the Trust as promptly as it deems
prudent. The Board shall notify the IRS, the PBGC and any other appropriate
governmental authority of such termination at least 30 days prior to the
termination date or at such other date as applicable law may require, and no
distribution of the Trust's assets shall be made until all applicable
governmental approvals have been obtained by the Fund.
(B) The Board shall determine the Trust's net funds remaining after providing
for necessary expenses and shall then allocate such funds to the extent
necessary and sufficient in the following order of priority:
(1) Each Member, former Member, Retirant, and Beneficiary or Contingent
Annuitant shall be entitled to a share equal to his Accumulated
Contributions (or the
99
Accumulated Contributions of the Member on whose behalf the individual
is entitled to benefits), if any, less the sum of any allowances
received.
(2) Next, each Retirant, Beneficiary or Contingent Annuitant entitled to an
immediate or deferred benefit on the termination date shall be entitled
to a share equal to the actuarial liability attributable to his
benefits reduced by his share under Paragraph (1) of this Subsection
(B).
(C) The Board shall then:
(1) Determine as of the termination date, in the same manner as described
in Article XII, Section 2, Subsection (A), the actuarial liability
established by the Fund for each Employer group of Members as described
in Article XII reduced by the amount of any allocations to such Members
pursuant to Paragraph (1) of Subsection (B);
(2) Determine the net funds remaining after providing for all allocations
under Subsection (B) of this Article XIII;
(3) Allocate such funds to all such groups of Members as of the termination
date on the basis of the ratio of the actuarial liability computed for
each group of Members to the total liability for such groups; and
(4) Allocate such amounts to the individual Members in each group in
accordance with the procedure set forth in Article XII, Section 3.
(D) The amounts determined in accordance with Subsections (B) and (C) of this
Article XIII shall, subject to the approval of the IRS, the PBGC and any
other appropriate governmental authority, be distributed to the individuals
described in such Subsections.
100
Any surplus remaining in the Trust after such distribution shall then be
distributed to the Employers in such manner as the Board shall deem
equitable and appropriate.
Upon completion of the foregoing distributions, the Trustee shall be
relieved of all further obligations under the Trust, but its powers shall
continue so long as any assets remain in the Trust.
(E) No asset or liability of the Trust shall in any event be merged,
consolidated with or transferred by the Trust to any other plan unless such
person affected thereby would, if such plan then terminated immediately
after such event, receive thereunder a benefit which is equal to or greater
than the benefit to which he would have been entitled if the Fund had
terminated immediately before such event.
(F) Notwithstanding the provisions of this Article XIII, all allocations and
distributions made pursuant to this Article XIII shall be made in accordance
with Title IV of ERISA.
(G) In the event of the termination of the Fund, the benefits of any highly
compensated employee (and any highly compensated former employee), as
defined in Section 414(q) of the IRC and IRS Regulations thereunder, shall
be limited to a benefit that is nondiscriminatory under Section 401(a)(4) of
the IRC.
The annual payments to a Restricted Employee (as defined below) may not
exceed an amount equal to the payments that would be made on behalf of such
Restricted Employee under a single life annuity that is the actuarial equivalent
of the sum of the Restricted Employee's accrued benefit and his other benefits
under the Fund. However, the restriction described in the foregoing sentence
shall not apply if:
101
(i) after payment to a Restricted Employee of all Benefits (as defined
below), the value of the assets of the Fund equals or exceed 110% of
the value of current liabilities (as defined in Section 412(1)(7) of
the IRC) under the Fund; or
(ii) the value of the Benefits for a Restricted Employee is less that 1% of
the value of current liabilities (as defined in Section 412(1)(7) of
the IRC) under the Fund; or
(iii) the value of the Benefits for a Restricted Employee does not exceed
$3,500.
For purposes of this Subsection (G), a "Restricted Employee" means a Member who
is a highly compensated employee or highly compensated former employee of the
Employer (as defined in Section 414(q) of the IRC and the IRS Regulations
thereunder). In any year, the total number of individuals who are subject to
the restrictions described in Subsection (G) shall be limited to a group of not
less than 25 highly compensated employees and highly compensated former
employees and the Employees included in the group shall be determined on the
basis of such Employees with the greatest compensation. For purposes of this
Subsection (G), the term "Benefits" includes loans in excess of amounts set
forth in Section 72(p)(2)(A) of the IRC, any periodic income, any withdrawal
values payable to a living Employee, and any death benefits not provided for by
insurance on the Restricted Employee's life.
102
ARTICLE XIV ADMINISTRATION AND MANAGEMENT OF FUND
SECTION 1. ADMINISTRATION
(A) The general administration of the Fund and the general responsibility for
carrying out the provisions of the Regulations shall be placed in a Board of
Directors who must be Members of the Fund. The President of the Fund shall
be the chief administrative officer of the Fund, a member ex officio of the
Board and, for purposes of ERISA, the "plan administrator." The Board shall
constitute the "named fiduciary" for purposes of ERISA.
(B) The Board may adopt, and amend from time to time, by-laws not inconsistent
with the Trust and the Regulations and shall have such duties and exercise
such powers as are provided in the Regulations, Trust and by-laws. The
number of Directors, their method of election and their terms of office
shall be governed by such by-laws. The Board shall hold an annual meeting
each year and may hold additional meetings from time to time.
(C) The Board shall select the Trustee of the assets of the Fund and shall
define the investment and other powers and duties of the Trustee and
determine the terms and provisions of the Trust, and may, subject to the
provisions of the Trust, appoint from time to time a successor trustee or
trustees as the Board in its discretion shall determine. The Trust shall
constitute a trust fund for the payment of benefits and expenses of the
Fund. All contributions, other income and property received by the Trust
shall be held by the Trustee and invested, reinvested and disbursed in
accordance with and subject to the provisions of the Trust and the
Regulations. All benefits payable under the Regulations shall be payable
from the Trust and from no other source. No person shall have interest in,
or right to, any part of the corpus or income thereof, except to the extent
expressly provided in the Regulations or the Trust.
103
(D) The Board shall elect a chairman and a vice-chairman of the Board and such
officers of the Fund as the Board deems desirable and shall define their
duties. The Board shall elect annually from its membership an Executive
Committee, a Retirement Committee, an Investment Committee, an Audit
Committee, a Personnel Committee and a Nominating Committee and shall define
their duties. It may appoint such other committees and arrange for and hire
such actuarial, legal, accounting, auditing, investment manager or advisory,
administrative, medical and other services as it deems appropriate to carry
out the Regulations and may act in reliance upon the advice and actions of
the persons or firms providing such services. The Board may establish,
staff, equip and maintain a Fund Office to assist it in the administration
of the Regulations. The Board may authorize the Trustee or any committee,
officer, employee or agent of the Fund to perform any act pertaining to the
Fund or the administration thereof. The Board shall cause to be maintained
proper accounts and accounting procedures, and shall submit an Annual Report
on the operations of the Fund to each Employer for the information of its
Members.
(E) The members of the Board shall use ordinary care and reasonable diligence in
the performance of their duties and shall serve without compensation, but
shall be reimbursed for any reasonable expenses incurred in their capacities
as Board members. No bond or other security need be required of the Trustee
or any Board member in any jurisdiction.
(F) Each Employer, other than the Fund Office, by its participation in the
Comprehensive Retirement Program, agrees that each Board member, officer and
employee of the Fund shall be indemnified by the Employer for any liability,
in excess of that which is covered by insurance, arising out of any act or
omission to act in connection with the Regulations or the Trust except for
fraud or willful misconduct. The obligation to pay any such
104
expense shall be deemed an administrative expense of the Regulations and
shall be allocated among the Employers, other than the Fund Office, by the
Board as nearly as practicable in the same proportions as the then current
administrative expenses of the Fund are borne by the Employers. No Board
member or officer of the Fund shall be personally liable by virtue of any
contract or other instrument executed by him or on his behalf in such
capacity nor for any mistake of judgment made in good faith.
(G) No Employer shall under any circumstances or for any purpose be deemed an
agent of the Board, the Trustee or the Fund. Neither the Board nor the
Trustee shall be required to enforce payment of any contributions payable
under the Regulations.
(H) The Board shall adopt, and may change from time to time, actuarial or other
tables and the interest rate or rates which shall be used in calculations
under the Regulations, and shall establish the contribution rates as
provided in Article IX. The actuary designated by the Board shall make an
annual actuarial valuation of the Fund's benefit programs, and on the basis
thereof shall recommend to the Board such tables and interest and
contribution rates for its adoption.
(I) The expenses of administering the Regulations including (i) the fees and
expenses of the Trustee for performance of its duties under the Trust, (ii)
the expenses incurred by the Board and the Fund Office in the performance of
their duties under the Regulations and the Trust, and (iii) all other proper
charges and disbursements of the Trustee and the Fund Office, shall be borne
by the Employers in such proportions as shall be determined by the Board,
but until paid by the Employers, all of such expenses shall be a charge
against the assets of the Trust.
105
SECTION 2. DISPUTE RESOLUTION
(A) The Board shall have the exclusive right and full discretionary authority to
interpret the Regulations and any questions arising under or in connection
with the administration of the Fund, including without limitation, the
authority to determine eligibility for employer participation, eligibility
for membership and benefits, and the amount and mode of all contributions,
benefits and other payments under the Regulations. The decisions or actions
of the Board in respect thereof shall be final, conclusive and binding upon
all persons having an interest in the Trust or under the Regulations or
under any agreement with an insurance company or a financial institution
constituting a part of the Regulations and the Trust.
(B) The Board shall have full discretionary authority to delegate to the
Retirement Committee, or any other committee of the Board or to the
President, all or any part of the interpretative and decisional authority of
the Board, described in Subsection (A) of this Section 2, with respect to
the Regulations or the administration of the Fund.
(C) All disputed claims with respect to contributions, benefit eligibility and
payments arising under the Regulations shall be submitted in writing to the
President of the Fund at the office of the Fund. Within 90 days after
receipt of such claim, the decision of the President with respect thereto
shall be mailed to the claimant and shall be final, binding and conclusive;
provided, however, if special circumstances require an extension of time for
processing the claim, an additional 90 days from the end of the initial
period shall be allowed for processing the claim, in which event the
claimant shall be furnished with a written notice of the extension prior to
the termination of the initial 90-day period indicating the special
circumstances requiring an extension. The claimant may appeal
106
such decision in writing to the Retirement Committee of the Board, at the
office of the Fund, within 60 days after the mailing to the claimant of such
written decision of the President. Such written appeal shall contain all
information which the claimant desires the Retirement Committee to consider
and the Committee's decision with respect thereto shall be mailed to the
claimant within 60 days after its receipt of such appeal unless special
circumstances require an extension of time for processing, in which event an
additional 60 days shall be allowed for review and claimant shall be so
notified in writing. The decision of the President, or in the case of an
appeal, the decision of the Retirement Committee, in respect of such claim
shall be final, binding and conclusive.
SECTION 3. MANAGEMENT
(A) The Board shall also have the power, acting directly or through the Trustee:
(1) To purchase, lease for any term, invest or otherwise acquire an
interest in any property, real, personal or mixed, and wherever
situated, including, but not by way of limitation, real property,
whether improved or unimproved, common and preferred stocks, bonds,
notes, debentures, mortgages, mutual fund shares, financial futures and
options contracts, and certificates of deposit issued by any financial
institution including an Employer, without being limited to the class
of securities in which trustees are authorized by law or any rules of
court to invest trust funds and without regard to the proportion any
such property may bear to the entire amount of the Trust Fund;
(2) To sell, exchange, manage, lend, lease for any term, improve, or
otherwise dispose of, and grant options and security interests with
respect to any such
107
property of the Fund, and any sale or other disposition may be public
or private and upon such terms and conditions as the Board may deem
best;
(3) To participate in any plan of reorganization, consolidation, merger,
combination or other similar plan relating to such property, and to
consent to or oppose any such plan and any action thereunder, or any
contract, lease, mortgage, purchase, sale or other action by any legal
entity;
(4) To deposit any such property with any protective, reorganization or
similar committee, to delegate discretionary power thereto and to pay
part of its expenses and compensation and any assessments levied with
respect to any such property so deposited;
(5) To engage suitable employees, agents and professional consultants, and
to pay their reasonable compensation and expenses;
(6) To extend the time of payment of any obligations;
(7) To enter into stand-by agreements for future investment of the Trust
Fund, either with or without a stand-by fee;
(8) To exercise all conversion and subscription rights and all voting
rights with respect to such property and to grant proxies,
discretionary or otherwise;
(9) To cause any investments to be registered and held in the name of one
or more nominees of the Board or any custodian of such property, with
or without the addition of words indicating that such investments are
held in a fiduciary capacity, and to cause any such investments to be
held in bearer form;
(10) To collect and receive any and all money and other property due to the
Fund and to give full discharge and acquittance therefor;
108
(11) To settle, compromise or submit to arbitration any claims, debts or
damages due or owing to or from the Fund; to commence or defend suits
or legal proceedings whenever, in its judgment, any interest of the
Fund requires it; to represent the Fund in all suits or legal
proceedings in any court of law or equity or before any other body or
tribunal; to abstain from the enforcement of any right or claim in its
absolute discretion and to abandon, if it shall deem it advisable, any
property held by the Fund;
(12) To hold uninvested, without liability for interest thereon, any money
received by the Fund until the same shall be invested or disbursed;
(13) For purposes of the Fund, to borrow money from others, to issue
promissory notes of the Fund for the same and to secure the repayment
thereof by pledging any property of the Fund and to enter into cash
collateral agreements referred to in Article IX, Section 6;
(14) To make any agency, trust, custodial, advisory, depository, management,
administrative or other arrangement (i) with any bank or other
financial institution for the deposit and safekeeping of the assets of
the Fund, and (ii) with any investment advisor or manager for the
investment and reinvestment of the assets of the Fund;
(15) To transfer for investment purposes any part of the assets of the Fund
(i) to any group trust which meets the requirements of Sections 401(a)
and 501(a) of the IRC, with the equitable share of the Fund in the
commingled assets of such trust being part of the Fund under the
Regulations, and (ii) to any group deposit administration annuity
contract or other type of contract issued to the Fund by one
109
or more insurance companies, utilizing under any such contract,
general, commingled, or separate investment accounts as the Investment
Committee in its discretion shall determine, all such contracts being
part of the Fund under the Regulations;
(16) To charge against and pay out of the Fund (in accordance with ERISA and
the IRC) (i) taxes of any and all kinds whatsoever which are levied or
assessed upon or become payable in respect of the Fund, the income from
any property forming a part thereof, or any security transaction
pertaining thereto, and (ii) the expenses incurred by the Board in the
performance of its duties in respect of the Fund and all other proper
charges and disbursements of the Fund;
(17) To delegate powers, including, without limitation, discretionary powers
with respect to any of the foregoing to any Committee of the Board or
any officer or employee of the Fund or investment advisor or manager,
custodian or other agent;
(18) To appoint any bank or trust company, wherever domiciled, as successor
trustee under the Declaration of Trust, upon such terms and conditions
as the Board deems advisable; and
(19) Generally to do all acts, whether or not expressly authorized, which
the Board may deem necessary or desirable for the administration,
management and protection of the Fund.
(B) Persons dealing with the Board or the Trustee shall be under no obligation
to see to the proper application of any money paid or property delivered to
the Fund.
110
SECTION 4. INFORMATION AND COMMUNICATIONS
(A) Each Employer, Member, Retirement and Beneficiary shall file with the Fund
such pertinent information as the Fund may require, and no Employer, Member,
Retirant, Beneficiary or Contingent Annuitant shall have any rights or be
entitled to any benefits from the Fund unless such information is filed in
the manner and form specified by the Fund. The Fund shall be fully protected
in acting upon any such information and shall be under no duty to inquire
into the accuracy or truth thereof, and the payment of any amount by the
Fund pursuant to such information shall constitute a complete discharge of
the liability therefor. All notices, instructions and other communications
shall be in writing and in such form as is prescribed from time to time by
the Fund, shall be mailed by first class mail or delivered personally, and
shall be deemed to have been duly given and delivered only upon actual
receipt thereof by the Fund.
(B) (1) In the case of a qualified joint and survivor annuity as described in
Article VII, Section 1, the Fund shall provide each Member no less than
30 days and no more than 90 days prior to the annuity starting date a
written explanation of: (i) the terms and conditions of a qualified
joint and survivor annuity; (ii) the Member's right to make and the
effect of an election to waive the qualified joint and survivor annuity
form of benefit; (iii) the rights of a Member's Spouse; (iv) the right
to make, and the effect of, a revocation of a previous election to
waive the qualified joint and survivor annuity; and (v) the relative
values of the various optional forms of benefit under the Fund.
(2) In the case of a preretirement survivor annuity as described in Article
IV, Section 3(B), the Fund shall provide each Member within the
applicable period for such
111
Member, a written explanation of the preretirement survivor annuity in
such terms and in such a manner as would be comparable to the
explanation provided for meeting the requirements of Paragraph (1) of
this Subsection (B) applicable to a qualified joint and survivor
annuity.
(3) The applicable period for a Member is whichever of the following
periods ends last: (i) the period beginning with the first day of the
plan year in which the Member attains age 32 and ending with the close
of the plan year preceding the plan year in which the Member attains
age 35; (ii) a reasonable period ending after the individual becomes a
Member; or (iii) a reasonable period ending after the preretirement
survivor annuity first applies to the Member. Notwithstanding the
foregoing, notice must be provided within a reasonable period ending
after separation of service in the case of a Member who separates from
service before attaining age 35.
(4) For purposes of the preceding paragraph, a reasonable period ending
after the enumerated events described in (ii), (iii) and (iv) is the
end of the two year period beginning one year prior to the date the
applicable event occurs and ending one year after that date. In the
case of a Member who separates from service before the plan year in
which age 35 is attained, notice shall be provided within the two year
period beginning one year prior to separation and ending one year after
separation. If such a Member thereafter returns to employment with the
employer, the applicable period for such Member shall be redetermined.
(C) A Member may, in accordance with this Subsection (C) elect to receive his
Retirement Allowance in one of the optional forms described in Article VI.
Any waiver of a
112
qualified joint and survivor annuity or a preretirement survivor annuity
shall not be effective unless: (a) the Member's Spouse consents in writing
to the election; (b) the election designates a specific alternate
beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Member without any further
spousal consent); (c) the Member's Spouse's consent acknowledges the effect
of the election; and (d) the Spouse's consent is witnessed by a notary
public. Additionally, a Member's waiver of the qualified joint and survivor
annuity will not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Member without any further
spousal consent.) If it is established to the satisfaction of the Fund that
such written consent may not be obtained because there is no Spouse or the
Spouse cannot be located, a waiver will be deemed a qualified election.
Any consent by a Spouse obtained under this provision (or establishment that
the consent of a Spouse may not be obtained) shall be effective only with
respect to such Spouse. A consent that permits designations by the Member
without any requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific beneficiary,
and a specific form of benefit where applicable, and that the Spouse
voluntarily elects to relinquish either or both of such rights. A revocation
of a prior waiver may be made by a Member without the consent of the Spouse
at any time prior to the commencement of benefits. The number of revocations
shall not be limited. No consent obtained under this provision shall be
valid unless the Member has received notice as provided in Subsection (B) of
this Article XIV, Section 4.
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ARTICLE XV AMENDMENTS
The Board reserves and shall have the right to amend the Regulations or the
Trust at any time in whole or in part, for any reason, and without the consent
of any Employer, or any Member or other person having an interest in the Trust,
or under the Regulations, and each Employer by its adoption of the Regulations
shall be deemed to have delegated this authority to the Board; but no amendment
shall be adopted which would:
(i) Raise the contribution rate of any Member since last becoming a Member
unless he shall consent thereto; or
(ii) Reduce the then accrued benefits of Members or Retirants for which
contributions have been received by the Fund, except to the extent
necessary to maintain the Trust as a trust qualified under Section 401(a)
of the IRC; or
(iii) Permit any of the assets of the Trust (other than that required to pay
taxes, if any, and the expenses described in Article XIV, Section 1(1) to
the extent, if any, not paid by the Employers) to be used for or diverted
to any purpose other than for the exclusive benefit of Members, Retirants,
and their Beneficiaries and Contingent Annuitants under the Regulations,
prior to the satisfaction of all liabilities with respect thereto.
114
ARTICLE XVI INTERPRETATION
The Regulations shall be construed in accordance with ERISA and the laws of the
State of New York.
115
SPECIAL EFFECTIVE DATES
SECTION DATE
Article I (18) July 1, 1985
Article VII, Section 2(B) (interest
rates used in calculating lump sum
settlements)
Article IX, Sections 1-4 July 1, 1987
Article XI, Section 1
Article XII, Section 2(A)
Article I(25) (inclusion of January 1, 1988
cafeteria plan contributions in
definition of salary)
Article II, Section 2(B) July 1, 1988
(removal of age 60 membership
exclusion)
Article IV, Section 4
Article I(25)(B) October 1, 1988
Article XI, Section 1(C)(5) May 17, 1989
Preamble July 1, 1989
Article I(25) ($200,000
limitation)
Article II, Section 1
Article IV, Section 2(B)(iii)
Article IV Section 3(F)
Article V, Section 2(E)
Article VI, Section 1, Option 4
Article XII, Section 1 (F) (5-year
cliff vesting for employees of
withdrawn employers which re-
quired 10 years of service for
full vesting)
116
SECTION DATE
Article V, Section 7 August 28, 1989
Article VII, Section 2(B) January 1, 1990
Article X, Section 3
Article I(25) January 1, 1991
(commissions limitation)
Article V, Section 1 (A)-(H), for
employers who commence Fund
participation on or after 1/1/91
Article X, Section 4(B), Type 1A
Article XII, Section 1(H), item (iii) February 8, 1991
Article XII, Section 6
Article XI, Section 7 May 1, 1991
Article IV, Section 2(D) July 1, 1991
Article V, Section 1(A)-(H), for
employers who commenced Fund
participation prior to 1/1/91
Article VI, Section 3
Article V, Section 1(B) and (D) October 1, 1991
Article XII, Section 1 (H), December 6, 1991
language preceding item (i)
Article V, Section 7(D), January 1, 1992
item (ii)
117
SECTION DATE
Article V, Section 1(I) and (J), July 1, 1992
for employers who commence
Fund participation on or
after 7/1/92
Article V, Section 7(D), item (iii)
Article V, Section 7(E)
Article XI, Section 1 (C)(5) November 1, 1992
Article V, Section 1(1) and (J), January 1, 1993
for employers who commenced
Fund participation prior to 7/1/92
Article VI I, Section 4
Article V, Section 8 Effective Upon IRS Approval
Article XII, Section 1(G)
Article V, Section 1(K), July 0, 0000
(X), (X), (X) and (O)
Article XII, Section 3(A) January 1, 1994
Article 1(25) July 1, 1994
($150,000 limit)
Article V, Section 1 (definition July 1, 1995
of Covered Compensation Level)
118
FINANCIAL INSTITUTIONS RETIREMENT FUND
CARROLLTON FEDERAL BANK, FSB BOARD RESOLUTION
#762 4049
WHEREAS, Carrollton Federal Bank, FSB, Carrollton, Georgia
("Carrollton") (Retirement Fund Member #4049) acquired 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxx xxxxxx of First Union Bank as of May 21, 1994 (the "Acquisition
Date" for plan purposes); and
WHEREAS, effective as of the Acquisition Date, Carrollton desires to
recognize the employees formerly of the Branch (the "New Members") as new
employees of Carrollton for the Financial Institutions Retirement Fund (the
"Fund") under all the stipulations and provisions of Carrollton's participation
in the Fund in effect on the Acquisition Date.
NOW, THEREFORE, with respect to the New Members, it is resolved that:
Each of the New Members will be enrolled in the Fund on the later of (i) the
Acquisition Date or (ii) the 1st day of the month coincident with or next
following completion of one year of service (as measured from the employment
date with First Union) and the attainment of age 21.
Vesting service will be measured from the New Members, original date of
employment with First Union. Benefit Service Credit will be provided for those
New Members who are enrolled on the Acquisition Date for service completed after
the enrollment date.
I, the undersigned, being duly elected and acting Secretary of Carrollton
Federal Bank hereby certify that the above is a true and exact copy of the
resolution adopted by the Board of Directors at Carrollton Federal Bank at a
meeting duly called and held on the 21st day of April, 1994 as the same appears
---- -----------
in the minutes of such meeting, and that the aforementioned resolution has not
been modified, changed or repealed since its adoption.
Date May 25, 1994 /s/ Xxxxxx X. XxXxxxxx
------------ -------------------------------------------
Secretary
****************
APPLICATION
The Carrollton Federal Bank, FSB
----------------------------
Address 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 hereby applies for
-------------------------------------------
participation of the New Members in the Fund's Comprehensive Retirement Program
under conditions stated in the foregoing Resolution.
/s/ Xxxx X. Xxxxxxxx
--------------------------------------------
Signature of Authorized Officer
Date: May 25, 1994 President and CEO
------------
___________________________________________
Title President and CEO
RESOLUTION TO CHANGE EMPLOYER'S
BASIS OF PARTICIPATION IN THE
FINANCIAL INSTITUTIONS RETIREMENT FUND
#900 RF# 4049
Financial Institutions INSTRUCTIONS
Retirement Fund
1. INDICATE ONLY THOSE PROVISIONS OF THE FUND BEING AMENDED.
2. THE EFFECTIVE DATE OF AN AMENDMENT MAY BE THE FIRST DAY OF ANY
MONTH, ALTHOUGH THE USE OF A RETROACTIVE DATE REQUIRES PRIOR
APPROVAL OF THE RETIREMENT FUND.
3. AS AN AMENDMENT TO THE FUND, ANY CHANGE ELECTED HEREIN MUST BE
APPROVED BY THE EMPLOYER'S BOARD OF DIRECTORS.
WHEREAS, Carrollton Federal Bank, FSB (the Employer), desires to amend its
----------------------------
participation in the Retirement Fund as indicated below, effective May 1, 1990.
-----------
NOW, THEREFORE, IT IS RESOLVED THAT THE EMPLOYER:
A. Membership Eligibility: ___ No Change
X In accordance with Article II, Section 2, amends employee eligibility
for membership, as follows:
(a) Waiting period governing enrollment of eligible employees:
X Period of employment limitation (specify any period up to
one year) 1
-
X Age limitation (specify any age up to 21) 21
----
NOTE: IF BOTH THE ABOVE BOXES ARE CHECKED, THE LATER OF THE ATTAINMENT OF THE
SPECIFIED PERIOD OF EMPLOYMENT OR SPECIFIED AGE WILL DETERMINE THE DATE OF
ENROLLMENT.
(b) Exclusions from membership:
____ Those who are covered by another designated pension plan of
the Employer.
X Those who are compensated on an hourly basis.
____ Those who are hired under a written agreement precluding
membership and limiting employment to no more than one year.
NOTE: IF ELIGIBILITY REQUIREMENTS FOR MEMBERSHIP ARE MORE RESTRICTIVE THAN THAT
WHICH HAD BEEN IN EFFECT HERETOFORE, THEN, UNLESS OTHERWISE INDICATED, THEY
SHALL BE APPLICABLE ONLY TO EMPLOYEES HIRED ON OR AFTER THE EFFECTIVE DATE; IF
LESS RESTRICTIVE, IT SHALL BE APPLICABLE TO PRESENT AS WELL AS FUTURE EMPLOYEES.
2
B. Plan Salary Definition X No Change
____ Provides that, in accordance with Article I, "Salary" for each
calendar year of benefit service shall be amended to:
(a) i ____ Basic salary rate as of January 1 of such year, or date of
employment, if later.
ii ____ Basic salary rate as of January 1 of such year, or date of
employment, if later, plus overtime payments earned in the
preceding calendar year.
Basic salary rate as of January 1 of such year, or date of
employment, if later, plus overtime payments and bonuses
earned in the preceding calendar year.
iii ____ Basic salary rate as of January 1 of such year, or date of
employment, if later, plus overtime payments and bonuses
in the preceding calendar year.
iv ____ In conjunction with i, ii or iii as indicated above,
salary shall also include commissions earned in the
current calendar year, not to exceed $______________.
(b) i ____ Basic salary rate as in effect for each month of such
year.
ii ____ Basic salary rate as in effect for, plus overtime payments
earned in, each month of such year.
iii ____ Basic salary rate as in effect for, plus overtime payments
and bonuses earned in, each month of such year.
iv ____ In conjunction with i, ii or iii as indicated above,
salary shall also include commissions earned in the
current calendar year, not to exceed $______________.
(c) ____ Total taxable compensation as reported on the member's
Internal Revenue Service Form W-2 (exclusive of any
compensation deferred from a prior year) for such year.
The above revised salary definition will be effective for employee-members
who terminate employment on or after ___________________________ (insert
date). It shall apply to benefit service completed on or after
_____________________ (date inserted must be 1st day of month. If a plan
salary definition change for a prior calendar year results in a lower plan
salary for such year, the prior reported salary shall be used.
NOTE: PLAN SALARY ALWAYS INCLUDES A MEMBER'S PRE-TAX CONTRIBUTION TO A
SECTION 401 (K) PLAN AND, UNLESS THE EMPLOYER ELECTS OTHERWISE, A MEMBER'S
PRE-TAX CONTRIBUTION TO A SECTION 125 CAFETERIA PLAN.
C. Early Retirement Provisions: X No Change
Establishes the earliest age for commencement of early retirement allowance
payments, as follows:
____ Age 45 or __ Age 55
Provides the following early retirement features [complete (a) and (b)]:
(a) Early Retirement Factors
i ____ Actuarial Equivalent
ii ____ 3%
iii ____ Rule of 70
iv ____ Rule of 80
3
(b) Unreduced Early Retirement Benefits at:
i ____ Age 60
ii ____ Age 62
iii ____ Age 65
NOTE: (B)I AND (B)II NOT AVAILABLE WITH INTEGRATED UNIT ACCRUAL FORMULAS
UNDER ITEM G BELOW .
D. Vesting Schedule X No Change
____ Establishes, in accordance with Article IV, the vesting schedule
indicated:
(a) ____ Vesting Table A-5 Year Cliff (b) ____ Vesting Table B - 2-6 Partial
Completed Years Vested Completed Years Vested
of Employment Percentage of Employment Percentage
Less than 5 0% Less than 2 0%
5 100% 2 20%
3 40%
4 60%
5 80%
6 100%
NOTE: VESTING TABLES A AND B APPLY WITHOUT REGARD TO AGE. IN ADDITION, A
MEMBER WHO REACHES AGE 65 IS 100% VESTED REGARDLESS OF THE NUMBER OF
COMPLETED YEARS OF EMPLOYMENT.
E. Lump Sum Settlement Option: X No Change
____ Agrees, in accordance with Article Vll, to make uniformly available
to all its retirants who have attained age ____ (any age between 45
and 65, inclusive, but not less than the early retirement
commencement age), the Lump Sum Settlement Option.
NOTE: IF THE LUMP SUM SETTLEMENT OPTION IS NOT ELECTED, ALL RETIREMENT
BENEFITS WILL BE PAID IN THE FORM OF A MONTHLY ALLOWANCE, EXCEPT IN THE
CASE OF CERTAIN DE MINIMIS AMOUNTS DESCRIBED IN THE REGULATIONS.
F. Prior Service Credit: X No Change
____ Provides, in accordance with Article III:
___ Prior service credit to be allowed for all service rendered since
______________ and/or
____ after attainment of age ______ and/or ____ completion of _____of
employment and/or
____ pursuant to attached rider(s)
G. Retirement Benefit Formula: X No Change
____ Provides the following benefit formula in accordance with the
Regulations [complete (a) or (b) or (c)]:
(a) ____ Nonintegrated Unit Accrual Formula
4
Annual Accrual Rate ____ (Any rate between 1% and 3%, inclusive, in
.25% increments)
Average Salary Base ____ (High-5, High-3, Career Average)
Service Cap (None, 25, 30, 35, 40, 45 or 50 years) May
____ not be used with Career Average Salary
(b) ____ Integrated Unit Accrual Formula
i. Salary Base
____ High-5 Year
____ High-3 Year
ii Accrual Rates
____ 1% up to covered compensation level ("CCL") plus 1.5%
of excess
____ 1.25% up to CCL, plus 1.75% of excess
____ 1.5% up to CCL, plus 2% of excess
____ 1.75% up to CCL, plus 2.25% of excess
iii Integration Level
____ Integration at member's CCL with Career Average Minimum
____ Integration at member's CCL without Career Average
Minimum
____ Integration at greater of $10,000 or 1/2 of CCL of
individual reaching Social Security Retirement Age in
year of calculation without Career Average Minimum
(c) Fixed Percentage Formula
i Salary Base ____ High-5 Year ____ High 3 Year
ii. Uniform Percentage of Salary (any percent between 40% and 80%
inclusive) _____%
iii. Benefit Service Requirement at Normal Retirement Date for
Percentage in Item ii.
____ 25 years ____ 30 years
____ This modification in formula does not constitute a reduction in future
---
benefit accruals.
X This modification in formula constitutes a reduction in future benefit
accruals and benefits accrued to the modification date will be
protected by
____ Frozen Add-ons X Grandfathered minimum
H. Ancillary Features: X No Change
(a) Annual Post Retirement Increment ____ Active Members Only ____ All Members
i ____ None
ii ____ 1%
iii ____ 2%
iv ____ 3%
(b) Active Service Death Benefit
i ____ Basic Benefit (Vested early retirement allowance only)
ii ____ Additional Benefit (1 to 3 times last 12 months salary
5
(c) Disability Retirement Benefit
____ Yes ____ No
(d) ____ 10-Year Certain Normal Form of Payment
(e) ____ Eliminate Retirement Adjustment Payment for Future Accruals
Will pay the total of the accrued actuarial liability as of the effective
date in the form of:
(a) ____ One lump sum as of the amendment date (may be subject to
Federal excise tax penalty).
(b) ____ A reduction in the Employer's Future Employer Contribution
Offset (FECO)*
(c) ____ An amortization and/or escrow program (subject to the terms and
conditions of the Fund).
* if accrued actuarial liability exceeds FECO, then box 9(a) or 9(c)
must also be checked.
Authorizes and directs its officers, or any of them:
(a) to execute the Employer's Application below and any other documents
(including agreements modifying costs and any required riders), and to
take such other action as he or they may deem advisable to finalize
the continued participation of the Employer in the Fund's
Comprehensive Retirement Program,
and
(b) to pay on behalf of the Employer to the Fund such contributions as are
determined by the Fund to be necessary to fund the benefits selected.
________________________________________________________________________________
I, the undersigned, being duly elected and acting Secretary of Carrollton
----------
Federal Bank FSB hereby certify that the above is a true and exact copy of a
----------------
resolution adopted by the Board of Directors of said Employer at a meeting duly
called and held on the 20th day of October, 1994, as the same appears in the
minutes of such meeting, and that the aforementioned resolution has not been
modified, changed or repealed since its adoption.
Date October 20, 1994 /s/ Xxxxxx X. XxXxxxxx
---------------- ------------------------------------
Secretary
APPLICATION
The Carrollton Federal Bank, FSB 5 8 - 0 1 8 4 9 8 5
Federal Identification No.
Address 000 Xxxxx Xxxxxx Xxxxxxxxxx XX 00000 hereby applies for the modified
-------------------------------------
basis of participation checked in the above Resolution under the conditions
stated therein and in accordance with the Regulations of the Fund.
Date: October 20, 1994 /s/ Xxxx X. Xxxxxxxx
----------------------- ---------------------------------------
Signature of Authorized Officer
President/CEO
---------------------------------------
Title
6
FINANCIAL INSTITUTIONS RETIREMENT FUND
CHANGES IN EMPLOYER'S BASIS OF PARTICIPATION
IN THE FINANCIAL INSTITUTIONS RETIREMENT FUND
RESOLUTION
#627 RF# 4049
1. INDICATE ONLY THOSE PROVISIONS OF THE FUND BEING AMENDED.
2. THE EFFECTIVE DATE OF AN AMENDMENT MAY BE THE FIRST DAY OF ANY MONTH,
ALTHOUGH THE USE OF A RETROACTIVE DATE REQUIRES PRIOR APPROVAL OF THE
RETIREMENT FUND.
3. AS AN AMENDMENT TO THE FUND, ANY CHANGE ELECTED HEREIN MUST BE APPROVED BY
THE EMPLOYER'S BOARD OF DIRECTORS.
WHEREAS, Carrollton Federal Bank, FSB (the Employer), desires to amend its
----------------------------
participation in the Retirement Fund as indicated below, effective January 1,
----------
1994.
----
NOW, THEREFORE, IT IS RESOLVED THAT THE EMPLOYER:
A. Membership Eligibility: X No Change
____ In accordance with Article II, Section 2, amends employee eligibility
for membership, as follows:
(a) Waiting period governing enrollment of eligible employees:
____ Period of employment limitation (specify any period up to
one year) ___
____ Age limitation (specify any age up to 21) ____
NOTE: IF BOTH THE ABOVE BOXES ARE CHECKED, THE LATER OF THE ATTAINMENT OF
THE SPECIFIED PERIOD OF EMPLOYMENT OR SPECIFIED AGE WILL DETERMINE THE DATE
OF ENROLLMENT.
(b) Exclusions from membership:
____ Those who are covered by another designated pension plan
of the Employer.
____ Those who are compensated on an hourly basis.
____ Those who are hired under a written agreement precluding
membership and limiting employment to no more than one
year.
NOTE: IF ELIGIBILITY REQUIREMENTS FOR MEMBERSHIP ARE MORE RESTRICTIVE THAN
THAT WHICH HAD BEEN IN EFFECT HERETOFORE, THEN, UNLESS OTHERWISE INDICATED,
THEY SHALL BE APPLICABLE ONLY TO EMPLOYEES HIRED ON OR AFTER THE EFFECTIVE
DATE; IF LESS RESTRICTIVE, IT SHALL BE APPLICABLE TO PRESENT AS WELL AS
FUTURE EMPLOYEES.
7
B. Plan Salary Definition X No Change
____ Provides that, in accordance with Article I, "Salary" for each
calendar year of benefit service shall be amended to:
(a) i ____ Basic salary rate as of January 1 of such year, or date
of employment, if later.
ii ---- Basic salary rate as of January 1 of such year, or date
of employment, if later, plus overtime payments earned in
the preceding calendar year.
iii ---- Basic salary rate as of January 1 of such year, or date
of employment, if later, plus overtime payments and
bonuses earned in the preceding calendar year.
iv ---- In conjunction with i, ii or iii as indicated above,
salary shall also include commissions earned in the
preceding calendar year, not to exceed
$_________________.
(b) i ---- Basic salary rate as in effect for each month of such
year.
ii ____ Basic salary rate as in effect for, plus overtime
payments earned in, each month of such year
iii ---- Basic salary rate as in effect for, plus overtime
payments and bonuses earned in each month of such year.
iv ---- In conjunction with i, ii or iii as indicated above,
salary shall also include commissions earned in the
current calendar year, not to exceed $______________.
(c) ---- Total taxable compensation as reported on the member's
Internal Revenue Service Form W-2 (exclusive of any
compensation deferred from a prior year) for such year.
The above revised salary definition will be effective for employee-members
who terminate employment on or after ___________________________ (insert
date). It shall apply to benefit service completed on or after
_____________________ (date inserted must be 1st day of month. If a plan
salary definition change for a prior calendar year results in a lower plan
salary for such year, the prior reported salary shall be used.
NOTE: PLAN SALARY ALWAYS INCLUDES A MEMBER'S PRE-TAX CONTRIBUTION TO A
SECTION 401 (K) PLAN AND, UNLESS THE EMPLOYER ELECTS OTHERWISE, A MEMBER'S
PRE-TAX CONTRIBUTION TO A SECTION 125 CAFETERIA PLAN.
C. Early Retirement Provisions: X No Change
Establishes the earliest age for commencement of early retirement allowance
payments, as follows:
____ Age 45 or ____ Age 55
Provides the following early retirement features [complete (a) and (b)]:
(a) Early Retirement Factors
i ____ Actuarial Equivalent
ii ____ 3%
iii ____ Rule of 70
iv ____ Rule of 80
8
(b) Unreduced Early Retirement Benefits at:
i ____ Age 60
ii ____ Age 62
iii ____ Age 65
NOTE: (B)I AND (B)II NOT AVAILABLE WITH INTEGRATED UNIT ACCRUAL FORMULAS
UNDER ITEM G BELOW.
D. Vesting Schedule X No Change
____ Establishes, in accordance with Article IV, the vesting schedule
indicated:
(a) ____ Vesting Table A-5 Year Cliff (b) ____ Vesting Table B - 2-6 Partial
Completed Years Vested Completed Years Vested
of Employment Percentage of Employment Percentage
Less than 5 0% Less than 2 0%
5 100% 2 20%
3 40%
4 60%
5 80%
6 100%
NOTE: VESTING TABLES A AND B APPLY WITHOUT REGARD TO AGE. IN ADDITION, A
MEMBER WHO REACHES AGE 65 IS 100% VESTED REGARDLESS OF THE NUMBER OF
COMPLETED YEARS OF EMPLOYMENT.
E. Lump Sum Settlement Option: X No Change
____ Agrees, in accordance with Article Vll, to make uniformly available
to all its retirants who have attained age ____ (any age between 45
and 65, inclusive, but not less than the early retirement
commencement age), the Lump Sum Settlement Option.
NOTE: IF THE LUMP SUM SETTLEMENT OPTION IS NOT ELECTED, ALL RETIREMENT
BENEFITS WILL BE PAID IN THE FORM OF A MONTHLY ALLOWANCE, EXCEPT IN THE
CASE OF CERTAIN DE MINIMIS AMOUNTS DESCRIBED IN THE REGULATIONS.
F. Prior Service Credit: X No Change
____ Provides, in accordance with Article III:
___ Prior service credit to be allowed for all service rendered
since
_________________ and/or
____ after attainment of age ______ and/or ____ completion of
____________ of employment and/or
____ pursuant to attached rider(s)
9
G. Retirement Benefit Formula: No Change
____ Provides the following benefit formula in accordance with the
Regulations [complete (a) or (b) or (c)]:
(a) X Nonintegrated Unit Accrual Formula
Annual Accrual Rate 1% (Any rate between 1% and 3%,
inclusive, in .25% increments)
Average Salary Base High-5 (High-5, High-3, Career Average)
Service Cap None (None, 25, 30, 35, 40, 45 or 50
---- years) May not be used with Career
Average Salary
(b) ____ Integrated Unit Accrual Formula
i. Salary Base
____ High-5 Year
____ High-3 Year
ii Accrual Rates
____ 1% up to covered compensation level ("CCL") plus
1.5% of excess
____ 1.25% up to CCL, plus 1.75% of excess
____ 1.5% up to CCL, plus 2% of excess
____ 1.75% up to CCL, plus 2.25% of excess
iii Integration Level
____ Integration at member's CCL with Career Average
Minimum
____ Integration at member's CCL without Career Average
Minimum
____ Integration at greater of $10,000 or 1/2 of CCL of
individual reaching Social Security Retirement Age
in year of calculation without Career Average
Minimum
(c) Fixed Percentage Formula
i Salary Base ____ High-5 Year ____ High 3 Year
ii. Uniform Percentage of Salary (any percent between 40% and 80%
inclusive) _____%
iii. Benefit Service Requirement at Normal Retirement Date for
Percentage in Item
ii.
____ 25 years ____ 30 years
____ This modification in formula does not constitute a reduction in
future benefit accruals.
X This modification in formula constitutes a reduction in future
benefit accruals and benefits accrued to the modification date will
be protected by
____ Frozen Add-ons X Grandfathered minimum
H. Ancillary Features: X No Change
(a) Annual Post Retirement Increment ____ Active Members Only ____ All Members
i ____ None
ii ____ 1%
iii ____ 2%
iv ____ 3%
10
(b) Active Service Death Benefit
i ____ Basic Benefit (Vested early retirement allowance only)
ii ____ Additional Benefit (1 to 3 times last 12 months salary
(c) Disability Retirement Benefit
____ Yes ____ No
(d) ____ 10-Year Certain Normal Form of Payment
(e) ____ Eliminate Retirement Adjustment Payment for Future Accruals
Will pay the total of the accrued actuarial liability as of the
effective date in the form of:
(a) ____ One lump sum as of the amendment date (may be subject to
Federal excise tax penalty).
(b) ____ A reduction in the Employer's Future Employer Contribution
Offset (FECO)*
(c) ____ An amortization and/or escrow program (subject to the terms
and conditions of the Fund).
* lf accrued actuarial liability exceeds FECO, then box 9(a) or
9(c) must also be checked.
Authorizes and directs its officers, or any of them:
(a) to execute the Employer's Application below and any other documents
(including agreements modifying costs and any required riders), and to
take such other action as he or they may deem advisable to finalize
the continued participation of the Employer in the Fund's
Comprehensive Retirement Program,
and
(b) to pay on behalf of the Employer to the Fund such contributions as are
determined by the Fund to be necessary to fund the benefits selected.
________________________________________________________________________________
I, the undersigned, being duly elected and acting Secretary of Carrollton
----------
Federal Bank FSB hereby certify that the above is a true and exact copy of a
----------------
resolution adopted by the Board of Directors of said Employer at a meeting duly
called and held on the 21st day of October, 1993, as the same appears in the
minutes of such meeting, and that the aforementioned resolution has not been
modified, changed or repealed since its adoption.
Date October 22, 1993 /s/ Xxxxxx X. XxXxxxxx
------------------------- -----------------------------------------
Secretary
11
APPLICATION
The Carrollton Federal Bank, FSB 5 8 - 0 1 8 4 9 8 5
Federal Identification No.
Address 000 Xxxxx Xxxxxx Xxxxxxxxxx XX 00000 hereby applies for the modified
-------------------------------------
basis of participation checked in the above Resolution under the conditions
stated therein and in accordance with the Regulations of the Fund.
Date: October 22, 1993 /s/ Xxxx X. Xxxxxxxx
------------------------- -----------------------------------------
Signature of Authorized Officer
President and Chief Executive Officer
-----------------------------------------
Title
12
