EMPLOYEES' RETIREMENT INCOME PLAN PITNEY-BOWES, INC. May 1, 1948 INSTITUTE OF I"DUSTRIAL REATIONS MAR I I 2

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1 EMPLOYEES' RETIREMENT INCOME PLAN PITNEY-BOWES, INC. May 1, 1948 INSTITUTE OF I"DUSTRIAL REATIONS MAR I I 2

2 One of a series of booklets describing THE PITNEY -BOWES EMPLOYEE SECURITY PROGRAM consistng of * REREMENT INCOME PLAN * GROUP LIFE INSURANCE * GROUP HOSPITALIZATION INSURANCE Published by *31 PITNEY - BOWES, INC. STAMFORD, CONN. October 28, 1949 Printed in U.S.A. EP M

3 PITNEY-BOWES, INC. El Stamford, Connecticut TO OUR EMPLOYEES: This booklet is your guide to our Retirement Income Plan, effective May 1, 1948, which replaced our former Retirement Annuity Plan. It differs from that plan in two important ways: First: it becomes a definite plank in our profit-sharing program, with the entire cost born by the Company, unlike the former Plan to which both the employee and Company contributed. Second: it covers all Pitney-Bowes employees and assures all who retire a larger annual income. You will find the Plan's full details, including approximate estimates of payments in different earnings and age groups, on the pages that follow. This Plan, as you would expect, was devised after the most careful study. We believe it compares with the best retirement programs in the nation. Although this booklet must be somewhat detailed, we have tried to make it clear to all. If, however, there are any parts of it that seem puzzling, please don't hesitate to see or write the Personnel Department for an explanation. Sincerely yours, October 1, 1949 W. H. Wheeler, Jr. President

4 THE PITNEY-BOWES EMPLOYEES' RETIREMENT INCOME PLAN I NTRODUCTION This booklet explains the Pitney-Bowes Employees' Retirement Income Plan. The Plan extends and increases the benefits of the former Retirement Annuity Plan, under which many employees contributed up to May 1, 1948, when the present Plan became effective. The new Plan does not require contributions by employees. Briefly, the Plan provides all regular employees with a retirement income at age 65. Age 65 is also the age when the regular Social Security benefits start. The retirement income under the Plan, when added to your Federal Social Security benefits, is designed to give you a total retirement income equal to approximately 1V2 per cent of your average annual compensation during the 10 consecutive years of your highest earnings, multiplied by the number of years of your service with the Company. Federal Social Security benefits depend upon the number of years you and the Company and your other employers have contributed to the Federal Social Security Plan, starting not earlier than January 1, The following pages of this booklet describe the provisions of the Plan in greater detail. P A R T I C I P A T I O N The Plan includes all regular employees of the Company less than age 65 on date of employment. Employees who did not contribute to the former Retirement Annuity Plan are nevertheless included under this Plan from May 1, 1948 with full credit for all previous service. However, employees who did contribute before May 1, 1948 had the option of getting their money back or receiving additional annuities based on their contributions to the former Plan. 2

5 COMPENSATION AND CREDITABLE SERVICE The amount of an employee's retirement income from the Plan will depend upon his average final compensation and years of creditable service completed before retirement. Average final compensation means the average annual total salary or wages, including bonuses, overtime and any other special pay, during the 10 complete consecutive calendar years of service during which such compensation was the highest. If employed for less than 10 years at retirement date, it will be the average of such annual salary or wages during all the complete calendar years of service. Service dates from the time of original employment, except when broken without leave of absence. NORMAL RETIREMENT The normal retirement date is the first day of the month nearest to an employee's 65th birthday. In the interest of maintaining a high degree of employee efficiency and opening avenues of advancement to younger employees, an employee may be continued in service beyond his normal retirement date only if it is clearly in the interest of the Company to do so. Service rendered during such a continuation will not increase an employee's retirement income under the Plan. No employee may be required to continue in service beyond the normal retirement age of sixty-five if he desires to retire. The formula for the normal retirement income from the Plan payable each year is: (a) 1% of average final compensation up to $3,000; plus (b) 1 ½y% of the part, if any, of average final compensation over $3,000 but not over $10,000; plus (c) 1 % of the part, if any, of average final compensation over $10,000; (d) all multiplied by the number of years of service, not exceeding 30, up to an employee's normal retirement date; plus 3

6 (e) if the employee has service in excess of 30 years, amounts equal to one-half the amounts under (a), (b) and (c), multiplied by the years of service over 30. If you were a participant in the former Retirement Annuity Plan on May 1, 1948, the benefits due you thereunder on account of Company contributions to that Plan will be offset against the above benefits, but any of your own contributions left under the former Plan will be used to provide an additional benefit for you at retirement. The formula is used to calculate your retirement income from the Plan exactly, when you reach age 65 and retire. However, you may estimate your future retirement income from all sources by using the work sheet on Page 11 of this booklet. EARLY RETIREMENT AND OTHER BENEFITS Under the Plan, every employee who reaches 50 years of age, and who has ten or more years of service with the Company, has definite rights and benefits. If you should leave the Company for any reason whatsoever after you become 50, and if you had ten or more years' service here, you would be entitled to receive, beginning at age 65, a retirement income based on the credits built up for you during the time you worked here. If the Company retired you involuntarily on your part, or laid you off through no fault of your own, before you were age 65 but after you were 50 and had ten years or more service, you could have your retirement income begin at once, instead of at the age of 65. In that case, of course, the payments would be smaller because of the longer time over which they would be payable. Even should you leave the Company of your own volition after reaching 50 and having ten years or more of service, you may receive an income beginning at an age earlier than 65 (reduced to take account of such earlier age), should you become permanently disabled. For an example of a reduced retirement income to start before age 65, take the case of an employee who retires at age 60 and whose 4

7 annual income calculated like a normal retirement income would be $1,000 commencing at age 65. The early retirement income commencing at age 60 would be reduced to approximately $650 to take account of the earlier retirement age and, therefore, the longer life expectancy over which the amount would normally be paid. OPTIONAL FORMS OF RETIREMENT INCOME The regular form of retirement allowance provides an income to the retired member only. If you have a dependent not adequately provided for by insurance or other means (your Company Group Life Insurance, as you know, is reduced to $500 on the normal retirement age of 65) you may wish to elect to have the funds available for your regular retirement income applied under one of the following options, but you must make your election before retirement income commences. Option 1. A retirement income payable during your life in a reduced amount, with the provision that it will be continued after your death, for the life of the beneficiary designated by you at retirement, if such beneficiary survives you. Option 2. A retirement income payable during your life in a reduced amount, with the provision that it will be continued after your death, at one-half of the rate paid to you, for the life of the beneficiary designated by you at retirement, if such beneficiary survives you. For example, take the case of an employee whose regular retirement income is $1,000 a year at age 65 and who elects Option 1. The exact amount of the income will depend on the age of the designated beneficiary. Suppose the employee designates his wife and she is also age 65. Then, the retired employee would receive approximately $700 a year, and after his death $700 a year would be paid to his wife if she survived him. Suppose the same employee takes Option 2 instead of Option 1. The retired employee would receive approximately $820 a year, and after his death his wife would receive $410 a year if she survived him.

8 An employee electing an option does not have to pass a physical examination. However, except in case of retirement at age 65, for the election to be effective he must live at least 30 days after applying for retirement. PAYMENTS BY THE COMPANY The Company makes all payments for benefits under the Plan, and no contributions are required from employees. Company payments take the form of profit-sharing declarations into the Plan's trust fund made quarterly by the Board of Directors at the same meetings at which dividends to stockholders and employees are considered. While it is the Company's firm intention to make its payments quarterly in sufficient amounts to fully maintain the Plan's schedule of retirement income payments to employees, it is of course necessary for the Company to reserve the right to end the Plan or to reduce or suspend payments if it should be necessary to the security of the Company to do so. However, all Company payments, as soon as they are made, are held in trust to be used exclusively for the benefit of employees and retired employees, according to the provisions of this Plan. ADMINISTRATION OF PLAN The Plan is administered by the Administrative Committee, which consists of six members who are appointed by the Board of Directors of the Company. The Committee arranges for all retirements and generally supervises the operation of the Plan. An employee member of the Industrial Relations Council advises and works with the Committee. INVESTMENT OF FUNDS All moneys are set aside in trust and can be used only for the benefit of employees and retired employees or their beneficiaries under the Plan. The Chase National Bank of the City of New York is the designated Trustee to which all contributions are paid for safekeeping and investment. 6

9 QUESTIONS AND ANSWERS The main provisions of the Retirement Plan have been outlined in the preceding text. The following questions and answers, however, may be helpful in answering specific questions which may occur to you. P A R T I C I P A T IO N 1. Who is included in the Retirement Plan? All regular employees, except those over age 65 when employed. Anyone employed on or after May 1, 1948 will automatically become a member as soon as he is employed. Anyone employed before May 1, 1948 was included on that date, whether or not he had contributed under the former Retirement Annuity Plan. 2. Does an employee have to pass a medical examination to join the Plan? No. 3. Do all employees participate? Yes. In order that all employees be treated uniformly and share in the benefits, the Plan provides that every employee shall paricipate unless he is age 65 or over when first employed. As the Company makes all payments, the Plan involves no cost to any employee. BENEFITS 4. When can an employee retire? Any employee can retire any time after he has attained age 50 and has completed ten years of service. However, his retirement 7

10 income will not commence until he reaches sixty-five unless the Company has agreed to his earlier retirement. 5. Must an employee retire at age 65? The normal retirement will be age 65. In the interest of maintaining a high degree of employee efficiency and opening avenues of advancement to younger employees, extensions in service beyond normal retirement date may be permitted only if it is dearly in the interest of the Company to do so. The amount of your retirement income when finally payable will not be increased on account of any period of work beyond your normal retirement date. No employee may be required to continue in service beyond age 65 if he desires to retire. 6. Suppose, at the request of the Company, an employee agrees to remain in service beyond age 65. May he retire whenever he pleases thereafter? Yes. He may apply for retirement to take place on the first day of the calendar month next following the date of filing his application. 7. How are retirement incomes paid? By checks mailed to the retired employee monthly as long as he is alive, and ending with the last check received before death. 8. What if I leave the Company before reaching normal retirement age of 65? Under the Plan, every employee who reaches 50 years of age, and who has ten or more years of service with the Company, would have definite rights and benefits. Details of this are covered under the heading "Early Retirement and other Benefits" on Pages 4 and 5 of this booket. 9. If an employee dies after he has retired, is there any further payment of benefits? 8

11 No; unless an optional form of retirement income has been elected as described below. 10. What is meant by optional benefits? At any time before his retirement income payments begin, an employee may elect to take a smaller retirement income for himself, in order that his wife or other beneficiary may receive an income after his death. These benefits, providing for payments to a beneficiary after your death, are known as "optional benefits". 11. If an employee elects an optional benefit, will his own retirement income be the same? No; it will be less, because of the cost of providing the supplemental benefits to the beneficiary named under the option. 12. May an employee revoke or change an optional election? Yes, but not later than 30 days before the date his retirement income payment is to become effective. MISCELLANEOUS 13. What contributions are made by employees? None. The Company makes all the payments to provide the benefits and pays all the administrative expenses of the Plan. 14. Who manages the Retirement Plan? The Retirement Plan is supervised by an Administrative Committee of six members who are appointed by the Board of Directors of the Company. An employee member of the Industrial Relations Council advises and works with the Committee. 9

12 15. Are all employees, including officers, treated on the same basis under the Plan? Yes, except that the benefits are reduced on that part of compensation in excess of $10,000 per year. 16. What assurance does an employee have that the Plan will continue to operate successfully? All moneys are set aside in trust and can be used only for the benefit of employees and retired employees or their beneficiaries under the Plan. The Chase National Bank of the City of New York is the designated Trustee to which all payments are made for safekeeping and investment. The payments of the Company are set on the basis of actuarial computations, to provide the full benefits under the Plan and create reserve funds to assure the payment of all benefits. The Company hopes and expects to continue the Plan indefinitely, but it reserves the right to change or discontinue the Plan if unforseen circumstances arise. NOTE: This brief booklet is not intended to be a substitute for the formal document that is the Plan and controls its operation. The formal document, however, is available at the office of the Company's Secretary to any employee who wishes to read it. Its provisions will be controlling, of course, in case of any conflict with this booklet. 10

13 How to Estimate Your Benefits at Age 65 IMAGINARY INCOME FOR FIRST 30 YEARS' SERVICE EXAMPLE YOURSELF 1. Expected average annual total pay during the 10 consecutive years before age 65 that it was the highest (.01) 2.1% of line (1) up to $3, ½% (.015) of line (1) between $3,000 and $10, $ % (.01) of line (1) over $10, Add 5. lines (2), (3) and (4)....$ Number of years of service, not over 30, to age Multiply line (5) by line (6) to obtain income for first 30 years of service under Company Plan...$... 1, ADDITIONAL INCOME IF YOU HAVE OVER 30 YEARS OF SERVICE 8. Take one half the amount under line (5) $ Years of service over 30 to age Multiply line (8) by line (9) to obtain allowance for service over 30 years....$... SOCIAL SECURITY BENEFIT 11. Expected average earnings per year, not over $3,000, while covered under Social Security from January 1, 1937 to age 65...$... 2, Add $180 to 1/10 of line (11) Number of years while covered under Social Security from January 1, 1937 to age Multiply 1% (.01) of line (12) by line (13) Add line (12) and line (14) YOUR TOTAL RETIREMENT INCOME 16. Company income for service up to 30 years from line (7)... $1, Company income for service in excess of 30 years from line (10).$ Social Security benefit from line (15) Total retirement income to you. $1, Additional Social Security Benefit if wife living and age 65 or over (½2 of line 18)... $ COMBINED INCOME $2,

14 Table for Estimating Your ANNUAL PITNEY-BOWES RETIREMENT INCOME Average Anneal Earnings During 10 Highest Consecaswe Years YEARS OF SERVICE AT AGE YES. 20 YRS. 25 YRS. 30 YRS. 35 YRS. 40 YES. 45 YERS $ 1,800 $ 270 $ 360 $ 450 $ 540 $ 585 $ , , , ,050 1,125 3, ,125 1,219 1,313 1,406 4, ,125 1,350 1,463 1,575 1,688 5, ,200 1,500 1,800 1,950 2,100 2,250 6,000 1,125 1,500 1,875 2,250 2,438 2,625 2,813 8,000 1,575 2,100 2,625 3,150 3,413 3,675 3,938 10,000 2,025 2,700 3,375 4,050 4,388 4,725 5,063 NOTE: The above table is to be used only for making estimates. It will not be used for calculating the exact amount of your Retirement Income. When you reach age 65, the exact amount of your Retirement Income will be calculated. The estimated Retirement Incomes shown in the above table do not indude your Old-Age Benefit payable under the Federal Social Security Act. See the following page for a table enabling you to estimate your Federal Social Security benefit. 12

15 Table for Estimating Your ANNUAL FEDERAL SOCIAL SECURITY BENEFITS YEARS COVERED UNDER FEDERAL SOCIAL SECURITY ACT (Since January 1, 1937) A : 15 YES. 20 YRS. 25 YRS. 30 YES. 35 YES. 40 YES. 45 YES. Ewwrrngs $ 1,800 S 414 S 432 $ 450 S 468 $ 486 $ 504 $ 522 2, , , , , , , , , NOTE: Federal Social Security benefits depend upon the number of years you and Pitney-Bowes, Inc., and your other employers, have contributed to the Federal Social Security Plan, since the program began, January 1, The estimated Federal Social Security benefits shown in above table are only the benefits payable to the retired employee. If any retired employee's wife is living and is also at least age 65, the Federal Social Security benefits will be increased 50 per cent. 13

16 LIFE BEGINS AT 65 Start planning now to enjoy security that new retirement plan offers you (Reprinted from the Pitney-Bowes BULLETIN of May-June, 1948) JOSEPH SMITH smiled as he worked at his bench in the machine shop of a small manufacturing industry. Next week at this time he would be home, with nothing to do but loaf, scratch around his garden, and sleep. He was retiring at the end of the week. He'd have a pretty good pension - not as much as he'd been earning, of course, but, with Social Security, enough to live comfortably. His house was paid for, his children grown, and his wants simple. Six months later, Joe Smith's wife wore a worried look. Joe was irritable, and paced endlessly around the house watching her do the housework, frowning and muttering. His children and grandchildren couldn't understand what was wrong, and began to make excuses why they couldn't drop by on Sunday. 6 The New Yorker Magazine, Inc. "Poor Father doesn't know what to do with himself since he's retired." 14

17 The next summer Joe died. The doctor wrote the Latin name for an ordinary disease on the death certificate. He should have written "BOREDOM." For that's what made Joe's retirement a failure, and his days of leisure full of frustration. The truth of the matter is Joe had never considered what it would be like when he quit work. He knew he would have to quit at 65, and had supposed it would be a pleasure, but it hadn't worked out that way, because Joe had no other interest except his job. Joe's case is worth remembering. With our new Retirement Income Plan, a lot of us may feel that our problems at 65 are solved. They aren't. Joe Smith's tragic experience is repeated time and again, year after year. And it needn't ever happen at all. Doctors, psychiatrists, and retirement personnel experts all agreethe man who has outside interests when he retires finds retirement the happiest time of his life. Perhaps he has developed an interest in wood carving over the years, and spends his years after 65 making and repairing furniture, or making model boats. Perhaps he takes a job clerking in a neighborhood grocery store half a day, not because he needs the money, but because he loves to meet and talk to people, and the work isn't hard. The interest isn't important, so long as it's there. For without it, the experts insist, the man or woman who has worked for years will be miserable with nothing to do but loaf and rest. And, having no interest in life, the chances are that he or she will die too soon. Now that our new Retirement Income Plan has gone into effect, we have one of the best retirement programs in the country. Its generous provisions, when added to Social Security payments, will give us an annual income equal to about 50 per cent of our average earnings during our highest paid consecutive ten years with the company (more if we average less than $3500, less if we average more than that amount). By planning now to develop outside interests, we stand a good chance of enjoying that income after we retire. Life can begin at 65, too, you know. 15

18 NOTES 16

19 AL A MARK OF PRODUCr EXCELLENCE A PLEDGE OF POSTAL SERVICE