SUMMARY PLAN DESCRIPTION

Transcription

1 SUMMARY PLAN DESCRIPTION for the ABC, INC. PENSION PLAN (\\t:\pension\permfile\pen-spd.doc) -i- (Rev. 7/2000)

2 TABLE OF CONTENTS I. INTRODUCTION... 1 II. YEAR OF SERVICE AND HOUR OF SERVICE... 1 III. PARTICIPATION IN THE PLAN... 2 IV. ELIGIBILITY FOR TYPES OF PENSIONS AND DEATH BENEFITS UNDER THE PLAN. 3 V. CALCULATION OF BENEFITS UNDER THE PLAN... 5 VI. BENEFIT PAYMENT OPTIONS... 9 VII. TOP HEAVY RULES VIII. CLAIMS BY PARTICIPANTS AND BENEFICIARIES IX. STATEMENT OF ERISA RIGHTS X. AMENDMENT AND TERMINATION OF THE PLAN XI. BENEFITS INSURED BY THE PENSION BENEFIT GUARANTY CORPORATION (\\t:\pension\permfile\pen-spd.doc) -ii- (Rev. 7/2000)

3 SUMMARY PLAN DESCRIPTION I. INTRODUCTION ABC, Inc. recognizes the efforts its employees make and wants to reward them for their efforts by helping to provide them with a financially secure retirement. The ABC, Inc. Pension Plan (the Plan ) provides retirement benefits for the exclusive benefit of eligible participants. The Plan is a defined benefit plan. That is, the Plan provides a benefit at retirement that is calculated using a benefit formula. Each year an actuary determines the amount ABC, INC. must contribute to the Plan to meet certain minimum funding standards under the Employee Retirement Income Security Act of 1974 ( ERISA ). ABC, INC. then contributes the required amounts to a trust to fund the pensions of all eligible employees. ABC, INC. makes all the contributions. You are not required to pay for any portion of your benefit. This Summary Plan Description ( SPD ) is a brief description of the Plan and your rights, obligations and benefits under the Plan. It is not meant to change or modify the provisions of the Plan. The provisions of the Plan may only be determined accurately by reading the actual Plan document. If there is a discrepancy between the SPD and the provisions of the Plan document, the Plan document will govern. CAUTION: Before you make any important decisions about your retirement, you should check with the Plan Administrator to make sure that your interpretation of the SPD is consistent with the Plan document. II. YEAR OF SERVICE AND HOUR OF SERVICE 1. Year of Service The term Year of Service is used throughout this SPD for measuring your eligibility for participation, eligibility for early retirement, benefit accrual, and vesting. For eligibility purposes, you complete a Year of Service if you complete 1,000 Hours of Service during the twelve consecutive month period beginning with your employment commencement date. If you do not complete 1,000 Hours of Service during this twelvemonth period, for eligibility purposes you complete a Year of Service if you complete 1,000 Hours of Service during any Plan Year, including the Plan Year that starts during your first year of employment. For all other purposes, you are credited with a Year of Service if you complete 1,000 Hours of Service during a Plan Year. Also, you receive a Year of Service for each full year you worked for ABC, INC. before January 1, Hour of Service You are credited with an Hour of Service for each hour you are paid or entitled to payment at regular and overtime rate by ABC, INC. for duties you perform for ABC, INC.. Also, you are credited with an Hour of Service (to a maximum of 501 such hours in any Plan Year) for each hour during which no duties are performed, but for which you are paid or entitled to payment for reasons such as vacations, holidays, incapacity (including disability), jury duty, or military duty. You are also credited with an Hour of Service if you receive a back pay award for hours for which you have not already received credit. Effective January 1, 1994, hours paid for on-call do not count toward the 1,000-hour requirement. (\\t:\pension\permfile\pen-spd.doc) -1- (Rev. 7/2000)

4 3. Years of Service on Rehire If you stop working for ABC, INC. after becoming a participant in the Plan and at a later date you are re-employed, you will re -enter the Plan as a participant on the date of your re-employment. If at the time of your termination from ABC, INC. you received a lump sum payment of your pension benefits, you can elect to repay the lump sum amount plus interest within five years of your re -employment. If you elect to repay the Plan, your prior Years of Service will count for both benefit and vesting purposes. If, however, you elect not to repay the Plan, your prior Years of Service will count for vesting purposes only. If you are a rehired employee and you want to make a repayment, contact the Plan Administrator. 4. If you became an employee of ABC, INC. by reason of the acquisition of your employer by ABC, INC., your service with your former employer will be treated as service with ABC, INC. for purposes of determining your eligibility to participate in the Plan and for purposes of determining your vesting credit (see Section V.7). Benefit accrual credit, however, is earned only while you are in the actual service of ABC, INC.. III. PARTICIPATION IN THE PLAN Before you become a participant in the Plan, there are certain eligibility and participation requirements you must satisfy. 1. Eligibility Requirements You will be eligible to participate in the Plan when you have attained age 21 and have completed one Year of Service for eligibility purposes. (See Section III.1. for information on completing a Year of Service for eligibility purposes.) 2. Participation Requirements Once you have satisfied the above eligibility requirements, you will automatically become a participant on the January 1 or July 1 first following the date you satisfy the eligibility requirements. If you are no longer employed on that January 1 or July 1, you would become a participant on the date you are rehired. 3. Excluded Employees If you are a member of a collective bargaining unit and the terms of your employment are governed by a collective bargaining agreement under which retirement benefits were the subject of good faith bargaining, you cannot participate unless the collective bargaining agreement expressly provides for your participation in this Plan. 4. Terminated Employees If you stop working for ABC, INC. before completing one Year of Service and attaining age 21 and at a later date you are rehired, you must start over with the eligibility requirements to become a participant. You will then become a participant on the first January 1 or July 1 after you have attained age 21 and have completed one Year of Service. 5. Election Not to Participate You may elect not to be an active participant in the Plan for any Plan Year(s). This may be done by sending written notification to the Advisory Committee at least 30 days prior to the beginning of the Plan Year(s) that you do not want to participate in the Plan. Years (\\t:\pension\permfile\pen-spd.doc) -2- (Rev. 7/2000)

5 of Service for determining your retirement benefit will not accrue for any Plan Year(s) that you elect not to participate. An election not to participate is irrevocable for the period covered by the election. Your decision not to participate in the Plan may be canceled by written notice for any future Years of Service. This notice must be received by the Advisory Committee no later than 15 days before the beginning of the applicable Plan Year. 6. Your Current Address It is important to keep ABC, INC. updated on any change in address for you or your beneficiaries by sending written notification to the Plan Administrator. IV. PLAN ELIGIBILITY FOR TYPES OF PENSIONS AND DEATH BENEFITS UNDER THE 1. Normal Retirement Pension You attain your normal retirement age and are entitled to a normal retirement pension when you reach the later of your 65 th birthday or the fifth anniversary of the date you started work with ABC, INC.. (See Section VI for more information on the calculation of your normal retirement pension.) Payment of your normal retirement pension may start no earlier than the first day of the month following your normal retirement age. To begin your pension, you must submit an application for pension benefits to the Advisory Committee. (See Section IX for more information about pension applications.) 2. Early Retirement Pension You may elect to retire before the age of 65 if you have reached age 55 and have completed 10 Years of Service. Your early retirement pension will begin after you file an application for pension benefits with the Advisory Committee. You may not receive pension benefits while you remain an employee of ABC, INC.. (See Section IX for more information about pension applications.) If payment of your pension begins prior to age 62 or begins between the ages of 62 and 65 and you have fewer than 25 Years of Service, your monthly pension benefit will be reduced to reflect the longer period during which payments will be collected. If payment begins at or after age 62 and you have at least 25 Years of Service, the full amount of your normal retirement pension will be paid without a reduction for early retirement. (See Section VI for more information on the calculation of your early retirement pension.) 3. Late Retirement Pension You may remain employed past your normal retirement age. Benefit payments will begin after you retire, file a proper application for benefits and select a date for benefits to begin. However, if you are not actively employed by ABC, INC. after normal retirement age, benefits must begin no later than 60 days after the end of the Plan Year in which you reach normal retirement age. 4. Death Benefit If you die before retirement and have completed at least three Years of Service, a death benefit is paid to your surviving spouse. The death benefit is calculated using the same benefit formula as for pension benefits. You are considered to have retired on the day before your death (or the date you would have attained age 55, if later), and you are considered to have received your benefit in the Joint and 50% Survivor Annuity form. (\\t:\pension\permfile\pen-spd.doc) -3- (Rev. 7/2000)

6 Your spouse receives a benefit equal to 50% of the benefit you would have received using this calculation, starting the first day of the month after you would have been age 55 or the date of your death, whichever comes later. This benefit continues for your spouse s lifetime. (See Section VII for a description of the Joint and Survivor Annuity.) In calculating the death benefit, if you were only partially vested or if you were not employed by ABC, INC. at your death, the benefit is based on your Years of Service at your date of death. If you were fully vested and employed by ABC, INC. at your death, the benefit is based on the Years of Service you would have had if you worked for ABC, INC. until you attained age 55. (See this Section V 7 below for information about vesting.) 5. Disability Pension If you become totally disabled while employed by ABC, INC. and have at least 10 Years of Service when you become disabled, you will be eligible to receive a disability pension at age 65 from the Plan. Your benefit amount will be based on the formula for determining benefits under the Plan, but it will be based on the total number of Years of Service you would have had at age 65 even though you terminated employment when you became disabled and did not actually work any Years of Service after you retired for disability. Under the Plan, disability is defined as a physical or mental condition resulting from bodily injury, disease or mental disorder that renders you incapable of continuing any gainful occupation. This condition must constitute total disability under the federal Social Security Act and you must actually receive a Social Security disability benefit to be eligible for a disability benefit under the Plan. If you become totally disabled while working for ABC, INC. after attaining age 55 and after you have completed 10 Years of Service, you qualify for an early retirement pension and may select an early retirement benefit instead of a disability benefit. 6. Pension on Termination of Employment The Plan is designed to encourage you to stay with ABC, INC. until retirement, and benefits are available only on your death, disability or retirement. If your employment terminates for reasons other than those listed above, you will be entitled to receive only your vested percentage (i.e., nonforfeitable portion) of your benefit. Your benefits under the Plan are determined under the provisions of the Plan on the date your employment with ABC, INC. terminates. Your vested pension will begin at age 65 or as soon as practical following your termination, whichever is later. If you have 10 or more Years of Service when you terminate, you may elect to receive an early retirement pension starting at age 55 or after. 7. Vesting Schedule You will always be 100% vested if you are eligible for a normal retirement pension, regardless of your Years of Service. If you were a Participant before January 1, 1999 and you were a ABC, INC. employee on January 1, 1999, your vested percentage for periods before you reach normal retirement age is determined under the following schedule based on your Years of Service. Completed Years of Service Nonforfeitable Percentage 3 20% (\\t:\pension\permfile\pen-spd.doc) -4- (Rev. 7/2000)

7 4 40% 5 100% If you terminated employment with ABC, INC. prior to January , your vested percentage is determined under the provisions of the Plan in effect on the date you terminated employment with ABC, INC.. If you become a Participant on or after January 1, 1999, you become fully vested before reaching normal retirement age after you complete five Years of Service. There is no partial vesting before completing five Years of Service. V. CALCULATION OF BENEFITS UNDER THE PLAN 1. If You Retire At or After Reaching Normal Retirement Age Your normal retirement pension will be the greater of, (a) your Gross Retirement Benefit less your Benefit Offset; or, (b) your benefit payable at normal retirement age determined under the terms of the Plan in effect on December 31, 1988, and determined as if your employment terminated on that date. (a) Your Gross Retirement Benefit is determined as follows: 1.75% of your Average Final Compensation Multiplied times Your Years of Service (maximum 30) Plus.5% of your Average Final Compensation Multiplied times Your Years of Service over 30 (b) (c) Your Average Final Compensation is calculated by averaging your monthly earnings of the 60 consecutive months with your highest earnings out of your last 120 months of employment with ABC, INC.. Earnings include your regular pay, overtime pay, commissions, bonuses, and amounts contributed by ABC, INC. under a compensation reduction agreement for an IRC Section 403(b) Tax Sheltered Annuity. Prior to January 1, 1994, the annual earnings that could be considered when calculating your Average Final Compensation were limited to $200,000, as adjusted periodically for cost of living increases. Beginning January 1, 1994, annual earnings were limited to $150,000, as adjusted periodically for cost of living increases. Your Benefit Offset is the least of the following: (1) 50% of your Gross Retirement Benefit; or, (2) 50% of your Gross Retirement Benefit, but using your Offset Compensation in place of your Average Final Compensation; or, (3).48% of your Offset Compensation multiplied times your Years of Service (maximum 30). (d) Your Offset Compensation is the lower of the following: (1) Your compensation in the three consecutive years before the current year divided by either 36 or the number of months you have worked, if fewer than 36. (\\t:\pension\permfile\pen-spd.doc) -5- (Rev. 7/2000)

8 (2) One-twelfth of your Covered Compensation. When determining your Offset Compensation, earnings in excess of the Social Security Contribution and Benefit Base for any year are disregarded. Your Covered Compensation is the average Social Security Contribution and Benefit Base each year for a 35-year period ending when you reach Social Security retirement age. For example: Ann retired December 31, 2003 at age 65. She started working for ABC, INC. in She has 25 Years of Service (she worked at least 1,000 hours each year). Assume her Average Final Compensation is $1,800 per month and her Offset Compensation is $1,526 per month. Here s how Ann s month pension benefit is calculated. Gross Benefit = 1.75% x $1,800 x 25 = $ Benefit Offset (least of the following): 1. 50% x $ = $ % x 1.75% x $1,526 x 25 = $ % x $1,526 x 25 = $ Number 3 is the Benefit Offset because it is the lowest of the three calculations. Ann s monthly pension benefit is $ $ = $ If Ann is single or married and has, with her spouse s consent, elected not to receive a Joint and Survivor form of benefit, she will receive a monthly pension benefit of $ until she dies. If Ann is married and does not make an election to receive an optional form of benefit distribution, she will receive a lesser amount because her husband will continue to receive monthly benefits under the Plan after her death. (See Section VII for information about benefit payment options.) 2. If You Retire Early (between ages 55 64) Early retirement pension is calculated under the same formula as your normal retirement pension. If you start collecting benefits prior to age 62 or between ages 62 and 65 with less than 25 Years of Service, your early retirement pension will be reduced to reflect the longer period that you will be receiving benefit payments. If you have fewer than 25 Years of Service, the reduction is equal to one-fifteenth (1/15) for each of the first five years and one-thirtieth (1/30) for each of the next five years by which your early retirement date is before you reach age 65. If you have at least 25 Years of Service an are at least age 62, you will receive the full amount of your normal retirement pension without reduction for early retirement. If you have at least 25 Years of Service and are at least age 55 but you are not at least age 62, (\\t:\pension\permfile\pen-spd.doc) -6- (Rev. 7/2000)

9 your pension benefit will be reduced by 5% for each year that you retire prior to attaining age 62. For example: Tom is leaving ABC, INC. with an early retirement pension at age 55 and with 15 Years of Service. He wants to start collecting his pension right away. The pension he would receive at age 65 is $600 a month. Because he s collecting his pension early, he will receive a reduced pension benefit of $300 a month. The reduction is calculated as follows: 5 1/15 = 5/15 (or, in other words, 10/30) 5 1/30 = 5/30 Total: 10/30 + 5/30 = 15/30 (or, 50%) Benefit reduction for Early Retirement: 50% x $600 = $300 The reduced monthly benefit is: $600 - $300 = $300 If Tom had decided to begin receiving his benefits at age 60 instead of age 55, his monthly pension benefit would have been $400. The reduction is calculated as follows: 5 1/15 = 5/15 (or, 33.3%) 33.3% x $600 = $200 The reduced benefit is: $600 - $200 = $400 If Tom is single or married and has elected, with his spouse s consent, not to receive a Joint and Survivor form of benefit, he will receive a month pension benefit of $400 until he dies. If Tom is married and does not make an election to receive an optional form of benefit distribution, he will receive a lesser amount because his wife will continue to receive monthly benefits under the Plan after his death. (See Section VII for information about benefit payment options.) (\\t:\pension\permfile\pen-spd.doc) -7- (Rev. 7/2000)

10 3. If You Terminate Before Becoming Eligible for Early Retirement If you terminate employment before becoming eligible for Early Retirement, you are entitled to the vested portion of your benefit, with payment to begin at age 65 or, if you have completed 10 Years of Service, as early as age 55. For example: Bill s employment with ABC, INC. terminated December 31, 2001, his 45 th birthday. He had worked for ABC, INC. for four years, during each of which he worked at least 1,000 hours. Because Bill became a Participant in the Plan before January 1, 1999, he is 40% vested with four Years of Service. Assume his Average Final Compensation is $1,800 per month and his Offset Compensation is $1,850 per month. His pension benefit is calculated as follows: Gross Benefit = 1.75% x $1,800 x 4 = $ Benefit Offset (least of the following): 1. 50% x $ = $ % x 1.75% x $1,850 x 4 = $ % x $1,850 x 4 = $35.52 Number 3 is the Benefit Offset because it is the lowest of the three calculations. Bill s pension benefit before calculating his vested portion is: $ $35.52 = $90.48 Since Bill has completed four Years of Service, he is 40% vested (five Years of Service are required for full vesting). His vested monthly pension benefit payable at age 65, is 40% of $90.48 = $36.19 per month. 4. Maximum Pension Benefit The law imposes certain limits on the amount of pension benefits that can be provided. These limits are very complex, but generally the pension paid to you at retirement may not exceed the lesser of 100% of your Average Final Compensation or $7,500 per month. The Plan Administrator will inform you if your benefit is restricted by these limits. If you receive your benefit in a form other than a life annuity or as a joint and survivor annuity with at least 50% of your benefit continuing for your spouse s life, the maximum limit must be adjusted for the form of benefit you are receiving. Effective January 1, 1995, the adjustment is based on a standard mortality table adopted by the Commissioner of Internal Revenue and interest factors selected by ABC, INC. and contained in the Plan, except that in determining the maximum lump sum benefit, the interest factor is the annual rate of interest on 30-year United States Treasury Securities. Your maximum benefit, determined with the new factors, cannot be less than the benefit that could have been paid to you at Decemb er 31, 1994 based on your accrued benefit at that date and based on the old factors. (\\t:\pension\permfile\pen-spd.doc) -8- (Rev. 7/2000)

11 5. Transfers From Other Qualified Pension Plans (Rollovers) Benefit distributions you receive from other pension plans may not be transferred (or rolled over) into the ABC, INC. Plan. VI. BENEFIT PAYMENT OPTIONS There are various options regarding the form of your benefit payment. Your form of benefit may depend on your marital status as well as the election you make. All optional forms of distribution are of equivalent actuarial value. A particular form of benefit is of equivalent actuarial value if the cost of providing that particular form of benefit is the same as a life annuity. Benefits forms are converted to equivalent actuarial value based on interest and mortality factors selected by ABC, INC. and specified in the Plan, but effective January 1, 1996, the equivalent actuarial value of lump sum benefits must be based on the annual rate of interest on 30-year United States Treasury Securities and a standard mortality table adopted by the Commissioner of Internal Revenue. 1. Forms of Payment Straight Life Annuity, with monthly payments ending on your death. This is the form of payment you will receive if you are single, unless you elect another form of payment. Joint and Survivor Annuity, under which you receive reduced monthly payments during your lifetime and your surviving beneficiary (who may be someone other than your spouse) receives 50% of your monthly benefit after your death. The amount of the reduction to your benefit depends on your age and your beneficiary s age at the time benefit payments begin. This is the form of payment you will receive if you are married, unless you elect another form of payment and your spouse consents. Other forms of the Joint and Survivor Annuity are the 75% and 100% options, where your benefit is further reduced but your spouse receives 75% or 100% of your benefit following your death. If more benefits are payable to your beneficiary, less benefits are payable to you during your life. Monthly Pension with 120 Monthly Payments Guaranteed. If you die prior to receiving 120 monthly payments, your beneficiary will receive the balance of the monthly payments until 120 monthly payments have been made. Level Social Security Option, under which you receive higher monthly payments prior to receiving Social Security benefits and lower monthly pension benefits thereafter, so that the combination of Plan benefits and Social Security benefits remains essentially level throughout your lifetime. This option is available only to early retirees. Lump Sum, under which you receive payment in a single lump sum. If you take a lump sum distribution, required taxes will be withheld from the distribution unless you elect a direct rollover of the distribution to an individual retirement account or another employer qualified pension plan. NOTE: Effective January 1, 1996, a lump sum payment is available only for the portion of your benefit earned before January 1, Benefits earned after December 31, 1995 are payable in a lump sum only if the lump sum value of the benefit earned after December 31, 1995 is not more than $5,000. Any benefit you earn that is not permitted to be paid in a lump sum will be paid in any of the other Benefit Payment Options discussed above. (\\t:\pension\permfile\pen-spd.doc) -9- (Rev. 7/2000)

12 2. Lump Sum Payment of Small Pension An involuntary payment, at the sole discretion of ABC, INC., can be made to a terminated Participant in the form of a lump sum if the pension total value is not in excess of $5,000. Small lump sum payments are made as soon as possible following termination of employment, usually within six months following the close of the quarter during which termination occurs 3. Qualified Domestic Relations Orders As a general rule, your interest in your pension benefit under the Plan may not be sold, used as collateral for a loan or otherwise transferred. Also, your creditors may not attach or garnish your benefit. There is an exception, however, for a qualified domestic relations order ( QDRO ). A QDRO is a decree or order issued by a court in a marital proceeding that allocates a portion of your assets in the Plan to an alternate payee. If the Plan Administrator receives a QDRO, all or a portion of your benefits will be paid in accordance with the terms of the QDRO. You will be notified if a QDRO is received in connection with your benefit. The Plan Administrator will determine the validity of any QDRO received by the Plan. VII. TOP HEAVY RULES A retirement plan that primarily benefits key employees is called a top heavy plan. Key employees are certain very highly paid employees, generally those earning over $150,000 per year. A plan is a top heavy plan if the benefits for key employees are more than 60% of the plan benefits for all participants. It is very unlikely that ABC, INC. s Plan could ever be top heavy, but if it were, certain minimum benefit and vesting rules would apply. VIII. CLAIMS BY PARTICIPANTS AND BENEFICIARIES You or your beneficiary must apply in writing to receive benefits under the Plan. 1. Requesting a Benefit Election Form and Election of Optional Forms of Retirement Benefits Generally, you should request a benefit application and election form from the Advisory Committee in writing about 90 days before you want your benefits under the Plan to begin. The Advisory Committee will then furnish you with an application and election form and will provide you with information about your benefits, including a description of the optional forms of benefit available to you. The Advisory Committee will also provide information that explains the steps necessary, including the consent required by your spouse, to elect an optional form of benefit. You must choose an annuity starting date for your benefit to begin on the benefit election form. That date must be the first day of a calendar month at least 30 days, but not more than 90 days, after you submit the properly completed benefit application and election form and the accompanying materials. The Advisory Committee must receive your completed election form at least 30 days before the annuity starting date you choose. If you die before your annuity starting date, no pension benefit is payable under the Plan; however, a death benefit may be payable to your spouse. Under the law, your benefit must commence by April 1 of the year following the year in which you attain age 70½ if you are no longer employed by ABC, INC.. Therefore, in the case of a participant who is age 70 ½, is no longer employed by ABC, INC. and has not notified the Advisory Committee of his or her intention to retire, the election period for that participant automatically starts on January 1 of the year following the year in (\\t:\pension\permfile\pen-spd.doc) -10- (Rev. 7/2000)

13 which the participant attains age 70½. If no application is filed, the participant s benefit will be paid as a Joint and 50% Survivor Annuity if s/he is married, or as a Straight Life Annuity if s/he is single. The first payment will be made on April 1 of the year following the year in which the participant attains age 70½. 2. Claim Determination If your claim for a pension benefit or your beneficiary s claim for a death benefit is wholly or partially denied, the Advisory Committee will furnish you or your beneficiary with a written notice of the denial. The written notice will contain the following information. (a) (b) (c) (d) the specific reason or reasons for the denial; specific reference to those Plan provisions on which the denial is based; a description of any additional information or material necessary to correct your claim and an explanation of why such material or information is necessary; and, appropriate information as to the steps to be taken if you or your beneficiary wishes to submit your claim denial for review. If notice of the denial of a claim is not furnished to you within a reasonable period of time in accordance with the above, your claim will be deemed denied. You will then be permitted to proceed to the review stage described in the following paragraphs. If your claim has been denied and you wish to submit your claim for review, you should follow the claims review procedure. 3. Claims Review Procedure (a) (b) (c) (d) (e) Upon the denial of your claim for benefits under the Plan, you may file your claim for review, which must be in writing, with the Advisory Committee. You or your beneficiary must file the claim for review no later than 75 days after you receive written notification of the denial of your claim for benefits. You may review all pertinent documents relating to the denial of your claim and submit any issues and comments, in writing, to the Advisory Committee. Your claim for review will be given a full and impartial review. If your claim is denied, the Advisory Committee will provide you with written notice of the denial within 60 days after the Advisory Committee receives your written claim for review. There may be times when this 60-day period may be extended. An extension may only be made, however, when there are special circumstances that are communicated to you in writing within the 60-day period. If there is an extension, a decision shall be made as soon as possible, but not later than 120 days after the Advisory Committee receives your claim for review. If the Advisory Committee s decision on review is not furnished to you within the time limitations described above, your claim will be deemed denied on review. (\\t:\pension\permfile\pen-spd.doc) -11- (Rev. 7/2000)

14 IX. STATEMENT OF ERISA RIGHTS ERISA, passed by Congress in 1974, gives you certain specific rights as a Plan participant. You are entitled to: 1. Examine, without charge, at the Plan Administrator s office and at other specified locations, such as work sites, all Plan documents, including insurance contracts and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions. 2. Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies. 3. Receive a summary of the Plan s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of the summary annual report. 4. Obtain a statement telling you whether you have a right to receive a pension at normal retirement age (age 65) and, if so, what your benefits would be at normal retirement age if you stop working under the Plan now. If you do not have a right to a pension, the statement will tell you how many more years you must work to qualify for a pension. This statement must be requested in writing and is not required to be given more than one a year. The plan must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called fiduciaries of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including ABC, INC. or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If your claim for a pension benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan reviewed and your claim reconsidered. Under ERISA, there are steps you can take to enforce the rights stated above. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that the Plan fiduciaries misuse the Plan s money or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees if it finds your claim to be frivolous, for example. If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Area Office of the U.S. Labor-Management Services Administration, Department of Labor. (\\t:\pension\permfile\pen-spd.doc) -12- (Rev. 7/2000)

15 X. AMENDMENT AND TERMINATION OF THE PLAN 1. Amendment The Board of Trustees of ABC, INC. has the right to amend, in writing, the Plan at any time. In no event, however, will any amendment: (a) (b) authorize or permit any part of the Plan assets to be used for purposes other than the exclusive benefit of participants or their beneficiaries, except for assets required to pay taxes and for administration expenses; or, cause any reduction in your accrued benefit. 2. Termination ABC, INC., through action by its Board of Trustees, has the right to terminate the Plan at any time. Upon termination of the Plan, you will become or remain fully vested in your benefit accrued to the extent funded as of such date of termination. ABC, INC. may direct that either: (a) (b) benefits be distributed to you in any manner permitted by the Plan as soon as practical; or, the Trust created by the Plan be continued and benefits to you or your beneficiary administered as if the Plan had not terminated. 3. Surplus If, upon termination of the Plan, there are assets remaining after the satisfaction of all Plan liabilities, the surplus shall be returned to ABC, INC.. XI. BENEFITS INSURED BY THE PENSION BENEFIT GUARANTY CORPORATION The Pension Benefit Guaranty Corporation ( PBGC ) insures pensions under this Plan. If the Plan should terminate and it does not have sufficient assets to cover all vested benefits, the PBGC will cover most vested normal retirement pensions, early retirement pensions, and certain disability and survivor s pensions. However, the PBGC does not insure all types of pensions under covered plans. The amount of pension protection is subject to certain limitations. The PBGC insures vested pensions at the level in effect on the date the Plan ends. However, if the Plan has been in effect less than five years before it ends, or if pensions have been increased within the five years before the Plan ends, the entire amount of the Plan s vested pensions or the pension increase may not be covered. In addition, there is a ceiling that is periodically adjusted on the amount of monthly benefits that the PBGC covers. For more information on PBGC insurance protection and its limitations, contact the PBGC. You should direct your questions to: Communication & Public Affairs Department Pension Benefit Guaranty Corporation 1200 K Street, N.W. Washington, D.C (202) END OF DOCUMENT (\\t:\pension\permfile\pen-spd.doc) -13- (Rev. 7/2000)