The definition of compensation has been changed to allow plan sponsors to choose between two different definitions: one that includes only base pay and the other that includes base pay, overtime pay, bonuses and severance pay.
The definition of Early Retirement Date has been changed so that plan sponsors can choose a service requirement for early retirement that is between 0 and 20 years.
A section was added that allows a plan sponsor to choose whether (1) to extend coverage to all employees or (2) to limit coverage to employees that are regularly scheduled to work at least 20 hours per week and those that actually work 1,000 or more hours during the Plan Year.
All references to employee contributions and accounts have been removed except for a provision that allows a plan sponsor to require employees to contribute to the Personal Investment Plan as a condition of participation in CPBF.
A provision was added that, in the event of a participant's divorce, would void any beneficiary designation made prior to the divorce in favor of the spouse. The spouse would be treated as is he/she had predeceased the participant.
Distinctions have been made between the Board as administrator and the Board as trustee.
A provision was added that allows the Board to pay a participant a single sum payment in lieu of an annuity if the amount of the annuity payment is less than a minimum amount determined by the Board.
A refusal of benefit provision was added that allows a beneficiary to refuse all of the payment to which he/she might otherwise be entitled. In the event of a refusal, benefits will be paid as if this beneficiary had predeceased the participant.
A provision was added to permit the Board will be to pay a relative, friend or legal representative of an individual who is entitled to receive a benefit but is incapable of handling his/her own financial affairs. The payment is to be used exclusively for the benefit of the incapacitated individual.
A provision was added that explains what will happen to unclaimed benefit payments if at the time of the required beginning date for payment there is no current mailing address on file with the Board.
A provision was added that outlines the duties and responsibilities of plan sponsors.
A provision was added that allows the administrator to charge users directly for non-routine services provided to participants or plan sponsors.
A provision was added that allows the Board to amend the plan as needed.
Provisions were added that allow plan sponsors either to merge their former pension programs into CPBF or to leave CPBF and merge the value of their employee's accounts into another plan not administered by the Board.
The plan clarifies the provisions of the plan are to be construed under Illinois law, unless preempted by federal law.
A provision was added that requires disputes between a plan sponsor and the Board to be settled through the use of a mediation/binding arbitration process.
Cumulative Pension and Benefit Fund
Article I The Plan
1.01 The Plan. The General Conference of The United Methodist Church had previously authorized the establishment of the Cumulative Pension and Benefit Fund in or about August 1972. Effective as of January 1, 1998, the General Conference hereby amends and restates the Cumulative Pension and Benefit Fund (hereinafter referred to as the "Plan") for the exclusive benefit of the Eligible Employees and their Beneficiaries in accordance with the terms and conditions set forth in the Plan. The Adoption Agreements to the Plan, as in effect from time to time, are a part of the Plan.
1.02 Type of Plan. The Plan is intended to meet the requirements of a "church plan" as that term is defined in section 414(e) of the Internal Revenue Code of 1986, as amended, and shall be administered pursuant to the retirement income account provisions of section 403(b)(9) of the Internal Revenue Code of 1986, as amended.
Article II Identification and Definitions
Whenever used in the Plan, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided herein. When the defined meaning is intended, the term is capitalized. The identification of the adopting Plan Sponsor, as well as certain variable definitions, are set forth in the Adoption Agreement.
2.01 "Account" shall mean the account maintained for each Participant in the books and records of the Plan for the purpose of recording contributions made to the Plan by the Plan Sponsor on behalf of a Participant pursuant to Section 4.01, adjusted for earnings and losses allocated thereto.
2.02 "Act" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
2.03 "Administrator" shall mean The Board of Pensions of The United Methodist Church, Incorporated in Illinois and any successors.
2.04 "Adoption Agreement" shall mean the agreement adopted by a Plan Sponsor in accordance with the provisions set forth in Article XI.
2.05 "Age" of a person shall mean the age at the last birthday.
2.06 "Anniversary Date" shall mean January 1 of each succeeding year.
2.07 "Annuity Starting Date" shall mean the first day of the month for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day of the month coinciding with or following the completion of all events which entitle the Participant to such benefit. In the case of a deferred annuity, the Annuity Starting Date shall be the date on which the annuity payments are scheduled to commence.
2.08 "Beneficiary" shall mean the person(s) (natural or otherwise), other than a Contingent Annuitant, designated as set forth in Section 5.02d, who is receiving, or entitled to receive, a deceased Participant's (or annuity- certain payee's) residual interest in this Plan which is nonforfeitable upon, and payable in the event of, such Participant's or payee's death.
2.09 "Break in Service" shall mean the cessation of crediting Hours of Service when the employee:
a. resigns;
b. is discharged;
c. fails to report for work within the period required under the law pertaining to veterans' reemployment rights after the employee is released from military service with the armed forces of the United States, in which case the Employee's Break in Service shall be deemed to have occurred on the first day of his/her authorized leave of absence for such military duty;
d. is on an authorized leave of absence and fails to return to employment, in which case his/her Break in Service shall be deemed to have occurred on the first day of his/her authorized leave of absence; or
e. retires or dies.
2.10 "Church" shall mean an organization described in Code Section 3121(w)(3)(A) and Treasury regulations thereunder, and generally shall refer to a church, a convention or association of churches, or an elementary or secondary school which is controlled, operated, or principally supported by a church or a convention or association of churches.
2.11 "Code" shall mean the Internal Revenue Code of 1986, as amended or replaced from time to time.
2.12 "Compensation" shall mean one of the following as specified by the Plan Sponsor in the Adoption Agreement:
a. Election A: The sum of the following paid in cash or in kind for personal services by the Plan Sponsor:
(1) Cash salary including overtime pay, bonuses and severance pay;
(2) Housing allowance or when lodging or similar accommodation is provided, a sum equivalent to the reasonable value of such accommodation; and
(3) Salary-reduction contributions with respect to employment with the Plan Sponsor:
(A) to a plan qualified under section 125 of the Code; or
(B) to a tax-sheltered annuity described in section 403(b) of the Code.
b. Election B: The sum of the following paid in cash or in kind for personal services by the Plan Sponsor:
(1) Base pay, not including such items as overtime pay, bonuses, and severance pay;
(2) Housing allowance or when lodging or similar accommodation is provided, a sum equivalent to the reasonable value of such accommodation; and
(3) Salary-reduction contributions with respect to employment with the Plan Sponsor:
(A) to a plan qualified under section 125 of the Code; or
(B) to a tax-sheltered annuity described in section 403(b) of the Code.
For Plan Years beginning after December 31, 1988, and before January 1, 1994, Compensation in excess of $200,000 shall be disregarded. For Plan Years beginning after December 31, 1993, the amount reported on the Employee's Federal Income Tax Withholding Statement (Form W-2) as wages, tips, and other compensation in excess of $150,000 shall be disregarded. Such amount shall be adjusted at the same time and in such manner as permitted under Code section 415(d).
2.13 "Contingent Annuitant" shall mean the person who, with a Participant, is the one upon the continuation of whose life the amount and/or duration of the pension benefit under this Plan depends.
2.14 "Contingent Annuity" shall mean an annuity for the life of the Participant with a survivor annuity for the life of his/her Contingent Annuitant which is not less than one- half, or greater than, the amount of the annuity payable during the joint lives of the Participant and his/her Contingent Annuitant. The Contingent Annuity will be the amount of benefit which can be purchased with the Participant's account balance. Unless elected otherwise by the Participant with spousal consent, the percentage of the Contingent Annuity will be 70%.
2.15 "Disability" shall mean the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months as determined by the Administrator. The permanence and degree of such impairment shall be supported by medical evidence.
2.16 "Early Retirement Date" shall mean the first day of the month (prior to Normal Retirement Date) coinciding with or following the date on which a Participant or Former Participant attains the Early Retirement Age indicated in the Adoption Agreement. Said Early Retirement Age shall be the age of the Participant in the year in which the later of two events occurs: (i) the year in which the Participant attains age "x" or (ii) the year in which the Participant has at least "y" Years of Service with the denomination, where "x" is a number between 55 and 65, inclusively, and where "y" is a number between 0 and 20, inclusively. A Participant shall become fully Vested upon satisfying this requirement if still employed at his/her Early Retirement Age. A Former Participant who terminates employment after satisfying the service requirement for early retirement and who thereafter reaches the age requirement contained herein shall be entitled to receive his/her benefits under this Plan.
2.17 "Effective Date" shall mean January 1, 1998.
2.18 "Eligible Employee" shall mean an Employee who meets the requirements of Article III for participation in the Plan.
2.19 "Employee" shall mean any person who is currently employed by the Plan Sponsor, but excludes any person who is employed as or through an independent contractor.
2.20 "Entry Date" shall mean the date upon which an Eligible Employee becomes a Participant, and initially shall be the Effective Date and subsequently shall be determined in accordance with the choice made by the Plan Sponsor in the Adoption Agreement pursuant to Section 3.04 herein.
2.21 "Excess Aggregate Contributions" shall mean, with respect to any Plan Year, the excess of the aggregate amount of the Required Employee Contribution made pursuant to Section 3.03, Plan Sponsor contributions made pursuant to Section 4.01, voluntary personal or salary-reduction contributions made to the Personal Investment Plan administered by the Administrator and any qualified non-elective contributions taken into account pursuant to Section 12.03 on behalf of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions permitted under the limitations of Section 12.02.
2.22 "Forfeiture" shall mean that portion of a Participant's Account that is not Vested, and occurs on the earlier of:
a. he distribution of the entire Vested portion of a Participant's Account; or
b. he last day of the Plan Year in which the Participant incurs five (5) consecutive One- Year Breaks in Service.
"Forfeiture" shall also mean amounts in accordance with Section 3.09 which were erroneously contributed on behalf of ineligible persons.
2.23 Former Participant" shall mean a person who has been a Participant, but who has ceased to be a Participant for any reason.
2.24 415 Compensation" shall mean compensation as determined by Code section 415 and the Regulations promulgated thereunder.
2.25 Highly Compensated Participant" shall mean any Participant who performed services for the Plan Sponsor during the "determination year" and is in one or more of the following groups:
a. Employees who received 415 Compensation during the "look- back year" from the Plan Sponsor in excess of $75,000;
b. Employees who received 415 Compensation during the "look- back year" from the Plan Sponsor in excess of $50,000 and were in the "top paid group" of Employees for the Plan Year;
c. Employees who during the "look- back year" were officers of the Plan Sponsor (as that term is defined within the meaning of the Regulations under Code section 416) and received 415 Compensation during the "look- back year" from the Plan Sponsor greater than 50% of the limit in effect under Code section 415(b)(1)(A) for any such Plan Year. The number of officers shall be limited to the lesser of (i) 50 employees; or (ii) the greater of 3 employees or 10% of all employees. If the Plan Sponsor does not have at least one officer whose annual 415 Compensation is in excess of 50% of the Code section 415(b)(1)(A) limit, then the highest paid officer of the Plan Sponsor will be treated as a Highly Compensated Participant.
d. Employees who are in the group consisting of the 100 Employees paid the greatest 415 Compensation during the "determination year" and are also described in Section 2.25a, b, or c above when these paragraphs are modified to substitute "determination year" for "look- back year."
For purposes of this Section, no Participant shall be considered an officer, person whose principal duties consist in supervising the work of other employees, or Highly Compensated Participant if such Participant during the "determination year" or the "look- back year" received compensation from the Plan Sponsor of less than $50,000 (adjusted at the same time and in such manner as permitted under Code section 415(d)).
The "determination year" shall be the Plan Year for which testing is being performed, and the "look- back year" shall be the immediately preceding twelve- month period.
A Participant in the "top paid group" shall be an Employee who is in the group consisting of the top 20% the Employees when ranked on the basis of 415 Compensation paid during such year.
For purposes of this Section, the determination of 415 Compensation shall be based only on 415 Compensation which is actually paid and, in the case of Plan Sponsor contributions made pursuant to a salary-reduction agreement, without regard to Code section 403(b). Additionally, the dollar threshold amounts specified in Section 2.25a and Section 2.25b above shall be adjusted at such time and in such manner as is provided in Regulations. In the case of such an adjustment, the dollar limits which shall be applied are those for the calendar year in which the "determination year" and the "look- back year" begins.
2.26 "Hours of Service" shall mean:
a. each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Plan Sponsor. These hours shall be credited to the Employee for the computation period in which the duties are performed;
b. each hour for which an Employee is paid, or entitled to payment, by the Plan Sponsor 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 shall be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period); and
c. each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Plan Sponsor. The same Hours of Service shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). These hours shall be credited to the Employee for the computation period or periods to which the award or agreement or payment is made.
Hours of Service will be credited for employment with other Plan Sponsors.
Solely for purposes of determining whether a break in service, as defined in Section 2.31, for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons shall mean an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited (1) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (2) in all other cases, in the following computation period.
2.27 "Late Retirement Date" shall mean the first day of the month coinciding with or next following a Participant's actual retirement date after having reached his/her Normal Retirement Date.
2.28 "Month of Service" shall mean any month during which the Employee performs at least one Hour of Service.
2.29 "Non- Highly Compensated Participant" shall mean any Participant who is not a Highly Compensated Participant.
2.30 "Normal Retirement Date" shall mean the first day of the month coinciding with or next following the later of (i) the date a Participant attains age 65, or (ii) the fifth (5th) anniversary of the date a Participant commenced participation in the Plan.
2.31 "One-Year Break in Service" for vesting purposes shall mean, for Plan Sponsors who adopt the Hours of Service requirement set forth in Sections 3.02b or 3.02c, any Plan Year in which a Participant has not completed more than 500 Hours of Service. For vesting purposes for Plan Sponsors who adopt the Hours of Service requirement set forth in Section 3.02a, a One-Year Break in Service shall mean a Plan Year in which a Participant has not completed one Hour of Service. For eligibility purposes, One-Year Break in Service shall mean the applicable computation period of 12 consecutive months during which the Employee fails to accrue a Month of Service.
2.32 "Participant" shall mean an Eligible Employee who has become a participating Employee as provided for in Article III of this Plan.
2.33 "Plan" shall mean this instrument, including all amendments thereto, and the Adoption Agreement submitted by each Plan Sponsor and accepted by the Administrator.
2.34 "Plan Sponsor" shall mean an eligible employer which is identified in the Adoption Agreement and which shall be one of the following units associated with The United Methodist Church or Autonomous Affiliated Churches in the United States of America or Puerto Rico:
a. a local church;
b. an Annual, Provisional or Missionary Conference;
c. a Conference board, agency or commission; or
d. any other organization eligible to participate in a church plan in accordance with the Employee Retirement Income Security Act of 1974 as amended from time to time.
2.35 "Plan Year" shall mean the calendar year.
2.36 "Qualified Church-Controlled Organization" shall mean an organization described in Code section 3121(w)(3)(B) and Treasury regulations thereunder, and generally shall refer to any church-controlled, tax-exempt organization described in Code section 501(c)(3), other than an organization which:
a. Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public, other than goods, services, or facilities which are sold at a nominal charge which is substantially less than the cost of providing such goods, services, or facilities; and
b. Normally receives more than 25% of its support from either (1) governmental sources or (2) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades of businesses, or both.
2.37 "Regulation" shall mean the Income Tax Regulations as promulgated by the Secretary of the Treasury or his/her delegate, and as amended from time to time.
2.38 "Required Employee Contributions" shall mean contributions made by the Participant as a condition of participation in the Plan in accordance with Section 3.04.
2.39 "Service" shall mean employment with the Plan Sponsor named in the Adoption Agreement or any other unit associated with the denomination known as The United Methodist Church. Where the Plan Sponsor maintains a plan of a predecessor employer, service for such predecessor employer shall be treated as service of the Plan Sponsor.
2.40 "Terminated Participant" shall mean a person who has been a Participant, but whose employment has been terminated other than by death, Disability, or retirement.
2.41 "Trustee" shall mean The Board of Pensions of The United Methodist Church, Incorporated in Missouri and any successors.
2.42 "Vested" shall mean the nonforfeitable portion of any account maintained on behalf of a Participant.
2.43 "Year of Service" for vesting purposes for Plan Sponsors who adopt the Hour of Service requirement set forth in Sections 3.02b or 3.02c shall mean a Plan Year during which the Participant has completed at least l,000 Hours of Service. A Year of Service for vesting purposes for Plan Sponsors who adopt the Hour of Service requirement set forth in Section 3.02a shall mean a Plan Year during which the Participant has completed one Hour of Service.
Article III Eligibility for Participation
3.01 Conditions of Eligibility. Each Employee of the Plan Sponsor shall become a Participant in the Plan on the Entry Date upon satisfaction of the requirements for eligibility set forth in the Adoption Agreement.
a. The Plan Sponsor shall use the Adoption Agreement to elect one of the following Service requirements:
(1) no minimum Service shall be required of an Employee in order for the Employee to participate in the Plan; or
(2) a Service requirement shall be imposed with such requirement being at least one month of Service, but no more than 24 months of Service.
In the event an Employee with previous Service incurs a One-Year Break in Service, the employee shall be considered a new Employee for eligibility purposes related to any Service requirement imposed by the current Plan Sponsor.
b. The Plan Sponsor shall use the Adoption Agreement to elect one of the following age requirements:
(1) no minimum Age shall be required of an Employee in order for the Employee to participate in the Plan; or
(2) an Age requirement shall be imposed with such requirement being at least 18 years of age, but no more than 21 years of age.
If any Employee was a Participant in the Plan prior to any amendment to the Adoption Agreement which would alter the service and age requirements, said Employee shall continue to participate in the Plan.
3.02 Hours of Service Requirement. The Plan Sponsor shall use the Adoption Agreement to elect one of the following Hours of Service requirements for Employees who meet the eligibility requirements of Section 3.01:
a. One Hour of Service per Plan Year shall be required in order to receive a contribution pursuant to Article IV.
b. 1000 Hours of Service per Plan Year shall be required in order to receive a contribution pursuant to Article IV. In addition, Employees who are normally scheduled to work 20 hours per week are eligible to receive a contribution pursuant to Article IV.
c. 1000 Hours of Service per Plan Year shall be required in order to receive a contribution pursuant to Article IV. In addition, Eligible Employees who are normally scheduled to work 20 hours per week are eligible to receive a contribution pursuant to Article IV. However, a person who normally works for a period of less than six months during a Plan Year shall be excluded.
3.03 Application for Participation. Each Eligible Employee who desires to become a Participant shall make application for participation in the Plan in such form as may be required by the Administrator and agree to the terms hereof and the Adoption Agreement. Upon the acceptance of any benefits under this Plan, such Employee shall automatically be deemed to have made application and shall be bound by the terms and conditions of the Plan and all amendments thereto.
3.04 Required Employee Contributions. As a condition of a Participant's participation in the Plan, a Plan Sponsor may require that the Participant make Required Employee Contributions to the Personal Investment Plan administered by the Administrator, limited to not more than the lesser of (i) 50% of the Plan Sponsor's contribution rate elected pursuant to Section 4.01 herein or (ii) 4% of Compensation.
a. This Required Employee Contributions stipulation shall be satisfied when:
(1) the Participant agrees to have contributions made to the Personal Investment Plan by payroll deduction in monthly installments and credited upon receipt to the Participant's Personal Account as tax paid; or
(2) when the Participant and Plan Sponsor enter into a salary- reduction agreement whereby it is agreed that the Plan Sponsor shall contribute to the Salary-Reduction Account of the Personal Investment Plan.
b. The Plan Sponsor may advance the contribution of each Participant to the Trustee as a part of the amount contributed whenever a payment is due, and each Participant agrees to repay such advance and authorizes the Plan Sponsor to recover such advance by payroll deductions from his/her compensation, or otherwise.
c. Should a Participant discontinue his/her Required Employee Contributions to the Personal Investment Plan while remaining an Employee, no further contribution shall be made to this Plan by the Plan Sponsor on his/her behalf until the Participant resumes making the Required Employee Contributions.
3.05 Effective Date of Participation. An Eligible Employee shall become a Participant in accordance with one of the following options selected by the Plan Sponsor in the Adoption Agreement:
a. an Eligible Employee shall become a Participant effective as of the first day of the Plan Year in which such Employee met the eligibility requirements of Section 3.01; or
b. an Eligible Employee shall become a Participant effective as of the first day of the month coinciding with or next following the date on which such Employee met the eligibility requirements of Section 3.01 provided such Employee was still employed as of such date (or if not employed on such date, as of the date of rehire if a One-Year Break in Service has not occurred); or
c. an Eligible Employee shall become a Participant effective as of the earlier of January 1 of the Plan Year or July 1 of the Plan Year coinciding with or next following the date such Employee met the eligibility requirements of Section 3.01, provided said Employee was employed as of such date (or if not employed on such date, as of the date of rehire if a One-Year Break in Service has not occurred).
3.06 Determination of Eligibility. Upon receipt of enrollment information from the Plan Sponsor, the Administrator shall accept such information as evidence of eligibility for participation in the Plan. However, the Administrator may from time to time audit such information or obtain additional information which might result in a determination of ineligibility for any particular Participant. The Administrator shall have final authority to determine the eligibility of any Employee and such determination shall be conclusive and binding upon all persons, as long as the determination is made pursuant to the provisions of the Plan and the Adoption Agreement.
3.07 Termination of Eligibility.
a. In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Former Participant shall continue to vest in his/her interest in the Plan for each Year of Service completed while a noneligible Employee, until such time as his/her Account shall be forfeited or distributed pursuant to the terms of the Plan.
b. In the event a Participant is no longer a member of an eligible class of Employees and becomes ineligible to participate, but has not incurred a One- Year Break in Service, such Employee will participate immediately upon returning to an eligible class of Employees. If such Participant incurs a One- Year Break in Service, eligibility will be determined under the break in service rules of the Plan.
3.08 Omission of Eligible Employee. If, in any Plan Year, any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his/her Plan Sponsor for the year has been made, the Plan Sponsor shall make a subsequent contribution subject to the Annual Account Addition limits of Sections 4.02 and 4.03 with respect to the omitted Employee in the amount which the said Plan Sponsor would have contributed with respect to him/her had he/she not been omitted.
3.09 Inclusion of Ineligible Employee. If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the Plan Sponsor shall not be entitled to recover the contribution made with respect to the ineligible person. In such event, the amount contributed with respect to the ineligible person shall constitute a Forfeiture for the Plan Year in which the discovery is made.
3.10 Election Not to Participate. An Employee may, subject to the approval of the Plan Sponsor, elect voluntarily not to participate in the Plan by written notice to the Plan Sponsor and the Administrator in such form as required by the Administrator.
Article IV Contributions and Forfeitures
4.01 Contributions. Each Plan Year the Plan Sponsor shall contribute to the Plan an amount equal to the percentage of a Participant's Compensation specified in the Adoption Agreement.
a. The minimum percentage which the Plan Sponsor may choose shall be 4% of a Participant's Compensation.
b. The maximum percentage which the Plan Sponsor may choose shall be 20% of a Participant's Compensation.
c. One- twelfth of the annual Plan Sponsor contribution shall be payable to the Plan each month.
d. All Plan Sponsor contributions for the Plan Year must be deposited with the Plan no later than June 15 of the following Plan Year.
e. The Administrator shall establish and maintain an Account in the name of each Participant to which the Administrator shall credit all amounts allocated to each Participant as set forth herein.
f. The Plan Sponsor shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Plan Sponsor's contribution for each Plan Year.
g. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution to each Participant's account in accordance with this Section 4.01.
h. As of each Anniversary Date any amounts which became Forfeitures since the last Anniversary Date shall first be made available to reinstate previously forfeited account balances of Former Participants, if any, in accordance with Section 5.04.
i. The remaining Forfeitures, if any, shall be used to reduce the contribution of the Plan Sponsor hereunder for the Plan Year immediately after the Plan Year in which such Forfeitures occur.
j. All amounts which are contributed by the Plan Sponsor to the Plan shall be irrevocable contributions to the Plan except that any contribution made by the Plan Sponsor because of a mistake of fact, shall be returned to the Plan Sponsor upon request within one year after the Plan Sponsor has reported and documented such mistake to the Administrator.
4.02 Annual Account Addition. Notwithstanding the foregoing, the maximum Annual Account Addition which may be credited to a Participant's accounts for any "limitation year" shall be equal to or less than the amount determined in accordance with Section 4.03 below.
a. For purposes of applying the limitations of Section 4.03, Annual Account Addition means the sum credited to a Participant's accounts for any "limitation year" of:
(1) contributions made by the Plan Sponsor on behalf of the Participant to this Plan and to any other pension program; and
(2) contributions made to the Personal Account pursuant to the provisions of the Personal Investment Plan administered by the Administrator for limitation years beginning after December 31, 1986; and
(3) forfeitures.
b. For purposes of applying the limitations of Section 4.03, Annual Account Addition does not include:
(1) rollover contributions made pursuant to the provisions of the Personal Investment Plan administered by the Administrator, and
(2) repayments of distributions received by an Employee pursuant to Section 5.04.
c. For purposes of applying the limitations of Section 4.03, the "limitation year" shall be the Plan Year.
d. For purposes of applying the limitations of Section 4.03, if a Participant participates in more than one plan maintained by the Plan Sponsor, this Plan shall be considered the primary plan of the Plan Sponsor in determining the Annual Account Addition.
4.03 Maximum Annual Account Addition.
a. General Limitation. Notwithstanding any provision herein to the contrary (other than Sections 4.03c and 4.03d) for any Plan Year the Annual Account Addition with respect to a Participant shall not exceed the lesser of:
(1) $30,000 or if greater, one- quarter of the dollar limitation in effect under Code section 415(b)(1)(A); or
(2) 25% of the Participant's 415 Compensation for such Plan Year.
b. Exclusion Allowance. The amounts contributed by the Plan Sponsor on behalf of a Participant shall be excluded from the gross income of the Participant for the Plan Year to the extent that the aggregate of such amounts does not exceed the Exclusion Allowance for such Plan Year.
(1) The Exclusion Allowance for any Participant for the Plan Year is an amount equal to the excess, if any of:
(A) the amount determined by multiplying 20% of the Participant's includible compensation by the number of years of service, less
(B) the aggregate of the amounts contributed by the Salary- Paying Unit on behalf of the Participant and excludable from the gross income of the Participant for any prior Plan Year.
(2) In the case of a Participant who makes an election under Section 4.03c below to have the provisions of Section 4.03c(3) apply, the exclusion allowance for any such Participant for the taxable year is the amount which could be contributed under subsection 4.03a by his/her Salary- Paying Unit.
(3) For purposes of this subsection, all years of service by a Participant as an "employee of a church" (as that term is defined in Code section 414(e)(3)(B)) shall be considered as years of service for one Plan Sponsor, and all amounts contributed hereunder by such organization during such years for the Participant shall be considered to have been contributed by one Plan Sponsor.
(4) The amount determined under Section 4.03b(1) shall not be less than the lesser of:
(A) $3,000; or
(B) the includible compensation of such Participant.
This paragraph shall not apply to a Participant in a Plan Year when such Participant has an adjusted gross income for such Plan Year which exceeds $17,000.
c. Annual Account Addition Election. A Participant may make an irrevocable election to have one of the following three Annual Account Addition elections apply to increase his/her Annual Account Addition. Not more than one election may be made under paragraph (1) below. A Participant who elects to have the provisions of paragraph (1), (2), or (3) of this subsection apply to him/her may not elect to have any other paragraph of this subsection apply to him/her. Such election shall be made in accordance with the provisions of Regulations prescribed by the Secretary of the Treasury.
(1) In the case of amounts contributed for the year in which occurs a Participant's separation from service, at the election of the Participant there is substituted for the amount specified in Section 4.03a(2) the amount of the exclusion allowance which would be determined under Code section 403(b)(2) (without regard to this section) for the Participant's taxable year in which such separation occurs if the Participant's years of service were computed only by taking into account his/her service for the Plan Sponsor (as determined for purposes of subsection 4.03b) during the period of years (not exceeding ten) ending on the date of such separation.
(2) In the case of amounts contributed hereto, at the election of the Participant there is substituted for the amount specified in paragraph 4.03a(2) the least of:
(A) 25% of the Participant's includible compensation (as defined in Code section 403(b)(3)) plus $4,000;
(B) the amount of the Exclusion Allowance determined for the year under paragraph 4.03b(1); or
(C) $15,000.
(3) In the case of amounts contributed hereto, at the election of the Participant the provisions of Section 4.03a shall apply, instead of Section 4.03b.
d. Certain contributions by church plans not treated as exceeding limits.
(1) Alternative Exclusion Allowance. Any contribution or addition with respect to any Participant, when expressed as an Annual Account Addition, which is allocable pursuant to the application of Section 4.03b(4) above to such Participant for such year, shall be treated as not exceeding the limitations of Section 4.03a.
(2) Contributions not in excess of $40,000 ($10,000 per year).
(A) General. Notwithstanding any other provision of this Plan, at the election of a Participant, Annual Account Additions hereto with respect to such Participant, when expressed as an Annual Account Addition to such Participant's account, shall be treated as not exceeding the limitation of Section 4.03a if such Annual Account Addition is not in excess of $10,000.
(B) $40,000 aggregate limitation. The total amount of additions with respect to any Participant which may be taken into account for purposes of this paragraph for all years may not exceed $40,000.
(C) No election if Section 4.03c(1) election made. No election may be made under this subparagraph for any year if an election is made under Section 4.03c(1) for such year.
Article V Determination and Distribution of Benefits
5.01 Determination of Benefits Upon Retirement. Every Participant may terminate his/her employment with the Plan Sponsor and retire for the purposes hereof on his/her Normal Retirement Date or Early Retirement Date.
a. Upon such Normal Retirement Date or Early Retirement Date, all amounts credited to such Participant's Account shall become distributable.
b. However, a Participant may postpone the termination of his/her employment with the Plan Sponsor to a later date, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.01, shall continue until the Participant's Late Retirement Date.
c. Upon a Participant's retirement date, or as soon thereafter as is practicable, the Administrator shall direct the Trustee to distribute all amounts credited to such Participant's Account in accordance with Section 5.05 and Section 5.07.
5.02 Determination of Benefits Upon Death.
a. Upon the death of a Participant before his/her retirement date or before a Participant's Annuity Starting Date, all amounts credited to such Participant's Account shall become fully Vested and shall be distributed in accordance with the provisions of Section 5.06 and 5.07.
b. Upon the death of a Former Participant or Terminated Participant before his/her having received a benefit from the Plan, the Administrator shall direct the Trustee to distribute in accordance with the provisions of Section 5.06 and Section 5.07 any remaining amounts credited to the Account of a deceased Former or Terminated Participant to such Former or Terminated Participant's Beneficiary.
c. The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the Account of a deceased Participant or Former Participant or Terminated Participant as the Administrator may deem appropriate. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive.
d. Unless otherwise elected in the manner prescribed below, the Beneficiary of the death benefit shall be the Participant's spouse.
(1) Except, however, the Participant may designate a Beneficiary other than his/her spouse if:
(A) the spouse consents in writing, witnessed by a Plan Sponsor representative or notary public, to the designation of another Beneficiary; or
(B) the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "Qualified Domestic Relations Order" as defined in Code section 414(p) which provides otherwise); or
(C) the Participant has no spouse; or
(D) the spouse cannot be located.
(2) In such event, the designation of a Beneficiary shall be made in such form as is satisfactory to the Administrator and must be received by the Administrator during the Participant's lifetime.
(3) A Participant may at any time revoke his/her designation of Beneficiary or change his/her Beneficiary by filing written notice (in such form as may be required by the Administrator) of such revocation or change with the Administrator. However, the Participant's spouse must again consent in writing in accordance with the provisions of Section 5.02d(1)(A) to any change in Beneficiary unless the original consent expressly permits such changes by the Participant without the requirement of further consent by the spouse.
(4) A Participant's divorce shall revoke any Beneficiary designation in favor of the Participant's spouse made prior to the divorce. Until such time as a new designation of Beneficiary is filed with the Board in accordance with the provisions of this Section, benefits will be payable as if the former spouse had predeceased the Beneficiary.
(5) In the event no valid designation of Beneficiary exists at the time of the Participant's death and there in no surviving spouse, the death benefit shall be payable to his/her estate.
5.03 Determination of Benefits in Event of Disability. In the event of a Participant's Disability prior to his/her retirement date or other termination of his/her employment, all amounts credited to such Participant's Account shall be fully Vested.
a. In the event of a Participant's Disability, the Administrator, in accordance with the provisions of Section 5.05 and Section 5.07, shall direct the Trustee to distribute to such Participant all amounts credited to such Participant's Account as though he/she had retired.
b. However, if the Plan Sponsor elects to continue to contribute to the Plan on behalf of such a Participant based upon the Participant's Compensation at the time of becoming disabled, such distribution shall be postponed until ninety days after the Plan Sponsor discontinues such additional contributions.
5.04 Determination of Benefits Upon Termination of Employment.
a. In the event a Participant terminates employment with the Plan Sponsor for any reason other than death, Disability, or retirement, the Vested portion of a Participant's Account shall remain in a separate account for the Terminated Participant until such time as a distribution is made to the Terminated Participant.
(1) Distribution of the funds due to a Terminated Participant shall be made on the occurrence of the Participant's death or Early, Normal, or Late Retirement.
(2) However, at the election of the Participant, the Administrator shall direct the Trustee to cause the entire Vested portion of the Terminated Participant's Account to be payable to such Terminated Participant after a Break in Service of twelve consecutive months. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 5.05.
(3) If the value of a Terminated Participant's Vested benefit derived from the Account does not exceed $3,500 and has never exceeded $3,500 at the time of any prior distribution, the Administrator shall direct the Trustee to cause the entire Vested benefit to be paid to such Participant in a single lump sum.
b. The Vested portion of any Participant's Employer Account shall be a percentage of the total amount credited to his/her Employer Account determined on a basis of the Participant's number of Years of Service according to one of the following schedules elected by the Plan Sponsor in the Adoption Agreement:
VESTING SCHEDULES
(1) 100% full and immediate vesting upon entry into the Plan.
(2) Three- Year Cliff Vesting.
Years of Service Percentage
less than 3 0%
3 or more 100%
(3) Five- Year Graded Vesting.
Years of Service Percentage
less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
c. In the event of an amendment to the Plan affecting the Vesting Schedules, a Participant with at least three (3) Years of Service as of the expiration date of the election period described below may elect to have his/her nonforfeitable percentage computed under the Plan without regard to an amendment of the vesting schedule.
(1) If a Participant fails to make such an election, such Participant shall be subject to the new vesting schedule.
(2) The Participant's election period shall commence on the adoption date of the amendment and shall end 60 days after the latest of:
(A) the adoption date of the amendment;
(B) the effective date of the amendment; or
(C) the date the Participant receives written notice of the amendment from the Plan Sponsor or the Board.
d. For the purposes of this Plan, a Year of Service with a Plan Sponsor who is eligible to participate in this Plan as a Plan Sponsor shall be considered a Year of Service with the Plan Sponsor in accordance with the following rules:
(1) If any Former Participant shall be reemployed by the Plan Sponsor or by another Plan Sponsor which is eligible to participate in this Plan before a One- Year Break in Service occurs, he/she shall continue to participate in the Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Plan Sponsor or by another Plan Sponsor which is eligible to participate in this Plan before five (5) consecutive One- Year Breaks in Service, and such Former Participant had received a distribution of his/her entire Vested interest prior to his/her reemployment, his/her forfeited account shall be reinstated only if he/she repays the full amount distributed to him/her before the earlier of five (5) years after the first date on which the Participant subsequently is reemployed by the Plan Sponsor or any other such employer or the close of the first period of five (5) consecutive One- Year Breaks in Service commencing after the distribution.
(A) In the event the Former Participant does repay the full amount distributed to him/her, the undistributed portion of the Participant's Account must be restored in full, unadjusted by any gains or losses occurring subsequent to the Anniversary Date or other valuation date coinciding with or preceding his/her termination.
(B) The source of such reinstatement shall first be any Forfeitures occurring during the year.
(C) If such source is insufficient, then the Plan Sponsor shall contribute an amount which is sufficient to restore any such forfeited accounts.
(3) If any Former Participant is reemployed after a One- Year Break in Service has occurred, Years of Service shall include Years of Service prior to his/her One- Year Break in Service subject to the following rules:
(A) If a Former Participant has a One- Year Break in Service, his/her pre- break and post- break service shall be used for computing Years of Service for eligibility and for vesting purposes only after he/she has been employed for one (1) Year of Service following the date of his/her reemployment with the Plan Sponsor.
(B) Any Former Participant who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from contributions shall lose credits otherwise allowable under (A) above if his/her consecutive One- Year Breaks in Service equal to or exceed the greater of (i) five (5) or (ii) the aggregate number of his/her pre- break Years of Service.
(C) After five (5) consecutive One- Year Breaks in Service, a Former Participant's Vested Account balance attributable to pre- break service shall not be increased as a result of post- break service.
(D) If a Former Participant who has not had his/her Years of Service before a One- Year Break in Service disregarded pursuant to (B) above completes one (1) Year of Service for eligibility purposes following his/her reemployment with the Plan Sponsor, he/she shall participate in the Plan retroactively from his/her date of reemployment.
(E) If a Former Participant who has not had his/her Year of Service before a One- Year Break in Service disregarded pursuant to (B) above completes one (1) Year of Service for eligibility purposes following his/her reemployment with the Plan Sponsor (a One- Year Break in Service previously occurred, but employment had not terminated), he/she shall participate in the Plan retroactively from his/her reemployment commencement date.
5.05 Distribution of Benefits For Any Reason Except Death.
a. (1) Unless otherwise elected as provided in Section 5.05a(3) below, a
Participant who is married on the Annuity Starting Date and who does not die
before the Annuity Starting Date shall receive the value of all of his/her
benefits in the form of a Contingent Annuity with his/her spouse as Contingent
Annuitant.
(A) Such Contingent Annuity benefits following the
Participant's death shall continue to the spouse (determined as of the Annuity
Starting Date) during the spouse's lifetime at a rate equal to 70% of the rate
at which such benefits were payable to the Participant.
(B) This 70% Contingent Annuity shall be considered the designated qualified Contingent Annuity and automatic form of payment for the purposes of this Plan.
(2) Unless otherwise elected as provided below, a Participant who is not married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of his/her benefit in the form of a life annuity.
(A) Such unmarried Participant, however, may elect in writing to waive the life annuity and elect to receive his/her benefit in accordance with Section 5.05b below.
(B) The election must comply with the provisions of this Section as if it were an election to waive the Contingent Annuity by a married Participant, but without the spousal consent requirement.
(3) Any election to waive the Contingent Annuity must be made by the Participant in writing during the election period and be consented to by the Participant's spouse.
(A) If the spouse is legally incompetent to give consent, the spouse's legal guardian, even if such guardian is the Participant, may give consent.
(B) Such election shall designate a Beneficiary (or a form of benefits) that may not be changed without spousal consent (unless the consent of the spouse expressly permits designations by the Participant without the requirement of further consent by the spouse).
(C) Such spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan Sponsor representative or a notary public.
(D) Such consent shall not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained because there is no spouse, the spouse cannot be located or other circumstances that may be prescribed by Regulations.
(E) The election made by the Participant and consented to by his/her spouse may be revoked by the Participant in writing without the consent of the spouse at any time during the election period.
(i) The number of revocations shall not be limited.
(ii) Any new election must comply with the requirements of this paragraph.
(F) A former spouse's waiver shall not be binding on a new spouse.
(4) The election period to waive the Contingent Annuity shall be the 90-day period ending on the Annuity Starting Date.
(5) With regard to the election, the Administrator shall provide to the Participant no less than 30 days and no more than 90 days before the Annuity Starting Date a written explanation of:
(A) the terms and conditions of the Contingent Annuity;
(B) the Participant's right to make, and the effect of, an election to waive the Contingent Annuity;
(C) the right of the Participant's spouse to consent to any election to waive the Contingent Annuity;
(D) the right of the Participant to revoke such election, and the effect of such revocation.
b. In the event a married Participant duly elects pursuant to Section 5.05a(3) above not to receive his/her benefit in the form of a Contingent Annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the Trustee to distribute to a Participant or to a Participant and his/her Contingent Annuitant any amount to which he/she is entitled under the Plan in one or more of the following methods determined and limited by rules and regulations of the Administrator:
(1) purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond either the life of the Participant (or the lives of the Participant and his/her designated Contingent Annuitant) or the life expectancy of the Participant (or the life expectancy of the Participant and his/her designated Contingent Annuitant).
(2) payments over a period certain in monthly or annual cash installments. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and his/her designated Contingent Annuitant).
(3) one or more annual partial lump-sum payments elected by the Participant in accordance with the rules established by the Administrator prior to the required beginning date specified in Section 5.05e herein and prior to annuitizing the remaining Account balance in accordance with other provisions of this Section.
(4) one lump-sum payment in cash.
c. If the Participant is married at the time he/she makes an election pursuant to Section 5.05b above, such election shall not be valid without the consent of the Participant's spouse given in accordance with the procedures stated in Section 5.05a(3).
d. If the present value of the Participant's Account is equal to or less than $3,500, the Administrator may direct the Trustee to distribute the full amount to the Participant without the consent of the Participant or his/her spouse.
e. Notwithstanding any provision in the Plan to the contrary, the distribution of a Participant's benefits shall be made in accordance with the following requirements:
(1) The entire interest of a Participant shall be distributed:
(A) no later than the required beginning date described in Section 5.05e(2); or
(B) beginning no later than the required beginning date over:
(i) the life of the Participant;
(ii) the lives of the Participant and a designated Contingent Annuitant;
(iii) a period not extending beyond the life expectancy of the Participant; or
(iv) a period not extending beyond the life expectancies of the Participant and a designated Contingent Annuitant.
(2) The term "required beginning date" is defined for the purposes of this subsection as April 1 of the calendar year following the calendar year in which the Participant reaches age 70-1/2. However if the Participant's Plan Sponsor is a Church or a Qualified Church-Controlled Organization, the "required beginning date" is the later of:
(A) the April 1 of the calendar year following the calendar year in which the Participant reaches age 70-1/2; or
(B) the April 1 of the calendar year following the calendar year in which the Participant retires.
(3) The provisions of this subsection shall not apply to the value of a Participant's Account balance(s) valued as of December 31, 1986, exclusive of subsequent earnings.
5.06 Distribution of Benefits upon Death.
a. In the event of the death of a Vested Participant prior to the Annuity Starting Date, his/her Account shall be paid to the Participant's Beneficiary subject to the requirements of Section 5.06b below.
b. Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall be made in accordance with the following requirements and shall otherwise comply with Code section 401(a)(9) and the Regulations thereunder.
(1) If the Participant's surviving spouse is the Beneficiary, the Account shall be paid according to one of the distribution options described in Section 5.05b as elected by the surviving spouse, but in no case shall any distribution provide for payments over a period extending beyond either the life of the surviving spouse or the life expectancy of the surviving spouse. Distributions to the surviving spouse Beneficiary must commence on or before the later of:
(A) December 31 of the calendar year immediately following the calendar year in which the Participant died; or
(B) December 31 of the calendar year in which the Participant would have attained age 70-1/2.
(C) If no election is made prior to the required beginning date described in Section 5.05b(1), the benefit shall be paid in the form of a single life annuity.
(2) If the Participant's Beneficiary is not the surviving spouse, the Participant's Account shall be distributed to his/her Beneficiary:
(A) by December 31 of the calendar year in which the fifth anniversary of the Participant's date of death occurs; or
(B) over the life of such designated Beneficiary (or over a period not extending beyond the life expectancy of such designated Beneficiary) provided such distribution begins not later than December 31 of the calendar year immediately following the calendar year in which the Participant died.
(i) For purposes of Section 5.06b(2), the election by a designated Beneficiary to be excepted from the 5- year distribution requirement must be made not later than December 31 of the calendar year following the calendar year of the Participant's death.
(ii) An election by a designated Beneficiary must be in writing and shall be irrevocable as of the last day of the election period stated herein.
(iii) In the absence of an election by the Participant or a designated Beneficiary, the 5- year distribution requirement shall apply.
(3) Notwithstanding the provisions of Section 5.06b(1) or Section 5.06b(2), if the present value of a deceased Participant's Account is equal to or less than $3,500 at the time of his/her death, the Administrator may direct the Trustee to distribute the full amount to the Participant's Beneficiary without the consent of the Beneficiary.
(4) If the distribution of a Participant's Account had begun and the Participant dies before his/her entire interest has been distributed to him/her, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution selected pursuant to Section 5.05 as of his/her date of death.
5.07 Benefit Increases. The amount of any monthly annuity benefit payable under Sections 5.05 or 5.06 shall be determined actuarially on the basis of the account value such that the amount shall be increased by 2%, or remain the same or be increased by 3% or 4% or 5%, if so elected by the Participant at the time of application, or the Beneficiary at the time benefits commence, as applicable, under Sections 5.05 and 5.06. These increases shall occur on each anniversary of the Annuity Starting Date.
5.08 Single Sum Payment of Benefits. Notwithstanding any provision of this Plan to the contrary, if the amount payable as a monthly annuity to the Participant or Beneficiary from all plans administered by the Administrator is less than the minimum amount established by the Trustee from time to time, the Administrator may, in its absolute discretion, require the vested amounts in the Participant's Account to be paid to the Participant or Beneficiary in a single sum. A single sum payment provided for under this subsection may be made to the Participant at any time following termination of employment and prior to the commencement of payment of benefits under another form of payment.
5.09 Direct Rollover.
a. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an "eligible rollover distribution" paid directly to an "eligible retirement plan" specified by the distributee in a "direct rollover."
b. For purposes of this Section the following definitions shall apply:
(1) 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 Code section 401(a)(9); and the portion of any distribution that is not includible in gross income.
(2) An "eligible retirement plan" is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), or an annuity arrangement described in Code section 403(b), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
(3) A "distributee" includes a Participant or Terminated Participant. In addition, the Participant's or Terminated Participant's surviving spouse and the Participant's or Terminated Participant's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee.
5.10 Relinquishment of Benefits. A Participant or Beneficiary who is receiving benefit payments from this Plan may relinquish all or a portion of the benefits payable after the relinquishment is made. Unless the relinquishment by its terms was made irrevocable, he/she may revoke such relinquishment with respect to benefits that become payable after the revocation of the relinquishment. Amounts not used to pay benefits because of the relinquishment shall remain in the appropriate fund for payment of benefits generally.
5.11 Refusal of Benefit. The Beneficiary has the right to refuse or disclaim a benefit which he/she is otherwise entitled to receive. The refusal must be of the entire benefit. The effect of such refusal is to treat the Beneficiary as if he/she had predeceased the Participant.
5.12 Distribution for Minor Beneficiary. In the event a distribution is to be made to a minor, the Administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains his/her residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Administrator, Trustee, Plan Sponsor, and Plan from further liability on account thereof.
5.13 Facility of Payment. Whenever in the Administrator's opinion a person entitled to receive any payment of a benefit under the Plan is under a legal disability or is incapacitated in any way so as to be unable to manage such person's financial affairs, the Administrator may direct the Trustee to make payments directly to the person, to the person's legal representative, or to a relative or friend of the person to be used exclusively for such person's benefit, or apply any such payment for the benefit of the person in such manner as the Administrator deems advisable. The decision of the Administrator, in each case, shall be final, binding, and conclusive upon all persons ever interested hereunder. The Administrator shall not be obligated to see to the proper application or expenditure of any payment so made. Any benefit payment (or installment thereof) made in accordance with the provisions of this subsection shall completely discharge the obligation for making such payment under the Plan.
5.14 Notification of Mailing Address. Each Participant and other person entitled to benefits hereunder shall from time to time file with the Administrator, in a form acceptable to the Administrator, such person's mailing address and change of mailing address. Any check representing any payment due hereunder, and any communication forwarded to a Participant or Beneficiary at the last known address as indicated by the records of the Administrator shall constitute adequate payment to such person and be binding on such person for all purposes of the Plan. The Administrator shall not be under any obligation to search for or ascertain the whereabouts of any such person.
5.15 Application for Benefits. The benefits payable hereunder to Participants and Beneficiaries shall not become payable until such individuals have made application to the Administrator for such benefits. However, notwithstanding this provision, a Participant or alternate payee shall be deemed to have made application for benefits on the "required beginning date" as described in Section 5.05e(2) if on that date the current mailing address of the Participant or alternate payee is on file with the Administrator. A Participant's Beneficiary shall be deemed to have made application for benefits on the date benefit payments are required to commence in accordance with Section 5.06b(1) and Section 5.06b(2) if on that date the current mailing address of the Beneficiary is on file with the Administrator.
5.16 Unclaimed Benefit.
a. If a Participant fails to properly claim a benefit due hereunder prior to the "required beginning date," as defined in Section 5.05e(2), and there is no current mailing address on file with the Administrator, the Administrator shall send a certified letter to the last known address of the Participant indicating that the Participant has 60 days to claim such benefit. If the Participant fails to claim the benefit within the 60-day period, the Participant shall be deemed, in accordance with rules and regulations adopted by the Administrator, to have relinquished any benefit that may be payable to the Participant.
b. The failure of a Beneficiary to properly claim a benefit due hereunder during the stated time period, or if no time period is stated, then within two years of being eligible to receive the benefit, shall cause the benefit to be considered to have been refused and forfeited and shall cause the benefit to be paid to the secondary Beneficiary or default Beneficiary in accordance with the Plan. If the last default Beneficiary does not claim the benefit within a two-year period commencing with the date on which he/she became eligible to receive the benefit, the benefit shall be considered to be refused and forfeited by said Beneficiary. After the last two-year period has expired, the Administrator shall send a certified letter to the last known address of the last default Beneficiary indicating that the Beneficiary has 60 days to claim such benefit. Failure to claim the benefit within the 60-day time period shall cause the benefit to be forfeited. Such forfeited amounts shall be added to the reserves of the Plan. However, any such forfeited amount will be reinstated and become payable if a claim is made by the estate of the Participant or Beneficiary. The Administrator shall prescribe uniform and nondiscriminatory rules for carrying out this provision.
5.17 Limitations of Benefits and Distributions. All rights and benefits, including elections, provided to a Participant in this Plan shall be subject to the rights afforded to any "alternate payee" under a "qualified domestic relations order." Furthermore, a distribution to an "alternate payee" shall be permitted if such distribution is authorized by a "qualified domestic relations order," even if the affected Participant has not reached the "earliest retirement age" under the Plan. For the purposes of this Section, the terms "alternate payee," "qualified domestic relations order," and "earliest retirement age" shall have the meaning set forth under Code section 414(p).
Article VI Trustee
6.01 Responsibilities of the Trustee. The Trustee shall have the following categories of responsibilities in addition to those responsibilities set out in Section VII:
a. To invest, manage and control the Plan assets;
b. At the direction of the Administrator, to pay benefits required under the Plan to be paid to Participants, or, in the event of their death, to their Beneficiaries;
c. To maintain records of receipts and disbursements and furnish to the Administrator for each Plan Year a written annual report.;
d. To invest the assets of the trust for the exclusive purpose of providing benefits to Participants and Beneficiaries and defraying reasonable expenses of the Plan. Such investing shall be done in accordance with investment policies that reflect the Social Principles of The United Methodist Church.
6.02 Investment Powers and Duties of the Trustee.
a. The Trustee shall invest and reinvest the assets of the Plan to keep the assets of the Plan invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, stocks, common or preferred, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the assets of the Plan consider, among other factors, the short and long- term financial needs of the Plan on the basis of information furnished by the Plan Sponsor. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act.
b. The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical and record- keeping nature.
c. The Trustee may create a trust to hold and invest all or any part of the assets of the Plan. The Trustee shall have the right to determine the form and substance of each trust agreement under which any part of the assets of the Plan is held, subject only to the requirement that they are not inconsistent with the terms of the Plan.
6.03 Other Powers of the Trustee. The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of the Plan, shall have the following powers and authorities, to be exercised in the Trustee's sole discretion:
a. To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;
b. To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement;
c. To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;
d. To cause any securities or other property to be registered in the Trustee's own name or in the name of one or more of the Trustee's nominees, and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the assets of the Plan;
e. To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the assets of the Plan; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;
f. To keep such portion of the assets of the Plan in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Plan, without liability for interest thereon;
g. To accept and retain for such time as the Trustee may deem advisable any securities or other property received or acquired as trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder;
h. To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;
i. To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;
j. To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be agent or counsel for the Plan Sponsor;
k. To invest in Treasury Bills and other forms of United States government obligations;
l. To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange;
m. To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations;
n. To pool all or any of the assets of the Plan, from time to time, with assets belonging to any other employee benefit plan created by a unit of The United Methodist Church or an affiliated unit of The United Methodist Church, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests.
o. To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan.
6.04 Valuation. Participants' Accounts shall be credited with interest at a rate to be determined by the Trustee. Any excess of the actual investment experience, including unrealized appreciation over the interest credited to accounts in a Plan Year, shall be credited to an investment reserve account from which the Trustee may withdraw funds in succeeding years in order to stabilize the rate of interest credited to Accounts from year to year.
6.05 Funding Through Insurance Contracts. The Trustee may, in lieu of paying benefits to a Participant or a Participant's Beneficiary from assets held by the Trustee, enter into a contract (or contracts) or an agreement (or agreements) with one or more insurance companies for the purchase (from such assets) of one or more insurance contracts which provide benefits which are substantially the actuarial equivalent of those provided for such Participant or Beneficiary under the Plan.
6.06 Services. Nothing herein shall prevent the Trustee from contracting for services with another entity, including one that is, with the Trustee, part of a controlled group.
Article VII Administration
7.01 Powers and Duties of the Administrator. The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of the Plan, shall have the following powers and authorities, to be exercised in the Administrator's sole discretion:
a. To establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan;
b. To determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Plan;
c. To compute, certify, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder;
d. In its sole discretion, to construe and interpret the Plan and make administrative rules in accordance therewith, and to resolve or otherwise decide matters not specifically covered by the terms and provisions of the Plan;
e. To maintain all necessary records for the administration of the Plan;
f. To interpret the provisions of the Plan and make and publish such rules for regulation of the Plan as are consistent with the terms hereof;
g. To file, or cause to be filed, all such annual reports, returns, schedules, descriptions, financial statements and other statements as may be required by any federal or state statute, agency, or authority;
h. To obtain from the Plan Sponsors and Employees such information as shall be necessary to the proper administration of the Plan;
i. To specify actuarial assumptions and methods for use in determining contributions and benefits under the Plan.
j. To assist any Participant regarding his/her rights, benefits or elections available under the Plan.
7.02 Records and Reports. The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to appropriate government entities, Participants, Beneficiaries and others as required by law.
7.03 Duties of the Plan Sponsor. The Plan Sponsor shall assume the following duties with respect to the Plan:
a. To enroll employees, as applicable;
b. To maintain records of a Participant's Service;
c. To maintain records of a Participant's Compensation;
d. To remit contributions to the Trustee;
e. To provide the Administrator with the statistical data and other statistical information satisfactory to the Administrator within a reasonable time after a request by the Administrator sufficient to enable the Administrator to discharge its duties under the Plan;
f. To register with and report to government agencies, as appropriate;
g. To properly notify employees of their rights and obligations under the Plan;
h. To provide the Administrator with prompt notice of termination of a Participant's employment and, upon request, verification of a Participant's vested percentage.
7.04 Fees and Expenses. All expenses incurred by the Administrator and Trustee in connection with the administration of this Plan shall be paid by the Plan.
a. The Trustee has the authority to determine administrative and expense charges and the methods for applying such charges.
b. The Trustee is authorized to deduct from the Plan's reserves, funds, contributions, and/or earnings thereon, the expenses and fees necessary or appropriate to the administration of the Plan, including an allocable share of the Administrator's operating expenses.
c. The Administrator is authorized to determine a reasonable charge for providing non-routine reports and services for Plan Sponsors and Participants and to require the Plan Sponsor or Participant to pay for such non-routine reports and service.
7.05 Attorney Fees and Costs. The Trustee may assess, to the extent permitted by law, against the assets it manages for any Participant, reasonable attorney fees and charges to reimburse the Administrator or Trustee for expenses incurred by the Administrator or the Trustee, through no fault of its (their) own, in responding to pleadings, retaining counsel, entering an appearance or defending any case in any action in civil law, in the event the Administrator or Trustee is served with a levy, subpoena, summons or other similar pleading by the Internal Revenue Service or by any other party, including the parties to marital litigation, in litigation or legal proceedings in which the Administrator or Trustee is not a party, or is a party only by virtue of its (their) role as a fiduciary in administering assets on behalf of a Participant.
7.06 Delegation of Authority. The Administrator may authorize one or more of its number, or any agent, to carry out its administrative duties, and may employ such counsel, auditors, and other specialists and such clerical, actuarial and other services as it may require in carrying out the provisions of this Plan. The Administrator may rely on any certificate, notice or direction, oral or written, purporting to have been signed or communicated on behalf of the Plan Sponsor, Participant, or others which the Administrator believes to have been signed or communicated by persons authorized to act on behalf of the Plan Sponsor, Participant or others, as applicable. The Administrator may request instructions in writing from the Plan Sponsor, Participant or others, as applicable, on other matters, and may rely and act thereon. The Administrator may not be held responsible for any loss caused by its acting upon any notice, direction or certification of the Plan Sponsor, Participant or others, which the Administrator reasonably believes to be genuine and communicated by an authorized person.
7.07 Submission of Claims. Claims for benefits under the Plan shall be filed with the Administrator on forms supplied by the Administrator. Written notice of the disposition of a claim shall be furnished to the Plan Sponsor and to the claimant within 45 days after all required forms and materials related to the application therefor are filed.
7.08 Denial of Claims. If any claim for benefits under the Plan is wholly or partially denied, the claimant shall be given notice in writing, within a reasonable period of time after receipt of the claim by the Plan, written in a manner calculated to be understood by the claimant, setting forth the following information:
a. the specific reasons for such denial;
b. specific reference to pertinent Plan provisions on which the denial is based;
c. a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
d. an explanation of the Plan's appeals procedures.
A "reasonable time" for such notice shall not exceed 45 days after the filing of the original claim or 45 days after the request for or submission of any additional data or documents requested by the Administrator, or, if special circumstances require an extension of time, written notice of the extension shall be furnished to the claimant and an additional 90 days will be considered reasonable.
7.09 Appeals from Denial of Claims. If a Participant is denied benefits hereunder, the Participant shall have the right to appeal the decision in accordance with the following procedures:
a. Intermediary Appeal Procedure. The Administrator shall establish an intermediary appeals procedure containing no more than a three- level process.
b. Final Procedure.
(1) There shall be an Appeals Committee of the Administrator nominated by its President and elected by the Administrator which shall hear and decide appeals after the intermediary appeal procedure has been followed.
(2) The Appeals Committee decision shall be final and not subject to action of the Administrator.
(3) After the final intermediary process has been completed and if the Participant's claim is still fully or partially denied, the claimant shall be advised that he/she may, in writing, request a review by the Appeals Committee of the decision denying the claim by filing with the Appeals Committee, on forms supplied by it, within 90 days after such notice has been received by the claimant.
(A) The Notice of Appeal shall be executed by the claimant.
(B) After filing the Notice of Appeal, the claimant may submit issues and comments and other relevant, supporting documents to the Appeals Committee for its consideration.
(C) If such Notice of Appeal is timely filed, the appeal will be heard by the Appeals Committee at its next meeting, unless special circumstances require an extension of time for processing, in which case the claimant shall be so notified and the appeal will be heard at the subsequent meeting of the Appeals Committee.
(D) To allow sufficient time for handling and processing, all Notices of Appeal and supporting documents must be filed with the Appeals Committee at least 30 days prior to the next meeting of the Appeals Committee, and no documents submitted to the Appeals Committee after that time can or will be considered by the Appeals Committee except by its leave and discretion.
(E) The claimant, his or her duly authorized representative, or a representative of the Plan Sponsor, may request permission to appear personally before the Appeals Committee to present evidence with respect to the claim, subject to conditions and time limitations set by the Appeals Committee, but the expense for any such personal appearance must be borne by the claimant or the Plan Sponsor.
(F) The claimant shall be given written notice of the decision resulting from an appeal. Such notice shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision is based, and such written notice shall be mailed to the claimant by the staff of the Administrator within 15 days following the action by the Appeals Committee.
7.10 Appeal a Condition Precedent to Civil Action. No cause of action in civil law with respect to any alleged violation of the terms and conditions of this contract shall be commenced or maintained by any Participant unless and until such Participant shall have initiated and completed the process of an Appeal as set forth in Sections 7.07 to 7.09 of this Plan.
7.11 Basis of Determination of Amount of Benefit. The amount of any monthly benefit provided for under Article V which is to be based upon the Participant's account(s) in the Plan shall be the actuarial equivalent of such account(s), determined on the basis of the mortality table and rate of interest adopted by the Administrator for such purpose. Upon an account being converted to an annuity, the account shall be closed and the annuity shall become an obligation of the appropriate fund.
7.12 Limitation of Liability. All benefits hereunder are contingent upon, and payable solely from, such contributions as shall be received by the Trustee and investment results of the Trustee. No financial obligations, other than those which can be met by the contribution actually received and the investment results, shall be assumed by the Administrator or the Trustee. To the extent assets of the Plan attributable to a Participant's accounts have been transferred to a trust as provided in Section 6.02c, all benefits to which the Participant is entitled under this Plan shall be provided only out of such trust and only to the extent the trust is adequate therefor. The members of the Administrator shall not personally be responsible or otherwise liable for the payment of any benefits hereunder.
Article VIII Right to Alter, Amend or Revoke
8.01 The General Conference hereby authorizes the Administrator to amend prospectively or retroactively any or all provisions of this Plan or the Adoption Agreement at any time by written instrument identified as an amendment of the Plan effective as of a specified date.
8.02 The Plan Sponsor shall have the right to amend any elective provisions of its Adoption Agreement at any time, with an effective date no earlier than the first day of the current Plan Year, to any extent that it may deem advisable without the consent of any Participant or any Beneficiary.
8.03 No amendment to the Plan shall decrease a Participant's Account balance or eliminate an optional form of distribution. Furthermore, no amendment to the Plan shall have the effect of decreasing a Participant's Vested interest determined without regard to such amendment as of the later of the date such amendment is adopted or the date it becomes effective.
8.04 No amendment shall, without written consent of the Administrator or Trustee, deprive the Administrator or Trustee of any of its exemptions and immunities; nor shall such amendment change the duties, responsibilities, rights, or privileges of any Administrator or Trustee or the provisions of any contract. If any amendment by the Plan Sponsor affects the rights, duties, responsibilities, or obligations of the Administrator or Trustee hereunder, such amendment may be made only with the consent of the Administrator or Trustee.
Article IX Termination of Plan
9.01 Plan Merger or Consolidation.
a. In the event a Plan Sponsor wishes to merge the value of its Participant's Accounts with or to any other Code section 403(b) plan, the assets held under the Plan allocable to such Participants shall be transferred to such other fund only if:
(1) The Trustee agrees to such merger;
(2) Each Participant would receive a benefit immediately after the merger which is equal to or greater than the benefit such Participant would have been entitled to receive immediately before such merger, consolidation or transfer if the plan had then terminated; and
(3) Resolutions of the Board of Trustees or Directors of the Plan Sponsor and the Board of Trustees or Directors of any new or successor employer of all affected Participants shall authorize such transfer of assets; provided, the resolutions of any such new or successor employer shall include an assumption of all liabilities related to such Participant's inclusion in such new or successor plan.
b. The Administrator shall direct the Trustee to transfer the aggregate of the value of the Participants' Accounts held by the Trustee for the benefit of the Plan Sponsor and its Participants to the funding agency specified by the Plan Sponsor within six months after the effective date of such consolidation or merger.
c. Notwithstanding Sections 9.01a and 9.01b, the Administrator, in its sole discretion, may elect to continue the benefits in pay status under the Plan and require that the actuarial equivalent value of assets, as determined by the Administrator in accordance with annuity tables in use by the Administrator, remain with the Trustee for the payment of such benefits.
d. The Administrator may require a release and indemnity agreement from the Plan Sponsor before any assets held by the Trustee are distributed as provided in this subsection.
e. Any distribution of assets made under this subsection may be made in whole or in part in cash, securities, nontransferable annuity contracts, or such other form as the Trustee in its sole discretion shall determine so long as no discrimination in value results.
9.02 Termination of Plan Participation by the Participating Plan Sponsor. Upon written notice to the Administrator ninety (90) days in advance of the date of such event, a Plan Sponsor may terminate participation in the Plan as established with the Administrator. As a condition precedent to its right to terminate participation in the Plan, the Plan Sponsor shall provide written notice of its intent to its Participants thirty (30) days in advance of such written notice to the Administrator, and shall provide to the Administrator evidence of such written notice to the affected Participants. In the event of such termination of participation in the Plan by the Plan Sponsor, the Accounts of the Participants shall remain with the Trustee. Each affected Participant shall have a 100% Vested interest in his/her Account in accordance with the terms of the Plan as then in effect. The former participating Plan Sponsor shall provide timely notice to the Administrator concerning a Participant's eligibility to receive benefits under the terms of the Plan. The Trustee shall have the responsibility to make distributions of benefits to the Participants in accordance with the terms of the Plan as if the Plan had, as then in effect, continued in effect.
9.03 Termination of Plan by the General Conference. The General Conference shall have the right to terminate the Plan at any time in a manner and to the extent not inconsistent with The Book of Discipline. Upon termination of the Plan, the Accounts of Participants shall be nonforfeitable and either distributed outright or held for distribution in accordance with the terms of the Plan. The assets remaining in the Plan after all obligations of the Plan have been satisfied shall be distributed pursuant to action by the General Conference.
Article X Adoption
10.01 This Plan may be adopted by any Plan Sponsor described in Section 2.34 herein, with the consent of the Administrator.
10.02 An adopting Plan Sponsor must complete an Adoption Agreement which must be acceptable to the Administrator. The effective date of the Adoption Agreement cannot be any earlier than the first day of the current Plan Year.
10.03 The Adoption Agreement shall be in the form prescribed by the Administrator.
10.04 With the consent of the Trustee, an adopting Plan Sponsor may merge its former Code section 403(b) plan into the Cumulative Pension and Benefit Fund. The assets of the merged plan shall be transferred to the Trustee in the manner prescribed by the Trustee. This Plan shall be the surviving plan and all provisions of the Plan and all rules, regulations, interpretations of the Plan shall be applied to and control the provisions of the former plan.
Article XI Miscellaneous
11.01 Rules and Forms. The Administrator shall have the authority and responsibility to:
a. adopt rules, regulations and policies for the administration of this Plan, in all matters not specifically covered by General Conference legislation or by reasonable implication;
b. prescribe such forms and records as are needed for the administration of the Plan.
11.02 Non- alienation of Benefits. No benefits payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, pledge, attachment, garnishment, or encumbrance of any kind. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber such benefit, whether presently or thereafter payable, shall be void. Except as provided in Section 11.04 hereof, no benefit nor any fund under the Plan shall in any manner be liable for, or subject to, the debts or liabilities of any Participant or other person entitled to any benefit.
11.03 Non- reversion. The Plan Sponsor shall have no right, title, or interest in the contributions made to the Plan, and no part of the funds shall revert to the Plan Sponsor, except that:
a. upon termination of the Plan and the allocation and distribution of the funds as provided in Articles IV and V hereof, any monies remaining because of an erroneous actuarial computation after the satisfaction of all fixed and contingent liabilities under the Plan may revert to the applicable Plan Sponsor; and
b. if a contribution is made to the Plan by the Plan Sponsor by a mistake of fact, then such contribution shall be returned to the Plan Sponsor upon request within one year after the Plan Sponsor has reported and documented such mistake to the Administrator.
11.04 Qualified Domestic Relations Order. The provisions of section 11.02 notwithstanding, all or part of a Participant's Vested benefits arising under this Plan may be transferred to one or more "alternate payees" on the basis of a "qualified domestic relations order," as those terms are defined in Section 414(p) of the Code, provided that (1) the Participant makes an assignment of benefits pursuant to the order, and the alternate payee accepts said assignment, on the forms provided by the Administrator; (2) said order was issued by a court having jurisdiction over the Administrator; or (3) said order was entered by any other court if the Administrator, in its sole discretion, determines that the order is likely to be entered by a court having jurisdiction over the Administrator.
a. When appropriate, the Administrator shall provide a Participant involved in marital litigation with information regarding the nature and value of the Participant's benefits and shall assist the Participant and the court in interpreting that information.
b. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Such procedure shall provide that during the period in which a determination is being made with respect to the qualified status of an order received by the Administrator and for thirty days thereafter, (1) the Administrator will direct the Trustee to segregate and separately account for any sums payable to the Participant which the order requires to be paid to the alternate payee; and (2) the Participant will be prohibited from electing to set up an annuity or to receive any other distribution which would compromise the rights granted to the alternate payee by the order, without the alternate payee's written consent.
c. Neither the alternate payee nor any person claiming through the alternate payee shall have the right (1) to transfer benefits to another alternate payee; or (2) to receive benefits in the form of a joint and survivor annuity with respect to the alternate payee and any subsequent spouse.
(1) In all other respects, the benefits transferred pursuant to a qualified domestic relations order shall be administered in accordance with the provisions of this Plan, and the alternate payee shall have all the rights and duties of a fully vested Terminated Participant with respect thereto.
(2) With respect to benefits transferred to an alternate payee pursuant to this section, the alternate payee shall have all of the rights of a Terminated Participant, to the exclusion of any claim thereto on the part of the Participant.
d. A subpoena or other instrument of judicial process (1) which is directed to the Administrator, its constituent corporations, or its officers or employees, (2) which appears on its face to be issued in the course of marital litigation to which a Participant is a party, and (3) which seeks information regarding the nature or value of the Participant's pension benefits, may be honored by the Administrator, in its sole discretion, without interposing any defense on the grounds of technical or jurisdictional defect.
e. Costs incurred by the Administrator in the process culminating in the transfer of benefits pursuant to a qualified domestic relations order, including but not limited to attorney's fees, litigation expenses, and a reasonable charge for services provided by the Administrator, shall be charged against the benefits of the Participant and the alternate payee in equal shares unless a different division of said costs is provided in the order.
11.05 Construction. The Plan and each of its provisions shall be construed and their validity determined by the laws of the State of Illinois, other than its laws respecting choice of law, to the extent such laws are not preempted by any federal law.
11.06 Indemnification. To the extent permitted by law, the Plan Sponsor shall indemnify and hold harmless the Administrator, Trustee, Participants, any employee, and any other person or persons to whom the Plan Sponsor, Trustee or Administrator has delegated fiduciary or other duties under the Plan, against any and all claims, losses, damages, expenses, and liabilities arising from any act or failure to act that constitutes or is alleged to constitute a breach of such person's responsibilities in connection with the Plan under any applicable law, unless the same is determined to be due to gross negligence, willful misconduct, or willful failure to act.
11.07 Alternative Dispute Resolution. If a dispute arises out of or related to the relationship between the Plan Sponsor and the Administrator or Trustee, the parties agree first to try in good faith to settle the dispute by mediation through the American Arbitration Association, or another mediation/arbitration service mutually agreed upon by the parties, before resorting to arbitration. Thereafter, any remaining unresolved controversy or claim arising out of or relating to the relationship between the Plan Sponsor and the Administrator or Trustee shall be settled by binding arbitration through the American Arbitration Association, or the other mediation/arbitration service which had been mutually agreed upon by the parties.
a. The site of the mediation and/or arbitration shall be in a city mutually agreed to by the parties which is not located within the boundaries of the Plan Sponsor.
b. The laws of the State of Illinois shall apply in situations where federal law is not applicable. The applicable rules of the selected service shall apply. If the service allows the parties to choose the number of arbitrators, unless another number is mutually agreed to, any arbitration hereunder shall be before at least three arbitrators, and the award of the arbitrators, or a majority of them, shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.
c. The fees and costs for mediation shall be borne equally by the parties. The fees and costs of arbitration shall be allocated to the parties by the arbitrators.
11.08 Titles and Headings. The titles and headings of the Articles and Sections of this instrument are placed herein for convenience of reference only, and in the case of any conflicts, the text of this instrument, rather than the titles or headings, shall control.
11.09 Number. Wherever used herein, the singular shall include the plural and the plural shall include the singular, except where the context requires otherwise.
Article XII Special Provisions
12.01 Special Rules for Certain Plan Sponsors. The provisions by the Plan shall be modified as follows for certain Plan Sponsors not described in Code section 403(b)(12)(B):
a. the Plan Sponsor's plan must satisfy the requirements of Code section 401(a)(3) (relating to minimum participation standards) and Code section 401(a)(6) as in effect on September 1, 1974;
b. the contributions or benefits provided under the plan must not discriminate in favor of Highly Compensated Employees. For purposes of this paragraph, there shall be excluded from consideration Employees described in Code section 410(b)(3)(A) and (C);
c. the Plan Sponsor's plan must satisfy the requirements of Code section 401(a)(5);
d. the Plan Sponsor may not elect the vesting provision contained in Section 5.04b(2);
e. the Plan Sponsor must satisfy the requirements of Sections 12.02 and 12.03 below.
12.02 Actual Contribution Percentage Tests For Certain Plan Sponsors.
a. The "Actual Contribution Percentage" for Plan Years beginning after December 31, 1988, for the Highly Compensated Participant group shall not exceed the greater of:
(1) 125% of such percentage for the Non- Highly Compensated Participant group; or
\(2) the lesser of 200% of such percentage for the Non- Highly Compensated Participant group, or such percentage for the Non- Highly Compensated participant group plus 2 percentage points. However, to prevent the multiple use of the alternative method described in this paragraph and Code section 401(m)(9)(A), any Highly Compensated Participant eligible to make elective deferrals pursuant to any cash or deferred arrangement maintained by the Plan Sponsor or an Affiliated Plan Sponsor and to make Employee contributions or to receive matching contributions under this Plan or under any other plan maintained by the Plan Sponsor or an Affiliated Plan Sponsor shall have his/her actual contribution ratio reduced pursuant to Regulation 1.401(m)- 2. The provisions of Code section 401(m) and Regulations 1.401(m)- 1(b) and 1.401(m)- 2 are incorporated herein by reference.
b. The Administrator shall issue rules and regulations with respect to this test consistent with Code section 401(m) and the Regulations thereto.
12.03 Adjustment to Actual Contribution Percentage Tests For Certain Plan Sponsors.
a. In the event that, for Plan Years beginning after December 31, 1988, the "Actual Contribution Percentage" for the Highly Compensated Participant group exceeds the "Actual Contribution Percentage" for the Non- Highly Compensated Participant group pursuant to Section 12.02a, the Administrator (on or before the fifteenth day of the third month following the end of the Plan Year, but in no event later than the close of the following Plan Year) shall direct the Trustee to distribute to the Highly Compensated Participant having the highest actual contribution ratio, his/her portion of Excess Aggregate Contributions (and income allocable to such contributions) until either one of the tests set forth in Section 12.02a is satisfied, or until his/her actual contribution ratio equals the actual contribution ratio of the Highly Compensated Participant having the second highest actual contribution ratio. This process shall continue until one of the tests set forth in Section 12.02a is satisfied. The distribution and/or Forfeiture of Excess Aggregate Contributions shall be made simultaneously from mandatory Employee contributions and related Plan Sponsor matching contributions in the following order:
(1) voluntary Employee contributions;
(2) simultaneously from mandatory Employee contributions and related Plan Sponsor matching contributions.
b. Any distribution and/or Forfeiture of the excess shall be made in accordance with Code section 401(m) and the Regulations thereto.
c. Notwithstanding the above, within twelve months after the end of the Plan Year, the Plan Sponsor may make a qualified non-elective contribution (as defined in Code section 401(m)(4)(C)) on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.03a. Such contribution shall be allocated to the Account of each Non-Highly Compensated Participant in the same proportion that each Non-Highly Compensated Participant's Compensation for the year bears to the total Compensation of all Non-Highly Compensated Participants. A separate account shall be maintained with respect to such contributions.
d. If during a Plan Year the projected aggregate amount of contributions to this Plan and to the Personal Investment Plan administered by the Administrator to be allocated to all Highly Compensated Participants under this Plan and the Personal Investment Plan would, by virtue of the tests set forth in Section 12.08a cause the Plan to fail such tests, then the Administrator may automatically reduce proportionately or in the order provided in Section 12.09a each affected Highly Compensated Participant's projected share of such contributions by an amount necessary to satisfy one of the tests set forth in Section 12.08a.
General Conference Webmaster: Susan Brumbaugh
PETS Creator: John Brawn
Petition Text: 21495-FA-NonDis-O
1996 United Methodist General Conference