Personal Investment Plan
Article I The Plan
1.01 The Plan. This Plan is established effective January 1, 1998, by The General Board of Pension and Health Benefits of The United Methodist Church under authority granted by the General Conference of The United Methodist Church. The General Conference had previously authorized the establishment of the Cumulative Pension and Benefit Fund, Ministerial Pension Plan and Staff Retirement Benefits Program. Effective January 1, 1998, the Clergy and Employee accounts of those plans are merged with and become part of this 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 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" means the aggregate of a Participant's interest in the Plan.
2.02 "Act" means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
2.03 "Administrator" means The General Board of Pension and Health Benefits of The United Methodist Church Incorporated in Illinois and any successors.
2.04 "Adoption Agreement" means the agreement adopted by a Plan Sponsor in accordance with the provisions set forth in Article XI.
2.05 "Age" means the age at the last birthday.
2.06 "Annuity Starting Date" means 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.
2.07 "Beneficiary" means 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.
2.08 "Book of Discipline" means the body of church law as established by the General Conference of The United Methodist Church, as amended from time to time.
2.09 "Church" means 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.
2.10 "Clergy" or "Clergyperson" means a person who is a bishop, a clergy member of a Conference, or a local pastor (as those terms are described in either Chapter Three or Chapter Four of the Book of Discipline), or a minister of another denomination who is a participant in the Ministerial Pension Plan.
2.11 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.
2.12 "Conference" includes Annual Conferences, Provisional Conferences and Missionary Conferences which are described in the Book of Discipline and which are located in Jurisdictional Conferences and the Puerto Rico Methodist Church.
2.13 "Contingent Annuitant" means 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" means 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 or Disabled" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. The permanence and degree of such impairment shall be supported by medical evidence. However, for the purpose of distributing amounts from the Personal Account, "Disability or Disabled" means:
a. For Clergy: the period during which the Participant is granted a disability leave pursuant to provisions of the Book of Discipline;
b. For Lay Employees of a General Agency: the Participant's receipt of a disability benefit from a long-term disability benefit program sponsored by his/her Plan Sponsor;
c. For all other Participants: 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" means 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. The Early Retirement Age shall be determined as follows:
a. For Clergy: The Early Retirement Age shall be determined in accordance with Paragraph 452.2b of the Book of Discipline. However, if a person retires in accordance with Paragraph 452.2a or Paragraph 452.3 or is a Terminated Participant, said Early Retirement Age shall be age 62;
b. For Lay Employees of a General Agency: The Early Retirement Age shall be determined in accordance with Paragraph 814.3 of the Book of Discipline.
c. For All Other Participants: The Early Retirement Age shall be, as indicated by the Plan Sponsor in the Adoption Agreement, 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 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" means January 1, 1998.
2.18 "Eligible Employee" means a Clergyperson or Employee who meets the requirements of Article III for participation in the Plan.
2.19 "Employee" means 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 "Former Participant" means a person who has been a Participant, but who has ceased to be a Participant for any reason.
2.21 "415 Compensation" means compensation as determined by Code section 415 and the Regulations promulgated thereunder.
2.22 "General Agency" means a general agency of The United Methodist Church as defined in Chapter Six of the Book of Discipline.
2.23 "Late Retirement Date" 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.
2.24 "Lay Employee or Layperson" means an Employee who is not a Clergyperson.
2.25 "Normal Retirement Date" means the following:
a. For Clergy: the first day of the month coinciding with the date specified in Paragraph 452.2c of the Book of Discipline;
b. For Lay Employees of a General Agency: the first day of the month coinciding with the date specified in Paragraph 814.3 of the Book of Discipline; and
c. For All Other Participants: the first day of the month, as specified by the Plan Sponsor in the Adoption Agreement, 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.
2.26 "Participant" shall mean an Eligible Employee who has become a participating Employee or Clergyperson as provided in Article III of this Plan.
2.27 "Personal Account" means the account established for a Participant for the purpose of recording any after-tax contributions made by a Participant pursuant to Section 4.02 or pursuant to the provisions of the Prior Plan as adjusted for earnings and losses allocated thereto.
2.28 "Personal Contributions" means those contributions made on an after-tax basis to the Personal Account by a Participant pursuant to Section 4.02 or pursuant to the provisions of the Prior Plan.
2.29 "Plan" means this instrument, including all amendments thereto.
2.30 "Plan Investments" means any investment alternatives made available by the Trustee for this Plan from time to time.
2.31 "Plan Sponsor" means an entity described below:
a. For Clergy:
(1) the General Council on Finance and Administration if the Participant is a bishop;
(2) the Conference if the Participant is a local pastor or a clergy member, except if the person is appointed in accordance with paragraphs 443.1a(2), (3), or (4), 443.1b, or 443.1d of the Book of Discipline;
(3) the General Council on Finance and Administration if the Participant is appointed to serve a general agency which has a voting representative on the Committee on Personnel Policies and Practices which is a committee of the General Council on Finance and Administration; or
(4) the Salary-Paying Unit if the Participant is classified in a category not described above.
b. For Lay Employees of a General Agency: the General Agency which employs the Participant, or the General Council on Finance and Administration if the Participant is employed by a general agency which has a voting representative on the Committee on Personnel Policies and Practices which is a committee of the General Council on Finance and Administration.
c. For All Other Participants: 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:
(1) a local church;
(2) an Annual, Provisional or Missionary Conference;
(3) a Conference board, agency or commission; or
(4) 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.
2.32 "Plan Year" means the calendar year.
2.33 "Prior Plan" means any or all of the following plans administered by the Administrator: Cumulative Pension and Benefit Fund, Ministerial Pension Plan, Staff Retirement Benefits Program.
2.34 "Qualified Church-Controlled Organization" means 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 or businesses, or both.
2.35 "Qualified Voluntary Employee Contributions" means any voluntary employee contribution made in cash after December 31, 1981, attributable to taxable years ending before January 1, 1987, within the meaning of Code section 219(e)(2) as it existed prior to the enactment of the Tax Reform Act of 1986.
2.36 "QVEC Account" means the account established for a Participant for the purpose of recording Qualified Voluntary Employee Contributions (QVEC) made by a Participant pursuant to Code section 219(e)(2) as it existed prior to the enactment of the Tax Reform Act of 1986 pursuant to Section 4.03 herein, or pursuant to the provisions of the Prior Plan, as adjusted for earnings and losses allocated thereto.
2.37 "Regulation" means 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 "Rollover Account" means the account established for a Participant in the books and records of the Plan for the purpose of recording any funds rolled over to the Plan from or attributable to another qualified plan pursuant to Section 4.04 herein or pursuant to the provisions of the Prior Plan, as adjusted for earnings and losses allocated thereto.
2.39 "Salary-Paying Unit" means one of the following units associated with The United Methodist Church:
a. the General Conference;
b. a general agency of The United Methodist Church;
c. a Jurisdictional Conference;
d. a Conference;
e. a Conference board, agency, or commission;
f. a local church located in a Conference;
g. any other organization located in a Jurisdictional Conference which is eligible to participate in a church plan in accordance with applicable federal law; or
h. any other entity to which a Clergyperson Under Episcopal Appointment is appointed.
2.40 "Salary Reduction Account" means the account established for a Participant in the books and records of the Plan for the purpose of recording contributions made to the Plan by the Salary-Paying Unit pursuant to a salary reduction agreement between the Participant and the Salary-Paying Unit pursuant to Section 4.01, or pursuant to the provisions of the Prior Plan, adjusted for earnings and losses allocated thereto.
2.41 "Salary Reduction Contributions" means the contributions made on behalf of a Participant under a written, legally binding salary reduction agreement between the Participant and the Salary-Paying Unit which satisfies the requirements of Code section 403(b).
2.42 "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.
2.43 "Terminated Participant" means:
a. A Clergyperson whose Conference relationship has been severed by such means as honorable location, withdrawal to unite with another denomination, surrender of ministerial credentials, or surrender of the local pastor license; or
b. A Clergyperson who has retired under the provisions of paragraph 452.2a of the Book of Discipline and a Clergyperson who has retired under the provisions of paragraph 452.3 of the Book of Discipline and who has not yet attained age 62; or
c. A Layperson who has been a Participant, but whose employment has been terminated other than by death, Disability, or retirement.
2.44 "Transfer Account" means the account established for a Participant in the books and records of the Plan for the purpose of recording amounts transferred to the Plan from or attributable to, another qualified plan pursuant to Section 4.05 herein, or pursuant to the provisions of the Prior Plan, as adjusted for earnings and losses allocated thereto.
2.45 "Trustee" means The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Missouri and any successors.
2.46 "Vested" means the nonforfeitable portion of any account maintained on behalf of a Participant.
2.47 "Under Episcopal Appointment" means an appointment made by a bishop pursuant to Sections V and VI of Chapter 3 of the Book of Discipline or pursuant to rules of the Puerto Rico Methodist Church.
Article III Eligibility for Participation
3.01 Conditions of Eligibility.
a. Each participant in the Cumulative Pension and Benefit Fund, the Ministerial Pension Plan, and the Staff Retirement Benefits Program, administered by the Administrator, is eligible to participate in this Plan if a Participant's Plan Sponsor or Salary-Paying Unit is making a current contribution to one of these plans.
b. All other Employees of a Plan Sponsor may participate in the Plan upon satisfaction of the requirements for eligibility set forth in the Adoption Agreement.
(1) A Plan Sponsor that is a Church or Qualified Church-Controlled Organization shall use the Adoption Agreement to elect one of the following Service requirements:
(A) no minimum Service shall be required of an Employee in order for the Employee to participate in the Plan; or
(B) a Service requirement shall be imposed with such requirement being at least one month of Service, but no more than 24 months of Service.
(2) A Plan Sponsor that is a Church or Qualified Church-Controlled Organization shall use the Adoption Agreement to elect one of the following age requirements:
(A) no minimum Age shall be required of an Employee in order for the Employee to participate in the Plan; or
(B) an Age requirement shall be imposed with such requirement being at least 18 years of age, but no more than 21 years of age.
c. No minimum Service or Age shall be required of any Employee of a Plan Sponsor that is not a Church or a Qualified Church-Controlled Organization.
3.02 Application for Participation.
a. Each Eligible Employee who is a Participant in the Cumulative Pension and Benefit Fund, Ministerial Pension Plan or Staff Retirement Benefits Program shall be deemed to have made application for participation in the Plan and shall be bound by the terms and conditions of the Plan and all amendments thereto.
b. Each Eligible Employee who desires to become a Participant and who is not a Participant in the Cumulative Pension and Benefit Fund, Ministerial Pension Plan or Staff Retirement Benefits Program shall make application for participation in the Plan in such form as may be required by the Board and agree to the terms hereof and the Adoption Agreement. Upon the acceptance of any benefits under this Plan, such Eligible 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.
3.03 Effective Date of Participation. An Eligible Employee shall become a Participant in accordance with one of the following:
a. An Eligible Employee shall become a Participant as of the date he/she becomes a Participant in the Cumulative Pension and Benefit Fund, Ministerial Pension Plan, or the Staff Retirement Benefits Program.
b. An Eligible Employee shall become a Participant in the Plan effective as of the later of the effective date of the Adoption Agreement or the date of enrollment by the Plan Sponsor.
3.04 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 or Clergyperson 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.
Article IV Contribution and Allocation
4.01 Salary Reduction Contributions.
a. Each Participant may elect to defer a portion of his/her compensation which would have been received in the Plan Year except for the deferral election. Such contributions shall be credited to the Participant's Salary Reduction Account.
b. The deferral election shall be made pursuant to a written, legally binding salary reduction agreement between the Participant and the Salary-Paying Unit which satisfies the requirements of Code section 403(b). To the extent required by law, the salary reduction agreement shall not be subject to amendment while it is in effect and shall apply only to those services which are to be rendered to the Salary-Paying Unit by the Participant on and after the effective date of the salary reduction agreement. Only one salary reduction agreement may be made with the Salary-Paying Unit in any calendar year, although an agreement may be terminated at any time with respect to future salary.
c. Salary Reduction Contributions may be in any amount up to the maximum amount which will not cause the Plan to violate the provisions of Section 4.07, and which shall not exceed the greater of $9,500 or the amount determined pursuant to Code section 402(g).
d. The balance in each Participant's Salary Reduction Account shall be fully Vested at all times and shall not be subject to forfeiture for any reason.
4.02 Personal Contributions
a. Each Participant may elect to voluntarily contribute a portion of his/her compensation earned while a Participant under this Plan. Such contributions shall be credited to the Participant's Personal Account.
b. The aggregate Personal Contributions of a Participant shall not exceed 10% of the Participant's cumulative compensation for all years since becoming a Participant.
c. The balance in each Participant's Personal Account shall be fully Vested at all times and shall not be subject to forfeiture for any reason.
4.03 Qualified Voluntary Employee Contributions
a. Any voluntary employee contribution made in cash after December 31, 1981, attributable to taxable years ending before January 1, 1987, shall be treated as a "Qualified Voluntary Employee Contribution" within the meaning of Code section 219(e)(2) as it existed prior to the enactment of the Tax Reform Act of 1986, and held in the Participant's QVEC Account.
b. The balance in each Participant's QVEC Account shall be fully Vested at all times and shall not be subject to forfeiture for any reason.
4.04 Rollovers Into the Plan. A Participant may, in accordance with procedures established by the Administrator and subject to any limitations imposed under the Code, roll over the following amounts, including amounts which are qualified voluntary employee contributions under Code section 219, to the Plan, provided the distribution is paid over to the Plan as a direct rollover or within 60 days following receipt of the distribution by the Participant, or such later date as may be permitted under the Code:
a. Part or all of a distribution received by the Participant from a Code section 403(b)(1) annuity contract, a Code section 403(b)(7) custodial account or a Code section 403(b)(9) retirement income account, including a direct rollover in accordance with Code section 401(a)(31) and 403(b)(10), to the extent such distribution is eligible for tax-free rollover to an annuity described in Code section 403(b); and
b. A distribution from an individual retirement account, the entire amount of which is from a source described in (a) above to the extent such amount is eligible for tax-free rollover to an annuity described in Code section 403(b).
Such amounts shall be allocated to the Participant's Rollover Account.
4.05 Transfers Into the Plan. Subject to any limitations imposed by applicable law, amounts may be transferred to the Plan on behalf of a Participant (or the Participant's Beneficiary, if the Participant is deceased, with respect to amounts attributable to the Participant) directly from a Code section 403(b)(1) annuity contract, a Code section 403(b)(7) custodial account or a Code section 403(b)(9) retirement income account, including amounts which are Qualified Voluntary Employee Contributions under Code section 219, provided that the transfer is made in accordance with rules and procedures established by the Administrator, including without limitation, minimum amounts for such transfers. Notwithstanding the foregoing, the Plan shall not accept a transfer of amounts which were originally contributed by an employer, except amounts contributed pursuant to a salary reduction agreement, nor shall a transfer be permitted which would require amendment of the Plan, as determined by the Administrator. Such transferred amounts shall be allocated to the Participant's Transfer Account.
4.06 Annual Account Addition. Notwithstanding the foregoing, the maximum Annual Account Addition which may be credited to a Participant's Account for any "limitation year" shall be equal to or less than the amount determined in accordance with Section 4.07 below.
a. For purposes of applying the limitations of Section 4.07, Annual Account Addition means the sum credited to a Participant's accounts for any "limitation year"of:
(1) contributions made by the Plan Sponsor or Salary-Paying Unit on behalf of the Participant to this Plan and to any other pension program; and
(2) contributions made to the Personal Account for limitation years beginning after December 31, 1986.
b. For purposes of applying the limitations of Section 4.07, Annual Account Addition does not include rollover or transfer contributions made pursuant to the provisions of Sections 4.04 and 4.05.
c. For purposes of applying the limitations of Section 4.05, the "limitation year" shall be the Plan Year.
4.07 Maximum Annual Account Addition.
a. General Limitation. Notwithstanding any provision herein to the contrary (other than Sections 4.07c and 4.07d) 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 or Salary-Paying Unit 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 4.07c below to have the provisions of Section 4.07c(3) apply, the Exclusion Allowance for any such Participant for the taxable year is the amount which could be contributed under Section 4.07a 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 4.07b(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 a Participant separates from service, at the election of the Participant there is substituted for the amount specified in Section 4.07a(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 Section 4.07b) 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 a(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 Section 4.07b(1), or
(C) $15,000.
(3) In the case of amounts contributed hereto, at the election of the Participant the provisions of Section 4.07a shall apply, instead of Section 4.07b.
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 4.07b(4) above to such Participant for such year, shall be treated as not exceeding the limitations of Section 4.07a.
(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 4.07a 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 4.07c(1) election made. No election may be made under this subparagraph for any year if an election is made under Section 4.07c(1) for such year.
4.08 Correction of Excess Contributions. If contributions by or on behalf of a Participant exceed the limitations of Section 4.07 in any given Plan Year, such excess shall be corrected as provided in this subsection to the extent permitted by law, notwithstanding any other provision of the Plan.
a. If the elective deferral limit under Code section 402(g) is exceeded and if the Participant files a written notification with the Administrator not later than business processing cut-off for April 15 certifying that the Participant has made elective deferrals within the meaning of Code section 402(g) for the immediately prior Plan Year in excess of the limitation of Code section 402(g) and stating the amount of such excess that the Participant has allocated to this Plan, then not later than the April 15 after the Plan Year in which the excess was contributed, the Trustee shall distribute to the Participant, to the extent provided by law, such allocated amount, adjusted for earnings (whether positive or negative) thereon, to the extent required by law. The Plan Sponsor or Salary-Paying Unit may give the notice provided for above, calculating the amount of excess elective deferrals taking into account contributions to all plans of the Plan Sponsor, including the Plan. The Administrator, on behalf of the Plan, may give the notice provided for above, calculating the amount of excess elective deferrals taking into account contributions to all plans maintained by the Administrator, including the Plan.
b. If the Exclusion Allowance limit under Code section 403(b) is exceeded, the excess Salary Reduction Contributions shall be distributed to the Participant (subject to the limitations of Article V and excess employer contributions shall be recharacterized as Personal Contributions in such manner determined in the discretion of the Administrator to maximize contributions to the Plan and other retirement arrangements of the Plan Sponsor and Participant. Excess Salary Reduction Contributions which may not be distributed shall remain in the Plan.
c. If the annual addition limit under Code section 415 is exceeded, then subject to any limitations imposed by law, the Administrator shall correct the excess contributions in such manner determined in the discretion of the Administrator to maximize contributions to the Plan and other retirement arrangements of the Plan Sponsor and Participant in any one or more of the following methods:
(1) recharacterizing excess employer contributions as Personal Contributions and distributing the recharacterized contributions (and earnings attributable thereto) to the Participant;
(2) returning excess Personal Contributions (and earnings attributable thereto to the extent required by law); and
(3) returning excess Salary Reduction Contributions (and earnings attributable thereto to the extent required by law); and
(4) any other method permissible under applicable law, as determined by the Administrator.
4.09 Determination of Excess Contributions. The Participant or (at the Participant's request) the Plan Sponsor or Salary-Paying Unit will advise the Administrator of any excess contributions determined under Section 4.07. The Administrator shall have no obligation to determine if the limitations of Section 4.07 are exceeded, but may do so, in its sole discretion, based on its record of actual contributions to plans maintained by the Administrator or any information provided by the Participant, Plan Sponsor or Salary-Paying Unit in a request to calculate the maximum permissible contributions to one or more plans maintained by the Administrator.
Article V Determination and Distribution of Benefits
5.01 Determination of Benefits Upon Retirement. Every Participant may 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 accounts shall become distributable in accordance with Section 5.07.
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 shall continue until the Participant's Late Retirement Date.
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 accounts shall be distributed in accordance with the provisions of Section 5.08.
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 5.08 any remaining amounts credited to the accounts of the 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 accounts of a deceased Participant or Former Participant or Terminated Participant as the Administrator may deem desirable. 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 the Event of Disability. In the event of a Participant's Disability, the Participant may request a distribution of all amounts credited to such Participant's accounts in accordance with the provisions of Sections 5.07 as though he/she had retired.
5.04 Determination of Benefits Upon Termination. In the event a Participant becomes a Terminated Participant for any reason other than death, Disability, or retirement, the Participant's Account shall be distributed as follows:
a. 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.
b. However, at the election of the Participant, the Administrator shall direct the Trustee to cause the Terminated Participant's Account to be payable to such Terminated Participant. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 5.07.
c. If the total value of all benefits payable from the Plan to a Terminated Participant 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 benefit to be paid to such Participant in a single lump sum.
5.05 In-Service Withdrawals. A Participant upon reaching age 591/2 may withdraw a portion or all of his/her interest in the Plan in accordance with Section 5.07.
5.06 Hardship Distributions.
a. Notwithstanding anything herein to the contrary, to the extent permitted by applicable law, the following are available for lump sum distribution in the event the Participant incurs a financial hardship:
(1) The accumulation in the Participant's Personal Account and Rollover Account; and
(2) The Participant's Salary Reduction Contributions and, with respect to the accumulations in the Transfer Account, contributions made pursuant to a salary reduction agreement (within the meaning of Code section 402(g)(3)(C) or, if previously held in a Code section 403(b)(7) custodial account, within the meaning of Code section 3121(a)(5)(D)). The distribution from these accounts shall not include any income attributable to such contributions.
b. To the extent not prohibited by applicable law, the following provisions shall apply with respect to financial hardship:
(1) A financial hardship under the provisions of Section 5.06a shall be limited to the following situations:
(A) Expenses for medical care described in Code section 213(d) previously incurred by the Participant, the Participant's spouse or dependents (as defined in Code section 152) or necessary for these persons to obtain medical care described in Code section 213(d);
(B) Costs directly related to the purchase of a principal residence of the Participant (excluding mortgage payments);
(C) Payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant or the Participant's spouse, children or dependents;
(D) Payments necessary to prevent the eviction of the Participant from his/her principal residence or foreclosure of the mortgage of the Participant's principal residence; or
(E) Such other circumstances as may be established by the Secretary of the Treasury, or established pursuant to regulations under Code section 401(k) as deemed immediate and heavy financial needs with respect to elective contributions under Code section 401(k) unless such application to the Plan is prohibited by law.
(2) A financial hardship shall be deemed to exist only if the Participant represents in a form acceptable to the Administrator that the need cannot be relieved by reimbursement from insurance, reasonable liquidation of the Participant's assets, cessation of Salary Reduction Contributions and Personal Contributions under the Plan, other distributions or loans from employee benefit plans or borrowing from commercial sources on reasonable commercial terms.
(3) The amount of the distribution made because of the Participant's financial hardship shall not exceed the amount needed to satisfy the financial hardship described in Section 5.06b(1) above; provided, however, the amount of the financial need may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution.
(4) The amount of the distribution shall be limited to the financial need of the Participant after the Participant has obtained all distributions (other than hardship distributions) and nontaxable loans otherwise available under all retirement plans maintained by the Plan Sponsor.
(5) If a Participant receives a financial hardship distribution under Section 5.06a, the Participant shall be suspended from making Salary Reduction Contributions and Personal Contributions to this Plan (with the exception of any Required Employee Contributions as described in section 3.04 of the Cumulative Pension and Benefit Fund) and all other plans maintained by the Plan Sponsor for a period of 12 months after receipt of the withdrawal. In addition, the maximum contributions permitted for the calendar year immediately following the calendar year of the withdrawal shall be reduced by the amount of elective deferrals (as defined in Code section 402(g)) made in the calendar year of the withdrawal.
(6) Notwithstanding the foregoing, a distribution on the basis of hardship shall be subject to rules and procedures established by the Administrator from time to time, including without limitation, providing the Administrator with information and documentation requested by the Administrator in a form acceptable to the Administrator concerning any of the requirements for a distribution on the basis of financial hardship.
5.07 Distribution of Benefits For Any Reason Except Death.
a. (1) Unless otherwise elected as provided in Section 5.07a(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 5.07b 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 5.07a(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 the life of the Participant (or the lives of the Participant and his/her designated Contingent Annuitant).
(2) Monthly or annual payments over a fixed period not to exceed the life expectancy of the Participant or the life expectancies of the Participant and a designated Beneficiary. Such payments shall be made in accordance with rules and regulations adopted by the Administrator. Any balance remaining at the death of both the Participant and his/her designated Beneficiary shall be distributed in a single lump sum to the Beneficiary named by the last to die of the Participant or the designated Beneficiary.
(3) one or more lump sum payments elected by the Participant in accordance with the rules established by the Administrator.
c. If the Participant is married at the time he/she makes an election pursuant to Section 5.07b above, such election shall not be valid without the consent of the Participant's spouse given in accordance with the procedures stated in Section 5.07a(3).
d. If the total of all benefits payable to the Participant from the Plan 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 5.07e(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 valued as of December 31, 1986, exclusive of subsequent earnings.
5.08 Distribution of Benefits upon Death.
a. In the event of the death of a Participant prior to the Annuity Starting Date, his/her Account shall be paid to the Participant's Beneficiary subject to the requirements of Section 5.08b 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 5.07b 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.
(A) Distributions to the surviving spouse Beneficiary must commence on or before the later of:
(i) December 31 of the calendar year immediately following the calendar year in which the Participant died; or
(ii) December 31 of the calendar year in which the Participant would have attained age 70-1/2.
(B) If no election is made prior to the required beginning date described in Section 5.08b(1)(A), 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 5.08b(2), the election by a designated Beneficiary to be excepted from the 5- year distribution requirement must be made no 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 5.08b(1) or Section 5.08b(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 5.07 as of his/her date of death.
5.09 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 balance 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.
5.10 Transfers Out of the Plan. Subject to limitations imposed by law, all or a portion of a Participant's interest in the Plan, excluding amounts required to be distributed under Section 5.07e, if any, may be transferred directly to a Code section 403(b)(1) annuity contract, a Code section 403(b)(7) custodial account or a Code section 403(b)(9) retirement income account upon the request of the Participant, in accordance with procedures established by the Administrator, provided that benefit payments have not commenced with respect to such accumulations.
5.11 Direct Rollovers Out of the Plan.
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 Plan 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 section 401(a)(9) of the Code; 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 section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, or an annuity plan described in section 403(b) of the Code 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 section 414(p) of the Code, 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.
5.12 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.
5.13 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.
5.14 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.
5.15 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.
5.16 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.
5.17 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 5.07e(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 5.08b(1) and Section 5.08b(2) if on that date the current mailing address of the Beneficiary is on file with the Administrator.
5.18 Unclaimed Benefit.
a. If a Participant fails to properly claim a benefit due hereunder prior to the "required beginning date," as defined in Section 5.07e(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.
5.19 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 Participant's Account
6.01 Types of Accounts. The Board will maintain the following separate accounts for each Participant:
a. Salary Reduction Account
b. Personal Account
c. QVEC Account
d. Rollover Account
e. Transfer Account.
6.02 Title to Accounts Not in Name of Participant. The fact that contributions shall be made and credited to the Account of a Participant shall not vest in such Participant any right, title or interest in or to any of the assets of the Plan except at the time and upon the conditions expressly set forth in this Plan. The words "Participant's account balance," "assets with respect to Participant," or "investment account of a Participant," or similar phrases shall not be interpreted to mean, under any circumstances or event, that a Participant has title to any specific assets of the Plan. The assets of the Plan are owned by the Trustee, as Trustee of the Personal Investment Plan Trust.
6.03 Investment of Accounts. The Participant shall have the right to elect to have future contributions allocable to the Participant's accounts and any accumulations in the Participant's accounts placed in any one or a combination of the Plan Investments as permitted by the Trustee, in its sole discretion. The Participant's election under this subsection 6.03 is subject to rules and procedures established from time to time by the Administrator, in its sole discretion, including without limitation, rules and procedures concerning the method in which elections are made, the frequency with which elections may be made, the availability of specific Plan Investments, the effective date of an election, minimum amounts or percentages for such elections, and any other requirements for such elections established by the Administrator.
Article VII Trustee
7.01 Responsibilities of the Trustee. The Trustee shall have the following categories of responsibilities in addition to those responsibilities set out in Article VIII:
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.
7.02 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.
7.03 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.
7.04 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.
7.05 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 VIII Administration
8.01 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 and Clergy 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.
8.02 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.
8.03 Duties of the Plan Sponsor. The Plan Sponsor shall assume the following duties with respect to the Plan:
a. To enroll Employees and Clergy, 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 and Clergy of their rights and obligations under the Plan;
h. To provide the Administrator with prompt notice of termination of a Participant's employment.
8.04 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 services.
8.05 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.
8.06 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.
8.07 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.
8.08 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.
8.09 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.
8.10 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 8.07 to 8.09 of this Plan.
8.11 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.
8.12 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 7.02c, 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 IX Right to Alter, Amend or Revoke
9.01 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.
9.02 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.
9.03 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.
9.04 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 X Termination of Plan
10.01 Plan Merger or Consolidation.
a. In the event a Plan Sponsor wishes to merge the value of its Participants' 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 Plan Sponsor is not also a Plan Sponsor of the Ministerial Pension Plan or the Staff Retirement Benefits Program administered by the Administrator;
(2) The Trustee agrees to such merger;
(3) 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
(4) 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 10.01a and 10.01b, 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.
10.02 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.
10.03 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 XI Adoption
11.01 This Plan may be adopted by any Plan Sponsor described in Section 2.31 herein, with the consent of the Administrator.
11.02 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.
11.03 The Adoption Agreement shall be in the form prescribed by the Administrator.
11.04 Those entities described in Section 2.31 that also are one of the following:
a. A "Plan Sponsor" as that term is defined in the Cumulative Pension and Benefit Fund or the Ministerial Pension Plan, administered by the Administrator; and
b. An "Employer" as that term is defined in the Staff Retirement Benefits Program, administered by the Administrator;
shall be Plan Sponsors for the purposes of this Plan. These Plan Sponsors shall be deemed to have completed an Adoption Agreement in accordance with this Section, and the effective date for purposes of this Plan shall be the later of the effective date of this Plan or the effective date of the adoption agreement completed for participation in the Cumulative Pension and Benefit Fund, Ministerial Pension Plan, or Staff Retirement Benefits Program.
Article XII Miscellaneous
12.01 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.
12.02 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 12.04 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.
12.03 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.
12.04 Qualified Domestic Relations Order. The provisions of section 12.02 notwithstanding, all or part of a Participant's 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 Code section 414(p), 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.
12.05 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.
12.06 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.
12.07 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.
12.08 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.
12.09 Number. Wherever used herein, the singular shall include the plural and the plural shall include the singular, except where the context requires otherwise.
Article XIII Loans to Participants
13.01 Loans to Participants.
a. The Trustee may, in the Trustee's discretion, make loans to Participants and Beneficiaries under the following circumstances:
(1) Loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis;
(2) Loans shall be available only for the purpose of satisfying the following financial needs:
(A) Expenses for medical care described in Code section 213(d) previously incurred by the Participant, the Participant's spouse or dependents (as defined in Code section 152) or necessary for these persons to obtain medical care described in Code section 213(d);
(B) Costs directly related to the purchase of a residence of the Participant (excluding mortgage payments);
(C) Payment of tuition and related educational fees for post-secondary education for the Participant or the Participant's spouse, children or dependents;
(D) Payments necessary to prevent the eviction of the Participant from his/her principal residence or foreclosure of the mortgage of the Participant's principal residence; or
(E) Such other circumstances as may be established by the Secretary of the Treasury, or established pursuant to regulations under Code section 401(k) as deemed immediate and heavy financial needs with respect to elective contributions under Code section 401(k) unless such application to the Plan is prohibited by law.
(3) Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Participants and Beneficiaries;
(4) Loans shall bear a reasonable rate of interest;
(5) Loans shall be adequately secured; and
(6) The Participant or Beneficiary shall provide for repayment over a reasonable period of time.
b. Loans shall not be made to any Shareholder-Employee.
c. No Participant loan shall take into account the present value of such Participant's Qualified Voluntary Employee Contribution Account.
d. Loans made pursuant to this Section (when added to the outstanding balance of all other loans made by the Plan to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from the Plan to the Participant during the one year period ending on the day before the date on which such loan is made, over the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made, or
(2) one-half of the present value of the non-forfeitable accrued benefit of the Participant under the Plan.
e. Loans shall provide for level amortization with payments to be made not less frequently than quarterly over a period not to exceed five years. However, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at the time the loan is made) as a principal residence of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five years.
f. Any loan made pursuant to this Article where the interest of the Participant is used to secure such loan shall require the written consent of the Participant's spouse in a manner consistent with Section 5.07a(3). Such written consent must be obtained within the 90-day period prior to the date the loan is made. However, no spousal consent shall be required under this paragraph if the total accrued benefit subject to the security is not in excess of $3,500.
g. Any loans granted or renewed shall be made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not be limited to, the following:
(1) The identity of the person or positions authorized to administer the Participant loan program;
(2) A procedure for applying for loans;
(3) The basis on which loans will be approved or denied;
(4) Limitations, if any, on the types and amounts of loans offered;
(5) The procedure under the program for determining a reasonable rate of interest;
(6) The types of collateral which may secure a Participant loan; and
(7) The events constituting default and the steps that will be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan. Furthermore, such Participant loan program may be modified or amended in writing from time to time without the necessity of amending this Section.
General Conference Webmaster: Susan Brumbaugh
PETS Creator: John Brawn
Petition Text: 21503-FA-NonDis-O
1996 United Methodist General Conference