The definition of compensation has been changed to indicate that compensation includes base pay, overtime pay, and bonuses but not severance pay or the value of taxable fringe benefits.
All references to employee contributions and accounts have been removed.
The provision was removed that requires a participant to have a 1,000 hours of service in order to receive a contribution in the initial 12 months of participation.
A provision was added that, in the event of a participant's divorce, would void any beneficiary designation made prior to the divorce in favor of the spouse. The spouse would be treated as having predeceased the participant.
Distinctions have been made between the Board as administrator and the Board as trustee.
A provision was added that allows the Board to pay a participant a single sum payment in lieu of an annuity if the amount of the annuity payment is less than a minimum amount determined by the Board.
The section dealing with benefits at termination of employment was changed to allow participants to receive a lump sum distribution of their employer contributions after a one-year break in service following termination, regardless of the size of the accumulation.
The provisions regarding benefit distributions of employer contributions were expanded to allow participants the option of electing a lump sum distribution or a period certain annuity, in addition to the life annuity options that are available currently.
A refusal of benefit provision was added that allows a beneficiary to refuse all of the payment to which he/she might otherwise be entitled. In the event of a refusal, benefits will be paid as if this beneficiary had predeceased the participant.
A provision was added to permit the Board will be to pay a relative, friend or legal representative of an individual who is entitled to receive a benefit but is incapable of handling his/her own financial affairs. The payment is to be used exclusively for the benefit of the incapacitated individual.
A provision was added that explains what will happen to unclaimed benefit payments if at the time of the required beginning date for payment there is no current mailing address on file with the Board.
A provision was added that outlines the duties and responsibilities of employers.
A provision was added that allows the administrator to charge users directly for non-routine services provided to participants or employers.
The plan clarifies the provisions of the plan are to be construed under Illinois law, unless preempted by federal law.
A provision was added that requires disputes between an employer and the Board to be settled through the use of a mediation/binding arbitration process.
Staff Retirement Benefits Program
Article I The Program
1.01 The Program. The General Conference of The United Methodist Church had previously authorized the establishment of the Uniform Staff Pension Fund (hereinafter referred to as the "Prior Program"), effective January 1, 1974. The General Conference subsequently merged the Prior Program into the Staff Pension Plan, effective January 1, 1985. As of January 1, 1993, the General Conference amended and restated the Staff Pension Plan as the Staff Retirement Benefits Program (hereinafter referred to as the "Program"). Effective as of January 1, 1998, the General Conference hereby amends and restates the Program for the exclusive benefit of Eligible Employees and their Beneficiaries in accordance with the terms and conditions set forth in the Program.
1.02 Applicability. The provisions of this Program shall apply to all General Agencies of The United Methodist Church and to their Employees, who meet the eligibility requirements contained herein.
1.03 Type of Program. The Program 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.
Article II Identification and Definitions
Whenever used in the Program, the following terms shall have the respective meanings set forth below, unless otherwise expressly provided herein. When the defined meaning is intended, the term is capitalized.
2.01 "Account" shall mean the account maintained for each Participant in the books and records of the Program for the purpose of recording contributions made to the Program by the Employer on behalf of a Participant pursuant to Section 4.01, adjusted for earnings and losses allocated thereto.
2.02 "Act" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
2.03 "Administrator" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Illinois and any successors.
2.04 "Annuity Starting Date" shall mean the first day of the month for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day of the month coinciding with or following the completion of all events which entitle the Participant to such benefit. In the case of a deferred annuity, the Annuity Starting Date shall be the date on which the annuity payments are scheduled to commence.
2.05 "Beneficiary" shall mean the person(s) (natural or otherwise), other than a Contingent Annuitant, designated as set forth in Section 5.02d, who is receiving, or entitled to receive, a deceased Participant's (or annuity- certain payee's) residual interest in this Program which is nonforfeitable upon, and payable in the event of, such Participant's or payee's death.
2.06 "Book of Discipline" shall mean the body of church law as established by the General Conference of The United Methodist Church, as amended from time to time.
2.07 "Break in Service" shall mean the cessation of crediting Hours of Service when the employee:
a. resigns;
b. is discharged
c. fails to report for work within the period required under the law pertaining to veterans' reemployment rights after the employee is released from military service with the armed forces of the United States, in which case the Employee's Break in Service shall be deemed to have occurred on the first day of his/her authorized leave of absence for such military duty;
d. is on an authorized leave of absence and fails to return to employment, in which case his/her Break in Service shall be deemed to have occurred on the first day of his/her authorized leave of absence; or
e. retires or dies.
2.08 "Code" shall mean the Internal Revenue Code of 1986, as amended or replaced from time to time.
2.09 "Compensation" shall mean the sum of the following for the Program Year paid or payable in cash or in kind by the Employer for personal services:
a. taxable cash salary or wages paid by the Employer for personal services rendered in the course of employment including overtime pay, bonuses and severance pay, but not including the cash value of taxable fringe benefits; and
b. salary-reduction agreements with respect to employment with the Employer:
(1) to a plan qualified under section 125 of the Code; or
(2) to a tax-sheltered annuity described in section 403(b) of the Code.
For Program Years beginning after December 31, 1988, and before January 1, 1994, Compensation in excess of $200,000 shall be disregarded. For Program Years beginning after December 31, 1993, the amount reported on Form W-2 as wages, tips, and other compensation in excess of $150,000 shall be disregarded. Such amount shall be adjusted at the same time and in such manner as permitted under Code section 415(d).
2.10 "Contingent Annuitant" shall mean the person who, with a Participant, is the one upon the continuation of whose life the amount and/or duration of the pension benefit under this Program depends.
2.11 "Contingent Annuity" shall mean an annuity for the life of the Participant with a survivor annuity for the life of his/her Contingent Annuitant which is not less than one- half, or greater than, the amount of the annuity payable during the joint lives of the Participant and his/her Contingent Annuitant. The Contingent Annuity will be the amount of benefit which can be purchased with the Participant's account balance. Unless elected otherwise by the Participant with spousal consent, the percentage of the Contingent Annuity will be 70%.
2.12 "Disabled or Disability" shall mean the Participant's receipt of a disability benefit from a long-term disability benefit program sponsored by his/her Employer.
2.13 "Early Retirement Date" shall mean the first day of the month (prior to Normal Retirement Date) coinciding with or following the date on which a Participant or Former Participant attains the Early Retirement Age. Said Early Retirement Age shall be determined in accordance with Paragraph 814.3 of The Book of Discipline.
2.14 "Effective Date" shall mean January 1, 1998.
2.15 "Eligible Employee" shall mean an Employee who meets the requirements of Article III for participation in the Program.
2.16 "Employee" shall mean any person who is currently employed by the Employer and who meets the requirements of Article III, but excludes (a) any person who is employed as an independent contractor, (b) any person who, for the same service at the Employer, is eligible to participate in another Employer-paid pension plan administered by the Administrator, or (c) any person who is a missionary of The United Methodist Church.
2.17 "Employer" shall mean a General Agency.
2.18 "Employment Commencement Date" shall mean the first day that an Eligible Employee is entitled to be credited with an Hour of Service for the performance of duty with the Employer.
2.19 "Former Participant" shall mean a person who has been a Participant, but who has ceased to be a Participant for any reason.
2.20 "415 Compensation" shall mean compensation as determined by Code section 415 and the Regulations promulgated thereunder.
2.21 "General Agency" shall mean a general agency of The United Methodist Church as defined in Chapter Six of The Book of Discipline.
2.22 "Hours of Service" shall mean
a. each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours shall be credited to the Employee for the computation period in which the duties are performed;
b. each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than 501 Hours of Service shall be credited under this paragraph for any single continuous period; and
c. each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under Section 2.22a or Section 2.22b, as the case may be, and under this Section 2.22c. These hours shall be credited to the Employee for the computation period or periods to which the award or agreement or payment is made.
Hours of Service will be credited for employment with other Employers.
Solely for purposes of determining whether a One-Year Break in Service, as defined in Section 2.26, for participation purposes has occurred, an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons shall mean an absence (1) by reason of the pregnancy of the individual, (2) by reason of a birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited (1) in the computation period in which the absence begins if the crediting is necessary to prevent a Break in Service in that period, or (2) in all other cases, in the following computation period.
2.23 "Late Retirement Date" shall mean the first day of the month coinciding with or next following a Participant's actual retirement date after having reached his/her Normal Retirement Date.
2.24 "Month of Service" shall mean any month during which the Employee performs at least one Hour of Service.
2.25 "Normal Retirement Date" shall mean the first day of the month coinciding with the date specified in Paragraph 814.3 of The Book of Discipline.
2.26 "One-Year Break in Service" shall mean any period of 12 consecutive calendar months in which a Participant has not completed 501 or more Hours of Service.
2.27 "Participant" shall mean an Eligible Employee who has become a participating Employee as provided for in Article III of this Program.
2.28 "Program" shall mean this instrument, including all amendments thereto.
2.29 "Program Year" shall mean the calendar year.
2.30 "Regulation" shall mean the Income Tax Regulations as promulgated by the Secretary of the Treasury or his/her delegate, and as amended from time to time.
2.31 "Service" shall mean employment with the Employer or any other unit associated with the denomination known as The United Methodist Church. Where the Employer maintains a plan of a predecessor employer, service for such predecessor employer shall be treated as service of the Employer.
2.32 "Terminated Participant" shall mean a person who has been a Participant, but whose employment has been terminated other than by death, Disability, or retirement.
2.33 "Trustee" shall mean The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Missouri and any successors.
2.34 "Vested" shall mean the nonforfeitable portion of any account maintained on behalf of a Participant.
Article III Eligibility for Participation
3.01 Conditions of Eligibility.
a. A person shall be a Participant in this Program on January 1, 1985, if on such date the person is eligible to participate in a "church plan" and is an Employee who is regularly employed at least 20 hours per week by a General Agency.
b. After January 1, 1985, each Employee of the Employer who is normally scheduled to work at least 20 hours per week shall be eligible to become a Participant in the Program upon the completion of at least 500 Hours of Service and six Months of Service. For purposes of this Section, an Eligible Employee will be deemed to have completed six Months of Service if he/she is in the employ of the Employer at any time six months after his/her Employment Commencement Date.
c. If any Former Participant shall be reemployed by the Employer or by another Employer which is eligible to participate in this Program before a One- Year Break in Service occurs, he/she shall continue to participate in the Program in the same manner as if such termination had not occurred.
d. An Employee who is a Participant and becomes Disabled or a person who was Disabled as of December 31, 1984, and was a participant in the Prior Program as of that date, shall continue to participate in the Program in accordance with the following provisions:
(1) In the event such a Participant becomes Disabled prior to age 60 and Disability continues, such person shall continue to be a Participant until his/her 65th birthday anniversary.
(2) In the event such a Participant becomes Disabled after age 60 and Disability continues, such person shall continue to be a Participant until the earlier of the end of a five-year period from the date of Disability or such Participant's 70th birthday anniversary.
(3) Such disabled Participant shall be deemed to have reached his/her Normal Retirement Date at the end of the period set forth in paragraph (1) or paragraph (2) above, as applicable, if at the end of the period the Participant is still determined to have a Disability.
3.02 Application for Participation. Each Eligible Employee who desires to become a Participant shall make application for participation in the Program in such form as may be required by the Administrator and agree to the terms hereof. Upon the acceptance of any benefits under this Program, such Employee shall automatically be deemed to have made application and shall be bound by the terms and conditions of the Program and all amendments thereto.
3.03 Effective Date of Participation. An Eligible Employee shall become a Participant in the Program effective retroactively to the Employment Commencement Date.
3.04 Determination of Eligibility. Upon receipt of enrollment information from the Employer, the Administrator shall accept such information as evidence of eligibility for participation in the Program. However, the Administrator may from time to time audit such information or obtain additional information which might result in a determination of ineligibility for any particular Participant. The Administrator shall have final authority to determine the eligibility of any Employee and such determination shall be conclusive and binding upon all persons, as long as the determination is made pursuant to the provisions of the Program.
3.05 Termination of Eligibility. In the event a Participant is no longer a member of an eligible class of Employees and becomes ineligible to participate, but has not incurred a One- Year Break in Service, such Employee will participate immediately upon returning to an eligible class of Employees. If such Participant incurs a One- Year Break in Service, eligibility will be determined under the Break in Service rules of the Program.
3.06 Omission of Eligible Employee. If, in any Program Year, any Employee who should be included as a Participant in the Program is erroneously omitted and discovery of such omission is not made until after a contribution by his/her Employer for the year has been made, the Employer shall make a subsequent contribution subject to the Annual Account Addition limits of Section 4.03 and 4.04 with respect to the omitted Employee in the amount which the said Employer would have contributed, including earnings that would have accrued, with respect to him/her had he/she not been omitted.
3.07 Inclusion of Ineligible Employee. If, in any Program Year, any person who should not have been included as a Participant in the Program is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the amount contributed with respect to the ineligible person shall constitute a mistake of fact for the Program Year in which the discovery is made.
3.08 Election Not to Participate. An Employee may, subject to the approval of the Employer, elect voluntarily not to participate in the Program by written notice to the Employer and the Administrator in such form as required by the Administrator.
Article IV Contributions
4.01 Contributions.
a. The Employer shall, for each Program Year, contribute to the Program an amount equal to 12% of a Participant's Compensation.
b. It shall be the responsibility of the Employer to make contributions on behalf of each Participant from the Employment Commencement Date. The contributions made pursuant to this subsection shall be the amount prescribed in Section 4.01a, plus the earnings that would have accumulated during the eligibility period had the contributions been made effective on or after the Employment Commencement Date.
c. The Employer shall contribute to the Account of each Disabled Participant based upon the Disabled Participant's Compensation in effect as of the date of Disability. The amount of the Employer Contribution shall be increased by 2% on July 1 of each year from January 1, 1985, through December 31, 1993, and by 3% each year effective January 1, 1994, during the duration of the Disability, provided the benefit was in effect on the previous December 31.
d. The annual Employer contribution shall be payable to the Program in at least monthly installments.
e. All Employer contributions for the Program Year must be deposited with the Program no later than June 15 of the following Program Year.
f. The Administrator shall establish and maintain an Account in the name of each Participant to which the Administrator shall credit all amounts allocated to each such Participant as set forth herein.
g. The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contribution for each Program Year.
h. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution to each Participant's account in accordance with this Section 4.01.
i. The obligation to make the contribution on behalf of a Participant shall fall upon, and be restricted to, the applicable General Agency by which the Participant is employed.
j. All amounts which are contributed by the Employer to the Program shall be irrevocable contributions to the Program except that any contribution made by the Employer because of a mistake of fact, shall be returned to the Employer upon request within one year after the Employer has reported and documented such mistake to the Administrator.
4.02 Vesting. Contributions credited to a Participant's Account shall be fully Vested.
4.03 Annual Account Addition. Notwithstanding the foregoing, the maximum Annual Account Addition which may be credited to a Participant's accounts for any "limitation year" shall be equal to or less than the amount determined in accordance with Section 4.04 below.
a. For purposes of applying the limitations of Section 4.04, Annual Account Addition means the sum credited to a Participant's accounts for any "limitation year"of:
(1) contributions made by the Employer on behalf of the Participant to this Program and to any other pension program; and
(2) contributions made to the Personal Account pursuant to the provisions of the Personal Investment Plan administered by the Administrator for limitation years beginning after December 31, 1986.
b. For purposes of applying the limitations of Section 4.04, Annual Account Addition does not include rollover contributions made pursuant to the provisions of the Personal Investment Plan administered by the Administrator.
c. For purposes of applying the limitations of Section 4.04, the "limitation year" shall be the Program Year.
d. For purposes of applying the limitations of Section 4.04, if a Participant participates in more than one plan maintained by the Employer, this Program shall be considered the primary plan of the Employer in determining the Annual Account Addition.
4.04 Maximum Annual Account Addition.
a. General Limitation. Notwithstanding any provision herein to the contrary (other than Sections 4.04c and 4.04d) for any Program 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 Program Year.
b. Exclusion Allowance. The amounts contributed by the Employer on behalf of a Participant shall be excluded from the gross income of the Participant for the Program Year to the extent that the aggregate of such amounts does not exceed the Exclusion Allowance for such Program Year.
(1) The Exclusion Allowance for any Participant for the Program Year is an amount equal to the excess, if any of:
(A) the amount determined by multiplying 20% of the Participant's includable 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 Program Year.
(2) In the case of a Participant who makes an election under Section 4.04c below to have the provisions of Section 4.04c(3) apply, the exclusion allowance for any such Participant for the taxable year is the amount which could be contributed under Section 4.04a 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 Employer, and all amounts contributed hereunder by such organization during such years for the Participant shall be considered to have been contributed by one Employer.
(4) The amount determined under Section 4.04b(1) shall not be less than the lesser of:
(A) $3,000; or
(B) the includable compensation of such Participant.
This paragraph shall not apply to a Participant in a Program Year when such Participant has an adjusted gross income for such Program Year which exceeds $17,000.
c. Annual Account Addition Election. A Participant may make an irrevocable election to have one of the following three Annual Account Addition elections apply to increase his/her Annual Account Addition. Not more than one election may be made under paragraph (1) below. A Participant who elects to have the provisions of paragraph (1), (2), or (3) of this subsection apply to him/her may not elect to have any other paragraph of this subsection apply to him/her. Such election shall be made in accordance with the provisions of Regulations prescribed by the Secretary of the Treasury.
(1) In the case of amounts contributed for the year in which occurs a Participant's separation from the service, at the election of the Participant there is substituted for the amount specified in Section 4.04a(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 Employer (as determined for purposes of Section 4.04b) during the period of years (not exceeding ten) ending on the date of such separation.
(2) In the case of amounts contributed hereto, at the election of the Participant there is substituted for the amount specified in paragraph 4.04a(2) the least of:
(A) 25% of the Participant's includable 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 4.04b(1), or
(C) $15,000.
(3) In the case of amounts contributed hereto, at the election of the Participant the provisions of Section 4.04a shall apply, instead of Section 4.04b.
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 4.04b(4) above to such Participant for such year, shall be treated as not exceeding the limitations of Section 4.04a.
(2) Contributions not in excess of $40,000 ($10,000 per year).
(A) General. Notwithstanding any other provision of this Program, 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 4.04a 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 4.04c(1) election made. No election may be made under this subparagraph for any year if an election is made under Section 4.04c(1) for such year.
Article V Determination and Distribution of Benefits
5.01 Determination of Benefits Upon Retirement. Every Participant may terminate his/her employment with the Employer and retire for the purposes hereof on his/her Normal Retirement Date or Early Retirement Date.
a. Upon such Normal Retirement Date or Early Retirement Date, all amounts credited to such Participant's Account shall become distributable.
b. However, a Participant may postpone the termination of his/her employment with the Employer to a later date, in which event the participation of such Participant in the Program, including the right to receive allocations pursuant to Section 4.01, shall continue until the Participant's Late Retirement Date.
c. Upon a Participant's retirement date, or as soon thereafter as is practicable, the Administrator shall direct the Trustee to distribute all amounts credited to such Participant's Account in accordance with Section 5.04 and Section 5.06.
5.02 Determination of Benefits Upon Death.
a. Upon the death of a Participant before his/her retirement date or before a Participant's Annuity Starting Date, all amounts credited to such Participant's Account shall be distributed in accordance with the provisions of Section 5.05 and 5.06.
b. Upon the death of a Former Participant or Terminated Participant before his/her having received a benefit from the Program, the Administrator shall direct the Trustee to distribute in accordance with the provisions of Section 5.05 and Section 5.06 any remaining amounts credited to the Account 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 Account 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 an Employer 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 is no surviving spouse, the death benefit shall be payable to his/her estate.
5.03 Determination of Benefits Upon Termination of Employment. In the event a Participant terminates employment with the Employer 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 Board shall cause the entire Vested portion of the Terminated Participant's Account to be payable to such Terminated Participant after a One- Year Break in Service. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 5.04.
c. After a One- Year Break in Service the Trustee shall cause the entire benefit to be paid to such Participant in a single lump sum if the value of a Terminated Participant's benefit derived from the Account does not exceed $3,500 and has never exceeded $3,500 at the time of any prior distribution.
5.04 Distribution of Benefits For Any Reason Except Death.
a. (1) Unless otherwise elected as provided in Section 5.04a(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 Program.
(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 5.04b 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 an Employer 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; and
(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 5.04a(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, on a date specified by the Participant (which date is in harmony with Section 5.04e below), to the Participant or to the Participant and his/her Contingent Annuitant any amount to which he/she is entitled under the Program in one or more of the following methods determined and limited by rules and regulations of the Administrator:
(1) purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond either the life of the Participant (or the lives of the Participant and his/her designated Contingent Annuitant) or the life expectancy of the Participant (or the life expectancy of the Participant and his/her designated Contingent Annuitant).
(2) payments over a period certain in monthly or annual cash installments. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and his/her designated Contingent Annuitant).
(3) one or more annual partial lump-sum payments elected by the Participant in accordance with the rules established by the Administrator prior to the required beginning date specified in Section 5.04e herein and prior to annuitizing the remaining Account balance in accordance with other provisions of this Section.
(4) one lump-sum payment in cash.
c. If the Participant is married at the time he/she makes an election pursuant to Section 5.04b above, such election shall not be valid without the consent of the Participant's spouse given in accordance with the procedures stated in Section 5.04a(3).
d. If the present value of the Participant's Account is equal to or less than $3,500, the Administrator may direct the Trustee to distribute the full amount to the Participant without the consent of the Participant or his/her spouse.
e. Notwithstanding any provision in the Program 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 5.04e(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 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 as of December 31, 1986, exclusive of subsequent earnings.
5.05 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 5.05b below.
b. Notwithstanding any provision in the Program 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 5.04b 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 5.05b(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 5.05b(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 5.05b(1) or Section 5.05b(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 interest 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 5.04 as of his/her date of death.
5.06 Benefit Increases. The amount of any monthly annuity benefit payable under Sections 5.04 or 5.05 shall be determined actuarially on the basis of the account value such that the amount shall be increased by 2%, or remain the same or be increased by 3% or 4% or 5%, if so elected by the Participant at the time of application, or the Beneficiary at the time benefits commence, as applicable, under Sections 5.04 and 5.05. These increases shall occur on each anniversary of the Annuity Starting Date.
5.07 Single Sum Payment of Benefits. Notwithstanding any provision of this Program to the contrary, if the amount payable as a monthly annuity to the Participant or Beneficiary from all plans administered by the Administrator is less than the minimum amount established by the Trustee from time to time, the Administrator may, in its absolute discretion, require the Vested amounts in the Participant's Account to be paid to the Participant or Beneficiary in a single sum. A single sum payment provided for under this subsection may be made to the Participant at any time following termination of employment and prior to the commencement of payment of benefits under another form of payment.
5.08 Direct Rollover.
a. Notwithstanding any provision of the Program to the contrary that would otherwise limit a distributee's election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an "eligible rollover distribution" paid directly to an "eligible retirement plan" specified by the distributee in a "direct rollover."
b. For purposes of this Section the following definitions shall apply:
(1) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9); and the portion of any distribution that is not includible in gross income.
(2) An "eligible retirement plan" is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), or an annuity arrangement described in Code section 403(b), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
(3) A "distributee" includes a Participant or Terminated Participant. In addition, the Participant's or Terminated Participant's surviving spouse and the Participant's or Terminated Participant's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Program to the eligible retirement plan specified by the distributee.
5.09 Relinquishment of Benefits. A Participant or Beneficiary who is receiving benefit payments from this Program 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.
5.10 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.
5.11 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, Employer, and Program from further liability on account thereof.
5.12 Facility of Payment. Whenever in the Administrator's opinion a person entitled to receive any payment of a benefit under the Program 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 Program.
5.13 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 Program. The Administrator shall not be under any obligation to search for or ascertain the whereabouts of any such person.
5.14 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 5.04e(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 5.05b(1) and Section 5.05b(2) if on that date the current mailing address of the Beneficiary is on file with the Administrator.
5.15 Unclaimed Benefit.
a. If a Participant fails to properly claim a benefit due hereunder prior to the "required beginning date," as defined in Section 5.04e(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 Program. 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 Program. 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.
5.16 Limitations of Benefits and Distributions. All rights and benefits, including elections, provided to a Participant in this Program 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 Program. For the purposes of this Section, the terms "alternate payee," "qualified domestic relations order," and "earliest retirement age" shall have the meaning set forth under Code section 414(p).
Article VI Trustee
6.01 Responsibilities of the Trustee. The Trustee shall have the following categories of responsibilities in addition to those responsibilities set out in Section VII:
a. To invest, manage and control the Program assets;
b. At the direction of the Administrator, to pay benefits required under the Program 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 Program 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 Program. Such investing shall be done in accordance with investment policies that reflect the Social Principles of The United Methodist Church.
6.02 Investment Powers and Duties of the Trustee.
a. The Trustee shall invest and reinvest the assets of the Program to keep the assets of the Program 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 Program consider, among other factors, the short and long- term financial needs of the Program on the basis of information furnished by the Employer. 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 Program. 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 Program is held, subject only to the requirement that they are not inconsistent with the terms of the Program.
6.03 Other Powers of the Trustee. The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of the Program, 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 Program;
e. To borrow or raise money for the purposes of the Program 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 Program; 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 Program in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Program, 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 Program, to commence or defend suits or legal or administrative proceedings, and to represent the Program 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 Employer;
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 Program, from time to time, with assets belonging to any other employee pension 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 Program 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 Program.
6.04 Valuation. Participants' Accounts shall be credited with interest at a rate to be determined by the Trustee. Any excess of the actual investment experience, including unrealized appreciation over the interest credited to accounts in a Program Year, shall be credited to an investment reserve account from which the Trustee may withdraw funds in succeeding years in order to stabilize the rate of interest credited to Accounts from year to year.
6.05 Funding Through Insurance Contracts. The Trustee may, in lieu of paying benefits to a Participant or a Participant's Beneficiary from assets held by the Trustee, enter into a contract (or contracts) or an agreement (or agreements) with one or more insurance companies for the purchase (from such assets) of one or more insurance contracts which provide benefits which are substantially the actuarial equivalent of those provided for such Participant or Beneficiary under the Program.
6.06 Services. Nothing herein shall prevent the Trustee from contracting for services with another entity, including one that is, with the Trustee, part of a controlled group.
Article VII Administration
7.01 Powers and Duties of the Administrator. The primary responsibility of the Administrator is to administer the Program for the exclusive benefit of the Participants and their Beneficiaries, subject to the terms of the Program. The Administrator shall administer the Program in accordance with its terms and shall have the power and discretion to construe the terms of the Program and to determine all questions arising in connection with the administration, interpretation, and application of the Program. 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 Program, 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 Program;
b. To determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Program;
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 Program and make administrative rules in accordance therewith, and to resolve or otherwise decide matters not specifically covered by the terms and provisions of the Program;
e. To maintain all necessary records for the administration of the Program;
f. To interpret the provisions of the Program and make and publish such rules for regulation of the Program 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 Employers and Employees such information as shall be necessary to the proper administration of the Program;
i. To specify actuarial assumptions and methods for use in determining contributions and benefits under the Program.
j. To assist any Participant regarding his/her rights, benefits or elections available under the Program.
7.02 Records and Reports. The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Program and shall be responsible for supplying all information and reports to appropriate government entities, Participants, Beneficiaries and others as required by law.
7.03 Duties of the Employer. The Employer shall assume the following duties with respect to the Program:
a. To enroll employees, as applicable;
b. To maintain records of a Participant's Service;
c. To maintain records of a Participant's Compensation;
d. To remit contributions to the Trustee;
e. To provide the Administrator with the statistical data and other statistical information satisfactory to the Administrator within a reasonable time after a request by the Administrator sufficient to enable the Administrator to discharge its duties under the Program;
f. To register with and report to government agencies, as appropriate;
g. To properly notify employees of their rights and obligations under the Program;
h. To provide the Administrator with prompt notice of termination of a Participant's employment.
7.04 Fees and Expenses.All expenses incurred by the Administrator and Trustee in connection with the administration of this Program shall be paid by the Program.
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 Program's reserves, funds, contributions, and/or earnings thereon, the expenses and fees necessary or appropriate to the administration of the Program, 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 Employers and Participants and to require the Employer or Participant to pay for such non-routine reports and service.
7.05 Attorney Fees and Costs. The Trustee may assess, to the extent permitted by law, against the assets it manages for any Participant, reasonable attorney fees and charges to reimburse the Administrator or Trustee for expenses incurred by the Administrator or the Trustee, through no fault of its (their) own, in responding to pleadings, retaining counsel, entering an appearance or defending any case in any action in civil law, in the event the Administrator or Trustee is served with a levy, subpoena, summons or other similar pleading by the Internal Revenue Service or by any other party, including the parties to marital litigation, in litigation or legal proceedings in which the Administrator or Trustee is not a party, or is a party only by virtue of its (their) role as a fiduciary in administering assets on behalf of a Participant.
7.06 Delegation of Authority. The Administrator may authorize one or more of its number, or any agent, to carry out its administrative duties, and may employ such counsel, auditors, and other specialists and such clerical, actuarial and other services as it may require in carrying out the provisions of this Program. The Administrator may rely on any certificate, notice or direction, oral or written, purporting to have been signed or communicated on behalf of the Employer, Participant, or others which the Administrator believes to have been signed or communicated by persons authorized to act on behalf of the Employer, Participant or others, as applicable. The Administrator may request instructions in writing from the Employer, 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 Employer, Participant or others, which the Administrator reasonably believes to be genuine and communicated by an authorized person.
7.07 Submission of Claims. Claims for benefits under the Program 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 Employer and to the claimant within 45 days after all required forms and materials related to the application therefor are filed.
7.08 Denial of Claims. If any claim for benefits under the Program 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 Program, 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 Program 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 Program's appeals procedures.
A "reasonable time" for such notice shall not exceed 45 days after the filing of the original claim or 45 days after the request for or submission of any additional data or documents requested by the Administrator, or, if special circumstances require an extension of time, written notice of the extension shall be furnished to the claimant and an additional 90 days will be considered reasonable.
7.09 Appeals from Denial of Claims. If a Participant is denied benefits hereunder, the Participant shall have the right to appeal the decision in accordance with the following procedures:
a. Intermediary Appeal Procedure. The Administrator shall establish an intermediary appeals procedure containing no more than a three- level process.
b. Final Procedure.
(1) There shall be an Appeals Committee of the Administrator nominated by its President and elected by the Administrator which shall hear and decide appeals after the intermediary appeal procedure has been followed.
(2) The Appeals Committee decision shall be final and not subject to action of the Administrator.
(3) After the final intermediary process has been completed and if the Participant's claim is still fully or partially denied, the claimant shall be advised that he/she may, in writing, request a review by the Appeals Committee of the decision denying the claim by filing with the Appeals Committee, on forms supplied by it, within 90 days after such notice has been received by the claimant.
(A) The Notice of Appeal shall be executed by the claimant.
(B) After filing the Notice of Appeal, the claimant may submit issues and comments and other relevant, supporting documents to the Appeals Committee for its consideration.
(C) If such Notice of Appeal is timely filed, the appeal will be heard by the Appeals Committee at its next meeting, unless special circumstances require an extension of time for processing, in which case the claimant shall be so notified and the appeal will be heard at the subsequent meeting of the Appeals Committee.
(D) To allow sufficient time for handling and processing, all Notices of Appeal and supporting documents must be filed with the Appeals Committee at least 30 days prior to the next meeting of the Appeals Committee, and no documents submitted to the Appeals Committee after that time can or will be considered by the Appeals Committee except by its leave and discretion.
(E) The claimant, his or her duly authorized representative, or a representative of the Employer, 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 Employer.
(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 Program provisions on which the decision is based, and such written notice shall be mailed to the claimant by the staff of the Administrator within 15 days following the action by the Appeals Committee.
7.10 Appeal a Condition Precedent to Civil Action. No cause of action in civil law with respect to any alleged violation of the terms and conditions of this contract shall be commenced or maintained by any Participant unless and until such Participant shall have initiated and completed the process of an Appeal as set forth in Sections 7.07 to 7.09 of this Program.
7.11 Basis of Determination of Amount of Benefit. The amount of any monthly benefit provided for under Article V which is to be based upon the Participant's account(s) in the Program shall be the actuarial equivalent of such account(s), determined on the basis of the mortality table and rate of interest adopted by the Administrator for such purpose. Upon an account being converted to an annuity, the account shall be closed and the annuity shall become an obligation of the appropriate fund.
7.12 Limitation of Liability. All benefits hereunder are contingent upon, and payable solely from, such contributions as shall be received by the Trustee and investment results of the Trustee. No financial obligations, other than those which can be met by the contribution actually received and the investment results, shall be assumed by the Administrator or the Trustee. To the extent assets of the Program attributable to a Participant's accounts have been transferred to a trust as provided in Section 6.02c, all benefits to which the Participant is entitled under this Program shall be provided only out of such trust and only to the extent the trust is adequate therefor. The members of the Administrator shall not personally be responsible or otherwise liable for the payment of any benefits hereunder.
Article VIII Amendment and Termination
8.01 Amendment of the Program. The General Conference may amend any or all provisions of this Program at any time by written instrument identified as an amendment of the Program effective as of a specified date. However, the Administrator is authorized to amend any or all provisions of this Program at any time by such written instrument in order to conform the Program to any applicable law and/or regulations promulgated thereunder.
8.02 Termination of the Program. The General Conference shall have the right to terminate the Program at any time in a manner and to the extent not inconsistent with The Book of Discipline. Upon termination of the Program, the accounts of Participants shall be nonforfeitable and either distributed outright or held for distribution in accordance with the terms of the Program. The assets remaining in the Program after all obligations of the Program have been satisfied shall be distributed pursuant to action by the General Conference.
Article IX Miscellaneous
9.01 Rules and Forms. The Administrator shall have the authority and responsibility to:
a. adopt rules, regulations and policies for the administration of this Program, 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 Program.
9.02 Non- alienation of Benefits. No benefits payable at any time under the Program 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 9.04 hereof, no benefit nor any fund under the Program shall in any manner be liable for, or subject to, the debts or liabilities of any Participant or other person entitled to any benefit.
9.03 Non- reversion. The Employer shall have no right, title, or interest in the contributions made to the funds under the Program, and no part of the funds shall revert to the Employer, except that:
a. upon termination of the Program and the allocation and distribution of the funds as provided in Articles IV and V hereof, any monies remaining in the funds because of an erroneous actuarial computation after the satisfaction of all fixed and contingent liabilities under the Program may revert to the applicable Employer; and
b. if a contribution is made to the Program by the participating Employer by a mistake of fact, then such contribution shall be returned to the participating Employer upon request within one year after the Employer has reported and documented such mistake to the Administrator.
9.04 Qualified Domestic Relations Order. The provisions of Section 9.02 notwithstanding, all or part of a Participant's vested benefits arising under this Program, including Supplement One, 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; (2) to receive a surviving spouse benefit arising from the Participant's pre-1985 service; or (3) 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 Program, 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.
9.05 Construction. The Program 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.
9.06 Indemnification. To the extent permitted by law, the Employer shall indemnify and hold harmless the Administrator, Trustee, Participants, any employee, and any other person or persons to whom the Employer, Trustee or Administrator has delegated fiduciary or other duties under the Program, 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 Program under any applicable law, unless the same is determined to be due to gross negligence, willful misconduct, or willful failure to act.
9.07 Alternative Dispute Resolution. If a dispute arises out of or related to the relationship between the Employer 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 Employer 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 Employer.
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.
9.08 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.
9.09 Number. Wherever used herein, the singular shall include the plural and the plural shall include the singular, except where the context requires otherwise.
General Conference Webmaster: Susan Brumbaugh
PETS Creator: John Brawn
Petition Text: 21504-FA-NonDis-O
1996 United Methodist General Conference