FORMS OF PENSION PAYMENT

The Plan provides several forms of pension benefit payment. When you apply for a pension, you will be advised of the amount of payment under each form of pension available to you. You will then be required to select the form of payment you desire.

IMPORTANT: Once you have started to receive pension benefits, you cannot change from one form of pension payment to another, even if additional earnings are received on your behalf, your marital status changes, or if your spouse or contingent annuitant dies before you. There are limited exceptions to this rule for a Disability Pensioner who recovers from his disability and returns to work or for an Early Retirement Pensioner who converts his Early Retirement Pension to a Disability Pension.

Automatic Lump Sum Payment

Regardless of the type of pension payment you qualify for, if the actuarial value of your lifetime pension is $1,000 or less, your pension will automatically be paid in one lump sum instead of monthly payments. If the actuarial value of your lifetime pension is between $1,000 and $5,000, you may elect to receive a lump sum payment instead of monthly payments. You will be advised when you apply for pension if you are subject to these lump sum payment provisions.

Five-Year Certain

This is the normal form of benefit payment under the Plan for unmarried participants. This form of payment provides a monthly pension to you for your lifetime with the guarantee that if you die before receiving 60 monthly pension payments, the remainder of the 60 monthly payments will be paid to your designated beneficiary. There is no reduction made to the pension amount for electing this form of payment.

If you are married, this form of payment is available only if you and your spouse have rejected the Husband-and-Wife Pension.

Husband-and-Wife Pension

This is the normal form of benefit payment under the Plan for married participants. This form of payment provides a monthly pension to you for your lifetime and, after your death, a lifetime pension for your surviving spouse. Your surviving spouse will receive monthly benefits equal to 50% of the amount you were receiving when you died. For example, if you were receiving a monthly Husband-and-Wife Pension of $700 per month and died leaving a widow, she would receive a monthly benefit of $350 per month for the rest of her life.

The Husband-and-Wife Pension extends protection over two lifetimes. Benefit levels are adjusted accordingly. During your lifetime, you will receive monthly benefits at a lower level than you would receive with the Five-Year Certain form. If your spouse is much younger than you, benefits will be reduced more than if you were close to the same age or if your spouse is older than you. The reason is that, statistically speaking, the younger spouse is likely to receive benefits over a longer period of time. The monthly amount of pension payable to you and your spouse under the Husband-and-Wife Pension is based on the life expectancy of you and your spouse. To obtain an estimate of the amounts, please contact the Plan Office.

If you are married, your pension will be paid on the basis of the Husband-and-Wife Pension unless you and your spouse complete and sign a notarized statement rejecting the Husband-and-Wife Pension and electing another form of payment. Any such rejection of the Husband-and-Wife Pension that is made more than 90 days before the Annuity Starting Date of your pension is not valid and a new rejection form must be completed.

Special Rules for the Husband-and-Wife Option

1. The Husband-and-Wife Pension only applies to the spouse who is legally married to you at the time pension payments start.
2. Once payments have begun on a Husband-and-Wife Pension, they will continue at the same level even if your spouse should die before you or the marriage should be dissolved. Please refer to the Pop-Up-Option on page 18 in the printed document.
3. Payments to the surviving spouse continue for life and are not affected by remarriage.
4. If your spouse dies before you but after pension payments have begun, all pension payments will stop with your death.

Joint and Survivor Option

The Joint and Survivor Option provides a reduced monthly pension to you for your lifetime, with 100% of the amount of your monthly pension continuing after your death for the lifetime of a contingent annuitant named by you.

If you are married, this form of payment is available only if you and your spouse have rejected the Husband-and-Wife Pension.

Because the Joint and Survivor Option provides benefits over two lifetimes, the benefit amount is reduced from the amount you would receive under the Five-Year Certain form. The monthly amount of pension payable to you and your contingent annuitant is based on the life expectancy of you and your contingent annuitant. To obtain an estimate of the amounts, please contact the Plan Office.

Special Rules for the Joint and Survivor Option

1. Election of the Joint and Survivor Option must be made in writing on a form prescribed by the Plan Trustees and filed with the Plan Office prior to the date the first pension payment is made.
2. The Joint and Survivor Option will take effect only if you and your contingent annuitant are both alive on the date when it is otherwise to take effect.
3. Once payments have begun on a Joint and Survivor Option, the reduced payments will continue at the same level even if your co-annuitant should die before you (or, if you co-annuitant is your spouse and you subsequently divorce). Please refer to the Pop-Up Option to the right.
4. If you select a contingent annuitant who is not your spouse and who is more than 10 years younger than you, the benefit payable to that contingent annuitant may be less than 100% of your benefit. Contact the Plan Office for details.
5. Once elected, the Joint and Survivor Option may only be revoked in writing on a form prescribed by the Plan Trustees and filed with the Plan office prior to the date the first pension payment is made.
   
   Exception: The Option will be automatically revoked if the contingent annuitant dies (or if the contingent annuitant is your spouse, you are divorced) before a pension in the optional form becomes payable. In such event, you may continue the Option if within 90 days of such an event you make a choice of another contingent annuitant and communicate it to the Plan Office in writing.


6. You may not change your contingent annuitant once payments have commenced. This is because the amount of payment is based on your age and the age of the contingent annuitant you select at retirement.
7. The Joint and Survivor Option is not payable if it would result in a monthly benefit of less than $30 to the participant.

Pop-Up Option

If you retire on after January 1, 1995 you may elect either the Husband-and-Wife Pension or the Joint and Survivor Option with a “Pop-Up Option”.

The Pop-Up Option reduces the monthly amount that would otherwise be payable under the Husband-and-Wife Pension or the Joint and Survivor Option. However, it guarantees that if your spouse or contingent annuitant dies before you, your monthly benefit will be increased (or popped up) to the amount that would have been payable had your benefit been paid as a Five-Year Certain at retirement. Without the Pop-Up Option, your monthly payments are not increased if your spouse or annuitant dies first.

If you are married, your spouse must consent to the Pop-Up Option.

Because the Pop-Up Option provides an additional guarantee, the monthly pension amount is reduced more than it would be under either the Husband-and-Wife Pension or Joint and Survivor Option without the Pop-Up Option. To obtain an estimate of the monthly amounts, please contact the Plan Office.

If you elect a Pop-Up Option and your spouse or contingent annuitant dies, you should send a certified copy of the death certificate to the Plan Office as soon as possible. The increased (popped-up) monthly benefit amount will become effective on the first of the month following the date of death. The increased monthly benefit will be payable for your lifetime and all payments will stop upon your death. However, if you die before receiving a total of 60 monthly payments (including all payments before and after the pop-up), payments will continue to your designated beneficiary until a total of 60 payments have been made.

Ten-Year Certain Option

If you are eligible for any type of pension other than a Disability or Occupational Disability Pension, you may elect to receive a Ten-Year Certain Option. This Option provides a reduced monthly pension to you for your lifetime with the guarantee that if you die before receiving 120 pension payments, the remainder of the 120 monthly payments will be paid to your designed beneficiary. Payments to your beneficiary will continue until a total of 120 payments have been made to you and your beneficiary combined.

If you are married, this form of payment is available only if you and your spouse have rejected the Husband-and-Wife Pension.

The amount of the reduction for the Ten-Year Certain Option is determined based on your age on the Annuity Starting Date of your pension, according to the table to the right.

Example: You are age 57 and eligible for an Early Retirement Pension in the amount of $600.00 per month. If you elect the Ten-Year Certain Option, your benefit will be reduced to $586.80 ($600.00 x 97.80%).

Special Rules for the Ten-Year Certain Option

1. Election of the Ten Year-Certain Option must be made in writing on a form prescribed by the Plan Trustees and filed with the Plan Office prior to the date the first pension payment is made.
2. Revocation of the Ten-Year-Certain Option must be made in writing on a form prescribed by the Plan Trustees and filed with the Plan Office prior to the effective date of the pension.
3. The Ten Year-Certain Option is not available if it would result in a monthly pension of less than $30 to you, nor is it available if your life expectancy or the joint life expectancy of you and your beneficiary is less than 10 years.

Partial Lump Sum Option

The Partial Lump Sum Option allows you to receive part of your pension in a lump sum. If you elect this option you will receive, at retirement, a lump sum payment equal to twelve times the monthly payment you would have received under the Five-Year Certain form of payment. Starting with the month after the lump sum payment is made, your pension will be paid in monthly payments for the rest of your life based on the form of payment you elect.

You may elect to receive the monthly payments under any form of payment provided by the Plan but the amount of the monthly payments will be reduced to take into account the lump sum payment. The amount of reduction is based on actuarial factors in effect at the time the pension first becomes payable.

For example, if you retire at age 65 with a monthly benefit of $1,200 under the Five Year Certain form of payment, you would receive $14,400 in a lump sum (12 x $1,200) and monthly payments of $1,102.00 thereafter for the rest of your life. If you elect the Husband-and-Wife Pension or any optional form of payment, the monthly payments would be further reduced in accordance with the rules for the form of payment selected.

If you have additional earnings credit after the lump sum is paid, your monthly payments will be increased to reflect the additional benefits but no additional lump sum payment will be made.

If you are married, your spouse must consent to the election of the Partial Lump Sum Option.