Pension Plan Document PDF (258 KB) Amendments: I  II  III  IV  V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII XIX XX XXI

    

Article IV, Section 14   see Amendment II    see Amendment III

Section 14. Limitation on Benefits.

1. Definitions. As used in this Section, the following terms shall have the meanings specified below.
   
   “Actuarial Equivalent” shall mean, subject to Revenue Ruling 98-1, the greater of (x) the adjusted amount based on 5% (except that the interest rate shall be the rate specified in Section 417(e)(3) of the Code with respect to a form of benefits subject to Section 417(e)(3)) and the mortality table specified in Section 415(b)(2)(E) of the Code or (y) the adjusted amount based on the factors specified in the Plan to adjust the applicable form of benefit.
   
   “Affiliated Employer” shall mean the Employer and any corporation which is a member of a controlled group of corporations (as defined in Section 414(b) of the Code and modified by Section 415(h) of the Code) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Section 414(c) of the Code and modified by Section 415(h) of the Code) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to regulations under Section 414(o) of the Code.
   
   “Defined Benefit Plan” means a defined benefit plan described in Section 415(k) of the Code.
   
   “Defined Contribution Plan” means a defined contribution Plan as described in Section 415(k) of the Code.
   
   “Defined Benefit Plan Fraction” shall mean a fraction, the numerator of which is the projected annual benefit (determined as of the close of the relevant Plan Year) of the Participant under all Defined Benefit Plans maintained by an Affiliated Employer, and the denominator of which is the lesser of (i) the product of 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1)(A) of the Code for the Plan Year, or (ii) the product of 1.4 multiplied by the amount which may be taken into account under Section 415(b)(1)(B) of the Code with respect to the Participant for the Plan Year.
   
   “Defined Contribution Plan Fraction” shall mean a fraction, the numerator of which is the sum of the annual additions to a Participant’s account under all Defined Contribution Plans maintained by an Affiliated Employer, and the denominator of which is the sum of the lesser of (i) or (ii) for such Plan Year and for each prior Plan Year of service with one or more Affiliated Employers, where (i) is the product of 1.25 multiplied by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for the Plan Year (determined without regard to Section 415(c)(6) of the Code), and (ii) is the product of 1.4 multiplied by the amount which may be taken into account under Section 415(c)(1)(B) of the Code (or Section 415(c)(7) of the Code, if applicable) with respect to the Participant for the Plan Year. Notwithstanding the foregoing, the numerator of the Defined Contribution Plan Fraction shall be adjusted pursuant to Treasury Regulations 1.415-7(d)(1), Questions T-6 and T-7 of Internal Revenue Service Notice 83-10, and Questions Q-3 and Q-14 of Internal Revenue Service Notice 87-21.
   
   “Section 415 Compensation” shall mean a Participant’s wages within the meaning of Code Section 3401(a) and all other payments of compensation to the Participant by an Employer (in the course of the Employer’s business) for which the Employer is required to provide the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Section 415 Compensation shall be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed. Compensation for any limitation year is the compensation actually paid or includable in gross income during such year. Effective January 1, 1998, “Section 415 Compensation” shall include elective deferrals as defined in Section 402(g)(3) of the Code and any amount which is contributed or deferred by an Employer at the election of a Participant and which is not includable in the gross income of the Participant by reason of Code Sections 125 or 457 or, effective January 1, 2001, Code Section 132(f)(4).
   
   “Social Security Retirement Age” shall mean the retirement age for the Participant under Section 216(1) of the Social Security Act, except that such section shall be applied without regard to the age increase factor, and as if the early retirement age under Section 216(l)(2) of such Act were 62. Accordingly, the Social Security Retirement Age is 65 for a Participant attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938), 66 for a Participant attaining age 62 after December 31, 1999, and before January 1, 2017 (i.e., born after December 31, 1937, but before January 1, 1955), and 67 for a Participant attaining age 62 after December 31, 2016 (i.e., born after December 31, 1954).
   
   
2. Basic Limitation.
   
   
   1. Subject to the adjustment hereinafter set forth, the maximum annual amount of retirement benefit payable with respect to a Participant under this Plan shall not exceed the lesser of:
      
      
      1. $90,000, which limitation for Participants (including persons who have already begin receiving benefits under the Plan) each Plan Year shall be adjusted automatically without amendment to the Plan for increases in the cost of living, in accordance with Regulations issued by the Secretary of the Treasury pursuant to the provisions of Section 415(d) of the Code.
         
         
      2. 100% of the Participant’s average annual compensation for the three consecutive calendar years during which he was a Participant and had the highest aggregate annual compensation from an Employer.
   1. For purposes of applying the above limitations, benefits payable in any form other than a straight life annuity with no ancillary benefits shall be adjusted, as provided by Treasury Regulations, so that such benefits are the equivalent of a straight life annuity. For purposes of this Section, the following benefits shall not be taken into account:
      
      
      1. any ancillary benefit which is not directly related to retirement income benefits;
         
         
      2. the Surviving Spouse Benefit provided under Section 4 of Article V; and
         
         
      3. any other benefit not required under Section 415(b)(2) of the Code and Regulations thereunder to be taken into account for purposes of the limitation in Section 415(b)(1) of the Code.
         
         
   2. The foregoing rules in clause (A) shall be implemented as follows:
      
      
      1. If the Participant elects the normal form of benefits under Article IV, Section 1(b), the limitation in subsection (b)(1) shall be reduced by the Actuarial Equivalent of the payments expected to be provided after the Participant’s death under the 60-month certain period in Article IV, Section 1(b). If the Participant elects a joint and survivor annuity with his spouse as coannuitant, the maximum benefit shall be the limit set forth in the preceding sentence.
         
         
      2. If the Participant elects any other optional form of benefit (excluding any joint and survivor annuity with the spouse as coannuitant), then such Plan benefit shall be converted to a single life annuity which is the Actuarial Equivalent of the Plan benefit in order to determine whether the Plan benefit exceeds the limitation set forth in subsection (b)(1).
         
         

   Notwithstanding the foregoing, if an individual was a Participant in this Plan prior to October 3, 1973, the maximum benefit payable to him shall not be reduced on account of this Section to less than his annual benefit payable at retirement based on the terms of this Plan as it existed on October 2, 1973, provided his compensation taken into account for any period after October 2, 1973, does not exceed his rate of compensation on that date, and provided further that such benefit does not exceed 100% of his annual rate of compensation on the earlier of October 2, 1973 or his termination of employment with the Employer. In addition, the maximum benefit payable to any Participant shall not be reduced below the amount provided by Section 235(g)(4) and (5) of the Tax Equity and Fiscal Responsibility Act of 1982 or the amount provided by Section 1106(i)(3) of the Tax Reform Act of 1986.

3. Adjustments in the Limitation. The limitation on the maximum amount of annual retirement benefits required by subsection (b) shall be adjusted as follows:
   
   
   1. Payments On or After Age 62 and Before Social Security Retirement Age. If the retirement benefits commence on or after age 62 and before Social Security Retirement Age, the dollar limitation in subsection (b)(1)(A) shall be decreased by 5/9 of 1% for each of the first 36 months and 5/12 of 1% for each of the additional months by which benefits commence before the month of the Participant’s Social Security Retirement Age, unless a different reduction is required under Section 415(b)(2)(C) of the Code and the regulations thereunder.
      
      
   2. Payments Prior to Age 62. If retirement benefits commence before age 62, the dollar limitation in subsection (b)(1)(A) payable at age 62 as set forth in subsection (c)(1) shall, subject to Revenue Ruling 98-1, be the lesser of (x) the equivalent amount actuarially computed using an interest rate of 5% and the mortality table specified in Section 415(b)(2)(E) of the Code or (y) an equivalent amount computed based on the early retirement factors specified in the Plan that are applicable to the Participant’s benefit. Any decrease in the dollar limit determined in accordance with this paragraph (2) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Participant.
      
      
   3. Payments After Social Security Retirement Age. If the retirement benefits commence after Social Security Retirement Age, the dollar limitation in subsection (b)(1)(A) shall, subject to Revenue Ruling 98-1, be the lesser of (x) the equivalent amount actuarially computed using an interest rate of 5% and the mortality table specified in Section 415(b)(2)(E) of the Code or (y) an equivalent amount computed based on the late retirement factors specified in the Plan that are applicable to the Participant’s benefit. Any increase or decrease in the dollar limit determined in accordance with this paragraph (3) shall not reflect the mortality decrement to the extent that benefits will not be forfeited upon the death of the Participant.
      
      
4. Adjustments in the Limitation for Employees of Tax-Exempt Employers. In the case of an Employer which is exempt from federal income taxes, the following rules will apply in lieu of those set forth in subsection (c) above.
   
   
   1. Payments On or After Age 62 and Before Age 65. If the retirement benefits commence on or after age 62 and before age 65, the dollar limitation in subsection (b)(1)(A) shall not be reduced.
      
      
   2. Payments Prior to Age 62. If retirement benefits commence on or after age 55 and before age 62, the dollar limitation in subsection (b)(1)(A) shall be reduced to provide the Actuarial Equivalent of an annual benefit equal to such limitation commencing at age 62 (as set forth in clause (1)), but not below $75,000. If retirement benefits commence prior to age 55, the dollar limitation in subsection (b)(1)(A) shall be reduced to provide the Actuarial Equivalent of an annual benefit equal to the limitation commencing at age 55. Such reduction shall be made in accordance with Section 415(b)(2)(E) of the Code.
      
      
   3. Payments After Age 65. If the retirement benefits commence after age 65, the dollar limitation in subsection (b)(1)(A) shall be increased to provide the Actuarial Equivalent of an annual benefit equal to such limitation commencing at age 65. Such increase shall be made in accordance with Section 415(b)(2)(D) and (E) of the Code.
      
      
5. Participation in Other Defined Benefit Plans. The limitation of this Section with respect to any Participant who at any time has been a Participant in any other Defined Benefit Plan maintained by an Affiliated Employer shall apply as if the total benefits payable under all Defined Benefit Plans maintained by the Affiliate Employer in which the Participant has been a participant were payable from one plan.
   
   
6. Benefits Not in Excess of $10,000. The provisions of this Section shall not apply to any Participant who has not at any time participated in any Defined Contribution Plan maintained by an Affiliated Employer if his total annual retirement benefit computed in accordance with this Section in any year is not in excess of $10,000.
   
   
7. Less Than 10 Years of Service. The maximum retirement benefits payable under this Section to any Participant who has completed less than 10 Qualified Years shall be the amount determined under this Section, multiplied by a fraction, the numerator of which is the number of the Participant’s Qualified Years (or part thereof) and the denominator of which is 10.
   
   
8. Participant in Defined Contribution Plan. In any case where a Participant under this Plan is also a Participant in a Defined Contribution Plan maintained by an Affiliated Employer, the sum of the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction shall not, subject to the restrictions and exceptions contained in Section 2004 of ERISA, exceed 1.0. The preceding sentence shall not apply to Participants who first retire on or after January 1, 2000. As to Participants who first retired prior to 2000, (1) the limit in this subsection (h) (the “Limit”) shall apply to payments due prior to 2000, (2) no adjustment in benefits shall be made after 1999 as a result of any reduction in benefits prior to 2000 due to the Limit, and (3) the Limit shall not apply to payments made on or after January 1, 2000.
   
   
9. Limitations Applied Jointly for Each Employer. Notwithstanding any other provision of this Section, unless it results in lower limitations, the limitations of this Section shall be applied by considering the Participant’s benefits, service, Plan participation and Compensation as if attributable to a single Employer; otherwise such limitations shall be determined on an Affiliated Employer by Affiliated Employer basis.
   
   
10. Reduction of Benefits. Reduction of benefits and/or contributions to all plans, where required, shall be accomplished by reducing the Participant’s benefit under plans (other than this Plan) in which he participates (in such priority as shall be determined by the administrators of such other plans). Benefits provided under this Plan shall not be reduced on account of this Section except to the extent required to prevent disqualification of this Plan under the Code. No reduction shall be made under this Plan unless the other plans taken into account under this Section have been terminated by the end of the Plan Year in question. Any benefits otherwise considered accrued under this Plan may be reduced if necessary to comply with Section 415 of the Code.
    
    
11. Certifications. For the purpose of determining the application of the limits of this Section to a particular Participant, the Participant and the Employers shall furnish all records and affidavits that the Directors shall request in order to determine the maximum benefit hereunder. The Directors’ determination of the applicable limitations under this Section for a particular Participant shall be conclusive.