Amount of Early Retirement Benefit

Effective January 1, 2000, there is no early retirement reduction for a Participant retiring on or after age 63; however, benefits frozen due to the Internal Revenue Code Section 401 compensation limitations are subject to the age reduction factor to the extent a Participant retires before age 65. A Participant retiring on an Early Retirement Benefit prior to age 63 will receive reduced payments designed to pay a subsidized amount during the lifetime of the retiree equal to what would have been paid over the remainder of the Participant’s lifetime if retirement had occurred at age 65 (Normal Retirement Date). The amount of the Early Retirement Benefit is calculated as follows:

1. Determine the amount of the Normal Retirement Benefit which would be payable to the Participant if retirement had occurred at the Normal Retirement Date as described in this earlier section.

2. Multiply the amount determined in 1. above by an Early Retirement Factor to take into account the fact that retirement benefit payments will begin earlier. For Participants whose Early Retirement Date is on or after January 1, 2000, that Factor is equal to 1/3 of 1% for each month (4% per year) the Participant is younger than age 63 down to age 55 and 1/2 of 1% for each month (6% per year) the Participant is younger than age 55 on the date the Early Retirement Benefit is to commence; there shall be no reduction for early retirement if retirement commences on or after the Participant attains age 63. However, if the Participant had any benefits frozen due to the Internal Revenue Code Section 401 compensation limits, the frozen portion will be subject to an early retirement reduction of 1/2 of 1% for each month the Participant is younger than age 65.

3. Subtract the amount of the Early Retirement reduction from the Normal Retirement Benefit.

Example:

Let’s say a married Participant (without any frozen benefits as described above) would qualify for a Normal Retirement Benefit of $500.00 per month, but decides to retire at age 60. The Normal Retirement Benefit will be reduced by 1/3 of 1% for each month the Participant is younger than age 63—in this case, 36 months or 12%.

Therefore, the Early Retirement Benefit would be equal to $440 ($500 minus 12% of $500). If the Participant retired at age 63 through 65, he would receive $500 per month. If the same Participant retired at age 53, his Normal Retirement Benefit will be reduced 1/3 of 1% for each month he is younger than 63 but older than 55 and 1/2 of 1% for each month he is younger than age 55. Thus, his Early Retirement Benefit would be equal to $280.00 per month ($500.00 minus 44% of $500.00).

The Early Retirement Benefit will then be reduced if any form of benefit other than a Five-Year Certain and Life Annuity is elected.