Annual Return/Report of Employee Benefit Plan

Transcription

1 Form 5500 Department of the Treasury Internal Revenue Service Department of Labor Employee Benefits Security Administration Pension Benefit Guaranty Corporation Part I Annual Return/Report of Employee Benefit Plan This form is required to be filed for employee benefit plans under sections 104 and 4065 of the Employee Retirement Income Security Act of 1974 (ERISA) and sections 6057(b) and 6058(a) of the Internal Revenue Code (the Code). Complete all entries in accordance with the instructions to the Form Annual Report Identification Information For calendar plan year 2017 or fiscal plan year beginning 01/01/2017 A X a multiemployer plan This return/report is for: X a single-employer plan X a DFE (specify) _C_ OMB Nos This Form is Open to Public Inspection and ending 12/31/2017 X a multiple-employer plan (Filers checking this box must attach a list of participating employer information in accordance with the form instructions.) B This return/report is: X the first return/report X the final return/report X an amended return/report X a short plan year return/report (less than 12 months) C If the plan is a collectively-bargained plan, check here X D Check box if filing under: X Form 5558 X automatic extension X the DFVC program X special extension (enter description) ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE Part II Basic Plan Information enter all requested information 1a Name of plan DOW EMPLOYEES' PENSION PLAN ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 2a Plan sponsor s name (employer, if for a single-employer plan) Mailing address (include room, apt., suite no. and street, or P.O. Box) City or town, state or province, country, and ZIP or foreign postal code (if foreign, see instructions) THE DOW CHEMICAL COMPANY ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI D/B/A ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 2211 c/o H.H. ABCDEFGHI DOW WAY ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI MIDLAND, MI ABCDEFGHI ABCDEFGHI ABCDE ABCDEFGHI ABCDEFGHI ABCDE CITYEFGHI ABCDEFGHI AB, ST UK Caution: A penalty for the late or incomplete filing of this return/report will be assessed unless reasonable cause is established. 1b Three-digit plan number (PN) 001 1c Effective date of plan YYYY-MM-DD 06/01/1947 2b Employer Identification Number (EIN) c Plan Sponsor s telephone number d Business code (see instructions) Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report, including accompanying schedules, statements and attachments, as well as the electronic version of this return/report, and to the best of my knowledge and belief, it is true, correct, and complete. SIGN HERE Filed with authorized/valid electronic signature. YYYY-MM-DD 10/15/2018 ABCDEFGHI MARIE CURRERI ABCDEFGHI ABCDEFGHI ABCDE Signature of plan administrator Date Enter name of individual signing as plan administrator SIGN HERE Filed with authorized/valid electronic signature. YYYY-MM-DD 10/15/2018 BRYAN ABCDEFGHI JENDRETZKE ABCDEFGHI ABCDEFGHI ABCDE Signature of employer/plan sponsor Date Enter name of individual signing as employer or plan sponsor SIGN YYYY-MM-DD ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDE HERE Signature of DFE Date Enter name of individual signing as DFE For Paperwork Reduction Act Notice, see the Instructions for Form Form 5500 (2017) v

2 Form 5500 (2017) Page 2 3a Plan administrator s name and address X Same as Plan Sponsor THE DOW CHEMICAL COMPANY ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI c/o DOW ABCDEFGHI NORTH AMERICA ABCDEFGHI BENEFITS ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI ABCDEFGHI 2211 H.H. DOW WAY MIDLAND, MI ABCDEFGHI ABCDEFGHI ABCDE ABCDEFGHI ABCDEFGHI ABCDE CITYEFGHI ABCDEFGHI AB, ST UK 4 If the name and/or EIN of the plan sponsor or the plan name has changed since the last return/report filed for this plan, enter the plan sponsor s name, EIN, the plan name and the plan number from the last return/report: a Sponsor s name c Plan Name 3b Administrator s EIN c Administrator s telephone number b EIN d PN Total number of participants at the beginning of the plan year Number of participants as of the end of the plan year unless otherwise stated (welfare plans complete only lines 6a(1), 6a(2), 6b, 6c, and 6d). a(1) Total number of active participants at the beginning of the plan year... 6a(1) a(2) Total number of active participants at the end of the plan year... 6a(2) b Retired or separated participants receiving benefits... 6b c Other retired or separated participants entitled to future benefits... 6c d Subtotal. Add lines 6a(2), 6b, and 6c.... 6d e Deceased participants whose beneficiaries are receiving or are entitled to receive benefits.... 6e f Total. Add lines 6d and 6e.... 6f g Number of participants with account balances as of the end of the plan year (only defined contribution plans complete this item)... 6g h Number of participants who terminated employment during the plan year with accrued benefits that were less than 100% vested... 6h Enter the total number of employers obligated to contribute to the plan (only multiemployer plans complete this item) a If the plan provides pension benefits, enter the applicable pension feature codes from the List of Plan Characteristics Codes in the instructions: 1A 1B 1C 1E 3F 3H b If the plan provides welfare benefits, enter the applicable welfare feature codes from the List of Plan Characteristics Codes in the instructions: 9a Plan funding arrangement (check all that apply) 9b Plan benefit arrangement (check all that apply) (1) X Insurance (1) X Insurance (2) X Code section 412(e)(3) insurance contracts (2) X Code section 412(e)(3) insurance contracts X (3) X Trust (3) X Trust (4) X General assets of the sponsor (4) X General assets of the sponsor 10 Check all applicable boxes in 10a and 10b to indicate which schedules are attached, and, where indicated, enter the number attached. (See instructions) a Pension Schedules b General Schedules (1) X R (Retirement Plan Information) (1) X H (Financial Information) X (2) X MB (Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information) - signed by the plan actuary (3) X SB (Single-Employer Defined Benefit Plan Actuarial Information) - signed by the plan actuary X X (2) X I (Financial Information Small Plan) (3) X 0 A (Insurance Information) (4) X C (Service Provider Information) (5) X D (DFE/Participating Plan Information) (6) X G (Financial Transaction Schedules)

3 Part III Form 5500 (2017) Page 3 Form M-1 Compliance Information (to be completed by welfare benefit plans) 11a If the plan provides welfare benefits, was the plan subject to the Form M-1 filing requirements during the plan year? (See instructions and 29 CFR ) X Yes X No If Yes is checked, complete lines 11b and 11c. 11b Is the plan currently in compliance with the Form M-1 filing requirements? (See instructions and 29 CFR )... X Yes 11c Enter the Receipt Confirmation Code for the 2017 Form M-1 annual report. If the plan was not required to file the 2017 Form M-1 annual report, enter the Receipt Confirmation Code for the most recent Form M-1 that was required to be filed under the Form M-1 filing requirements. (Failure to enter a valid Receipt Confirmation Code will subject the Form 5500 filing to rejection as incomplete.) Receipt Confirmation Code X No

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7 Schedule SB Statement by Enrolled Actuary Plan Sponsor The Dow Chemical Company EIN/PN /001 Plan Name Dow Employees' Pension Plan Enrolled Actuary Andrea L. Fleser Enrollment Number The actuarial assumptions that are not mandated by IRC 430 and regulations, represent the enrolled actuary's best estimate of anticipated experience under the plan, subject to the following conditions: The actuarial valuation, on which the information in this Schedule SB is based, has been prepared in reliance upon the employee and financial data furnished by the plan administrator and the trustee. The enrolled actuary has not made a rigorous check of the accuracy of this information but has accepted it after reviewing it and concluding it is reasonable in relation to similar information furnished in previous years. The amounts of contributions and dates paid shown in Item 18 of Schedule SB were listed in reliance on information provided by the plan administrator and/or trustee. Effective December 31, 2016, the Dow Corning Corporation Employees Retirement Plan ( DCC Plan ) (EIN: , PN: 333) merged into the Dow Employees Pension Plan ( DEPP ). Thus, note the following regarding prior year information shown on the enclosed Form 5500 Schedule SB: Line 7 amount of 1,184,287,916 is based on 918,273,982 from line 13 of the 2016 Schedule SB for DEPP and 266,013,934 from line 13 of the 2016 Schedule SB for the DCC Plan. Line 8 amount of 341,757,903 is based on 318,431,133 from line 35 of the 2016 Schedule SB for DEPP and 23,326,770 from line 35 of the 2016 Schedule SB for the DCC Plan Line 10 interest rate of 7.06% is the weighted average of 6.70% for DEPP and 7.94% for DCC Plan

8 Schedule SB, Line 7 Explanation of Discrepancy in Prior Year Funding Standard Carryover Balance or Prefunding Balance Effective December 31, 2016, the Dow Corning Corporation Employees Retirement Plan ( DCC Plan ) (EIN: , PN: 333) merged into the Dow Employees Pension Plan ( DEPP ). Thus, note the following regarding prior year information shown on the enclosed Form 5500 Schedule SB: Line 7 amount of 1,184,287,916 is based on 918,273,982 from line 13 of the 2016 Schedule SB for DEPP and 266,013,934 from line 13 of the 2016 Schedule SB for the DCC Plan. Line 8 amount of 341,757,903 is based on 318,431,133 from line 35 of the 2016 Schedule SB for DEPP and 23,326,770 from line 35 of the 2016 Schedule SB for the DCC Plan Line 10 interest rate of 7.06% is the weighted average of 6.70% for DEPP and 7.94% for DCC Plan

9 Schedule SB, Line 22 Description of Weighted Average Retirement Age as of 01/01/2017 See Schedule SB, Part V - Statement of Actuarial Assumptions and Methods for retirement rates. The average retirement age for Line 22 was calculated by determining the average age at retirement for those current active participants expected to reach retirement, based on all current decrements assumed.

10 Schedule SB, Part V Schedule SB, Line 24 Change in Actuarial Assumptions The segment rates used to calculate the funding target and target normal cost were updated from an applicable month of September 2015 to September The healthy mortality table used to calculate the funding target and target normal cost was updated to include one additional year of projected mortality improvements. The assumed plan-related expense added to the target normal cost was changed from $44,103,000 (including the former Dow Corning Corporation Employees Retirement Plan amount) last year to $48,210,000 this year based on the assumption described in this appendix. Estimated termination dates provided by Dow were used for participants impacted by the 2016 restructuring announcements. For purposes of the maximum deductible contribution, annual increases in compensation decreased from 4.50% to 4.25%

11 Schedule SB, Line 26 Schedule of Active Participant Data as of January 1, Years of Credited Service Attained Age No. Under 1 1 to 4 5 to 9 10 to to to to to to & Over Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. No. Avg. Comp. Under , ,161 77, , ,099 1,047 91, , , , , , , , , , , , , , , , , , , , , , ,481 1, , , , , , , , , , , , , , , , , , , , , , , , , , , , & Over Includes participants in the ANGUS and Celotex hourly benefit structures. Plan Name: Dow Employees' Pension Plan Plan Sponsor: The Dow Chemical Company

12 Schedule SB, Line 26 Schedule of Active Participant Data for Account Balance Plans as of 01/01/ Years of Credited Service Under 1 1 to 4 5 to 9 10 to to to to to to & Over Attained Age No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. No. Avg. Bal. Under , ,009 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , & Over Includes only those participants accruing benefits under the DEPP or PPA account balance formulas. Plan Name: Dow Employees' Pension Plan Plan Sponsor: The Dow Chemical Company

13 Schedule SB, Line 32 Schedule of Amortization Bases as of 01/01/2017 Type of Base Date Established Remaining Amortization Period (Years) Outstanding Balance Amortization Payment 1 Shortfall 01/01/ ,027,480 61,912,426 2 Shortfall 01/01/ ,546,703 52,395,794 3 Shortfall 01/01/ ,841,111 10,796,883 4 Shortfall 01/01/ ,223,917 1,386,872 5 Shortfall 01/01/ ,826,029 26,312,220 6 Shortfall 01/01/ (231,489,431) (118,103,237) 7 Shortfall 01/01/ ,381,096 57,381,096 Total 615,356,905 92,082,054 Plan Name: Dow Employees' Pension Plan Plan Sponsor: The Dow Chemical Company

14 Schedule SB, Part V Statement of Actuarial Assumptions and Methods Economic Assumptions Interest Rate Basis Applicable month September Interest rate basis Interest Rates 3-Segment Rates Reflecting Corridors First segment rate 4.16% 1.52% Second segment rate 5.72% 3.80% Third segment rate 6.48% 4.79% Effective interest rate 5.91% 4.13% Not Reflecting Corridors Compensation Increases Future Increases in Social Security Future Increases in Maximum Benefits and Plan Compensation Limitations Compensation is assumed to increase 4.25% per annum for purposes of determining the target normal cost and the additional Funding Target for maximum deductible contribution purposes. 3.50% for purposes of determining the target normal cost and the additional Funding Target for maximum deductible contribution purposes. For purposes of determining the target normal cost and the Funding Target for maximum deductible contribution purposes it is assumed that maximum benefit and plan compensation limitations under the Internal Revenue Code will not increase in the future. For purposes of determining the additional funding target to calculate the maximum deductible contribution it is assumed that maximum benefit and plan compensation limitations will increase 3.00% per year in the future under Internal Revenue Code.

15 Assumed Cost of Living Adjustments It is assumed that eligible individuals will have their pension benefit accrued as of December 31, 2008 increased at the rate of 2.30% per annum for participants of the former Rohm and Haas Company Retirement Plan. Interest Credit Rate The actual interest credit rate for 2017 was used. The long-term assumption is 4.50%. Interest and Mortality for Determining Lump Sums For the participants of the former Rohm and Haas Company Retirement Plan, the long-term lump sum assumptions are as described below. The PPA lump sum basis also applies to the ANGUS Hourly participants. For funding purposes: The grandfathered pre-ppa 30-year Treasury interest rate is 5.00%. The mortality assumption used for the grandfathered pre-ppa lump-sum basis is the table described in Revenue Ruling The PPA lump sum interest rate is based on the valuation interest rates under the general rule of the IRC 430(h)(2). The mortality assumption used for the PPA lump sum basis is the required table for the current plan year lump sum payments.

16 Demographic and Other Assumptions Inclusion Date The valuation date coincident with or next following the enrolment date on which the employee becomes a participant. New or Rehired Employees It was assumed that there will be no new or rehired employees. Form of Payment For DEPP, Celotex Hourly and Mycogen, single participants are assumed to elect a life only annuity and married participants are assumed to elect a 50% Joint and Survivor benefit. For ANGUS Hourly, 80% of participants who retire from active service are assumed to elect an immediate lump sum form of payment and 20% of the participants who retire from active service are assumed to elect the normal form as described above. For participants covered by the PPA formula and participants of the former Rohm and Haas Company Retirement Plan, it is assumed that 10% of active participants will elect a life annuity and 90% of active participants will elect a lump sum upon retirement or withdrawal. It is assumed that 100% of PPA active participants will be paid a lump sum at death or disability. For participants of the former Dow Corning Corporation Employees Retirement Plan, it is assumed that 80% of married active males and 50% of married active females elect the 50% Joint and Survivor option. All other actives are assumed to elect a Single Life annuity. 90% of pre 2006 employees are assumed to elect payment in the form of the Early Retirement Level Income Option in conjunction with the 50% Joint and Survivor or Single Life Annuity.

17 Percent Married 85% of the male and 50% of the female participants are assumed to be married. For the participants of the former Rohm and Haas Company Retirement Plan, 80% of the participants are assumed to be married. For former participants in the Morton International, Inc. Pension Plan for Collectively Bargained Employees, it is assumed that 90% of males and 50% of females are married. For the participants of the former Dow Corning Corporation Employees Retirement Plan, it is assumed that 75% of males and 50% of females are married. Spouse Age The male spouse is assumed to be three years older than the female spouse. For the participants of the former Dow Corning Corporation Employees Retirement Plan, the male spouse is assumed to be two years older than the female spouse. Plan Compensation For DEPP and PPA formula participants, present earnings for the current plan year were estimated by using the pay rate on the last day of the preceding plan year increased by half a year of salary scale and reduced by the percentage of base pay deferred under the Elective Deferral Plan plus the plan award for the previous plan year increased by a full year of salary scale and reduced by the percentage of award deferred. For the participants of the former Rohm and Haas Company Retirement Plan, present earnings for the current year were estimated based on actual pay for the preceding plan year without regard to the actual bonuses plus 100% of the target bonus increased by the salary scale. For participants of the former Dow Corning Corporation Employees Retirement Plan, compensation assumed paid in the current year beginning on the valuation date is last year s compensation paid (including the target bonus) increased by the assumed salary increase.

18 Demographic Assumptions Mortality Rates Healthy Separate rates for non-annuitants (based on RP-2000 Employees table without collar or amount adjustments projected to 2032 using Scale AA) and annuitants (based on RP-2000 Healthy Annuitants table without collar or amount adjustments, projected to 2024 using Scale AA). Disabled 1 Alternative disabled life mortality tables as defined under Revenue Ruling Not applicable for employees participating in the Celotex Hourly benefit structure or the Legacy Rohm and Haas employees

19 Retirement Rates For employees participating in the Dow Employees Pension Plan benefit structure: Age Percentage Retiring During the Year Employees Eligible for Full Transition All Other Accruals Employees % 6.0% and over For employees participating in the ANGUS Hourly and Celotex Hourly benefit structures and for Mycogen participants: Percentage Retiring During the Year Age Rate %

20 Retirement Rates (cont.) For employees participating in the former Rohm and Haas Company Retirement Plan: Age Percentage Retiring During the Year Legacy Rohm and Haas Employees* All Other Employees % 10.0% and Over * The following retirement assumptions also apply: 0.0% if employee is under age 60 and has not completed 30 years of service or if employee is age 60 and older and has not completed 15 years of service. 25.0% if year is first year in which employee has attained age 56 and completed 30 years of service or has attained age 60 and completed 15 years of service. Employees who currently are eligible to participant in the Rohm and Haas Non-Qualified Pension Plan are assumed to retire at age 62 or immediately if age 62 or older as of December 31, 2002.

21 Retirement Rates (cont.) For employees participating in the former Dow Corning Corporation Employees Retirement Plan: Age Percentage Retiring During the Year* Pre 2006 Post 2005 Age Pre 2006 Post % N/A % 2.0% N/A N/A N/A N/A % *Employees that have 85 points and are below age 60 have a retirement decrement of 16.8%. Estimated termination dates provided by Dow were used for participants impacted by the 2015 and 2016 restructuring announcements. Participants retirement eligible at their estimated termination date are assumed to commence immediately.

22 Disability Rates 1 Rates of disability were determined as 50% of the 1977 estimated rates from the Social Security Study #75. For employees participating in the former Rohm and Haas Company Retirement Plan: Percentage Becoming Disabled During the Year Age Male Female 25.03%.03% For employees participating in the former Dow Corning Employees Retirement Plan, 25% of 1977 Social Security incidence rates. The rates of incidence are illustrated below. Percentage Becoming Disabled During the Year Age Male Female % % Not applicable for employees participating in the Celotex Hourly benefit structure or the Legacy Rohm and Haas employees.

23 Representative Termination Rates (not due to disability, retirement or mortality) For employees participating in the Dow Employees Pension Plan benefit structure: Age Percentage Terminating During the Year Service Less Service Greater Than 5 Years Than 5 Years % 6.50% and Over Retirement Rates Retirement Rates For employees participating in the ANGUS Hourly and Celotex Hourly pension benefit structure: Percentage Terminating During the Year Age Rate % NIL For Mycogen participants: Percentage Terminating During the Year Age Male Rate Female Rate % 26.5%

24 Representative Termination Rates (not due to disability, retirement or mortality) (cont.) For employees participating in the former Rohm and Haas Company Retirement Plan: Percentage Terminating During the Year Age Male Female % 11.04% For employees participating in the former Dow Corning Corporation Employees Retirement Plan: Percentage Terminating During the Year* Age Pre 2006 Post % 8.0% *For Post 2005 participants under age 60, withdrawal decrements are increased for participants with less than 4 years of service (10% for 0-1 years, 9% for 1-2 years, 8.5% for 2-3 years and 8% for 3-4 years). Estimated termination dates provided by Dow were used for participants impacted by the 2015 and 2016 restructuring announcements.

25 Additional Assumptions Administrative Expenses Administrative expenses for the year are assumed to be equal to $48,210,000, the average of actual administrative expenses during the prior two calendar years adjusted for the actual current year PBGC premium amount. Cash Flow Timing of benefit payments Annuity payments are payable monthly at the beginning of the month and lump sum payments are payable on date of decrement. Amount and timing of contributions Contributions are assumed to be made on the last day required to meet quarterly and minimum funding requirements unless otherwise directed by the plan sponsor. Funding Policy The funding policy is to contribute to the Plan when pension laws and/or economics either require or encourage funding.

26 Methods Valuation Date First day of plan year Funding Target Present value of accrued benefits as required by regulations under IRC 430. Target Normal Cost Present value of benefits expected to accrue during the plan year plus plan-related expenses expected to be paid from plan assets during the plan year as required by regulations under IRC 430. Actuarial Value of Assets for Determining Minimum Required Contributions Average of the fair market value of assets on the valuation date and 12 and 24 months preceding the valuation date, adjusted for contributions, benefits, administrative expenses and expected earnings of 6.48% (with such expected earnings limited as described in IRS Notice ). The average asset value must be within 10% of market value, including discounted contributions receivable (discounted using the effective interest rate for the prior plan year.) The method of computing the actuarial value of assets complies with rules governing the calculation of such values under the Pension Protection Act of 2006 (PPA). These rules produce smoothed values that reflect the underlying market value of plan assets but fluctuate less than the market value. As a result, the actuarial value of assets will be lower than the market value in some years and greater in other years. However, over the long term under PPA's smoothing rules, the method has a significant bias to produce an actuarial value of assets that is below the market value of assets. Tax Policy The actuarial valuation for the plan year ending December 31, 2017 is used to determine the maximum deductible contribution for the tax year ending December 31, PBGC Premium Funding Target For purposes of determining the PBGC Funding Target, the Standard Premium Funding Target was determined using the assumptions above.

27 Benefits Not Valued All benefits described in the Plan Provisions section of this report were valued. Willis Towers Watson has reviewed the plan provisions with the plan sponsor and, based on that review, is not aware of any significant benefits required to be valued that were not. Data Sources Participant data was extracted from the administrative system as of January 1, Data were reviewed for reasonableness and consistency, but no audit was performed. Based on discussions with the plan sponsor, assumptions or estimates were made when data were not available. Estimated termination dates provided by Dow were used for participants impacted by the 2015 and 2016 restructuring announcements. We are not aware of any errors or omissions in the data that would have a significant effect on the results of our calculations. Assumptions and Methods Rationale Discount Rate The basis chosen was selected by the plan sponsor from among choices prescribed by law, all of which are based on observed market data over certain periods of time. Assumed Return for Asset Smoothing The assumed return of 6.48% used for asset smoothing for the 2017 plan year is the third segment rate. Although we have not explicitly determined an expected return on assets, based on an analysis of the plan sponsor s investment policy we believe the expected return rate would be above the third segment rate for the 2016 plan year. Inflation Inflation is set based on the long-term average. Social Security Increase Assumed social security increases are based on general inflation plus 0.50% for assumed productivity growth. Compensation Growth Assumed compensation increases are based on Dow s longterm compensation philosophy, which reflects both current conditions and future expectations.

28 Lump Sum Conversion As required by IRC 430, lump sum benefits are valued using annuity substitution, so that the PPA interest rates assumed are effectively the same as described above for the discount rate. The grandfathered pre-ppa interest rates were determined based on general inflation plus an assumed spread of 2.00% derived from Dow s historical review of rates. Pension Increase Based on the historical long-term percentage increase in the US CPI-W Revised, but not greater than 3.00%. Interest Crediting Rate Based on general inflation plus assumed 1.50% spread based on long-term average. Healthy Mortality Assumptions used for funding purposes are as prescribed by IRC 430(h). Disabled Mortality Assumptions used for funding purposes are as prescribed by IRC 430(h). Termination Termination rates were based on an experience study, with annual consideration of whether any conditions have changed that would be expected to produce different results in the future. Retirement Retirement rates were based on an experience study, with annual consideration of whether any conditions have changed that would be expected to produce different results in the future. Source of Prescribed Methods The methods used for funding purposes as described in Appendix A, including the method of determining the plan assets, are prescribed methods set by another party, as defined in the actuarial standards of practice (ASOPs). These methods are required by IRC 430, or were selected by the plan sponsor from a range of methods permitted by IRC 430.

29 Schedule SB, Part V Summary of Plan Provisions Dow Employees Pension Plan Plan Sponsor The Dow Chemical Company Effective Date and Most Recent Amendment The plan was most recently restated effective January 1, 2016, and subsequently amended effective December 31, Plan Year The 12 month period beginning each January Statutory Limits Maximum Benefit: The Internal Revenue Code 415 Maximum Benefit payable as a life annuity at Social Security Normal Retirement Age is the lesser of $210,000 or 100 percent of the participant s average compensation for his high 3 years. Plan Compensation Limit: The 401(a) (17) Maximum Compensation which can be recognized for benefit calculation purposes is $270,000. All benefits and pay for any calendar year may not exceed the maximum limitations for that year as defined in the Internal Revenue Code. The plan provides for increasing dollar limits automatically as such changes become effective. Increases in the dollar limits are not assumed for funding or AFTAP purposes. Future Plan Changes Willis Towers Watson is not aware of any future plan changes which are required to be reflected.

30 Changes in Benefits Valued Since Prior Year Effective December 31, 2016, the Dow Corning Corporation Employees Retirement Plan was merged into the Dow Employees Pension Plan. Effective October 1, 2016, new hires at Dow Corning Corporation will participant in the Personal Pension Account formula. Effective December 31, 2016, benefits for Hemlock Semiconductor participants have been frozen under the former Dow Corning Corporation Employees Retirement Plan. Hemlock Semiconductor actives became 100% vested as of December 31, Effective January 1, 2017, the interest rate the DEPP account balance is increased by following date of termination was reduced from 8% to 6%, the highest market rate of return allowed by the IRS under regulations released in September 2014.

31 Dow Employees Pension Plan (excluding provisions for the former Rohm and Haas Company Retirement Plan and the former Dow Corning Corporation Employees Retirement Plan) Coverage and Participation Employees who were participants in the Dow Employees Pension Plan on April 13, 2010 are participants in the Dow Employees Pension Plan on April 14, Effective April 14, 2010, employees are eligible to participate the first day of the month following the later of attainment of age twenty one and completion of an Applicable 12-Month Period during which the employee completes 1,000 Hours of Service. This Applicable 12-Month Period is defined as the 12-month period following the date of hire, or, if 1,000 Hours of Service are not completed in this period, the Plan Year. In general, unless otherwise noted, the provisions described herein are applicable to participants eligible for the Dow Employees Pension Plan (DEPP) benefit structure. Note that special provisions apply to hourly employees represented by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC on behalf of Local No. 786 (ANGUS Hourly benefit structure) and to hourly employees acquired by The Dow Chemical Company from Celotex Corporation (Celotex Hourly benefit structure). Credited Service Eligibility Service Vesting Service Compensation An employee receives Credited Service each Plan Year equal to such employee s hours of service divided by 2,080 and rounded up to the nearest one tenth of a year. In no event will more than 1 year be credited during any Plan Year. Equal to Credited Service. An employee receives a year of Vesting Service for each Plan Year in which the Employee is credited with at least 1,000 hours. Service with previous employers counts as Vesting Service in certain cases as specified under the Plan. Where applicable, compensation is defined as annualized pensionable earnings which includes cash base pay and a plan award (reduced by the percentage deferred). For years prior to 2002, the retroactive application of the compensation limits as allowed by EGTRRA applies. Final Average Compensation Highest average compensation of any three consecutive years preceding retirement or termination.

32 Eligibility for Benefits If a participant s employment shall terminate: 1. On or after the participant s 65 th birthday, 2. After the participant has completed 3 years of Vesting Service, or 3. On account of the participant s death with 3 years of Vesting Service, the participant, or his/her beneficiary in the case of death, shall be entitled to receive a benefit. Normal Form of Benefit Optional Forms of Benefit Single life annuity unless married at retirement. If married, the 100% Joint and Survivor benefit is the normal form of payment unless the Participant elects another form of payment and the spouse consents in writing. Optional forms of payment are the 50% Joint and Survivor, Early Retirement Level Income, Guaranteed Payout and the Pension Purchase Option. A lump sum is available, though for DEPP formula participants only if the Account Balance is less than or equal to $15,000. Other optional forms may also be available under prior grandfathered benefit formulas.

33 Benefit Amount DEPP Benefit Structure Benefits for participants hired on or after January 1, 2008 are determined based on the Personal Pension Account (PPA) formula. Under this formula, a participant eligible to receive a benefit, or their surviving spouse, will receive the participant s PPA balance converted to an annuity based on the interest and mortality defined in Code 417(e)(3) for the plan year of distribution. Participants are also eligible to elect a lump sum distribution. Dow Chemical and Former Union Carbide Employees: Prior to January 1, 2006, the benefit payable upon termination/retirement will be based on the greater of the new plan formula (Dow Employees Pension Plan or DEPP) and the old plan formula (Employees Retirement Plan or ERP for eligible Dow Chemical employees and Union Carbide Retirement Program or UCRP for former Union Carbide employees) with full service and pay roll ups. Beginning January 1, 2006, the old plan formula (ERP or UCRP, as applicable) continues to apply as a minimum benefit based on the service and highest consecutive 3-year average compensation (HC3A) as of December 31, Under the DEPP formula, a participant eligible for a retirement, disability or vested benefit, or the surviving spouse of a deceased participant who was eligible for a pre-retirement death benefit, will receive the participant s DEPP account balance converted to an annuity based on the 1983 Group Annuity Mortality Table (using 50% of the male mortality and 50% of the female mortality) and an 8% interest assumption. Dow AgroSciences Employees: Prior to January 1, 2013, the benefit payable upon termination/retirement will be based on the greater of the new plan formula (Dow Employees Pension Plan or DEPP) and the old plan formula (Dow AgroSciences Pension Plan or DASPP) with full service and pay roll-ups. Beginning January 1, 2013, the old plan formula (DASPP) continues to apply as a minimum benefit based on the service and highest consecutive three year average compensation (HC3A) as of December 31, Mycogen Employees: Benefits accrued under the Mycogen Corporation Pension Plan were frozen as of December 31, Mycogen participants will receive the standard pension equity formula for service earned after December 31, 2007.

34 DEPP Account Balance The DEPP account balance is determined by: (1) calculating the employee s total standard and excess accruals; (2) multiplying the total standard accrual by the employee s highest consecutive three year average compensation (HC3A) and the total excess accrual by the excess of the employee s highest consecutive three year average compensation (HC3A) over the 36-month average of the Social Security Maximum Taxable Wage Bases at termination/retirement and (3) calculating the sum. The standard and excess accruals are: Age During Service Standard Percentage Earned Excess Percentage Earned <30 4% 1% % 2% % 2% % 3% % 4% % 4% > 55 18% 4% Maximum 425% 120% Dow Chemical Employees: Employees who have at least 10 years of eligibility service on January 1, 1996, were hired prior to age 30 and were actively employed on January 1, 1996, will receive transition accruals according to the schedule below. These transition accruals provide additional standard accruals for service earned at age 45 and later. These transition accruals are phased in depending on the employee s age at January 1, The schedule below provides the total percentage accrual earned for service at age 45 and after (inclusive of the standard accruals), for employees who were 45 and above on January 1, Hire Age Accrual for Service at 45 & Later <23 33% 23 28% 24 25% 25 23% 26 21% 27 19% 28 16% 29 14%

35 DEPP Account Balance (cont.) The transition accruals were phased-in for employees below age 45 on January 1, 1996 according to the phase-in percentages outlined below: Age at 1/1/96 Phase-In Percentage <31 5% 32 10% 33 15% 34 20% 35 25% 36 30% 37 35% 38 40% 39 45% 40 50% 41 56% 42 63% 43 70% 44 85% >45 100% Former Union Carbide Employees: Employees who have at least 10 years of eligibility service on February 6, 2001, were hired as an employee of UCC prior to age 30 and were actively employed on February 6, 2001 will receive transition accruals according to the schedule below. These transition accruals provide additional standard accruals for service earned at age 45 and later. These transition accruals are phased in depending on the employee s age at February 6, The schedule below provides the total percentage accrual earned for service at age 45 and after (inclusive of the standard accruals) for employees who were age 50 and above on February 6, Accrual for Service at: Hire Age & Later < % 33.0% % 28.0% % 25.0% % 23.0% % 21.0% % 19.0% % 16.0% % 14.0%

36 DEPP Account Balance (cont.) The transition accruals were phased-in for employees below age 50 on February 6, 2001 according to the phase-in percentages outlined below: Age at 2/6/2001 Phase-In Percentage <36 5% 37 10% 38 15% 39 20% 40 25% 41 30% 42 35% 43 40% 44 45% 45 50% 46 56% 47 63% 48 70% 49 85% >50 100% Dow AgroSciences Employees: Employees who have at least 10 years of eligibility service on January 1, 2006, were hired prior to age 30 and were actively employed on January 1, 2006, will receive transition accruals according to the schedule below. These transition accruals provide additional standard accruals for service earned at age 45 and later. These transition accruals are phased in depending on the employee s age at January 1, The schedule below provides the total percentage accrual earned for service at age 45 and after (inclusive of the standard accruals), for employees who were 45 and above on January 1, Hire Age Accrual for Service at 45 & Later <23 33% 23 28% 24 25% 25 23% 26 21% 27 19% 28 16% 29 14%

37 DEPP Account Balance (cont.) The transition accruals were phased-in for employees below age 45 on January 1, 2006 according to the phase-in percentages outlined below: Age at 1/1/06 Phase-In Percentage <31 5% 32 10% 33 15% 34 20% 35 25% 36 30% 37 35% 38 40% 39 45% 40 50% 41 56% 42 63% 43 70% 44 85% >45 100% The DEPP Account Balance is increased by an interest rate of 8% per annum for each year the benefit is deferred from the date of termination to the date of benefit commencement or January 1, 2017, if earlier. Effective January 1, 2017, the interest rate will reduce from 8% to 6%, the highest market rate of return allowed by the IRS under regulations released in September Partial years of deferment shall receive a pro-rata portion of such interest increase. PPA Balance The PPA balance is the sum of the Pay Credits and Interest Credits that have been credited to the account. These items are defined as follows: Pay Credits are 5% of compensation for the plan year. These amounts are credited to the account as of the last day of the plan year. Interest Credits are the interest credit rate multiplied by the PPA balance as of the last day of the immediately preceding plan year. The interest credit rate is the closing rate for the six-month Treasury bill on the last business day of September immediately preceding the plan year plus one hundred and fifty basis points. This rate is subject to a maximum rate equal to the third segment rate of the stabilized segment rate structure mandated for minimum funding requirements for the plan year. This amount is credited to the account as of the last day of the plan year before any Pay Credits are added to the account.

38 Retirement DEPP Benefit Structure DEPP and PPA Formula: A participant s immediate retirement annuity is determined as described above under Benefit Amount. Dow Chemical Employees: ERP Formula: In general, the normal retirement pension for service earned through December 31, 2005 is equal to 1.6% of the Employee s highest consecutive 3 year average compensation (HC3A) multiplied by the Employee s years of Credited Service not in excess of 35 years, plus.8% of the Employee s HC3A multiplied by the Employee s years of Credited Service, if any, in excess of 35 years minus The basic offset factor (as defined below) multiplied by the Employee s average offset compensation (the lesser of the Social Security Taxable Wage Base for each calendar year or an employee s compensation when compared on an individual calendar basis for the last full three calendar years prior to termination of employment, partial years shall be disregarded) multiplied by the Employee s years of Credited Service not in excess of 35 years reduced by 5/9 of 1% for each of the first 60 months and 5/18 of 1% for each month in excess of 60 that the first benefit payment precedes Social Security retirement age multiplied by the ratio of the lesser of $30,000 or the Employee s HC3A to $30,000. The basic offset factor is determined by the ratio of the Employee s average offset compensation to such Employee s Covered Compensation according to the following schedule: Ratio Basic Offset Factor less than % % to % % to % % to % % to % % or more.0042 Covered Compensation is the annual average of the contributions and benefit bases in effect under Section 230 of the Social Security Act for each year in the averaging period ending with the year before the year in which the Employee attains Social Security retirement age.

39 Retirement DEPP Benefit Structure (cont.) A participant who is over age 50 and has at least 10 years of Eligibility Service is eligible for early retirement under the ERP formula. The employee s accrued normal pension before any offset amount is reduced by ½ of 1% for each month by which the first early retirement payment precedes the earliest of the following dates: (1) age plus service at least equal to 85 or (2) attainment of age 60 and completion of 10 years of service. The offset amount is reduced in the same manner as for normal retirement. Former Union Carbide Employees: UCRP Formula: In general, the normal retirement pension for service earned through December 31, 2005 is the greatest of 1, 2 or 3: % of HC3A times years of Credited Service, plus $ $6.00 per month for each year of Credited Service for the first ten years, $9.00 per month for each year of Credited Service for the next ten years, and $12.00 per month for each year of Credited Service over 20 years, plus 10% of HC3A reduced by 1% for each year by which Credited Service is less than eight years, plus $ % of HC3A times years of Credited Service less the product of: a. the estimated Social Security benefit based on the law in effect at actual retirement assumed to commence at the later of retirement or age 62, and b. a factor determined to be the least of 1.5% times Credited Service, 50%, or the maximum offset based on IRS integration rules in effect at actual retirement. In no event shall the UCRP Formula benefit be less than the accrued benefit as of February 6, 2003 under the terms of the Union Carbide Corporation Retirement Plan for U.S. Employees. Benefits for former Union Carbide Employees (based on the greater of the DEPP or UCRP) are reduced by the portion of the participant s benefit covered by the Prudential annuity purchase which remains payable from the Union Carbide Employees Pension Plan.

40 Retirement DEPP Benefit Structure (cont.) A participant, who is over age 50 and has at least 10 years of eligibility service, is eligible for early retirement under the UCRP formula. The employee s accrued normal pension before any offset amount is reduced by 5% for each year by which the first early retirement payment precedes the earliest of the following dates: (1) age plus service at least equal to 85, or (2) attainment of age 62 and completion of 10 years of service, or (3) attainment of age 60 and completion of 30 years of service. Dow AgroSciences Employees: DASPP Formula: In general, the normal retirement pension for service earned through December 31, 2012 is equal to: % of Employee s HC3A multiplied by the Employee s years of Credited Service not in excess of 35 years plus.8% of the Employee s HC3A multiplied by the Employee s years of Credited Service, if any, in excess of 35 years, minus % of the lesser of the Employee s HC3A or Covered Compensation multiplied by the Employee s years of Credited Service not in excess of 35 years, plus 3. any benefit attributable to past service with Dow Chemical, Eli Lilly or Rohm and Haas as outlined below. A participant who is over age 50 and has at least 10 years of Eligibility Service is eligible for early retirement under the DASPP formula. The participant s benefit prior to age 65 is equal to the normal retirement pension 1 above, reduced ½ of 1% for each month by which the first early retirement payment precedes the earliest of the following dates: (a) age plus service at least equal to 85 or (b) attainment of age 60 and completion of 10 years of service, less the normal retirement pension 2 above, plus the normal retirement pension 3 above with appropriate reduction for early retirement. A participant with total age and years of service equal to at least 80 is eligible to receive the normal retirement pension accrued through December 31, 2005 on an immediate basis with the reduction factor outlined above.