Ashland Hercules Pension Plan Schedule B. Summary Plan Description

Transcription

1 Ashland Hercules Pension Plan Schedule B Summary Plan Description Publication Date: January 1, 2014 i

2 TABLE OF CONTENTS ABOUT THIS BOOKLET... 5 PLAN PARTICIPATION... 6 Eligibility... 6 Transfer Out of an Eligible Group... 6 Re-employment of a Participant... 6 CONTRIBUTIONS... 6 SERVICE... 6 Direct Rollover of Lump Sum Distributions... 7 Automatic Rollover... 7 WHEN YOU CAN RETIRE... 8 Normal Retirement... 8 Deferred Vested Retirement... 8 Early Retirement... 8 Postponed Retirement... 8 RETIREMENT INCOME BENEFITS... 8 Normal Retirement Pension... 8 Delayed Pension... 9 Deferred Vested Pension... 9 Early Retirement Pension Death Benefit TYPES OF RETIREMENT INCOME...11 Standard Form of Payment Not Married Married 50% Joint and Survivor Annuity Pre-Retirement Survivor Annuity Optional Forms of Payment Choosing An Optional Benefit Form of Payment Possible Benefit Payment Restrictions SPECIAL PROVISIONS AFFECTING GRANDFATHERED PARTICIPANTS FROM THE HERCULES PENSION PLAN...13 VESTING...14 CLAIM PROCEDURES...14 How to Apply For Benefits Notice of Claim Denial/Right of Appeal Initial Claim Notice of Denial Appeal of Denied Claim PLAN INFORMATION...16 Plan Sponsor Plan Identification Plan Year Trust Fund Legal Service Participants Rights Plan Interpretation/Administration Plan Amendment/Termination Top-Heavy Provisions PBGC Insurance Assignment of Benefits ii

3 Authority to Delegate Elections and Notices Applicable Law SPECIAL PARTICIPANT GROUPS...19 APPENDIX B...20 APPENDIX C...21 APPENDIX E...23 APPENDIX F...25 APPENDIX G...26 APPENDIX H...27 APPENDIX J...29 APPENDIX K...30 APPENDIX L...31 APPENDIX N...32 APPENDIX O...34 APPENDIX P...35 APPENDIX Q...37 APPENDIX R...39 APPENDIX S...41 APPENDIX T...43 APPENDIX U...44 APPENDIX V...45 APPENDIX W...46 APPENDIX X...47 APPENDIX Y...48 APPENDIX Z...49 APPENDIX AA...51 APPENDIX BB...53 APPENDIX CC...55 APPENDIX DD...57 APPENDIX EE...59 APPENDIX FF...61 APPENDIX GG...62 APPENDIX HH...63 APPENDIX II...64 iii

4 APPENDIX JJ...65 iv

5 ABOUT THIS BOOKLET This Summary Plan Description ( SPD ) summarizes the provisions of the Ashland Hercules Pension Plan (the Plan ) for employees (the Employees ) of Ashland, Inc. and/or Hercules, Inc., or their subsidiaries or affiliates (the Company ), who participate in Schedule B of the Plan. This SPD is effective January 1, This booklet describes benefits earned under Schedule B of Part 1 of the Plan. If a member has accrued a benefit under Schedules A, C, D, E of Part 1 or Part 2 of the Plan, that member must refer to the summary plan descriptions created for those Schedules or for Part 2 of the Plan. The Pension Plan of Hercules Incorporated (the Hercules Pension Plan ) was originally effective January 1, The Ashland, Inc. and Affiliates Pension Plan (the Ashland Pension Plan ) was originally effective March 1, 1951 and was frozen on September 30, On or about November 13, 2008, Hercules Incorporated was acquired by the Company. Effective September 30, 2009, the Ashland Pension Plan was merged into the Hercules Pension Plan and was then re-named the Ashland Hercules Pension Plan. The merger of the plans did not change the way your benefits are computed or administered. The Plan is maintained in accordance with the Employee Retirement Income Security Act of 1974 ( ERISA ), as amended, and within federal tax regulations. The provisions of the Plan are subject to change due to changes in the law or regulations promulgated by the Internal Revenue Service ( IRS ) or Department of Labor ( DOL ). If any provisions of this SPD change, you will be notified by the Plan. The Company maintains the Plan to provide retirement benefits for the exclusive benefit of Employees, and his or her beneficiaries, as explained below. The Plan is intended to qualify as a defined benefit plan under Section 401(a) of the Internal Revenue Code (the Code ) and the Trust is intended to qualify as a tax exempt trust under Code Section 501(a). The Plan is administered by the Plan Administrator. If there is any discrepancy between this SPD and the governing Plan document and Trust Agreement, the Plan document or the Trust Agreement shall govern. You may call the Ashland HR Service Center at if you have any questions about this SPD. No provision of the Plan: (1) gives any Employee the right to be retained by the Company; (2) affects the right of the Company to terminate or discharge any Employee at any time; (3) gives the Company the right to require any Employee to remain in its employ; or (4) affects any Employee's right to terminate employment at any time. References to "Plan Sponsor" are to Hercules Incorporated. References to Plan Administrator are to the Ashland Inc. Investment and Administrative Oversight Committee ( IAOC ). The Plan has multiple groups of Participants that have differing eligibility, benefits, forms of payment and other Plan terms. Where these groups differ from the terms explained in this SPD, an Appendix will explain the difference. The following groups of Participants must refer to their appropriate Appendix to determine the Plan s term as applicable to them. Each Participant Group and corresponding Appendix are listed in the section Special Participant Groups. These groups of Participants will be collectively referred to as Special Participant Groups in the remainder of this SPD. 5

6 PLAN PARTICIPATION Eligibility Except for certain Special Participant Groups, participation in the Plan shall commence immediately upon an Employee s date of hire at an employment location, or upon his first day of employment in an employment status, to which Schedule B has been extended. Notwithstanding the foregoing, Employees who are members of a collective bargaining unit that has bargained in good faith for separate and alternative retirement benefits or where such bargaining has resulted in no pension plan coverage are not eligible to participate in the Plan under the provisions of Schedule B except as otherwise provided herein. The provisions of Schedule B have been extended to the Employees of Hercules Incorporated, and the following subsidiaries Global Environmental Solutions, Inc., Hercules Defense Electronics, Inc., Aqualon Company, Hercules Country Club, and FiberVisions, Inc. (effective May 1, 1999) (all of which are considered singularly a Participating Company and together are Participating Companies ), except to the extent such Employees are members of a collective bargaining unit which has bargained in good faith for other retirement benefits. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above eligibility rules are the same. Transfer Out of an Eligible Group If you transfer out of an eligible group that is not extended benefits under Schedule B of the Plan, your participation is suspended as long as you are employed in an ineligible group. Re-employment of a Participant If you terminate employment while unvested and are rehired, you are not eligible to participate in Schedule B of the Plan. Upon your reemployment with a location participating under Schedule B of the Plan, you will receive credit for any Credited Service, excluding any absence from work in which you did not earn any Earnings. If you are receiving payments under the Plan upon your reemployment, payments will cease during the period of reemployment. Payment will recommence upon your termination of employment and will be reduced by the actuarial equivalent of the payments you already received. CONTRIBUTIONS The Company makes actuarially determined contributions to the Plan to maintain funding levels required by federal law. Participant contributions are not required or permitted. SERVICE Except for certain Special Participant Groups, each month in which you accrue Earnings or, following January 1, 1985, are eligible to receive benefits under the Long Term Disability Plan of the Company (the LTD Plan ) (up to the maximum described below), you will be credited as a month of Credited Service. The total months of Credited Service, divided by 12, will equal your number of years of Credited Service. Your years of Credited Service are used to calculate your pension benefit under the Plan. In addition, the Company may grant you Credited Service for any time you may spend on military duty or at a related or acquired company or a subsidiary. Credited Service will accrue while you are eligible to receive benefits under the LTD Plan up to a certain age. For Participants first qualified to receive payments under the LTD Plan prior to October 1, 1990, Credited Service will accrue until you reach age 60. For Participants first qualified to receive benefits under the LTD Plan on or after October 1, 1990, Credited Service will accrue until you reach age 65. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above service crediting rules are the same. The Special Participant Groups are defined in the section entitled Special Participant Group. 6

7 DIRECT ROLLOVER DISTRIBUTIONS Direct Rollover of Lump Sum Distributions A Participant or a Participant s surviving spouse who will receive a lump sum distribution may elect to directly transfer all or an allowed portion of the distribution (determined in increments of 10 percent) to an eligible employer plan, traditional Individual Retirement Account (IRA) or a Roth IRA that accepts rollover contributions. An eligible rollover distribution cannot be rolled over to a SIMPLE IRA or a Coverdell Education Savings Account (formerly known as an education IRA). An eligible employer plan includes tax-qualified plans of deferred compensation under Section 401(a) of the Internal Revenue Code; Section 403(a) annuity plans; Section 403(b) tax-sheltered annuities; and an eligible Section 457(b) plan maintained by a governmental employer. An individual may only designate one eligible employer plan, traditional IRA or Roth IRA that will receive all or an allowed part of a lump sum distribution. Annuity distributions are not eligible for direct rollover. The Plan Sponsor may impose other allowed restrictions on direct rollovers, from time to time. A beneficiary who is not your surviving spouse may also directly transfer an eligible rollover distribution to a traditional IRA. In that event, the IRA must be treated as an inherited IRA. If such a beneficiary delays making this transfer until after December 31 in the year following your death, the IRA will be subject to the required distribution rule of this Plan, which requires a complete distribution by December 31 of the fifth calendar year following the calendar year of your death. Automatic Rollover If the present value of your benefit is $5,000 or less (or monthly benefit of $35.00 or less) it is subject to the mandatory cash out distribution rules under the Plan. If your benefit is subject to these rules, you can elect to receive your benefit or you can elect to have your benefit directly rolled over to an eligible plan of your choice. The IRA provider that the Plan Administrator designated is: The Principal Bank 711 High Street Des Moines, Iowa Therefore, if you fail to elect to receive a distribution or fail to elect an eligible plan for a direct rollover of your benefit, the Plan will transfer your benefit to The Principal Bank to hold your benefit in an IRA for you. Once transferred to this IRA, your benefit will be invested in an FDIC insured savings account. The fees charged by the IRA provider will be deducted directly from your benefit. There are early withdrawal fees if you withdraw or transfer your benefit within 90 days of the date your IRA is established. All of the fees are subject to change. The fees cannot exceed what the IRA provider charges for its other rollover IRAs. The mandatory automatic rollover rules described in this section do not apply to your surviving spouse, an alternate payee under a qualified domestic relations order or to your designated beneficiary. Mandatory cash out amounts that are $1,000 or less will be distributed directly to you without your consent, unless you elect to directly rollover those amounts to an eligible plan of your choice before the distribution. If you have questions about the automatic rollover rules, you can contact the HR Service Center at You can address written questions to the Ashland Inc. Employee Benefits Department, Attention: Pension Automatic Rollover, 3499 Blazer Parkway, Lexington, Kentucky

8 WHEN YOU CAN RETIRE Except for certain Special Participant Groups, your retirement benefit under Schedule B of the Plan is as follows. If you were an active Participant in the Hercules Pension Plan as of December 31, 1984 and were covered under Schedule B of the Plan prior to January 1, 2005 see the section on Special Provisions Affecting Grandfathered Participants From the Hercules Pension Plan below. Otherwise, your retirement benefit can begin as provided in this section. Normal Retirement Your Normal Retirement Date is the first day of the month following your 65th birthday. Your Normal Retirement Age is 65. You will be eligible to receive a Normal Retirement Pension, as more fully explained below, when you terminate on or after your Normal Retirement Date and accrue 10 years of Credited Service with the Company. Deferred Vested Retirement If you terminate without 10 years of Credited Service, you will be eligible for your Deferred Vested Pension, as more fully explained below. Early Retirement You may retire before your Normal Retirement Age. This is known as your Early Retirement Date. You may retire as early as age 55. Upon attainment of your Early Retirement Age, you will be eligible to receive an Unreduced Early Retirement Pension or a Reduced Early Retirement Pension, as more fully explained below. Postponed Retirement You will be eligible for Postponed Retirement as early as age 55 if you so elect, provided, you are eligible for a Reduced Early Retirement Pension but not eligible for an Unreduced Early Retirement Pension. Your Postponed Retirement may be delayed to age 62. The Postponed Retirement will be computed in the same manner as the Reduced Early Retirement Pension or the Unreduced Early Retirement Pension, whichever is applicable. In addition to the above, a mandatory distribution (i.e., required minimum distribution) will be made to you on April 1 st following the calendar year in which (a) you attain age 70.5 or (b) retire, whichever occurs later, and by December 31 st for each subsequent distribution. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above normal, early, deferred vested, postponed, or delayed retirement rules are the same. The Special Participant Groups are defined in the section entitled Special Participant Groups. RETIREMENT INCOME BENEFITS Except for certain Special Participant Groups and active Participants in the Hercules Pension Plan as of December 31, 1984 who were covered under Schedule B of the Plan prior to January 1, 2005 (see Special Provisions Affecting Grandfathered Participants from the Hercules Pension Plan below), your retirement benefit under Schedule B of the Plan is as follows. Normal Retirement Pension Your Normal Retirement Pension equals 1.2% of the Average Monthly Earnings up to the Social Security Earnings Base plus 1.6% of the Average Monthly Earnings in excess of the Social Security Earnings Base multiplied by your years and months of Credited Service. In the case of a Participant who was not covered under Schedule C of the Plan before January 1, 2005, a base period of the 60 consecutive calendar months for which his or her Earnings are the highest during his or her final 120 calendar months of service; provided however, that such 60 and 120 months figures 8

9 shall each be increased by the whole or partial consecutive calendar months after December 31, 2004 in which he or she has Earnings. Earnings or Compensation is your regular base salary, wages and commissions, including pre-tax contributions under the Ashland Savings Plan, Medical Plan, Dental Plan and Flexible Spending Accounts Plan. Commissions and other Participating Company designated non-standard pay, which are considered part of your base salary or wages paid the previous calendar year, are added to compensation the following calendar year for Plan purposes. Compensation does not include such special pay as severance pay, incentive bonuses, awards, overtime, shift premium or other allowances not included in your base compensation rate. If the Company's policy for military leave of more than 30 days in qualified military services provides for differential wage payments and if you are on such a military leave, then you are treated as an Employee for purposes of the Plan. A differential wage payment is compensation that is equal to the difference between your ordinary base compensation and what you are paid for your qualified military service. The payment of differential wages means you are considered to continue in Plan service while receiving such wages and such wages count towards Plan benefits. Social Security Earnings Base is used to help determine how to calculate your pension benefit under the Plan. The Social Security Earnings Base is half of the historical maximum Social Security wage base in effect prior to your retirement divided by 12, which results in a monthly factor. Example: Assume your Average Monthly Earnings is $4,800 and the Social Security Earnings Base is $3,666 and you have 35 years of Credited Service. The formula below shows you how to estimate your monthly pension benefit. 1. Enter your final Average Monthly Earnings $4, Enter Social Security Earnings Base $3, Subtract Line 2 from Line 1 $1, Multiply Line 2 by 1.2% (.012) $ Multiply Line 3 by 1.6% (.016) $ Add Lines 4 and 5 $ Multiply Line 6 by the number of years and months of Credited Service 35 Years 8. Your estimated monthly pension $2, Delayed Pension Participant s Termination of Employment occurs after such Participant is eligible for a Reduced Early Retirement Pension but before such Participant is eligible for an Unreduced Early Retirement Pension, such Participant shall be eligible to delay his Pension Benefit Payment Commencement Date, but in no event shall such delay continue past the Participant s sixtieth (60th) birthday. If your first payment date occurs on or after December 1, 1992, your benefit will be calculated in the same manner as a Reduced Early Retirement below. If your first payment date occurred before December 1, 1992, your benefit will be calculated in the same manner as a Reduced Early Retirement below except the reduction factor used will be.667% for each month. Deferred Vested Pension Your Deferred Vested Pension will be calculated in the same manner as the Normal Retirement Pension if you retire at your Normal Retirement Age. A Participant may elect to receive payment of a Deferred 9

10 Vested Pension as early as age 55 by proper application. The amount which would have been payable at age 65 will be actuarially reduced in accordance with reductions determined pursuant to actuarial tables (GAM 1983 using an interest rate assumption of 8%) applied to each month by which the Participant s first payment date precedes the date on which the Participant reaches age 65. Early Retirement Pension Your Early Retirement Pension will be calculated in the same manner as the Normal Retirement Pension if you terminate employment before Normal Retirement Age at age 60 or later with 10 years of Credited Service. Example: Assume you are age 62 and have been with the Company for 20 years. Assume also that your Average Monthly Earnings are $4,800 and the Social Security Earnings Base is $3,666. The formula below shows you how to estimate your monthly pension benefit. 1. Enter your final Average Monthly Earnings $4, Enter Social Security Earnings Base $3, Subtract Line 2 from Line 1 $1, Multiply Line 2 by 1.2% (.012) $ Multiply Line 3 by 1.6% (.016) $ Add Lines 4 and 5 $ Multiply Line 6 by the number of years and months of Credited Service 20 Years 8. Your estimated monthly pension $1, If you retire before you are eligible for an Unreduced Early Retirement Pension and terminate at age 55 with 10 years of Credited Service, you will be eligible for a Reduce Early Retirement. Your Reduced Early Retirement Pension will be calculated in the same manner as the Normal Retirement Pension but will be reduced by a percentage that is multiplied by each year, or fraction thereof, that a Participant s Termination of Employment precedes the Participant s sixtieth (60th) birthday. The annual reduction percentage is computed by dividing 150 by a Participant s Vesting Service with a maximum reduction for each year of five percent (5%) per year or.4167% for each month. Example: Assume the same as above, but you are age 58 and have been with the Company for 20 years. Your estimated monthly pension would be 90% (24 months multiplied by.4167%) of the Normal Retirement Pension, or, thought of another way, it would be reduced by 10%. Your pension at age 58 would be $1, Enter your final Average Monthly Earnings $4, Enter Social Security Earnings Base $3, Subtract Line 2 from Line 1 $1, Multiply Line 2 by 1.2% (.012) $ Multiply Line 3 by 1.6% (.016) $

11 6. Add Lines 4 and 5 $ Multiply Line 6 by the number of years and months of Credited Service 20 Years 8. Your estimated monthly pension (with no $1, reduction) 9. 10% reduction for 24 months to age 60 $ Your estimated monthly pension $1, Death Benefit There is no pre-retirement death benefit under the annuity formula other than the pre-retirement survivor annuity for the surviving spouse. If a single Participant dies with a vested benefit the benefit is forfeited. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above normal, deferred vested, early (reduced or unreduced) and death benefit pension rules are the same. The Special Participant Groups are defined in the section entitled Special Participant Groups. TYPES OF RETIREMENT INCOME Your retirement benefit under Schedule B of the Plan is as follows except for certain Special Participant Groups rules may apply. Furthermore, if you were an active Participant in the Hercules Pension Plan as of December 31, 1984 and were covered under Schedule B of the Plan prior to January 1, 2005 see the section on Special Provisions Affecting Grandfathered Participants from the Hercules Pension Plan below. Otherwise, your retirement benefit can be distributed in the form as provided in this section. Standard Form of Payment Your retirement income will be paid in the following manner according to your marital status, unless you elect an option described in the Optional Forms of Payment Section. Not Married If you are not married, the standard form of distribution will be in the form of a life annuity in monthly installments over your lifetime. When you die, payments stop. There is no payment after your death. Married 50% Joint and Survivor Annuity If you are married, the standard form of distribution will be in the form of a 50% Qualified Joint and Survivor Annuity over your lifetime, with a survivor annuity to your surviving spouse. If you die prior to retirement, your benefits will be payable to your surviving spouse in the form of qualified Pre-Retirement Survivor Annuity. These survivor benefits are more fully explained below. Example: Sam is married when he retires and his monthly pension is $670, reduced for the 50 percent joint and survivor annuity. After Sam's death, his wife, if living, will be entitled to a surviving spouse's benefit of $335 a month for her lifetime. If Sam's wife predeceases him, Sam continues to receive $670 a month for his life. Pre-Retirement Survivor Annuity If you die before you retire, your spouse will receive a monthly pension for the rest of his or her life, beginning, generally, the month following the date you would have turned age 55. If you are past that age, and still employed when you die, the pension will begin as soon as the month following your death. The amount of the pre-retirement survivor annuity will reflect your years of Credited Service, Earnings and you and your spouse s age at the time of your death. The Company will calculate a monthly pension based on your Earnings and Credited Service to the time of your death and will pay a benefit to your surviving spouse as if you began receiving payment of your vested pension benefit beginning the first of 11

12 the month following your death. Your surviving spouse will be given a pension equal to 50% of that amount for the rest of his or her life. A charge for this type of Pre-retirement Survivor Annuity is made to you or your beneficiary's Deferred Vested Pension benefit. The appropriate charge for an unmarried or married Participant that chooses the 100% surviving nonspouse beneficiary option to distribute his or her Deferred Vested Pension is: From date of pension vesting through age 44: 0.10% per year the option is in effect. From age 45 through age 50: 0.25% per year the option is in effect. From age 50 to retirement: 0.50% per year the option is in effect. In addition to the automatic 50% preretirement surviving spouse benefit provided to vested Participants, you may elect one of the following options at least 30 days prior to commencement of your pension benefit payments. A married Participant may elect to provide a 100% surviving spouse benefit or, with spousal consent, may elect a 50% or 100% nonspouse benefit. A married or unmarried Participant may elect a 50% or 100% nonspouse beneficiary for the Normal Retirement Pension, Reduced Early Retirement Pension, or Unreduced Early Retirement Pension. The appropriate charge for these options is: 50% Nonspouse Option: 0.5% per year the option is in effect. 100% Nonspouse Option: 0.9% per year the option is in effect. 100% Surviving Spouse Option: 0.4% per year the option is in effect. Example: Tony is married, has ten (10) years of continuous service and dies at age 50. Had he lived he would have been entitled to commence early retirement income payments at age 55. Based on his pay and service at his date of death, Tony's age 55 benefits would have been $300 a month reduced for the 50 percent joint and survivor benefit and early retirement. His wife will be entitled to a surviving spouse's benefit of $150 a month for her lifetime, beginning on the date Tony would have been entitled to receive age 55 benefits. Optional Forms of Payment You may elect to have your pension benefit paid under one of the optional methods of payment described in the following paragraphs. You must elect at least 30 days prior to receiving your first pension benefit payment. If you are married, you will need your spouse's notarized consent within 180 days before payments begin to elect a payment other than a spousal 50% Joint and Survivor Annuity. Your benefit under the prior terminated plan will be paid according to the election you make under this plan under the annuity formula. Straight Life Annuity Under this form of payment, your pension is paid monthly for your lifetime only. Payments stop at your death; Straight Life Annuity with a 60 Month Certain Option Under this form of payment, you receive a reduced monthly pension for your lifetime or 60 months, whichever is later. If you die within 60 months of first receiving a payment, your Beneficiary will receive any remaining payments. Payments stop after the later of the date of your death or 60 months; Joint And Survivor Annuity Under this form of payment, you receive a reduced pension during your lifetime in order to provide 100 percent or 50 percent of your reduced income to your joint annuitant. The amount of reduction in your benefit will depend on the percentage you choose to provide to your joint annuitant and the ages of you and your joint annuitant at the time you retire; 51% Partial Cash Payment Under this form of payment, you will receive a single cash payment equal to the actuarial equivalent of 51% of the portion of your pension. You are eligible to receive this 12

13 51% partial cash payment only if you completed 10 years of Credited Service. This optional form of benefit is not available to designated beneficiaries; Lump Sum Payment If the actuarial equivalent of your pension benefit determined in accordance with interest rates provided by the actuary is not greater than $5,000 at the time of payment, the Plan Administrator may pay this benefit in one lump-sum payment with your consent (but without the consent of your spouse). If your monthly benefit is $35.00 or less, and when converted to a lump sum in accordance with the above interest rates exceeds $5,000, the amount may be paid as a lump sum provided you and, if married, your spouse consent to such a payment. Choosing An Optional Benefit Form of Payment If you wish to elect an optional form of payment, you must do so before you begin receiving your benefit. You may change your election at any time prior to the date your payments are to begin. If your joint annuitant dies before payments to you begin, your election of that form of payment will be canceled and you can make another election. If you do not make another election, you will receive your pension in the form of a straight life annuity. If you should die before payments to you begin, your optional election will not become effective. Therefore, your surviving spouse would be entitled to the benefits described in the Pre-Retirement Survivor Annuity Section of this SPD. Any change in your election which changes your spouse's benefit from the automatic form of payment to an optional form requires your spouse's notarized consent. Also, any changes among optional forms of benefit require your spouse's notarized consent, unless your spouse is your beneficiary and the change is between levels of survivor income payments under the joint and survivor income option. Possible Benefit Payment Restrictions Complicated mathematical rules apply to determine the funding level of the Plan. Under law, if the funding level falls below a prescribed threshold measured as a percentage of the Plan's liabilities, the availability of certain optional forms of distribution and certain otherwise applicable benefit increases are restricted. For example, if the Plan's adjusted funding target attainment percentage falls below 60%, lump sum distributions (other than a mandatory cash out of benefits of $5,000 or less) would not be allowed. If one or more of these funding based benefit restrictions apply, you would receive a notice from the Plan Administrator within 30 days of their application to you. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above forms of payment rules are the same. The Special Participant Groups are defined in the section entitled Special Participant Groups. SPECIAL PROVISIONS AFFECTING GRANDFATHERED PARTICIPANTS FROM THE HERCULES PENSION PLAN If you were an active Participant in the Hercules Pension Plan as of December 31, 1984 and were covered under Schedule B of the Plan prior to January 1, 2005 ( Grandfathered Participants ) this section has special rules that apply to you. Notwithstanding anything to the contrary in this SPD, the following special provisions apply to Grandfathered Participants: (1) A Grandfathered Participant with 10 years of Credited Service may begin Reduced Early Retirement Pension at age 50 for his or her accrued benefit under the Hercules Pension Plan as of December 31, 1984 and increased for Credited Service until termination of employment with the Company. Upon attaining age 55, the benefit of a Grandfathered Participant with 10 years of Credited Service will be recalculated based on the benefit accrued under Schedules A, C, D, or E of the Plan using the actuarial reduction factors at age 55. (2) A Grandfathered Participant whose termination of employment occurs on or after January 1, 1985 and who is not eligible for an Unreduced Early Retirement Pension or a Reduced Early Retirement Pension may elect to commence his Deferred Vested Pension at age

14 (3) A Grandfathered Participant who on or after January 1, 1985 becomes age 50 with 10 years of Credited Service that is married may elect to a 100% spousal joint and survivor annuity. In the event the Grandfathered Participant dies prior to age 55, his or her spouse shall receive a benefit commencing with the month following the death of the Grandfathered Participant. The spouse may delay receipt until age 62. (4) A Grandfathered Participant (whether married or not) who on or after January 1, 1985 becomes age 50 but is less than age 55 with 10 years of Credited Service at the time of termination from employment may elect the joint and survivor options available under the Hercules Pension Plan, subject to appropriate charges. The surviving Beneficiary shall be entitled to the appropriate survivor benefit payable under the terms of the Hercules Pension Plan. (5) A Grandfathered Participant who becomes disabled prior to April 1, 1985, the benefit payable will be the greater of the benefit calculated under Schedule B of the Plan or the Hercules Pension Plan using Average Monthly Earnings as of December 31, 1984, and Credited Service through the date of termination of employment. VESTING Except for certain Special Participant Groups, vesting refers to the process by which you obtain full entitlement or a non-forfeitable interest in your benefit under the Plan. You will be fully vested if you are employed upon attainment of Normal Retirement Age or upon completion of 5 years of Vesting Service. If a Participant receives earnings or is eligible to receive benefits under the Long Term Disability Plan of the Company, even if the Participant has terminated service, for at least six (6) months in a vesting computation period, the Participant is credited with one year of Vesting Service. A Participant s initial vesting computation period beings on the date of hire and ends twelve (12) months later. Subsequent vesting computation periods operate on the same twelve month cycle as the initial vesting computation period. Your vested benefits will be forfeited upon your death if you are not married and have revoked the standard form of benefit, as described above, or if you are married and have not elected a joint and survivor benefit. If you leave the Company before your benefit is vested, your non-vested accrued benefit is treated as though it were distributed. The Vesting Service related to that deemed distribution is forfeited. You lose all of your Vesting Service if you are not re-employed. If you are re-employed your prior Vesting Service, and the benefit related to that service, are automatically reinstated. Any Employee in a Special Participant Group must refer to his or her appropriate Appendix to determine whether the above vesting rules are the same. The Special Participant Groups are defined in the section entitled Special Participant Groups. CLAIM PROCEDURES How to Apply For Benefits To apply for your benefit under this Plan or your prior Plan benefits, you must complete the appropriate forms and return them to the Plan Administrator. Upon request, the Company will furnish you a description of the retirement income options available to you and an estimate of your benefit under each option. You can call the Ashland HR Service Center at for a description of your benefit options. 14

15 Notice of Claim Denial/Right of Appeal Initial Claim Notice of Denial Written notification of a denied claim will be delivered to the claimant in a reasonable period, but not later than 90 days after the claim is received. The 90-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received. The written decision will include: The reasons for the denial; Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description; A description of additional materials or information needed to process the claim. It will also explain why those materials or information are needed; and A description of the procedure to appeal the denial, including the time limits applicable to those procedures. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974, as amended (ERISA 29 U.S.C. 1132). The claimant must exhaust the Plan s appeal procedures before filing a civil action in court. If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied. In that event the claimant may proceed with the appeal procedure described below. Appeal of Denied Claim The claimant may file a written appeal of a denied claim with the Plan Administrator in Lexington, Kentucky. The IAOC is the named fiduciary under ERISA for purposes of the appeal of the denied claim. The IAOC has delegated its authority to the Ashland Inc. Benefit Appeals Panel (Panel). The Panel has authority to further delegate some of its authority. The appeal must be sent at least 60 days after the claimant received the denial of the initial claim. If the appeal is not sent within this time, then the right to appeal the denial is waived. The claimant may submit materials and other information relating to the claim. The Panel (or its delegate) will appropriately consider these materials and other information, even if they were not part of the initial claim submission. The claimant will also be given reasonable and free access to or copies of documents, records and other information relevant to the claim. Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received. The 60-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received. Special rules apply if the Company or the Panel designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims. For the special rules to apply, the committee (or the Panel if it functions as such a committee) must meet regularly on at least a quarterly basis. When the special rules for committee meetings apply, the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal. If the appeal is received within 30 days of the next following meeting, then the decision must not be made later than the date of the second committee meeting following the receipt of the appeal. The period for making the decision on the appeal can be extended under special circumstances. If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the 15

16 otherwise applicable period within which to make a decision. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received. In any event, the claimant will be provided written notice of the decision within a reasonable period after the meeting at which the decision is made. The notification will not be later than five days after the meeting at which the decision is made. Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include: The reasons for the denial; Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description; A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim; and A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA 29 U.S.C. 1132). If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied. In that event the claimant may file a civil action in court. PLAN INFORMATION Plan Sponsor Hercules Incorporated is the Plan Sponsor. The address and telephone number are: Hercules Incorporated P.O. Box Lexington, KY Plan Administrator The Ashland Inc. Investment and Administrative Oversight Committee ( IAOC ) is the Plan Administrator and a named fiduciary of the Plan. The Plan Administrator has the responsibility of managing, operating and interpreting the Plan. The Plan Administrator can be contacted through: Ashland Inc. Employee Benefits Department Attention: Investment and Administrative Oversight Committee P.O. Box Lexington, KY Upon written request to the Plan Administrator, information may be provided as to whether a particular Company has adopted the Plan and the address of such a Company if it has adopted the Plan. Collective Bargaining Agreements - Certain collective bargaining units are eligible to participate in this Plan. You may review the collective bargaining agreement applicable to your group and/or request a copy from the appropriate individual at you work location. Plan Identification The Ashland Hercules Pension Plan is a trusteed, defined benefit plan providing retirement and survivor benefits. It is identified by the following numbers under IRS rules: The Employer Identification Number assigned by the IRS to the Plan Sponsor is

17 The Plan Number assigned to the Plan is 001 Plan Year For recordkeeping purposes, the Plan year is October 1 to the following September 30. Trust Fund Plan assets are held in a trust fund established for Plan purposes under the terms of a trust agreement. The name and address of the Trustee are: Mellon Trust of New England, N. A. 135 Santilli Highway Everett, MA The prior terminated plan is funded by a group annuity contract issued by Metropolitan Life Insurance Company. Legal Service Service of legal process may be made upon the Secretary of Ashland Inc., 50 E. RiverCenter Boulevard, P. O. Box 391, Covington, KY Legal process may also be served on the Trustee. Participants Rights As a Participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). ERISA provides that all Plan Participants shall be entitled to: Examine without charge at the Plan Administrator's office and at various work sites all Plan documents including insurance contracts, collective bargaining agreements and copies of all documents filed by the Plan with the U.S. Department of Labor, such as annual reports and Plan descriptions; Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. There will be a charge of $.10 per page for these documents and you will be required to furnish a personal check, payable to Ashland Inc., covering the photocopying cost prior to receiving such copies; Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each Participant with a copy of this summary financial report; Obtain, once a year, a statement of the total pension benefits accrued and the nonforfeitable (vested) pension benefits (if any), or the earliest date on which benefits will become nonforfeitable (vested). This information will be furnished upon receipt of your written request to the Plan Administrator; and File suit in a federal court if any materials requested are not received within 30 days of your request, unless the materials were not sent because of matters beyond the control of the Plan Administrator. The court may require the Plan Administrator to pay up to $110 for each day s delay until the materials are received. In addition to creating rights for Plan Participants, ERISA imposes obligations upon the persons who are responsible for the operation of the employee benefit plan. These persons are referred to as "fiduciaries" under the law. Fiduciaries must act solely in the interest of Plan Participants and they must exercise prudence in the performance of their Plan duties. Fiduciaries who violate ERISA may be removed and required to make good any losses they have caused the Plan. Your employer may not fire or discriminate against you to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If you are improperly denied a benefit, in full or in part, you have a right to file suit in federal or state court. If Plan fiduciaries are misusing the Plan's money, you have a right to file suit in a federal court or request assistance from the U.S. Department of Labor. If you are successful in your lawsuit, the court may, if it so decides, require the other party to pay your legal costs, including attorney's fees. 17

18 If you have any questions about this statement or your rights under ERISA, you should contact the Plan Administrator or the nearest Office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C Plan Interpretation/Administration The Plan Administrator has all necessary, appropriate, and convenient discretion, power and authority to interpret, administer and apply the provisions of the Plan with respect to all persons having or claiming to have any rights, benefits, entitlements or obligations under the Plan. This includes, without limitation, the ability to make factual determinations, construe and interpret provisions of the Plan, reconcile any inconsistencies between provisions in the Plan or between provisions of the Plan and any other statement concerning the Plan, whether oral or written, supply any omissions to the Plan or any document associated with the Plan, and to correct any defect in the Plan or in any document associated with the Plan. All such factual determinations and interpretations of the Plan and documents associated with the Plan and questions concerning its administration and application as determined by the Plan Administrator shall be binding on all persons having an interest under the Plan. The Plan Administrator may employ one or more persons to render advice with respect to its fiduciary responsibilities. The Plan Administrator may also delegate fiduciary responsibilities to one or more persons who shall have the right to employ one or more persons to render advice with respect to its fiduciary duties. There is no restriction on any person serving in more than one fiduciary capacity under the Plan. Plan Amendment/Termination Subject to the applicable collective bargaining agreement, the Plan Sponsor, or the Personnel & Compensation Committee of the Ashland Inc. Board of Directors, the Chief Executive Officer of Ashland Inc. or the delegates of either of the foregoing (pursuant to resolution, by-law, or otherwise), reserves the right, in its sole discretion, to amend, suspend, modify, interpret, discontinue or terminate the Plan or change the funding method at any time without the requirement to give cause or consideration to any individual. No accounting treatment or funding of the Plan shall be deemed evidence of an intent to limit in any way the right to amend or terminate the Plan. Top-Heavy Provisions There are provisions in the Plan that go into effect if the Plan should ever show an imbalance in benefits for Company officers. A more detailed explanation of these provisions will be provided in the extremely unlikely event they should ever go into effect. PBGC Insurance Benefits under this Plan are insured by the Pension Benefit Guaranty Corporation (PBGC) if the Plan terminates. Generally, the PBGC guarantees most vested normal retirement age benefits, early retirement benefits, and certain survivor's pensions. However, the PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit protection is subject to certain limitations. The PBGC guarantees vested benefits at the level in effect on the date of plan termination. However, if a plan has been in effect less than five years before it terminates, or if benefits have been increased within the five years before plan termination, the whole amount of the plan's vested benefits or the benefit increase may not be guaranteed. In addition, there is a ceiling on the amount of monthly benefit that the PBGC guarantees, which is adjusted periodically. For more information on the PBGC insurance protection and its limitations, contact the PBGC. Inquiries to the PBGC should be addressed to the Office of Communications and Public Affairs, PBGC, 1200 K Street, N.W., Washington, D.C The PBGC may also be reached by calling