INEOS USA Pension Plan Summary Plan Description

Transcription

1 INEOS USA Pension Plan Summary Plan Description The information provided in this booklet is a summary of how the INEOS USA Pension Plan (the "Plan ), works. This summary describes the benefits offered under the Plan effective as of January 1, The full details are contained in the official plan document and applicable benefit schedules. If there is a difference between this booklet and the official plan documents and benefit schedules, the wording of the official plan documents and benefit schedules governs. Nothing contained in the Plan should be construed as a guarantee of employment, either expressed or implied. Plan provisions are subject to change without prior notification to plan participants. The Plan sponsor reserves the right to amend, modify, or terminate the Plan. A summary of your legal rights as guaranteed under the Employee Retirement Income Security Act of 1974 (ERISA) and the administrative summary data for the INEOS USA Pension Plan are contained in this summary description. Issued October 1, 2014

2

3 Table of Contents Introduction... 1 Who Is Eligible... 2 How the Plan Works... 2 Cash Balance... 2 Current Account... 2 Opening Account... 3 How Opening Accounts Were Calculated... 4 Pay Credits... 5 Social Security Wage Base... 5 Eligible Pay... 5 Regular Interest Credits... 6 Supplemental Interest Credits... 6 Vesting... 7 Account Statements... 7 How your Account is calculated upon retirement... 7 Normal Retirement Benefit... 8 Early retirement accrued benefit... 8 Late Retirement... 8 Mortality Table... 9 Grandfathered Provision Amoco Heritage Retirement Eligibility Plan Benefit Calculation Final Average Pay Career Average Minimum Service Minimum Early Retirement Reduction Temporary Annuity Supplement Albemarle Heritage Plan Benefit Calculation Final Average Pay Building Block Method Temporary Annuity Supplement Union Carbide Final Average Pay Career Average Minimum Service Minimum Temporary Annuity Supplement ARCO Heritage Retirement Eligibility Final Average Earnings Membership Service Social Security Integration Level Normal Retirement Benefit Minimum Normal Retirement Allowance Early Retirement Burmah Castrol Retirement Eligibility USA Pension Plan Page i

4 Eligible Earnings Benefit Credit Service Accrued Benefit Calculation Early Retirement Reduction BP Solvay JV Retirement Eligibility Plan Benefit Calculation Early Retirement Reduction What Happens If You Take a Leave of Absence Medical and Disability Leave of Absence What Happens If You Are Rehired Former Vested Participant What Happens If You Have Plan Service in Two or More USA Heritage Companies What Happens if You Transfer When You Leave the Company How to Apply for Benefits Payment Options Lump-Sum Payment Single Life Annuity Qualified 50% Joint & Survivor Annuity Qualified Optional 75% Joint & Survivor Annuity Other Optional Forms of Payment Additional Payment Options Additional Payment Options Cash Out Distributions Automatic Payment of Benefits Less Than $1, Automatic Payment of Benefits Less Than $5,000 if age 65 and older Benefits Valued Between $1,000 and $5, Beneficiary Designations What Happens if you Die If you die prior to payments beginning If you die after payments have begun Beneficiary Payment Options If the plan is ended or modified General Information Government Limits Tax Considerations Annuity Payments Lump Sum Distributions Rollovers Roth IRA rollovers Top-heavy Plans Adjusted Funding Target Attainment Percentage Restriction Provisions Restrictions on Benefit Accruals Restrictions on Accelerated Payments How to Appeal A Claim Content of Notice Review Procedures Decision on Review Disability Related Claim USA Pension Plan Page ii

5 Non-Assignment Mergers, consolidations, or transfers Pension Benefit Guaranty Corporation (PBGC) Statement of ERISA Rights Receive Information about Your Plan and Benefits No Right to Employment Governing Plan Documents Function of the Plan Administrator ERISA Plan Information USA Pension Plan Page iii

6 Introduction BP Corporation North America (formerly known as BP Amoco Corporation) previously maintained the BP America Retirement Accumulation Plan for former employees of BP America Inc. and the Employee Retirement Plan of the Amoco Corporation and Participating Companies for former employees of the Amoco Corporation and their respective affiliates. Effective July 1, 2000 the Amoco Heritage Plan was merged with and into the Pre Plan and the Pre-2000 Plan was renamed the BP Amoco Retirement Accumulation Plan. The Plan was restated January 1, Effective January 1, 2002, a defined benefit pension plan was established for eligible employees of Solvay Polyethylene North America. On January 6, 2005, BP Solvay Polyethylene North America became a wholly-owned subsidiary of BP America Inc. BP Corporation North America Inc., a subsidiary of BP, became the Plan sponsor on the same date. Effective April 1, 2005, the Plan's name was changed to BP Polyethylene Pension Plan (the Prior Plan ) and the Plan was converted to a non-contributory cash balance defined benefit plan for eligible employees. There was an amendment and restatement of the Prior Plan which as of its effective date of December 12, 2005 was known as the Innovene Pension Plan (the Plan ). Sponsorship of the Plan was transferred from BP North America Inc. (BP) to INEOS USA LLC, formerly known as Innovene (the "Company"), due to various corporate transactions. Applicable provisions were carried over to the Plan from the BP Retirement Accumulation Plan ("BP RAP") such as provisions for Amoco Heritage and cash balance participants. Effective June 16, 2006, the Plan name was changed from Innovene Pension Plan to INEOS USA Pension Plan. Effective December 31, 2009, INEOS NOVA LLC withdrew as a Participating Employer from the INEOS USA Pension Plan and spunoff the INEOS NOVA Pension Plan USA from the INEOS USA Pension Plan (prior plan) and merged it plans into the INEOS NOVA Retirement Plan for Indian Orchard Plant Union Employees (along with respective transfers of assets and liabilities). Effective December 31, 2012, the provisions of the plan have frozen for covered participants under this section with notable exceptions. Effective January 1, 2013, the plan was restated. Effective January 1, 2014, INEOS Barex USA LLC and INEOS Technologies USA LLC became Participating Members of the Plan. USA Pension Plan Page 1

7 Who Is Eligible In general, you are eligible to participate in the INEOS USA Pension Plan if you are a full-time, part-time, occasional, temporary, or term contract employee of a participating employer (and on a U.S. dollar payroll), have worked 1,000 hours with the company within one calendar year and were hired prior to January 1, Regardless of your employee classification above, you are not eligible to participate in the Plan if you are: a leased employee; a non-resident alien with no U.S. income; an independent contractor or fee-forservice worker; a member of a collective bargaining unit (union), unless your collective bargaining agreement provides for participation in the Plan; covered by an agreement specifying that you are not eligible to participate in the Plan; not classified as an employee on a participating employer s payroll, even if reclassified as an employee by any third party; an employee whose basic compensation for services is not paid by an employer; an employee who is accruing benefits under any other tax-qualified defined benefit plan sponsored by the Company; an employee who is a citizen or resident of a foreign country and covered by a US payroll on or after January 1, 2006 unless coverage is otherwise provided by an agreement; an employee who first performs an hour of service on or after January 1, 2008 an employee who is rehired on or after February 14, 2008 except for as stated in applicable collective bargaining agreements; or an employee hired on or after January 1, 2008 or rehired after February 14, 2008 who immediately prior was an active employee of INEOS Americas LLC and a member of the INEOS Pension Plan. How the Plan Works All plan assets are held in a trust to pay each participant s plan benefit. Towers Watson is the Company s record keeper who handles the calculations and payments of pension benefit on behalf of INEOS. They also house your beneficiary information. In general, participants under the Plan may be eligible for a Cash Balance benefit, a grandfathered benefit or both. Cash Balance In general, under the Cash Balance benefit formula, each month your cash balance account will be credited with a monthly pay credit and regular interest credits. The amount of the pay credit you will receive is a percentage of your eligible pay, based on your age or years of service whichever provides the greater percentage. Every participant will have a Current Account which will receive these monthly pay credits and regular interest credits except certain ARCO Union employees. Some BP, Amoco (including Union Carbide and Albemarle), ARCO, Burmah Castrol, and Solvay heritage employees will also have an Opening Account. Current Account Your Current Account reflects monthly pay credits, based on a percentage of your eligible pay, plus regular interest credits. Pay Credits were no longer earned as December 31, 2012 when the plan froze with the exception of Arco who froze December 31, 2013, Arco Union participants with Cash Balance accounts who froze December 31, 2014 and Burmah Castrol Heritage participants who froze USA Pension Plan Page 2

8 December 31, Regular interest credits continue until you elect to receive payment of your plan benefit. Your Current Account began on your hire date, rehire date or the date your employer became a participating employer, if later. If you are an Amoco heritage employee including Albemarle and Union Carbide who was eligible for an Opening Account as of June 30, 2000, your Current Account began on July 1, If you are an ARCO heritage employee who was eligible for an Opening Account as of December 31, 2001, your Current Account began on January 1, If you are a Burmah Castrol heritage employee who was eligible for an Opening Account as of December 31, 2003, your Current Account began on January 1, If you are a Solvay Polymers heritage employee who was eligible for an Opening Account as of October 31, 2001, your current account began on January 1, If you were a Solvay Polymer heritage employee not eligible for an opening account as of October 31, 2001 because you did not have 85 points, your current account began on January 1, If you were an employee at a Solvay location who did not receive an opening or current account as of January 1, 2002, your current account began April 1, Your Current Account earned regular pay credits for each month of service, up to a maximum of 37 years of plan service this included any eligible prior plan service in BP, Amoco (including Albemarle and Union Carbide), ARCO, Burmah Castrol, or Solvay heritage plan as well as any plan service in any other pension plan whose benefit was converted to the INEOS USA Pension Plan, and any other defined benefit plan maintained by BP or an affiliate. Opening Account Some participants will also have an Opening Account. You are eligible for an Opening Account if: you are a BP heritage employee hired before 1989 who participated in BP s former pension plan and made the transition to the BP America Retirement Accumulation Plan; or you were a participant in the Amoco Employee Retirement Plan on June 30, 2000 and made the transition to the BP America Retirement Accumulation Plan; or you were a participant in the ARCO Retirement Plan on December 31, 2001 and were an active BP employee (or on a leave of absence) as of January 1, 2002; or you were a participant in the Burmah Castrol Group USA Pension Plan on December 31, 2003 and were an active BP employee (or on a leave of absence) as of January 1, 2004; or you were a participant in the Solvay America Companies pension plan with Solvay Polymers and did not meet the requirements for an early retirement subsidy or have 85 points as of October 31, 2001; or you have participated in any other pension plan whose benefit has been converted to the INEOS USA Pension Plan. Your Opening Account equals a lump-sum present value of any benefits converted from a former pension plan at the time of entry into this plan except if you were a Solvay Polymers participant eligible for an opening account balance. Your Opening Account will be credited with both regular interest credits and supplemental interest credit. USA Pension Plan Page 3

9 How Opening Accounts Were Calculated BP heritage employees hired before 1989 who participated in BP s former pension plan received an Opening Account balance when their retirement benefit was converted into the BP America RAP. That Opening Account balance was automatically transitioned to the INEOS USA Pension Plan. Amoco Heritage Active Amoco heritage employees who participated in the Amoco Employee Retirement Plan on June 30, 2000 were eligible to receive a BP Retirement Accumulation Plan Opening Account on July 1, This Opening Account balance reflects a lump-sum present value of your retirement benefits accrued through June 30, 2000 under the Amoco Employee Retirement Plan. Burmah Castrol Participants in the Burmah Castrol Group USA Pension Plan on December 31, 2003 who were active BP employees (or on leave of absence) as of January 1, 2004, were eligible to receive a BP Retirement Accumulation Plan Opening Account balance on January 1, This Opening Account balance was based on the lumpsum present value of the benefit earned in the Burmah Castrol Group USA Pension plan through December 31, Burmah Castrol heritage employees who did not meet the eligibility requirements as of December 31, 2003 but were eligible for the BP Retirement Accumulation Plan on January 1, 2004 are not eligible for an Opening Account balance. However, these employees received pay credits (based on base pay for service before January 1, 2004) and regular interest credits, retroactive to their hire date. ARCO Participants in the ARCO Retirement Plan on December 31, 2001 who were active BP employees (or on a leave of absence) as of January 1, 2002 were eligible to receive a BP Retirement Accumulation Plan Opening Account balance on January 1, This Opening Account balance reflects the lump-sum present value of retirement benefits accrued through December 31, 2001 under the ARCO Retirement Plan. ARCO heritage employees who did not meet the ARCO Retirement Plan s two-year eligibility requirement as of December 31, 2001 but were eligible for the BP Retirement Accumulation Pension Plan on January 1, 2002 are not eligible for an Opening Account balance. However, these employees will receive pay credits (based on base pay for service before January 1, 2002) and regular interest credits, retroactive to their hire date. Solvay Polymers Former Solvay Polymers employees who participated in the Solvay America Companies Pension plan on October 31, 2001 and who did not qualify for an early retirement subsidy or did not had 85 points were eligible to receive a BP Retirement Accumulation Plan Opening Account balance on January 1, If you had 85 points as of October 1, 2001, no opening account balance was established. If you are rehired as an eligible participant in the plan and you have an accrued benefit under a plan whose benefits were merged into this plan, your Opening Account balance will be calculated as of your rehire date if you were rehired prior to February 14, 2008, based on the benefit you previously earned. If you are rehired as an eligible participant in the plan and, you have an accrued benefit under a plan whose benefits were merged into this plan, your Opening Account balance will be calculated as of your rehire date based on the benefit you previously earned. USA Pension Plan Page 4

10 Pay Credits Your Current Account received pay credits up until December 31, 2012 or your freeze date if you are an Arco, Arco Union participant with a Cash Balance account or Burmah Castrol Heritage participant. Annual pay credits are equal to a percentage of your eligible pay, based on your age or service whichever yields the higher percentage according to the table that follows. Pay credits were calculated on a monthly basis based on your age and service at the beginning of the month and your current month s eligible pay. The formula has two tiers. First you received credits on your Eligible Pay earned during a month up to ¼ of the Social Security Wage Base which is described below. Next you received credits on your Eligible Pay if it exceeds ¼ of the Social Security Wage Base during a month. Below is a chart that shows the levels of pay credits you could earn: Pay Credit Formula The greater of Years of Service or Age % of Your Eligible Pay (up to ¼ of the Social Security Wage Base) Under 10 Under 40 4% 7% 10 but less than but less than 37* 40 but less than or more 5% 9% 6% 11% Social Security Wage Base The Social Security Wage Base is the maximum amount of earnings on which both you and INEOS USA LLC pay annual Social Security, or FICA taxes, for non- % of Your Eligible Pay (above ¼ of the Social Security Wage Base) Medicare purposes. The Social Security Wage Base is subject to change each year. The IRS restricts the amount of compensation that can be recognized under a qualified retirement plan in any given plan year. The annual compensation limit for 2014 is $260,000 and is subject to change each year. If your eligible pay is greater than the compensation limit in any given year, you received pay credits for eligible pay only up to the annual limit under this plan. However, if you reached this limit or if you deferred pay, you may have been eligible to have benefits accrue under a non-qualified retirement plan. It is important to note that if, in a given month, you moved to a higher pay credit category because of additional age or service; you earned pay credits at a higher rate beginning the following month. Eligible Pay Your benefits are based on a percentage of your eligible pay. For purposes of the plan, eligible pay includes the following components of your pay: basic salary or wages (including beforetax contributions for benefits); overtime pay; shift and rate differentials; pay based on piecework; payment by mileage for drivers; commissions; lump-sum performance awards paid in connection with annual salary administration; pay in lieu of vacation; fire brigade pay, for represented employees at the Carson Business Unit What Is Not Included in Eligible Pay Eligible pay does not include the following components of your pay: sign-on, retention or ratification payments; USA Pension Plan Page 5

11 relocation payments or allowances educational assistance reimbursement expense allowances or premium pay based on your work site the value of any stock award or longterm incentive payment the value of any share appreciation right or stock option grant or exercise spot awards, reward or recognition payments, or any other comparable payments bonuses of a recurring nature such as variable pay and EBITBA and special one-time bonuses effective January 1, 2007 severance or separation payments; additional pay to compensate you for working during all or part of a 60-day period following notice in connection with a severance or separation program; deferred compensation (including salary, bonus or variable pay) tax reimbursements meal reimbursement wellness and fitness reimbursement dependent care expenses paid by the Company payments made under an annual incentive plan in connection with an employee s termination of employment paid prior to the time that payments are made to similarly situated active employees of the business unit or stream payments excluded as eligible pay under the plan by an employment contract or bonus plan payments under an annual incentive plan amounts paid in a settlement including back pay unless ordered by a court, arbitrator, or administrative agency. any other compensation not described as eligible pay Regular Interest Credits Your Current Account and your Opening Account if you have one will receive regular interest credits every month until you elect to receive payment of your plan benefit. The regular interest crediting rate is based on the monthly average interest rate for 30-year U.S. Treasury Bonds for the fourth month prior to the current month. Keep in mind that the 30-year Treasury Bond interest rate is an annual rate of return that must be converted to a monthly crediting rate. The minimum annual interest crediting rate is 5%. The interest crediting rate is reset each month based on the interest rate for 30- year U.S. Treasury Bonds for the fourth month prior to the current month. For example, the monthly interest crediting rate for June 2014 was based on monthly average interest rate for 30-year Treasury Bonds for February Your account will continue to receive regular interest credits until you commence your benefit under the Plan. Supplemental Interest Credits Supplemental interest credits provide additional interest on your Opening Account if you have one. The supplemental interest credit percentage is equal to one-half the regular interest credit rate and is applied to your Opening Balance in addition to the regular interest credit. For example, if the regular interest credit rate is 6% on an annual basis, your Opening Account (if you have one) will receive regular interest credits of 6% plus supplemental interest credits of 3% per year (one-half of 6%), for a total of 9% on your Opening Account balance. You will continue to receive supplemental interest credits until the earlier of December 31, 2020 or the date you leave the Company. If you leave employment and elect to defer receipt of your plan benefit, your Opening Account will continue to receive regular interest credits. Supplemental interest credits will not be USA Pension Plan Page 6

12 paid after the end of the month in which your employment ends. If your employment ends prior to the last of day of the month, your account will not be credited with a supplemental interest credit for that month. Vesting Your right to ownership of your retirement benefit is known as vesting. You will become 100% vested in your INEOS USA Pension Plan benefit when: you have completed at least three years of vesting service and have completed an hour of service on or after January 1, 2008; or you reach age 65 while still employed; you die while still employed by the Company; or you become totally and permanently disabled, for purposes of the Company s Long Term Disability Plan, while employed by the Company. If you are not eligible to participant in the Long Term Disability Plan, you are considered disabled under the Plan if you are determined to be disabled for purposes of the Federal Old Age Act. Regardless of your years of service, you become 100% vested in your benefit immediately if you terminate employment: involuntarily as a result of a sale of all or part of your employer to an unrelated entity, the closing of a facility, or the cessation of operations at a facility; under the terms of a written severance plan of general application adopted by the company regardless of whether a release, as required under such plan, is executed by you; or involuntarily as a result of your employment function being outsourced in accordance with a contract between the company and the outsourcer. If you left the company prior to January 1, 2008 and were not rehired the five-year cliff vesting provision still applies. This special vesting provision does not apply to term contract employees. If you leave the Company for any reason other than those noted above and you are not yet vested, you will not receive any benefit under the Pension Plan. If you were not a plan participant (due to termination) when your pension plan merged into the BP Retirement Accumulation Plan but were subsequently rehired, you may be subject to rehire provisions. If you were an active participant in the INEOS Pension Plan immediately prior to becoming a participant in this plan, your vesting service under the INEOS Pension Plan will count toward your vesting service in this plan. Account Statements You will receive annual statements that show you how interest credits increase the value of your account. If you are in a grandfathered class of employees who still receive pay credits until your provisions freeze, your statement will also show the pay credits you have earned. You can also view information on the TowersWatson website at neos/ess. Using the modeling tool available will keep you up-to-date on your cash balance account and should help you in your ongoing retirement planning. How your Account is calculated upon retirement Under the Cash Balance formula, you are eligible to take a distribution from the plan USA Pension Plan Page 7

13 as long as you are fully vested. The method to calculate your benefit will depend on if you choose to take a distribution at normal retirement date which is age 65 or prior to normal retirement date. Normal Retirement Benefit The normal retirement benefit for a Cash Balance only participant is a monthly benefit comprised of the participant s cash balance benefit. If you choose to take your benefit at age 65, the monthly benefit will be the actuarial equivalent of your total account balance at age 65. You have the option of taking this benefit as an annuity in its many optional forms or as a lump sum. If you are covered under the grandfathered provision, your heritage age-65 normal retirement benefit is quoted as a single life annuity (SLA). The SLA is converted to a lump sum using an IRS mortality table and the plan s Corporate Bond Segment rates for the fourth month preceding your benefit commencement date. If you are an Arco Union Heritage participant, the Corporate Bond Segment rates for the second month preceding your benefit commencement date are used to calculate your lump sum payment option. Under the cash balance formula, to convert the value of your cash balance account to a joint and survivor annuity, your balance is first converted to a single life annuity. To do this, the plan uses a standard mortality table and the plan s current 30-year Treasury Bond interest rate for the fourth month preceding your benefit commencement date. If you are covered under the grandfathered provision, your heritage plan benefit is expressed as an age-65 single life annuity. This life annuity is converted to a joint and survivor benefit using the plan s current 30-year Treasury Bond interest rate for the fourth month preceding your benefit commencement date and the plan s standard mortality table. Early retirement accrued benefit If you leave the company prior to age 65 and commence your benefit prior to age 65, there are a few steps that are performed in order to determine your accrued benefit. Late Retirement If you keep working after Normal Retirement Age, you will continue to accrue benefits under the Plan the same way you accrued benefits before that date except that pay credits and traditional benefit accruals froze as of December 31, 2012 for the plan with the exception of Arco, Arco Union and Burmah Castrol participants. In general, unless a suspension of benefit notice is provided under ERISA Section 203 prior to Normal Retirement date, your benefit at retirement will be the greater of: Your accrued benefit as of your late retirement date or The actuarial equivalent of your benefit on your Benefit Commencement Date that would have been payable on your Normal Retirement Date If you continue to work past age 70 ½, your frozen accrued benefit will be recalculated at the end of each calendar year. Your benefit will be the greater of your accrued benefit after recalculation or the actuarial equivalent of your accrued benefit at the end of the prior year. Whipsaw Your benefit will be calculated using the Whipsaw method. To calculate the Whipsaw for pre-age 65 commencements the following steps are performed: USA Pension Plan Page 8

14 Step 1: Your total Cash Balance Account Balance at your Benefit Commencement Date (BCD) is projected forward to age 65 using the greater of 5% and the applicable 30- year Treasury rate (also known as the GATT rate). Step 2: This amount is then converted to a Single Life Annuity (SLA) using the Immediate Age 65 GATT Actuarial Equivalence Factor. Step 3: The SLA is then converted back to a lump sum using the Immediate Age 65 PPA Actuarial Equivalence Factor. Step 4: The lump sum amount is discounted back to the Benefit Commencement Date using the applicable PPA segment rates and no pre-retirement mortality. Step 5: This amount is compared to your current account balance and the greater of the two lump sum amounts will be compared to the immediate lump sum calculation. Immediate lump sum calculation You benefit will also be calculated as an immediate lump sum benefit. The lump sum amount payable is the greater of either your current account balance or the Whipsaw amount as determined in Step 5 or your immediate lump sum benefit. An immediate lump sum benefit is determined as follows: Step 1: Projecting your account balance as of your Benefit Commencement Date (BCD) forward to age 65 using the regular interest crediting rate in effect for the month of your BCD. Step 2: Calculating the present value of this age 65 benefit as of your BCD using the monthly average interest rate for 30-year Treasury Bonds and PPA segments for the fourth month prior to your BCD. as the interest-crediting rate, your lump sum will equal your account balance. However, if the interest rate is lower than the 5% minimum interest-crediting rate, your immediate lump-sum amount will be slightly greater than your account balance. You receive the greater of the two amounts. The Cash Balance Benefit is a monthly benefit that is actuarially equivalent to the lump sum amount determined at your benefit commencement date. Mortality Table Effective December 31, 2002, IRS rules requires that the mortality table used in the conversion of an age 65 single life annuity under a heritage benefit formula to an immediate lump-sum must be the GAR 94 blended mortality table. This updated mortality table reflects a longer life expectancy than the GAM 83 50/50 table and produces a 2% to 3% larger lump sum amount. As of January 1, 2012, the mortality table used in the conversion of an age 65 single life annuity under a heritage benefit formula to an immediate lump-sum will be the following: Calendar Year 2012 and after Mortality Table PPA Table for the Calendar Year However, due to the longer life expectancy reflected in the new table, the conversion from a cash balance account to a monthly amount results in 2% to 3% smaller monthly annuities under the cash balance plan. If the interest rate used to determine your immediate lump-sum amount is the same USA Pension Plan Page 9

15 Grandfathered Provision The grandfathered provision provides a comparison of the calculation of your retirement benefit under the current cash balance formula and your accrued retirement benefit under your prior pension plan s formula. You will receive the greater benefit of the two. The grandfathered provision is available to: BP heritage employees who were actively employed by BP America and were at least age 50 on January 1, 1989; Amoco heritage employees who were participants in the Amoco Employee Retirement Plan on June 30, 2000 and made the transition to the BP Retirement Accumulation plan; ARCO heritage employees who were active participants in the ARCO Retirement Plan on December 31, 2001 and were active BP employees (or on a leave of absence) as of January 1, 2002; Burmah Castrol heritage employees who were active participants in the Burmah Castrol group USA Pension Plan on December 31, 2003 and were active employees (or on a leave of absence) as of January 1, 2004; Employees rehired within one year of their termination date; or Heritage employees also include those who were not employed on the transition date but were/are rehired before incurring a one-year break in service. For BP grandfathered employees, your benefit will be calculated under the INEOS USA Pension Plan formula and the provision of the BP heritage retirement plan that was in effect on December 31, The value of your cash balance account under the INEOS USA Pension Plan will be converted to an annual amount. You will receive the larger of these two benefits. For eligible BP Solvay JV heritage employees the grandfathered provision combines your cash balance account with your BP Solvay JV heritage benefit. Amoco Heritage If you are an Amoco heritage employee who is eligible for the grandfather provision, certain terms and provisions will apply that may differ from those under the INEOS USA Pension Plan provisions. Certain provisions also apply to Albemarle and Union Carbide participants. Your retirement benefit will be calculated under the Cash Balance formula and the Amoco Employee Retirement Plan formula. The Amoco Employee Retirement Plan formula froze as of December 31, 2012 or on your date of termination whichever was earlier. You will receive the greater of these two retirement benefits. Retirement Eligibility Under the Amoco heritage plan, your normal retirement age is your 65 th birthday. Once you reach normal retirement age, you may retire and receive full benefits from the plan, regardless of your vesting service. You can elect an early retirement benefit, as long as: you are at least age 50 and have 15 or more years of vesting service; or you were a participant in the plan on August 1, 1989, and on your employment termination date you are at least age 55 and the sum of your age plus years of benefit service equals at least 75. Plan Benefit Calculation There are three formulas that were used to calculate your benefit under the Amoco heritage plan. These formulas were USA Pension Plan Page 10

16 calculated as of December 31, 2012 or your date of termination which ever was earlier: Final Average Pay; Career Average Minimum; or Service Minimum The formulas are compared to each other to find your winning grandfathered benefit. Final Average Pay Under the Final Average Pay formula, your benefit was calculated as follows using the greater of the average monthly earnings: your average monthly earnings for the last consecutive 36 months of employment or as of 12/31/2012 whichever was earlier; or Gross Benefit % of your final average earnings multiplied by your benefit service maximum of 36 years * less Offset 1.50% of your primary Social Security benefit multiplied by your benefit service (maximum of years)** less Offset Union Carbide 7/1/199 6 Age 65 Benefit * But no more than 60% of final average earnings. ** But no more than 50% of your primary Social Security benefit. This determines your single life annuity payable at age 65. Career Average Minimum The Career Average annuity for each year was calculated as follows: 1.5% of your earnings up to the Social Security Wage Base for each year of benefit service Plus 2% of your earnings in excess of the wage base for each year of benefit service Service Minimum Under the service minimum formula, your annual age-65 annuity benefit was equal to $144 per year for each year of benefit service in which you participated in the plan until your termination date or 12/31/2012 which ever was earlier. This benefit is not offset by any Social Security benefits you may be entitled to receive. Early Retirement Reduction If you are eligible for early retirement and your annuity starts before age 60, your annuity benefit will be reduced. The chart below shows the percentage payable for an annuity starting at age 60 and below: If your annuity starts at age The percentage of annuity benefit payable is: % 59 95% 58 90% 57 85% 56 80% 55 75% 54 70% 53 65% 52 60% 51 55% 50 50% If you commence payments prior to age 50, your accrued benefit as of your earliest retirement date will be reduced using a plan-specific mortality table and the 30- year Treasury bond interest rate for the fourth month preceding your benefit commencement date. USA Pension Plan Page 11

17 Temporary Annuity Supplement This supplement is only available if you retired or left employment prior to December 31, 2012 and you begin your plan benefit before you first become eligible for Social Security benefits at age 62. You will be provided with a temporary annuity supplement approximately equal to your retirement Social Security benefit that would otherwise be offset. When you first become eligible to receive a Social Security benefit at age 62, the temporary annuity supplement will be discontinued, regardless of whether you actually apply for Social Security Benefits at that time. Albemarle Heritage If you are an Albemarle heritage employee who is eligible for the grandfather provision, certain terms and provisions will apply that may differ from those under the INEOS USA Pension Plan provisions. your average monthly earnings for the last consecutive 36 months of employment or as of 12/31/2012 whichever was earlier; or your average monthly earnings for the highest consecutive 3 calendar years out of your last 10 years of benefit service while employed or 12/31/2012 whichever was earlier. Under the Final Average Pay formula, your benefit was calculated two different ways. First it was calculated using a Wrap-Around Method that included all service. Second, it was calculated using a Building Block Method which only included service after March 1, 1996 until your termination date or 12/31/2012 whichever was earlier. Wrap Around Method Gross Benefit Offset Offset Plan Benefit Calculation There are three formulas that were used to calculate your benefit under the Albemarle heritage plan. These formulas were calculated as of December 31, 2012 or your date of termination which ever was earlier: % of your final average earnings 1.50% of your primary Social Security benefit Albemarle Corporation 3/1/1996 Age 65 benefit Final Average Pay; Career Average Minimum; or Service Minimum The formulas are compared to each other to find your winning grandfathered benefit. The annuity benefit is calculated similarly to the Amoco benefit, but is offset for prior amounts payable from the Albemarle Corporation. Final Average Pay Under the Final Average Pay formula, your benefit was calculated as follows using the greater of the average monthly earnings: multiplied by your benefit service maximum of 36 years)* less multiplied by your benefit service (maximum of years)** less * But no more than 60% of final average earnings. ** But no more than 50% of your primary Social Security benefit. This calculation produced an Age 65 Wrap Around benefit. USA Pension Plan Page 12

18 Building Block Method Wrap Around Method Gross Benefit % of your final average earnings multiplied by your benefit service from 3/1/1996 (maximum of 36 years)* less Offset 1.50% of your primary Social Security benefit multiplied by your benefit service from 3/1/1996 (maximum of years)** Gross Benefit Age 65 wrap around benefit Added to 1.50% of your primary Social Security benefit multiplied by less Offset 1.50% of your primary Social Security benefit multiplied by This calculation produced an Age 65 Building Block benefit. Both methods were compared at your termination date or as of 12/31/2012 whichever was earlier and the winning benefit was stored. The winning annuity benefit formula will then be compared to the Career Average annuity and the Service Minimum annuity calculations described below. your benefit service after 3/1/1996 to a maximum of years)** multiplied by Your Early Retirement factor at BCD your benefit service from 3/1/1996 (maximum of years)** If you are eligible to retire early, the winning early retirement annuity benefit is determined by using the Wrap Around method and the Building Block method: * But no more than 60% of final average earnings. ** But no more than 50% of your primary Social Security benefit. USA Pension Plan Page 13

19 Building Block Method Gross Benefit % of your final average earnings multiplied by your benefit service from 3/1/1996 (maximum of 36 years)* multiplied by Final Average Pay applicable at BCD multiplied by less Offset 1.50% of your primary Social Security benefit multiplied by your benefit service from 3/1/1996 (maximum of years)** This method produced your Normal Retirement Benefit and is subject to any applicable early retirement factor. Service Minimum Under the service minimum formula, your annual age-65 annuity benefit was equal to $144 per year for each year of benefit service after 3/1/1996 in which you participated in the plan until your termination date or 12/31/2012 whichever was earlier. This benefit is not offset by any Social Security benefits you may be entitled to receive. This method produced your Normal Retirement Benefit and is subject to any applicable early retirement factor. Temporary Annuity Supplement This supplement is only available if you retired or left employment prior to December 31, 2012 and begin your plan benefit before you first become eligible for Social Security benefits at age 62. your Early Reduction Factor at BCD * But no more than 60% of final average earnings. ** But no more than 50% of your primary Social Security benefit. The winning benefit will then be compared to the Career Average annuity and the Service Minimum annuity as follows. Career Average Minimum The Career Average Minimum for each year was calculated as follows: 1.5% of earnings up to the Social Security Wage Base for each year of benefit service after 3/1/1996 multiplied by 2% of earnings in excess of the wage base for each year of benefit service after 3/1/1996 You will be provided with a temporary annuity supplement approximately equal to your retirement Social Security benefit that would otherwise be offset, but will be calculated to only include service after March 1, When you first become eligible to receive a Social Security benefit at age 62, the temporary annuity supplement will be discontinued, regardless of whether you actually apply for Social Security Benefits at that time. Union Carbide If you are a Union Carbide heritage employee who is eligible for the grandfathered provision, certain terms and provisions will apply that may differ from those under the INEOS USA Pension Plan provisions. There are three formulas that were used to calculate your benefit under the Union Carbide heritage plan. These formulas were calculated as of your date of USA Pension Plan Page 14

20 termination or 12/31/2012 whichever was earlier: Final Average Pay; Career Average Minimum; or Service Minimum The Final Average Pay benefit was calculated similarly to the Amoco benefit, but is offset for prior amounts payable from the Union Carbide Corporation. Final Average Pay Under the Final Average Pay Annuity benefit formula, your plan benefit was calculated as follows using the greater of the below average monthly earnings: your average monthly earnings for the last consecutive 36 months of employment or as of 12/31/2012 whichever was earlier; or your average monthly earnings for the highest consecutive 3 calendar years out of your last 10 years of benefit service while employed or 12/31/2012 whichever was earlier. This calculation produced an Age 65 Wrap Around benefit. If you are eligible to retire early, the below steps produce a winning early retirement annuity benefit using the Wrap Around method: Wrap Around Method Gross Benefit Age 65 wrap around benefit Added to 1.50% of your primary Social Security benefit multiplied by your benefit service after 7/1/1996 to a maximum of years)** multiplied by less Offset 1.50% of your primary Social Security benefit multiplied by your benefit service from 7/1/1996 (maximum of years)** Gross Benefit Offset Offset Your Early Retirement factor at BCD % of your final average earnings multiplied by your benefit service maximum of 36 years)* less 1.50% of your primary Social Security benefit multiplied by your benefit service (maximum of years)** less Union Carbide 7/1/1996 Age 65 benefit Career Average Minimum The Career Average Minimum for each year is: 1.5% of your earnings up to the Social Security Wage Base for each year of benefit service Plus 2% of your earnings in excess of the wage base for each year of benefit service This method produced your Normal Retirement Benefit and is subject to any applicable early retirement factors. Also this benefit will be offset by the amount payable under the Union Carbide Corporate plan. USA Pension Plan Page 15

21 Service Minimum Under the service minimum formula, your annual age-65 annuity benefit was equal to $144 per year for each year of benefit service in which you participated in the plan until your termination date or 12/31/2012 whichever was earlier. This benefit is not offset by any Social Security benefits you may be entitled to receive. This method produced your Normal Retirement Benefit and is subject to any applicable early retirement factors. Also this benefit will be offset by the amount payable under the Union Carbide Corporate plan. Temporary Annuity Supplement This supplement is only available if you retired or left employment prior to December 31, 2012 and begin your plan benefit before you first become eligible for Social Security benefits at age 62. You will be provided with a temporary annuity supplement approximately equal to your retirement Social Security benefit that would otherwise be offset. When you first become eligible to receive a Social Security benefit at age 62, the temporary annuity supplement will be discontinued regardless of whether you actually apply for Social Security benefits at that time. ARCO Heritage If you are an ARCO heritage employee who is eligible for the grandfather provision, certain terms and provisions will apply that may differ from those under the INEOS USA Pension Plan. Grandfathered ARCO Salaried Heritage Employees Your benefit will be calculated under both the INEOS USA Pension Plan cash balance formula and the ARCO Retirement Plan formula. The ARCO Retirement Plan benefit is calculated using service and base pay as of your termination date or December 31, 2013 if later using your current age for any reduction factors. The INEOS USA Pension Plan cash balance benefit will be calculated as of the benefit commencement date. You will receive the greater of those two retirement benefits. Grandfathered Arco Union Heritage Employees Your benefit will be calculated under the ARCO Retirement Plan formula. The ARCO Retirement Plan benefit will be calculated using service and base pay as of your termination date or December 31, 2014 if later using your current age for any reduction factors. Retirement Eligibility Under the grandfathered ARCO Retirement Plan benefit, your normal retirement age is your 65 th birthday, regardless of your years of membership service when you leave the company. You are eligible to receive an early retirement allowance on or after the first day of the month following the date you reach age 55 if you have at least 10 years of membership service on the date you retire or leave the company. You may commence your retirement benefit any time after you terminate your employment, but the amount of your retirement benefit will vary depending on the benefit commencement date you choose. Final Average Earnings Your final average earnings is the average of the highest annual base pay you received for any period of 36 consecutive months of membership service after December 31, Annual base pay excludes overtime pay, incentive pay and other extra pay, even though some of these forms of pay are included as eligible pay under the INEOS USA Pension Plan cash balance formula. Annual base pay is unreduced for any elective deferrals you made to any INEOS Retirement Savings Plan or for before-tax contributions to any USA Pension Plan Page 16

22 medical and/or dental plans or Flexible Spending Accounts (including the Health Care Account and the Dependent Care Assistance Plan). Annual base pay does not include fire brigade pay for represented employees at the Carson Business Unit. Membership Service Membership service includes your membership service in the ARCO heritage plan as of December 31, 2001 and any service under the INEOS USA Pension Plan after December 31, Your membership service may also include service under predecessor plans of ARCO, or, in certain circumstances, service from companies acquired by ARCO. Social Security Integration Level To calculate your retirement allowance, the ARCO Retirement Plan uses the Social Security Integration Level for the year in which you leave the company. This number will freeze at the 2013 level for Arco Salaried employees and will freeze at the 2014 level for Arco Union Heritage employees. The Social Security Integration Level is a specific dollar amount used to calculate your retirement allowance. It is determined according to the following formula, rounded down to the nearest $100: 1 [2 3], where 1 = The Social Security Integration Level for the immediately preceding year. The Social Security Integration Level for 2013 is $31,300 2 = The All Urban Consumer Price Index for the 12-month period ending on June 30 of the immediately preceding year. 3 = The All Urban Consumer Price Index for the 12-month period ending on June 30 of the next preceding year. Normal Retirement Benefit Under the ARCO Retirement Plan, you are eligible to receive a normal retirement allowance on or after the date you reach the Normal Retirement Age of 65, regardless of your years of membership service when you leave the company. To calculate your annual normal retirement allowance, use the following formula: 1.18% of your final average earnings up to the Social Security Integration Level plus 1.54% of your Final Average Earnings above the Social Security Integration Level multiplied by Years of memberships service If you have more than 35 years of membership service, an additional component is added to your normal retirement allowance calculated above. This component equals: 1.45% of your Final Average Earnings multiplied by Years of membership service in excess of 35 Minimum Normal Retirement Allowance Your normal retirement allowance will not be less than $13 per month multiplied by the number of years and partial years of your minimum benefit service. Minimum benefit service is the sum of your benefit service plus certain continuous periods not longer than 60 days during which you do not receive pay and for which you are not granted membership service. If you were employed by ARCO before January 1, 1989, you may be eligible for a USA Pension Plan Page 17