SUMMARY PLAN DESCRIPTION FOR THE

Transcription

1 SUMMARY PLAN DESCRIPTION FOR THE RETIREMENT PLAN OF THE HOSPITAL OF THE UNIVERSITY OF PENNSYLVANIA, PRESBYTERIAN MEDICAL CENTER AND THE PENNSYLVANIA HOSPITAL Note: This booklet is only a summary of certain portions of the Plan. Only the Plan itself can give any person a right to benefits and this is not the Plan. This booklet does not describe all the provisions of the Plan and is not a substitute for the Plan. If you want to determine your rights under the Plan, ask to see a copy of the Plan. If anything in this booklet conflicts with the Plan, the Plan will be followed. Nobody speaking on behalf of the Plan or the Plan sponsor can alter the terms of the Plan. Participants Hired or Rehired Before July 1, 2010 and Eligible to Accrue Benefits after January 1, 2011 January 1, 2017

2 TABLE OF CONTENTS Page INTRODUCTION... 1 PRIOR VERSIONS OF THE PLAN... 2 HOW THE PLAN IS ADMINISTERED... 3 HOW THE PLAN WORKS... 3 WHO PARTICIPATES IN THE PLAN... 3 SERVICE UNDER THE PLAN... 6 RETIREMENT BENEFITS... 9 CALCULATING YOUR RETIREMENT BENEFIT DISABILITY BENEFITS DEFERRED VESTED BENEFITS SPECIAL SITUATIONS FORMS OF BENEFIT PAYMENT DEATH BENEFITS STATUTORY AND TOP-HEAVY LIMITATIONS PLAN OVERPAYMENTS NON-ASSIGNMENT OF BENEFITS ASSIGNMENT OF BENEFITS PARTICIPANT, BENEFICIARY AND ALTERNATE PAYEE RESPONSIBILITY TAX INFORMATION BENEFITS INSURED BY PENSION BENEFIT GUARANTY CORPORATION ("PBGC") AMENDING OR TERMINATING THE PLAN LOSS OF BENEFITS CHANGE OF FUNDING VEHICLE PLAN EXPENSES CLAIMS AND APPEALS PROCEDURES WHAT SOCIAL SECURITY ADDS PLAN DOCUMENT REQUEST GENERAL INFORMATION YOUR RIGHTS UNDER ERISA i

3 INTRODUCTION Regardless of what retirement means to you now--or will mean to you when you get there--just about everybody worries about the same thing: financial security. Just how much money will you need to be financially secure and independent at retirement? This depends on many things-- most of which are determined by your own personal situation. In your planning, remember that many work-related expenses drop out of your financial picture when you retire. If you have a family, your children will most likely be grown. You will no longer pay Social Security taxes when you stop working, and your other taxes probably will be less. So how much of your working income will you have to replace? Obviously, based on individual responsibilities and potential sources of retirement income, each person's financial needs in retirement will differ. But two planning considerations apply in everyone's situation: First, aim for enough income to maintain your basic lifestyle. Second, begin making your retirement plans early. Few people enjoy a comfortable retirement by accident; it takes careful thought and planning. The Retirement Plan of the Hospital of the University of Pennsylvania, Presbyterian Medical Center and the Pennsylvania Hospital (the "Plan") described in this summary plan description ( "SPD") can help you meet the retirement goals you set for yourself. Benefits from the Plan could be an important part of your retirement income and you should understand how the Plan works. This SPD describes the terms of the Plan as they apply to employees who were hired or rehired before July 1, 2010 and who made an "Option 1" Retirement Choice election to be eligible to earn benefits under the Plan on and after January 1, 2011 (an "Option 1 Choice Participant"). Employees who made an "Option 2" Retirement Choice election, and employees who are hired or rehired, or who transfer to or from a "Non- Participating Employer" (as defined below), on or after July 1, 2010, are not eligible to participate in the Plan (employees who made an "Option 2" Retirement Choice election ceased being eligible to earn benefits under the Plan on and after January 1, 2011). Employees who are not eligible to earn benefits under the Plan generally are eligible to receive employer contributions under the defined contribution plans of the University of Pennsylvania Health System ("UPHS"). This SPD applies to you if you are an Option 1 Choice Participant. If you transfer to a "Non-Participating Employer," your active participation in this Plan stops. Once your active participation in this Plan stops, it cannot restart even if you return to a "Participating Employer" (as defined below). However, your service with the Non-Participating Employer will be counted for purposes of determining your eligibility for early retirement and vesting (as described below). A copy of this SPD should be retained as part of your permanent records. Every effort has been made to ensure that this description of the Plan accurately describes the Plan's relevant DB1/

4 provisions, but if there is a difference between this summary and the Plan document, the terms of the Plan document always govern; your rights to receive a benefit under the Plan are determined solely on the basis of the official Plan documents and not this SPD. If you have any questions about the Plan, you should contact the UPHS Benefits Department at the address and number set forth in the "General Information" section. This booklet, which is the Plan's official SPD, gives you a brief outline of the Plan as it applies to you. Although this SPD is updated periodically, it may not reflect all recent amendments or changes in law applicable to the Plan. Ask about changes in the Plan before you make decisions based upon the information in this SPD. Please review the entire SPD because if you take parts of it out of context, it could appear to be misleading. More importantly, the Plan is detailed and not every rule that may apply to you can be summarized here. This SPD applies to general situations and not to your particular circumstances. If you have any questions, please contact the UPHS Benefits Department. The Plan originally covered only eligible employees of the Hospital of the University of Pennsylvania ("HUP"), but it was amended as of June 30, 2001 to cover employees of the Presbyterian Medical Center ("PMC") and the Pennsylvania Hospital ("PAH"). At the same time, the Presbyterian Medical Center of Philadelphia Pension Plan (the "PMC Plan") and the Pennsylvania Hospital Retirement Plan (the "PAH Plan") were merged into the Plan. The Phoenixville Hospital of the University of Pennsylvania Health System Pension Plan ("Phoenixville Plan") was merged into the Plan as of October 1, 2004; however, if you are a participant in the Plan who accrued benefit under the Phoenixville Plan this SPD does not apply to you. The Plan was amended as of July 1, 2002 to "standardize" the benefits provided to all Plan participants employed by HUP, PMC and PAH. In most instances, the Plan was standardized by taking the most favorable features of each individual pre-merger plan and extending them to all Plan participants. As such, most Plan participants will receive better benefits under the merged, standardized Plan (for example, an improved benefit formula or more distribution options, etc.). A small number of Plan participants, however, may not see an immediate improvement in their Plan benefits. IMPORTANT: Under no circumstances, however, will a Plan participant's benefit under the standardized Plan be less than the benefit accrued by such participant under an individual pre-merger plan before the standardization took effect. If you have any questions about the standardization of the Plan or any other Plan changes, you should contact the UPHS Benefits Department at the address and number set forth in the "General Information" section. PRIOR VERSIONS OF THE PLAN Please keep in mind that prior versions of the Plan (including a prior version of any plan before that plan was merged into the Plan) generally continue to apply to events that occurred while those versions were in effect. For example, as a general rule, participants who previously retired or terminated employment will have their benefits determined under the version of the Plan as in effect at the time of their retirement or termination. This SPD describes the Plan in effect as of the date shown on the front cover of this booklet (except that special effective dates may be set DB1/

5 forth in the Plan and this SPD for certain specific provisions). HOW THE PLAN IS ADMINISTERED The Plan is administered by the University of Pennsylvania Health System Retirement Committee ("Committee"), which is a group of individuals appointed by the UPHS Executive Committee to administer the Plan. The Committee is responsible for all matters relating to the Plan, including, but not limited to: interpreting the Plan's provisions, resolving questions about Plan eligibility, making decisions about claims for benefits, and establishing rules and procedures for Plan operations. The Committee may delegate responsibility for any aspect of Plan administration to other individuals or entities. Expenses related to the administration of the Plan are paid from the Plan's trust fund unless they are paid by one of the "Participating Employers" (described below). The Committee has delegated much of the authority for day-to-day administration of the Plan to the UPHS Benefits Department. If you have any questions about the Plan or Plan administration, you should contact the UPHS Benefits Department or the Committee at the telephone number and address listed in the "General Information" section. HOW THE PLAN WORKS Your benefit under the Plan generally is based on two factors: (1) your years of "Benefit Accrual Service" under the Plan; and (2) your "Final Average Earnings." Your right to receive this benefit depends upon the length of your service with a Participating Employer or a Related Employer and whether you are fully "vested" when you terminate employment. All of these concepts and terms are described in more detail below. To provide benefits under the Plan, a separate trust fund (administered by the "Trustee" as designated in the "General Information" section) was established to hold the Plan's assets. The Participating Employers periodically make contributions to the Plan in accordance with the minimum funding standards required pursuant to ERISA and the Internal Revenue Code to fund the Plan's benefits. The amount of these contributions is determined by the Plan's actuaries. Employees are not required or permitted to make contributions to the Plan. All Plan benefits are paid from the Plan's trust fund and not by a Participating Employer or any other entity. WHO PARTICIPATES IN THE PLAN All employees of the Participating Employers who are "Covered Employees" are eligible to participate in the Plan after satisfying the Plan's eligibility requirements as described below. Covered Employers As described above, there are certain UPHS organizations who have adopted the Plan for their eligible employees. These organizations are referred to as "Participating Employers." Currently, DB1/

6 HUP, PAH, PMC and Clinical Care Associates of the University of Pennsylvania Health System ("CCA") (only with respect to certain transferees) are the only Participating Employers. Other UPHS organizations who have not adopted the Plan for their employees (for example, the University of Pennsylvania, CCA (other than certain transferees), Chester County Health System, Lancaster General Health System, etc.) are "Non-Participating Employers" and are sometimes referred to in this summary as "Related Employers." This difference between "Participating" and "Related" Employers can be important, particularly in situations involving eligibility and crediting of service issues. These situations are described in more detail below. Covered Employees Only Option 1 Choice Participants who are "Covered Employees," as defined below, can actively participate in and accrue benefits under the Plan. The following groups of employees are Covered Employees and are eligible to participate in the Plan upon the satisfaction of the Plan's eligibility requirements: Covered Employees of HUP All regular exempt and non-exempt employees of HUP are covered under the Plan except (1) an employee whose employment is incidental to his educational program, and (2) employees assigned to Community Radiology Associates of UPHS, Motion Physical Therapy, or Penn Medicine at Radnor. Covered Employees of PMC All regular exempt and non-exempt employees of PMC are covered under the Plan. Covered Employees of PAH All regular exempt and non-exempt employees of PAH are covered under the Plan except any employee of the Benjamin Franklin Clinic. Covered Employees of CCA All Covered Employees of HUP, PMC, and PAH who transfer to CCA on or after December 1, 2012 and who are Option 1 Choice Participants actively participating in, and accruing benefits under the Plan on the date of their transfer. In addition to the various exclusions described above, the following groups of employees are NOT Covered Employees and are NOT eligible to participate under the Plan under any circumstances: Employees Hired or Rehired Before July 1, 2010 Who Are Not Option 1 Choice Participants Employees who were hired or rehired before July 1, 2010 but who are not Option 1 Choice Participants (i.e., employees who were eligible for, but did not make, an "Option 1" Retirement Choice election). Employees who are Hired or Rehired, or who Transfer, On or After July 1, 2010 Employees who are hired or rehired, or who transfer employment from or to a Non- Participating Employer, on or after July 1, DB1/

7 Residents, Fellows, Interns, Etc. Employees who are residents, fellows, attending physicians, interns, students or any such other similar category of employees. Collectively Bargained Employees Employees covered by the terms of a collective bargaining agreement (unless the collective bargaining agreement explicitly provides for participation in the Plan). Leased Employees Employees who are leased employees. Employees Covered Under Other Plans Employees employed by a division or affiliate of the University of Pennsylvania or UPHS who are covered by any other retirement plan sponsored by such division or affiliate (other than a 403(b) plan). Certain Part-Time and Temporary Employees Part-time or temporary employees who never accrue 1,000 or more Hours of Service during either the first 12 months of service with a Participating Employer (or a Related Employer) or during any subsequent Plan Year. Independent Contractors Individuals classified by a Participating Employer or a Related Employer as independent contractors or non-employees. Non-Resident Aliens Non-resident aliens with no U.S. source income. Certain Executive Level Employees Certain executive-level employees who are excluded from Plan participation from time to time. Eligibility Requirements If you are a Covered Employee, you are eligible to participate in the Plan as of the January 1 or July 1 following the date you reach age 21 and complete a year of Eligibility Service. (Eligibility Service is discussed in the "Service Under the Plan" section.) Eligibility and Reemployment Reemployment before July 1, 2010 If you terminated employment after becoming a Plan participant as described above and were later reemployed before July 1, 2010 as a Covered Employee before having incurred five or more consecutive Breaks in Service (the term "Break in Service" is discussed in the "Service Under the Plan" section), or if you were fully vested when you left employment, you began immediately participating in the Plan upon your reemployment. Otherwise, if you terminated employment and were rehired as a Covered Employee before July 1, 2010 but after having incurred five or more consecutive Breaks in Service, you generally became eligible to participate only after satisfying the Plan's eligibility requirements for a new employee. DB1/

8 Reemployment on and after July 1, 2010 If you terminated employment and were hired or rehired on or after July 1, 2010, you cannot become a Covered Employee or accrue additional benefits under the Plan. However, your employment will be counted following your rehire date for purposes of determining your eligibility for early retirement and vesting (as described below). Dual Employment Some employees are employed by a Participating Employer and a Related Employer at the same time. Such employees will be covered by either the Plan or the retirement plan of the Related Employer, but not by both plans. In these situations, the Committee will determine which plan will cover the employee by reference to the applicable employment and personnel policies of the Participating Employer and the Related Employer. This determination generally will be based upon which employer for whom the employee performs the most work, but other factors also may be taken into account. If you have questions about these dual employment situations, you should contact the UPHS Benefits Department at the address and number set forth in the "General Information" section. SERVICE UNDER THE PLAN Service is an important concept under the Plan because it is used to determine your eligibility to participate under the Plan, your "vested" interest in Plan benefits, your eligibility for early retirement benefits, and the amount of your Plan benefits. Your service generally is based upon the Hours of Service you accrue during your period of employment with a Participating Employer or a Related Employer. Counting service under the Plan can be complicated, particularly if you terminate employment and are later reemployed, if you transfer to a different job status or to a Related Employer, or if you are absent from active employment for some reason (for example, a period of disability). Thus, if you have questions about your service under the Plan, you should contact the UPHS Benefits Department. Important Terms to Understand As you review this portion of the summary relating to service, you should understand what the following terms mean: Hours of Service You will be credited with an Hour of Service for each hour for which you are paid or entitled to be paid by a Participating Employer or a Related Employer for the performance of your job duties. If you are paid for non-working periods such as vacation, holiday, and sick time, you will receive credit for some or all of the Hours of Service for those periods. You will also be credited with Hours of Service during certain periods of absence as long as you return to employment within the time periods prescribed by your Participating Employer's leave policies or by applicable law. For example, you will receive Hours of Service for a military leave of absence, a leave of DB1/

9 absence during which you receive benefits under a UPHS-sponsored long-term disability program before reaching retirement age, or an authorized leave of absence of up to six months. You will not receive credit for Hours of Service for payments that reimburse you for medical expenses or for periods during which you are receiving workers' compensation, unemployment compensation or disability benefits under a program required by applicable law. If your Participating Employer does not track your actual hours worked, you shall be credited with 190 Hours of Service for each calendar month during which you work at least one Hour of Service. Breaks in Service You generally will incur a Break in Service for any service counting period for which you fail to complete more than 500 Hours of Service. Certain absences (for example, an absence due to pregnancy or the birth/adoption of your child or an absence due to leave under the Family Medical Leave Act), however, will not immediately cause a Break in Service. If you are absent for one of these reasons, you should contact the UPHS Benefits Department to determine how your service will be affected. Eligibility Service The amount of Eligibility Service you have will determine when you can participate in the Plan. You will receive a year of Eligibility Service for a service counting period in which you complete 1,000 or more Hours of Service with a Participating Employer or a Related Employer. For purposes of determining Eligibility Service, the service counting period is the 12-month period beginning on the date you first complete an Hour of Service and then each Plan Year beginning thereafter. Employees hired or rehired on or after July 1, 2010 are not eligible to actively participate in, or accrue benefits under, the Plan. Vesting Service The amount of your Vesting Service will determine your "vested" or ownership interest in your Plan benefits (see the "Vesting" section for more information about vesting). You will be credited with a year of Vesting Service for each service counting period in which you complete 1,000 or more Hours of Service with a Participating Employer or a Related Employer. The Plan changed service counting periods from a fiscal year (July 1 to June 30) to a calendar year (January 1 to December 31) effective as of January 1, Benefit Accrual Service The amount of Benefit Accrual Service you have under the Plan will be used to determine the amount of your Plan benefits. You generally will be credited with a year of Benefit Accrual Service for each service counting period in which you complete 1,000 or more Hours of Service as a Covered Employee. The Plan changed service counting periods from a fiscal year (July 1 to June 30) to a calendar year (January 1 to December 31) effective as of January 1, Please keep in mind that employees who were hired or rehired before July 1, 2010 and who are not Option 1 Choice Participants ceased earning Benefit Accrual Service on and after January 1, In addition, an Option 1 Choice Participant who transfers to a Non-Participating DB1/

10 Employer, or who terminates employment and is rehired, on or after July 1, 2010 cannot again become a Covered Employee, and his or her Benefit Accrual Service will be determined based upon the amount of Benefit Accrual Service credited through the transfer or termination of employment. IMPORTANT: Only service as a Covered Employee counts as Benefit Accrual Service under the Plan. As such, any service you may earn with a Related Employer may count as Eligibility or Vesting Service under the Plan but generally WILL NOT count as Benefit Accrual Service. In addition, any service you earn if you are rehired after July 1, 2010 may count as Vesting Service under the Plan but WILL NOT count as Benefit Accrual Service. Service Before "Standardization" Service that you accrued with HUP, PMC, or PAH before the Plan was standardized as of July 1, 2002, will be determined in accordance with the terms of the individual plan that covered you before the standardization took effect. Service and Reemployment If you terminate employment and are later reemployed, under some circumstances, the Vesting and Benefit Accrual Service that you accrued before your termination of employment will be restored to you. Vesting and Benefit Accrual Service will be restored to you upon your reemployment if (1) you were fully vested (see the "Deferred Vested Benefits" section) when you terminated employment, or (2) you are reemployed by a Participating Employer or a Related Employer before you incur five or more consecutive Breaks in Service. Any such restored Vesting and Benefit Accrual Service will be added to any Vesting and Benefit Accrual Service you earn after your reemployment; provided, however, that you cannot earn any additional Benefit Accrual Service if your reemployment occurs on or after July 1, (Note: If you received a cash-out of your benefit upon your termination of employment (see the "Cash-Outs of Small Benefits" section), you will not receive credit for your prior Benefit Accrual Service upon your reemployment. Service and Transfers If you transfer employment from one Participating Employer to another and you are a Covered Employee, you will continue to accrue service under the general terms of the Plan as described above. If you transfer to or from employment with a Related Employer, your service will be determined as follows: Transfers to a Participating Employer If you are actively participating in a defined benefit plan of a Related Employer and you transfer employment to a Participating Employer before July 1, 2010, all of your covered service with the Related Employer will be treated as Eligibility, Vesting and Benefit Accrual Service under the Plan. However, as described in the "Special Situations" section, your Plan benefit will be adjusted to reflect the benefit that you are eligible to receive under the defined benefit plan of the DB1/

11 Related Employer. This provision is designed to minimize the impact of an employment transfer on your Plan benefits, but it will only apply if the Related Employer from which you transfer sponsors a defined benefit plan that is very similar to the Plan. If you transfer employment from a Related Employer to a Participating Employer on or after July 1, 2010, you cannot become a Covered Employee or earn benefits under the Plan after the transfer, but your service with the Related Employer will be treated as Vesting Service under the Plan. Transfers from a Participating Employer If you are actively participating in the Plan and you transfer to a Related Employer (i.e., University of Pennsylvania, CCA, Chester County Health System, Lancaster General Health System, etc.), you will stop accruing Benefit Accrual Service under the Plan as of the date of the transfer. Once you stop accruing Benefit Accrual Service on and after July 1, 2010, you will not be able to later begin accruing Benefit Accrual Service under the Plan. However, you will continue to accrue Vesting Service as long as you continue to work with the Related Employer. If you are contemplating a transfer to a Related Employer, you should contact the UPHS Benefits Department to determine how your Plan benefits will be affected. RETIREMENT BENEFITS Assuming that you meet the necessary eligibility requirements, you may retire under the Plan at an early, normal or postponed retirement date. Even if you terminate employment before these retirement dates, you may still be eligible to receive benefits if you are fully vested under the Plan (see the "Deferred Vested Benefits" section). Normal Retirement You may retire with a normal retirement benefit upon reaching your "Normal Retirement Age" while employed by a Participating Employer or any Related Employer. Your Normal Retirement Age is the latest of your 65 th birthday or the 5 th anniversary of the date you started participating in the Plan. Early Retirement You may retire with an early retirement benefit upon reaching your "Early Retirement Age" while employed by a Participating Employer or any Related Employer. Your Early Retirement Age is any date after you have reached age 55 and completed five or more years of Vesting Service. Postponed Retirement You may retire from a Participating Employer or any Related Employer with a postponed retirement benefit at any time after reaching your Normal Retirement Age. You should review the "Special Situations" section for more information about how your benefits will be determined if you postpone your retirement beyond Normal Retirement Age. DB1/

12 CALCULATING YOUR RETIREMENT BENEFIT Normal Retirement Benefit The amount of any retirement benefit you may receive under the Plan will depend upon a number of factors (your Final Average Earnings, your years of Benefit Accrual Service, your Federal Social Security Compensation Level, and when you retire or terminate employment or, if you were hired or rehired before July 1, 2010 and are not an Option 1 Choice Participant, as of December 31, 2010). This section describes these terms and factors in more detail and includes examples to show you how retirement benefits are calculated under the Plan. As described in the examples below, your monthly normal retirement benefit is the sum of your "Regular Compensation Benefit" and your "Excess Compensation Benefit" (if any) as follows: Regular Compensation Benefit Your Regular Compensation Benefit is equal to your years of Benefit Accrual Service multiplied by your Final Average Earnings multiplied by a Percentage Multiplier of 1.25%. Excess Compensation Benefit Your Excess Compensation Benefit is equal to your years of Benefit Accrual Service not in excess of 40 multiplied by your Final Average Earnings (if any) that exceed your Federal Social Security Compensation Level multiplied by a Percentage Multiplier of.50%. Once your Regular Compensation Benefit and your Excess Compensation Benefit (if any) are calculated and added together, the total amount is divided by 12 to determine the amount of the benefit in the form of monthly payments. For purposes of applying this benefit formula, the following terms have the following meanings: Years of Benefit Accrual Service Your years of Benefit Accrual Service are determined in accordance with the service provisions above. Final Average Earnings Your Final Average Earnings is the average of your five highest calendar years of earnings as a Covered Employee up to a compensation limit imposed under Federal tax laws (this compensation limit is $270,000 for the year 2017, but is adjusted periodically by the Federal government). Your earnings will not include certain non-regular forms of compensation, such as disability payments, workers' compensation payments, the value of fringe benefits, deferred compensation payments, etc. However, your earnings will include any "elective deferrals" that are deducted from your pay on a pre-tax basis (for example, for contributions to a 403(b) plan or to pay for qualifying health or welfare benefits). If you terminate employment and are rehired on or after July 1, 2010, you will not be a Covered Employee and your Final Average Earnings will not include any earnings after the date of your rehire. Similarly, if you transfer employment to a Related Employer on or after July 1, 2010, you will cease being a Covered Employee and your Final Average Earnings will not increase after your transfer. DB1/

13 Federal Social Security Compensation Level The Social Security Administration establishes an annual compensation amount (referred to as the "taxable wage base"), which is the compensation level taken into account each year in determining the level of your and your employer's Social Security contributions. Any compensation you may earn in a given year that exceeds the taxable wage base is disregarded in determining Social Security contributions and will not create a larger Social Security retirement benefit for you. Because you do not receive any Social Security retirement benefits for this excess compensation, the Plan provides you with an additional benefit if your Final Average Earnings exceeds your "Federal Social Security Compensation Level." Your Federal Social Security Compensation Level generally is the average of the taxable wage bases for the 35-year period ending with the year in which you reach Social Security Retirement Age (which currently is age 65, age 66, or age 67 depending upon when you were born). Important: If you believe you are entitled to a benefit that you have not received or if you disagree with any determination made by the Committee regarding your benefit (such as the amount of your benefit or how it is calculated), you may submit a claim for benefits under the Plan. However, the time period during which you can submit a claim for benefits (including the time period to bring suit after exhausting the Plan's claims and appeals procedures) is limited. If you fail to make a timely claim for benefits or you fail to timely appeal a denied claim, you may lose your right to those benefits. For important information regarding the process for submitting a claim for benefits and the deadlines for submitting such a claim, including the deadline for filing a claim in court (see the "Claims and Appeals Procedures" section for more information). In addition, under certain circumstances, your benefit under the Plan may be reduced or lost (such as, for example, if you do not provide the Committee with your current address and you cannot be located). (See the "Loss of Benefits" section for important information regarding the circumstances under which your benefit may be lost or reduced.) Examples of Retirement Benefit Calculations Example 1: Assume that Richard started to work for HUP at age 35 and retires at age 65 with 30 years of Benefit Accrual Service. Richard retires in During his five highest-paid years with HUP, his compensation was as follows: $21, , , , ,000 = $127,000 When Richard's five highest-paid years, as indicated above, are added together and divided by five, his Final Average Earnings is $25,400 ($127,000/5 = $25,400). This Final Average Earnings is less than the applicable Federal Social Security Compensation Level, which is $51,348 for This means that Richard will not receive an Excess Compensation Benefit. Given that Richard's Final Average Earnings is $25,400 and that he has 30 years of Benefit Accrual Service, his monthly normal retirement benefit would be calculated as follows: Richard's Final Average Earnings $25,400 multiplied by Percentage Multiplier of 1.25% multiplied by Richard's Years of Benefit Accrual Service 30 DB1/

14 divided by 12 months 12 equals Monthly Plan Benefit $ Example 2: Assume that Alan started to work for PMC at age 35 and retires at age 65 with 30 years of Benefit Accrual Service. Alan retires in During his five highest-paid years with PMC, his compensation was as follows: $54, , , , ,000 = $290,000 When Alan's five highest-paid years, as indicated above, are added together and divided by five, his Final Average Earnings is $58,000 ($290,000/5 = $58,000). This Final Average Earnings amount is more than the applicable Federal Social Security Compensation Level, which is $51,348 for This means that Alan will receive an Excess Compensation Benefit. His monthly normal retirement benefit would be calculated as follows: Alan's Regular Compensation Benefit Alan's Final Average Earnings $58,000 multiplied by Percentage Multiplier 1.25% multiplied by Alan's Years of Benefit Accrual Service 30 divided by 12 months 12 equals Monthly Regular Compensation Benefit $1, PLUS Alan's Excess Compensation Benefit Alan's Final Average Earnings That Exceed the Federal Social Security Compensation Level $6,652 multiplied by Percentage Multiplier.50% multiplied by Alan's Years of Benefit Accrual Service 30 divided by 12 months 12 equals Monthly Excess Compensation Benefit $83.15 EQUALS Alan's Total Retirement Benefit Alan's Regular Compensation Benefit $1, DB1/

15 plus Alan's Excess Compensation Benefit $83.15 Equals Alan's Total Monthly Retirement Benefit $1, Early Retirement Benefit If you retire early (any time after age 55 if you have five or more years of Vesting Service), you can choose to begin receiving your monthly benefits before you reach your Normal Retirement Age. If you choose to start your benefits before Normal Retirement Age, however, your benefits will be reduced because the Plan may have to pay benefits to you over a longer period of time. Your retirement benefits will be reduced by: First 60 Months 5/9 of 1% for each of the first 60 months that your benefits start before your Normal Retirement Age Next 60 Months 5/18 of 1% for each of the next 60 months that your benefits start before your Normal Retirement Age By way of example, early retirees will receive the following percentages of their normal retirement benefit: Age 55-50% Age % Age 62-80% Age % Age % Example 3: This example shows how the Plan's benefit formula would work for someone who retires early. Assume that Anne retires at age 55 with 25 years of Benefit Accrual Service, that her Final Average Earnings is $21,300, and that she elects to receive her retirement benefit immediately. Given these factors, Anne's monthly early retirement benefit would be calculated as follows: Anne's Final Average Earnings $21,300 multiplied by Percentage Multiplier of 1.25% 1.25% multiplied by Anne's Years of Benefit Accrual Service 25 multiplied by 50% Early Retirement Reduction.50% divided by 12 months 12 equals Monthly Plan Benefit $ DB1/

16 The example shows that Anne would receive a monthly benefit of $ for life, beginning at age 55. Note that if Anne had elected to retire at age 55 but postponed the start of her benefits until Normal Retirement Age, she would have received a full monthly normal retirement benefit of $ (not reduced by 50% for early retirement). Postponed Retirement Benefit You may continue to work beyond your Normal Retirement Age. If you delay retirement beyond your Normal Retirement Age, your monthly benefit generally will start being paid to you when you retire. However, there may be some circumstances in which you can start receiving your benefits at your Normal Retirement Age if you are engaged in part-time employment. (See the "Special Situations" section for more information about in-service distributions on or after Normal Retirement Age). Benefits are required to begin no later than April 1 following the calendar year in which you reach 70½ or if later, terminate employment with a Related Employer ("required beginning date"). You should also be sure that you understand how your benefits will be calculated if you delay payment until after Normal Retirement Age. (See the "Special Situations" section for information about suspension of benefits). If you have any questions about how these Plan provisions work, you should contact the UPHS Benefits Department at the address and phone number set forth in the "General Information" section. DISABILITY BENEFITS If you meet all of the Plan's requirements, you may be eligible to receive disability benefits under the Plan if you are fully vested and you become disabled while you are a Covered Employee employed by a Participating Employer. The Plan does not pay monthly benefits during your disability; rather, you continue to earn Vesting and Benefit Accrual Service while you are disabled. You will continue to earn Vesting and Benefit Accrual Service as long as you are receiving benefits under your Participating Employer's long-term disability program. You will stop earning Vesting and Benefit Accrual Service under the Plan at the earliest of your: Benefit Payment Date The date as of which you first begin receiving benefit payments from the Plan. Disability Ends The date you are no longer disabled as determined under your Participating Employer's long-term disability program. Death The date of your death. Recovery from Disability Before July 1, 2010, if you recovered from your disability (as determined under your Participating Employer's long-term disability program) and resumed employment with a Participating Employer before your Normal Retirement Age, the period of your disability up to your resumption of employment generally is considered as years of Vesting and Benefit Accrual Service under the Plan. In addition, if you resumed employment with a Participating Employer as a Covered Employee, you continued to earn Vesting and Benefit Service under the Plan. For DB1/

17 purposes of calculating your retirement benefit, your assumed rate of earnings during your period of disability will be based upon the earnings you were receiving before your disability. For periods on and after July 1, 2010, special rules apply to determine whether you can earn additional benefits under the Plan if you recover from your disability and resume employment. These special rules, and whether you can earn additional benefits under the Plan upon your return to employment with a Participating Employer, depend on whether you became disabled prior to July 1, If you became disabled prior to July 1, 2002 If you became disabled prior to July 1, 2002 and started receiving a disability benefit under the Plan, in the event that you recover from your disability (as determined under your Participating Employer's longterm disability program) on or after July 1, 2010 and you immediately resume employment with a Participating Employer before your Normal Retirement Age, the period of your disability up to your resumption of employment is considered as years of Vesting and Benefit Accrual Service under the Plan. In addition, you will be treated as if you were an Option 1 Choice Participant and you will be eligible to earn additional benefits under the Plan, as long as you remain a Covered Employee. For purposes of calculating your retirement benefit, your assumed rate of earnings during your period of disability will be based upon the earnings you were receiving before your disability. If became disabled on or after July 1, 2002 If you became disabled on or after July 1, 2002 and started receiving a disability benefit under the Plan, in the event that you recover from your disability (as determined under your Participating Employer's longterm disability program) on or after July 1, 2010, the period of your disability up to your resumption of employment is considered as years of Vesting and Benefit Accrual Service under the Plan. However, you will not be eligible to earn additional benefits under the Plan (even if you immediately resume employment with a Participating Employer). For purposes of calculating your retirement benefit, your assumed rate of earnings during your period of disability will be based upon the earnings you were receiving before your disability. If you do not resume employment with a Participating Employer or a Related Employer after recovering from your disability, the period of your disability will be considered as years of Vesting and Benefit Accrual Service under the Plan, but you will be considered to be terminated as of the date of your recovery from your disability. You may then be entitled to receive a benefit payable at your Normal Retirement Age or at an earlier date if you satisfy the requirements for early or deferred vested benefits. DEFERRED VESTED BENEFITS Even if you terminate employment before one of the retirement dates discussed above, you may still be eligible to receive benefits under the Plan if you are fully vested upon your termination of employment. The vesting requirements and the method for calculating deferred vested benefits are explained below. DB1/

18 Vesting You will be vested in your Plan benefits when you have earned five years of Vesting Service. Calculating Deferred Vested Benefits Unless your deferred vested benefit is "cashed-out" (see the "Cash-Outs of Small Benefits" section), your deferred vested benefit ordinarily will be paid to you as of the date you reach your Normal Retirement Age. However, you may elect to begin receiving your deferred vested benefit on the first day of any month following the month in which you reach age 55. Your monthly-deferred vested benefit will be calculated in the same manner as normal retirement benefits as described above. If you elect to start receiving your deferred vested benefits before your Normal Retirement Age, however, your deferred vested benefit will be reduced in the same manner as early retirement benefits as described above. SPECIAL SITUATIONS Most Plan participants retire on their Early or Normal Retirement Age and begin receiving their benefits under the Plan shortly thereafter. However, there are special situations involving participants who (1) transfer to a Participating Employer from a Related Employer, (2) may want to start receiving their benefits while they are still employed, (3) delay retirement until after Normal Retirement Age, or (4) come back to work after terminating employment and starting to receive benefits. This section explains how the Plan handles these special situations. Benefit Adjustments for Transferred Employees Participants who transfer from a Related Employer that sponsors a similar pension plan may be eligible to receive additional service credit as described in the "Service and Transfer" section (but under no circumstance will any additional service credit be counted as Benefit Accrual Service for transfers occurring on or after July 1, 2010). The Plan benefit of any such participant shall be reduced by the benefit accrued in the pension plan of the Related Employer if you receive benefit service credits under both pension plans for the same period of employment. This servicecrediting and offset approach keeps a participant's overall benefits "current" by including all of the participant's service in the Plan (to the extent permitted under the Plan), but avoids "doubledipping" by making sure that service is only counted once under each plan. In-Service Distributions When you reach Normal Retirement Age, you may elect to start receiving your benefits if you are engaged in (or you switch to) "part-time employment." Part-time employment generally means that you are scheduled to work less than 1,000 Hours of Service in a given year as determined under your Participating Employer's employment and personnel policies. If you start receiving benefits under this provision and your employment becomes "full-time" (more than 1,000 Hours DB1/

19 of Service in a given year), your benefits will be "suspended" as described below until you return to part-time employment or terminate employment entirely. If you terminate employment, start receiving your benefits, and are later reemployed, you may elect to continue receiving your benefits after your reemployment if you are engaged in part-time employment. If you continue your benefits under this provision and your employment becomes full-time, your benefits will be suspended as described below until you return to part-time employment or terminate employment entirely. Postponement of Retirement Past Normal Retirement Age If you postpone retirement past Normal Retirement Age (and do not start taking in-service distributions as described above), your benefits will be suspended until you actually retire and begin receiving your benefits. The term "suspended" simply means that you will not start receiving your benefits until you retire. As long as you are working, and you are a Covered Employee, you will continue to accrue benefits in accordance with the Plan's terms. If you delay payment of your benefits beyond age 70½ (a statutory distribution date set forth in the Internal Revenue Code), your benefit will be increased when it is eventually paid to you to reflect the delayed payment of your benefits. Reemployment Reemployment before July 1, If you terminate employment before July 1, 2010, start your benefits, and are later reemployed (and you do not continue receiving in-service distributions as described above), your benefits will be suspended until you terminate employment from your Participating Employer and all Related Employers. When your benefits start being paid to you again, your benefit will be based upon all of your Benefit Accrual Service (including service you earned before and after your reemployment (if any)), but your benefit will be reduced by the value of the distributions you received prior to your reemployment. When your benefits start being paid to you again, you generally will not be able to elect a different form of payment unless your subsequent retirement occurs on or before your Normal Retirement Age. Reemployment on and after July 1, 2010 If you terminate employment on or after July 1, 2010, start your benefits, and are later reemployed (and you do not continue receiving in-service distributions as described above), your benefits will be suspended until you terminate employment from your Participating Employer and all Related Employers. When your benefits start being paid to you again, your benefit will be based upon all of your previously earned Benefit Accrual Service, but your benefit will be reduced by the value of the distributions you received prior to your reemployment. When your benefits start being paid to you again, you generally will not be able to elect a different form of payment unless your subsequent retirement occurs on or before your Normal Retirement Age. DB1/

20 Approved Absence for Uniformed Service Federal law provides certain protections for an employee who returns to employment from an approved absence for uniformed service (i.e., military duty). To the extent required by law, you will be credited with benefit accruals and receive service credit during your absence for uniformed service (as if you had remained actively employed) provided that you return to active employment within the time frame required by applicable law. This means that if you are not a Covered Employee when you leave employment to enter uniformed service, you cannot receive benefit accruals as a result of your military duty. If you are planning to leave employment to enter uniformed service, it is your obligation to provide advance notice to the Committee. Suspension of Benefits As described above, there are certain situations in which your benefits may be suspended if you continue working beyond your Normal Retirement Age or if you are reemployed (or return to full-time employment) after starting your benefits. If your benefit payments are suspended, your benefits will start being paid to you again whenever you terminate employment, or return to parttime employment. Also, as described above, the benefit payable to you may be reduced to take into account the benefit payments that you have already received. FORMS OF BENEFIT PAYMENT Unless your benefits are very small (see the "Cash-Outs of Small Benefits" section) and are paid to you in a single sum when you retire or terminate employment, your benefits will be paid in monthly payments under one of the forms described below. Automatic Forms of Payment Unless you elect an optional form of payment, your benefit automatically will be paid to you (depending upon your marital status) in one of the following forms: Unmarried Participants If you are not married when your benefit begins, your benefit will be paid to you in a "Single Life Annuity," which provides equal monthly payments to you for your lifetime only. At your death, all benefits will cease and any beneficiaries you may have will receive nothing. Married Participants If you are married when your benefit begins, your benefit will be paid to you as a "Qualified Joint and Survivor Annuity." A Qualified Joint and Survivor Annuity provides reduced, equal monthly payments to you during your lifetime and, if your spouse lives longer than you, to your spouse for your spouse's lifetime. The monthly benefit payable to your spouse upon your death is equal to 50%, 75%, or 100% (as you may elect) of the monthly benefit paid to you during your lifetime. The monthly payment during your lifetime is reduced to provide for payments to your spouse after your death. The amount of this reduction will depend upon the joint and survivor annuity percentage you choose (for example, the 100% survivor annuity will result in a larger reduction) and DB1/