UMass Memorial Health Care. Pension Plan Summary Plan Description

Transcription

1 UMass Memorial Health Care Pension Plan Summary Plan Description October 1, 2014

2 Table of Contents OVERVIEW OF THE PENSION PLAN... 3 ELIGIBLE EMPLOYEES... 3 PARTICIPATION... 3 TERMS YOU NEED TO KNOW... 4 SERVICE AWARD FOR UMASS MEDICAL CENTER EMPLOYEES... 5 VESTING... 6 PLAN PAYMENT OPTIONS... 7 LUMP SUM OPTION... 8 LIFETIME ANNUITY OPTION... 8 RECEIVING YOUR LUMP-SUM BENEFIT... 9 IF YOU LEAVE BEFORE AGE RECEIVING YOUR LIFETIME ANNUITY BENEFIT ANNUITY PAYMENT OPTIONS IF YOU LEAVE BEFORE AGE LATE COMMENCEMENT OF PAYMENT(S) IF YOU LEAVE UMMHC AND ARE REHIRED IF YOU HAVE A BREAK IN SERVICE TAXES ON YOUR PAYMENT DISABILITY ANNUITY BENEFIT PRE-RETIREMENT DEATH BENEFIT IF YOU DIE WHILE ON MILITARY LEAVE THE SUPREME COURT S DECISION ON SAME-SEX MARRIAGE: WHAT IT MEANS TO YOU AND YOUR SAME-SEX SPOUSE IMPORTANT FACTS ABOUT THE PLAN PLAN NAME PLAN NUMBER PLAN SPONSOR PLAN ADMINISTRATOR COVERED AFFILIATES PLAN FUNDING PLAN YEAR OTHER INFORMATION TYPE OF PLAN ASSIGNMENT OF BENEFITS MINIMUM LUMP SUM MAXIMUM BENEFIT TOP HEAVY PROVISIONS RESPONDING TO YOUR CLAIM APPEALING A DENIED CLAIM LEGAL PROCESS... 21

3 CHANGE OF ADDRESS SOCIAL SECURITY CONTINUANCE OF THE PLAN PENSION BENEFIT GUARANTY CORPORATION YOUR RIGHTS UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA) RECEIVE INFORMATION ABOUT YOUR PLAN AND BENEFITS DUTIES OF THE PLAN FIDUCIARIES STEPS YOU CAN TAKE TO ENFORCE YOUR RIGHTS IF YOU HAVE QUESTIONS... 25

4 THE UMASS MEMORIAL HEALTH CARE PENSION PLAN Planning for the future is something many of us don t think about. And when it comes to saving for retirement, we often have trouble finding the extra money in our budgets. But you should start saving and the sooner the better. Because the sooner you begin, the more financial security you ll have. That means being able to spend your retirement years doing the things you most enjoy whether it s relaxing on the beach (or on the golf course) or spending time with your family. To help you build your retirement savings, UMass Memorial Health Care, Inc. (UMMHC) offers the UMass Memorial Health Care Pension Plan (the Pension Plan or Plan). The Plan provides you with a retirement benefit based on your pay and years of service with UMMHC. The Plan has many advantages, including: Competitive benefit. The Plan provides a benefit that can be the foundation for your retirement. Easy to understand. Your benefit is calculated using a simple formula, so it s easy to determine and easy to understand. Guaranteed benefit. UMMHC assumes the investment risks of the Plan, so your benefit is secure, predictable, and guaranteed to be there when you need it. Choice of payment options. You choose how you want to receive your benefit as a lump sum (with spousal consent, if married) or as a lifetime annuity. No cost to you. Perhaps best of all, UMMHC pays the entire cost of the Plan. Retirement choice. Retirement Choice was available for a limited time to members of certain collective bargaining units, as follows: Collective Bargaining Unit Beginning of Choice Period End of Choice Period MNAU January 1, 2007 December 31, 2009 UFCW January 1, 2007 May 29, 2010 UFCWS January 1, 2008 September 30, 2010 MNAMH February 1, 2007 November 16, 2010 Eligible employees were permitted to choose between two retirement programs: 1. Participation in this Pension Plan and the 401(k) Plan with a basic matching contribution 2. A waiver of participation in the Pension Plan in favor of an enhanced match in this 401(k) Plan. 1

5 Limited choice offering. In 2008, clinical lab PhDs and the Director of Medical Physics in Radiation Oncology were given a one-time opportunity to choose between two retirement programs: 1. Continued accrual under this Pension Plan plus basic matching contributions to the 401(k) Plan plus an additional nonmatching contribution of 1% of total pay to the 401(k) Plan 2. A waiver of future participation in this Pension Plan in favor of a 5% of pay nonmatching contribution to the 401(k) Plan. You were notified if the limited choice offering applied to you, and detailed information about that program was provided separately. The Plan will add to your Social Security benefits and your benefits under the Commonwealth of Massachusetts State Employees Pension Plan (for those who worked for the UMass Medical Center), as well as other personal savings and investments. * * * * * This summary plan description (SPD) highlights the provisions of the UMass Memorial Health Care Pension Plan. The benefits described herein apply to employees who perform at least one hour of service on or after October 1, Benefits for participants who terminated earlier are governed by the plan document in effect at their termination of employment. Complete details of the Plan are described in the Plan document. If there is a discrepancy between this booklet and the Plan document, the Plan document will govern. In addition, if any oral or written representations conflict with this SPD, the Plan document will control and takes the place of any prior oral or written communications. 2

6 OVERVIEW OF THE PENSION PLAN ELIGIBLE EMPLOYEES You are an eligible employee if you are an employee of a participating UMass Memorial affiliate organization and you are not a member of an ineligible classification. In general, you are ineligible if you: are covered by a collective bargaining agreement which excludes your participation; or are eligible for enhanced employer matching contributions under the UMass 401(k) Plan. Certain special rules apply. You are ineligible if you: are a Physician or a clinical PhD staff member in a certain job classification and were hired on or after January 1, 2000, unless you had previously participated in the Plan or had elected to join the Plan in your written employment acceptance executed before December 31, 1999; are a Clinical PhD lab and staff members hired on or after January 1, 2008, or the Director of Medical Physics in Radiation Oncology hired into that position on or after January 1, 2008; or are a Clinical lab PhD or the Director of Medical Physics in Radiation Oncology, and you elected to waive participation in the plan. As of October 1, 2014, participating UMass Memorial affiliates include UMass Memorial Medical Center, Inc., UMass Memorial Medical Group, Inc. and any other UMass Memorial affiliate that is designated as a participating affiliate by the President/CEO of UMass Memorial Health Care, Inc. If the President/CEO designates only certain classifications of an affiliate s employees as eligible for the Plan, you will not be eligible to participate if you are not within one of those classifications. Participants and beneficiaries may receive, upon written request to UMMHC, information regarding a particular affiliate s participation in the Plan, including the affiliate s address. Please contact Human Resources for details about participating affiliates. PARTICIPATION You are eligible to participate in the Pension Plan on the first day of the month after you have completed one year of service as an employee of a participating UMass Memorial affiliate during which you were paid for 1,000 hours or more (approximately 20 hours per 3

7 week). You will remain a participant as long as you are paid for at least 500 hours in each calendar year and remain employed by a participating UMass Memorial affiliate. Please be aware that as a plan participant your ability to make and deduct contributions to an IRA may be limited. See your tax advisor for more information. Once you meet the eligibility requirements, your participation in the Plan is automatic. All you need to do is name a beneficiary. Beneficiary designation forms are available in Human Resources. If you had already met these eligibility requirements at UMass Medical Center on the date you transferred from UMass Medical Center, you will join the Plan immediately. TERMS YOU NEED TO KNOW To fully understand how the Plan works, you will need to become familiar with the following terms: Average annual earnings. Your average annual earnings is the average of your total earnings for the five consecutive calendar years (January 1 to December 31) when your pay was highest or, if greater, the last 60 months of your employment with UMMHC. Benefit service. You earn one year of benefit service for each calendar year in which you are paid for 1,000 hours or more while an eligible employee. Partial years of service may be credited in the year of hire (or the date you transfer to employment with UMMHC) and in the year your employment with UMMHC terminates. Benefit service includes years of service as a Memorial (also known as The Med Center ) employee prior to the merger with UMass Medical Center. Benefit Service, however, does not include service with UMass Medical Center except as granted under the Service Award Program, nor does it include certain other periods of service that are excluded by the official Plan document. Please contact Human Resources for further details. Break in service. A break in service will occur if you are not credited with at least 500 hours of service in a calendar year. If you are not vested (see page 5) and incur five consecutive break in service years, your Plan participation will end. Earnings. Generally, your pensionable earnings include all compensation paid to you during the year, including amounts that you deferred into the 401(k) Plan, the Tax Sheltered 403(b) Plan, or that you elected as pre-tax employee contributions to other benefit plans. Earnings will not include any severance pay in excess of 8 weeks, termination pay, unused vacation pay, or deferred compensation or pay earned during a time when you are not an eligible employee. According to IRS regulations, the maximum compensation that can be taken into account for Plan purposes is $260,000 for This amount is subject to change with inflation. Please contact Human Resources for additional information. 4

8 Vesting service. You earn one year of vesting service for each calendar year in which you are paid for 1,000 or more hours. Generally, continuous service with UMass and Memorial (The Med Center) prior to the merger is included in the calculation of vesting service. SERVICE AWARD FOR UMASS MEDICAL CENTER EMPLOYEES If you transferred from the UMass Medical Center you may be eligible to receive a Service Award in the UMass Memorial Pension Plan. Your eligibility for a Service Award depends upon your designation as of November 25, Short Service Employees The Service Award for employees who are defined as short service (less than nine years of creditable service in the State Retirement System as of November 25, 1997) is based upon the number of years of creditable service you had on your date of transfer. For example (using the chart below), if you had six years of creditable service on your date of transfer, you would receive 5.75 years of Credited Service in the UMass Memorial Health Care Pension Plan. SERVICE AWARDS FOR EMPLOYEES WITH LESS THAN NINE YEARS OF CREDITABLE SERVICE (AS OF NOVEMBER 25, 1997) Creditable Service 1 Earned as of Your Transfer Date Benefit Service Award in UMMHC Pension Plan 1 year 1.00 year 2 years 2.00 years 3 years 3.00 years 4 years 4.00 years 5 years 5.00 years 6 years 5.75 years 7 years 6.50 years 8 years 7.25 years 9 years or more 8 years 1 You will receive credit for your actual years and months of creditable service. For example, if your creditable service upon transfer is 6 years and 9 months, you would receive a prorated Service Award that recognizes the years and months worked. Long Service Employees If you had nine or more years of creditable service in the State Retirement System on November 25, 1997, you are considered a long service employee. While long service employees do not receive service credits in the UMass Memorial Health Care Pension Plan, they do become 100% vested in the Plan on their date of transfer to UMass Memorial. Physicians and Clinical Faculty If you are a short service physician or clinical faculty member (i.e., less than nine years of creditable service in the State Retirement System as 5

9 of November 25, 1997) and you did not participate in the Optional Retirement Plan, you are eligible to receive a Service Award upon transfer to UMass Memorial. Your Service Award is approximately half the level for short service employees (see chart on page 5). SERVICE AWARDS FOR PHYSICIANS AND CLINICAL FACULTY WITH LESS THAN NINE YEARS OF CREDITABLE SERVICE (AS OF NOVEMBER 25, 1997) Creditable Service 2 Earned as of Your Transfer Date Benefit Service Award in UMMHC Pension Plan 1 year.51 year 2 years 1.02 years 3 years 1.53 years 4 years 2.04 years 5 years 2.55 years 6 years years 7 years or more 3.30 years 2 You will receive credit for your actual years and months of creditable service. For example, if your creditable service upon transfer is 6 years and 9 months, you would receive a prorated Service Award that recognizes the years and months worked. VESTING If you are not covered by a collective bargaining agreement, you become vested or earn the right to a Pension Plan benefit upon the earliest of (i) completion of three (3) years of vesting service; (ii) attainment of age 55 if you were an eligible employee on December 31, 2006; (iii) death; or (iv) disability. (See page 12 for the definition of disability.) If you are covered by a collective bargaining agreement, vesting requirements are based on the bargaining unit of which you are a member: If you are a member of MNA - University Unit or NAGE (International Association of EMTs and Paramedics) - you become vested or earn the right to a Pension Plan benefit once you have completed five (5) years of vesting service unless the collective bargaining agreement specifies otherwise or when you reach normal retirement age (65), if earlier. If you incur a disability (as defined on page 12), you will become fully vested in your benefit if you elect to receive your benefit as described under the section entitled Plan Payment Options, in lieu of the disability benefit described in the section entitled Disability Annuity Benefit. If you are a member of SHARE (State Healthcare And Research Employees); ACOPS (American Coalition of Public Safety); MNA - Memorial, Hahnemann, UFCWS 6

10 (United Food and Commercial Workers Skilled Maintenance); Local 1445 of the UFCW - you become vested or earn the right to a Pension Plan benefit once you have completed three (3) years of vesting service unless the collective bargaining agreement specifies otherwise or when you reach normal retirement age (65), if earlier. If you incur a disability (as defined on page 12), you will become fully vested in your benefit if you elect to receive your benefit as described under the section entitled Plan Payment Options, in lieu of the disability benefit described in the section entitled Disability Annuity Benefit. If you were employed by either UMass Medical Center or Memorial Hospital (The Med Center) as of the date of the merger (March 31, 1998), your prior service will be counted towards your vesting service under the Plan. So, all employees transferring to UMMHC with five or more years of vesting service at Memorial as of the date of the merger or with five or more years of creditable service under the State Retirement System will be immediately vested in the Plan. PLAN PAYMENT OPTIONS Your normal retirement benefit under the Pension Plan is determined based on your average annual earnings and your benefit service with UMMHC. The standard form of payment is a lifetime annuity. However, you may choose instead to receive your benefit in the form of a lump-sum payment. Under federal pension law, your Pension Plan benefit will automatically be paid as a lifetime annuity instead of a lump sum unless you elect otherwise. If you are married, your annuity will be paid as a reduced 50% joint and survivor annuity under which, after your death, half of your reduced benefit will continue to your spouse for the rest of his/her life. To elect a payment option other than the normal annuity form of payment, simply complete an election form at the time you want to receive payment. If you are married and you wish to elect the lump-sum payment or one of the other annuity options, your spouse must consent in writing to this election, as witnessed by a notary public. Payment election forms are available in Human Resources. More information on the payment options available to you are discussed in the following sections. Please read this information carefully. 7

11 LUMP SUM OPTION With the lump sum option, your Plan benefit is available to you for reinvestment or other use. The formula for calculating a lump-sum benefit at normal retirement is: $380 plus 11% of your average annual earnings in excess of $6,600 times Your years of benefit service (up to 30 years) LIFETIME ANNUITY OPTION With the lifetime annuity option, you receive monthly payments for a certain period of time, depending on the annuity option you choose. The formula for calculating a lifetime annual annuity at normal retirement is: $43.20 plus 1.25% of your average annual earnings in excess of $6,600 times Your years of benefit service (up to 30 years) For example, let s assume that: you receive your benefit at age 65 you have 30 years of benefit service your average annual earnings equals $36,000. Your lump-sum payment would equal $108,420, determined as follows: $380 $380 Plus 11% times $29,400 +3,234 Equals $3,614 Times 30 years of benefit service x 30 Total lump sum $108,420 For example, let s assume that: you receive your benefit at age 65 you have 30 years of benefit service your average annual earnings equals $36,000. Your lifetime annuity benefit (paid monthly) would equal $1,026.75, determined as follows: $43.20 $43.20 Plus 1.25% times $29, Equals $ Times 30 years of benefit service x 30 Total lifetime annual annuity $12, Divided by 12 months 12 Total lifetime monthly annuity $1, Of course, your normal retirement benefit will depend on your average annual earnings and benefit service at the time you retire. In addition, your benefit will be reduced if you decide to receive benefits before age 65. BENEFITS FOR THOSE WHO OPTED OUT OF THE PENSION PLAN If you are a Physician or a clinical PhD staff member who elected to waive accrual of future benefits under this Plan effective December 31, 1999, in favor of participation in the defined contribution plan with profit sharing contributions, your benefit under this Plan will be calculated as the larger of (1) and (2) below: 8

12 (1) Your accrued benefit as of December 31, 1998 calculated as set forth above, based on your years of benefit service and average annual earnings as of December 31, (2) Your accrued benefit as of December 31, 1999 calculated as set forth above, based on your years of benefit service and average annual earnings as of December 31, The amounts calculated will be reduced by the actuarial value of the profit sharing contributions made on your behalf to the defined contribution plan on or after December 31, BENEFITS FOR THOSE WHO OPTED OUT OF THE PENSION PLAN GENERAL If you waived participation in this Plan in favor of enhanced benefits under the 401(k) plan, your benefit ceased to accrue under this Plan as of the effective date of the waiver. Earnings and benefit service earned after that point are not included in your benefit. RECEIVING YOUR LUMP-SUM BENEFIT If you terminate employment or retire with a vested benefit under the Pension Plan that is worth more than $1,000, you may leave your lump sum in the Plan and claim it later (as late as your normal retirement age), or you may elect to receive an immediate reduced lump-sum payment. Your immediate lump sum will be paid to you as soon as administratively feasible following your termination of employment. If the value of your Pension Plan benefit is $1,000 or less and you have reached your normal retirement age, it will automatically be paid to you as a lump sum as soon as administratively feasible following your termination of employment. Keep in mind that there are some special tax rules you should consider if you elect to receive your benefit as a lump sum (see Taxes on Your Payment, page 10, for more information). Note: If you defer your lump sum and then die before you claim it, your beneficiary will receive only the pre-retirement death benefit (generally 55% of your lump sum) as described on page 12. IF YOU LEAVE BEFORE AGE 65 You may receive your lump-sum benefit from the Plan before you reach age 65. However, your lump-sum benefit will be reduced by: 3% for each year that you leave prior to age 65 (until age 40); and an additional 1% for each year that you leave prior to age 40. 9

13 The table below shows how your lump-sum benefit will be reduced for early payment at various ages. Age When Benefit Is Paid % of Normal Retirement Lump-Sum Benefit 65 or after 100% 60 85% 55 70% 50 55% 45 40% 40 25% 35 20% 30 15% 25 10% Note: Regardless of your age when you leave, you will never receive less than 10% of your normal retirement lump-sum benefit. Your payment will be pro-rated to reflect your exact age in years and completed months. For example, let s assume that you are eligible to receive a lump-sum payment of $80,000 at age 65. If you decide to retire early and receive your lump-sum payment when you are age 55, you would receive $56,000 (70% of $80,000). If you leave at age 40 and decide to receive your benefit at that time, you would receive $20,000 (25% of $80,000). RECEIVING YOUR LIFETIME ANNUITY BENEFIT ANNUITY PAYMENT OPTIONS If the value of your benefit is more than $5,000, you may elect to receive your Plan benefit in one of the following annuity options: Life annuity. The life annuity option provides a monthly payment to you for your lifetime. Upon your death, benefit payments will end. This is the normal form of payment for employees who are not married. Joint and survivor options. A joint and survivor payment option provides a reduced monthly annuity to you, and continues a percentage of your reduced monthly payment (either 50%, 66-2/3%, 75% or 100%, depending on the option you select) to your beneficiary after you die. The 50% joint and survivor option is the normal form of payment for married employees. 10

14 Certain and continuous options. A certain and continuous payment option also provides a reduced monthly annuity to you for life, but it guarantees that either five or 10 years of payments will be made, depending on the option you select. If you die before the guaranteed payments have been completed, payments will be continued to your beneficiary for the remainder of the guarantee period. IF YOU LEAVE BEFORE AGE 65 If you leave before age 65, you may receive your benefit as an immediate lifetime annuity. However, as with a lump-sum payment, your annuity benefit will be reduced to account for the longer period of time over which it is paid. The table below shows how your lifetime annuity benefit will be reduced for early payment at various ages. Age When Benefit Is Paid % of Normal Retirement Annuity Benefit % 64 93% 63 86% 62 80% 61 75% 60 70% 59 66% 58 62% 57 58% 56 54% 55 51% Note: Your lifetime annuity benefit will be further reduced if you leave before age 55 and elect to begin annuity payments at that time (see your Human Resource representative for more information). Your payment will be pro-rated to reflect your exact age in years and completed months. LATE COMMENCEMENT OF PAYMENT(S) If you continue to work after age 65, you may defer your Plan benefit payment(s) until your actual retirement date. At that time, your Plan benefit will be determined using your average annual earnings and benefit service at the time you leave. In this way, you continue earning benefits under the Plan for as long as you work for UMMHC. 11

15 Alternatively, you may begin receiving your Plan benefit at age 65 and continue working for UMMHC. To exercise this option, however, you must receive your benefit in the form of an annuity. When you retire, your annuity payments will be adjusted to reflect any increase in pension you may have earned after age 65. You may not elect to receive your benefit as a lump sum at a later date once annuity payments have begun. You may not receive your accrued Plan benefit as a lump sum at age 65 while continuing to work for UMMHC. Note: If you work beyond age 65, elect to receive your vested Plan benefit as an annuity, but defer the commencement of your annuity beyond age 65, your monthly annuity payment will be slightly increased to reflect your shorter remaining life expectancy. Please see Human Resources for more details. IF YOU LEAVE UMMHC AND ARE REHIRED If you leave UMMHC, receive your Plan benefit, and then return to work with UMMHC as an eligible employee, you participate in the Plan immediately, your prior benefit service is reinstated, and you earn benefit service for purposes of determining your Plan benefit. Your future benefit under the Plan will be calculated based on your benefit service and average annual earnings when you eventually retire or otherwise terminate employment, but will be reduced to account for the benefit payment(s) you have already received. If you leave UMMHC after becoming a Participant but before electing to receive your Plan benefit, and then return to work with UMMHC as an eligible employee, you resume active participation in the Plan on your reemployment date. If you leave UMMHC prior to becoming a Participant and then return to work with UMMHC, you will be treated as a new employee and must fulfill the eligibility requirements summarized on page 2. IF YOU HAVE A BREAK IN SERVICE If you are not credited with at least 500 hours of service in a calendar year, you will have a break in service. If you were vested before you incurred the break in service, you retain the benefit and vesting service you have earned. If you were not vested before you incurred the break in service, your prior years of benefit and vesting service will be reinstated if your consecutive break in service years are not greater than or equal to five. If your consecutive break in service years are equal to or greater than five, your participation ends and your service is lost. TAXES ON YOUR PAYMENT You will pay taxes when you receive your benefit from the Plan. If you elect a lump-sum payment, you will pay income taxes on your entire benefit at one time. In addition, if you leave UMMHC before age 55 and receive a lump-sum payment before age 59½, you may also be required to pay a 10% penalty tax. 12

16 If you receive your benefit as a lump sum, you may roll over your payment to a traditional Individual Retirement Account (IRA), a Roth IRA or another employer s qualified plan (but not a Simple IRA or Education IRA). In this way, you can avoid the 10% penalty tax. If you receive a monthly annuity, taxes are based on your annual income. Note: Because tax laws change, you should consult a tax advisor before receiving any benefits from the Plan. DISABILITY ANNUITY BENEFIT Disability under the Plan means a physical or mental condition which renders you incapable of continuing any gainful occupation, which can be expected to last or has lasted 12 or more months or which can be expected to result in death, or which condition constitutes total disability under the Social Security Act. Disability does not mean, however, any incapacity which was contracted, suffered, or incurred while engaged in, or resulting from having engaged in, a felonious enterprise, or which resulted from addiction to narcotics, a self-inflicted injury, or services in the armed forces of the United States. You will be eligible to receive the disability annuity benefit under the Pension Plan if you incur a Disability as defined above while actively employed and: You are at least 50 (but not yet 65) years of age; You have 10 or more years of vesting service in the Plan; and You are totally and permanently disabled as defined by the Plan. If you become disabled, you may choose to receive the special disability annuity benefit or you may claim your vested normal retirement benefit just as if you were voluntarily terminating employment. If you choose to receive your normal retirement benefit, you may elect the lump-sum payment or you may choose from among the various immediate or deferred annuity options the Plan offers. Your special disability annuity benefit under the Plan will be calculated using the same formula as for your normal retirement benefit under the lifetime annuity payment option. Your special benefit will be reduced to account for any Hospital-sponsored Worker s Compensation benefit you may receive. However, it will not be reduced to account for early commencement of payments. Disability annuity benefits will begin on the first day of the month after six months have passed from the date you became eligible for a disability annuity benefit from UMMHC. Disability benefits will stop on the earliest of: When you no longer are totally and permanently disabled; When you have attained normal retirement age; and Your death. 13

17 When your disability annuity benefit ceases because you have recovered or because you have attained normal retirement age, or if you choose to voluntarily stop collecting the disability annuity, you will still be entitled to receive your regular vested retirement benefit. The amount of that benefit will be equal to the benefit you had earned as of the date you ceased work. (See Receiving Your Lump-Sum Benefit and Annuity Payment Options for information on the payment options available to you.) If you die while receiving a disability annuity benefit, however, the only death benefit payable from the Plan is the normal pre-retirement death benefit (see below). Under the Heroes Earnings Assistance and Relief Tax Act of 2008 ( HEART Act ), you may be entitled to special rights if you become disabled during military service. Please contact the Plan Administrator if you need to learn more about these rights. PRE-RETIREMENT DEATH BENEFIT If you are vested and die while still employed, if you die after your termination of employment but before you receive your lumpsum benefit, if you have elected an annuity option other than the special disability annuity and die before annuity payments commence, or if you die while receiving the special disability annuity benefit your beneficiary will receive a lump-sum payment equal to 55% of the benefit you would have received had you elected to retire on the date of your death and chosen the lumpsum option. If your spouse is your beneficiary, he or she may choose to take the preretirement death benefit as a life annuity instead. If you are married on your date of death, the amount of the lump-sum payment will not be less than the lump-sum value of the 50% survivor annuity your spouse would have received had you retired on the day before your death, selected the 50% joint and survivor annuity option, and then died. (In most cases, the 55% lump-sum payment will exceed the annuity lump-sum alternative.) If you are single on your date of death, the pre-retirement death benefit will be paid as a lump sum to your designated beneficiary. In the absence of a beneficiary designation, the distribution shall be paid to your estate. If you are no longer employed by UMMHC but you have completed the paperwork to request an immediate lump-sum payment and then you die before receiving your payment, the pre-retirement death benefit payable to your beneficiary will not be of less value than the lump-sum payment you would have received had you survived. 14

18 If you are married, keep in mind that unless you elect otherwise, your spouse will be your beneficiary. You may name someone other than your spouse as your beneficiary as long as your spouse provides written, notarized consent. Beneficiary designation forms are available in Human Resources. IF YOU DIE WHILE ON MILITARY LEAVE Under the Heroes Earnings Assistance and Relief Tax Act of 2008 ( HEART Act ), your surviving spouse or beneficiary may be entitled to special rights if you die during military service. In general, if you are called into active duty and you would have been entitled to reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 ( USERRA ), your surviving spouse or beneficiary may be entitled to the Plan s death benefits if you die during military service. Please contact the Plan Administrator if you would like to learn more about these rights. THE SUPREME COURT S DECISION ON SAME-SEX MARRIAGE: WHAT IT MEANS TO YOU AND YOUR SAME-SEX SPOUSE This section describes the rights of you and your same-sex spouse in light of the Supreme Court decision on same-sex marriage. If you do not have a same-sex spouse, you may disregard this section. Your same-sex spouse is recognized under the Plan, provided you were married in a jurisdiction that recognizes such marriages as legal. Recognition of same-sex marriage under the Plan generally gives same-sex spouses the same rights as opposite-sex spouses, including: Form of Payment. If you are married, the Plan must pay your benefit in the form of an annuity with survivor protection for your same-sex spouse, unless you and your same-sex spouse consent to a different optional form of payment. Beneficiary Status. Your same-sex spouse is the default beneficiary for death benefits under the Plan. The consent of your same-sex spouse will be required if you want to designate a different beneficiary. Qualified Domestic Relations Orders (QDROs). Payments may be made to an alternate payee pursuant to a QDRO where the alternate payee is your same-sex spouse. This means your retirement benefits under the Plan can be divided upon divorce. Age 70 ½ Minimum Required Distributions. Special rules apply to the timing and calculation of minimum required distributions where such payments are made to a beneficiary who is a surviving spouse. 15

19 Rollovers. Same-sex spouses now have expanded options with respect to the rollover of lump sum distributions. Specifically, a same-sex spouse has ability to roll over plan distributions to his or her own IRA or another employer plan. IMPORTANT FACTS ABOUT THE PLAN Plan Name The name of the Plan is the UMass Memorial Health Care Pension Plan. Plan Number The employer identification number, together with the Plan number, should be used in any formal correspondence about the Plan. Plan Sponsor The Employer Identification Number is: The Plan Number is: 002 The Plan Sponsor is: UMass Memorial Health Care, Inc. 67 Millbrook Street, North Building, 2 nd Floor Worcester, MA Plan Administrator UMMHC has appointed the Pension Committee to administer the Plan. The Committee s address is: Pension Committee UMass Memorial Health Care, Inc. 67 Millbrook Street, North Building, 2 nd Floor Worcester, MA Tel. (508) As Plan Administrator, the Pension Committee has overall responsibility for the Plan. The Committee is responsible for the operation and administration of the Plan, including matters relating to interpretation of Pension Plan provisions, implementation of Plan administration procedures, and compliance with IRS rules and regulations. Covered Affiliates Participating UMass Memorial affiliates include: UMass Memorial Medical Center, Inc., UMass Memorial Medical Group, Inc. and any other UMass Memorial affiliate that is 16

20 designated as a participating affiliate by the President/CEO of UMass Memorial Health Care, Inc. If the President/CEO designates only certain classifications of an affiliate s employees as eligible for the Plan, you will not be eligible to participate if you are not within one of those classifications. Clinton Hospital is covered by the Plan but under a different formula with different eligibility criteria and benefits. Participants and beneficiaries may receive, upon written request to UMMHC, information regarding a particular affiliate s participation in the Plan, including the affiliate s address. Please contact Human Resources for details about participating affiliates. Plan Funding The Plan s assets are held in a trust fund under the control and management of the trustee: UMass Memorial Health Care, Inc. 67 Millbrook Street, North Building, 2 nd Floor Worcester, MA Contributions to the Plan are actuarially determined and placed with the trustee. Plan benefits are paid solely from the trust fund. Plan Year The Plan Year is January 1 through December 31. Collective Bargaining Information This Plan is maintained pursuant to one or more collective bargaining agreements. A copy of any collective bargaining agreement pursuant to which the Plan is maintained may be obtained upon written request to the Plan Administrator. You may also receive, upon request, information as to whether a particular employer or union is a Plan sponsor and, if so, the Plan sponsor s address. OTHER INFORMATION Type of Plan The UMass Memorial Health Care Pension Plan is considered by law to be a defined benefit plan. This means that your benefits are based on a formula. Assignment of Benefits Under federal law, you cannot assign your benefits under this Plan for any reason. In addition, your benefit(s) are not subject to assignment or attachment except in the case of a property settlement, child support, or alimony ordered by a court under a qualified domestic relations order (QDRO). If such an order is received, all or part of your benefits may be used to satisfy the obligation. 17

21 There are specific requirements the order must meet to be recognized by the Plan Administrator and specific procedures regarding the amount and timing of payments. Note: The Plan Administrator has designated a third party administrator to assume responsibility for processing and approving QDROs. Any action or determination made by the person or entity designated by the Plan Administrator will have the same force and effect for all purposes as if such action or determination had been made or taken by the Plan Administrator. Participants and beneficiaries can obtain a copy, free of charge, of the plan's procedures governing QDRO determinations by contacting the Towers Watson QDRO Service Center. If you are affected by a QDRO, you will be notified. The Towers Watson QDRO Service Center can be reached at: TW QDRO Service Center Attn: UMass Memorial Health Care, Inc. QDRO Compliance Team P.O. Box Los Angeles, CA Phone Toll Free: Fax: TWQDRO@towerswatson.com Minimum Lump Sum Federal pension law governs the relationship between the size of the lump-sum payment provided by the Plan and the amount of the annuity income you may alternatively elect. While UMMHC has chosen a lump-sum formula that will customarily be larger than the minimum lump sum required by federal law, under certain market conditions, the federal minimum lump sum may apply. In that case, the Plan will pay the larger required payment. Maximum Benefit Federal regulations limit the maximum amount payable from the Plan to certain employees with relatively high compensation. According to IRS regulations, the maximum annual benefit from a qualified pension plan is $210,000 for This amount is subject to change with inflation. Additional information regarding this limitation may be requested from the Plan Administrator. Benefit Restrictions By law, certain restrictions apply if the Plan s funded status decreases below a certain threshold. In the event that benefit restrictions apply to the Plan, the Plan Administrator will separately notify participants and beneficiaries of the Plan. 18

22 Top Heavy Provisions The Internal Revenue Service (IRS) has issued special rules establishing minimum vesting and benefit formulas for plans that become top heavy. In general, the Plan would become top heavy if the value of the benefits earned by certain highly compensated employees under the Plan (or any other pension, profit sharing or stock bonus plan in combination with this Plan) is more than 60% of the value of benefits earned by all covered employees. It is unlikely that this Plan will ever become top heavy. If this should occur, however, you will receive complete information on any required vesting and benefit formula adjustments. The following table of vesting percentages would apply if the Plan were determined to be top heavy : Responding to Your Claim Years of Vesting Service Vested Percentage Less than 2 years 0% 2 years but less than 3 years 20% 3 years but less than 4 years 40% 4 years but less than 5 years 60% 5 years or more 100% If you make a claim for benefits under the plan and all or part of it is denied, the Plan Administrator or Claims Administrator will notify you of the reasons for the denial. You will be notified within 90 days after the plan receives your claim. In special circumstances the plan may require up to 180 days to make a decision. In this event, you will receive a notice before the end of the original 90-day period that explains the special circumstances involved and the date by which the plan expects to make its decision. If your claim is denied, you will receive a notice that: states the specific reason for the denial refers to the plan provision on which the decision was based describes any additional material or information you may need to furnish to complete the claim and the reason why this material or information is needed, and describes the plan s review procedures including the applicable deadlines and a statement of your right to bring a civil action in court if the appeal of your denied claim is also denied after it has been reviewed. 19

23 If you have any questions about a denied claim, you should contact the Plan Administrator. Appealing a Denied Claim You or your authorized representative may appeal a denied claim, following the appeal procedures outlined below. 1. Within 60 days of receiving the notice of your claim denial, you may appeal that denial by filing with the Plan Administrator a written request for the review of your claim. 2. Upon receipt of your appeal, the Plan Administrator or other plan fiduciary will conduct a full and fair review of your claim. This plan fiduciary will have had no role in the initial claim denial and the review will be an independent one without giving the original denial any special consideration. 3. During this review, you may be given an opportunity to appear personally before the Plan Administrator s representative to present your case. You will be able to submit written comments, documents, records and other information relating to your claim. You will also have access to all documents, records and other information relevant to your benefit claim, and copies of this information will be provided free of charge upon your request. Within 60 days after your written appeal is received by the Plan Administrator you will be given a notice of the decision with respect to your appeal based on the facts and the pertinent provisions of the plan. If special circumstances require an extension of time for reviewing the claim, the Plan Administrator will provide you with written or electronic notice of the extension prior to the end of the initial 60-day period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the plan expects to make its decision. The Plan Administrator may take an additional 60 days to review your claim, or a total of 120 days from the day your appeal was received. The notice of the decision on your appeal will be written or electronic and shall include the following information: the specific reasons for the decision the plan provisions on which the decision was made an explanation of your right to request access to or copies of all information relevant to your claim, free of charge, without regard to whether such records were considered or relied upon in making the appeal decision, including any reports, and the identities, of any experts whose advice was obtained a statement describing any voluntary appeal procedures offered by the plan and the claimant s right to obtain the information about such procedures, and your right to bring a civil action in court. 20

24 If the Plan Administrator fails to follow the claims appeals procedures as outlined above, you will have the right to bring a civil action in court. Legal Process Any legal process related to the UMass Memorial Health Care Pension Plan should be directed to the Plan Administrator at the address on page 16. Legal process may also be served on the Plan trustee at the same address. Change of Address To make sure you receive your benefits and any communications pertaining to the Pension Plan after you (or your beneficiary) change your address, it is critical that you send a written notice to the Human Resources department, c/o UMass Memorial Health Care, Inc., 67 Millbrook Street, North Building, 2 nd Floor, Worcester, MA The notice should include: Your name and new address; Your Social Security number; and Your beneficiary s name and address. Keeping this information up-to-date will ensure that you (or your beneficiary) receive your benefit payment(s) without undue delay. Social Security You may receive benefits from Social Security in addition to the benefits you will receive from the Pension Plan. UMMHC does not have any control over Social Security benefits, which are provided and administered by the federal government. This section is intended only as a brief introduction to Social Security. Social Security benefits may be payable in the event of your death or disability as well as retirement. Your Social Security benefits are based on the amount of your earnings that are subject to Social Security taxes. You may contact your local Social Security office for a record of your past wages that were subject to Social Security taxes. You may also request from the Social Security a booklet that explains in detail how to calculate your Social Security benefits. The Social Security Administration s toll-free phone number is This number is in operation from 7:00 a.m. to 7:00 p.m. (EST) on business days. You can also learn more about your Social Security benefits at 21

25 CONTINUANCE OF THE PLAN UMMHC expects to continue the Pension Plan indefinitely, but reserves the right to change or discontinue the Plan at any time. No change may deprive you of any rights to the benefits you earned before the change was made to the extent Plan benefits have been funded as of that date. UMMHC may, in its sole and absolute discretion, satisfy its benefit payment obligations under the Plan to a participant or beneficiary by buying a fully paid annuity and distributing it to the participant or beneficiary. In the event that UMMHC terminates the Plan, you will automatically become 100% vested in the benefits you earned as of the Plan s termination date, again, to the extent Plan benefits have been funded as of that date. This is true regardless of how much service you have in the Plan at that time. Except under very limited circumstances, the Plan may be terminated only if there are Plan assets sufficient to satisfy all of the Plan s benefit commitments. If the Plan assets exceed the amount necessary to meet these commitments, UMMHC may be entitled to a portion of these assets. If Plan assets are not sufficient to satisfy all of the Plan s benefit commitments, the Plan may be terminated only in limited situations involving bankruptcy or preservation of UMMHC s ability to stay in business. If the Plan is terminated under these conditions and Plan assets are not sufficient to satisfy all benefit commitments, the law establishes priorities as to how the trust fund s assets will be used to provide Plan benefits after termination. Assets are used to pay for the following benefits in the order they are listed below, until the assets are fully allocated. 1. Benefits for (a) those who have received Plan benefits for at least three years before the termination date, and (b) those who could have started receiving benefits at least three years before the termination date. Benefits in these instances will be based on any Plan provision in effect during the five years prior to termination that would produce the lowest amount. In addition, the maximum for those who have received benefits for at least three years would be based on the lowest benefit payment received during that three-year period. 2. All other benefits that are guaranteed by the Pension Benefit Guaranty Corporation (see below). 3. Vested benefits that are not guaranteed by the Pension Benefit Guaranty Corporation. 4. Any other benefits earned in the Plan. This includes those benefits that became vested only because of Plan termination. 22

26 PENSION BENEFIT GUARANTY CORPORATION If the plan is terminated (ends), benefits under this plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency. If the plan terminates (ends) without enough money to pay all benefits, the PBGC will step in to pay pension benefits. Most people receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits. The PBGC guarantee generally covers: (1) normal and early retirement benefits, (2) disability benefits if you become disabled before the plan terminates, and (3) certain benefits for your survivors. The PBGC guarantee generally does not cover: benefits greater than the maximum guaranteed amount set by law for the year in which the plan terminates, some or all of benefit increases and new benefits based on Plan provisions that have been in place for fewer than 5 years at the time the plan terminates, benefits that are not vested because you have not worked long enough to acquire adequate vesting service, benefits for which you have not met all of the requirements at the time the plan terminates, certain early retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in an early retirement monthly benefit greater than your monthly benefit at the plan s normal retirement age, and non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay, and severance pay. Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money your plan has and on how much money the PBGC collects from employers. For more information about the PBGC and the benefits it guarantees, ask your Plan Administrator or contact the PBGC's Technical Assistance Division. Inquiries should be directed to: PBGC Technical Assistance Division 1200 K Street N.W. Suite 930 Washington, DC (not a toll-free number) TTY/TDD users may call the federal relay service toll-free at and ask to be connected to Additional information about the PBGC s pension 23