MORAVIAN CHURCH NORTHERN PROVINCE AMENDED AND RESTATED 403(B)(9) PENSION PLAN

Transcription

1 MORAVIAN CHURCH NORTHERN PROVINCE AMENDED AND RESTATED 403(B)(9) PENSION PLAN SUMMARY PLAN DESCRIPTION SEPTEMBER 4, 2014

2 2 TABLE OF CONTENTS TOPIC FACTS ABOUT THE PLAN 4 INTRODUCTION 5 DEFINITIONS 6-8 TYPE OF PLAN 9 PARTICIPATION 9 VESTED 9 NORMAL RETIREMENT AGE 9 EARLY RETIREMENT AGE 9 GRANDFATHER RULE FOR A COVERED PERSON WHO IS 55 OR OLDER ON JANUARY 1, MANDATORY RETIREMENT AGE 9 SERVICE CALCULATIONS GENERAL RULE 10 FULL-TIME CALLS OR APPOINTMENTS 10 PARTIAL CALLS OR APPOINTMENTS 10 GRANDFATHER RULE FOR PARTIAL CALLS OR APPOINTMENTS PRIOR TO JANUARY 1, COVERED PERSONS ON DISABILITY 11 GRANDFATHER RULE FOR PASTORS WHO ARE DISABLED AND NOT RETIRED PRIOR TO JANUARY 1, LEAVE OF ABSENCE 11 SABBATICAL LEAVE 11 SERVICE FOLLOWING RE-EMPLOYMENT 12 COOPERATION WITH OTHER PROVINCES 12 LATE PAYMENT OF ASSESSMENTS 12 HOW BENEFITS ARE CALCULATED 12 CALCULATIONS OF PENALTIES ON RETIREMENT BENEFITS, DEFERRED BENEFITS, AND SERVICE REQUIREMENTS UPON RETURN TO AN MCNP PENSION-FUNDED CALL OR APPOINTMENT PENALTIES 13 EARLY RETIREMENT 13 GRANDFATHER RULE FOR PASTORS WHO ARE AT LEAST 55 ON JANUARY 1, DEFERRED BENEFITS 15 BASIC RULE 15 SERVICE REQUIREMENT UPON RETURNING TO AN MCNP PENSION-FUNDED CALL OR APPOINTMENT TERMINATION OF EMPLOYMENT 16 CALL OR APPOINTMENT DOES NOT COVER PLAN PARTICIPATION 16 RETURN FROM A LEAVE OF ABSENCE CONTINUED PAYMENT OF BENEFITS FOLLOWING RE-EMPLOYMENT 17 PAYMENT OPTIONS OPTION A: JOINT AND FIFTY PERCENT (50%) 17 OPTION B: JOINT AND ONE HUNDRED PERCENT (100%) 18 SINGLE COVERED PERSON 18 LUMP SUM DISTRIBUTIONS 18 SURVIVOR BENEFITS 19 DEATH OF A COVERED PERSON PRIOR TO RETIREMENT 19 DEATH OF A COVERED PERSON DURING RETIREMENT 19 DEATH OF A SURVIVING SPOUSE 19 DEATH OF A COVERED PERSON WHO HAS NOT COMPLETED FIVE (5) YEARS OF VESTED SERVICE 19 DEATH OF A COVERED PERSON WHEN BOTH HUSBAND AND WIFE ARE COVERED PERSONS 19 PAGE NO.

3 3 TABLE OF CONTENTS (Continued) TOPIC PAGE NO. STEPS TO FOLLOW TO BEGIN THE RETIREMENT PROCESS 20 PAYMENT OF BENEFITS 20 DISPUTE OF BENEFIT CALCULATION 20 PLAN ADMINISTRATION (FROM THE PLAN DOCUMENT) PLAN ADMINISTRATOR 20 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR PERIODIC REVIEW 21 RULES AND DECISIONS 21 APPLICATION AND FORMS FOR DISTRIBUTION 21 AMENDMENT AND TERMINATION (FROM THE PLAN DOCUMENT) RIGHT TO AMEND 21 RIGHT TO TERMINATE MISCELLANEOUS (FROM THE PLAN DOCUMENT) PROHIBITION AGAINST DIVERSION 22 RESPONSIBILITIES OF PARTIES 22 FEES AND EXPENSES 22 NOTIFICATION OF MAILING ADDRESS 22 UNCLAIMED BENEFITS 23 NONALIENATION OF BENEFITS 23 FACILITY OF PAYMENT 23 GOVERNING LAW 23 HEADINGS NOT PART OF AGREEMENT 23 LIMITATIONS ON LIABILITY 23 NONGUARANTEE OF EMPLOYMENT 24 EXCLUSIONS AND SEPARABILITY 24 REVIEWING COPIES OF THE PLAN DOCUMENT 24 COVERED PERSON OR SURVIVING SPOUSE RESPONSIBILITY AFTER BENEFITS BEGIN 24

4 4 FACTS ABOUT THE PLAN Name of the Plan Employer Name, Address and Telephone Number Effective Date of Plan Plan Administrator and Agent for Service of Legal Process Type of Administration Type of Plan Trustee Insurance of Benefits Moravian Church Northern Province Amended and Restated 403(b)(9) Moravian Church Northern Province 1021 Center Street Bethlehem, PA This Summary Plan Description (SPD) is of the Pension Plan as amended effective January 1, Moravian Church Northern Province 1021 Center Street Bethlehem, PA Legal process may also be served on the Trustee named below. The assets of the Plan are managed by the Trustee. The Plan Administrator, the Provincial Elders Conference (PEC), is responsible for Plan Administration based on recommendations from the Plan Committee. Defined Benefit Pension Plan Controller Moravian Church Northern Province 1021 Center Street Bethlehem, PA Because this is a church plan, benefits under the Plan are not insured by the Pension Benefit Guaranty Corporation. THIS BOOKLET IS A SUMMARY OF THE PLAN. IF THERE IS A CONFLICT BETWEEN THE LEGAL DOCUMENTS WHICH GOVERN THE PLAN AND THIS BOOKLET, THE PLAN DOCUMENTS WILL RULE.

5 5 INTRODUCTION The Moravian Church Northern Province (the Church) has amended and restated this Pension Plan to comply with current pension law and Internal Revenue Code, effective January 1, Contributions to the Plan are made by the Church, congregations, boards, agencies and institutions when applicable. The Pension Plan of the Moravian Church Northern Province was established to provide monthly retirement benefits to pastors who have served the Moravian Church. The Plan is designed to provide a monthly pension benefit for the lifetime of a Covered Person and the spouse of a Covered Person if the Covered Person dies before or during retirement. The administration of the Plan is the responsibility of the Plan Administrator and the Plan Committee. They manage the Plan, interpret its provisions, and maintain its records. Distributions from the Pension Fund are provided through the support of the paid annual Retirement Benefits Assessment. Contributions made to the Plan are deposited in a Trust Fund managed by the Trustee. This money and the income it earns through investments are used to operate the Plan and to pay benefits. This Summary Plan Description (SPD) describes the Plan, how it works, what options are available and the process to follow to begin receiving benefits. There are examples provided to help clarify how service and benefits are calculated. Should there be any questions about the Plan, please contact the Benefits Office at , extension 16.

6 6 DEFINITIONS The following definitions are important terms used in the Plan. Some of them may be unfamiliar, but will help in understanding the provisions of the Plan. ACCRUED BENEFIT - Accrued Benefit shall mean the retirement benefit which a Covered Person has earned as a result of service with the Church. ACTUARY Actuary shall mean a person that reviews the various statistics of the Plan to determine the funding level needed to continue the Plan, the affordability of the Plan at the monthly benefit rate, and the overall health of the plan based on life spans and the age of members. The Actuary also recommends changes to the monthly benefit rate and the impact to the Plan. ASSESSMENT Assessment shall mean the amount each employer is assessed each year for the Covered Person s Retirement Benefits. BREAK IN SERVICE Break in Service shall mean a period of time when a Covered Person is not under call or appointment, on an approved Leave of Absence, or has Terminated Employment with the Church. COVENANTED RELATIONSHIP Covenanted Relationship shall mean a lifelong covenant before God that is formally recorded in the PEC office, which requires continuous loyalty of the individuals toward each other and calls them to a life of sexual fidelity to their partner. COVERED PERSON Covered Person shall mean an ordained person under call or appointment of the PEC or District Boards. Subject to the approval of the PEC, a Covered Person shall also include a Licensed Lay Minister under appointment. A Moravian Seminarian shall also be a Covered Person, provided payment of the Assessment is made with respect to such Moravian Seminarian s service. A Covered Person shall continue to be a Covered Person until all benefits to which he or she is entitled under this Plan have been paid to him or her. CREDITED SERVICE Credited Service shall mean the days, months, or years that a Covered Person s employer has paid the applicable Retirement Benefits Assessment to the Trustee. A Covered Person shall not be entitled to Credited Service to the extent that the PEC determines that the Assessment was not paid for such Service where an Assessment is required to be paid. DISABILITY Disability or Disabled shall mean a disability eligible for coverage under the Church s separate long-term disability plan. DISTRICT BOARD District Board shall mean the boards that govern the Eastern, Western, and Canadian Districts of the Church. EARLY RETIREMENT AGE Early Retirement Age shall mean age 62. EMPLOYER Employer shall mean the Church, a congregation, board, agency or institution. LEAVE OF ABSENCE Leave of Absence shall mean any leave of absence that has been approved by the PEC, excluding a Sabbatical Leave.

7 7 LICENSED LAY MINISTER Licensed Lay Minister shall mean a person who has been licensed by the PEC to serve in some pastoral leadership capacity. MANDATORY RETIREMENT AGE Mandatory Retirement Age shall mean age 70. MONTHLY PENSION BENEFIT RATE Monthly Pension Benefit Rate shall mean the dollar value used in conjunction with a Covered Person s months of vested and credited service to determine the Covered Person s annual pension upon retirement. This dollar value is determined by the PEC, based, in part, on the annual actuarial valuation of the Plan. The Monthly Pension Benefit Rate is changed from time to time by the PEC, at its sole discretion. MORAVIAN SEMINARIAN Moravian Seminarian shall mean an approved candidate for ministry in the Church who is serving a congregation under appointment of the PEC or District Board. NORMAL RETIREMENT AGE Normal Retirement Age shall mean age 65. PEC PEC shall mean the Provincial Elders Conference of the Moravian Church Northern Province. PERCENTAGE RATE Percentage Rate shall mean the rate used to establish the amount of the Assessment for retirement benefits. This rate is established annually by the PEC. PLAN Plan shall mean the retirement plan established and maintained by the Church as set forth herein. PLAN ADMINISTRATOR Plan Administrator shall mean the PEC. PLAN COMMITTEE Plan Committee shall mean a committee comprised of individuals with pension and insurance expertise that is under the direction of the PEC. The Plan Committee reviews all of the benefit offerings and financial health of the benefit plans annually. The Plan Committee makes recommendations for change or improvement to the Plan Administrator (PEC) for consideration and approval. PLAN YEAR Plan Year shall mean the calendar year. RETIREMENT - Retirement shall mean the conclusion of employment with the Employer on or after attainment of Early Retirement Age. SABBATICAL LEAVE Sabbatical Leave shall mean a period of time off with full salary and benefits for personal rest, reflection and renewal as approved by the Joint Board or Governing Board of the Covered Person s Employer and the Covered Person. SERVICE Service shall mean the number of months that a Covered Person serves under call or appointment, full time or part time, of the PEC or District Board, whether as a pastor, officer or paid member of a Moravian board, agency, entity or institution, or when employed in specialized ministry. A Covered Person shall cease to accrue Service upon Termination of Employment or Retirement. SURVIVING SPOUSE Surviving Spouse shall mean the person to whom the Covered Person is legally married or with whom they are in a Covenanted Relationship on the date of the Covered Person s retirement or death if the death precedes the retirement.

8 8 TERMINATE EMPLOYMENT OR TERMINATION OF EMPLOYMENT Terminate Employment or Termination of Employment shall mean the act of ending or concluding service under call to the Moravian Church prior to Early Retirement Age, whether it is by choice or dismissal. TRUST FUND OR FUND - Trust Fund or Fund shall mean the investment funds to which contributions are made by the Church and held by the Trustee for investment. TRUSTEE Trustee shall mean the corporation, individual or individuals as may from time to time be designated as such by the PEC. The appointment, removal, and terms and conditions of employment of the Trustee shall be determined by the PEC. VESTED SERVICE Vested Service shall mean the number of months of a Covered Person s Service, whether or not the entity employing such Covered Person has paid Assessments on such Service. Vested Service shall also include service rendered under call of another Unity Province of the Moravian Church. VESTED Vested shall mean a Covered Person is fully vested in the Plan after the completion of five (5) years of Service.

9 9 TYPE OF PLAN This Plan is a defined benefit pension plan. A defined benefit pension plan is a retirement plan in which the Covered Person receives a set amount in benefits each month once he or she begins receiving benefits. The Monthly Pension Benefit Rate used to determine the monthly benefit for a Covered Person is based on the actuarial valuation of the plan and its investments and is changed at the discretion of the Plan Administrator. PARTICIPATION A Covered Person is eligible to participate in the Plan if he or she is an ordained person under call or appointment of the PEC or District Boards. A Licensed Lay Minister under appointment can be a Covered Person with PEC approval. A Moravian Seminarian can be a Covered Person provided the Assessment is paid with respect to the Seminarian s service. VESTED A Covered Person must serve five (5) years in order to be vested in the Plan and to be eligible for a benefit upon retirement. A Covered Person s Normal Retirement Age is 65. NORMAL RETIREMENT AGE EARLY RETIREMENT AGE A Covered Person s Early Retirement Age is 62. Unless covered under the Grandfather Rule described in the next paragraph, a Covered Person who retires on or after reaching Early Retirement Age but before his or her Normal Retirement Age will incur a penalty on his or her pension benefit. See the section on Penalties on Page 13. Grandfather Rule for a Covered Person Who Is 55 or Older on January 1, 2014 A Covered Person who is 55 or older on January 1, 2014, can retire with no penalty after reaching Early Retirement Age of 62. A Covered Person who is 55 or older on January 1, 2014, can retire with penalties if electing to retire and begin receiving benefits before the age of 62. See the section on Penalties on Page 14. MANDATORY RETIREMENT AGE Retirement from active service is mandatory when a Covered Person reaches age 70.

10 10 SERVICE CALCULATIONS General Rule A Covered Person shall receive one month of Credited Service for each month of Service for which his or her employer pays the Assessment as required by the Retirement Benefits Assessment. A Covered Person is not entitled to receive Credited Service (i) upon the attainment of age seventy (70), or (ii) after beginning to receive benefits under this Plan. Following are examples of how Service is calculated: Full-Time Calls or Appointments A full-time call or appointment accumulates Service based on the start date and the end date of the call or appointment. An example of how full-time Service is calculated: Name Congregation Start Date End Date Vested Months of Service Doe, John Sunshine Moravian Church 8/15/ /31/ Ocean Moravian Church 1/1/2001 8/16/ TOTAL Partial Calls or Appointments A Covered Person who begins serving under a partial call or appointment on or after January 1, 2014 accumulates Service based on the percentage of time established in the call or appointment. An example, of how Service for a partial call or appointment is calculated: Start % of Vested Months of Name Congregation End Date Months Date Call Service Doe, Jack Wave Moravian Church 1/1/ /31/ Start % of Vested Months of Name Congregation End Date Months Date Call Service Doe, Sally Sand Moravian Church 1/1/ /31/ Start % of Vested Months of Name Congregation End Date Months Date Call Service Doe, Pete Tide Moravian Church 1/1/ /31/ Grandfather Rule for Partial Calls or Appointments Prior to January 1, 2014 A Covered Person who is serving under a partial service call or appointment on December 31, 2013, shall have months of Service added based on the greater of one of the following two ways: 1. Based on the percent (%) of call or appointment as shown in the above example, or 2. Based on the Covered Person s total compensation as a percent of the total compensation of all full-time pastors. This is how partial service has been calculated through December 31, 2013.

11 11 This Grandfather Rule for calculating partial service for calls or appointments prior to January 1, 2014 will remain in effect until the partial call is rewritten or until the Covered Person accepts a new call. Covered Persons on Disability All Covered Persons who are Disabled, regardless of the date he or she became disabled, will cease to accrue months of Service when he or she reaches Normal Retirement Age (65) provided he or she has not begun to receive pension benefits. A Covered Person who begins a period of Disability on or after January 1, 2014, will accrue months of Service at sixty percent (60%) for every month he or she is Disabled. Following is an example of how Service is calculated for someone who is Disabled beginning January 1, 2014: Service Start Date End Date Months 60% of # of Months on Disability Total Months Used to Calculate Benefit $ Boardwalk Moravian Church 7/15/1990 2/25/ Approved Disability through insurance carrier 2/26/2014 1/1/ x.6 = TOTAL MONTHS USED TO CALCULATE PENSION BENEFITS Grandfather Rule for Pastors Who Are Disabled and Not Retired Prior to January 1, 2014 A Covered Person who is Disabled prior to January 1, 2014 shall receive one month of Service for each month during which he or she is disabled. Following is an example of how Service is calculated for someone who has been Disabled prior to December 31, Service Start Date End Date Total Months Used to Calculate Benefit $ Lifeguard Moravian Church 7/15/1989 2/25/ Disability Period 2/26/2013 1/1/ TOTAL MONTHS USED TO CALCULATE PENSION BENEFITS Leave of Absence A Leave of Absence must be approved by the PEC and may be granted for a period of up to one (1) year. No Service will accrue while a Covered Person is on a Leave of Absence. Upon return to an active call, Service begins to accumulate on the start date of the return to an active call. That Service will be added to what Service has accumulated prior to the Leave of Absence. See the section Service Requirement Upon Returning to an MCNP Pension-Funded Call or Appointment on Pages 16 and 17. Sabbatical Leave A Covered Person who is on an approved Sabbatical Leave is eligible to receive Credited Service provided the Employer pays the Assessment due for the Covered Person.

12 12 Service Following Re-Employment A Covered Person, who terminates employment and is received back into the service of the Church under call or appointment following such Termination of Employment, shall be eligible to accrue additional Credited Service. Credited Service accrued prior to Termination of Employment shall be aggregated with all subsequent Credited Service for determining the benefits payable upon retirement. Cooperation with Other Provinces A Covered Person s Credited Service in the Northern Province shall not be lost or otherwise changed by the acceptance of a call to another Province recognized by the Unity of the Moravian Church. Late Payment of Assessments The PEC may award Credited Service even if Assessments have not been made on time if the PEC, in its sole discretion, determines that it would be in the interest of fairness and equity to award Credited Service; provided, however, that an amount equal to the required Assessments must be paid to the Plan prior to the Covered Person s Retirement. The PEC may establish rules and procedures for paying any past due Assessments and awarding Credited Service with respect to such Assessments. HOW BENEFITS ARE CALCULATED Retirement benefits are calculated by multiplying the number of months of Credited Service times the Monthly Pension Benefit Rate. Start Date End Date Months Rate Calculation Annual Retirement Benefit Boat Moravian Church 9/25/2000 9/15/ Wave Moravian Church 9/16/ /31/ Rain Moravian Church 1/1/2007 9/25/ Total $ x $37.00 $5,772.74

13 13 CALCULATIONS OF PENALTIES ON RETIREMENT BENEFITS, DEFERRED BENEFITS, AND SERVICE REQUIREMENTS UPON RETURN TO AN MCNP PENSION-FUNDED CALL OR APPOINTMENT The Monthly Pension Benefit Rate shown in the following sections is for illustrative purposes only. The calculations show a complete calculation of benefits. The Payment Options available in the Plan are described and illustrated on Pages 17 and 18. Early Retirement PENALTIES A Covered Person who does not fall under the Grandfather Rule under the section on Early Retirement Age on Page 9 and who elects to retire on his or her Early Retirement Date (62) or before he or she attains Normal Retirement Age (65), does so with a penalty. For every month prior to age 65 that a Covered Person elects to begin receiving his or her pension benefits, the penalty on the pension is reduced by 0.5% per month. Following are examples of the penalty impact: Age Pension Benefit Begins # of Months Prior to age 65 Penalty months 0.5% x 36 = 18% reduction months 0.5% x 24 = 12% reduction months 0.5% x 12 = 6% reduction months 0.5% x 6 = 3% reduction An example of a retirement benefit calculated using the penalty chart above for a Covered Person retiring with benefits at age 62: DOB Date of Retirement Age This pastor has elected to retire at the age of 62. Doe, Bob 1/28/1960 1/31/ Annual Pension with 50% Surviving Spouse Start Date End Date Months Rate Retiree Spouse Surf Moravian Church 9/25/ /31/ Rain Moravian Church 1/1/2006 1/31/ The penalty on this pastor's retirement is calculated as follows: Annual Pension with 100% to Surviving Spouse Retiree 90% Spouse - 90% $37.00 $15, $7, $14, $14, Annual Pension with an 18% reduction $12, $6, $11, $11, The number of months between 62 and 65 = 36 Difference -$2, $1, $2, $2, The penalty when beginning to receive pension prior to 65 is calculated as follows: 100% - 18% = 82% of pension benefit months x $37 = $15, x 82% = $12,878.42

14 14 Grandfather Rule for Pastors Who Are at Least 55 on January 1, 2014 The rules in this section apply only to a Covered Person who is 55 or older on January 1, A Covered Person who is eligible for this Grandfather Rule may elect to retire on or after his or her attainment of Early Retirement Age (62) without any penalty reduction. In the following example, Erin Doe is older than 55 on 1/1/2014 and therefore can retire at the age of 62 with no penalties because she will fall under this provision of the Grandfather Rule: DOB Age on 1/1/2014 Doe, Erin 1/28/1956 1/1/ DOB Date of Retirement Age 1/28/1956 1/31/ Start Date End Date Months Rate Bucket Moravian Church 9/25/ /31/ Annual Pension with 50% Surviving Spouse Retiree 100% Spouse Annual Pension with 100% to Surviving Spouse Retiree Spouse 90% 90% Shovel Moravian Church 1/1/2006 1/31/ Annual Pension Under Grandfather Rule with no Penalty at $37.00 $13, $6, $12, $12, A Covered Person who is eligible for this Grandfather Rule and who Terminates Employment prior to attainment of Early Retirement Age (62) shall be entitled to benefits with the following penalties: a. a reduction of 0.3% times the number of months (up to 24) by which Termination of Employment precedes the Covered Person s Early Retirement Age (62); plus b. a reduction of 0.5% times the number of months by which Termination of Employment precedes the Covered Person s 60 th birthday. An example of how the penalties affect retirement benefits under the conditions in 2a and 2b where Jane Doe is older than 55 on 1/1/2014 but Terminated Employment on 6/30/2014 at the age of and elected to begin receiving her benefits with penalties effective 6/30/2014: DOB Doe, Jane 1/28/1956 DOB 1/28/1956 Date of Retirement 6/30/2014 Age Annual Pension with 50% Surviving Spouse Start Date End Date Months Rate Retiree Spouse Badge Moravian Church 9/25/ /31/ Umbrella Moravian Church 1/1/2006 6/30/ Annual Pension with 100% to Surviving Spouse Retiree 90% Spouse 90% $37.00 $12, $6, $11, $11, Annual Pension with the impact of the 16.44% penalty reduction $10, $5, $9, $9, This pastor is over 55 on 1/1/2014. This pastor has elected to retire at the age of There are two penalties on this pastor's retirement The first: The retirement age of is months prior to age 60. The penalty is 0.5% x = 9.24% The second: Age at 60 is 24 months prior to 62. The penalty is 0.3% x 24 = 7.2% THE TOTAL PENALTY IMPACT: 100% % - 7.2% = 83.56% OR A 16.44% REDUCTION IN BENEFIT

15 15 DEFERRED BENEFITS Basic Rule A Covered Person who Terminates Employment prior to attainment of Normal Retirement Age (65) and following completion of five (5) years of Credited Service shall be eligible to receive a deferred pension beginning on or after such Covered Person s Early Retirement Age. 1. A Covered Person who Terminates Employment prior to Normal Retirement age (65) and whose deferred pension benefit begins on or after Normal Retirement Age (65) shall be entitled to a retirement benefit that is not penalized. The pension benefits, however, will be calculated using the Monthly Pension Benefit Rate in effect under this Plan on the date the Covered Person terminated employment and will not be adjusted to reflect any future increases in the dollar value. For example: DOB Date of Termination Age Doe, Ann 1/28/ /31/ Annual Pension with 50% Surviving Spouse Start Date End Date Months Rate Retiree Spouse Annual Pension with 100% to Surviving Spouse Retiree Spouse 90% 90% Chair Moravian Church 9/25/ /31/ $37.00 $12, $6, $11, $11, The pension benefit rate in effect in 2013 was $37.00 per month. This Covered Person Terminated Employment at the age of and the Monthly Pension Benefit Rate is frozen at $ This Covered Person defers the start of receiving benefits until the age of 65. The annual pension for this Covered Person will always be what is shown above even if the pension benefit rate in effect upon turning 65 is greater than the rate in effect on the date employment was terminated. 2. A Covered Person who Terminates Employment prior to Normal Retirement Age and defers the start of receiving benefits to on or after the Covered Person s Early Retirement Age but before age 65 will have the pension reduced according to the Early Retirement Penalties as discussed in the section on Penalties on Page 13. The penalties are noted again in the following chart: Age Pension Benefit Begins # of Months Prior to age 65 Penalty months 0.5% x 36 = 18% reduction months 0.5% x 24 = 12% reduction months 0.5% x 12 = 6% reduction months 0.5% x 6 = 3% reduction

16 16 SERVICE REQUIREMENT UPON RETURNING TO AN MCNP PENSION-FUNDED CALL OR APPOINTMENT Termination of Employment The months of Service are frozen when a Covered Person Terminates Employment prior to Early Retirement Age (62). In addition, the Monthly Pension Benefit Rate is frozen on the date of Termination. If a Covered Person who had Terminated Employment returns to an active call with the Northern Province and that call includes participation in the Plan, the Covered Person must remain in that call at least twelve (12) months before the Monthly Pension Benefit Rate will be unfrozen. Service will begin to accumulate the day the Covered Person returns. Call or Appointment Does Not Cover Plan Participation When a Covered Person serves a non-mcnp Pension-funded call or appointment to a Moravian Agency or to Specialized Ministries, that Covered Person s months of Service and the Monthly Pension Benefit Rate will be frozen on the start date of that call or appointment. When a Covered Person returns from a non-mcnp Pension-funded call or appointment to an MCNP Pension-funded call or appointment, the Covered Person must complete twelve (12) months of Service in an MCNP Pension-funded call or appointment before the Monthly Pension Benefit Rate will be unfrozen. Service will begin to accumulate on the start date of the new call or appointment. Return from a Leave of Absence When a Covered Person begins a Leave of Absence, Service and the Monthly Pension Benefit Rate are frozen on the start date of that Leave of Absence. When a Covered Person returns from a Leave of Absence to an active call or appointment that includes participation in the MCNP Pension Plan, the Covered Person must complete twelve (12) months of Service before the Monthly Pension Benefit Rate will be unfrozen. Service will begin to accumulate on the start date of the new call or appointment. Following is an example of a Covered Person s record of service after completing the twelve (12) months of Service immediately following the conclusion of the Leave of Absence: DOB Doe, Dillon 1/28/1975 Start Date End Date Months Rate Towel Moravian Church 9/25/ /31/ $30.00 Leave of Absence 1/1/ /31/2006 No Credit $30.00 Rain Moravian Church 1/1/2007 6/30/ $37.00 Total $37.00

17 17 Following is an example of a Covered Person who resigned after completing only 9.96 months of Service immediately following the conclusion of the Leave of Absence: DOB Doe, Avery 1/28/1975 Start Date End Date Months Rate in Effect Rate Benefit is Calculated on Bike Moravian Church 9/25/2000 5/31/ $37.00 Leave of Absence 6/1/2012 5/31/2013 No Credit $37.00 Volley Moravian Church 6/1/2013 3/31/ $40.00 Total $37.00 Because this pastor Terminated Employment 9.96 months after returning from the Leave of Absence, the pension benefit is calculated using the total months (150.21) times the rate in effect at the start of the Leave of Absence which was $37.00 The two examples in this section can also be applied to the Termination of Employment and the Call or Appointment Does Not Cover Plan Participation sections on Page 16 or for any situation where there is a break in Service and then a return to Service. CONTINUED PAYMENT OF BENEFITS FOLLOWING RE-EMPLOYMENT If a Covered Person returns to employment with an Employer following his or her Retirement, the payment of benefits will continue but no additional months of Service will accrue during this period. Option A: Joint and Fifty Percent (50%) PAYMENT OPTIONS With this option, the Covered Person would receive 100% of his or her benefit. Upon the Covered Person s death, the surviving spouse on record at the start of retirement would receive 50% of the benefit. The following is an example of a pension calculation where the Covered Person has elected the Joint and fifty percent (50%) option: Name DOB Retirement Date Age Doe, Cassidy 1/1/1949 1/1/ Credited Service Annual Pension with 50% to Surviving Spouse Start Date End Date Months Total Rate Retiree Spouse Sand Bar Moravian Church 1/26/ /31/ TOTAL MONTHS AND ANNUAL BENEFIT $37.00 $17, $8,870.20

18 18 Option B: Joint and One Hundred Percent (100%) With this option, the Covered Person would receive 90% of his or her calculated benefit. Upon the retiree s death, the surviving spouse on record at the start of retirement would receive 100% of the retiree s benefit or the exact amount that the Covered Person was receiving prior to his or her death. The following is an example of a pension calculation where the Covered Person has elected the Joint and one hundred percent (100%) option: Name DOB Retirement Date Age Doe, Drew 1/1/1949 1/1/ Credited Service Annual Pension with 100% to Surviving Spouse Start Date End Date Months Total Rate Retiree 90% Spouse 90% Fishing Moravian Church 1/26/ /31/ TOTAL MONTHS AND ANNUAL BENEFIT $37.00 $15, $15, Single Covered Person Because there are no survivor benefits if a Covered Person is single at retirement, the Covered Person would receive one hundred percent (100%) of his or her benefit upon retirement. If a Covered Person marries after beginning to receive benefits from this Plan, the surviving spouse would not be entitled to any benefits upon the death of the Covered Person. Name DOB Retirement Date Age Doe, Justine 1/1/1949 1/1/ Credited Service Annual Pension 100% No Surviving Spouse Start Date End Date Months Total Rate Retiree Boat Moravian Church 1/26/ /31/ TOTAL MONTHS AND ANNUAL BENEFIT $37.00 $17, LUMP SUM DISTRIBUTIONS There is no option to receive a Lump Sum Distribution from the Plan.

19 19 Death of a Covered Person Prior to Retirement SURVIVOR BENEFITS If the Covered Person who is entitled to benefits dies prior to beginning to receive benefits from this Plan, the Surviving Spouse shall be entitled to receive a retirement benefit equal to ninety percent (90%) of the Covered Person s accrued benefit calculated based on the Covered Person s age on the date of his or her death. Based on the age of the Covered Person at the time of his or her death and the date upon which the Surviving Spouse begins to receive benefits, there may or may not be penalties applied to this benefit. See the sections on Penalties and Deferred Benefits on Pages Death of a Covered Person During Retirement If a Covered Person dies after beginning to receive benefits from this Plan, the Surviving Spouse on record at the time a Covered Person completed the retirement application is the person who will continue to receive survivor benefits based on the payment option selected by the Covered Person at the time he or she completed the retirement application. Death of a Surviving Spouse If the Surviving Spouse of a Covered Person on record at the time of retirement dies before the Covered Person and the Covered Person remarries during retirement, the new spouse is not entitled to any Survivor Benefits upon the death of the Covered Person. Death of a Covered Person Who Has Not Completed Five (5) Years of Vested Service If a Covered Person Terminates Employment prior to the completion of five (5) years of Vested Service, the Surviving Spouse is not eligible for any benefits under the Plan. Death of a Covered Person When Both Husband and Wife Are Covered Persons If both husband and wife are Covered Persons under this Plan, each is entitled to any applicable survivor benefit in addition to any retirement benefits he or she may be entitled to under this Plan.

20 20 STEPS TO FOLLOW TO BEGIN THE RETIREMENT PROCESS As soon as a Covered Person has made the decision to retire and has established an effective date, he or she must request in writing permission to retire from the PEC. This should be done a minimum of four (4) months in advance of the effective date. It is preferred that the effective date be the last day of the month with retirement benefits to begin the first day of the following month. Once PEC approval has been granted, the Director of Human Resources and Benefits is notified. A retirement letter is prepared that includes the following: 1. The calculation of pension benefits 2. Selection of the payment option 3. Verification of Social Security Numbers for both the Covered Person and the Surviving Spouse on record at the time of retirement 4. Health insurance benefits available and what the cost for those benefits will be, if any 5. Life insurance benefits available and what the cost for those benefits will be, if any 6. Establishment of direct deposit for pension benefits PAYMENT OF BENEFITS Pension benefits will be paid on the first of every month. DISPUTE OF BENEFIT CALCULATION In the event a Covered Person or Surviving Spouse believes the pension benefit calculation provided by the Benefits Office is in error, the Covered Person or the Surviving Spouse should contact the Benefits Office first to understand, clarify and/or rectify the situation. If the matter is not resolved sufficiently for the Covered Person or Surviving Spouse, the PEC office should be contacted regarding the concern. Plan Administrator PLAN ADMINISTRATION (from the Plan Document) The PEC shall serve as the administrator of the Plan; provided, however, that the PEC may, in its sole discretion, designate another person or committee to administer the Plan. Powers and Duties of the Plan Administrator The Plan Administrator shall have such other duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following: a) to construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder; b) to prescribe procedures to be followed by Covered Persons or Surviving Spouses filing applications for benefits;

21 21 c) to prepare and distribute, in such manner as the Plan Administrator determines to be appropriate, information explaining the Plan; d) to receive from the Employer and from Covered Persons such information as shall be necessary for the proper administration of the Plan; e) to furnish the Covered Person or the Employer, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate; f) to appoint or employ individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel; g) to determine what portion of the annual Assessment shall be contributed to the Plan and what portion (if any) shall be contributed to the Church s supplemental health benefits plan; and h) to make all determinations as to the right of any person to a benefit pursuant to Benefits. Periodic Review The PEC shall appoint an advisory commission of at least five (5) members to review the Plan annually and recommend any changes to the Dollar Value (Monthly Pension Benefit Rate) or other actions affecting the Plan. Rules and Decisions The Plan Administrator may adopt such rules as it deems necessary, desirable, or appropriate in administering the Plan. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Covered Person or Surviving Spouse. Application and Forms for Distributions The Plan Administrator may require a Covered Person or Surviving Spouse to complete and file with the Plan Administrator an application for distributions and all other forms approved by the Plan Administrator and to furnish all pertinent information requested by the Plan Administrator. The Plan Administrator may rely upon all such information so furnished it, including the Covered Person s or Surviving Spouse s current mailing address. Right to Amend AMENDMENT AND TERMINATION (from the Plan Document) The PEC may amend the Plan at any time. No modification or amendment shall make it possible for assets of the Plan to be used for, or diverted to, purposes other than the exclusive benefit of Covered Persons and their Beneficiaries. Right to Terminate While it is expected that the Plan will be continued indefinitely, the PEC may terminate the Plan at any time by delivering advance written notice of the Proposed Termination Date to the Trustee and the Plan Administrator. The Plan Administrator must notify all affected parties of the PEC s intent to terminate the Plan and the Proposed Termination Date at least 60 days prior to the Proposed Termination Date.

22 22 Prior to the proposed date of termination, the Actuary shall provide the PEC with: (1) the projected amount of the assets of the Plan as of the proposed date of final distribution of assets as determined by the PEC and (2) the actuarial present value of the accrued benefit of each person covered under the plan as of the Proposed Termination Date, whether as a Covered Person, a retiree, a terminated vested participant, or a Surviving Spouse. The PEC shall pay the expenses incurred in administering the Plan termination or in liquidating the Plan. The PEC shall allocate the assets of the Plan to all Covered Persons, retirees, terminated vested participants, or Surviving Spouses based on the present value of their accrued benefits as determined by the Actuary. Each Covered Person shall receive a lump sum distribution equal to such present value times the overall actuarial funding level of the Plan at the time of such distribution, as determined by the Actuary. For purposes of this Section, the term Proposed Termination Date shall mean the date the PEC identifies on which the Plan will be terminated. Prohibition Against Diversion MISCELLANEOUS (from the Plan Document) Subject to Code section 414(p), there shall be no diversion of any portion of the assets of the Plan other than for the exclusive benefit of Covered Persons and their Beneficiaries. Responsibilities of Parties The Plan Administrator shall be responsible for the administration and management of the Plan, and shall have responsibility for the management and control of the assets of the Plan. Fees and Expenses The expenses and fees of the Plan shall be payable from the assets of, or contributions to, the Plan, or the earnings thereon. Notification of Mailing Address Each Covered Person and other person entitled to benefits hereunder shall register from time to time with the Plan Administrator in writing, such person s post office address and change of post office address. Any check representing any payment due hereunder, and any communication forwarded to a Covered Person or surviving spouse at the last known address as indicated by the records of the Plan Administrator shall constitute adequate payment to such person and be binding on such person for all purposes of the Plan. The Plan Administrator shall not be under any obligation to search for or ascertain the whereabouts of any such person.

23 23 Unclaimed Benefits If any benefits payable to, or on behalf of, a Covered Person are not claimed within a reasonable period of time from the date of entitlement, as determined by the Plan Administrator, and if the Covered Person cannot be located at his or her last provided mailing address, such Covered Person shall be presumed dead and the post-death benefits, if any, under this Plan shall be paid to his or her Surviving Spouse if such Surviving Spouse is then living and can be located. If the Covered Person s Surviving Spouse is not then living or cannot be located, no benefits shall be due under this Plan. Nonalienation of Benefits Benefits payable under the Plan shall not be subject in any manner to anticipation, alienation, sale transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, prior to actually being received by the person entitled to the benefits under the terms of the Plan. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder shall be void. The amounts from time to time contributed to the Plan hereunder shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits under the Plan. Facility of Payment Whenever, in the Plan Administrator s opinion, a person entitled to receive any payment of a benefit under the Plan is under a legal disability or is incapacitated in any way so as to be unable to manage such person s financial affairs, the Plan Administrator may, to the extent permitted by law, make payments directly to (i) the person, (ii) the person s legal guardian or representative, or (iii) the individual having charge and custody of the person to be used exclusively for the person s benefit. Any benefit payment (or installment thereof) made in accordance with the provisions of this paragraph shall completely discharge the obligation for making such payment under the Plan. Governing Law This Plan shall be administered, and its validity, construction, and all rights hereunder shall be governed by the laws of the Commonwealth of Pennsylvania. If any provision of the Plan shall be held invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective. Headings Not Part of Agreement Headings of sections and subsections of the Plan are inserted for convenience of reference. They do not constitute any part of the Plan and are not to be considered in the construction thereof. Limitations on Liability The Plan Administrator shall not be liable to any person or entity for any of its acts carried out hereunder in good faith and based upon the information available at the time.

24 24 Nonguarantee of Employment Nothing contained in this Plan shall be construed as a contract of employment between the Employer and any employee, or as a right of any employee to be continued in the employment of the Employer, or as a limitation of the right of the Employer to discharge any of its employees, with or without cause. Exclusions and Separability Each provision hereof shall be independent of each other provision hereof, and if any provision of this Plan proves to be void or invalid as to any Covered Person or group of Covered Persons, such provision shall be disregarded and shall be deemed to be null and void and no part of this Plan; but such invalidation of any such provision shall not otherwise impair or affect this Plan or any of the other provisions or terms thereof. All Plan Participants shall be entitled to: REVIEWING COPIES OF THE PLAN DOCUMENT 1. Examine all Plan Documents at the Plan Administrator s office without charge. 2. Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator, for which the Plan Administrator may make a reasonable charge. 3. Obtain a statement telling the Covered Person whether he or she has a right to receive benefits under the Plan at Normal Retirement Age and if so, what those benefits would be at Normal Retirement Age if the Covered Person were to stop working immediately. If the Covered Person does not have a right to a benefit, the statement will tell you how many more years he or she would have to work before he or she would have a right to a benefit. This statement must be requested in writing and is not required to be given from the Plan Administrator more than once a year. The Plan must provide the statement free of charge. COVERED PERSON OR SURVIVING SPOUSE RESPONSIBILITY AFTER BENEFITS BEGIN Once a Covered Person or a Surviving Spouse is receiving monthly benefits, it is the responsibility of the Covered Person or the Surviving Spouse to notify the Benefits Office of any change of mailing address or bank routing and account numbers for direct deposit.