United Methodist Personal Investment Plan (Effective January 1, 2006 and Amended and Restated as of January 1, 2017) A Defined Contribution Retirement Benefits Church Plan of The United Methodist Church As Adopted by the General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Illinois 3407/032718 UMPIP17.001
Section United Methodist Personal Investment Plan TABLE OF CONTENTS Page 1 Introduction...1 1.1 Defined Terms...1 1.2 History...1 1.3 The Plan...1 1.4 Type of Plan...2 1.5 Funding...2 1.6 Exclusive Benefit...3 1.7 Adoption of the Plan...3 1.8 Plan Sponsors...3 1.9 Prospective Application...6 2 Definitions and Rules of Interpretation...7 2.1 Account...7 2.2 Account Balance...7 2.3 Accountholder...7 2.4 Accounting Date...7 2.5 ACP Contributions...7 2.6 ACP Test...8 2.7 Active Conference Member...8 2.8 Active Participant...8 2.9 Actual Contribution Amount...8 2.10 Actual Contribution Percentage...8 2.11 Administrator...9 2.12 Adoption Agreement...9 2.13 Affiliate...9 2.14 Affiliate Member...9 2.15 After-Tax Contributions...9 2.16 After-Tax Contribution Account...9 2.17 Age 50 Catch-Up Contributions...10 2.18 Agency Affiliate...10 2.19 Aggregate Account Balance...10 2.20 Alternate Payee...10 2.21 Annual Additions...10 2.22 Annual Conference...11 2.23 Application for Benefits...11 2.24 Appoint or Appointment...11 2.25 Approved Conference-Elective Extension Ministry List...11 2.26 Associate Member...11 2.27 Automatic Enrollment...12 2.28 Before-Tax Contributions...12 2.29 Before-Tax Contribution Account...12 2.30 Beneficiary...12
Section Page 2.31 Bishop...12 2.32 Break in Service...13 2.33 Business Day...13 2.34 Cash Installments...13 2.35 Catch-Up Contributions...13 2.36 Church Plan...13 2.37 Claimant...13 2.38 Clergy Employee...13 2.39 Clergyperson...13 2.40 Code...14 2.41 Compensation...14 2.42 Conditional Contribution...15 2.43 Conditional Contribution Account...15 2.44 Conference...15 2.45 Conference-Elective Entity...15 2.46 Conference Member...16 2.47 Conference-Responsible Unit...16 2.48 Contribution...16 2.49 Contribution Period...16 2.50 Contribution Rate...16 2.51 CPBF...16 2.52 CPBF Participant...16 2.53 CPP...16 2.54 CPP Disabled or CPP Disability...16 2.55 CRSP...16 2.56 Credit...16 2.57 Deacon in Full Connection...17 2.58 Debit...17 2.59 Decimal Percentage...17 2.60 Default Beneficiary...17 2.61 Designated Beneficiary...17 2.62 Determination Year...17 2.63 Disabled...17 2.64 Discipline...17 2.65 Disclaim...18 2.66 Discretionary Contribution...18 2.67 Discretionary Contribution Account...18 2.68 Distribution Calendar Year...18 2.69 Distribution-Eligible Participant...18 2.70 Due Date...19 2.71 Early Retirement Date...19 2.72 Effective Date...20 2.73 Elder in Full Connection...20 2.74 Eligible Rollover Distribution...20 2.75 Eligibility Service...21 2.76 Employee...21 - ii -
Section Page 2.77 Entry Date...21 2.78 ERISA...22 2.79 15-Year Catch-Up Contributions...22 2.80 15-Year Catch-Up Aggregate Sum...22 2.81 15-Year Catch-Up Service...22 2.82 Final CPBF Account Balance...22 2.83 Final PIP Account Balance...23 2.84 Five-Year Distribution Option...23 2.85 Five-Year No Record of Appointment...23 2.86 Forfeitable Account Balance...23 2.87 Forfeiture...23 2.88 Forfeiture Account...23 2.89 Forfeiture Suspense Account...24 2.90 Form...24 2.91 403(c) Contract...24 2.92 415 Affiliate...24 2.93 415 Compensation...24 2.94 415 Suspense Account...26 2.95 Full-Time...27 2.96 Gap Period...27 2.97 GCFA...27 2.98 General Agency...27 2.99 General Board...27 2.100 General Conference...27 2.101 HCE...27 2.102 Highly Compensated Level...28 2.103 Highly Compensated ACP...28 2.104 Hour of Paid Service...28 2.105 Includible Compensation...29 2.106 IRA...29 2.107 IRS...29 2.108 Jurisdictional Conference...29 2.109 Lay Employee...29 2.110 Leased Employee...30 2.111 Leave of Absence...30 2.112 Life Expectancy...32 2.113 LifeStage Investment Management...32 2.114 Lifetime Distribution Option...32 2.115 Limitation Year...32 2.116 Local Church...32 2.117 Local Pastor...32 2.118 Look-Back Year...32 2.119 LTD Plan Disabled or LTD Plan Disability...32 2.120 Matching Contribution...32 2.121 Matching Contribution Account...33 2.122 Maximum ACP...33 - iii -
Section Page 2.123 Medical Leave...33 2.124 Missionary Conference...33 2.125 MPP...33 2.126 Month of Service...34 2.127 Non-HCE...34 2.128 Non-Highly Compensated ACP...34 2.129 Non-Matching Contribution...34 2.130 Non-Matching Contribution Account...34 2.131 Non-QCCO...34 2.132 Normal Retirement Date...34 2.133 Notice...35 2.134 One-Year Break in Service...35 2.135 Paid Leave...35 2.136 Participant...36 2.137 Participant Contribution Account...36 2.138 Participant Contributions...36 2.139 Part-Time...36 2.140 Pastoral Charge...36 2.141 Permanent...37 2.142 Permanently Disabled...37 2.143 PIP...37 2.144 PIP Participant...37 2.145 Plan...37 2.146 Plan Sponsor...37 2.147 Plan Sponsor Contribution Account...37 2.148 Plan Sponsor Contribution...37 2.149 Plan Year...37 2.150 Provisional Member...38 2.151 QCCO...38 2.152 QDRO...38 2.153 QNEC...38 2.154 QNEC Account...38 2.155 QVEC...38 2.156 QVEC Account...38 2.157 Reemployed...39 2.158 Regulation...39 2.159 Relinquish...39 2.160 Remitter...39 2.161 Representative Contribution Rate...39 2.162 Required Beginning Date...39 2.163 Retire or Retirement...40 2.164 Rollover Account...41 2.165 Roth Contributions...41 2.166 Roth Contribution Account...41 2.167 Roth Qualified Distribution...42 2.168 Salary-Paying Unit...42 - iv -
Section Page 2.169 Salary-Reduction Agreement...43 2.170 Section...43 2.171 Service...43 2.172 Service Agreement...43 2.173 Simplified Rule...43 2.174 Sponsor Account Balance...43 2.175 Spouse...44 2.176 Supplement...44 2.177 Supplement One...44 2.178 Supplement Two...44 2.179 Supplement Three...44 2.180 Terminated Participant...44 2.181 Termination of Conference Relationship...45 2.182 Termination of Employment...46 2.183 Top-Paid Group...47 2.184 Transitional Leave...47 2.185 Trust...47 2.186 Trust Agreement...48 2.187 Trustee...48 2.188 Under Episcopal Appointment...48 2.189 Unsupplemented Plan...48 2.190 USERRA...48 2.191 Valuation Account Balance...48 2.192 Valuation Calendar Year...48 2.193 Vested...48 2.194 Vesting...48 2.195 Vesting Service...48 3 Participation...49 3.1 Eligibility Service...49 3.2 Eligibility for Participation...50 3.3 Determination of Entry Date...56 3.4 Determination of Eligibility...57 3.5 Cessation and Resumption of Participation...57 3.6 Omission of Eligible Employee...57 3.7 Inclusion of Ineligible Person...58 3.8 Election Not to Participate...59 4 Amount and Allocation of Contributions...60 4.1 Plan Sponsor Contributions...60 4.2 Participant Contributions...64 4.3 Allocation and Deposit of Contributions...70 4.4 Late Contributions...70 4.5 Ineligible Participants...71 4.6 Rollovers into the Plan...71 4.7 Transfers into the Plan...73 - v -
Section Page 5 Limits on Contributions...75 5.1 Limit on Annual Additions...75 5.2 Limit on Salary-Reduction Contributions...79 5.3 Annual Additions for Disabled Persons...81 5.4 ACP Test for Non-QCCOs...82 5.5 Other Limitations for Non-QCCOs...86 5.6 Purpose of Limitations; Authority of Administrator...86 6 Investments and Plan Accounting...87 6.1 Accounts...87 6.2 Investment Fund Accounting...88 6.3 Investment of Accounts...88 7 Vesting and Forfeiture...90 7.1 Fully Vested Accounts...90 7.2 Forfeitable Account Balances...91 7.3 Time of Vesting...92 7.4 Vesting Service...94 7.5 Forfeitures of Vested Accounts...96 8 Payment of Benefits...97 8.1 Methods of Benefit Payment...97 8.2 Distributions...98 8.3 Payments After an Accountholder s Death...100 8.4 Required Minimum Distributions...101 8.5 Direct Rollovers and Transfers Out...108 8.6 Unclaimed Benefits...110 8.7 Payment with Respect to Incapacitated Accountholders...111 8.8 Ordering of Distributions...112 8.9 In-Service Withdrawals...112 8.10 Hardship Loans...115 8.11 Disclaimer...119 8.12 Trailing Account Balances...119 8.13 Beneficiaries...119 8.14 Administrative Rules...122 9 Adoption of Plan...123 9.1 Eligible Plan Sponsors...123 9.2 Adoption Agreement...123 9.3 Merging Other Plans...124 9.4 CPBF and PIP Plan Sponsors...124 9.5 Service Agreement...124 10 Plan Administration...126 10.1 General Fiduciary Standard of Conduct...126 10.2 Allocation of Responsibility Among Fiduciaries...126 10.3 Administrator...126 - vi -
Section Page 10.4 Powers and Duties of Administrator...127 10.5 Records and Reports...129 10.6 Duties of Each Plan Sponsor...129 10.7 Fees and Expenses...130 10.8 Attorney Fees and Costs...131 10.9 Delegation of Authority...131 10.10 Indemnification by Plan Sponsors...131 10.11 Claims Procedure...131 10.12 Qualified Domestic Relations Orders....134 11 Amendment, Termination, and Merger of Plan...136 11.1 Amendment...136 11.2 Termination of Plan Sponsorship...137 11.3 Termination of the Plan...138 11.4 Continuation by a Successor or Purchaser...139 11.5 Plan Merger, Consolidation, or Transfer...139 12 General Provisions...142 12.1 Rules and Forms...142 12.2 Non-Alienation of Benefits...142 12.3 Non-Reversion...142 12.4 Construction...143 12.5 Limitation of Liability...143 12.6 Alternative Dispute Resolution...144 12.7 Titles and Headings...144 12.8 Number and Gender...144 12.9 USERRA...144 12.10 Participant, Beneficiary, and Accountholder Duties...144 12.11 Adequacy of Evidence...144 12.12 Notice to Other Parties...145 12.13 Waiver of Notice...145 12.14 Successors...145 12.15 Severability...145 12.16 Supplements...145 12.17 Change in Classification...145 SUPPLEMENT ONE-CUMULATIVE PENSION AND BENEFIT FUND-147 S1.1 History...147 S1.2 Frozen Plan...147 S1.3 Transfer of CPBF Accounts...147 S1.4 CPBF Annuities...148 S1.5 CPBF Funding...148 S1.6 Termination of CPBF...149 - vii -
Section Page SUPPLEMENT TWO-PERSONAL INVESTMENT PLAN 150 S2.1 History...150 S2.2 Frozen Plan...150 S2.3 Transfer of PIP Accounts...150 S2.4 PIP Annuities...151 S2.5 PIP Funding...151 S2.6 Termination of PIP...152 SUPPLEMENT THREE-CENTRAL CONFERENCE BISHOPS 153 S3.1 Central Conference Bishop...153 S3.2 Eligible Employees...153 S3.3 Plan Operation...153 Execution...153 Note: The United Methodist Personal Investment Plan is a church plan that is not subject to registration, regulation, or reporting under the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, Title 15 of the United States Code, or State securities laws. Similarly, the Administrator and the Trustee of the Plan and the entities maintaining any investment funds under the Plan are not subject to those provisions of those Acts or laws. Therefore, Plan participants and beneficiaries will not be afforded the protection of those provisions. - viii -
United Methodist Personal Investment Plan SECTION 1 INTRODUCTION 1.1 Defined Terms. As used in this Plan, capitalized terms, including acronyms, have the meanings set forth in Section 2. When not set forth in that Section, capitalized terms have the meanings set forth in predecessor plans, given to them in the Discipline, or understood in common usage. 1.2 History. In accordance with resolutions of the Board of Directors of the General Board adopted at various times since January 1, 2006, the Plan is amended and restated as of January 1, 2017 (except as otherwise specified). The Plan was originally effective January 1, 2006 (except as otherwise specified) and was an amendment and restatement of its predecessor plans, CPBF and PIP, in the form of a renamed plan approved by the Board of Directors of the General Board by resolution dated November 20, 2004. General Conference authorized the establishment of CPBF in or about August 1972 and the establishment of PIP effective January 1, 1998. Before January 1, 1998, PIP existed as a part of various other plans administered by the General Board in the form of personal contributions to those plans. Other predecessor plans include the Tax-Deferred Annuity Contributions Program (for participant contributions) and the Lay Employees Pension Fund (for plan sponsor contributions). CPBF and PIP have been frozen as of December 31, 2005 and have been preserved in Supplements One and Two hereto, respectively, except to the extent that benefits from those plans have been transferred to the Unsupplemented Plan as provided in Supplements One and Two. 1.3 The Plan. The Plan for any Plan Sponsor consists of the following subdivisions, plus any others that may be added to the Plan (and minus any subdivisions that may be removed from the Plan) from time to time: (c) (d) (e) the Unsupplemented Plan; Supplement One, also formerly known as CPBF; Supplement Two, also formerly known as PIP; Supplement Three, covering central conference bishops; and the Adoption Agreement for that Plan Sponsor. The Plan will apply to a Participant, a Terminated Participant, a Beneficiary, or an Accountholder as of the earlier of the date such person first became eligible for the Plan, first had an Account, or was first eligible for an annuity payment under a Supplement and will remain applicable, as the Plan exists from time to time, until such person no longer
has an Account or is no longer due a benefit under the Plan. If any issue under the Plan applies after such person s Account has been distributed or other benefit has been paid, then the terms of the Plan as they existed on the date of such payment or distribution will apply to such person. In the case of a Beneficiary or any other person who does not have an Account or a benefit due according to Plan records, but who claims a benefit under the Plan, the terms of the Plan as they existed at the time or times such person would have been entitled to an Account or a benefit if such claim were upheld will govern. 1.4 Type of Plan. The Plan is intended to be a program of one or more church-sponsored retirement income accounts within the meaning of Code 403(9), with the portions of Supplements One and Two that are paying annuities being defined benefit plans, as that term is defined in Code 414(j), and all other portions of the Plan, including the Unsupplemented Plan, being defined contribution plans, as that term is defined in Code 414. The defined benefit plans are grandfathered pre-august 14, 1982 defined benefit Code 403 plans under Code 403(9) in accordance with 251(e)(5) of the Tax Equity and Fiscal Responsibility Act of 1982. Any portion of an Accountholder s Account Balance that is not fully Vested, in accordance with Regulations under Code 403, will be deemed to be a separate unvested Code 402 contract until such time as such amount is either fully Vested or has been Forfeited, at which point any such Vested amount will once again be part of the main contract subject to Code 403(9). Any portion of the Contributions to an Accountholder s Account Balance that is an excess Annual Addition under Regulations under Code 415(c) will be deemed, to the extent not refunded to the Accountholder under Section 5.1 or applicable Regulations, to be a separate account under Code 72 or a separate contract not subject to Code 403 until such time as such amount satisfies Code 415(c), at which point such amount will once again be part of the main contract subject to Code 403(9). For the purpose of Code 401(4), the Plan is intended to be a multiple employer plan involving more than one Plan Sponsor. Plan Sponsors may or may not be Affiliates of one another. For the purpose of Code 414(e), each Plan Sponsor is intended to be a church, a convention or association of churches (within the meaning of Code 414(e)(3)(C)), or an organization controlled by or associated with a church or a convention or association of churches (within the meaning of Code 414(e)(3)(D)). Accordingly, the Plan Sponsors are intended to be one employer solely for the purpose of Code 414(e) (and separate employers for other purposes, except as may otherwise be specifically provided in the Plan). Further, the Plan is intended to meet the requirements of a church plan as that term is defined in Code 414(e) and ERISA 3(33) and to be exempt from ERISA as a Church Plan to the extent permitted under Code 410(d), applicable ERISA sections (including, but not limited to, ERISA 4(2) and 4021(3)), and any other applicable law. 1.5 Funding. Contributions to fund the benefits provided under the Plan are made by the Plan Sponsors as provided in the Plan or transferred as provided in the Supplements. The Trust. To receive such Contributions, the General Board has established the Trust pursuant to the Trust Agreement. All benefits under the Plan will be provided exclusively by distributions from the Trust. The Trustee has the powers and duties specified in the Trust Agreement. The Administrator has the authority - 2 -
to replace the Trustee of the Trust at any time, or to establish additional Trusts to fund benefits under the Plan. Insurance Contracts. Benefits under the Plan may also, at the General Board s discretion, be provided by the purchase of insurance contracts, and, in such event, the term Trust will also include the Plan s interest, if any, in such insurance contracts. Such insurance contracts may be entered into by the General Board or by the Trustee in accordance with the General Board s direction. The outsourced insurance contracts provided for in Sections S1.4 and S2.4 are not part of the Plan or the Trust. 1.6 Exclusive Benefit. The Plan is for the exclusive benefit of Accountholders and annuitants under Supplements One and Two. No portion of the funds contributed to the Plan will revert to or be applied for the benefit of the Plan Sponsors, except as specifically permitted herein. 1.7 Adoption of the Plan. An eligible Plan Sponsor may adopt the Plan in accordance with Section 9 and the terms of an Adoption Agreement. A Plan Sponsor may discontinue sponsoring the Plan in accordance with Section 11 and the terms of its Adoption Agreement. 1.8 Plan Sponsors. Eligible Entities. Subject to the limitations of Code 414(e)(2) and subsections, (c), and (d) below, either of the following entities (described in or ) that is eligible to sponsor a Code 403 Church Plan is eligible to execute or accept an Adoption Agreement to be a Plan Sponsor under the Plan: An entity that is: (A) (B) controlled by or associated with The United Methodist Church or an autonomous affiliated church; and a Code 501(c)(3) organization or a person who normally works at least 500 hours per year as a self-employed minister within the meaning of Code 414(e)(5)(A)(I). An entity: (A) (B) (C) that does not satisfy paragraph ; but that pays one or more Clergypersons who are Under Episcopal Appointment to such entity; and that sponsors the Plan with respect to any such Clergyperson who qualifies under Code 414(e)(3)(B), even though The United Methodist Church is deemed to be such Clergyperson s employer under Code 414(e)(3)(C). Notwithstanding the foregoing, any - 3 -
such Clergyperson will be treated as a Clergy Employee of the Plan Sponsor for the purposes of this Plan other than the penultimate sentence of Section 1.4. No other entity may be a Plan Sponsor of the Plan. Plan Sponsors who qualify under paragraph above may sponsor the Plan only for Clergypersons described in such paragraph, while Plan Sponsors who qualify under paragraph above may sponsor the Plan for any one or multiple groups of Employees described in subsection below, subject to any applicable nondiscrimination or coverage testing requirements. Covered Employees. The following Plan Sponsors who qualify under subsection above may execute or accept an Adoption Agreement with respect to the following types or classes of Employees and types of Contributions, subject to any limitations otherwise specified in the Plan: Clergy. Subject to any limitations in paragraph below or Section 3.2 and in accordance with the terms of its Adoption Agreement, an entity qualifying under subsection above may be a Plan Sponsor with respect to the Clergypersons: (A) (B) for which it serves as the Salary-Paying Unit; or in the case of a Conference, who are its members for: (1) Plan Sponsor Contributions; and/or (2) Participant Contributions. Clergy Participant Contributions. (A) (B) When a Clergyperson s Conference has elected not to be a Plan Sponsor with respect to such Clergyperson for Participant Contributions, then such Clergyperson s Salary-Paying Unit may be a Plan Sponsor with respect to such Clergyperson for Participant Contributions. If, however, a Clergyperson s Conference has elected to be a Plan Sponsor with respect to such Clergyperson for Participant Contributions, then such Clergyperson s Salary-Paying Unit may not be a Plan Sponsor with respect to such Clergyperson for Participant Contributions (although such Conference will have to arrange for the Salary-Paying Unit to timely remit such Participant Contributions to the Administrator or to timely forward such Participant Contributions to such Conference so that the - 4 -
Conference may timely remit such Contributions to the Administrator). (iii) Lay Employees. Any entity that qualifies under paragraph above may be a Plan Sponsor with respect to its Lay Employees for: (A) (B) Plan Sponsor Contributions and Participant Contributions; or Participant Contributions. (iv) Bishops. GCFA or another Salary-Paying Unit may be a Plan Sponsor with respect to Bishops for: (A) (B) Plan Sponsor Contributions; and/or Participant Contributions. (c) Multiple Adoption Agreements. A Plan Sponsor may execute more than one Adoption Agreement, subject to: (iii) the foregoing limits in this Section and elsewhere in the Plan; any rules established from time to time by the Administrator; and the following rules and limits: (A) (B) (C) (D) The Code and Regulations impose coverage and nondiscrimination requirements, especially for Non-QCCOs. Those coverage and nondiscrimination requirements must be reflected in the Plan Sponsor s Adoption Agreement or Agreements, based on the composition of the Plan Sponsor s workforce from time to time. Subject to Section 3.2(A) and (B), a Plan Sponsor must cover all of its Employees who are eligible under Sections 3.2 and 3.3 with respect to Participant Contributions. A Plan Sponsor may execute more than one Adoption Agreement covering different mutually exclusive classifications of Employees. No Employee may be covered for the same job classification on more than one such Adoption Agreement. A given Participant may be covered under the Plan by more than one Adoption Agreement only if he or she is employed in different mutually exclusive job classifications. The Plan Sponsor whose Adoption Agreement covers a given job classification is responsible for Contributions with respect to Compensation paid by such Plan Sponsor or its related Salary-Paying Unit to any Employee in such job classification. - 5 -
(E) A single Plan Sponsor may make multiple kinds of Plan Sponsor Contributions under one Adoption Agreement covering a given job classification, provided that all of such kinds of Plan Sponsor Contributions have the same vesting schedule. (d) Related Entities. Whether two or more related entities are two separate Plan Sponsors or one Plan Sponsor is based on all the facts and circumstances. The following factors are not intended to be an exhaustive list of such facts and circumstances: If two entities have different: (A) (B) (C) federal employer identification numbers; boards of directors; or boards of trustees; they will be presumed to be independent entities. Either or both may be a Plan Sponsor, but not with respect to the same job classification. Any person working for both Plan Sponsors would have to separately qualify for the Plan with respect to his or her employment with each Plan Sponsor. If two entities have the same: (A) (B) (C) federal employer identification number; board of directors; or board of trustees; they will be presumed to be one Plan Sponsor. Such Plan Sponsor may execute more than one Adoption Agreement, as provided in subsection (c) above, but not with respect to the same job classification. 1.9 Prospective Application. No benefits will accrue under the Plan before the Effective Date, although Account Balances may be transferred to the Plan from CPBF and/or PIP as of the Effective Date. - 6 -
SECTION 2 - DEFINITIONS AND RULES OF INTERPRETATION As used in this Plan, capitalized terms have the meanings set forth below. Definitions are sometimes supplemented with examples or other additional information. 2.1 Account. The aggregate of the separate recordkeeping entries maintained by the Administrator according to the books and records of the Plan for the purpose of recording the aggregate amount of the type of Contribution made to the Plan for the benefit of an Accountholder, adjusted for any applicable Debits or Credits. The maintenance of separate Accounts does not require physical segregation of plan assets with respect to any Account. Any means the Administrator uses to separately track amounts can support a separate Account. The Accounts maintained under the Plan represent the Accountholders interests in the Plan and Trust and are intended as bookkeeping records to assist the Administrator in the administration of the Plan. Any reference to an Accountholder s Accounts refers to all of the Accounts maintained in the Accountholder s name under the Plan (including any separate contracts, such as under Sections 7.2 or 8.8), unless the context otherwise requires. In the case of a Forfeiture Account or a 415 Suspense Account, the term Account refers to an account held in the name of a Plan Sponsor until the balance is reallocated to Plan Sponsor Contribution Accounts, Before-Tax Contribution Accounts, or Roth Contribution Accounts for the benefit of Participants or returned to the Plan Sponsor when so authorized by the Plan. 2.2 Account Balance. The total amount held for an Accountholder in his or her Account (or in the specific separate Account or portion of an Account or Accounts referred to), as determined on the coincident or immediately preceding Accounting Date in accordance with the provisions of the Plan. 2.3 Accountholder. A Participant, a Terminated Participant, an Employee who has rolled over an amount into the Plan, an Alternate Payee, a Beneficiary, or some other person, any of whom has an Account under the Plan. 2.4 Accounting Date. Each Business Day of each calendar year and any other date upon which Contributions to, or Debits or Credits with respect to, Account Balances are made. 2.5 ACP Contributions. The sum of: (c) Matching Contributions made for; Conditional Contributions (when, under a Plan Sponsor s Adoption Agreement, a Participant must make Participant Contributions to earn a Plan Sponsor Conditional Contribution) made for; QNECs, if any, and if elected to be included by the Plan Sponsor, made for; and - 7 -
(d) After-Tax Contributions made by a Participant or former Participant in a Plan Year. 2.6 ACP Test. A comparison of the ACP Contributions of the HCEs of a Plan Sponsor (or Agency Affiliate) for a Determination Year to the ACP Contributions of the Non-HCEs of the Plan Sponsor (or Agency Affiliate) for the Look-Back Year (or Determination Year, if so elected by the Plan Sponsor in accordance with Regulations), requiring the Actual Contribution Percentage of the HCEs to be no greater than the Maximum ACP for the Determination Year in order to pass the ACP Test. As permitted or required by Regulations, a Plan Sponsor s Agency Affiliate will be aggregated with or disaggregated from such Plan Sponsor, as elected by such Plan Sponsor when such Regulations so permit. 2.7 Active Conference Member. A Clergyperson who is not a Retired or terminated Conference Member. 2.8 Active Participant. Any Employee who: participates or is qualified to participate in the Plan as provided in Section 3, while he or she remains an Employee; and is not: (iii) a Terminated Participant; a Retired Participant (except in the case of a rehired Retired Participant); or on a Leave of Absence. Having an Account Balance in the Plan is participation in the Plan, even if current Contributions are not being made to the Plan. An Employee who has elected not to participate in the Plan but who is qualified to participate under subsection above will be treated as an Active Participant. 2.9 Actual Contribution Amount. The total dollar amount of ACP Contributions and QNECs allocated to an Active Participant with respect to a Plan Year. If an Active Participant is eligible to receive any such contributions under any other 403 plan maintained by a Plan Sponsor or an Affiliate (other than a plan that cannot be aggregated with the Plan under 410 and 414(l) of the Code) for such Plan Year, his or her Actual Contribution Amount will include the contributions as determined under such other plan. 2.10 Actual Contribution Percentage. The Actual Contribution Amount allocated to an Active Participant s Accounts with respect to a Plan Year, expressed as a percentage of such Active Participant s 415 Compensation (or, if the Plan Sponsor so elects, any other compensation allowed under Regulation 1.401(m)-5) for such Plan Year and calculated - 8 -
to the nearest 1/100th of a percentage point. The Actual Contribution Percentage of an Active Participant who receives no such Actual Contribution Amount will be zero. 2.11 Administrator. The General Board of Pension and Health Benefits of The United Methodist Church, Incorporated in Illinois or any successor. 2.12 Adoption Agreement. An agreement executed (or deemed to be executed) by each Plan Sponsor and accepted by the Administrator that is a part of this Plan and is the means by which a Plan Sponsor adopts the Plan, becomes a Plan Sponsor, and specifies any optional provisions that are a part of the Plan as to that Plan Sponsor. The Adoption Agreement may be supplemented by a Service Agreement, which the Administrator may require the Plan Sponsor or a separate Salary-Paying Unit to execute as a condition of accepting Contributions for the Plan Sponsor s or Salary-Paying Unit s Employees. 2.13 Affiliate. Any entity that, under a reasonable, good faith standard (see IRS Notice 89-23), is: (c) (d) a corporation that is a member of the same controlled group of corporations, as defined in Code 414, as a Plan Sponsor; a trade or business, whether or not incorporated, that is under common control with a Plan Sponsor within the meaning of Code 414(c); a member of the same affiliated service group, as defined in Code 414(m), as a Plan Sponsor; or otherwise required to be aggregated with a Plan Sponsor pursuant to Regulations issued under Code 414(o), but that is not itself a Plan Sponsor. Effective January 1, 2009, Non-QCCOs may permissively aggregate with other organizations as provided in Regulation 1.414(c)-5. 2.14 Affiliate Member. A person enrolled as an affiliate member in a Conference within the meaning of 344.4, 370.1, or 586.4 of the Discipline. 2.15 After-Tax Contributions. Participant Contributions made by the Plan Sponsor to the Plan in accordance with an election by a Participant to contribute a portion of his or her Compensation into the Plan as an After-Tax Contribution after receipt of the Compensation for taxation purposes. 2.16 After-Tax Contribution Account. The Account established for an Accountholder on the books and records of the Plan for the purpose of recording any: After-Tax Contributions made pursuant to Section 4.2(B); and after-tax transfers made pursuant to Section 4.7; adjusted for any applicable Debits or Credits attributable to such Contributions. - 9 -
2.17 Age 50 Catch-Up Contributions. Before-Tax and/or Roth Contributions made on behalf of a Participant who has attained, or is expected, by the end of the Plan Year, to attain (even if death, Termination of Conference Relationship, or Termination of Employment intervenes), age 50 and who has exceeded the limits otherwise applicable under Code 402(g) and Section 5.2, provided that such Contributions do not exceed the limits specified in Section 4.2(c)(B). 2.18 Agency Affiliate. Any entity that is owned or controlled by a General Agency Plan Sponsor, such as a separately incorporated Affiliate, that has employees who are not common law employees of the Plan Sponsor. 2.19 Aggregate Account Balance. The sum of an Accountholder s: Vested Account Balance in this Plan; plus vested account balances in all other plans administered by the Administrator (except pre-82 balances in MPP). 2.20 Alternate Payee. A Participant s Spouse, former Spouse, child, or other dependent entitled to receive a portion of such Participant s Account under a QDRO. 2.21 Annual Additions. Effective January 1, 2008, the sum of: (c) (d) (e) (f) (g) Plan Sponsor Contributions made by a Plan Sponsor (and any other employer contributions made under any other Code 403 defined contribution plan maintained by a Plan Sponsor, or a 415 Affiliate aggregated under Code 415(k)(4)), even if made in excess of Code 401(m)(2) limits; Participant Contributions (other than Age 50 Catch-Up Contributions) made under the Plan; any before-tax, salary-deferral contributions made on behalf of such Participant under any other Code 403 defined contribution plan maintained by a Plan Sponsor, or a 415 Affiliate aggregated under Code 415(k)(4); any after-tax contributions made on behalf of such Participant under any other Code 403 defined contribution plan maintained by a Plan Sponsor, or a 415 Affiliate aggregated under Code 415(k)(4); reallocated Forfeitures, if any; any Roth contributions made under Code 402A under any other Code 403 defined contribution plan maintained by a Plan Sponsor, or a 415 Affiliate aggregated under Code 415(k)(4); and for the purpose of Section 5.1(A) only (and not Section 5.1(B)), any amounts allocated to an individual medical account, as defined in Code 415(l)(2), that is part of a pension or annuity plan maintained by a Plan Sponsor, - 10 -
amounts derived from contributions that are attributable to post-retirement medical benefits, allocated to the separate account of a key employee, as provided in Code 419A(d)(3); required employee contributions to a defined benefit plan; and amounts allocated to a simplified employee pension that is maintained by the Plan Sponsor, all if allocated or contributed to a Code 403 plan, that are credited, in a Limitation Year, to such Participant s Account or on behalf of such Participant to such other Code 403 defined contribution plan, individual medical account, or other plan that is maintained by the Plan Sponsor, or that is maintained by a 415 Affiliate that is aggregated with this Plan for the purpose of Section 5.1. Catch-up contributions under Code 414(v); Roth Conversions made pursuant to Section 4.8; earnings on a Participant s Account; distributed excess deferrals; plan loan repayments; repayment of previously distributed benefits; restorative payments to correct situations that could reasonably result in federal or state fiduciary liability; direct transfers of benefits from one plan to another; rollover contributions under Code 402(c) or 408(d) made to a Plan Sponsor s, or an aggregated 415 Affiliate s, plan; and adjustments to investment earnings due to late or erroneous contributions are not included in Annual Additions. Annual additions to Code 401, 457, or other non- 403 plans are subject to separate limitations under Code 415(c) and Regulation 1.415-8(d)(1). 2.22 Annual Conference. The basic body of The United Methodist Church as further described in 33 and in Section IX of Chapter Four of Part VI of the Discipline. 2.23 Application for Benefits. A Form established by the Administrator from time to time upon which a Participant, Terminated Participant, or other Accountholder officially applies for benefits under the Plan. 2.24 Appoint or Appointment. Officially appointed by a Bishop to a ministry pursuant to 425 through 430 of the Discipline. 2.25 Approved Conference-Elective Extension Ministry List. A list of extension ministries reported annually to the Administrator by a Conference. By reporting any such extension ministry, a Conference Plan Sponsor agrees to make contributions under the Plan on behalf of all Clergypersons Under Episcopal Appointment by that Conference s Bishop to that extension ministry. A Conference may add or remove extension ministries from the Approved Conference-Elective Extension Ministry List annually as of a date specified from time to time by the Administrator during such reporting period as the Administrator may designate from time to time, but once an extension ministry is reported for the Approved Conference-Elective Extension Ministry List, it will remain on the list until it is removed by a Conference as of a later annually-specified date based on the Conference s later report during a designated annual reporting period. 2.26 Associate Member. A person elected to associate membership in an Annual Conference within the meaning of 227, 321, 322, or 370.1 of the Discipline. 2.27 Automatic Contribution Escalation. An option under which the rate of Participant Contributions of a contributing Participant escalates annually by a selected percentage of - 11 -
the Participant s Compensation (in an increment acceptable to the Administrator), at a selected month of the year, unless the contributing Participant opts out of the feature on a Form acceptable to the Administrator, or unless the contributing Participant is a member of a category of Participants that is ineligible for escalation, as defined by the Administrator from time to time. This option may be elected by a Plan Sponsor on its Adoption Agreement if that Plan Sponsor has also elected Automatic Enrollment. Plan Sponsors making the election may choose the percentage rate of increase, the month of the year in which the increase occurs, and the contribution rate at which escalation ceases. This option may also, at the Administrator s discretion, be elected by individual Participants whose Plan Sponsor has not elected Automatic Contribution Escalation. Such individuals may make the same elections as Plan Sponsors, except for the month in which the escalation occurs. The Automatic Contribution Escalation option is subject to any rules or procedures that the Administrator chooses to implement. 2.28 Automatic Enrollment. An option that a Plan Sponsor may elect on its Adoption Agreement that provides that Employees of the Plan Sponsor who belong to a covered category of Employees specified on the Adoption Agreement and who are eligible for Participant Contributions under the Plan will be enrolled by the Plan Sponsor (after an appropriate Notice of same to each such Employee) for Before-Tax Contributions of a chosen percentage of at least 1% (in an increment acceptable to the Administrator) of each such Employee s Compensation (as elected by the Plan Sponsor on its Adoption Agreement), unless any such Employee elects, in a Form acceptable to the Administrator, not to make such Contributions or to change their amount or type or unless the contributing Participant is a member of a category of Participants that is ineligible for Automatic Enrollment, as defined by the Administrator from time to time. 2.29 Before-Tax Contributions. Participant Contributions made by the Plan Sponsor to the Plan in accordance with an Automatic Enrollment or a Salary-Reduction Agreement pursuant to an election by a Participant to defer a portion of his or her Compensation into the Plan as a Before-Tax Contribution before receipt of the Compensation for taxability purposes. 2.30 Before-Tax Contribution Account. The Account established for an Accountholder on the books and records of the Plan for the purpose of recording any: Before-Tax Contributions made pursuant to Section 4.2; and before-tax transfers made pursuant to Section 4.7; adjusted for any applicable Debits or Credits attributable to such Contributions. 2.31 Beneficiary. An Accountholder s Designated Beneficiary or Default Beneficiary in accordance with Section 8.13. 2.32 Bishop. A bishop of The United Methodist Church elected by a Jurisdictional Conference in accordance with 405 of the Discipline and continuing to serve under Section III of Chapter Three of Part VI of the Discipline. - 12 -
2.33 Break in Service. A period of time relating to an Employee s severance from service with a particular Plan Sponsor: beginning on the day the Employee: (iii) incurs a Termination of Employment with; incurs a Termination of Conference Relationship with; or Retires from employment with that Plan Sponsor and its Affiliates that results in the cessation of crediting Hours of Paid Service; and ending (if at all) on the day he or she is Reemployed by that Plan Sponsor or any of its Affiliates. Taking a Leave of Absence, taking a Paid Leave, or becoming (and remaining) Disabled does not begin a Break in Service. 2.34 Business Day. A day on which both the New York Stock Exchange (or its successor) and the Administrator are open for business. 2.35 Cash Installments. A distribution option described in Section 8.1(c). 2.36 Catch-Up Contributions. Either or both of Age 50 Catch-Up Contributions or 15-Year Catch-Up Contributions. 2.37 Church Plan. A plan, such as this Plan, qualifying under Code 414(e) or ERISA 3(33) that has not made an election under Code 410(d). 2.38 Claimant. A person who makes a claim for benefits under the Plan or who appeals the denial of such a claim, or such person s representative. 2.39 Clergy Employee. An Employee who is: a Clergyperson who is: Under Episcopal Appointment to; or on a Leave of Absence from: a Plan Sponsor; or a Bishop (whose Plan Sponsor is GCFA). 2.40 Clergyperson. One of the following persons who is not a Bishop: an Elder in Full Connection; - 13 -
(c) (d) (e) (f) a Deacon in Full Connection; a Local Pastor; an Affiliate Member; a Provisional Member; an Associate Member; or (g) a clergyperson of another denomination within the meaning of 346.2 or 346.3 of the Discipline who, solely for the purpose of eligibility for the Plan under Section 3, is an Active Conference Member. 2.41 Code. The Internal Revenue Code of 1986, as now in effect or as hereafter amended, and any regulation, ruling, or other administrative guidance issued with respect thereto by the IRS. 2.42 Compensation. In a Plan Year, for a Participant, the sum of the following: the Participant s 415 Compensation, but excluding: any Includible Compensation earned outside of such Plan Year, other than Includible Compensation of a Participant eligible under Section 3.2(h); and any 415 Compensation paid to the Participant in lieu of Plan Sponsorprovided group health plan coverage, including coverage of the Participant s family members, as determined by the Plan Sponsor in accordance with procedures that may be established by the Administrator; (c) in the case of a Participant who is a Clergy Employee, cash received from a Plan Sponsor (or such Plan Sponsor s Agency Affiliate) and excluded from taxable cash salary pursuant to Code 107(2); and when, as part of such Participant s compensation: (1) a parsonage is provided to a Clergy Employee Participant under Code 107(1); or (2) housing is provided tax-free to a Lay Employee Participant under Code 119 or another applicable Code provision, then 25% of the sum of: the Participant s 415 Compensation as provided in subsection above; and - 14 -
any cash excluded from taxable cash salary pursuant to Code 107(2) as provided in subsection above. The Compensation of a Participant taken into account for any Contributions made with respect to any Plan Year beginning after December 31, 2009, may not exceed $245,000, as adjusted for cost-of-living increases in accordance with Code 401(17)(B) ($270,000 in 2017). Effective January 1, 2008, the limit in the foregoing sentence (as it applies or applied for any year) applies only to Participants whose Plan Sponsors are Non-QCCOs. 2.43 Conditional Contribution. A type of Plan Sponsor Contribution to a Participant s Account that is made in the amount of a predetermined percentage of at least 1.00% of the Participant s Compensation on the condition that the Participant makes a Participant Contribution to the Plan in a specified Decimal Percentage of Compensation. The Plan Sponsor elects in its Adoption Agreement both its own predetermined Decimal Percentage of at least 1.00% of the Participant s Compensation that will constitute its Plan Sponsor Contribution to each Participant s Conditional Contribution Account and the minimum Participant Contribution percentage of Compensation a Participant must elect to earn the Conditional Contribution for each Contribution Period. 2.44 Conditional Contribution Account. The Account established for an Accountholder in the books and records of the Plan for the purpose of recording any: Conditional Contributions made pursuant to Section 4.1(iii); and Conditional Contribution-type transfers made pursuant to Sections 4.7 and 4.8; adjusted for any applicable Debits or Credits attributable to such Contributions. 2.45 Conference. Any Annual Conference, Provisional Conference, or Missionary Conference that is described in the Discipline and is located in a Jurisdictional Conference. When speaking of a Clergyperson s Conference, it is: (c) the Conference in which such Clergyperson is a Conference Member (except as provided in subsection (c) below); the Conference whose Bishop Appoints such Clergyperson or grants him or her a Leave of Absence, when such Clergyperson is not a Conference Member of any Conference; or the Conference in which the Clergyperson is to serve under 346.1 of the Discipline, when a Clergyperson retains Conference Membership in his or her home Conference but receives an Appointment to serve in another Conference. 2.46 Conference-Elective Entity. Any extension ministry (such as an agency, a camp, or a foundation) that is on a Conference s Approved Conference-Elective Extension Ministry List. - 15 -
2.47 Conference Member. A Clergyperson specified in 581.1, 586.4, or 602.1 of the Discipline. 2.48 Conference-Responsible Unit. As provided in 344.1a)(1) of the Discipline, an Annual Conference unit within the connectional structures of United Methodism to which certain Clergy are Appointed, such as district superintendents, staff members of conference councils and boards, treasurers, bishops assistants, superintendents or directors of parish development, general evangelists, and campus ministers, and for which unit the Annual Conference provides for Contributions to the Plan on behalf of such Clergy. Appointments described above that are to the Annual Conference itself (rather than a unit thereof) are also included within the term. 2.49 Contribution. A Plan Sponsor Contribution or a Participant Contribution. 2.50 Contribution Period. The time period during which Compensation on which a Plan Sponsor Contribution or Participant Contribution is based is earned by a Participant. It is often the same as a payroll period, but may be as long as a Plan Year. The Plan Sponsor elects the Contribution Period in its Adoption Agreement within the parameters permitted therein or in rules established by the Administrator. 2.51 Contribution Rate. With respect to a Non-HCE of a Non-QCCO: the sum of all Matching Contributions, Conditional Contributions, and QNECs made with respect to the Non-HCE (and used in the ACP Test) for a given Plan Year; divided by such Non-HCE s 415 Compensation (or, if the Plan Sponsor so elects, any other definition of compensation allowed under Regulation 1.401(m)-5) for such Plan Year. 2.52 CPBF. The Cumulative Pension and Benefit Fund, a predecessor to the Plan incorporated in Supplement One. 2.53 CPBF Participant. A participant in CPBF or its predecessor plans before January 1, 2006. 2.54 CPP. The Comprehensive Protection Plan, a Church Welfare Benefits Plan for Clergy Associated with a Jurisdictional Conference of The United Methodist Church, as amended from time to time. 2.55 CPP Disabled or CPP Disability. Receiving disability benefits under CPP, or having been awarded disability benefits under CPP, as determined by the Administrator. 2.56 CRSP. The Clergy Retirement Security Program, a Code 403(9) plan that provides benefits to eligible clergy funded by plan sponsor contributions and that is administered by the General Board. 2.57 Credit. Any adjustment to an Account reflecting any applicable interest, earnings, gains, - 16 -
Forfeitures credited, transfers in, corrections, unrealized appreciation, and/or other addition to an Account. 2.58 Deacon in Full Connection. A member of the Order of Deacons within the meaning of 306-309 of the Discipline who is a member of a Conference and not a Provisional Member. 2.59 Debit. Any adjustment to an Account reflecting any applicable withdrawals, distributions, expenses, fees, Forfeitures charged, losses, transfers out, corrections, unrealized depreciation, and/or other reduction to an Account. 2.60 Decimal Percentage. A number expressed as a percentage of up to two decimal points of exactness, such as 3.25% or 2.33%. 2.61 Default Beneficiary. The person(s) (including an estate) specified in Section 8.13, or elsewhere in the Plan, to receive benefits that are payable at the death or disappearance of an Accountholder when there is no Designated Beneficiary or when the Plan so provides. 2.62 Designated Beneficiary. The person(s) (including a trust or other entity), designated by an Accountholder, as set forth in Section 8.13, elsewhere in the Plan, in Code 401(9), or in Regulation 1.401(9)-4, who is receiving, entitled to receive, or at the death or disappearance of an Accountholder will be entitled to receive the residual interest under the Plan that is payable following such Accountholder s death or disappearance. 2.63 Determination Year. The Plan Year for which the ACP Test is performed with respect to a Plan Sponsor. 2.64 Disabled. Any of the following with respect to an Employee: (c) (d) (e) determined to be disabled by the Social Security Administration; being CPP Disabled; being LTD Plan Disabled; placed on Medical Leave; or in the case of an Employee or a Terminated Participant who is not eligible for a Social Security Administration determination of disability, determined to be disabled by an outside professional firm selected by the Administrator, based on reasonable and consistently applied factors established by the Administrator from time to time. 2.65 Discipline. The Book of Discipline of The United Methodist Church 2016, the body of church law established by General Conference, as amended and restated from time to time. Cited paragraphs or other subdivisions are deemed to refer to successor provisions when an amendment or restatement of the Discipline causes a change in citation. - 17 -