Your Retirement Guide How to get started Just call 888.465.1300 and ask to speak with a retirement specialist. A retirement specialist will be your point of contact to assist with your pension and retiree health coverage decisions, as applicable to you. Start the process Start the process three months before you re ready to commence your benefits. You should start the pension retirement process as early as 90 days before you intend to retire but no later than 30 days before your anticipated retirement date. If you do not start your pension benefits when you retire, the above time frames apply when you want to start payment of your pension benefits, if applicable, after you leave the company. About 60 days prior to your anticipated effective retirement date, let your manager or Human Resources business partner know about your decision to retire. A retirement date is always the first of a month and pension benefits are paid at the end of a month. If you are age 65 or over, additional considerations may apply. Refer to page 8. If your retirement date changes, please call the Duke Energy myhr Service Center immediately. Sign, date and return any forms, as required. If your marital status is single, or if you are married and you elect the standard form of payment for a married participant, you can complete the entire pension retirement process online at the Your Benefits Resources website no forms to complete. Make your retiree health and insurance coverage elections, as applicable. Please contact a Retirement Specialist for information about the applicable deadlines for enrolling in retiree health coverage. Your health and insurance coverage as an active employee will end on the day before your retirement date (i.e., on the last day of the month in which your employment ends). which your employment terminates). This guide provides general information about Duke Energy s employee benefits plans to assist you in making decisions at retirement. The information in this booklet is provided as general participant education, and nothing in this booklet should be construed as an investment recommendation or investment advice. If any statement herein, or any other communication, conflicts with applicable plan documents, the plan documents will govern. Duke Energy retains the right to amend, modify or terminate its benefits plans in any respect and at any time, and neither its benefits plans nor your plan participation will be considered a contract for future employment. October 2017 1
Work with a retirement specialist A retirement specialist will take your benefit elections over the phone, help you complete and return any required paperwork, if necessary, and help you understand: How to choose a retirement date; What your retiree benefit options are, including retiree health coverage, if applicable; The forms and information you ll receive about your retiree benefits; How to begin your Social Security and Medicare benefits; How to take advantage of Duke Energy s other retiree programs, including gifts, awards and any Duke Energy Retiree Clubs that may meet near you; and Other actions you need to take and when. Online tools and information Additionally, you can visit the Your Benefits Resources website at http://resources.hewitt.com/dukeenergy for information about your Duke Energy retiree benefits and access to easy-to-use modeling tools that will help you make your retirement benefit decisions. You may be able to complete the entire retirement process online without the assistance of a retirement specialist. The online pension projection tool is not available after you start the retirement process. In the mail to you After you start the retirement process, you ll receive a package of information that may include any or all of the following items depending on how you initiate payment (by phone or online), your retiree benefits eligibility, and the benefits elections that you may have already made by phone or online. You can also view most of this information online. Pension Disclosure Notice Starting Your Pension Benefit Pension Calculation Statement Pension Option Descriptions Notice of Rights Relative Value Notice Your Rollover Options Notice Coverage Information Sheet Direct Debit Authorization Medicare Part D Notice of Creditable Coverage If you or your eligible dependent is age 65 or over, you ll also receive individual health coverage enrollment information from our vendor partners. October 2017 2
Your retirement action checklist Pension If you re a vested participant, you re entitled to a pension benefit. Important: Choose your pension benefit commencement date carefully. Your benefit commencement date is always the first day of a month. Your age and years of service can affect your pension benefit. Your retirement specialist can give you information to help you make the decision that s right for you. Remember that your pension benefit is paid on the last day of the month. Choose the type of payment(s) you want, or defer your payment(s). Return the required Pension Election Authorization Form before your benefit commencement date to make sure that your payment(s) won t be delayed. We suggest that you return the form at least 30 days prior to your benefit commencement date, if possible. Have your bank account information available to set up direct deposit of your monthly pension payments, if elected. 401(k) You generally cannot take a distribution of your account until after your employment ends. In-service withdrawals are available in certain circumstances (e.g., hardship, age 59 ½). Generally, employee contributions are taken from any eligible trailing pay that s paid within 60 days of your termination date and company matching contributions apply to eligible pay. If you have an outstanding loan balance in the Duke Energy Retirement Savings Plan (RSP), you may choose (1) to pay off the loan in full, or in part, by certified check or money order or (2) to continue to repay the loan through electronic payments. If you fail to repay the loan by either option, or if you commence a total distribution of your account while the loan is still outstanding, your loan will default and the unpaid principal and accrued interest will be reported to the IRS as taxable income for the year in which the default occurred. Choose how and when you want to take a distribution. Call Fidelity s Duke Energy Customer Service Line at 800.376.4015 or access the Fidelity NetBenefits website at www.401k.com for information and assistance. October 2017 3
Medical, Dental, Vision and Health Care Spending Account (HCSA) coverage Generally, your coverage as an active employee ends on the last day of the month during which your Duke Energy employment ends. If you are under age 65 at retirement: You will receive information about the Duke Energy-sponsored retiree health coverage available to you and your eligible dependents, if applicable to you. Additionally, you will receive information from our partner OneExchange to help you explore individual health coverage choices that may be available to you and your dependents. Please refer to those communications for enrollment instructions and important deadlines. If you are age 65 or over at retirement: You will receive information from our vendor partners that offer supplemental health coverage to Medicareeligible individuals. Please refer to those communications for enrollment instructions and important deadlines. If your eligible dependent is younger than age 65 when your employment ends, Duke Energy will send you information about medical coverage available through Duke Energy for your eligible dependent. Additionally, your dependent will receive information from our partner OneExchange about individual health coverage choices that may be available. Refer to page 10 for information about paying for Duke Energy-sponsored retiree health coverage, if applicable. It s important to understand the impact of Medicare when you and/or your dependents are or become Medicare-eligible. Refer to page 9. You will also receive information about your COBRA rights and COBRA contributions. Refer to page 5. You cannot continue HCSA participation as a retiree. In certain circumstances, you can elect COBRA continuation coverage for your HCSA through the end of the year in which you retire. Find out if you re eligible for Duke Energy-sponsored retiree health coverage by calling the Duke Energy myhr Service Center. Consider the coverage options available to you outside of Duke Energy and the cost of those coverage options. Decide if you want to enroll in Duke Energy-sponsored pre-65 retiree health coverage, if applicable to you. If you wish to enroll in Duke Energy-sponsored pre-65 retiree health coverage, call the Duke Energy myhr Service Center to make your elections within 31 calendar days of your retirement date. If you do not make these retiree health coverage elections within 31 calendar days of your retirement date, the default election for retiree health coverage under the Duke Energy Retiree Medical, Dental and Vision Plans is NO COVERAGE. You cannot change your coverage elections or default coverage October 2017 4
elections to enroll in coverage until the next annual benefits enrollment opportunity unless you experience a work or life event for which enrollment changes are permitted during the year. If you are age 65 or over (or your dependents are age 65 or over) at the time of your retirement, you should make a timely enrollment in Medicare Part B. Refer to page 7. If you and/or your eligible dependents age 65 or older wish to enroll in individual Medicare supplemental coverage, please do so at least 15 days prior to your retirement date. If you do not elect supplemental coverage on a timely basis, future enrollment may be limited to certain times during the year, result in higher premiums or be denied altogether due to Centers for Medicare and Medicaid Services restrictions. You can submit spending account claims for eligible expenses incurred until the date that your HCSA participation ends, up to the total amount that you elected to contribute for the plan year (less any previous reimbursements). Claims must be submitted for reimbursement no later than March 31 of the following year. Once your Duke Energy employment ends, you will need to submit any HCSA reimbursement requests online at the Your Spending Account website. You cannot use your HCSA debit card. Commuter Benefits If you participate in Commuter Benefits: Before your Duke Energy employment ends, you need to cancel your Parking Spending Account (PSA) or your transit pass order, if applicable to you, prior to the 10th of the month in which your employment ends. You can complete the necessary actions by accessing the Commuter Benefits information on the Duke Energy Portal while you still have access to the Portal. You ll also need to contact your parking vendor directly to cancel your parking. Canceling your Duke Energy PSA or transit pass order does NOT cancel your individual parking arrangement. COBRA You can temporarily continue your active medical, dental and vision coverage through COBRA when your Duke Energy employment ends. COBRA contributions are 102 percent of the total cost of coverage. If you or your eligible dependents are age 65 or over at the time of your retirement, Medicare will be the primary payer for medical (non-pharmacy) October 2017 5
claims and any COBRA coverage you elect pays secondary to Medicare. In certain circumstances, you can elect COBRA continuation coverage for your HCSA through the end of the year in which you retire, and you will be responsible for 102 percent of the cost. If eligible, you will have the opportunity to elect Duke Energy-sponsored retiree medical, dental and vision coverage at retirement or, if applicable, when your continuation of coverage under COBRA ends. Decide if you want to enroll in COBRA coverage. If you want COBRA coverage, enroll when you receive your COBRA enrollment materials in the mail. Life Insurance Basic, supplemental and dependent life, business travel accident and accidental death and dismemberment insurance coverage ends when your Duke Energy employment ends. You may be able to port or convert your active life and accidental death and dismemberment insurance coverage into retirement. Review information you will receive from the insurance carrier about your opportunity to port or convert your current active employee life and accidental death and dismemberment insurance coverage (and the applicable rates). Disability Short- and long-term disability coverage ends when your Duke Energy employment ends. October 2017 6
Social Security You may begin receiving a reduced benefit as early as age 62; you can receive a full benefit between the ages of 65 and 67, depending on your birth date; or you can delay commencement and receive delayed retirement credits. Important: Apply for Social Security benefits three months before you want your benefit payments to begin. Visit www.socialsecurity.gov or call 800.772.1213 for information about how and when to apply for benefits. Medicare Part A and Part B You are automatically enrolled in Medicare Part A when you sign up for Social Security retirement benefits. If you do not commence your Social Security retirement benefits at or before age 65, as a retiree you should enroll in Medicare Part A and Part B at age 65. If you retire at age 65 or later, Medicare immediately becomes your primary payer. You may elect coverage that supplements Medicare. Refer to page 9 for more information. Enroll in Medicare Part A and B three months before you reach age 65, or before you retire from Duke Energy and lose active medical coverage, if later, to avoid delays enrolling in Medicare supplemental coverage and/or possible premium penalties. Visit www.socialsecurity.gov or call 800.772.1213. For information about Medicare, visit www.medicare.gov or call 800.MEDICARE (800.633.4227). Medicare Part D Duke Energy s retiree prescription drug coverage, for retirees who may be Medicare-eligible but have not reached age 65, has been certified as comparable to or better than Medicare Part D drug coverage. As a result, if eligible, you can enroll in Duke Energysponsored retiree medical coverage if you are a retiree who has not yet reached age 65 and if you later decide to enroll in a Medicare Part D plan, you can do so without paying the premium penalties imposed by Medicare for late enrollment. However, you will need to provide proof of prior creditable coverage to Medicare, and can do October 2017 7
so by providing a copy of Duke Energy s Notice of Creditable Coverage. If you will be age 65 or over on your retirement date, you will need to enroll in Medicare Part D prescription drug coverage. You will receive information from our vendor partners about the Medicare Part D prescription drug coverage options available to you. Refer to page 9 for more information. Review the information about Medicare Part D coverage to determine if you want to enroll in Medicare Part D. If you are age 65 or over on your retirement date, discuss your Medicare Part D prescription drug coverage options with our vendor partners that offer Medicare Part D prescription drug coverage. Pension plan payment options and considerations If you re eligible, you ll be asked to choose a pension payment option as part of the benefit commencement process. Your choices may include a lump sum option if you are eligible. Your retirement specialist can help you understand your choices and the tax rules that may apply. Because these rules are very complex, you should consider talking with a qualified financial advisor about your personal situation. You may have to pay income taxes on your pension payments and any distribution that you take from the RSP. Generally, under current federal law and, where applicable, state and local laws: You can continue to defer income taxes on a lump-sum distribution until April 1 following the calendar year in which you reach age 70 ½ by rolling over lump-sum payments into an IRA or another eligible retirement plan. (If you want to roll over an amount to another employer s eligible retirement plan, you will need to confirm with the other plan s administrator that the plan will accept your rollover.) If you re interested and have an account balance in the RSP, you can roll over your Duke Energy lump-sum pension benefit into the RSP. Please ask about this opportunity when you speak with your Retirement Specialist. If your vested pension benefit is more than $5,000, you may elect to receive your benefit at any time after your company employment ends. However, if you do not elect a payment option on a timely basis prior to the April 1 following the calendar year in which you reach age 70 ½ (or, if you continued working past age 70 ½, April 1 following the calendar year in which your company employment ends), your vested pension benefit, if greater than $5,000, will automatically commence at that time. Please refer to the appropriate Summary Plan Description for complete information. October 2017 8
Retiree medical coverage and Medicare Medicare is a federal health insurance program for people who are age 65 and older and others, including some disabled people under age 65 and people with End-Stage Renal Disease. It has three parts: Part A Part B This covers hospital stays, care in skilled nursing facilities, home health care, hospice care and blood transfusions. Everyone who s eligible for Medicare gets Part A; there s no charge for it. This covers doctors services, outpatient hospital care, and some medical supplies and equipment. It also covers some services that Part A doesn t cover, such as certain physical and occupational therapy and home health care services. Part B, which is optional, has a monthly premium that s deducted from your monthly Social Security retirement benefits. Part D This covers prescription drugs. Part D is optional a monthly premium applies. Medicare delivers Part D coverage by contracting with private prescription drug plans. These plans offer standard Part D coverage, and also may offer more coverage and additional drugs for higher monthly premiums. Several Medicare prescription drug plans are available in each state, so you ll need to determine which plan best meets your needs. You may enroll in Medicare Part D from Oct. 15 through Dec. 7 each year. Enrollment isn t automatic if you want coverage, you must enroll directly with a private prescription drug plan. If you and/or your covered dependents are eligible for Medicare but not yet age 65, typically Duke Energy-sponsored pre-65 retiree medical coverage will pay benefits in a way that assumes that you are covered by both Medicare Part A and Part B coverage, that you don t have Part D coverage, and that you use providers who accept Medicare. Although enrollment in Medicare Part B coverage is optional, it s important that you enroll in both Part A and Part B coverage and use providers that accept Medicare, even if you have other retiree medical coverage. You must enroll in Part B to enroll in an individual Medicare supplemental plan available through one of our vendor partners that offers Medicare supplemental medical coverage plans. Important: When you retire, if you are eligible for Duke Energy-sponsored medical coverage and not age 65, you can t enroll in both Medicare Part D coverage and Duke Energy retiree medical or prescription drug coverage at the same time. You or any covered family member who enrolls in Medicare Part D for a calendar year will not be eligible for Duke Energy s retiree medical or prescription drug coverage for that calendar year. If you remain eligible, you may be able to enroll in Duke Energysponsored retiree medical and prescription drug coverage during the next annual enrollment period, provided you drop your Medicare Part D coverage. QUESTIONS? For more information about Medicare, visit www.medicare.gov or call 800.MEDICARE (800.633.4227). To enroll in Medicare Parts A and B, visit the Social Security Administration website at www.socialsecurity.gov or call 800.772.1213. October 2017 9
Duke Energy Post-Retirement Health Reimbursement Accounts (HRAs) If you are eligible for a Duke Energy-sponsored retiree HRA, Alight Solutions, the administrator, will send you information about your account and how and when you may use your account to pay for eligible health care expenses. Eligible health care expenses may include the premiums you pay for individual health insurance coverage. If you have questions about your HRA, including when you can access amounts credited to your HRA and how to use your HRA to receive reimbursements, call the Duke Energy myhr Service Center at 888.465.1300. Piedmont Post-Retirement Health Reimbursement Accounts (HRAs) If you are eligible for a Piedmont HRA, the administrator, OneExchange, will send you information about your account and how and when you may use your account to pay for eligible health care expenses. Eligible health care expenses may include the premiums you pay for individual health insurance coverage. If you have questions about your Piedmont HRA, including when you can access amounts credited to your Piedmont HRA and how to use your Piedmont HRA to receive reimbursements, call OneExchange at 866.202.9691. Paying for retiree health coverage If you elect to enroll in a pre-65 Duke Energy-sponsored retiree medical, dental or vision coverage option, initially you will be billed directly for the monthly contributions. There are several options available to you for making payment for Duke Energy-sponsored pre-65 retiree medical, dental and vision coverage: If you receive annuity payments from a Duke Energy-sponsored pension plan, you may elect to have your contributions (if this payment option is available to you) deducted from your monthly pension check. If you wish to pay your contributions by this payment method, please call the Duke Energy myhr Service Center. Rather than receiving a monthly bill, you may set up an automatic debit from your checking or savings account to cover your monthly contributions. If you are billed directly each month, you will receive a statement that explains how to make your contribution payments, when they are due and where to send your payment. Call the Duke Energy myhr Service Center (888.465.1300) to set up one of these alternate billing arrangements or to change your payment method. You are responsible for making timely payments. If you or your eligible dependent is age 65 or older, our vendor partners will provide you with information about the payment options available to you for your individual retiree health coverage options. October 2017 10
Your last day at work: A check list Here s a list of what you need to do before you leave work on your last day. Complete and submit any outstanding expense reports. Make sure your corporate credit card balance is at zero and return it to your manager. Cancel parking, if applicable. Return the following company property to your manager: ID card(s) Parking ID card, if applicable Credit card, phone card Keys (building, desk, cabinets, vehicles, storage, etc.) Mobile device(s) or pager Computer, laptop, printer, and other company equipment Remember to report address changes After you retire, don t forget to let Duke Energy know when your address changes. To report an address change, call the Duke Energy myhr Service Center at 888.465.1300 and ask to speak with a representative. October 2017 11
myhr, Your Benefits Resources and Your Spending Account are registered marks of Alight Solutions LLC. October 2017 12