SUMMARY PLAN DESCRIPTION Of The JOY GLOBAL PENSION PLAN As Amended & Restated 11/1/2007 (Hired Before May 1, 2005)
This section of your handbook summarizes the key features of the (the Plan ) for eligible salaried employees of Joy Mining Machinery; it does not cover all of the details. The full terms and conditions of the Plan are described in the formal Plan document that legally governs the operation of the Plan. In case of a discrepancy between the legal Plan document and this summary, the wording of the legal Plan document will govern. See page P-27 to find out how you can get a copy of the Plan document.
Information At A Glance INTRODUCTION...P-1 PLAN PARTICIPATION...P-1 PLAN COST...P-1 DESCRIPTION OF BENEFITS...P-2 Overview of Benefits...P-2 ABOUT YOUR SERVICE...P-3 Vesting Service...P-3 Benefit Service...P-3 Break in Service...P-4 Service When You Are Not Actively Working...P-6 Service if You Are No Longer a Salaried Employee...P-6 IMPORTANT PLAN TERMINOLOGY...P-7 PENSION BENEFITS...P-7 Pension Formula...P-7 Normal Retirement...P-7 Early Retirement...P-7 Deferred Vested Benefit...P-10 Disability Retirement...P-11 Late Retirement...P-12 Suspension of Benefits...P-13 Legal Limits on Benefits...P-14 Benefits Paid From Other Sources...P-14 VESTING...P-14 SMALL BENEFIT AMOUNTS...P-14 BENEFIT PAYMENT OPTIONS...P-15 Normal Payment Forms...P-16 Optional Payment Forms...P-16 Spousal Consent...P-17 ELIGIBLE SPOUSE...P-18 Page P-i
SURVIVOR BENEFITS...P-18 Pre-Retirement Survivor Benefits...P-18 Paying for Surviving Spouse Coverage...P-18 Survivor Benefits after Pension Benefits Begin...P-19 GENERAL INFORMATION...P-20 Plan Administration...P-20 When Conflicts Arise...P-20 Claiming Your Benefits...P-20 How Benefits Can Be Forfeited or Delayed...P-21 Claims Appeal Process...P-22 Social Security Benefits...P-23 Plan Amendment and Termination...P-23 Pension Benefit Guaranty Corporation...P-24 Top Heavy Rules...P-25 Nonassignability of Benefits...P-25 Controlling Documents...P-25 ADMINISTRATIVE INFORMATION...P-26 Your Rights Under ERISA...P-27 Page P-ii
INTRODUCTION Retirement can be one of the most rewarding times in your life. To help you meet your financial needs at retirement, Joy Global Inc. and its participating subsidiaries (the Company ) offer a noncontributory retirement plan known as the (the Plan ). This Summary Plan Description describes the portion of the Plan that covers eligible salaried employees of Joy Mining Machinery ( Joy Salaried Employees ). Other employees who participate in the Plan receive separate Summary Plan Descriptions that describe their benefits. The is a defined benefit pension plan, which means that your benefit is based on a set formula (refer to page P-7). If you have any questions after reading this Summary Plan Description, or if you would like to discuss the details further, contact your local Human Resources Representative or the Benefits Department. PLAN PARTICIPATION If you were a Joy Salaried Employee on April 30, 2005, you continue to participate under the provisions of the Plan as described in this summary. Joy Salaried Employees hired on or after May 1, 2005 (or rehired after a break in service of 12 or more consecutive months) are not eligible to participate and shall not earn benefits under the Plan. You are not eligible to participate and shall not earn benefits under the Plan for any period you are classified by an employer as a leased employee, independent consultant, contract employee or independent contractor regardless of whether you are subsequently determined by a government agency or court to be an employee. PLAN COST The Company pays the entire cost of the benefits provided by the Plan. There is no cost to you. Page P-1
DESCRIPTION OF BENEFITS Overview of Benefits Under the Plan, you may earn one of several types of pension benefits. The following chart summarizes the different pensions and when they are available. Type of Retirement How You Qualify When You May Begin Benefits Normal Retirement Terminate employment at age 65. Generally, 1 st day of month after termination of employment. *Early Retirement *See pages P-8 to P-10 for types of Early Retirement under the Plan Late Retirement Disability Retirement Deferred Vested Benefit Terminate employment at age 55 or older. Terminate employment after age 65. If you are disabled under Title II of the Social Security Act from an injury or medical condition incurred while an employee of Joy. Terminate employment with at least 5 years of Vesting Service prior to age 55. Reduced benefit may begin on the 1 st day of any month after termination of employment. 1 st day of month after termination of employment. 1 st day of month after determined to be disabled by the Social Security Administration (without regard to any retroactive determination) Unreduced benefit may begin on the 1 st day of the month after age 65. Reduced benefit may begin on the 1 st day of any month after age 55. Page P-2
ABOUT YOUR SERVICE Vesting Service Benefit Service Your years with Joy Global and its subsidiaries play a large role in determining your retirement benefit. Under the Plan, there are two types of service: Vesting Service and Benefit Service. Vesting Service determines your eligibility for pension benefits. You earn Vesting Service beginning on your first day of employment with the Company and ending when you retire or terminate employment. Vesting Service also includes any periods of employment with (a) one of Joy Global s subsidiaries that has not adopted the Plan, (b) a company before it was acquired by Joy Global, and (c) a participating subsidiary before it adopted the Plan. As explained below, your benefit is determined by a formula that uses your Benefit Service. You receive Benefit Service credit for full and partial years of service. Generally, your Benefit Service ends when you quit, die, or are discharged, whichever occurs first. For service prior to September 27, 1996, you earned Benefit Service while you were employed as a Joy Salaried Employee. For counting fractional years, each year of service is considered to have 360 days and each month is considered to have 30 days. For service after September 27, 1996, you earn one month of Benefit Service for each calendar month you are employed as a Joy Salaried Employee. However, if the number of days you work during your first and last months of employment do not total at least 31, you are credited with only one month of Benefit Service for both of those partial months of employment. Page P-3
Break in Service If you terminate employment and are later reemployed by Joy Global (or one of its subsidiaries or affiliates), what happens to your prior service and your accrued benefit, and whether you can earn additional benefits, depends on (i) when you are reemployed, (ii) whether or not you were vested when you left Joy Global, and (iii) how long you are away. Before May 1, 2005 If you have less than five years of Vesting Service when you terminate employment and you are later reemployed by Joy Global (or one of its subsidiaries or affiliates) before May 1, 2005, what happens to your prior service and your accrued benefit depends on how long you are away. If you are gone: Less than one year, your prior service and accrued benefit are restored. In addition, you are credited with Vesting Service (but not Benefit Service) for the time you are away. More than one year but less than five years, your prior service and your accrued benefit are restored if you complete 12 months of service after your rehire. You do not receive credit for the time you are away. Five years or more, you lose your prior years of service and your prior accrued benefit is not restored. If you have more than five years of Vesting Service when you terminate employment and Joy Global (or one of its subsidiaries or affiliates) later reemploys you before May 1, 2005, the Vesting Service and Benefit Service you accumulated before you left is restored upon your return (as long as you did not previously receive your benefit due under the Plan) and you are eligible to earn additional Benefit Service under the Plan. Your accrued benefit was never forfeited; either you received it or it is still in the Plan. Page P-4
After May 1, 2005 If you have less than five years of Vesting Service when you terminate employment and you are later reemployed by Joy Global (or one of its subsidiaries or affiliates) on or after May 1, 2005, what happens to your prior service and your accrued benefit, and whether you can earn additional benefits depends on how long you are away. If you are gone: Less than one year, your prior service and accrued benefit are restored. In addition, you are eligible to earn additional Benefit Service under the Plan and you are credited with Vesting Service (but not Benefit Service) for the time you are away. More than one year but less than five years, your prior service and your accrued benefit are restored if you complete 12 months after your rehire. However, you are not eligible to earn additional Benefit Service and you are not credited with any service for the time you are away. Five years or more, you lose your prior years of service and your prior accrued benefit is not restored. In addition, you are not eligible to earn additional Benefit Service. If you have more than five years of Vesting Service when you terminate employment and Joy Global (or one of its subsidiaries) later reemploys you on or after May 1, 2005, the Vesting Service and Benefit Service you accumulated before you left will be restored upon your return (as long as you did not previously receive your benefit due under the Plan). Your accrued benefit was never forfeited; either you received it or it is still in the Plan. Whether you can earn additional Benefit Service under the Plan, however, depends on how long you are away. If you are gone: Less than one year, you are eligible to earn additional Benefit Service under the Plan when you are reemployed. More than one year, you are not eligible to earn additional Benefit Service when you are reemployed. Page P-5
Service When You Are Not Actively Working You receive service for certain times when you are not actively working for the Company (i.e., leave of absence). In most of these cases, you must return to work at the Company when your leave of absence ends to receive service. You receive Vesting Service and Benefit Service for the following periods when you are not actively at work: Family and Medical Leave Act (FMLA) of 1993 Your leave of absence if approved as a leave under the FMLA by the Company and if it is not treated as a termination of employment. Disability Your disability leave of absence for up to two (2) years determined from the expiration of Company-provided short-term disability benefits (salary continuation) during which you are receiving disability benefits under the long-term disability benefit plan maintained by the Company. Military Service Your leave of absence required by law or granted on account of service in military or governmental branches described in any applicable statute granting reemployment rights to employees who enter such branches. Service if You Are No Longer a Salaried Employee Your benefit will be affected if you continue to work at Joy or at another Joy Global company, but transfer to an hourly position or to a salaried position at another location. If you transfer from a salaried position covered by the Joy salaried portion of the Plan to: an hourly position within Joy or another Joy Global company; or a salaried position with another Joy Global company, your benefits under the Joy salaried portion of the Plan are based on your Benefit Service and Final Average Earnings as a Joy Salaried Employee when you change jobs. That benefit is held in the Plan until your service with Joy and its affiliates and subsidiaries ends. As long as you remain an employee of the Company, however, you continue to earn Vesting Service. Page P-6
IMPORTANT PLAN TERMINOLOGY Your Final Average Earnings equal your average monthly earnings for the 60 consecutive calendar months when your earnings were the highest during your last 120 consecutive calendar months of employment as a covered employee. Your earnings equal your regular salary or wages from the Company as a covered employee, plus overtime, bonuses, commissions, incentive compensation, salary continuation, salary reduction contributions to a 401(k) or cafeteria plan, and severance pay (if applicable). Current law limits the amount of earnings that the Plan can recognize during any 12-month period. That limit in 2010 is $245,000 and is subject to periodic change by the IRS. PENSION BENEFITS Pension Formula Your pension benefit is based on a formula that determines your benefit at normal retirement age (age 65). The monthly pension benefit calculated under this formula is the normal retirement benefit payable as a single life annuity. The amount you actually receive when you retire depends on your age at retirement, when you choose to begin receiving your benefits, and the payment option you elect. Your monthly benefit is calculated by multiplying your Final Average Earnings by a percentage, which is the sum of the percentages determined according to the following chart: For Each Year of Benefit Service Percentage of Final Average Earnings Age 21 through age 24* 0.50% Age 25 through age 34 0.75% Age 35 through age 44 1.25% Age 45 through age 54 1.50% Age 55 on 2.00% *This first step applies to service after September 28, 1985. Before that date, an employee had to be at least 25 years old to participate in the Plan. *Example: Suppose your birthday is May 27, 1962, you started working for Joy at age 35 on July 15, 1997, and you retire on June 1, 2027, after you have completed 29 years and 11 months of Benefit Service. Assuming that your Final Average Earnings are $3,618.33, your monthly pension at retirement would be determined as follows: Page P-7
Age Benefit Service X Factor = Percent of Final Average Earnings 35-44 9.917 years X 1.25% 12.4% (9 years, 11 months) 45-54 10 years X 1.50% 15.0% 55-64 10 years X 2.00% 20.0% TOTAL 47.4% Your monthly benefit at retirement would be 47.4% of $3,618.33, or $1,715.09. *Note: this example does not address the cost of pre-retirement surviving spouse coverage see page P-18 for additional information. Normal Retirement You are eligible for a normal retirement benefit if you retire at age 65. This benefit is payable on the first day of the month following your 65 th birthday (unless your birthday is the first day of the month, then your benefit is payable as of that date). Your pension will be the amount determined under the pension formula described above. Early Retirement You are eligible for an early retirement benefit when you retire as early as age 55. In that situation, you may elect to receive your benefit any time between age 55 and 65, but your monthly benefit will be reduced to reflect early commencement. The types of early retirement under the Plan are described below. Early Retirement If You Are Age 62, 63 or 64 and Have at Least 15 Years of Vesting Service -- Your early retirement benefit will be determined using the pension formula based on your Final Average Earnings when you retire and your Benefit Service projected to age 65. The amount determined under the formula is reduced by 0.25% for each month your benefit begins before age 65. This reduction reflects the fact that your pension is expected to be paid over a longer period of time. Page P-8
*Example: Suppose you retire at age 63 years & 9 months, with 29 years & 11 months of Benefit Service, and your Final Average Earnings are $3,000. Using the example on page P-8, your monthly pension at age 65 would be 47.4% of $3,000, or $1,422.00. Your benefit is reduced by 0.25% for every month before age 65 that you receive a benefit. In this case, you would receive monthly benefits for 15 months before age 65, so your total reduction for early commencement is $53.32 (that is 3.75% (.25% x 15 months) times $1,422.00). Your monthly early retirement benefit at age 63 and 9 months is $1,368.68 ($1,422.00 minus $53.32). *Note: this example does not address the cost of pre-retirement surviving spouse coverage see page P-18 for additional information. Early Retirement If You Are Age 58, 59, 60, or 61 and Have At Least 15 Years of Vesting Service: Your early retirement benefit will be determined using the pension formula based on your Final Average Earnings when you retire and your Benefit Service projected to age 65. The amount determined under the formula is then multiplied by a service factor that is determined by your actual Benefit Service plus one-half of your Benefit Service projected from your early retirement date to age 65, divided by your Benefit Service projected to age 65. Finally, the amount is reduced by 0.25% for each month your benefit begins before age 65. This reduction reflects the fact that your pension is expected to be paid over a longer period of time. *Example: Suppose you retire at age 60 years and 2 months, you have 25 years and 1 month of Benefit Service, and your Final Average Earnings are $2,700. Using the example from page P-8, your monthly pension at age 65 would be 47.4% of $2,700, or $1,279.80. Next, the service factor is applied as follows: Actual Benefit Service = 25 years, 1 month (25.083 years) Benefit Service projected to age 65 = 29 years, 11 months (29.917 years) [25.083 +.5(29.917 25.083)] = 27.500 =.9192 29.917 29.917 $1,279.80 x.9192 = $1,176.39 Finally, your benefit is reduced by 0.25% for every month before age 65 that you receive a benefit. In this example you would be receiving monthly benefits for 58 months before age 65, so your total reduction for early commencement is $170.58 (that is, 14.5% (.25% x 58 months) times $1,176.39). Therefore, your monthly early retirement benefit is $1,005.81 ($1,176.39 minus $170.58). *Note: this example does not address the cost of pre-retirement surviving spouse coverage see page P-18 for additional information. Page P-9
Early Retirement If You Are Age 55, 56, or 57 Regardless of Years of Vesting Service OR If You Have Less Than 15 Years of Vesting Service and Retire On/Or After Age 58 But Before Age 65: Your early retirement benefit will be determined using the pension formula, based on your Final Average Earnings when you retire and your Benefit Service projected to age 65. The amount determined under the formula is then multiplied by a service factor that is determined by your actual Benefit Service divided by your Benefit Service projected to age 65. Finally, the amount is reduced by 0.5% a month for each month your benefit begins before you reach age 65. This reduction reflects the fact that your pension is expected to be paid over a longer period of time. *Example: Suppose you retire at age 55 and your Final Average Earnings are $2,200. Using the example from page P-8, your monthly pension at age 65 would be 47.4% of $2,200 or $1,042.80. Next, the service factor is applied as follows: Actual Benefit Service = 19 years, 11 months (19.917 years) Benefit Service projected to age 65 = 29 years, 11 months (29.917 years) 19.917 =.6657 29.917 $1,042.80 x.6657 = $694.19 Finally, the amount of $694.19 is then reduced by 0.5% for every month before age 65 that you receive the benefit. In this example, you would receive benefits for 120 months before age 65 (0.5% x 120 months), so your total reduction for early commencement is $416.51 (that is, 60% times $694.19). Therefore, your monthly early retirement benefit is $277.68 ($694.19 minus $416.51). *Note: this example does not address the cost of pre-retirement surviving spouse coverage see page P-18 for additional information. Deferred Vested Benefit If you are vested when you terminate service, but are not old enough or have not met the service requirements to retire, you are eligible for a deferred vested benefit. The amount of your deferred vested benefit is calculated in the same way described above for early retirement benefit for employees with less than 15 years of Vesting Service; the Plan starts with your projected age-65 pension (based on your Final Monthly Earnings when you leave and your Benefit Service projected to age 65), applies a service factor (actual Benefit Service divided by Benefit Service projected to age 65), and then reduces the amount for early commencement (if applicable). Page P-10
Disability Retirement You may begin receiving your deferred vested benefit when you reach age 65, or you may elect to being receiving your deferred vested benefit any time after you reach age 55. If you begin your benefit before age 65, it is reduced to recognize that your benefits are expected to be paid for a longer period of time. The reduction for early commencement is.5% for every month before age 65 that you receive a benefit. If you are eligible for a deferred vested benefit, you will receive a notice explaining your future deferred vested benefit and your options regarding the timing of payments shortly after you terminate employment. Be sure to keep the Benefits Department informed of your current address. If you are employed by the Company when you become disabled, you may be eligible for a disability retirement benefit. For this purpose, you are disabled if the Social Security Administration determines that you are disabled under Title II of the Social Security Act. You can begin receiving your disability retirement benefit on your disability retirement date. Your disability retirement date under the Plan is the first day of the month following the later of the date you receive notice from the Social Security Administration that you have been awarded Social Security disability benefits or the date you terminate employment. For Plan purposes, your disability retirement date is based on the date you receive the letter from the Social Security Administration, not the date of any retroactive payment awarded to you by the Social Security Administration. You have up to two years from the expiration of short-term disability benefits (salary continuation) to apply for a disability retirement. As discussed on page P-6, if you are absent from work due to disability, you may continue to receive Benefit Service and Vesting Service credit under the Plan for up to two years, determined from the expiration of Company-provided short-term disability benefits (salary continuation) and during which you receive disability benefits under the long-term disability (LTD) benefit plan maintained by the Company. Disability retirement benefits under the Plan will offset (reduce) dollar for dollar any LTD payments you receive. Page P-11
A disability pension is determined using the pension formula described on page P-8 (based on your Final Monthly Earnings when you leave and your Benefit Service projected to age 65). The amount determined under the formula is then multiplied by a service factor that is determined by your actual Benefit Service divided by your Benefit Service projected to age 65. Finally, this amount is actuarially reduced for immediate payment, which means that the reduction factor depends on your age at the time payments begin. A disability pension continues until the earlier of the date on which you are no longer disabled or the date you reach age 65. If your disability continues until age 65, you will begin receiving a normal retirement pension at that time. In that case, your normal retirement pension is the greater of your disability pension or the recalculation amount described below. Recalculating your disability pension. If you remain disabled until age 65, the Plan recalculates your benefit by first figuring what your normal retirement benefit would have been if your period of disability was included in your Benefit Service. The monthly recalculated benefit when combined with benefits you are receiving from other sources, including Social Security, Company- and governmentsponsored disability plans, and workers compensation plans, cannot be more than 50% of the greater of your Final Average Earnings or your monthly compensation (excluding any amounts deferred under the Company s deferred compensation plan) as of your disability retirement date. (The Social Security benefit used in the recalculation is the amount to which you are entitled on your disability retirement date and does not include any subsequent benefit increases.) If you recover. If you retire on a disability retirement, recover from your disability before age 65 and subsequently return to work for the Company, all service you accumulated before you became disabled will be restored. Late Retirement You may decide to work beyond age 65 and retire at a later date. If you do, you will not receive pension payments while you remain actively employed by the Company. However, when you do retire, your benefit is based on your Final Average Earnings and total Benefit Service (including your years of Benefit Service after age 65) when you actually retire. Page P-12
Your late retirement benefit will be determined using the pension formula described above based on your Final Average Earnings when you retire and your Benefit Service as of age 65. Then, the result will be multiplied by a service factor that takes into consideration your actual Benefit Service as follows: Your actual Benefit Service Benefit service to age 65 Since your actual Benefit Service will be greater than your Benefit Service to age 65, your pension will be higher than if you retired on your normal retirement date. *Example: Suppose that you retire when you are age 68, and your Final Average Earnings are $3,800. Using the example on page P-8, your monthly pension at age 65 would be 47.4% of $3,800, or $1,801.20. Then, the service factor is applied as follows: Actual Benefit Service = 32 years, 11 months (32.917 years) Benefit Service to age 65 = 29 years, 11 months (29.917 years) 32.917 = 1.1003 29.917 $1,801.20 x 1.1003 = $1,981.86 Your monthly late retirement benefit = $1,981.86 *Note: this example does not address the cost of pre-retirement surviving spouse coverage see page P-18 for additional information. Suspension of Benefits If the Company reemploys you after benefit payments have started or if you continue to work for the Company after age 65, pension payments generally are suspended. If your benefit is suspended during reemployment or while working after age 65, your benefit may be increased on account of increases in your years of Benefit Service and Final Average Earnings. Of course, any benefit payments you receive from the Plan before or during your period of reemployment or while working after age 65 are taken into account when calculating your future benefit payments. When you terminate employment again, your benefit will not be less than your benefit immediately before your reemployment. Page P-13
Legal Limits on Benefits Benefits Paid From Other Sources VESTING Internal Revenue Code Section 415 limits the amount of benefits that can be paid to you from the Plan. Internal Revenue Code Section 401(a) (17) limits the amount of compensation the Plan can consider when calculating your benefits. These limits normally only affect the higher paid employees (or in some cases, employees retiring at an early age) and are subject to periodic change by the IRS. If these limits apply to you, you will be notified. If you were a participant in the plan for salaried employees that was in effect immediately prior to September 25, 1987, your accrued benefit at that date was fully vested and provided for through a guaranteed annuity contract with American International Life Assurance Company of New York (AILife). When you retire or terminate employment and are eligible for a monthly benefit under the Plan, your total benefit under the Plan will be paid from that annuity and the Plan s trust. Vesting is your right to receive a benefit under this Plan. You are vested after you have completed at least five years of Vesting Service or reach normal retirement age (age 65) while employed by Joy Global or a subsidiary. Once you are vested, you will receive a benefit from the Plan, even if your employment ends before you are eligible to retire (deferred vested benefit). If your employment ends before you are vested, you will not receive a benefit from the Plan. SMALL BENEFIT AMOUNTS If the present value of your vested benefit under the entire Plan is $1,000 or less when you terminate employment, the Plan Administrator will distribute your benefit in a single lump sum payment. If the present value of your pension exceeds $1,000, but is $5,000 or less when your employment ends, you may elect to receive your vested benefit as a lump sum. If you are legally married, your spouse must consent in writing (witnessed by a notary) to you election of this lump sum. You may receive your lump sum in cash to you, or as a rollover to an IRA or another employer s plan. Once a lump sum payment is made, neither you nor any of your beneficiaries have any further rights under the Plan. Page P-14
BENEFIT PAYMENT OPTIONS Your monthly pension will be paid as the normal form of payment unless you elect otherwise. This election must be made in writing and filed with the Benefits Department. Unless the Small Benefit Amounts section applies to you, your benefit will be paid as a monthly annuity a fixed sum of money paid each month. There are several types of payment options available to you: life annuity, joint and survivor annuity, and life annuity with period certain guarantee. In general, these payment options are of equal total value. This means that when your benefit is paid in a form other than a single life annuity, your monthly payment amount is lower to reflect that survivor benefits may be payable after your death. The following rules apply to your benefit payment choice: You cannot change your payment option after your benefits begin. If you are married and want to select a payment option without at least a 50% survivor benefit for your eligible spouse, your spouse must consent in writing, witnessed by a notary, to your election. If before benefits begin you want to change an election made with your eligible spouse s consent, you must have your eligible spouse s written, notarized consent unless your new election is a joint and survivor annuity with your eligible spouse. If you are married and wish to name a beneficiary other than your eligible spouse, your eligible spouse must consent in writing, witnessed by a notary, to that beneficiary. Certain payment options may not be available if you name a beneficiary (other than your eligible spouse) who is significantly younger than you. When you apply for retirement benefits, the Benefits Department will let you know if this applies to you. Page P-15
If you elect a joint and survivor annuity or a life annuity with period certain and your designated beneficiary dies before you retire or terminate employment, your election of that form of benefit is automatically canceled and your benefit will be paid in your normal form of payment unless you elect another payment option, in writing, and file it with the Benefits Department. Normal Payment Forms Life Annuity If you are single, the normal payment option is a life annuity (unless you elect otherwise). A life annuity is a series of equal monthly payments, beginning on your retirement date and continuing for your lifetime, with no payments continuing after your death. 50% Joint and Surviving Spouse Annuity If you are married with an eligible spouse, the normal payment option is the 50% joint and surviving spouse annuity (unless you elect otherwise). A joint and surviving spouse annuity pays a reduced monthly benefit to you for your lifetime. If you die before your eligible spouse, your eligible spouse receives 50% of your monthly benefit for his or her lifetime. If your eligible spouse dies before you and after your pension begins, your monthly payment amount remains the same and no further payments are made when you die. Optional Payment Forms In addition to the normal forms of payment, the Plan offers several optional forms of payment to both married and single participants. Life Annuity. If you are married, you can choose the life annuity option described above, but your eligible spouse must consent in writing to this option. 66-⅔% or 100% Joint and Surviving Spouse Annuity. If you are married, you can choose one of these options instead of the 50% joint and surviving spouse annuity described above. Under these options, you receive reduced monthly benefit payments for your lifetime. If you die before your eligible spouse, your spouse receives 66-⅔% or 100% (as you elect) of your reduced monthly benefit for his or her lifetime. If your eligible spouse is no longer living at your death, no further payments are made. Page P-16
50%, 66-⅔%, or 100% Joint and Survivor Annuity: Under these options, you receive reduced monthly benefit payments for your lifetime. Following your death, your designated nonspouse beneficiary receives monthly payments equal to 50%, 66-⅔%, or 100% (as you elect) of your monthly benefit payment for his or her lifetime. If your beneficiary is no longer living at your death, no further payments are made. By law, if your beneficiary is not your spouse, you may elect one of these options only if your eligible spouse consents in writing. The actuarial value of the benefits paid to you under this option must be at least 50% of the single lump sum value of your benefit. Life Annuity with 10 or 20 Year Period Certain: Under these options, you receive reduced monthly pension payments for your entire lifetime. If you die before the end of the 10 or 20- year guarantee period (as the case may be), your beneficiary receives monthly payments until the end of the guarantee period. If you are married to an eligible spouse and elect a life annuity with a 10 or 20-year period certain, your eligible spouse must consent in writing to your election. When you elect this payment form, the combined life expectancy of you and your beneficiary must be more than the guarantee period you elect. If you elect a life annuity with a period certain guarantee, you are permitted to change your beneficiary at any time before your death with your eligible spouse s consent if you are married. Spousal Consent You do not need the consent of anyone to retire or begin the payment of benefits when you retire. However, if you are married to an eligible spouse, you will need your spouse s written, notarized consent to: Elect a payment option other than a joint and surviving spouse annuity with your eligible spouse as beneficiary; or Choose someone other than your eligible spouse as your beneficiary. Page P-17
ELIGIBLE SPOUSE SURVIVOR BENEFITS Pre-Retirement Surviving Spouse Benefits Your eligible spouse is your legal spouse on the date you begin receiving benefits under the Plan (or your date of death for preretirement survivor benefits). In order for your spouse to be eligible for survivor benefits, you must be married for at least 12 months at the time of your death. Your eligible spouse (or in some cases, another beneficiary) may be eligible to receive benefits at your death. The type of benefits he or she will receive depends on when your death occurs. If you are vested and die before receiving a pension benefit from the Plan, your eligible spouse receives a pre-retirement surviving spouse benefit. This benefit is payable as early as the first day of the month after your 55 th birthday. However, your eligible spouse can defer payment of the pre-retirement survivor benefit until the first day of any month on or before the date you would have reached age 65. If your eligible spouse defers payment, he or she will likely receive a higher monthly benefit. The pre-retirement survivor benefit is a monthly benefit payable for your surviving spouse s lifetime. It equals the amount your spouse would have received if you had lived and retired on the day before your death with a 50% joint and surviving spouse annuity benefit. If you terminate your employment after becoming vested, you will continue to be covered by the pre-retirement surviving spouse benefit until you begin receiving your pension benefit. Paying for Surviving Spouse Coverage If you do not waive the pre-retirement survivor benefit coverage, your pension benefit is reduced to pay for that coverage. Your pension is reduced for each year the pre-retirement survivor benefit is in effect by the following amounts: Your Age 35 through 44 45 through 54 55 through 64 Cost Per Year of Coverage 0.20% 0.40% 0.60% For example, if this coverage were to be in effect continuously from your 35 th birthday until you reach age 65, your normal retirement benefit would be reduced by 12%, to pay for the coverage as determined below: Page P-18
Age 35-44 45-54 55-64 Years 10 10 10 X Annual Cost 0.20% 0.40% 0.60% Total 2.0% 4.0% 6.0% Total Reduction 12.0% You can, with the consent of your spouse, waive the pre-retirement survivor coverage and avoid the benefit reduction by filing the proper form with your local Human Resources Department. Unless you and your eligible spouse waive coverage, however, the Plan automatically will provide the pre-retirement surviving spouse coverage and reduce your benefit to pay for it. Your local Human Resources Department notifies you of your right to waive pre-retirement survivor coverage, and its effect, when you first become eligible to do so. Survivor Benefits after Pension Benefits Begin If you die after you have begun receiving your benefits or after payment of your benefit was scheduled to begin, no further benefits will be paid in your name after your date of death. In that case, survivor benefits are payable after your death only if the distribution option you elected at retirement provides for survivor benefits to your beneficiary. If you die after your benefit starts and while receiving benefits in the form of a joint and surviving spouse annuity, the person who was your eligible spouse when you began receiving your benefit will receive the survivor benefit, whether or not you are still married on the date of your death, unless otherwise provided for in a qualified domestic relations order. If you retire and you die after you have begun receiving pension benefit payments (except for deferred vested benefits), your beneficiary receives a lump sum death benefit of $3,000. This death benefit is in addition to any survivor benefit payable under the distribution option you choose. Page P-19
GENERAL INFORMATION The Plan is administered in accordance with applicable laws and government regulations. One of the most important of these laws is the Employee Retirement Income Security Act of 1974 (ERISA). ERISA guarantees your right to obtain certain information about the Plan. As a participant in the Plan, you have certain other rights under ERISA, as described in more detail below. ERISA sets certain benefit standards and requires that certain procedures be followed. ERISA also requires that the plans it covers include certain procedures for filing claims, and for reviewing claims that have been denied. This section outlines such administrative information about the Plan. Plan Administration When Conflicts Arise Claiming Your Benefits The Benefits Department and the Plan Administrator each play a role in the Plan. You will find that most of your questions regarding the Plan can be answered by the Benefits Department. If your question involves either an interpretation of the Plan or a discretionary decision, it will be forwarded to the Plan Administrator. The Plan Administrator has complete and final discretionary authority to determine all questions regarding an employee s participation and benefits and to interpret and to construe the provisions of the Plan documents, including any uncertain terms. Decisions made by the Plan Administrator will be given full deference by any court of law. If conflicts or discrepancies occur, it is important that you understand that the Plan document always controls, even if its terms conflict with the advice or information given by the Benefits Department or this Summary Plan Description. If you wish to apply for your benefits, please contact your local Human Resources Department or the Benefits Department at least 60 days before your benefits are to begin. Your local Human Resources Department will work with the Benefits Department to provide you with a written explanation of your benefit options. Page P-20
A retirement application will be prepared based on your chosen benefit commencement date. If you are married, the Benefits Department will also provide you and your eligible spouse a written explanation of your eligible spouse s right to receive a joint and surviving spouse annuity, which provides a benefit to your eligible spouse in the event of your death. This notice must be provided at least 30 days before your benefit commencement date. Generally, payments under the Plan will not begin until you have completed and returned the required forms. You must submit a completed retirement application within 180 days of the date prepared, along with a copy of your birth certificate and any other forms required by the Plan Administrator. If you are married, you must also provide a copy of your marriage license and your eligible spouse s birth certificate. If your retirement application is not returned or completed within 180 days of preparation, the application will expire for the chosen benefit commencement date. Benefits will be recalculated for a new (future) commencement date and a new retirement application will be issued. A claim for survivor benefits must be made in writing and accompanied by a certified copy of the participant s death certificate and any other forms required by the Plan Administrator. How Benefits Can Be Forfeited or Delayed There are certain situations under which Plan benefits can be forfeited or delayed. Most of these circumstances are spelled out in the previous pages, but you can also delay payment of your benefit if: you (or your eligible spouse) do not apply for a pension; you do not furnish information requested to complete or verify your retirement application; or your current address is not on file with the Benefits Department. You can forfeit payment of your benefit if: you leave the Company before you are vested; Page P-21
you die before retirement and you are not married; or you die after retirement benefits begin and death benefits are not available under your distribution option when you die. If the Plan pays benefits to you in error, the Plan may recover those amounts. If necessary, the Plan may reduce your Plan benefits (as allowed by law) to recover benefits paid to you in error. Claims Appeal Process If your claim is denied (in whole or in part), the Plan Administrator will notify you in writing within 90 days after you submit an application for benefits unless the Plan Administrator notifies you in writing that an extension (not to exceed 90 days) is needed. The claim denial notice will include: the specific reason(s) for the denial; specific reference to the Plan provision(s) on which the denial is based; a description of any additional material or information the Plan Administrator requires and an explanation of why it is necessary; an explanation of the claims review procedure; and notice of your right to bring civil action under ERISA following a denial upon appeal. If you disagree with the denial, you have 60 days after receiving the written denial to submit a written request for review to the Plan Administrator. In connection with preparing your appeal, you or your representative may review relevant documents. When you file your appeal, you can submit issues and comments in writing. If you do not properly submit all the necessary information in your appeal, the Plan Administrator may request additional information and set deadlines for providing that information. Page P-22
The Plan Administrator will review all disputed claims. They will notify you of their findings and decision in writing within 60 days (unless special circumstances require an extension not to exceed an additional 60 days) after they receive the appeal. Your notification will include: the specific reason(s) for the denial; specific reference to the Plan provision(s) on which the denial is based; a description of any additional material or information the Plan Administrator requires and an explanation of why the material or information is necessary; and notice of your right to bring civil action under ERISA following a denial upon appeal. In no event can you (or any other person) challenge a decision in court until this claims procedure has been complied with and exhausted. Social Security Benefits Plan Amendment and Termination Social Security benefits are independent of your benefits under the Plan and are paid through the Social Security Administration. Please remember that Social Security benefits are not paid automatically; you must apply for them. To get more information about your Social Security benefit, contact your local Social Security Administration Office, call the toll free number at 1-800-772-1213, or visit their website at http://www.ssa.gov. Joy Global reserves the right to amend, modify, suspend, or terminate the Plan, in whole or in part, at any time, by action of the Board of Directors or the Plan Sponsor Committee. Any change or termination may apply to active employees, future retirees and current retirees either as separate groups or as one group. No change will reduce the benefit you earned before the date of change, and you will be notified of any amendment that reduces the amount of benefits you can earn after the amendment s effective date. No one can orally change the terms of the Plan. Page P-23
If the Plan is terminated, Plan assets will be disbursed according to established federal guidelines. These rules provide that all benefits accrued under the Plan up to the date of termination become vested to the extent that the benefits are funded at that time. If the Plan does not have sufficient assets to pay all benefits, the assets held by the Plan are divided among the participants and beneficiaries in accordance with Plan provisions and applicable law. If the Plan has more assets than needed to pay all of the benefits that have been earned before the date of termination, the excess will be paid to the Company (except as otherwise specifically provided in the Plan). If the Plan is terminated, the insurance provided by the Pension Benefit Guaranty Corporation (PBGC) may also take effect, as described below. Pension Benefit Guaranty Corporation Your pension benefits under this plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency. If the plan terminates (ends) without enough money to pay all benefits, the PBGC will step in to pay pension benefits. Most people receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits. The PBGC guarantee generally covers: (1) normal and early retirement benefits; (2) disability benefits if you become disabled before the plan terminates; and (3) certain benefits for your survivors. The PBGC guarantee generally does not cover: (1) benefits greater than the maximum guaranteed amount set by law for the year in which the plan terminates; (2) some or all of benefit increases and new benefits based on plan provisions that have been in place for fewer than 5 years at the time the plan terminates; (3) benefits that are not vested because you have not worked long enough for the company; (4) benefits for which you have not met all of the requirements at the time the plan terminates; (5) certain early retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in an early retirement monthly benefit greater than your monthly benefit at the plan s normal retirement age; and (6) non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay, and severance pay. Page P-24
Even if certain benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money your plan has and on how much the PBGC collects from Joy Global and its subsidiaries. For more information about the PBGC and the benefits it guarantees, ask your plan administrator or contact the PBGC s Technical Assistance Division, 1200 K Street N.W., Suite 930, Washington, D.C. 20005-4026 or call 202-326-4000 (not a toll-free number). TTY/TDD users may call the federal relay service toll-free at 1-800- 877-8339 and ask to be connected to 202-326-4000. Additional information about the PBGC s pension insurance program is available through the PBGC s website on the internet at http://www.pbgc.gov. Top Heavy Rules Nonassignability of Benefits Controlling Documents If the Plan becomes top heavy, special rules will apply. If the Plan ever becomes top heavy, you will be notified. This Plan is intended to pay benefits only to you and your eligible survivors. Your benefits cannot be used as collateral for loans or assigned in any other way, except for certain tax levies and qualified domestic relations orders issued by a court of law. A qualified domestic relations order requires payment of alimony, child support or other marital assets (which could include all or a portion of your benefits from this Plan) to a spouse, former spouse, child or other dependent. You will be notified if such an order is received against you and of the procedure followed by the Plan Administrator in determining whether the order is qualified. You may request a copy of the Plan s procedures for qualified domestic relations orders without charge from the Plan Administrator. This Summary Plan Description is intended to summarize the major provisions of the Plan as they relate to you. Complete details are in the official Plan document and Trust Agreement that legally govern the operation of the Plan. If there is any discrepancy between this Summary Plan Description and the Plan document, the Plan document will govern. Page P-25