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(c) 2012 DATAIR Page 1 2012 DB Interim Amendment 2012 INTERIM AMENDMENT FOR DEFINED BENEFIT PLANS <
AMENDMENT # <<___>>
Section 1. General Rules.
1.1. Purpose and Adoption. The purpose of this Amendment is to incorporate required changes from the 2011 Cumulative List of Changes in Plan Qualification Requirements described in section 4 of Revenue Procedure 2005-66 as modified by Revenue Procedure 2007-44, it includes certain provisions from the Pension Protection Act of 2006 (“PPA “), the Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”) and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), as they relate to section 436 of the Code with respect to the limitations on distributions before and after a cessation period and benefit accruals after the cessation period as required by the Pension Protection Act of 2006.
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1.2. Precedence. The requirements of this Amendment will take precedence over any inconsistent provisions of the Plan, including any previous amendments adopted by the Employer. Where appropriate, the term “Plan” shall mean the Plan and Trust.
1.3. Requirements of Treasury Regulations Incorporated. All matters addressed under this Article will be determined and made in accordance with the Internal Revenue Code (“Code”) and the Treasury Regulations.
1.4. Effective Date. Unless otherwise stated by the regulations, or the Adoption Section of this Amendment, this Amendment is effective for Plan Years beginning on or after January 1, 2008. Plans are required to operate according to these provisions as of that date. The deadline to incorporate these provisions in the Plan is the last day of the Plan Year beginning on or after January 1, 2011. This deadline has been extended to the last day of the first Plan Year beginning on or after January 1, 2012 or for a newly established plan, the last day of the first Plan Year or the Employer’s tax filing date with extensions in which provisions required by section 436 were first effective for the Plan.
Section 2. Funding Based Limits on Benefits and Benefit Accruals.
A Plan that adopted the 2009 Interim Amendment without Section 5 (Funding Based Limits on Benefits and Benefit Accruals) of that Amendment hereby adopts this Section 2 (Funding Based Limits on Benefits and Benefit Accruals) in its entirety. If the Plan adopted the 2009 or 2010 Interim Amendment including the above referenced Section it hereby adopts the changes enumerated below:
2.1. Generally, for purposes of section 401(a)(29) of the Code, the Plan shall be treated as meeting the requirements of this section if the Plan meets the requirements of Subsections 2.2, 2.3, 2.4, and 2.5.
2.2. Funding-Based Limitation on Shutdown Benefits and Other Unpredictable Contingent Event Benefits.
Section 5.2 of the 2009 Interim Amendment is amended to add a new Paragraph (d) below. The Provisions of Section 5.2 of the 2009 Interim Amendment or Section 2.2 of the 2010 Interim Amendment prior to the adoption of this Amendment shall continue to apply unless a new option under Section 2.2 is selected in the Adoption Section of this Amendment.
(c) 2012 DATAIR Page 2 2012 DB Interim Amendment (a) Generally, if a Participant is entitled to an unpredictable contingent event benefit payable with respect to any event occurring during any Plan Year, the Plan shall provide that such benefit may not be provided if the Adjusted Funding Target Attainment Percentage (AFTAP) for such Plan Year:
(1) is less than 60 percent, or
(2) would be less than 60 percent taking into account such occurrence by redetermining the AFTAP applying an actuarial assumption that the likelihood of occurrence of the unpredictable contingent event during the Plan Year is 100 percent.
(b) Exemption. Paragraph (a) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year, upon payment by the Plan Sponsor of a contribution (in addition to any minimum required contribution under section 303 of the Employee Retirement Income Security Act of 1974 (ERISA)) equal to:
(1) in the case of Paragraph (a)(1), the amount of the increase in the funding target of the Plan (under section 430 of the Code) for the Plan Year attributable to the occurrence referred to in Paragraph (a), and
(2) in the case of Paragraph (a)(2), the amount sufficient to result in an AFTAP of 60 percent.
(c) Unpredictable Contingent Event Benefit. For purposes of this Section, the term "Unpredictable Contingent Event Benefit" means any benefit payable solely by reason of:
(1) a plant shutdown (or similar event, as determined by the Secretary of the Treasury), or
(2) an event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.
(d) Limitation Continuation. If elected in the Adoption Section, the limitation in Paragraph (a) shall continue to apply after the Plan Sponsor makes a contribution pursuant to the requirements of Paragraph (b), as if the exemption of Paragraph (b) had not been met.
If no such election is made and an unpredictable contingent event benefit with respect to an unpredictable contingent event that occurs during the Plan Year is not permitted to be paid after the occurrence of the event because of the limitation of Section 2.2(a), but is permitted to be paid later in the same Plan Year (as a result of additional contributions or pursuant to the Plan’s enrolled actuary’s certification of the AFTAP for the Plan Year that meets the requirements of section 1.436-1(g)(5)(ii)(B) of the Treasury Regulations), then that unpredictable contingent event benefit shall be paid, retroactive to the period that benefit would have been payable under the terms of the Plan (determined without regard to Section 2.2(a)). If the unpredictable contingent event benefit does not become payable during the Plan Year in accordance with the preceding sentence, then the Plan is treated as if it does not provide for that benefit unless the Employer elects in the Adoption Section to provide such benefit prospectively or elects to continue to apply the limitation to the plan.
2.3. Limitations on Plan Amendments Increasing Liability for Benefits.
Section 5.3 of the 2009 Interim Amendment is amended to add a new Paragraph (e) below and Section 2.3 of the 2010 Interim Amendment is amended to replace Paragraph (e) with a new Paragraph (e) below. The Provisions of Section 5.3 of the 2009 Interim Amendment and Section 2.3 of the 2010
(c) 2012 DATAIR Page 3 2012 DB Interim Amendment Interim Amendment prior to the adoption of this Amendment shall continue to apply unless a new option under Section 2.3 is selected in the Adoption Section of this Amendment.
(a) Generally, no amendment to the Plan which has the effect of increasing liabilities of the Plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable may take effect during any Plan Year if the AFTAP for such Plan Year is:
(1) less than 80 percent, or
(2) would be less than 80 percent taking into account such amendment.
(b) Exemption. Paragraph (a) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year (or if later, the effective date of the amendment), upon payment by the Plan Sponsor of a contribution (in addition to any minimum required contribution under section 430 of the Code) equal to:
(1) in the case of Paragraph (a)(1), the amount of the increase in the funding target of the Plan (under section 430 of the Code) for the Plan Year attributable to the amendment, and
(2) in the case of Paragraph (a)(2), the amount sufficient to result in an AFTAP of 80 percent.
Notwithstanding, if the plan amendment is to increase benefits for a future period and no contribution is required under Paragraph (b)(1) or (b)(2), then the amendment is permitted to take affect without regard to the limitation in Paragraph (a, however the amendment may have to be taken into account in determining the funding target and the target normal cost in certain situations pursuant to Treasury Regulation 1.430(d)-1(d)(2)).
(c) Exception For Certain Benefit Increases. Paragraph (a) shall not apply to any amendment which provides for an increase in benefits under a formula which is not based on a Participant's Compensation, but only if the rate of such increase is not in excess of the contemporaneous rate of increase in average wages of Participants covered by the amendment.
(d) Delayed Effective Date. In the case of the delayed effective date of an amendment to the Plan described in Paragraph (a), the Employer may elect in the Adoption Section to accrue benefits that would have accrued under the Plan but for Paragraph (a), if the Plan meets the requirements of Paragraph (b) for the period benefit accruals were limited.
(e) Amendment Treated As If It Were Never Adopted. If a plan amendment does not go into effect as of the effective date of the amendment because of the limitations of this Section 2.3, but could go into effect later in the Plan Year as a result of additional contributions that satisfy the requirements of section 436(c)(2) of the Code or an enrolled actuary’s certification of the AFTAP for the Plan Year, then the plan amendment will not take effect. In order to adopt the changes contained in the Amendment, the Employer must readopt the Amendment with an effective date after the end of the cession period.
(f) Amendment with Later Effective Date. If elected in the Adoption Section, a plan amendment that does not go into effect as of the effective date of the amendment because of the limitations of this Section 2.3, but is permitted to go into effect later in the Plan Year as a result of additional contributions that satisfy the requirements of section 436(c)(2) of the Code or the Plan’s enrolled actuary certifies the AFTAP for the Plan Year, then the Plan amendment must automatically take effect as of the first day of the Plan Year (or if later, the original effective date of the amendment). However, if the Plan amendment cannot take effect during the Plan Year,
(c) 2012 DATAIR Page 4 2012 DB Interim Amendment then it must be treated as if it were never adopted.
2.4. Limitations on Accelerated Benefit Distributions.
If the Plan adopted the 2009 Interim Amendment or the 2010 Interim Amendment, it hereby adopts the following changes: Section 5.4 of the 2009 Interim Amendment and Section 2.4 of the 2010 Interim Amendment are amended by adding language after the first sentence in Paragraph (a) below; adding the last two paragraphs of Paragraph (a) below and a new Paragraph (f) below. The Provisions of Section 5.4 of the 2009 Interim Amendment and Section 2.4 fo the 2010 Interim Amendment prior to the adoption of this Amendment shall continue to apply unless directly overridden by this Amendment or a new option under Section 2.4 is selected in the Adoption Section of this Amendment.
(a) Funding Percentage Less Than 60 Percent. If the Plan's AFTAP for a Plan Year is less than 60 percent, the Plan may not pay any prohibited payment after the Valuation Date for the Plan Year and the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment. If the Plan’s AFTAP for a Plan Year is less than 60 percent, a Participant or Beneficiary is not permitted to elect an optional form of benefit that includes a prohibited payment, and the Plan will not pay any prohibited payment, with an Annuity Starting Date that is on or after the applicable section 436 measurement date.
If a Participant or Beneficiary requests a prohibited payment at a time when that form of payment cannot be made, the Participant or Beneficiary retains the right to delay commencement of benefits only if the right to delay commencement is in accordance with the terms of the Plan and applicable qualification requirements (such as sections 411(a)(11) and 401(a)(9) of the Code). Thus, where payment of an optional form of benefit is restricted pursuant to Section 2 of this Amendment or Section 5 of the 2009 Interim Amendment, the Plan is not required to provide any Participant with deferral rights that would not be otherwise available.
The Employer may elect in the Adoption Section to provide that, in addition, after the section 436 Measurement Date on which the limitation on prohibited payments under this Section 2.4(a) ceases to apply to the Plan, any Participant or Beneficiary who had an Annuity Starting Date within the period during which that limitation applied to the Plan is permitted to make a new election (within 90 days after the section 436 Measurement Date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new Annuity Starting Date to be changed to a single sum payment for the remaining value of the Participant’s or Beneficiary’s benefit under the Plan, subject to the other rules in this section of the Plan (including Section 2.4(c)) and applicable requirements of section 401(a) of the Internal Revenue Code, including spousal consent.
The Employer may elect in the Adoption Section to provide that, during a period when Section 2.4(a) applies to the Plan, Participants and Beneficiaries are permitted to elect payment in any optional form of benefit otherwise available under the Plan that provides for the current payment of the unrestricted portion of the benefit (as described in section 1.436-1(d)(3)(iii)(D) of the Treasury Regulations), with a delayed commencement for the restricted portion of the benefit (subject to other applicable qualification requirements, such as sections 411(a)(11) and 401(a)(9) of the Internal Revenue Code).
(b) Bankruptcy. Notwithstanding any other provisions of the Plan, a Participant or Beneficiary is not permitted to elect, and the Plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an annuity starting date that occurs during any period in which the Plan Sponsor is a debtor in a case under title 11, United States Code, or similar Federal or State law, except for payments made within a Plan Year with an annuity starting date that occurs on or after the date on which the Plan’s enrolled actuary certifies that the Plan’s AFTAP for that Plan Year is not less than 100 percent. In addition, during
(c) 2012 DATAIR Page 5 2012 DB Interim Amendment such period in which the Plan Sponsor is a debtor, the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that occur on a date within a Plan Year that is on or after the date on which the Plan’s enrolled actuary certifies that the Plan’s AFTAP for that Plan Year is not less than 100 percent. The limitation set forth in this Section 2.3 does not apply to any payment of a benefit which under section 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the Participant.
(c) Limited Payment if Percentage At Least 60 Percent but Less Than 80 Percent.
(1) Generally, in any case in which the Plan's AFTAP for a Plan Year is 60 percent or greater but less than 80 percent, the Plan may not pay any prohibited payment after the Valuation Date for the Plan Year to the extent the amount of the payment exceeds the lesser of:
(i) fifty (50) percent of the Present Value (determined in accordance with section 417(e)(3) of the Code) of the benefit payable in the optional form of benefit that includes the prohibited payment; or
(ii) one hundred (100) percent of the present value of the Pension Benefit Guaranty Corporation (PBGC) maximum benefit guarantee amount (as defined in section 1.436-1(d)(3)(iii)(C) of the Treasury Regulations).
The limitation set forth in this Section 2.4(c) does not apply to any payment of a benefit, which under section 411(a)(11) of the Internal Revenue Code, may be immediately distributed without the consent of the Participant. If an optional form of benefit that is otherwise available under the terms of the Plan is not available to a Participant or Beneficiary as of the Annuity Starting Date because of the application of the requirements of this Section 2.4(c), the Participant or Beneficiary is permitted to elect to bifurcate the benefit into unrestricted and restricted portions (as described in section 1.436-1(d)(3)(iii)(D) of the Treasury Regulations). The Participant or Beneficiary may also elect any other optional form of benefit otherwise available under the Plan at that Annuity Starting Date that would satisfy the 50 percent/PBGC maximum benefit guarantee amount limitation described in this Section 2.4(c), or may elect to defer the benefit in accordance with any general right to defer commencement of benefits under the Plan.
In addition, Participants or Beneficiaries are not permitted to elect the payment of an optional form of benefit that includes a prohibited payment.
The Employer may elect in the Adoption Section to provide that, in addition, after the section 436 Measurement Date on which the limitation on prohibited payments under Section 2.4(c) ceases to apply to the Plan, any Participant or Beneficiary who had an Annuity Starting Date within the period during which that limitation applied to the Plan is permitted to make a new election (within 90 days after the section 436 Measurement Date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new Annuity Starting Date to be changed to a single sum payment for the remaining value of the Participant or Beneficiary’s benefit under the Plan, subject to the other rules in this section of the Plan and applicable requirements of section 401(a) of the Internal Revenue Code, including spousal consent.
The limitation set forth in this Section 2.4(c) does not apply to any payment of a benefit which under section 411(a)(11) of the Internal Revenue Code may be immediately distributed without the consent of the Participant.
(c) 2012 DATAIR Page 6 2012 DB Interim Amendment (3) One-Time Application.
(i) Generally. Only one (1) prohibited payment meeting the requirements of Paragraph (c) may be made, in most cases, with respect to any Participant during any period of consecutive Plan Years to which the limitations under either Paragraph (a) or (b) or this Section 2.4 applies.
(ii) Treatment of Beneficiaries. For purposes of this Subparagraph, a Participant and any Beneficiary on his behalf (including an Alternate Payee, as defined in section 414(p)(8) of the Code), shall be treated as one (1) Participant. If the Accrued Benefit of a Participant is allocated to such an Alternate Payee and one (1) or more other persons, the amount under Subparagraph (1) shall be allocated among such persons in the same manner as the Accrued Benefit is allocated unless the Qualified Domestic Relations Order (as defined in section 414(p)(1)(A) of the Code) provides otherwise.
(d) Exception. This Subsection shall not apply to any Plan Year, if the terms of such Plan (as in effect for the period beginning on September 1, 2005, and ending with such Plan Year) provide for no Benefit Accruals with respect to any Participant during such period.
(e) Prohibited Payment. For purpose of this Subsection, the term "prohibited payment" means:
(1) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of section 411(a)(9)), to a Participant or Beneficiary whose Annuity Starting Date (as defined in section 417(f)(2)) occurs during any period a limitation under paragraph (1) or (2) is in effect,
(2) any payment for the purchase of an irrevocable commitment from an insurer to pay benefits, and
(3) any other payment specified by the Secretary of the Treasury by regulations.
(f) Recommencement of Benefits. Once the restriction of Section 2.4(b) of this Amendment or Section 5.4 of the 2009 Interim Amendment ceases to apply, the Participant’s benefits will continue to be paid in the form previously elected unless the Plan offers the Participant a new election that modifies the prior election. The Plan may provide that the Participant will be offered the opportunity to have a new election under which the form of benefit previously elected may be modified, subject to applicable qualification requirements, and clarify that any such new election will result in a new Annuity Starting Date for purposes of section 417 of the Code.
2.5. Limitation on Benefit Accruals for Plans with Severe Funding Shortfalls.
Section 5.5 of the 2009 Interim Amendment is amended by incorporating as a new Paragraph (c), Paragraph (c) of this Amendment below:
(a) Generally, in any case in which the Plan's AFTAP for a Plan Year is less than 60 percent, Benefit Accruals under the Plan shall cease as of the Valuation Date for the Plan Year.
(b) Exemption. Paragraph (a) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year, upon payment by the Plan Sponsor of a contribution (in addition to any minimum required contribution under section 430 of the Code) equal to the amount sufficient to result in an AFTAP of 60 percent.
(c) 2012 DATAIR Page 7 2012 DB Interim Amendment (c) Recommencement of Accruals. If a limitation on Benefit Accruals under Section 2.5 or Section 5.5 of the 2009 Interim Amendment applies to the Plan, then, unless the Employer elects otherwise, benefit accruals under the Plan will resume prospectively and that limitation does not apply to Benefit Accruals that are based on service on or after that later section 436 Measurement Date, except as otherwise provided under the Plan. If the Benefit Accruals resume effective in the middle of a Plan Year, the Plan shall comply with the rules relating to partial years of participation and the prohibition on double proration under Department of Labor regulation 29 CFR 2530.204-2(c) and (d).
The restoration of Benefit Accruals pursuant to this Paragraph (c) is generally treated as a plan amendment that is subject to Section 2.5(a) (Section 5.5(a) of the 2009 Interim Amendment or Section 2.5(a) of the 2010 Interim Amendment). However, such a provision shall take effect without regard to the limits of Section 2.5(a) of this Amendment or Section 5.5 of the 2009 Interim Amendment or Section 2.5(a) of the 2010 Interim Amendment, if:
(i) The continuous period of the cessation of accruals is 12 months or less; and
(ii) The Plan’s enrolled actuary certifies that the AFTAP for the Plan would not be less than 60 percent taking into account the restored Benefit Accruals for the prior Plan Year.
2.6. Rules Relating to Contributions Required to Avoid Benefit Limitations
(a) Security may be provided.
(1) In general, the AFTAP shall be determined by treating as an asset of the Plan any security provided by a Plan Sponsor in a form meeting the requirements of Subparagraph (2). However, this asset may not be taken into consideration for any other reason, including section 430 of the Code.
(2) Form of Security. The security required under Subparagraph (1) shall consist of:
(i) a bond issued by a corporate surety company that is an acceptable surety for purposes of section 412 of the Employee Retirement Income Security Act of 1974,
(ii) cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or
(iii) such other form of security as is satisfactory to the Secretary of the Treasury and the parties involved.
(3) Enforcement. Any security provided under Subparagraph (1) may be perfected and enforced at any time after the earlier of:
(i) the date on which the Plan terminates,
(ii) if there is a failure to make a payment of the minimum required contribution for any Plan Year beginning after the security is provided, the due date for the payment under section 430(j) of the Code, or
(iii) if the AFTAP is less than 60 percent for a consecutive period of 7 years, the Valuation Date for the last year in the period.
(4) Release of Security. The security shall be released (and any amounts thereunder shall be refunded together with any interest accrued thereon) at such time as the Secretary of the Treasury may prescribe in regulations, including regulations for partial
(c) 2012 DATAIR Page 8 2012 DB Interim Amendment releases of the security by reason of increases in the AFTAP.
(b) Prefunding Balance or Funding Standard Carryover Balance may not be used. No prefunding balance under section 430(f) of the Code, or Funding Standard Carryover Balance may be used under Sections 2.2, 2.3, or 2.5 of this amendment or Sections 5.2, 5.3 or 5.5 of the 2009 Interim Amendment or Section 2.2, 2.3, or 2.5 of the 2010 Interim Amendment to satisfy any payment the Employer may make under any such Section to avoid or terminate the application of any limitation under such Subsection.
(c) Deemed Reduction of Funding Balances.
(1) Generally, subject to Subparagraph (3), in any case in which a benefit limitation under Sections 2.2, 2.3, 2.4, or 2.5 of this amendment , Sections 5.2, 5.3, 5.4, or 5.5 of the 2009 Interim Amendment, or Section 2.2, 2.3, ,2.4, or 2.5 of the 2010 Interim Amendment would (but for this subparagraph and determined without regard to Subsection 2.2(b), 2.3(b), or 2.5(b) of this amendment or Sections 5.2(b), 5.3(b), or 5.5(b) of the 2009 Interim Amendment or Subsections 2.2(b), 2.3(b) or 2.5(b) of the 2010 Interim Amendment apply for the Plan Year, the Plan Sponsor of such plan shall be treated for purposes of this Section as having made an election under section 430(f) of the Code to reduce the prefunding balance or funding standard carryover balance by such amount as is necessary for such benefit limitation to not apply to the Plan for such Plan Year.
(2) Exception for Insufficient Funding Balances. Subparagraph (1) shall not apply with respect to a benefit limitation for any Plan Year, if the application of Subparagraph (1) would not result in the benefit limitation not applying for such Plan Year.
(3) Restrictions of Certain Rules to Collectively Bargained Plans. With respect to any benefit limitation under Section 2.2, 2.3, or 2.5 of this amendment or Sections 5.2, 5.3, or 5.5 of the 2009 Interim Amendment, Subparagraph (1) shall only apply in the case of a plan maintained pursuant to one (1) or more collective bargaining agreements between employee representatives and the Employer.
2.7. New Plans, Plan Termination, Certain Frozen Plans, and Other Special Rules.
(a) First 5 Plan Years. The limitations in Sections 2.2, 2.3, or 2.5 of this amendment or Sections 5.2, 5.3, or 5.5 of the 2009 Interim Amendment or Sections 2.2, 2.3, or 2.5 of the 2010 Interim Amendment, shall not apply to this Plan for the first five (5) Plan Years of the Plan determined under the rules of section 436(i) of the Internal Revenue Code and section 1.436-1(a) (3)(i) of the Treasury Regulations.
(b) Plan Termination. The limitations on prohibited payments in Section 2.4(a), Section 2.4(b) and Section 2.4(c) do not apply to prohibited payments that are made to carry out the termination of the Plan in accordance with applicable law. Any other limitations under this Section of the Plan do not cease to apply as a result of termination of the Plan.
(c) Exception to Limitations on Prohibited Payments under Certain Frozen Plans. The limitations on prohibited payments set forth in 2.4(a), 2.4(b), and Section 2.4(c) do not apply for a Plan Year, if the terms of the Plan, as in effect for the period beginning on September 1, 2005 and continuing through the end of the Plan Year, provide for no benefit accruals with respect to any Participants. This Section 2.7(c) shall cease to apply as of the date any benefits accrue under the Plan or the date on which a Plan amendment that increases benefits takes effect.
(d) Special Rules Relating to Unpredictable Contingent Event Benefits and Plan Amendments Increasing Benefit Liability. During any period in which none of the presumptions under Section 2.8(a) apply to the Plan and the Plan’s enrolled actuary has not yet
(c) 2012 DATAIR Page 9 2012 DB Interim Amendment issued a certification of the Plan’s AFTAP for the Plan Year, the limitations under Section 2.2(a) and Section 2.3(a) shall be based on the inclusive presumed AFTAP for the Plan, calculated in accordance with the rules of section 1.436-1(g)(2)(iii) of the Treasury Regulations.
For purposes of this Section, the reference in this Section to the Plan shall include a reference to any predecessor plan.
2.8. Presumed Underfunding for Purposes of Benefit Limitations.
(a) Presumption Of Continued Underfunding. In any case in which a benefit limitation under Subsection 2.2, 2.3, 2.4, or 2.5 of this Amendment, Sections 5.2, 5.3, 5.4, or 5.5 of the 2009 Interim Amendment, or Sections 2.2, 2.3, 2.4, or 2.5 of the 2010 Interim Amendment, has been applied to the Plan with respect to the Plan Year preceding the current Plan Year, the AFTAP of the Plan for the current Plan Year shall be presumed to be equal to the AFTAP of the Plan for the preceding Plan Year until the Plan’s enrolled actuary of the Plan certifies the actual AFTAP of the Plan for the current Plan Year. The first day of the current Plan Year is a section 436 Measurement Date.
(b) Presumption of Underfunding after 10th Month. In any case in which no certification of the AFTAP for the current Plan Year is made (or if the Plan’s enrolled actuary has issued a range certification for the Plan Year pursuant to section 1.436-1(h)(4)(ii) of the Treasury Regulations but has not issued a certification of the specific AFTAP for the Plan by the last day of the Plan Year) with respect to the Plan before the first day of the 10th month of such year, for purposes of Sections 2.2, 2.3, 2.4, or 2.5 of this Amendment, Sections 5.2, 5.3, 5.4, or 5.5 of the 2009 Interim Amendment, or Sections 2.2, 2.3, 2.4, or 2.5 of the 2010 Interim Amendment, such first day shall be deemed, for purposes of such Section, to be the Valuation Date of the Plan for the current Plan Year and the Plan's AFTAP shall be conclusively presumed to be less than 60 percent as of such first day.
(c) Presumption of Underfunding after 4th Month for Nearly Underfunded Plans. The Plan shall be presumed to be underfunded in any case in which:
(1) a benefit limitation under Section 2.2, 2.3, 2.4, or 2.5 of this Amendment, Sections 5.2, 5.3, 5.4, or 5.5 of the 2009 Interim Amendment, or Sections 2.2, 2.3, 2.4, or 2.5 of the 2010 Interim Amendment did not apply to the Plan with respect to the Plan Year preceding the current Plan Year, but the AFTAP of the Plan for such preceding Plan Year was not more than 10 percentage points greater than the percentage which would have caused such Section to apply to the Plan with respect to such preceding Plan Year, and
(2) as of the first day of the 4th month of the current Plan Year, the Plan’s enrolled actuary has not certified the actual AFTAP of the Plan for the current Plan Year,
Until the Plan’s enrolled actuary certifies the Plan’s AFTAP, such first day shall be deemed, for purposes of such Subsection, to be the Valuation Date of the Plan for the current Plan Year and the AFTAP of the Plan as of such first day shall, for purposes of such Subsection, be presumed to be equal to 10 percentage points less than the AFTAP of the Plan for such preceding Plan Year.
2.9. Treatment of Plan as of Close of Prohibited or Cessation Period. For purposes of applying this Section:
(a) Operation of Plan after Period. Unless elected, otherwise in this Amendment or the Adoption Section of this Amendment, at the beginning of the Cessation Period, the Plan will be frozen until the Employer adopts an amendment to unfreeze the Plan. If the Employer elected to recommence payments and/or accruals, such payments and/or accruals will resume effective as
(c) 2012 DATAIR Page 10 2012 DB Interim Amendment of the day following the close of the period for which any limitation of payment or accrual of benefits under Section 2.4 or 2.5 of this Amendment, Sections 5.4 or 5.5 of the 2009 Interim Amendment, or Sections 2.4 and 2.5 of the 2010 Interim Amendment applies.
(b) Treatment of Affected Benefits. Nothing in this Section shall be construed as affecting the Plan's treatment of benefits which would have been paid or accrued but for this Section.
2.10. Terms Relating To Funding Target Attainment Percentage. For purposes of this Section:
(a) Generally, the term "Funding Target Attainment Percentage" has the same meaning given such term by section 430(d)(2) of the Code.
(b) Adjusted Funding Target Attainment Percentage. The term "Adjusted Funding Target Attainment Percentage" (AFTAP) means the Funding Target Attainment Percentage which is determined under Paragraph (a) by increasing each of the amounts under subparagraphs (A) and (B) of section 430(d)(2) of the Code by the aggregate amount of purchases of annuities for Employees other than Highly Compensated Employees (as defined in section 414(q) of the Code) which were made by the Plan during the preceding two (2) Plan Years.
(c) Application to Plans which are Fully Funded Without Regard to Reductions for Funding Balances.
(1) Generally, for any Plan Year, if the Funding Target Attainment Percentage is 100 percent or more (determined without regard to this Paragraph and without regard to the reduction in the value of assets under section 430(f)(4)(A) of the Code), the Funding Target Attainment Percentage for purposes of paragraph (a) shall be determined without regard to such reduction.
(2) Transition Rule. Subparagraph (2) shall be applied to Plan Years beginning after 2007 and before 2011 by substituting for `100 percent' the applicable percentage determined in accordance with the following table:
In the case of a Plan Year The applicable beginning in calendar year: percentage is: 2008 92 2009 94 2010 96
(3) Limitation. Subparagraph (2) shall not apply with respect to any Plan Year after 2008 unless the Funding Target Attainment Percentage (determined without regard to this Paragraph) of the Plan for each preceding Plan Year after 2007 was not less than the applicable percentage with respect to such preceding Plan Year determined under subparagraph (2).
(4) WRERA Temporary modification of benefit accrual limitations. In the case of the first Plan Year beginning during the period of October 1, 2008 through September 20 2009, the Plan may substitute the previous year's AFTAP for the percentage for such first Plan Year in the Period. The provision does not apply, if the AFTAP for the current Plan Year is greater than the preceding year.
(5) Funding shortfall relief. The Pension Protection Act of 2006 (PPA) transition rules of section 430(c)(5)(B) of the Code modified the minimum funding rules for single
(c) 2012 DATAIR Page 11 2012 DB Interim Amendment employer defined benefit plans. The PPA had a transition rule where the percentage of funding could be 92 percent in 2008, 94 percent in 2009, and 96 percent in 2010. However, if a plan fell short of the transition rule percentage for a plan year, the Plan could not use the transition rule in a subsequent year. WRERA 2008 relaxes this transition rule, allowing the transition percentages to be used through 2010.
(c) Cessation Period. The period beginning with the date on which a section 436 limitation first applies (section 436 Measurement Date) and ending on the date on which that imitation ceases to apply. This period is extended to the adoption date of any amendment required to recommence payments or accruals, if so elected by the Employer.
(d) Measurement Date or section 436 Measurement Date. The term “section 436 Measurement Date” is the date or dates on which a limitation under Section 2 of this Amendment or Section 5 of the 2009 Interim Amendment may apply or cease to apply.
2.11. Special Rule for 2008. For purposes of this Section, in the case of Plan Years beginning in 2008, the Funding Target Attainment Percentage for the preceding Plan Year may be determined using such methods of estimation as the Secretary of the Treasury may provide.
2.12. Special Rules under PRA 2010.
(a) Payments under Social Security Leveling Options. For purposes of determining whether the limitations under Section 2.4(a) or 2.4(c) apply to payments under a social security leveling option within the meaning of section 436(j)(3)(C)(i) of the Internal Revenue Code, the AFTAP for a Plan Year shall be determined in accordance with the “Special Rule for Certain Years” under section 436(j)(3) of the Internal Revenue Code and any Treasury Regulations or other published guidance thereunder issued by the Internal Revenue Service.
(b) Limitation on Benefit Accruals. For purposes of determining whether the accrual limitations under Section 2.3(a) and 2.5(a) apply to the Plan, the AFTAP for a Plan year shall be determined in accordance with the “Special Rule for Certain Years” under section 436(j)(3) of the Internal Revenue Code (except as provided under section 203(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, if applicable).
2.13. Notice Requirement. See section 101(j) of ERISA for rules requiring the Plan Administrator of a single employer defined benefit pension plan to provide a written notice to Participants and Beneficiaries that must be given within 30 days after certain specified dates, if the Plan has become subject to a limitation described in Section 2.2(a), Section 2.3(a), Section 2.4, or Section 2.5.
2.14. Effective Date. The rules in Section 2 are effective for Plan Years beginning after December 31, 2007, unless a later Effective Date is selected in the Adoption Section.
(c) 2012 DATAIR Page 12 2012 DB Interim Amendment
Adoption Section 2012 DEFINED BENEFIT INTERIM AMENDMENT
1. Benefit Accrual after Cessation Period. Section 2.2, 2.3, and 2.9 (Sections 5.3, 5.4, and 5.5 of the 2009 Interim Amendment and Section 2.2, 2.3 and 2.9 of the 2010 Interim Amendment).
a. Benefit Accruals not permitted by benefit restrictions under Sections 2.2(a) and 2.3(a) shall not be reinstated as provided for in Subsections 2.2(d) and 2.3(d) (Sections 5.3(a) and 5.3(d) of the 2009 Interim Amendment and Sections 2.3(a) and 2.3(d) of the 2010 Interim Amendment) unless elected below:
[ ] 1. Benefit Accruals not permitted to accrue shall recommence; however, Benefit Accruals for the cessation period shall not be reinstated.
[ ] 2. Benefit Accruals not permitted to accrue shall recommence and Benefit Accruals for the cessation period shall be reinstated pursuant to Subsection 2.3(d).
b. Benefit Accruals not permitted due to severe funding shortfalls under Subsection 2.5 (Section 5.5 of the 2009 Interim Amendment or Section 2.5 of the 2010 Interim Amendment) shall not be reinstated following the end of the cessation period unless elected below:
[ ] 1. Benefit Accruals not permitted to accrue by Subsection 2.5 shall recommence as of the day following the end of the cessation period and Benefit Accruals for the cessation period shall be reinstated pursuant to Subsection 2.5(b).
[ ] 2. Benefit Accruals not permitted to accrue by Subsection 2.5 shall be reinstated as of the day following the end of the cessation period however, Benefit Accruals for the cessation period shall not be reinstated pursuant to Subsection 2.5(b).
2. Participant Distribution options when Payment Restrictions Apply (Section 2.4 (Section 5.4 of the 2009 Interim Amendment or Section 2.4 of the 2010 Interim Amendment))
[ ] a. Allow Full Single Sum Payments for Participants and Beneficiaries Who Previously Could Only Elect Half Single Sums Pursuant to Section 2.4(a) of this Amendment.
[ ] b. Allow Half Single Sum Payments for Participants and Beneficiaries Who Could Not Elect Single Sum Payments Pursuant to Section 2.4(c) of this Amendment.
[ ] c. Allow Special Optional Forms of Benefit When Only Half Single Sum Payments Are Permitted Pursuant to 2.4(a)
[ ] d. Participant may elect backup distribution form in case the optional form selected could later be subject to restrictions.
Effective Date: This provision is first effective ___/___/_____ (Must be effective January 1, 2008 or later)
*************************************************************************** The Employer hereby adopts this Amendment this _____ day of ______, 20__.
Employer: Trustee:
(c) 2012 DATAIR Page 13 2012 DB Interim Amendment ______
Adopting Employer:
______
______Date
(c) 2012 DATAIR Page 14 2012 DB Interim Amendment <
To: Participants of <
This Amendment is a summary of recent changes to your Plan.
This Amendment incorporates required changes from the 2011 Cumulative List of Changes in Plan Qualification Requirements described in section 4 of Revenue Procedure 2005-66 as modified by Revenue Procedure 2007-44. It includes changes to the Internal Revenue Code and Treasury Regulation pursuant to the Pension Protection Act of 2006 and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010). This Amendment reflects Benefit Limitations for Defined Benefit plans pursuant to IRS Notice 2011-96 and Code section 436.
If your plan is determined to be under funded under the requirements of The Pension Protection Act of 2006, restrictions are imposed that may affect your plan benefits.
These four (4) restrictions occur, if the plan’s actuary determines that the “Adjusted Funding Target Attainment Percentage (AFTAP)” is less than 60% for the plan year.
1. Your accrued benefit will be frozen as of the valuation date of that plan year. This means that your plan benefit will not increase with the accruals described in the Summary Plan Description. Your plan benefit cannot increase with accruals until the plan’s AFTAP is at least 60%. < (c) 2012 DATAIR Page 15 2012 DB Interim Amendment . Or, you may elect to postpone commencement, until the restrictions end. . Also, if you are receiving payments under a method that is prohibited during this time, you will be able to elect a permitted form of payment. >> The payment restrictions described in (4) also apply in years when the AFTAP is less than 60%; or, 60% or more but less than 80%. < Your plan administrator will provide you with additional information, if the plan becomes subject to the restrictions described above. *** Please file this "Summary of Material Modifications" with your Summary Plan Description (the booklet that explains your Plan). If you would like to see the full text of the changes, you may inspect the Plan Document or receive a copy of the changes as explained in the "ERISA Rights" section of your Summary Plan Description. Your plan has been amended effective < (c) 2012 DATAIR Page 16 2012 DB Interim Amendment RESOLUTIONS OF < FOR THE ADOPTION OF 2012 INTERIM AMENDMENT On < RESOLVED, that the form of the Amendment presented to this meeting to adopt the required changes from the 2011 Cumulative List of Changes in Plan Qualification Requirements described in section 4 of Revenue Procedure 2005-66 as modified by Revenue Procedure 2007-44, it includes the Pension Protection Act of 2006 (“PPA “) and the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), as they relate to section 436 of the Code with respect to the limitations on distributions before and after a cessation period and benefit accruals after the cessation period as required by the Pension Protection Act of 2006 is approved. This Amendment is effective < RESOLVED, that the proper Officers of the Employer shall act as soon as possible to notify employees of the Employer of the adoption of this Amendment. RESOLVED, that the proper Officers of the Employer be, and hereby are, authorized and directed to execute any and all such documents and to perform any and all such acts as may be necessary and proper to effect the foregoing; and THE UNDERSIGNED does hereby certify that the foregoing is a full, true and correct copy of the Resolutions duly and regularly adopted by the Board of Directors of said Employer. ______Secretary ______Date (c) 2012 DATAIR Page 17 2012 DB Interim Amendment