BMW PENSION PLAN Summary Plan Description Describing Plan Provisions As of December 1, 2012
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BMW PENSION PLAN Summary Plan Description Describing Plan Provisions as of December 1, 2012 -FIN US_ACTIVE-108708807.14-AWSIZEMO Table of Contents Introduction ................................................................................................................... 1 Fast Facts About Your BMW Pension Plan ................................................................. 2 BMW Pension Plan At A Glance................................................................................... 3 How the Pension Plan Works ....................................................................................... 4 Eligible Employees ................................................................................................................................... 4 Plan Participation ...................................................................................................................................... 4 Eligibility Service ....................................................................................................................................... 4 Pension Service ........................................................................................................................................ 5 Becoming a Vested Participant ................................................................................................................. 5 Vesting Service ......................................................................................................................................... 5 How Your Pension Benefit is Calculated .................................................................................................. 6 What Goes Into Determining Your Pension Benefit? ............................................................................... 6 Pension Calculation Example ................................................................................................................... 7 Grandfathering Provision for BMW Manufacturing Participants ............................................................... 8 Life Events that Affect Your Pension Benefit ............................................................. 9 If You Are Married ..................................................................................................................................... 9 If You Divorce ........................................................................................................................................... 9 If You Become Disabled ........................................................................................................................... 10 If You Leave BMW and Then Return to Active Employment .................................................................... 10 When Breaks in Service Don’t Apply ...................................................................................................... ..11 If You Leave Active Employment for Military Service ............................................................................... 12 If You Die Prior to Retirement ................................................................................................................... 12 If You Return to Work After You Retire .................................................................................................... 13 When You May Begin To Receive Pension Benefits ................................................ 14 Fast Facts ............................................................................................................................................... 14 Normal Retirement .................................................................................................................................. 14 Early Retirement ..................................................................................................................................... 15 Deferred Vested Benefit if You Leave BMW Before Age 60 With at Least 5 but Less Than 10 Years of Vesting Service .................................................................. 18 Deferred Vested Benefit if You Leave BMW Before Age 55 With at Least 10 Years of Vesting Service......................................................................................... 18 Pension Commencement After Normal Retirement Age ........................................................................ 20 If You Leave BMW and You are Not Vested .......................................................................................... 20 Forms of Payment under the BMW Pension Plan ..................................................... 21 Fast Facts ............................................................................................................................................... 21 Payment Options .................................................................................................................................... 22 The Joint and Survivor Annuity Options ................................................................................................. 23 The Single Life Annuity Option ........................................................................................................... 26 The Ten-Year Certain and Life Annuity Option .................................................................................. 26 The Social Security Level Income Benefit Option ............................................................................. 27 Lump Sum Distributions ...................................................................................................................... 27 Applying for Your Pension Benefits ........................................................................................................ 29 i Deciding Which Option to Elect .............................................................................................................. 30 Special Provisions That Apply if the Plan Becomes Underfunded ......................................................... 30 Administrative Information .......................................................................................... 31 Plan Sponsor and Plan Administrator ..................................................................................................... 31 Plan Identification Numbers .................................................................................................................... 31 Plan Funding ........................................................................................................................................... 31 Summary of Important Administrative Information ................................................................................. 32 Plan Continuation ................................................................................................................................... 33 Official Plan Documents Determine Benefits .......................................................................................... 34 Plan Participation Doesn’t Guarantee Employment ............................................................................... 34 Benefit Claims and Appeals Procedure ..................................................................... 35 How to File a Claim ................................................................................................................................. 35 Denial of Benefits .................................................................................................................................... 35 Appeal of Denial ..................................................................................................................................... 35 Review on Appeal ................................................................................................................................... 36 Statements Required by Government Regulations ................................................... 37 Glossary ........................................................................................................................ 40 Retirement Eligibility Chart ......................................................................................... 42 ii Introduction This Summary Plan Description is prepared for the employees and beneficiaries of all Plan participating employers except BMW Manufacturing Co., LLC. This document is only a summary of certain portions of the BMW Pension Plan (the “Plan”) in non-legal language. Please do not misunderstand: only the Plan gives any person a legal right to benefits and this is not the Plan. This summary does not describe all of the provisions of the Plan and is not a substitute for the Plan. Please review this whole summary because if you take parts of it out of context, you might read only partial information that could be misleading. Refer to the Administrative Information section of this summary on page 31 for further details about the Plan documents and your legal rights. After you have read this summary, put it in a safe place for future reference by you and your family. Capitalized words used throughout this summary plan description are defined in the section entitled “Glossary” on page 40. 1 Fast Facts About Your BMW Pension Plan You automatically became a participant in the Plan once you completed one year of service, provided you were at least 18 years old and were hired or rehired before March 1, 2012. BMW pays the entire cost of the Plan – you pay nothing. One of the ways you become fully vested in the Plan is to