DOW CORNING CORPORATION EMPLOYEES’ RETIREMENT PLAN
Summary Plan Description
January 1, 2013
Dow Corning Corporation HR Service Center - Mail #HRSC
P.O. Box 994
Midland, MI 48686-0994 (800) 440-0772
TABLE OF CONTENTS
FAST FACTS ... 1
INTRODUCTION ... 4
ELIGIBILITY ... 5
BENEFIT CALCULATION ... 5
Benefit Formula ... 5
Formula Definitions ... 6
VESTING ... 7
BREAKS IN SERVICE ... 7
TIMING OF RETIREMENT BENEFITS ... 8
Small Benefit Cash Outs ... 8
All Other Distributions ... 8
PAYMENT OF BENEFITS ... 10
Forms of Payments ... 10
Domestic Partners ... 12
Suspension of Benefits ... 12
DEATH BENEFITS ... 12
Active Participants Not Yet Eligible for Early Retirement ... 12
Participants Who Became Eligible for Early Retirement While Active ... 13
Deferred Vested Participants ... 13
DISABILITY ... 14
RECEIVING YOUR BENEFITS ... 14
Applying for Benefits ... 14
The Initial Decision on Your Claim ... 14
When the Initial Decision on Your Claim Will Be Made ... 15
Review of the Denial of Your Claim ... 15
When the Decision on the Review of Your Appeal Will Be Made ... 15
Content of the Decision on the Review of Your Appeal... 15
Finality of the Decision on the Review of Your Appeal ... 15
Seeking Review of Your Claim in Court ... 16
Taxes ... 16
OTHER IMPORTANT INFORMATION ... 16
Estimating Your Benefit ... 16
Benefits Insured by the Pension Benefit Guaranty Corporation ... 17
Loss, Limitation, or Reduction of Benefits ... 17
Changes to the Plan and Termination ... 18
Assignment of Plan Benefits ... 18
Top Heavy ... 19
Employment ... 19
ERISA Rights... 19
Receive Information About Your Plan and Benefits ... 19
Prudent Actions by Plan Fiduciaries ... 20
Assistance With Your Questions ... 21
Service of Legal Process ... 21
Tax Qualification ... 21
ADMINISTRATIVE INFORMATION ... 21
Plan Name ... 21
Plan Sponsor and Agent for Service of Process ... 21
Identification Numbers ... 22
Plan Administrator ... 22
Plan Year ... 22
Plan Trustee ... 22
INDEX OF DEFINED TERMS ... 23
FAST FACTS
Item Information SPD Page #
Eligibility You are automatically enrolled in the Plan on the first day you are actively at work, unless you are excluded because of your
employment status.
5
Benefit Formulas
There are two Plan formulas. The one that applies to you depends on your plan participation date.
• Pre-2006 Participant. Your benefit is equal to your years of Credited Service (CS), times 1.6%, times your Average Pensionable Compensation (AC). Your benefit will be reduced by your Social Security Offset (SS). The formula looks like this: ((CS x 0.016 x AC) – (0.016 x CS x SS))
• Post-2005 Participant. Your benefit is equal to your years of Credited Service (CS), times 1%, times your Average Pensionable Compensation (AC). The formula looks like this: CS x 0.01 x AC.
5
Vesting / Vested Service
To be eligible for any benefits from the Plan, you must be vested. Being Vested means that you have the right to keep the benefits you earned under the Plan. You are fully vested in your Plan benefit once you complete five years of Vested Service.
7
Timing of Retirement Benefits
If the value of your Vested benefit is $1,000 or less, you will promptly receive a lump-sum payment of that value, regardless of whether you have applied for a benefit.
Otherwise, you have the following options:
• Immediate Distribution if the value of your benefit does not exceed $15,000
• Wait to receive your full benefit at age 65
• Elect Early Retirement at a reduced amount
8
Item Information SPD Page #
Payment Forms Your benefit will be paid under the form of payment you elect from one of the following options if the value of your benefit exceeds
$1,000:
• Cash Out: You are eligible to receive a Cash Out if the Actuarial Equivalent present value of your benefit is not more than $15,000.
• Single Life Annuity: Under this form of payment, you will receive monthly payments until you die, with no benefit payable to anyone after your death. This is the largest monthly benefit payment you can receive.
• 50%, 75%, or 100% Survivor Options: Under these options, your spouse, Domestic Partner, and/or children under age 23 will receive monthly payments after your death.
• 10 Year Certain and Life Option: This is a monthly annuity payable for your lifetime that guarantees at least 120
payments will be made to you or your beneficiary. If you die before 120 payments are made to you, your beneficiary will receive monthly survivor payments until a total of 120 payments are made from the Plan, including any payments you have already received.
10
Death Benefits If you die after you become Vested, your spouse or children may be eligible to receive benefits after your death. The amount of the death benefits varies based on your age and employment status at your death.
12
Disability If you become Disabled, you will continue to accrue one-half month of Credited Service under the Plan for each month you remain Disabled until you retire.
14
Receiving Your Benefits / Taxes
When you are ready to receive Plan benefits, you must file an application for benefits with the Retirement Team, unless your Plan benefits will be paid automatically (for example, a Cash Out or you reach age 65 and have terminated employment but have not yet started your benefits).
You must advise the Plan Administrator at least 60 days before the date you want your benefits to start.
All payments from the Plan are includible in your taxable income. The Company is generally required by law to withhold federal taxes on all distributions from the Plan. Monthly annuity payments are subject to the required withholding rate at the time, unless you elect otherwise. Lump sum payments are subject to a 20% federal withholding rate unless rolled over to another plan or IRA. State tax treatment of payments from the Plan will vary by state.
14
Item Information SPD Page #
Contacting the Retirement Team
Toll-Free Telephone: (800) 440-0772 Local: (989) 496-4772
Fax: (989) 496-1886
E-mail: G1HRSC or HRSC@dowcorning.com
4
INTRODUCTION
Dow Corning Corporation (“Dow Corning”) has established the Dow Corning Corporation Employees’ Retirement Plan (the “Plan”) to assist you with your financial needs during your retirement years. The Plan is provided at no cost to you.
Some subsidiaries and other closely affiliated companies of Dow Corning have also adopted the Plan for the benefit of their employees and are collectively, along with Dow Corning, referred to as the “Company” throughout this document. As of the date of this summary, the following affiliated companies have adopted the Plan: Hemlock Semiconductor Corporation; Dow Corning Compound Semiconductor Solutions, LLC; Dow Corning STI, Inc.; and Hemlock Semiconductor, L.L.C. An updated list of affiliated companies that have adopted the Plan is available upon written request to the Retirement Team.
This booklet is your Summary Plan Description (“SPD”). It describes certain key terms of the Plan but is not intended to cover every situation that might arise. Under no circumstances should this SPD be regarded as a substitute for the Plan itself. In case of any conflict between the terms of the Plan and the explanation contained in this SPD, the Plan's terms always control. The official Plan document is available for inspection at the Company's offices during regular business hours. Throughout this SPD, capitalized words have special meanings. They are defined terms, which are usually defined when they first appear in the Plan. There is an index of defined terms at the end of this SPD.
Dow Corning has prepared this SPD to make sure that you understand the Plan's rules. Please read it and keep it with your personal records for future reference. The SPD is also available through the Dow Corning & Me Homepage. If you still have any questions about the Plan, please contact the Retirement Team at (989) 496-HRSC (4772) or toll-free at (800) 440-0772.
ELIGIBILITY
As an employee of the Company, you are eligible to participate in the Plan and will be automatically enrolled on the first day you are actively at work, unless you are:
• a nonresident alien who receives no earned income from sources within the United States;
• a person who is actively covered by any other pension or retirement plan maintained or contributed to by the Company or other closely affiliated company, other than the Dow Corning Corporation Employees’ Capital Accumulation Plan or Social Security;
• a person who was an employee of another entity and who became an employee of the Company as a result of an acquisition by the Company of all or a part of the business of the other entity, unless employees of the other entity are specifically permitted by the Company to participate;
• a union employee whose retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement specifically provides for coverage under the Plan;
• a person (a) participating in a student employment program (including a co-op or intern), (b) characterized by the Company as a project worker, or (c) on leave or vacation from another employer; or
• a person who is classified by the Company as not an Employee, even if a judicial or administrative determination concludes he or she is legally an Employee.
BENEFIT CALCULATION
Benefit Formula
There are two Plan formulas. The formula that applies to you depends on the date you started participating in the Plan.
• Pre-2006 Participant. Your “Accrued Benefit” is equal to your years of Credited Service (CS), times 1.6%, times your Average Pensionable Compensation (AC). Your benefit will be reduced by your Social Security Offset. Your “Social Security Offset” is equal to 1.6% times your years of Credited Service (CS) times your Estimated Social Security Benefit (SS). The formula looks like this: ((CS x 0.016 x AC) – (0.016 x CS x SS)). Your Estimated Social Security benefit will be based on your compensation with the Company. The Plan allows you to have your Estimated Social Security Benefit based instead on your actual wage history. You will receive a notice of this when you terminate employment.
• Post-2005 Participant. Your “Accrued Benefit” is equal to your years of Credited Service (CS), times 1%, times your Average Pensionable Compensation (AC). The formula looks like this: CS x 0.01 x AC.
Formula Definitions
• “Pre-2006 Participant” is a Participant who received any Credited Service in the Plan before January 1, 2006.
• “Post-2005 Participant” is a Participant who received Credited Service in the Plan only after December 31, 2005. If you were a co-op employee who had co-op time prior to January 1, 2006, and were hired into a part-time or full-time position after December 31, 2005 (with or without a break in service), you are a Post-2005 Participant and not a Pre-2006 Participant. Your years of service as a co-op, however, are included in the Credited Service component of the benefit calculation.
• “Credited Service” (CS) is calculated in increments of 195 Hours of Service. Each 195 Hours of Service that you work will be counted as 1/10th of a year. A maximum of 1,950 hours – or one full year of Credited Service – will be considered toward your benefit calculation each calendar year. If you became a Company Employee as part of an acquisition or merger, you may receive Credited Service for your time with the acquired or merged company, at the discretion of the Retirement Board.
• An “Hour of Service” has a special meaning for Plan purposes. You will be credited with an Hour of Service for:
o each hour for which you are directly or indirectly paid by the Company (or by any company that is part of its controlled group of companies, collectively called the “Employer Group”) for performance of duties during the Plan Year;
o each hour for which you are directly or indirectly paid by the Employer Group for reasons other than performance of duties (such as vacation, holidays, sickness, disability, lay-off, military duty, jury duty, or leave of absence during the Plan Year) up to a maximum of 501 hours for any single continuous period during which you do not perform any duties for the Company; and
o each hour during the Plan Year for which back pay has been either awarded or agreed to by the Employer Group.
You can only receive credit for an Hour of Service once, even if it falls under more than one of the categories above. If you are a salaried employee, for whom hours are not counted, you are automatically credited with 190 Hours of Service for each month in which you have at least one Hour of Service. You will also be credited for service during a family leave under the Company’s Family Leave Policy.
• “Average Pensionable Compensation” (AC) is calculated using an average (see below) of your Company earnings, including your base pay, straight time portion of overtime pay, and the Annual Variable Incentive Program (“AVIP”) generally factored at one times your target amount based on your level. Merit awards given in lieu of merit increases are also included in your earnings.
Earnings that are not included in your AC include overtime premiums, relocation allowances, disability payments, foreign service allowances, shift allowance payments, recognition awards, long-term incentives, promotion awards, and actual AVIP payments.
The maximum earnings that may be taken into account for your AC is
$255,000 annually (for 2013, which may be increased for inflation in later years).
If you are a Pre-2006 Participant, your AC is the average of your highest 3 consecutive annual earnings, either based on the highest 3 calendar years within your last 10 years, or your final 3 years ending on your retirement date, whichever is larger. The annual average is then converted to a monthly amount.
If you are a Post-2005 Participant, your AC is the average of your highest 5 consecutive annual earnings, either based on the highest 5 calendar years within your last 10 years, or your final 5 years ending on your retirement date, whichever is larger. The annual average is then converted to a monthly amount.
VESTING
To be eligible for any benefits from the Plan, you must be Vested. Being “Vested” means that you have the right to keep the benefits you earned under the Plan. You are fully vested in your Plan benefit once you complete five years of Vested Service. You receive a year of “Vested Service” for each Plan Year in which you complete 1,000 Hours of Service. In no case will your Vested Service be less than your Credited Service.
Vested Service includes service with any member of the Company’s controlled group of companies.
BREAKS IN SERVICE
If you leave the Company and later return to work, generally your Credited Service and your Vested Service will be restored. If, however, you had received a Cash Out distribution of your entire benefit, your prior Credited Service will not be counted unless you repay your Cash Out amount to the Plan within five years of your reemployment date. The repayment must include interest.
TIMING OF RETIREMENT BENEFITS
Your Vested benefit is payable when you leave the Company, retire, or die. Small Benefit Cash Outs
If the Actuarial Equivalent present value of your Vested benefit is $1,000 or less, you will promptly receive a lump-sum payment of that value, regardless of whether you have applied for a benefit (“Cash Out”). No other timing or form of benefit is available.
“Actuarial Equivalent” means an equivalent amount, based upon factors specified in the Plan, that takes into account the fact that you will be receiving payments over a different period of time or in a different manner than you would under the Plan’s normal timing and form of benefit rules.
All Other Distributions
If the Actuarial Equivalent present value of your Vested benefit is more than
$1,000, you have the following options:
• Immediate Distribution of Limited Benefits. If the Actuarial Equivalent present value of your benefit does not exceed $15,000, you may elect immediate payment.
• Wait Until Normal Retirement. You may begin receiving your full benefit as an annuity when you reach age 65 (“Normal Retirement Age”).
• Elect Early Retirement. You may begin receiving your benefit as an annuity before your Normal Retirement Age under certain circumstances, although your monthly benefit may be reduced to reflect the longer period over which your benefit is paid. The reduction depends on your age and service at the time you want benefits to begin. To determine the reduced amount, you must multiply your Accrued Benefit (the benefit that would be paid to you in a Single Life Annuity if you waited until your Normal Retirement Age) by your Early Retirement Factor, as described below. o Early Retirement.
For Pre-2006 Participants: You are eligible for early retirement if you stop working with the Company after you reach age 50 and have at least 10 years of Credited Service.
• Level Benefit Alternative. This alternative is intended to provide the same monthly payment from the Plan throughout your retirement, both before and after you are eligible for Social Security benefits. The reduction is determined by applying your “Early Retirement Factor” (ERF) to your benefit before the Social Security Offset. The ERF is 100% (unreduced) if you:
o have 85 points; or
o are at least age 60 with 10 years of Credited Service.
Solely for purposes of determining the amount of any ERF, Credited Service includes service with any member of the Company’s controlled group of companies.
Your ERF is reduced 6% for each year you are away from either (a) 85 points or (b) age 60 with 10 years of Credited Service, whichever of the two you are closer to. Keep in mind that you earn two points each year: one for age and one for service. As an example, if you have 83 points, you would be two points (or one year) away from 85 points. Hence, you would receive a 6% (not 12%) reduction.
Your Estimated Social Security Benefit offset is reduced by the “Social Security Reduction Factor,” which is 100% at age 65 and reduced 0.555 of 1% for each month of the first 60 months that you retire before you reach age 65, and 0.278 of 1% for each of the next 60 months you retire before you reach age 65.
• Level Income Alternative. This alternative is available only if you have not yet reached age 62. It provides an increased monthly benefit during your lifetime up to age 62, and then a lesser monthly amount when you reach age 62, when you can begin to receive Social Security. It is designed to provide you with monthly amounts that, when combined with Social Security, are level before and after age 62.
• Basic Formula Alternative. This alternative is also available only if you have not yet reached age 62, but it does not provide a completely level income before and after age 62. If you are eligible for early retirement before age 62, this option provides a lifetime monthly annuity that gives you a higher benefit before you reach age 62 and a reduced benefit after age 62.
For Post-2005 Participants: You are early retirement eligible if you stop working with the Company after you reach age 55 and have at least 10 years of Credited Service. Your “Early Retirement Factor” (ERF) is 100% at age 65, and is reduced 5% for each year that you retire before you reach age 65. For example, if you retire at age 60, five years early, there would be a 25% (5 x 5%) reduction in your ERF. Your ERF would be 75% (100% - 25%). o Deferred Vested. If you leave employment before eligibility for early
retirement, you can begin your benefit before age 65 once you meet the early retirement criteria, but your ERF will be different. Your
“Early Retirement Factor” (ERF) is 100% at age 65, and is reduced
0.555 of 1% for each month of the first 60 months that you retire before you reach age 65, and 0.278 of 1% for each of the next 60 months you retire before you reach age 65.
Detailed information about each of these options will be provided in your benefit election forms when you are ready to retire.
PAYMENT OF BENEFITS
Forms of Payments
Your benefit will be paid under the form of payment you elect from one of the options below. For immediate distribution of limited benefits before Early Retirement with a value of $15,000 or less, only the Cash Out, the Single Life Annuity for unmarried participants, and the 50% or 75% annuity for married participants are available.
• Cash Out. A Cash Out is available if the Actuarial Equivalent present value is not more than $15,000. Under current federal law, this payment method may not be elected when the Plan’s adjusted funding target attainment percentage (AFTAP) is less than 80%. When you apply for benefits, you will be notified whether this restriction applies to you and of the alternative benefit distribution options available at that time.
• Single Life Annuity. Under this form of payment, you will receive monthly payments until you die, with no benefit payable to anyone after your death. This is the largest monthly benefit payment you can receive.
• Survivor Options. If you are married, have a Domestic Partner, or have Children under the age of 23 at the time you retire, you may elect to receive a reduced pension benefit for your lifetime in order to provide a survivor benefit to your spouse, Domestic Partner or Children. If you have a spouse or Domestic Partner and you both die, the monthly benefit will continue to be paid to any Children, in equal portions, who have not reached age 23. When a Child reaches age 23, his or her portion will be distributed among the remaining Children, if any, who have not yet reached age 23.
You may choose from the following survivor options. If you do not have a spouse or Domestic Partner, only the 50% Survivor Option is available for your Children:
o 50% Survivor. Your benefit is reduced by 6% from the amount you would receive if you elected the Single Life Annuity. But when you die, your surviving spouse or Domestic Partner will receive a lifetime monthly benefit equal to 50% of your reduced monthly benefit.
If your spouse or Domestic Partner is significantly older or younger than you, the 6% reduction is further adjusted. The reduction is increased ½% for each year by which your spouse or Domestic Partner is more than five years younger than you and increased by ½% for each year by which your spouse or Domestic Partner is more than five
years older than you up to 17 years. If you do not have a spouse or Domestic Partner and elect this option for your Children, the reduction will be calculated as though you are married and your spouse is the same age as you.
o 75% Survivor. Your benefit is reduced by 10% from the amount you would receive if you elected the Single Life Annuity. But when you die, your surviving spouse or Domestic Partner will receive a lifetime monthly benefit equal to 75% of your reduced monthly benefit.
If your spouse or Domestic Partner is significantly older or younger than you, the 10% reduction is further adjusted. The reduction is increased ½% for each year by which your spouse or Domestic Partner is more than five years younger than you and increased by ½% for each year by which your spouse or Domestic Partner is more than five years older than you up to 25 years.
This option is not available if you are not married and do not have a Domestic Partner.
o 100% Survivor. Your benefit is reduced by 14% from the amount you would receive if you elected the Single Life Annuity. But when you die, your surviving spouse or Domestic Partner will receive a lifetime monthly benefit equal to 100% of your reduced monthly benefit. If your spouse or Domestic Partner is significantly older or younger than you, the 14% reduction is further adjusted. The reduction is increased ½% for each year by which your spouse or Domestic Partner is more than five years younger than you and increased by ½% for each year by which your spouse or Domestic Partner is more than five years older than you up to 33 years.
This option is not available if you are not married and do not have a Domestic Partner.
• 10 Year Certain and Life Option. This is a monthly annuity payable for your lifetime, which guarantees that at least 120 payments will be made to you or your beneficiary. If you die before 120 payments are made to you, your beneficiary will receive monthly survivor payments until a total of 120 payments are made from the Plan, subtracting any payments you have already received. Compared to the Single Life Annuity, there is a 5% reduction in the monthly amount you or your beneficiary will receive with this option.
If you are legally married when your payments begin and you choose a payment form other than the 50% Survivor Option, your spouse must sign a waiver of benefits form witnessed by a Plan representative or a notary public.
“Child” or “Children” means your or your spouse’s living, natural, or legally adopted child:
• who was born either prior to or within nine months after your death;
• if adopted, whose adoption was final on or prior to the date of your termination of employment with the Employer Group; and
• who is living in a family relationship in your household on the date of your death, or in your spouse’s household if born after your death.
Domestic Partners
The Plan considers you married to your Domestic Partner, and will treat your Domestic Partner as your spouse, except for any spouse consent or waiver required under the Plan. A “Domestic Partner” is a person of the same or opposite sex with respect to whom, before your termination of employment: (1) Dow Corning’s requirements for health and welfare domestic partner benefits have been met; (2) you have filed with Dow Corning a Statement of Domestic Partner Relationship, and (3) you have not subsequently filed a Termination of Domestic Partner Relationship form.
Suspension of Benefits
If you have begun receiving benefit payments and are later rehired before age 70, or you continue working past your Normal Retirement Date, your benefit payments will be suspended for any calendar month in which you complete 40 or more Hours of Service or receive compensation for any such Hours in 8 or more days. You will be notified that your benefit payments have been suspended for the period of suspension after your Normal Retirement Date. You will continue to earn benefits while you work. When your employment later ends, you will have the opportunity to make new elections as if you had not previously begun to receive benefits. Your benefits will be offset by the Actuarial Equivalent of any payments you received before your final retirement. In any event, your benefit on your subsequent termination will not be less than your benefit on any rehire date.
DEATH BENEFITS
Active Participants Not Yet Eligible for Early Retirement
If you are Vested and die while an active employee, but before becoming eligible for early retirement:
• If you are married, your spouse will receive in monthly payments for the remainder of the spouse’s life, the greater of:
o 50% of the Actuarial Equivalent of the monthly benefit that would have been paid to you under a Single Life Annuity at your earliest retirement date, assuming you had terminated employment at the time of your death, or
o the Actuarial Equivalent of the amount your spouse would have been entitled to under the 50% Survivor Option had you terminated employment the day before your death, survived to your earliest retirement date and then died.
• If you have at least one Child under the age of 23 at the time of your death and you are not married or at the time your surviving spouse subsequently dies, the amount as determined above for the spouse will instead be paid equally to each of your Children under age 23. When a Child reaches age 23, his or her portion will be distributed among the remaining Children, if any, who have not yet reached age 23.
• If you do not fit either scenario above, the Plan pays no benefits upon your death.
Participants Who Became Eligible for Early Retirement While Active
If you become eligible to receive early retirement benefits while in active employment with the Company and then die before beginning your benefits (even if you are not employed by the Company at your death and had deferred the start of your benefits):
• Your spouse will receive monthly payments as though you had elected the 100% Survivor Option. If you have at least one Child under the age of 23 at the time of your death and you are not married, or at the time your surviving spouse subsequently dies, the amount as determined above for the spouse will instead be paid equally to each of your Children under age 23. When a Child reaches age 23, his or her portion will be distributed among the remaining Children, if any, who have not yet reached age 23.
• If you do not have a surviving spouse or any Children under age 23, the Plan will pay to your designated beneficiary an amount equal to the 120 monthly payments that would have been paid to your beneficiary had you retired the day before your death with the 10 Year Certain and Life Option.
Deferred Vested Participants
If you are Vested, but die before meeting the early retirement criteria, your spouse will receive 50% of the Actuarial Equivalent of the monthly benefit that would have been paid to you in a Single Life Annuity at your earliest deferred Vested retirement date.
If you are Vested, but die after meeting the early retirement criteria, your spouse will receive monthly payments for the remainder of your spouse’s life. The monthly payment will be equal to 50% of the benefit that would have been paid to you in a Single Life Annuity had you retired on the day before your death. If you have at least one Child under the age of 23 at the time of your death and you are not married, or at the time your surviving spouse subsequently dies, the amount as determined above for the spouse will instead be divided equally among your Children under age 23. When a Child reaches age 23, his or her portion will be distributed among the remaining Children, if any, who have not yet reached age 23. No other death benefits are payable with respect to terminated vested participants.
DISABILITY
You are “Disabled” if you have a condition that makes you eligible for, and you receive, disability benefits from the Company’s long-term disability plan.
If you become Disabled, you will continue to accrue one-half month of Credited Service under the Plan for each month you remain Disabled until age 65.
RECEIVING YOUR BENEFITS
Applying for Benefits
When you are ready to receive Plan benefits, you must file an application for benefits with the Retirement Team, unless your Plan benefits will be paid automatically (for example, a Cash Out Payment or you reach age 65 and have terminated employment but have not yet started your benefits).
In the event of your death, your beneficiary should make contact the Retirement Team. The Retirement Team will assist you or your beneficiary in completing any retirement paperwork that may be required. You may also have someone else represent you, for example, legal counsel, family member, or someone with a Power of Attorney. In that event, the Retirement Team will communicate with your authorized representative rather than with you.
You must advise the Retirement Team at least 60 days before the date you want your benefits to start. To help ensure that you receive your benefit in a timely manner, you also should keep the Retirement Team informed of any change in your mailing address.
Your retirement paperwork, as well any inquiry regarding your benefit (such as the calculation of your benefit), will be treated as a “claim” under the Department of Labor’s claims procedure rules. The rest of this section describes those rules.
The Initial Decision on Your Claim
Your claim for Plan benefits will be subject to a full and fair review by the Retirement Team. If your claim is denied in whole or in part, the Retirement Team will notify you in writing or electronically (for example, by e-mail) of the denial. The notification will provide you with:
• the specific reason(s) for the denial;
• the Plan provisions on which the denial is based;
• an explanation of the Plan's claims decision review process and applicable time limits;
• a description of any additional materials necessary to perfect your claim, with an explanation of why such material is necessary; and
• a statement that you have the right to bring a lawsuit if there is still an adverse determination after the review.
When the Initial Decision on Your Claim Will Be Made
Generally, notice of the decision on your claim will be issued within 90 days from when it was filed with the Retirement Team. If special circumstances require an extension of time for processing your claim, the 90-day period may be extended up to an additional 90 days, to a total of 180 days. In the event an extension of time is needed, you will be notified within the original 90 days of the date by which the Retirement Team expects to render a final decision.
Review of the Denial of Your Claim
If your claim for Plan benefits is denied, in whole or in part, and you want a review of that denial, you must make a written appeal to the Retirement Board for a review of the denial of your claim. You must make your written appeal within 60 days after you receive notice of the denial of your claim.
You may review pertinent Plan documents and submit issues and comments to the Retirement Board in writing.
The review of your appeal will take into account all comments, documents, records, and other information submitted by you relating to your claim, even if such information was not submitted or considered in the initial decision of your claim.
When the Decision on the Review of Your Appeal Will Be Made
If the Retirement Board receives your appeal no later than 10 days before its next quarterly meeting, it will make a decision at that meeting. Otherwise, your appeal will be considered at the following quarterly meeting. The Retirement Board will notify you of its decision in writing within five days after the meeting.
If special circumstances require an extension of time for processing the review of your appeal, you will be notified prior to the beginning of the extension. That notice will also provide a description of the special circumstances that require the extension and identify the date on which the determination on review is expected. Content of the Decision on the Review of Your Appeal
The Retirement Board's decision of your appeal will be in writing, or in electronic format; for example, by e-mail. The decision will provide you with:
• the specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based; and
• a statement that you are entitled to copies of documents relevant to your claim and your right to take the matter to court.
Finality of the Decision on the Review of Your Appeal
The decision of the Retirement Board on review of your appeal is final.
Seeking Review of Your Claim in Court
You must first exhaust your claim and appeal rights under this Plan before you seek review of your claim in court. This means you must follow and complete the procedures described above for making your claim for Plan benefits and seeking review of an initial decision on your claim in a timely manner. If you do not follow and complete these procedures, a review of your claim in court will be subject to dismissal for your failure to exhaust your claim and appeal rights under the Plan. If the Retirement Team or the Retirement Board do not follow these procedures for the initial decision on your claim or the appeal of your claim, you will be deemed to have exhausted all of the claim and appeal procedures available under the Plan and you will be entitled to bring a lawsuit in a state or federal court under Section 502(a) of ERISA to pursue any remedies you may have regarding your claim.
Taxes
All payments from the Plan are includible in your taxable income. Unless you elect otherwise, the Company is required by law to withhold federal taxes on all distributions from the Plan, in accordance with the required withholding rate at the time. State tax treatment of payments from the Plan vary by state.
If you receive a Cash Out Payment, you may roll over that lump sum amount into an IRA or tax-qualified retirement plan within 60 days of the date you receive the distribution. You may also instruct the Retirement Team to directly roll over the lump sum amount to your IRA or tax-qualified retirement plan without any distribution to you. In either case, the amount distributed will not be taxable income. Beneficiaries have similar rollover rights, although non-spouse beneficiaries can roll over only to IRAs.
You will be notified again about the withholding and rollover rules at the time you are eligible to receive a distribution.
OTHER IMPORTANT INFORMATION
Estimating Your Benefit
An online tool, Wealth Matters, can help you estimate your Plan benefit. You can calculate “what if” scenarios to help you with your financial planning for retirement. The tool allows you to select when you want to retire, by either age or date. It also allows you to input a salary increase assumption. The results display the factors that are used your Plan benefit calculation. The estimates include all of the payment options available to you.
Please note that information provided by this tool is only an estimate and may vary from your actual benefit when paid.
To access the Wealth Matters system:
• Via the intranet while you are at work. Go to Dow Corning Homepage Dow Corning & Me Manage My Compensation & Benefits Estimate My Pension Benefit.
• Via the Internet at http://DowCorning.PensionPath.com.
Benefits Insured by the Pension Benefit Guaranty Corporation
Your pension benefits under this Plan are insured by the Pension Benefit Guaranty Corporation (“PBGC”). If the Plan terminates without enough money to pay all benefits, the PBGC will step in to pay benefits up to a certain guaranteed level. Most people receive all of the benefits they would have received under the Plan, but some people may lose certain benefits.
Specifically under the Plan, the PBGC guarantee generally covers: (1) normal and early retirement benefits and (2) 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 (for 2013 this is a single life annuity of up to $4,789.77 per month); (2) some or all of the benefit increases and new benefits based on Plan provisions that have been in place for fewer than five 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 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, including health insurance, life insurance, certain death benefits, vacation pay, and severance pay.
Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money the Plan has and on how much the PBGC collects from the Company and any other entity that may be responsible for the Plan’s funding.
For more information about the PBGC and the benefits it guarantees, contact the PBGC’s Technical Assistance Division, 1200 K Street NW, 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 (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 www.pbgc.gov.
Loss, Limitation, or Reduction of Benefits
If you are not fully Vested in your Plan benefits, then you will lose your non-Vested benefits when you terminate your employment with the Company. Even if you are fully Vested in your Plan benefits, if the Company decides to terminate the Plan and, at that time, there are insufficient funds to pay all benefits and the PBGC
guarantees do not cover your entire benefit payment, you may not receive the full amount of your Plan benefit.
If the Company decides to reduce the amount of Plan benefits that can be earned on future service, you may not be able to earn as great a retirement benefit as you otherwise may currently expect.
If your spouse or other joint annuitant dies before you do and after you have started to receive monthly payments under the Plan that were reduced for the survivor option, the amount of your payments will not be increased.
Under federal law, the maximum amount of benefits that can be paid to you from this type of Plan is, for 2013, the lesser of 100% of your total compensation or
$205,000 per year, indexed to inflation, and adjusted for benefit commencement before age 62 or after age 65 or in alternative forms. To the extent your Plan benefit would otherwise exceed this limitation, it will not be paid.
Changes to the Plan and Termination
The Company intends to maintain the Plan as a continuing part of its benefits program. The Company, however, has the right to change part or all of the Plan, or to terminate the Plan entirely, at any time. You will be informed of any Plan changes that affect your Plan benefits. No changes will decrease your benefit accrued under the Plan when the Plan is changed.
In addition, if the Plan is terminated, you have certain guarantees:
• You will be 100% Vested in your Plan benefit as of the date of termination.
• After payment of expenses, the Plan’s assets will be used to provide benefits for retired, active, and terminated Plan participants who have not yet received their entire benefits. No Plan assets may revert to the Company until all Plan benefits and expenses are paid.
• If the assets are not sufficient to provide benefits for all participants, Plan money would be used, as provided by law, to pay expenses and to provide for those benefits for which there are sufficient funds. After the assets are exhausted, the PBGC takes over.
Assignment of Plan Benefits
As long as the Trustee holds Plan funds, you cannot, under any circumstances, assign, pledge, or otherwise use your rights to benefits under the Plan to satisfy your creditors or pay your debts.
However, the Plan will pay all or a portion of your benefits to someone other than you if a court issues a domestic relations order relating to child support, alimony, or marital property rights, and this order satisfies the requirements of a Qualified Domestic Relations Order (“QDRO”) under federal law. In such circumstances, the Plan will make payments to another person (“Alternate Payee”).
If you need more information, contact the Retirement Team for a copy of the Plan’s QDRO procedures.
Top Heavy
Under federal law, the Plan is required to contain provisions that will become effective if it becomes Top Heavy sometime in the future. The Plan will be considered “Top Heavy” if the present value of the accumulated benefits under the Plan for certain “key employees” exceeds 60% of total accumulated benefits under the Plan for all employees.
It is very unlikely that the Plan will ever become Top Heavy. If it does, however, vesting will accelerate under the Plan so that you will have a nonforfeitable right to your Plan benefit if you have completed at least three years of Credited Service. Also, certain additional minimum benefits may have to be provided.
A more detailed explanation of the Plan’s Top Heavy rules will be provided if and when the Plan ever becomes Top Heavy.
Employment
Your participation in this Plan is not a guarantee or contract of employment. ERISA Rights
As a participant in the Plan, you are entitled to certain rights and protections under ERISA.
Receive Information About Your Plan and Benefits ERISA provides that all Plan participants are entitled to:
• Examine, without charge, at the HR Service Center and at other specified locations, such as worksites, all documents governing the Plan, including insurance contracts, if applicable, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.
• Obtain, upon written request to the Retirement Team, copies of documents governing the operation of the Plan, including insurance contracts, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The Retirement Team may make a reasonable charge for the copies.
• Receive a summary of the Plan's annual funding notice. The Retirement Board is required by law to furnish each participant with a copy of this annual funding notice.
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA.
Enforce Your Rights
If your claim for a retirement benefit is denied or ignored in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Retirement Board to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Retirement Team. If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the Plan's decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court. If it should happen that the Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person(s) you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees if, for example, it finds your claim is frivolous.
Assistance With Your Questions
If you have any questions about the Plan, you should contact the Retirement Team. If you have any questions about this statement, or about your rights under ERISA, or if you need assistance in obtaining documents from the Retirement Team or Retirement Board, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
Any questions regarding the terms of the Plan or your benefits will be treated as a claim and will be handled according to the procedures outlined above in the section titled “Benefit Claims.”
Service of Legal Process
The Company believes that the claims review procedure, general Plan administration, and ERISA protections will make legal action on the part of participants and/or beneficiaries unnecessary. However, if legal action is considered to be in order, the entity specifically designated for service of legal process is the Company. Legal process may also be served on the Retirement Board or the Trustee at the addresses shown below.
Tax Qualification
The Company intends that the Plan will meet the IRS requirements for a tax-qualified retirement plan. A tax-qualified retirement plan has important tax advantages for you. For example, earnings of the trust accumulate tax-free and the earnings, the Company's contributions and your authorized contributions will not be taxed to you until you receive benefits from the Plan.
ADMINISTRATIVE INFORMATION
Plan Name
The official name of the Plan is the Dow Corning Corporation Employees’ Retirement Plan. The Plan is a defined benefit plan and provides participants with fixed benefit payments. The Plan does not require or permit employee contributions. The Company makes all contributions to the Plan, the amount of which is actuarially determined. The Plan’s assets are held in a trust account with the Plan’s trustee, The Northern Trust Company.
Plan Sponsor and Agent for Service of Process Dow Corning Corporation
Mail #HRSC P.O. Box 994
Midland, MI 48686-0994
Identification Numbers
The Company's employer identification number is 38-0495575. The plan number for the Plan is 333.
Plan Administrator
The Plan is administered by the “Retirement Board” appointed by Dow Corning. As “Plan Administrator”, the Retirement Board is responsible for and has complete discretion in interpreting the Plan, establishing procedures, carrying out the terms of the Plan, and determining the status and rights of all parties claiming benefits under the Plan.
Dow Corning Corporation Retirement Board HR Service Center - Mail #HRSC
P.O. Box 994
Midland, MI 48686-0994 (800) 440-0772
The Retirement Board has delegated some of its responsibilities under the Plan to the Retirement Team, as noted in this SPD and in other Plan-related documents. Plan Year
The “Plan Year” for the Plan is the 12-month period ending December 31 each year.
Plan Trustee
All Plan funds are placed in a trust fund and are invested by the Plan's “Trustee”. The Northern Trust Company is the Trustee for the Plan, and the address is:
The Northern Trust Company Trustee for the
Dow Corning Corporation Employees’ Retirement Plan 50 S. LaSalle Street
Chicago, IL 60675
The Trustee receives all contributions, manages and invests the amounts contributed, and makes payments as directed by the Retirement Board, as appropriate.
Questions to the Trustee may be directed to the Retirement Team instead of to the Trustee.
INDEX OF DEFINED TERMS
Accrued Benefit ... 5
Actuarial Equivalent... 8
Alternate Payee ... 19
Average Pensionable Compensation.. 7
AVIP ... 7
Cash Out... 8
Child ... 12
Children ... 12
Company ... 4
Credited Service ... 6
Disabled ... 14
Domestic Partner ... 12
Dow Corning ... 4
Early Retirement Factor ... 8, 9 Employer Group ... 6
Hour of Service ... 6
Normal Retirement Age... 8
PBGC ... 17
Plan ... 4
Plan Administrator ... 22
Plan Trustee ... 22
Plan Year ... 22
Post-2006 Participant ... 5
Pre-2006 Participant ... 5
QDRO ... 19
Retirement Board ... 22
Retirement Team ... 4
Single Life Annuity ... 10
Social Security Offset ... 5
Social Security Reduction Factor ... 9
SPD ... 4
Survivor Option ... 10
Top Heavy ... 19
Trustee ... 22
Vested ... 7
Vested Service ... 7
