Section 3. Definitions

Section 3.1. Employer-provided accrued retirement benefit. For purposes of this section, the employer-provided accrued retirement benefit as of a plan year is the participant's accrued retirement benefit under the plan (determined on an actual basis and not a projected basis) attributable to employer contributions under the plan.

Section 3.2. Final pay. For purposes of this section, a participant's final pay from the employer as of a plan year is the participant's compensation during the twelve consecutive month period (ending with or within the 5-plan year period ending with the plan year in which the participant terminates employment with the employer) in which the participant receives the highest compensation from the employer. Compensation means compensation as defined in section _____ of the plan, including amounts contributed by the employer pursuant to a salary reduction agreement which are excludable from the participant's gross income under IRC 125, IRC 402(e)(3), IRC 402(h), or IRC 403(b).

60 | Defined Benefit Plan LRM Package 06/2026

(Note to reviewer: The blank should be filled in with the plan section number that corresponds to LRM #6.)

Section 3.3. Projected primary insurance amount. As of a plan year, a participant's projected primary insurance amount is the primary insurance amount (determined as of the close of the plan year) payable to the participant upon attainment of the participant's Social Security retirement age, assuming the participant's annual compensation from the employer treated as wages for purposes of the Social Security Act remains the same from the plan year until the participant's attainment of Social Security retirement age.

The actual compensation paid to the participant by the employer during all periods of service of the participant for the employer during which the participant was covered by the Social Security Act shall be used in determining the participant's projected primary insurance amount. With respect to years before the participant's commencement of service for the employer, it will be assumed that the participant received compensation for such service in an amount computed by using a 6% salary scale projected backwards from the determination date to the participant's twenty first birthday. However, if the participant provides the employer with satisfactory evidence of the participant's actual past compensation for the prior years treated as wages under the Social Security Act at the time the compensation was earned and the actual past compensation results in a smaller projected primary insurance amount, the plan must use the actual past compensation.

Each participant shall be provided with written notice of the participant's right to supply actual compensation history, and of the financial consequences of failing to supply such history. The notice shall be given each time the summary plan description is provided to the participant and will also be given upon the participant's separation from service. The notice shall also state that the participant can obtain the actual compensation history from the Social Security Administration.

If distribution of a participant's accrued benefit begins before the participant's attainment of Social Security retirement age (including a benefit commencing at normal retirement age) the projected primary insurance amount (as determined under section 3.3) will be reduced by 1/15 for each of the first five years and 1/30 for each of the next five years by which the starting date of such benefit precedes the Social Security retirement age of the participant, and reduced actuarially for each additional year thereafter.

Section 3.4. Social Security retirement age. Social Security retirement age means age 65 if the participant attains age 62 before January 1, 2000 (i.e., born before January 1, 1938), age 66 if the participant attains age 62 after December 31, 1999, but before January 1, 2017 (i.e., born after December 31, 1937, but before January 1, 1955), and age 67 if the participant attains age 62 after December 31, 2016 (i.e., born after December 31, 1954).