Borough of Edgeworth, PA Article XVII Payment of Benefits

§ 23-37 Forms of payment.

The automatic form of payment of retirement benefits shall be a single life annuity with 120 months certain, unless a participant elects to receive his benefits in some other form as provided in this Article XVII by giving written notice to the employer at least 30 days prior to his actual retirement date or other date on which payments will commence. The normal form of benefit distribution provides monthly benefits during the participant's life with the provision that if the participant dies prior to receiving 120 monthly payments, monthly payments in the same amount shall be continued to the participant's beneficiary until a total of 120 payments have been made. The optional forms of benefit payment are as follows:

A. Joint and survivor annuity option. A participant may elect to have reduced monthly benefits payable during his life, with the provision that upon the participant's death, payments shall be continued to the participant's beneficiary throughout the remainder of the beneficiary's lifetime. The monthly benefit to the beneficiary shall be equal to either 50% or 100% of the monthly benefit payable to the participant, depending upon the percentage elected by the participant. If a participant commences receiving reduced benefits in this form and the beneficiary predeceases the participant, then the participant's benefits shall be continued in the same monthly amount, and no other payments shall be made to any other person subsequent to the participant's death.

B. Any optional form of payment provided in accordance with this section shall be the actuarial equivalent of a single life annuity, with 120 months certain.

§ 23-38 Nonduplication of benefits.

To avoid any duplication of benefits, if any participant ceases to be employed for any reason and is reemployed, any benefit payments then being paid pursuant to the terms of this plan shall be suspended, and future retirement benefits shall be coordinated in such a manner as to preclude any duplication hereunder.

§ 23-39 Required distributions.

A. Notwithstanding any other distribution provision of this plan:

(1) The entire benefit of any participant who becomes entitled to benefits prior to his death shall be distributed either:

(a) Not later than the required beginning date; or

(b) Over a period beginning not later than the required beginning date and extending over the life of such participant or over the lives of such participant and a designated beneficiary (or over a period not extending beyond the life expectancy of such participant or the joint life expectancies of such participant and a designated beneficiary).

(2) If a participant who is entitled to benefits under this plan dies prior to the date when his entire interest has been distributed to him/her after distribution of his benefits has begun in accordance with Subsection A(1)(b) above, the remaining portion of such benefit shall be distributed at least as rapidly as under the method of distribution being used under Subsection A(1)(b) as of the date of his death.

B. If a participant who is entitled to benefits under this plan dies before distribution of his benefit has begun, the entire interest of such employee shall be distributed within five years of the death of such employee, unless the following sentence is applicable. If any portion of the employee's interest is payable to (or for the benefit of) a designated beneficiary, such portion shall be distributed over the life of such designated beneficiary (or over a period not extending beyond the life expectancy of such beneficiary), and such distributions begin not later than one year after the date of the employee's death or such later date as provided by regulations issued by the Secretary of the Treasury; then, for purposes of the five-year rule set forth above, the benefit payable to the beneficiary shall be treated as distributed on the date on which such distributions begin; provided, however, that notwithstanding the preceding sentence, if the designated beneficiary is the surviving spouse of the participant, then the date on which distributions are required to begin shall not be earlier than the date upon which the employee would have attained age 70 1/2 years and, further provided, if the surviving spouse dies before the distributions to such spouse begin, this subsection shall be applied as if the surviving spouse were the employee.

C. For purposes of this section, the following definitions and procedures shall apply:

(1) Definitions.

DESIGNATED BENEFICIARY

Any individual designated by the employee under this plan according to its rules.

REQUIRED BEGINNING DATE

April 1 of the calendar year following the later of the calendar year in which the employee attains age 70 1/2 years or the calendar year in which the employee retires.

(2) Any amount paid to a child shall be treated as if it had been paid to the surviving spouse if such amount will become payable to the surviving spouse upon such child's reaching majority (or other designated event permitted under regulations issued by the Secretary of the Treasury).

(3) For purposes of this section, the life expectancy of an employee and/or employee's spouse (other than in the case of a life annuity) may be redetermined but not more frequently than annually.

D. This section is intended to ensure compliance with Code Section 401(a)(9). It is not intended to create substantive rights to benefits not contained elsewhere in the plan.