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General Information
About the Bank Benefit Structure

   Estimate of Your Retirement Benefits
  (Pre-Retirement Estimate)  

The Federal Reserve provides you with another tool to help you plan for your retirement--an estimate of your retirement benefits. The estimate includes benefits you will receive under

• the Retirement Plan,
• the Thrift Plan, or
• Social Security (as projected by the Social Security Administration using certain assumptions).

It also reflects your eligibility for continued coverage under your health and life insurance programs.

The estimate is calculated in the same way as your actual retirement benefits. However, you can make certain assumptions, including the following:

• Future salary rates
• Future Thrift Plan contributions
• Future Thrift Plan earnings

Estimates can be produced through Benefits Express online.

   IRS Limits on Pension Benefits  

From time to time, the Internal Revenue Service (IRS) establishes certain maximum limits on pension payments. They affect only those employees with very high pension benefits. The IRS limits the compensation the Retirement Plan can use to calculate benefits to:

• $150,000, indexed to the consumer price index (CPI) increases in multiples of $10,000 ($230,000 for 2008), for employees who began participating in the Plan after 1995, or
• $200,000, indexed to CPI increases in multiples of $5,000 ($345,000 for 2008), for employees who began participating in the Plan before 1996.

The IRS also places an annual limit on how much the Plan can pay a retiree.

The Federal Reserve has established a nonqualified Retirement Benefit Equalization Plan (BEP). Together, the Retirement Plan and BEP will pay retirees the amount that they would have received from the Retirement Plan if not for IRS compensation and pension limits.

If your pension amount is more than the IRS limits, you will receive an explanation of these rules with your retirement benefit estimate.

   Other Limits  

The Plan also provides that your normal retirement pension allowance can't be more than 80 percent of your final average salary. If it is, your Plan benefit will be reduced and the reduction will not be restored by the nonqualified BEP.

   Assignment of Benefits  

Except as required by applicable law (such as payment of a federal income tax levy), benefits provided under the Plan are not subject to sale, assignment, alienation, attachment, garnishment, pledge, bankruptcy, or any other form of transfer.

However, your Plan benefit can become subject to a property or other financial settlement in case of a divorce. The court may then issue a Qualified Domestic Relations Order (QDRO), which could award a portion of your benefit to someone other than you or your designated beneficiary. A QDRO is a court order related to divorce or separation, which provides child support, alimony, or marital property rights to your former spouse, your child, or another dependent. Contact Benefits Express if this situation applies to you, and they can arrange to send you or your attorney a model form of a QDRO.

   Pension Benefit Guaranty Corporation  

The Retirement Plan is not covered by the Employee Retirement Income Security Act of 1974 (ERISA), so the Pension Benefit Guaranty Corporation (PBGC) does not insure your benefits under the Retirement Plan.

   If the Plan Ends  

If the Retirement Plan is modified, suspended, or terminated, you have a permanent vested right to the accrued benefit you have earned up to that time.