Ernst & Young Defined Benefit Retirement Plan

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Ernst & Young DefinedBenefit Retirement PlanandErnst & Young InactiveDefined BenefitRetirement PlanSeptember 2020

ContentsIntroduction. 1Terms . 2Eligibility, vesting and types of retirement . 5Eligibility . 5Rehires. 5Vesting. 5Break-in-service . 5Military service leave . 5Types of retirement benefit accruals. 5Forms of retirement benefit payments . 6Retirement benefit calculations: combined accrued benefit . 7Your combined accrued benefit formula . 7Retirement benefit calculations: Part B — Cash Balance Benefit . 8Cash Balance Formula . 8Annual Cash Balance Credits . 8Interest Credits . 9Transitional Credits. 9Retirement benefit calculations: Part A — Benefit . 10(1) FAC Benefit . 10(2) Prior CB Benefit. 10(3) Minimum Flat Dollar Benefit . 11Special rules for participants of Predecessor Plans . 11Termination before retirement age . 12Special vested benefits . 12Deferred vested benefits. 12How your retirement benefit is paid . 13Normal forms of payment . 13Optional forms of payment. 13Beneficiary designations . 13Required distributions . 14Lump-sum payment . 14How a lump-sum payment works . 14Rollover into a Roth IRA . 15Written spousal consent . 15Recovery of overpayment. 15Survivor benefits, offset and special tax rules . 16Survivor benefits . 16Offset for Arthur Young account balance . 16Special tax rules for lump-sum distributions . 17Applying for benefits, loss of benefits and plan cost . 18Estimating your benefits . 18Applying for your benefits . 18How you can lose your benefits . 18Plan cost . 18Plan interpretation . 19Assignment of benefits. 19

Qualified Domestic Relations Order . 19Top-heavy rules . 19If the Plans are underfunded . 19Termination of the Plans. 19Plan termination insurance . 19How to request benefits . 20The Employee Retirement Income Security Act of 1974 (ERISA) . 21Statement of ERISA rights . 21Receive information about the Plans and your plan benefits . 21Prudent actions by plan fiduciaries . 21Enforce your rights . 21Assistance with your questions . 22Appendix A: Sample benefit calculations . 25Early retirement benefit . 27Deferred vested benefit . 29Appendix B: Social Security Covered Compensation . 32

IntroductionThis document summarizes the benefits available to staffmembers of Ernst & Young US LLP (the Firm or EY), itsparticipating joint ventures, participating affiliates, and itsparticipating subsidiaries, under the Ernst & Young DefinedBenefit Retirement Plan and the Ernst & Young InactiveDefined Benefit Retirement Plan (collectively, the Plans).References herein to the provisions of the Ernst & YoungDefined Benefit Retirement Plan also includes comparableprovisions under the Ernst & Young Inactive DefinedBenefit Retirement Plan unless otherwise noted. After yourservice with the Firm ends, your benefits accrued under theErnst & Young Defined Benefit Retirement Plan aretransferred to the Ernst & Young Inactive Defined BenefitRetirement Plan generally upon the earlier of the date yourmonthly annuity commences or at the expiration of sixmonths following the end of your employment with EY. Thistransfer will have no impact on the amount of your benefit.All references to the Firm or to EY in this document are toErnst & Young US LLP and its applicable affiliates, theclient-serving firm located in the United States.The term “staff members” in this document refers to all EYemployees other than employees who are participants inthe Ernst & Young Partnership Defined Benefit RetirementPlan (non-partner participants), interns, leased employees,inpatriates who transferred to the Firm on or after July 1,2010, employees on temporary assignment to the Firm andemployees classified as "assignees on host compensation”.A partner/principal is also not a staff member for purposesof the Plans. If you are a partner/principal or a nonpartner participant, you are not eligible to accruebenefits under the Ernst & Young Defined BenefitRetirement Plan. Please see the Ernst & YoungPartnership Defined Benefit Retirement Plan SummaryPlan Description (SPD) for a description of the retirementbenefits which may be available to you.If while you are a staff member you are placed on aninternational assignment for which you are classified as an“assignee on host compensation”, you will not be eligiblefor additional benefits under the Ernst & Young DefinedBenefit Retirement Plan during your assignment periodother than Interest Credits. Vesting service under theErnst & Young Defined Benefit Retirement Plan willcontinue during your qualifying assignment period. Anyaccrued benefits you earned during your period of serviceas a staff member will be available to you under the termsof the Ernst & Young Defined Benefit Retirement Plan afteryou meet the vesting requirements under the plan.If you are an employee on temporary assignment to the USfirm, you are not eligible for benefits under the Ernst &Young Defined Benefit Retirement Plan.Complete information about the Plans is contained in theapplicable plan documents maintained by EY. Thisdocument is merely a summary of certain provisions of thePlans. If a conflict exists between this summary and thePlans’ documents, the Plans’ documents will govern.Questions may be directed to Better You (formerly BenefitsExpress) at 1 877 339 1239 or you may write to theRetirement Plan Administrator, Ernst & Young LLP, 200Plaza Drive, Secaucus, NJ 07094.For answers to questions regarding coverage and eligibility, access Better You (formerly Benefits Express)at http://digital.alight.com/ey or call Better You (formerly Benefits Express) at 1 877 339 1239.While the Firm intends to continue the Plans, the Firm reserves the right to amend or terminate the Plans,in whole or in part, without prior notice, in any manner, at any time and with respect to any class of individual.Ernst & Young Defined Benefit Retirement PlanErnst & Young Inactive Defined Benefit Retirement Plan1

TermsImportant terms used in this document are defined as follows:Actuarial Equivalent: The method used to convert a benefitin one form of payment, such as a lump sum, into anotherform, such as a life annuity. The conversion is done in such away that, given a set of actuarial assumptions aboutmortality and interest, and reflecting the age of theparticipant, and beneficiary, if relevant, at the time ofbenefit commencement, the two forms of payment areexpected to have an equivalent actuarial value. Theassumptions used to determine Actuarial Equivalentamounts differ, depending on the form of payment youchoose, your Pension Commencement Date, and your periodof service. Where appropriate, the “applicable interest rate”is determined under Internal Revenue Code Section417(e)(3) for the fifth calendar month preceding thecalendar quarter in which the date of distribution occurs andthe “applicable mortality rates” are the mortality ratesprescribed by Internal Revenue Code Section 417(e)(3) forthe Plan Year in which the distribution occurs.Annual Cash Balance Credit: Also known as “pay credit,”this credit is a percentage of your Compensation earned foryears beginning on or after January 1, 2017, and is basedon your Points (your age in whole years and months plusyour Years of Vesting Service as of the previousDecember 31 in whole years and months, in both cases witheach full month counting as one-twelfth of a Point). TheAnnual Cash Balance Credit is added to your Cash BalanceAccount as of the end of the year, or as of the date youremployment terminates, if earlier.Cash Balance Account: The notional account established forparticipants eligible for the Part B — Cash Balance Benefit.Compensation: Compensation, while an employee, iscalendar-year compensation, before deferrals, withholdings,and deductions, paid by the Firm, but does not includepayments of allowances, reimbursement of expenses,severance pay, pay for unused vacation days or bonuses andincentives paid after the last day of the payroll period thatincludes the employee’s last day of employment with theFirm and its applicable affiliates. Compensation isdetermined without regard to any reductions inCompensation elected under the Ernst & Young RetirementSavings Plan and/or any pre-tax benefit plans. The Planslimit Compensation to the annual amount permitted by theInternal Revenue Code, 285,000 for the 2020 calendaryear. which may periodically be adjusted by the InternalRevenue Service (IRS).2Domestic Partner: The person you have properly designatedas your Domestic Partner with the Retirement Committeethrough Better You (formerly Benefits Express) (athttp://digital.alight.com/ey or by calling 1 877 339 1239). If you are not married but have aqualifying Domestic Partner you must properly designatethat individual under rules established by the RetirementCommittee in order for your Domestic Partner to receivesurvivor benefits as your Domestic Partner. If you properlydesignate a Domestic Partner through Better You (formerlyBenefits Express), that individual automatically becomesyour beneficiary under the Plans and any prior beneficiarydesignation is superseded. Please keep in mind that you maydesignate an individual as your beneficiary under the Plansrather than as your Domestic Partner, but if you do so thatindividual will not be treated as a Domestic Partner forpurposes of the Plans and will be treated only as yourdesignated beneficiary.Ernst & Young Defined Benefit Retirement Plan: This is theplan in which your benefits accrue while you are an active,qualifying EY staff member. If your employment with EYterminates and you take a lump-sum payment of yourbenefits under the plan within six months of that date, yourbenefit will be paid from this plan. However, if you elect toreceive an annuity, or if you elect to defer commencementof your benefit beyond six months after severance ofemployment, your benefits are transferred from this plan tothe Ernst & Young Inactive Defined Benefit Retirement Plan.This transfer has no impact on the amount of your benefitpayment. Special rules apply to help ensure the Firm’scontinuing independence if you are employed in anaccounting role or financial reporting oversight role at anEY SEC registered audit client, when confirmed by EYIndependence. If you are employed in such a role, yourbenefit is immediately transferred to the Ernst & YoungInactive Defined Benefit Retirement Plan. The transfer ofyour benefit to that plan has no impact on the amount ofyour benefit.Ernst & Young Inactive Defined Benefit Retirement Plan:This is the plan from which all benefits accrued under theErnst & Young Defined Benefit Retirement Plan are paid(other than lump sums that are paid within six months oftermination of employment to a participant who is notemployed in an accounting role or financial reportingoversight role at an EY SEC registered audit client, asconfirmed by EY Independence). If you are rehired as staffby EY, any unpaid benefits and their associated assets are

transferred back to the Ernst & Young Defined BenefitRetirement Plan — although certain exceptions apply if youwere a Partner/Principal at one time before rehire. Anytransfer between the Plans has no impact on the amount ofyour benefit.Final Average Compensation: The average of yourCompensation for any five calendar years during the last10 calendar years of service ending before January 1, 2017,with the Firm that produce the highest average, subject toInternal Revenue Code limits.Firm: The partnership known as Ernst & Young US LLP.Interest Credit: For each Plan Year beginning on or afterJanuary 1, 2018, your Cash Balance Account will becredited with 4% interest annually under Part B. However,interest will not be credited on a contribution made to yourCash Balance Account until that contribution has been agedone year (that is, included in your account for one year).Interest will continue to accrue until you commence paymentof your benefit or until the later of reaching your normalretirement date or terminating employment. Each year’sInterest Credit is credited to your account as of thebeginning of the next Plan Year or, if earlier, a proratedamount will be credited based on the date you leave theFirm, reach Normal Retirement Date, or commence yourbenefit. No interest will be credited after you commencepension payments. If you work past your Normal RetirementDate, interest will be prorated through the last full monthpreceding your severance of employment.Minimum Flat Dollar Benefit: (Applies to your Part A —Benefit only.) This minimum benefit, which is 3,800 peryear, accrues on a monthly basis (beginning January 1,2014) during the period you participate in theErnst & Young Defined Benefit Retirement Plan followingyour commencement of participation (up to a maximum ofthree years). Accruals under this formula were frozen as ofDecember 31, 2016.Normal Retirement Date: The later of:(1) The date you attain age 65; or(2) The earlier of (i) the fifth anniversary of the date youbegin participating in the Ernst & Young DefinedBenefit Retirement Plan or (ii) the date you completethree Years of Vesting Service, if you are credited withone hour of service on or after January 1, 2017.Part A — Benefit: The portion of your benefit accrued as ofDecember 31, 2016 based on the Final AverageCompensation formula (FAC Benefit) or minimum formulas(Prior CB Benefit or Minimum Flat Dollar Benefit) then ineffect. The benefit accrued at that point will remain thesame and will not increase or decrease, but may beadjusted if you commence payments before your NormalRetirement Date, and/or terminate employment before youare eligible for Early Retirement or Special Vesting.Ernst & Young Defined Benefit Retirement PlanErnst & Young Inactive Defined Benefit Retirement PlanPart B — Cash Balance Benefit: The portion of your benefitaccrued starting on January 1, 2017 under the Plans’ cashbalance formula.Pension Commencement Date: Generally, the first day ofthe first period that an amount is payable under the Plans.Your Pension Commencement Date will be recalculated ifyou return to work at EY and your pension is suspendeduntil you again commence your pension. If you commencea disability pension, your Pension Commencement Date willbe the earlier of the first of the month following yourNormal Retirement Date or the date you commence yourpension due to disability retirement.Plan Year: The period commencing each January 1 andending the following December 31.Points: The sum of your age and Vesting Service, both asof the end of the prior year, and both counted in wholeyears and whole months (each whole month counting asone-twelfth of a Point). Your Points determine the level ofAnnual Cash Balance Credits you can accrue during thecurrent year under Part B — Cash Balance Benefit.Predecessor Plan(s): the Ernst & Young Retirement Planfor Arthur Young as in effect on September 30, 1990 (theArthur Young Plan) and the Ernst & Whinney DefinedBenefit Pension Plan as in effect on September 30, 1990.Prior CB Benefit: (Applies to your Part A — Benefit only.) Ifyou were hired before January 1, 2014 and (i) became anactive participant after September 30, 1994 or (ii) onSeptember 30, 1994, you had been a participant duringthree or fewer plan years, this benefit produced a notionalbookkeeping “account” balance based on yourCompensation and years of service. Accruals under thisformula were frozen as of December 31, 2016.Retirement Committee or Review Committee: TheErnst & Young US LLP Retirement Committee.Social Security Covered Compensation: (Applies to yourPart A — Benefit only.) Relates to your year of birth and it isdetermined annually by averaging the Social Security wagebases (the maximum amounts on which Social Securitytaxes are paid each year) for the 35-year period endingwith the year in which you reach your Social Securitynormal retirement age. For purposes of calculating SocialSecurity Covered Compensation, your Social Securitynormal retirement age is age 65 if you were born before1938, age 66 if you were born between 1938 and 1954;and age 67 if you were born after 1954. Appendix B showsthe IRS table in effect beginning on January 1, 2016, thelast year Social Security Covered Compensation was usedto calculate your benefit. This amount is frozen as ofDecember 31, 2016 and may not increase after this date.3

Transition Points: The sum of your age and Years ofVesting Service, both determined on December 31, 2016,and both counted in whole years and whole months (eachwhole month counting as one-twelfth of a Point). YourTransition Points determine the level of Transitional Creditsyou can accrue between January 1, 2017 andDecember 31, 2021 under Part B — Cash Balance Benefit.Transitional Credit: If you have at least 10 Years ofVesting Service and 60 Transition Points, both as ofDecember 31, 2016, you are eligible for TransitionalCredits, which are contributed to the Plan only for years ofservice between January 1, 2017 and December 31, 2021.This credit is a fixed percentage of your Compensation onor after January 1, 2017 and on or before December 31,2021 based on your Transition Points. The TransitionalCredit is added to your Part B — Cash Balance Benefit at theend of the year, or as of the date you terminateemployment, if earlier.Years of Vesting Service: Your eligibility for a Plan benefitis determined by your Years of Vesting Service. Your Yearsof Vesting Service are equal to the sum of:(1) The total of your periods of service with the Firmcommencing with October 1, 1990 or, if later, your dateof hire (or rehire) with the Firm, excluding any period ofservice prior to your 18th birthday; plus(2) The Years of Vesting Service you had under thePredecessor Plan(s) on September 30, 1990; plus(3) The Years of Vesting Service you had under the KennethLeventhal & Company Tax Reduction & Profit Sharing Planon May 31, 1995, provided you were employed by EY onJune 1, 1995.Your service will be aggregated on the basis that12 calendar months will equal one year and each additionalmonth will equal one-twelfth of a year, provided yourperiod of service is at least 15 days that month.If you were hired on or after January 1, 2017, VestingService credited after you incur five consecutive one-yearbreaks in service will be disregarded for determining yourPart B — Cash Balance Benefit earned before your break inservice if you were not yet vested when your severancefrom service occurred.Years of Benefit Service: The total of your service with theFirm, commencing as of your date of hire, excluding anyinternship, through December 31, 2016. Your service willbe aggregated on the basis that 12 calendar months equalone year and each additional month will equal one-twelfthof a year. You will be credited with a full month providedyour period of employment is at least 15 days that month.Years of Benefit Service will not be credited for any periodof service after December 31, 2016 and is limited to30 years. Certain exceptions may apply if you were at leastage 40 with at least 15 years of Vesting Service at the timeyou incurred a permanent and total disability prior toJanuary 1, 2017. Your pension amount in the Part A —Benefit is determined by Years of Benefit Service.4Years of Eligibility Service: The total of your periods ofservice with the Firm and its applicable affiliates, generallycommencing with your date of hire, determine your Yearsof Eligibility Service. You will complete a Year of EligibilityService once you have been with the Firm and its applicableaffiliates a full 365 days.Special rules may apply to participants from firmsmerged with or acquired by EY.

Eligibility, vesting and typesof retirementEligibilityBreak-in-serviceYou are eligible to participate on the earlier of:If your initial date of hire is on or after January 1, 2017,and you have less than three Years of Vesting service priorto your severance of employment and you incur a five-yearbreak-in-service, then service after your severance date isnot included as Years of Vesting Service for purposes ofdetermining your vested Cash Balance Benefit earnedbefore your break-in-service. Years of Vesting Serviceearned before your five-year break-in-service will beincluded for purposes of determining your vested CashBalance Benefit you earn after you are rehired. The January 1 or July 1 coinciding with or immediatelyfollowing the date you reach age 21 and complete oneyear of service, or The first day of the month after you reach age 35,regardless of service.RehiresIf you are a former employee or former partner whoterminated employment while previously eligible for thePlans, and you are rehired as an employee on or afterJanuary 1, 2017, you are eligible for the Ernst & YoungDefined Benefit Retirement Plan on the date you arerehired.After rehire, benefits previously accrued under the Ernst &Young Partnership Defined Benefit Retirement Plan byformer partners/principals and non-partner participantswho become staff employees will be transferred from theErnst & Young Inactive Defined Benefit Retirement Plan tothe Ernst & Young Partnership Defined Benefit RetirementPlan. See the Ernst & Young Partnership Defined BenefitRetirement Plan SPD if you earned a benefit as apartner/principal or non-partner participant.VestingIf you are credited with an hour of service on or afterJanuary 1, 2017, you will become vested in your benefitsaccrued under the Ernst & Young Defined BenefitRetirement Plan after you complete three Years of VestingService.Vesting is important because it means you have a nonforfeitable right to a benefit from the Plans even if youleave the Firm before retirement. If you terminateemployment before vesting, your right to any unvestedbenefit will be forfeited.If your death occurs before you retire or after you leavethe Firm and you are vested, your spouse or properlydesignated Domestic Partner continues to have a right to abenefit from the Plans.Ernst & Young Defined Benefit Retirement PlanErnst & Young Inactive Defined Benefit Retirement PlanIf you have a break-in-service of 12 months or less, you willbe credited with Years of Eligibility and Vesting Service(but not Years of Benefit Service) for the entire period ofyour break. If your break-in-service is more than12 months, service from all periods with EY will be addedto determine your Years of Eligibility, Vesting and BenefitService.Military service leaveIf you leave EY or its participating affiliates to serve in oneof the uniformed services of the United States and returnto EY or its participating affiliates following that service,you may be entitled to contributions and service creditunder the Plans for your period of qualified military service,as provided by the Uniformed Services Employment andReemployment Rights Act (the Act). Qualified militaryservice is service in the uniformed services for which youare entitled to reemployment rights under the Act. Formore information, you should contact Better You (formerlyBenefits Express).Types of retirement benefit accrualsFor participants terminating employment on or afterJanuary 1, 2017, your retirement benefit may becomposed of two parts (see “Appendix A: Sample benefitcalculations” for examples): Part A — Benefit: The portion of your benefit accrued as ofDecember 31, 2016 based on the Final AverageCompensation formula (FAC Benefit) a

Benefit Retirement Plan unless otherwise noted. After your service with the Firm ends, your benefits accrued under the Ernst & Young Defined Benefit Retirement Plan are transferred to the Ernst & Young Inactive Defined Benefit Retirement Plan generally upon the earlier of the date your monthly annuity commences or at the expiration of six

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