PENSION AGREEMENT
between
Empire Iron Mining Partnership
Tilden Mining Company L. C.
doing business together as
Cliffs Michigan Mining Company
and
United Steelworkers of America
with
Summary Plan Description
Effective August 1, 2004
GENERAL INFORMATION
The Plan:
The name of the plan under which benefits are provided is the Restated Pension Plan for Hourly Employees of The Cleveland-Cliffs Iron Company and Its Associated Employers (the“Plan”) as amended and restated August 1, 2004 (the Plan as so amended and so applicable is referred to in this General Information Section as the “2004 Plan”). Benefits under the 1999 Plan are provided pursuant to an Agreement between The Cleveland-Cliffs Iron Company and Its Associated Employers, 1100 Superior Avenue, Cleveland, OH 44114-2589, and the United Steelworkers of America, Five Gateway Center, Pittsburgh, PA 15222. The employer identification number assigned by the Internal Revenue Service is 34-0677332 and the Plan Number is 004. The plan is a defined benefit plan under the Employee Retirement Income Security Act (ERISA).
The plan is financed by The Cleveland-Cliffs Iron Company and Its Associated Employers through contributions to a trust fund which are held by the Trustee. The minimum amount of contributions made to the trust fund is established by law. The Company also pays the cost of administering the plan. Records of the plan are kept on a calendar year basis. An annual report giving detailed financial information about the plan is submitted to the Internal Revenue Service and the Department of Labor, and a summary of the report is provided to each participant. Benefits under the plan are provided by a trust set up with the Trustee, SEI Private Trust Company, One Freedom Valley Drive, Oaks, Pennsylvania 19456. A Pension Committee established under the terms of the Plan is the Plan Administrator. The Plan Administrator has the responsibility to manage the plan and act in the interests of Plan Participants, and must carry out its duties in accordance with the fiduciary standards of ERISA. The telephone number for the Plan Administrator is (216) 694-5700. The Agent for Service of Legal Process under the Plan is General Counsel, The Cleveland-Cliffs Iron Company, 1100 Superior Avenue, Cleveland, Ohio 44114-2589.
Employee Rights:
As a participant in the plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan Participants shall be entitled to:
Examine, without charge, at the plan administrator’s office and at other specified locations, all plan documents including the 2004 Plan, the Trust Agreement, the collective bargaining agreement and copies of all documents filed by the plan with the U. S. Department of Labor, such as detailed annual reports and plan descriptions.
Obtain copies of all plan documents and other plan information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies.
Receive a summary of the plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
Obtain a statement telling you whether you have a right to receive a pension at normal retirement age (age 65 with 10 years of continuous service) and if so, what your benefits would be at normal retirement age if you stop working under the Plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. This statement must be requested in writing from the Plan Administrator and is not required to be given more than once a year. The Plan Administrator will provide the statement free of charge.
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 your 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, your union, 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.
If your claim for a pension benefit is denied in whole or in part you will receive a written explanation of the reason for denial. You have the right to appeal this denial in accordance with the provisions outlined on page ____.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan Administrator 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 Plan Administrator to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that 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 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. If you have any questions about your Plan, you should contact the Plan Administrator. The telephone number for the Plan administrator is (216) 694-5700. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Area Office of the U. S. Labor-Management Services Administration, Department of Labor.
The Pension Benefit Guaranty Corporation:
BENEFITS UNDER THIS PLAN ARE INSURED BY THE PENSION BENEFIT GUARANTY CORPORATION (PBGC) IF THE PLAN TERMINATES. Generally, the PBGC guarantees most vested normal age retirement benefits, early retirement benefits and certain disability and survivor’s benefits. However, PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit protection is subject to certain limitations.
The PBGC guarantees vested benefits at the level in effect on the date of plan termination. However, if a plan has been in effect less than five years before it terminates, or if benefits have been increased within the five years before plan termination, the whole amount of the plan’s vested benefits or the benefit increase may not be guaranteed by the PBGC. In addition, there is a ceiling on the amount of monthly benefit that PBGC guarantees, which is adjusted periodically.
For more information on the PBGC insurance protection and its limitations, ask your Plan Administrator or the PBGC. Inquiries to the PBGC should be addressed to the Office of Communications, PBGC, 2020 K Street N.W., Washington D.C. 20006. The PBGC Office of Communications may also be reached by calling (202) 778-8840.
Note: You have rights beyond the rights provided by ERISA as outlined above which arise from the Pension Agreement contained in this booklet.
FOREWORD
This booklet contains the Pension Agreement between The Cleveland-Cliffs Iron Company as Operating Agent for Empire Iron Mining Partnership and Tilden Mining Company L.C., doing business together as Cliffs Michigan Mining Company (hereinafter referred to as the “Company”) and the United Steelworkers of America (hereinafter referred to as the “Union”) which is effective August 1, 2004. This booklet also contains a description of the principal provisions of that Agreement (referred to in the description as “2004 Pension Agreement”). The 2004 Pension Agreement covers employees in bargaining units listed on Exhibit A, page ____. A covered employee becomes a “participant” under the terms of the Agreement when he attains age 21 and completes one year of continuous service, and upon becoming a participant he receives credit for all continuous service prior to participation.
This description is designed to explain to a participant the highlights of the 2004 Pension Agreement. The 2004 PENSION AGREEMENT IS THE ONLY GOVERNING DOCUMENT. This description is not a part of the 2004 Pension Agreement and does not modify it or serve as an agreed interpretation of any provision of the 2004 Pension Agreement. This description was developed with reference to the circumstances applicable to most participants and does not fully cover less usual circumstances.
Pension, surviving spouse benefits and certain survivor options are provided under the 2004 Pension Agreement only with respect to participants accruing continuous service on or after August 1, 2004. The pension, surviving spouse’s benefit and survivor option provisions applicable to retirements or deaths prior to that date are governed by earlier pension agreements, the latest of which was the Pension Agreement dated July 31, 1999.
Every effort has been made to ensure that the benefits described in this booklet conform with the provisions of the Pension Agreement. In the event of any inconsistency between this booklet and the provisions of the Pension Agreement, the provisions of the Pension Agreement will govern. This booklet is not a Plan document, a contract, or an offer to enter into a contract. It does not convey any legal rights and does not vary or alter the Pension Agreement provisions. Your eligibility for any pension benefit depends on your satisfying the requirements of the Pension Agreement.
TABLE OF CONTENTS
SUMMARY PLAN
DESCRIPTION OF PRINCIPAL PROVISIONS
OF 2004 PENSION AGREEMENT
Page
SUMMARY OF BENEFIT TYPES
Types of Retirement on Pension.................................................... 7
Surviving Spouse’s Benefit............................................................. 8
Survivor Options............................................................................. 8
CALCULATION OF PENSION BENEFITS
Special Payment............................................................................. 9
Regular Pension............................................................................. 10
The Percent Pension...................................................................... 10
The Minimum Pension.................................................................... 10
Increased Pension - 30-Year Retirement and
62/15 Retirement .......................................................................... 13
Increased Pension - 70/80 and Permanent
Incapacity Retirements................................................................... 13
Increased Pension - Rule-of-65 Retirement................................... 13
Average Monthly Earnings............................................................. 14
Possible Deductions....................................................................... 15
BASIC PENSION REQUIREMENTS
Retirement Date............................................................................. 16
Continuous Service........................................................................ 16
ELIGIBILITY AND AMOUNT OF PENSION
Normal Retirement......................................................................... 18
62/15 Retirement........................................................................... 18
30-Year Retirement....................................................................... 18
60/15 Retirement........................................................................... 19
Permanent Incapacity Retirement.................................................. 20
70/80 Retirement........................................................................... 20. Rule-of-65 Retirement 21
Deferred Vested Pension............................................................... 22
ADMINISTRATIVE PROVISIONS
Application for Pension................................................................... 25
Commencement and Termination of Pension................................ 25
Qualified Domestic Relations Order (QDRO)................................. 25
SURVIVING SPOUSE’S BENEFIT
Eligibility.......................................................................................... 26
Amount of Benefit........................................................................... 26
Application for Surviving Spouse’s Benefit...................................... 27
Commencement and Termination of Benefits................................ 27
SURVIVOR OPTIONS
Pre-Pension Spouse Coverage...................................................... 28
Pre-Retirement Survivor Annuity Coverage................................... 28
Automatic 50% Spouse Option....................................................... 29
50% Joint and Survivor Pop-Up Option.......................................... 29
Co-Pensioner Options (50% or 100%).......................................... 30
General.......................................................................................... 30
CONDITIONS UNDER WHICH BENEFITS
WILL NOT BE PAID TO A PARTICIPANT,
HIS/HER SURVIVING SPOUSE, OR HIS/HER
CO-PENSIONER........................................................................... 31
APPEALS PROCEDURE............................................................... 32
PENSION AGREEMENT
Table of Contents........................................................................... 34
Pension Agreement........................................................................ 37
DESCRIPTION OF PRINCIPAL PROVISIONS
OF THE 2004 PENSION AGREEMENT
SUMMARY OF BENEFIT TYPES
Types of Retirement on Pension
Pensions are provided for eight types of retirement. The age and continuous service requirements to qualify for the various types of retirement are specified below.
Normal
Age 65 or over-at least 10 years of continuous service.
62/15
Age 62 to 65-at least 15 years of continuous service.
30-Year
Before age 62-at least 30 years of continuous service.
60/15
Age 60 to 62-at least 15 but less than 30 years of continuous service.
Permanent Incapacity
Before age 65-at least 15 years of continuous service-permanent and total incapacity.
70/80
Age 55 to 62-at least 15 years of continuous service with age plus continuous service equaling at least 70, or before age 55 with age plus continuous service equaling at least 80-special circumstances such as permanent shutdown or prolonged layoff or disability.
Rule-of-65
Before age 55-at least 20 years of continuous service as of last day worked with age plus continuous service equaling at least 65 but less than 80-special circumstances such as permanent shutdown or prolonged layoff or disability and not offered suitable long-term employment with the Company, as defined in Appendix A of the 2004 Pension Agreement.
Deferred Vested
Any age-at least 5 years of continuous service continuous service broken for any reason and not eligible for other pension. Each type of retirement is described in more detail under “Eligibility and Amount of Pension” beginning on page ____.
Surviving Spouse’s Benefit
Under most circumstances a benefit is payable to the surviving spouse of a participant with at least 15 years of continuous service who dies on or after August 1, 2004. This benefit is described in more detail on pages ____ and ____.
Survivor Options
IN ADDITION TO THE SURVIVING SPOUSE’S BENEFIT, as described in the preceding section, an eligible married participant is automatically provided, without charge, Pre-Retirement Survivor Annuity Coverage.
A participant may also provide for a spouse or a co-pensioner to receive, in the event of the participant’s death, a lifetime monthly payment. Such benefit may be obtained by the participant under one or more of the available survivor options, which are as follows:
Automatic 50% Spouse Option
50% Joint and Survivor Pop-Up Option
Co-Pensioner Options (50% or 100%)
A general description of these benefits is set forth beginning on page ____.
CALCULATION OF PENSION BENEFITS
Pension amounts and the periods for which they are payable are determined as follows:
Special Payment
The Special Payment is the payment for the first three full calendar months following the month in which retirement occurs, but it does not apply in the case of a permanent incapacity retirement or a deferred vested pension, and consists of:
(1) A lump sum equal to 13 weeks of vacation pay (14 weeks of vacation pay in the case of employees eligible for more than four weeks of regular vacation in the year of retirement), reduced by any regular vacation pay received for the year of retirement or for an earlier year if the participant is not entitled to vacation in the year of retirement. Under the basic labor agreement a participant entitled to vacation which he has not taken by the time of retirement does not receive that vacation or vacation pay if he is eligible for the Special Payment, but no deduction will be made from the Special Payment for such vacation.
(2) An additional lump sum amount payable to a participant who retires on or after August 1, 2004 but prior to September 1, 2008 and who has attained one of the following continuous service thresholds as of August 1, 2004:
32 Years of Continuous Service $3,000
34 Years of Continuous Service $6,000
36 Years of Continuous Service $12,000
For example, a person with 33 years of service on August 1, 2004 shall be entitled to $3,000 upon retirement, but shall accrue no further continuous service to reach a higher amount.
Any pensioner who is reemployed shall not, upon subsequent retirement, be eligible for a Special Payment, if he received a Special Payment upon his initial retirement.
For each month to which the Special Payment does not apply, the pension is the Regular Pension.
Regular Pension
The Regular pension is a monthly payment equal to the higher of the percent pension or the minimum pension determined as follows, but may be adjusted in accordance with certain other additions and deductions, some of which are described on pages ____-____.
The Percent Pension
An amount equal to the participant’s average monthly earnings (see page ____) multiplied by:
(1) For a participant with more than 30 years of continuous service,
34.65% plus a percentage determined by multiplying 1.26% by his years of continuous service in excess of 30 years, and
(2) for a participant with 30 or less years of continuous service,
1.155% multiplied by his years of continuous service; or
(See table on page ____ for the calculation of the applicable percent for all years of service up to 50).
The Minimum Pension
For participants retiring on or after August 1, 2004 an amount equal to:
($56.25 multiplied by years of continuous service up to 30 years, plus $75.00 multiplied by years of continuous service in excess of 30 years.
(See table on page ____ for the minimum pension for all years of service from 5-50.)
Table of Monthly Pension Under
2004 Agreement Minimum Formula
and Applicable Percentage Used to Determine the
Monthly Pension Under the Percentage Formula
For Retirements on or After August 1, 2004:
Total Effective Applicable
Years of Percentage Under
Service* August 1, 2002 Percent Formula
5 281.25 5.775%
6 337.50 6.930%
7 393.75 8.085%
8 450.00 9.240%
9 506.25 10.395%
10 562.50 11.550%
11 618.75 12.705%
12 675.00 13.860%
13 731.25 15.015%
14 787.50 16.170%
15 843.75 17.325%
16 900.00 18.480%
17 956.25 19.635%
18 1,012.50 20.790%
19 1,068.75 21.945%
20 1,125.00 23.100%
21 1,181.25 24.255%
22 1,237.50 25.410%
23 1,293.75 26.565%
24 1,350.00 27.720%
25 1,406.25 28.875%
26 1,462.50 30.030%
27 1,518.75 31.185%
28 1,575.00 32.340%
29 1,631.25 33.495%
30 1,687.50 34.650%
31 1,762.50 35.910%
32 1,837.50 37.170%
33 1,912.50 38.430%
34 1,987.50 39.690%
35 2,062.50 40.950%
36 2,137.50 42.210%
37 2,212.50 43.470%
38 2,287.50 44.730%
39 2,362.50 45.990%
40 2,437.50 47.250%
41 2,512.50 48.510%
42 2,587.50 49.770%
43 2,662.50 51.030%
44 2,737.50 52.290%
45 2,812.50 53.550%
46 2,887.50 54.810%
47 2,962.50 56.070%
48 3.037.50 57.330%
49 3,112.50 58.590%
50 3,187.50 59.850%
* Service is adjusted for fractions of year adjusted to the nearest month.
Increased Pension-30-Year Retirement, and 62/15 Retirement
Participants who retire on or after August 1, 2004 on 30-year retirements will have their regular pension increased by the greater of $300 or the amount necessary to give the participant a monthly pension of $1,250. The increase is payable only until the participant is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit or becomes eligible for Social Security disability benefits. However, in no event will the participant receive less than twelve months of the increased pension unless the participant dies within that twelve-month period.
Participants who retire on or after August 1, 2004 on 62/15 retirements will have their regular pension increased by the greater of $300 or the amount necessary to give the participant a monthly pension of $1,250. This increased pension shall be payable for the first twelve months of regular pension unless the participant dies within that twelve-month period.
Increased Pension - 70/80 and Permanent Incapacity Retirements
Pensions payable for 70/80 or Permanent Incapacity retirements will be increased by $400 per month. The increase is payable only until the participant is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit or becomes eligible for Social Security disability benefits. Since the increase is not payable for any month for which the participant receives Social Security disability benefits, the participant should notify the Company promptly if he is awarded such a benefit. A retroactive adjustment will be made if it is determined that a participant had improperly received the increase in pension during a period for which he also received Social Security disability benefits, and the participant’s Regular Pension will be suspended until the full amount of the overpayment has been recovered. Thus, failure to report to the Company an award for Social Security disability benefits on a timely basis will result in a larger pension overpayment and a longer suspension of Regular Pension. The increase in pension is payable to the participant only and is not used to determine the amount payable to either a surviving spouse or a co-pensioner, if a survivor option has been elected.
Increased Pension - Rule-of-65 Retirement
A $400 per month increase in pension is payable until a participant is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit for Rule-of-65 retirements, but not for any month for which the participant receives Social Security disability benefits. The same provisions applicable to the increase in pension for 70/80 or Permanent Incapacity retirements also apply to Rule-of-65 retirements, with the addition of the following:
the $400 increase is subject to reduction by $1 for every $2 which the participant earns over $17,000 in 2000 or subsequent calendar years, with such amount to be prorated for the year of retirement and for the year of commencement of Social Security benefits;
In order to determine the amount of his earnings, the participant will be required to sign authorizations for the Social Security Administration and/or the Railroad Retirement Board to release earnings information to the Company each year and will also be required to submit W-2 forms and a statement of earnings to the Company for each year after retirement on a form provided by the Company;
Failure to submit the required information may result in suspension of the increase in pension and Regular Pension.
Any overpayments which result from a participant’s ineligibility to receive all or any portion of the increase will be recovered by suspension of the increase in pension and Regular Pension. Any underpayments will be paid promptly to the participant.
Average Monthly Earnings
The average monthly earnings for pension purposes are determined by totaling the participant’s earnings1 for each of the last ten consecutive twelve calendar month periods (calculation years) before retirement. There shall then be selected from such ten calculation years the five consecutive calculation years which yield the highest earnings (calculation period). Earnings during the calculation period are then divided by 60 to determine average monthly earnings, except that the 60 may be reduced, as described below, to exclude certain months during the calculation period in which the participant did not receive pay because of layoff or disability:
(1) In the case of permanent incapacity retirement only, if the calculation period is the last five calculation years before retirement, first subtract from 60 the number of months without pay because of disability in the last six months before retirement;
(2) In all cases the 60 is reduced or further reduced for other months without pay during the calculation period if (1) applies-by the greater of the number of months without pay:
(a) in excess of three, during each absence, or
(b) in excess of 6.
Months deducted under (1) are not counted as months of absence under (2).
Possible Deductions
The amount of pension otherwise payable is subject to reduction because of other benefit payments such as Public Pension and Other Pension.
BASIC PENSION REQUIREMENTS
Retirement Date
In order for a participant to qualify for a pension under the 2004 Pension Agreement, he must retire on or after August 1, 2004 under the conditions of eligibility established by the 2004 Pension Agreement. The date of retirement for a participant who applies for pension prior to a break in continuous service is specified by him but it must be on or after:
the date he requests retirement,
the date he first becomes eligible to retire on pension, or
the last day for which he earns pay,
whichever is latest, but not later than the last day of his continuous service.
A participant who applies for a pension after a break in continuous service is considered to have retired on the last day of his continuous service-thus, a participant cannot accrue any additional eligibility with respect to either age or continuous service after a break in his continuous service (except in the case of reemployment under certain circumstances).
Continuous Service
The length of continuous service is an essential factor in determining eligibility for and the amount of pension. The rules for determining continuous service for pension purposes are contained in the 2004 Pension Agreement, and they may or may not produce the same length of continuous service as the rules used to determine continuous service for seniority and other purposes. For example, continuous service for pension purposes breaks at the end of two years’ absence because of layoff or disability, whereas continuous service for seniority purposes may remain unbroken for up to five years of such absence.
Briefly summarized, the continuous service provisions in the 2004 Pension Agreement give credit for all years of service calculated to the nearest month (except as noted in the following paragraph) in the employment of the Company from the date of initial employment to the date of retirement unless such service was broken and after reemployment the break was not removed. In such cases, the rehired employee receives credit only for service from his last hiring date. The provisions as to breaks in continuous service have changed from time to time and whatever provisions were in effect at a given time determine whether or not a break then occurred. The 2004 Pension Agreement provides that continuous service breaks when an employee quits, is discharged or accepts severance pay, or when he has been absent because of layoff, disability or for other reasons for more than two years.
A break in continuous service resulting from discharge is removed if the employee is reemployed within six months. A break in continuous service resulting from absence on layoff or disability is removed if the participant returns to employment while he still has continuous service for seniority purposes, but in such case no continuous service for pension purposes is credited for the period of absence beyond two years.
In addition, a break in continuous service which occurs after January 1, 1976 for any reason is removed if an employee, not eligible for an immediate or deferred vested pension, is subsequently reemployed for a period of one or more years and the period of time between the break and reemployment is less than the period of continuous service at the time of the break but in no case is continuous service for pension purposes credited for the period between the break and reemployment. If an employee who breaks continuous service on or after January 1, 1976 as a result of a quit or discharge prior to accruing at least five years of continuous service is reemployed within one year of the quit or discharge and subsequently incurs another break in service, he shall receive credit for continuous service accrued prior to his original break, the period of absence between the break and reemployment and continuous service during reemployment in order to determine his eligibility for a normal retirement or an unreduced deferred vested pension payable at age 65.
An employee who incurs a break in continuous service on or after January 1, 1985, who is not eligible for any type of pension, and who is subsequently reemployed for a period of one or more years will receive credit for the continuous service accrued prior to the break in continuous service, if the period between the break and reemployment is less than five years.
A special rule may provide greater continuous service credit than above in cases of absence because of occupational disability. An employee who is reemployed after he has started to receive a pension or after he has attained eligibility for a deferred pension shall, upon reemployment, receive credit for the continuous service applicable to his prior retirement. This prior continuous service plus any continuous service accrued during reemployment shall be used for the purpose of determining eligibility and the amount of benefits upon subsequent retirement.
ELIGIBILITY AND AMOUNT OF PENSION
Normal Retirement
A PARTICIPANT WHO HAS REACHED AGE 65 AND HAS AT LEAST 10 YEARS OF CONTINUOUS SERVICE may retire and receive a Special Payment and a Regular Pension.
62/15 Retirement
A PARTICIPANT WHO IS BETWEEN THE AGES OF 62 AND 65 AND HAS AT LEAST 15 YEARS OF CONTINUOUS SERVICE may retire and receive a Special Payment and a Regular Pension.
If such a participant retires on or after August 1, 2004, his Regular Pension will be increased by a supplement equal to a minimum of $300 or the amount necessary to make the participant’s monthly pension $1,250 if such an amount is greater than $300. This pension supplement for such a participant shall be in effect for the first 12 Regular Pension payments.
30-Year Retirement
A PARTICIPANT WHO HAS NOT REACHED AGE 62 BUT WHO HAS AT LEAST 30 YEARS OF CONTINUOUS SERVICE may retire and receive a Special Payment and a Regular Pension calculated as though at the date of his retirement he had reached age 62.
If such a participant retires and on or after August 1, 2004, his Regular Pension will be increased by a supplemental equal to a $300. The increased monthly pension for such a participant shall be in effect for the first 12 Regular Pension payments, or until the participant is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit, whichever period is longer.
60/15 Retirement
A PARTICIPANT WHO IS BETWEEN THE AGES OF 60 AND 62 AND HAS AT LEAST 15 BUT LESS THAN 30 YEARS OF CONTINUOUS SERVICE may retire and receive a Special Payment and a Regular Pension. The Special Payment will be made following retirement. The participant may elect to have his Regular Pension start in the fourth month after he reaches age 62, or he may elect to have a lower Regular Pension start with the fourth month after retirement. In the latter case, he will receive a reduced Regular Pension calculated by applying the appropriate percentage shown in the following table to the Regular Pension which would otherwise begin after he reaches age 62.
Age at Start
of Pension Percentage
60...................................................................... 83.82%
60-1/12.............................................................. 84.46%
60-2/12.............................................................. 85.09%
60-3/12.............................................................. 85.73%
60-4/12.............................................................. 86.36%
60-5/12.............................................................. 87.00%
60-6/12.............................................................. 87.64%
60-7/12.............................................................. 88.27%
60-8/12.............................................................. 88.91%
60-9/12.............................................................. 89.54%
60-10/12............................................................ 90.18%
60-11/12............................................................ 90.81%
61...................................................................... 91.45%
61-1/12.............................................................. 92.16%
61-2/12.............................................................. 92.87%
61-3/12.............................................................. 93.59%
61-4/12.............................................................. 94.30%
61-5/12.............................................................. 95.01%
61-6/12.............................................................. 95.72%
61-7/12.............................................................. 96.44%
61-8/12.............................................................. 97.15%
61-9/12.............................................................. 97.86%
61-10/12............................................................ 98.57%
61-11/12............................................................ 99.29%
62...................................................................... 100.00%
The above percentages shall be applied on the basis of the participant’s age to the nearest month.
Permanent Incapacity Retirement
A PARTICIPANT WHO HAS AT LEAST 15 YEARS OF CONTINUOUS SERVICE AND WHO HAS BECOME PERMANENTLY AND TOTALLY INCAPACITATED AND HAS BEEN SO INCAPACITATED FOR AT LEAST FIVE CONSECUTIVE MONTHS may retire before age 65 and receive a Regular Pension, so long as he remains totally incapacitated. A Special Payment is not made.
If such participant is under the age at which he/she is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit and not eligible for Social Security disability benefits, he will be entitled to receive the $400 increase in pension described on page ____. When he becomes eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit or becomes eligible for Social Security disability benefits before the age of said 80% Social Security benefit eligibility, the $400 increase in pension will cease to apply.
The Company assumes that a participant retired for permanent incapacity is eligible for Social Security disability benefits unless he informs the Company that he has applied for and been denied such disability benefits.
70/80 Retirement
UNDER CERTAIN CIRCUMSTANCES, A PARTICIPANT WHO HAS AT LEAST 15 YEARS OF CONTINUOUS SERVICE MAY RETIRE BEFORE HE HAS REACHED AGE 62, and receive a Special Payment and a Regular Pension if:
• he has reached age 55 and the total of his age and continuous service equals at least 70 (rule-of-70); or
• the total of his age and continuous service equals at least 80 (rule-of-80).
THE CIRCUMSTANCES UNDER WHICH A PARTICIPANT MAY RETIRE UNDER THE RULE-OF-70 OR THE RULE- OF-80 ARE:
• when his continuous service has broken because of a layoff or disability, or because of a permanent shutdown; or
• during a layoff elected at the time of such a shutdown, or during the first 90 days on a job with the Company taken while on such layoff.
If such participant is not eligible for Social Security disability benefits, he will be entitled to receive the $400 increase in pension described on page ____. When he attains the age at which he/she is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit or becomes eligible for Social Security disability benefits before the age of said 80% Social Security benefit eligibility, the $400 increase in pension will cease to apply.
Rule-of-65 Retirement
UNDER CERTAIN CIRCUMSTANCES, A PARTICIPANT WHO HAS AT LEAST 20 YEARS OF CONTINUOUS SERVICE AS OF HIS LAST DAY WORKED MAY RETIRE BEFORE HE HAS REACHED AGE 55, and receive a Special Payment and a Regular Pension if:
the total of his age and continuous service equals at least 65 but less than 80; and
he has not been offered suitable long-term employment with the Company.
THE CIRCUMSTANCES UNDER WHICH A PARTICIPANT MAY RETIRE UNDER THE RULE-OF-65 ARE:
• when his continuous service has broken because of a layoff or disability; or
• during a layoff elected at the time of a permanent shutdown and the Company advises him that he will not be offered suitable long-term employment.
A job offered by the Company will normally be considered “suitable long-term employment" if:
• the employee is physically able to perform the job; and
• the employee has or can acquire through training the ability and skills needed to perform the job; and
• it is not a temporary job; and
• it is at the employee’s home plant or, if such a job is not available at the employee’s home plant, at another employment location, in accordance with Appendix A of the 2004 Pension Agreement.
A more comprehensive definition of suitable long-term employment may be found in Section I of Appendix A on page ____ of this booklet. If such participant is not eligible for disability Social Security benefits, he will be entitled to receive the $400 increase in pension described on page ____. When he attains the age at which he/she is eligible for a monthly Social Security benefit equal to 80% of the full retirement age Social Security benefit or becomes eligible for Social Security disability benefits before the age of said 80% Social Security benefit eligibility, the $400 increase in pension will cease to apply. The $400 increase is subject to reduction by $1 for every $2 which the participant earns over $17,000 in 2000 or subsequent calendar year after retirement. The $17,000 for 2000 or subsequent calendar year will be prorated for the year of retirement and for the year of commencement of Social Security.
Offer and Acceptance of Suitable Long-Term Employment (SLTE)
• Normally, an employee may refuse an offer of SLTE without becoming ineligible for a rule-of-65 retirement if such offer is made during his grace period. The grace period is a period of weeks following the employee’s last day worked that is equal to the number of SUB credit units in excess of 52 credited him under the Supplemental Unemployment Benefit Plan as of his last day worked.
• AN EMPLOYEE WHO REFUSES AN OFFER OF SLTE AFTER THE EXPIRATION OF HIS GRACE PERIOD WILL BE INELIGIBLE FOR A RULE-OF-65 RETIREMENT. IN ADDITION, AN EMPLOYEE WHO REFUSES AN OFFER OF SLTE DURING THE LAST 30 DAYS OF SUCH GRACE PERIOD WILL BE INELIGIBLE FOR RULE-OF-65 RETIREMENT IF THE OFFER OF SLTE IS AT AN EMPLOYMENT LOCATION OTHER THAN HIS HOME PLANT AND HE WOULD NOT BE REQUIRED TO START WORK ON SUCH JOB UNTIL AFTER THE EXPIRATION OF HIS GRACE PERIOD.
• An employee will be given a written explanation of his rights and obligations in connection with any offer of SLTE at the time he receives such offer.
• An employee who accepts SLTE may have rights to additional earnings protection, supplemental relocation bonus, additional SUB credit units, repayment of visitation expenses, and rule-of-65 retirement under certain conditions.
Deferred Vested Pension
A PARTICIPANT (NOT ELIGIBLE TO RETIRE ON PENSION UNDER ANY OTHER PROVISIONS OF THE 2004 PENSION AGREEMENT) WHO HAS AT LEAST 5 YEARS OF CONTINUOUS SERVICE AND WHOSE CONTINUOUS SERVICE BREAKS FOR ANY REASON WILL BE ELIGIBLE FOR A DEFERRED VESTED PENSION. The Company will give him a written notice of eligibility to apply for a deferred vested pension. A participant eligible for a deferred vested pension who has a break in continuous service after attaining age 40 and completing at least 15 years of continuous service shall be eligible for a deferred vested pension commencing with the month following the month in which he attains age 62, or if he desires, a deferred vested pension starting between age 60 and 62, reduced from the amount which would be payable at age 62 by applying the percentages shown in the table on page ____ for a reduced 60/15 pension.
A participant who has a break in continuous service either prior to attaining age 40, or after attaining age 40 and before completing at least 15 years of continuous service, shall be eligible for a deferred vested pension commencing with the month following the month in which he attains age 65, or, if he desires, a deferred vested pension starting between age 60 and 65, reduced from the amount which would be payable at age 65 by applying the percentages shown in the following table:
Age at Start Age at Start
of Pension Percentage of Pension Percentage
60 63.10% 62-7/12 79.51%
60-1/12 63.58 62-8/12 80.11
60-2/12 64.06 62-9/12 80.71
60-3/12 64.54 62-10/12 81.32
60-4/12 65.02 62-11/12 81.93
60-5/12 65.50 63 82.53
60-6/12 65.98 63-1/12 83.21
60-7/12 66.45 63-2/12 83.89
60-8/12 66.93 63-3/12 84.58
60-9/12 67.41 63-4/12 85.26
60-10/12 67.89 63-5/12 85.94
60-11/12 68.37 63-6/12 86.62
61 68.85 63-7/12 87.30
61-1/12 69.38 63-8/12 87.99
61-2/12 69.92 63-9/12 88.67
61-3/12 70.45 63-10/1 89.35
61-4/12 70.99 63-11/1 90.03
61-5/12 71.53 64 90.72
61-6/12 72.06 64-1/12 91.49
61-7/12 72.60 64-2/12 92.26
61-8/12 73.14 64-3/12 93.04
61-9/12 73.67 64-4/12 93.81
61-10/12 74.21 64-5/12 94.58
61-11/12 74.75 64-6/12 95.36
62 75.28 64-7/12 96.13
62-1/12 75.89 64-8/12 96.91
62-2/12 76.49 64-9/12 97.68
62-3/12 77.10 64-10/12 98.45
62-4/12 77.70 64-11/12 99.23
62-5/12 78.30 65 100.00
62-6/12 78.91
The above percentages shall be applied on the basis of the participant’s age to the nearest month.
Application for a deferred vested pension can be made not earlier than 90 days before the month the participant wants the pension to start, within the period described above.
A Special Payment is not made in the case of a deferred vested pension, and the Regular Pension is determined on the basis of continuous service and earnings prior to the break in continuous service.
ADMINISTRATIVE PROVISIONS
Application for Pension
An application for pension must be made in writing on a form provided by the Company. The application form can be secured from an Employee Relations representative of the Company; preferably at the location where the participant is or was last employed before retirement. The application may be made at any time prior or subsequent to retirement, except as indicated above in the case of a deferred vested pension.
Commencement and Termination of Pension
A Regular Pension starts with the month following the three months for which any Special Payment is made. If no Special Payment is payable, the Regular Pension starts with the first month following retirement.
The last installment of Regular Pension is payable for the month in which death of the participant occurs. However, a participant’s Regular Pension (except a deferred vested pension) is guaranteed to be payable for at least the first 60 months after retirement regardless of death. Also, a reduced pension may be payable thereafter to a spouse or a co-pensioner under a survivor option election, and/or a surviving spouse’s benefit may be payable under the surviving spouse’s benefit provisions. Special rules are applicable to the commencement of any deferred pension (see “60/15 Retirement”, page ____ and “Deferred Vested Pension” page ____).
Notwithstanding anything to the contrary, no pension is payable for any month with respect to which a participant claims and is eligible for sickness and accident benefits provided under a program of the Company.
Effect of Reemployment on Pension
Any pensioner retired under this or a prior Agreement between the parties who is reemployed shall, upon reemployment, have his pension suspended.
Qualified Domestic Relations Order (QDRO)
The Company is required by the provisions of the Retirement Equity Act of 1984 to comply with any qualified domestic relations order as such term is defined in the Act. In the event that such an order requires payment of a part or all of a participant’s current or future pension benefit, any benefit payable under the 2004 Pension Agreement to such participant and to a third party under the QDRO shall be the actuarial equivalent of the pension benefits which otherwise would now, or subsequently, become payable to a participant.
SURVIVING SPOUSE’S BENEFIT
Eligibility
The surviving spouse of a participant who has completed at least 15 years of continuous service and who dies on or after August 1, 2004 is eligible for a monthly benefit if death occurs:
• before retirement, or
• after retirement and the participant had retired on or after August 1, 2004, on other than a deferred vested pension and the surviving spouse was married to the participant at the date of his retirement; and
• the surviving spouse is a widow or widower within the provisions of the Social Security Act.
NOTE: A divorced spouse under the Social Security Act is not the same as a widow or widower under such Act. Accordingly, an individual who is a divorced spouse but not a widow or widower under such Act is not eligible for a surviving spouse’s benefit.
Amount of Benefit
A surviving spouse’s benefit is payable for the life of an eligible surviving spouse in the following amount:
• for each month until the surviving spouse reaches age 60, 50% of the participant’s pension or, if higher, a minimum benefit of $250.00 per month; and
• for each month after the surviving spouse reaches age 60, 50% of the participant’s pension less 50% of the amount of widow’s (or widower’s) Social Security benefit or, if higher, a minimum benefit of $200.00 per month.
As used above, “participant’s pension” means:
• in the case of a participant who dies while accruing continuous service, the minimum, or percent pension, which would have been payable had he retired on the date of his death and then been age 62; or
• in the case of a participant who dies after retirement, the minimum or percent pension which was payable after application of and any actuarial reduction for early commencement of pension.
Application for Surviving Spouse’s Benefit
An application for a surviving spouse’s benefit must be made in writing on a form provided by the Company. The application form can be secured from any Human Resources office of the Company, preferably at the location where the participant is or was last employed before death, or from the Plan Administrator. The application may be made at any time subsequent to the participant’s death.
Commencement and Termination of Benefits
The first installment is payable for the month following the month in which the participant dies but not for any month for which a special payment was payable to the participant. The last installment is payable for the month in which the surviving spouse dies.
SURVIVOR OPTIONS
A general description of these benefits is set forth in the following pages. If any participant desires additional information concerning such survivor options, he should contact the Human Resources office at the location at which he is employed, or was last employed.
Pre-Pension Spouse Coverage
Pre-Pension Spouse Coverage is available on a continuation basis only for those participants who elected such coverage under a prior agreement and such election was in effect immediately prior to August 1, 2004. For these participants, Pre-Pension Spouse Coverage becomes effective two years after the election date or the date the participant attains the required age and service, whichever is later. The pension payable to any participant who elects Pre-Pension Spouse Coverage will be reduced by 7/10 of 1% (.7%) for each year that such coverage is in effect. This coverage terminates upon revocation, divorce, death of the spouse, retirement or incurrence of a break in continuous service. If a participant elects the Pre-Pension Spouse Coverage and dies while such coverage is in effect, his spouse will receive, in addition to any surviving spouse’s benefit which may be payable, 50% of the amount which would have been payable to the participant had he retired on the date of his death and had he been age 65 on the date of his death, reduced by the appropriate survivor option percentage from Exhibit B on page ____.
Pre-Retirement Survivor Annuity Coverage
Pre-Retirement Survivor Annuity Coverage is automatic unless the participant with the written consent of the participant’s spouse revokes such coverage. Pre-Retirement Survivor Annuity Coverage provides a benefit for the spouse of a participant who has been married for at least one year and has completed at least 5 years of continuous service and dies while employed by the Company, or who dies after termination of employment with eligibility for a deferred vested pension and prior to commencement of pension payments. The Pre-Retirement Survivor Annuity Coverage provides a benefit ranging from 36% to 48% of the participant’s accrued pension (or deferred vested pension payable at age 60), depending on the age differential between the participant and the spouse, and the participant’s age at death.
The cost of Pre-Retirement Survivor Annuity Coverage is paid by the Plan, and there is no charge to the participants.
Note: At least 180 days prior to the year in which the participant attains age 35, the Company will provide notice of this coverage.
THE PRE-RETIREMENT SURVIVOR ANNUITY BENEFIT IS REDUCED BY THE AMOUNT OF ANY SURVIVING SPOUSE’S BENEFIT PAYABLE TO THE SURVIVING SPOUSE. In the case of participants covered by the surviving spouse’s benefit provisions, the Pre-Retirement Survivor Annuity Benefit is first payable when the surviving spouse attains 60 years of age. In the case of participants not covered by the surviving spouse’s benefit provisions, the Pre-Retirement Survivor Annuity Benefit is first payable commencing with the month following the month in which the participant would have attained 60 years of age or in which the participant’s death occurs, whichever is later.
Automatic 50% Spouse Option
If a participant has a spouse at retirement and does not revoke the Automatic 50% Spouse Option, the participant will receive a reduced amount during his/her life and after death the participant's spouse will receive an amount equal to half of such reduced amount (excluding the $400 increase in pension and the supplements for 30 year and 62/15 retirements if applicable) in addition to any surviving spouse’s benefit to which he or she may be entitled for the remainder of the spouse's life. If the participant revokes the Automatic 50% Spouse Option, he or she may elect the 50% Joint and Survivor Pop-Up Option if married, or a Co-Pensioner Option described below. A participant may revoke the Automatic 50% Spouse Option only with the written consent of his or her spouse. The revocation will be effective only when the form is filed with the company.
50% Joint and Survivor Pop-Up Option
If a participant has a spouse at retirement and revokes the Automatic 50% Spouse Option, the participant may elect the 50% Joint and Survivor Pop-Up Option. The participant will receive a reduced amount during his/her life and after his/her death the spouse will receive an amount equal to half of such reduced amount (excluding the $400 increase in pension and the supplements for 30-Year and 62/15 retirements if applicable) in addition to any surviving spouse's benefit to which he or she may be entitled for the remainder of the spouse's life, However, in the event that the participant's spouse should die prior to the participant, the participant's pension shall then increase (pop-up), effective with the month following the month in which death of the participant's spouse occurs, by eliminating the required reduction for this option.
The required reduction in payments to the participant takes effect immediately upon commencement of pension payments, and ceases as of the month following the month that the death of the participant's spouse occurs. Election of this option may be made at any time prior to retirement.
Co-Pensioner Options (50% or 100%)
If the participant desires to provide benefits to his or her spouse which are different than those provided under the terms of the Automatic 50% Spouse Option or to provide benefits to a person other than his or her spouse, he or she may do so by making timely election of a 50% or 100% Co-Pensioner Option and receive a reduced amount after his or her retirement. However, if he or she has a spouse at the time of retirement such election will not be effective unless he or she revokes the Automatic 50% Spouse Option. If the co-pensioner is not the participant’s spouse, the spouse must give written consent to the specific co-pensioner election. Subject to the above, any participant who has elected a Co-Pensioner Option under a prior agreement will be considered to have elected the equivalent Co-Pensioner Option under the 2004 Pension Agreement.
Payments to a co-pensioner under an elected Co-Pensioner Option do not become payable unless death of the participant occurs after retirement. The required reduction in payments to the participant takes effect immediately upon commencement of pension payments. Election of an option may be made at any time prior to retirement.
General
The Company will commence payment of benefits to an individual entitled to lifetime monthly payments under the option provisions without such individual having to make application.
Each participant should consider, as he or she approaches the age at which he or she will be eligible for Pre-Retirement Survivor Annuity Coverage, or retirement, whether or not a survivor option is in his or her best interests. Each participant will be notified at the appropriate time as to the availability of the various options. If he or she is interested, he or she should request an explanation of the detailed provisions from a Human Resources or personnel representative at the location where he or she is employed, or was last employed.
CONDITIONS UNDER WHICH BENEFITS
WILL NOT BE PAID TO
A PARTICIPANT, HIS OR HER SURVIVING SPOUSE,
OR HIS OR HER CO-PENSIONER
Pension Benefits
Benefits will not be paid to a participant if he does not complete a minimum of 5 years of continuous service or if having completed such minimum he dies before commencement of pension.
Surviving Spouse’s Benefits
Surviving spouse’s benefits will not be paid to the surviving spouse of a participant if the participant does not complete a minimum of 15 years of continuous service or having completed such minimum he or she dies and is not survived by an individual eligible for surviving spouse’s benefits or such individual does not make application for surviving spouse’s benefits (see page ____). Surviving spouse’s benefits will not be paid if the participant incurs a break in service with eligibility only for a deferred vested pension.
Survivor Option Benefits
Benefits under the survivor options will not be paid if the participant does not complete a minimum of 5 years of continuous service or having completed such minimum he or she dies without a survivor option in effect or, although having an option in effect, he or she is not survived by an eligible beneficiary (see page ____).
APPEALS PROCEDURE
Any dispute between the Company and a participant as to a participant’s eligibility for a pension or the amount of pension is to be resolved by the Company and the Union or the Company and the Union may submit it to arbitration. Any dispute concerning a co-pensioner or surviving spouse is also to be resolved by the Company and the Union, or the Company and the Union may submit it to arbitration.
There is also a procedure in the 2004 Pension Agreement for resolution of any dispute as to whether a participant is permanently incapacitated. Under this procedure if a doctor selected by the Union and a doctor selected by the Company disagree:
(a) In the case of a participant who has been granted disability benefits under Social Security with an award effective date during the period he/she was accruing continuous service, such participant will be deemed to be permanently incapacitated; or
(b) In the absence of a disability benefits award under Social Security, a third doctor is selected and his determination as to whether the participant is permanently incapacitated is binding.
PENSION AGREEMENT
between
EMPIRE IRON MINING PARTNERSHIP
TILDEN MINING COMPANY L.C.
doing business together as
CLIFFS MICHIGAN MINING COMPANY
and
UNITED STEELWORKERS OF AMERICA
Effective August 1, 2004
JE319
TABLE OF CONTENTS
Paragraph Page
1. INTRODUCTION
Definitions ...................................................................... 1.1 37
When Retirement Occurs .............................................. 1.2 40
Provision of Benefits ...................................................... 1.3 41
2. ELIGIBILITY FOR PENSION
Normal Retirement ........................................................ 2.1 42
62/15 Retirement .......................................................... 2.2 42
30-Year Retirement ...................................................... 2.3 42
60/15 Retirement .......................................................... 2.4 42
Permanent Incapacity Retirement ................................. 2.5 42
70/80 Retirement .......................................................... 2.6 43
Rule-of-65 Retirement .................................................. 2.7 43
Deferred Vested Pension .............................................. 2.8 44
3. AMOUNT OF PENSION
Types of Pension Payments .......................................... 3.1 45
Special Payment ............................................................ 3.2 45
Regular Pension ............................................................ 3.3 47
Increased Pension-Permanent Incapacity, 70/80
30-Year with Age 60, 62/15 and 30-Year ..................... 3.4 50
Increased Pension - Rule-of-65 .................................... 3.5 51
Regular Pension Part-Time Participants ....................... 3.6 53
Deduction for Public Pension ......................................... 3.7 53
Deduction for Other Pension ......................................... 3.8 54
Pension Application ....................................................... 3.9 54
Commencement and Termination of -
Regular Pension ............................................................ 3.10 55
Lump Sum Payment ...................................................... 3.11 56
Pre-Pension Spouse Coverage ..................................... 3.12 56
Pre-Retirement Survivor Annuity Coverage .................. 3.13 59
Automatic 50% Spouse Option ...................................... 3.14 64
50% Joint and Survivor Pop-Up Option.......................... 3.15 67
Co-Pensioner Options ................................................... 3.16 70
QDRO Reduction .......................................................... 3.17 75
Automatic 5-Year Term Certain..................................... 3.18 75
4. SURVIVING SPOUSE’S BENEFIT
Eligibility ......................................................................... 4.1 78
Amount of Benefit .......................................................... 4.2 78
Commencement and Termination of Benefit.................. 4.4 79
Determination of Status as Surviving Spouse................. 4.5 80
Surviving Spouse of Part-Time Participant .................... 4.7 80
5. DETERMINATION OF CONTINUOUS SERVICE......... 5.1 81
6. REEMPLOYMENT AFTER ATTAINMENT OF
PENSION ELIGIBILITY
Applicability of Other Sections ........................................ 6.1 85
Effect on Pension .......................................................... 6.2 85
Continuous Service of Reemployed Participant.............. 6.3 85
Special Pension Eligibility After Reemployment.............. 6.4 86
Special Rules as to Amount of Pension.......................... 6.5 86
7. APPEALS PROCEDURE
Disputes as to Eligibility or Amount................................. 7.1 87
Disputes as to Permanent Incapacity............................. 7.2 87
8. TRUST........................................................................... 8.1 89
9. REPORTS ..................................................................... 9.1 89
10. GENERAL PROVISIONS
Administration................................................................. 10.1 90
Continuation of Benefits................................................. 10.2 90
Nonalienation................................................................. 10.3 90
Notice for Pension Payment Through Electronic
Deposit ..................................................................... 10.4 90
Overpayment of Pension ............................................... 10.5 90
Deduction for Insurance Premiums and
Overpayments................................................................ 10.6 91