Common use of Spousal Eligibility Clause in Contracts

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees officers hired on or after August 1, 2003: If the spouse of an employee officer is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees officers hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee officer covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee officer under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees Officers who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employeesofficers, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employeesofficers. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees Officers who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employeeofficer’s final annual gross salary at the time of retirement from State service equal to the active employee officer contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees officers who retire on or after July 1, 2011 2012 shall be three percent (3%) of the employeeofficer’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees officers who retired on or after July 1, 2007 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee officer who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee officer who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee officer who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three three-year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three three-year requirement will not apply, (d) an employee officer who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three three-year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three three-year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee officer had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee officer who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three three-year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three three-year requirement will not apply. (4) All officers who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such officers. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees Officers hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 12 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-TIAA- CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 17 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 20072008, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 20072008, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July January 1, 2011 2013 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 2008 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of ageservice. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service serviced for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for to elect coverage in the REHP plan of benefits, which has been modified to confirm to the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or hired after July 1, 2007, and 2011 who elect REHP coverage upon retirement shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percent of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 9 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement retirement, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement Memorandum between the Employer and the Fundfund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees retirees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age age, and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age age, and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited serviceservice if retired on or after July 1, 2008), (c) an employee who leaves State employment prior to superannuation age age, and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she the employee must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation Article 14 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-TIAA- CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service service, regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after prior to July 1, 2007, and who elect REHP coverage, 2004 shall be eligible for to elect coverage in the medical and prescription REHP plan of benefits in effect for active employeeson June 30, provided that 2003, as modified by the Employer from time-to-time. Effective July 1, 2004, the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Employees retiring on or after July 1, 2004, shall be eligible to elect coverage in the modified REHP plan of benefits. Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees For those who retire prior to July 1, 2005 and elect REHP coverage, the Employer shall continue to pay the full cost of coverage under the REHP. Those who retire on or after July 1, 20072005, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage one percent (1.0%) of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefitsservice, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution ratesannuitant shares, for employees annuitants who retire under (1), (2), (3), (4) or (53) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation Article 14 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service service, regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems.active b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. . c Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 2012 shall be three percent (3%) percent of the employee’s final average annual gross salary at the time of retirement, as determined by the methodology utilized by the retirement from State Employees’ Retirement System to calculate pension benefits, service and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) percent will be reduced to one one-and-one-half percent (1.5%) percent of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3)., (4) 4 or (5) 5 below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems, or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems.the b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement retirement, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees Supervisors hired on or after August 1, 2003: If the spouse of an employee a Supervisor is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees Supervisors hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee a Supervisor covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees Supervisors who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees Supervisors who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employeeSupervisor’s final annual gross salary at the time of retirement from State service equal to the active employee Supervisor contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the annual retiree contribution rate for employees who leave state employment during the term of this agreement memorandum for employees Supervisors who retire on or after July 1, 2011 2012 shall be three percent (3%) of the employeeSupervisor’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees Supervisors who retired on or after July 1, 2007 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee a Supervisor who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee a Supervisor who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee a Supervisor who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee Supervisor returns during the recall period, this three year requirement will not apply. If the employee Supervisor had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee a Supervisor who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee Supervisor returns during the recall period, this three year requirement will not apply. If the employee Supervisor had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee a Supervisor had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee a Supervisor who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee Supervisor returns during the recall period, this three year requirement will not apply. If the employee Supervisor had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All Supervisors who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such Supervisors. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees Supervisors hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan benefit plans to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 9 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-TIAA- CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service service, equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, coverage subject to the required retiree contribution rates, for employees retirees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply,. (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemploymentre-employment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP Retired Employees Health Program prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 14, Section 7.b.(1b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service eligibility points will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited serviceeligibility points, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceeligibility points, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited serviceeligibility points, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service eligibility points with at least three years of credited service eligibility points from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three three-year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three three-year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service eligibility points with at least three years of credited service eligibility points from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceeligibility points, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service eligibility points in the State and/or Public School Retirement Systems or 25 years of credited service eligibility points regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited serviceeligibility points, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service eligibility points with at least three years of credited service eligibility points from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For the purposes of eligibility for REHP coverage under this Sectionsection, credited service eligibility points earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service eligibility points under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service eligibility points under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service eligibility points for military service, such credited service eligibility points will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service eligibility points for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. The extent and level of benefits shall be set at an actuarial value that will not subject the Commonwealth or PEBTF to any local, state or federal fees, assessments, penalties, taxes, etc. The Commonwealth will negotiate with the Union before requiring bargaining unit members to contribute toward the cost of any such fees, assessments, penalties, taxes, etc. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate rate(s) which are effective for employees who leave state employment during covered by the term of this agreement AFSCME Master Memorandum for employees who retire on or after July the time period effective September 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement2014 through August 31, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate2017. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that: (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply,. (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 9 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she the employee must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation Article 14 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service service, regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. Section 7. When an employee dies as a result of a work-related accident, the Fund shall continue to provide medical plan benefits and supplemental benefits, as determined and extended by the Fund, to the spouse and eligible dependents of the employee until the spouse remarries or becomes eligible for coverage under another employer's health plan. Annual certification of non-coverage will be required. The medical plan benefits and supplemental benefits will be converted to the REHP at the time when the employee would have reached superannuation age. Section 8. The parties will evaluate the health plans offered under the Fund, and take action as necessary, in order to ensure that a tax and/or penalty is not assessed against the Commonwealth pursuant to the Affordable Health Care Act as a result of the impact upon employees of any such plans.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public Schools Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percent of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.methodology

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public Schools Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 14, Section 7.b.(1b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three three-year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three three-year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for to elect coverage in the REHP plan of benefits, which has been modified to confirm to the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire hired on or after July 1, 2007, and 2011 who elect REHP coverage upon retirement shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percent of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percent of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) percent will be reduced to one one-and-one-half percent (1.5%) percent of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4), (5) or (56) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For UC Claims Intermittent Intake Interviewers in the Department of Labor and Industry who are treated as permanent employees for benefits purposes, entitlement to the REHP will require an additional six months of credited service for each five (5) years of credited service established in (1), (2), (3) and (4) above. (6) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement retirement, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan benefit plans to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service service, equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, coverage subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. Howeverif retired on or after July 1, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage 2008) in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2d) Disability retirement, which requires at least five an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with service (20 or more years of credited service if retired on or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participantsafter July 1, the disability retirement application must be approved by the Office of Administration using the same criteria as 2008) in the State Employees’ and/or Public School Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service Systems with at least three years of credited service from the most recent date of reemploymentre- employment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service in the State and/or Public School Retirement Systems or (3) Other retirement with at least 25 years of credited service in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the Retired Employees Health Program prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees officers hired on or after August 1, 2003: If the spouse of an employee officer is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees officers hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee officer covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee a contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee officer under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees Officers who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits to elect coverage in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time benefits, which has been modified to conform to the medical and prescription benefits in effect for the active employees/officers. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees . Officers who retire on or after July January 1, 20072013, and who elect REHP coverage coverage, shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly coverage at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employeeofficer’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree Said contribution rate for employees who retired on or after July shall remain at three percent (3%) during the term of this agreement. Further, effective January 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) salary when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. c. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The d. For officers who retire prior to January 1, 2013, the Employer shall continue to pay the entire cost of coverage for annuitants who retire under (1), (2), (3) or (4) below and who have elected REHP coverage. For officers who retire on or after January 1, 2013, the Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage:. (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008), in the State and/or Public School Retirement Systems, except that: (a) an employee officer who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee officer who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee officer who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply,. (d) an employee officer who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee officer had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement SystemSystems. (3) Other retirement retirement, with at least 25 years of credited service, service in the State and/or Public School Retirement Systems except that an employee officer who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP REHP, prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes Retirement at age 50 with at least 20 years of eligibility for REHP coverage under service in positions included within this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Programbargaining unit.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. . c Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The rate Effective January 1, 2013, the annual retiree contribution rate for employees who leave state employment during the term initial three contract years of this agreement for employees who retire on or after July 1, 2011 2012 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.three

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after prior to July 1, 2007, and who elect REHP coverage, 2004 shall be eligible for to elect coverage in the medical and prescription REHP plan of benefits in effect for active employeeson June 30, provided that 2003, as modified by the Employer from time-to-time. Effective July 1, 2004, the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Employees retiring on or after July 1, 2004, shall be eligible to elect coverage in the modified REHP plan of benefits. Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees For those who retire prior to July 1, 2005 and elect REHP coverage, the Employer shall continue to pay the full cost of coverage under the REHP. Those who retire on or after July 1, 20072005, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage one percent (1.0%) of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefitsservice, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution ratesannuitant shares, for employees annuitants who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) service in the State and/or Public School Retirement Systems, an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (cb) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (dc) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems.the b. Employees who retire on or after July 1, 20072008, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 20072008, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July January 1, 2011 2013 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 2008 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 15 years of credited serviceservice (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, coverage subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retire on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. Howeverif retired on or after July 1, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage 2008) in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2d) Disability retirement, which requires at least five an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with service (20 or more years of credited service if retired on or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participantsafter July 1, the disability retirement application must be approved by the Office of Administration using the same criteria as 2008) in the State Employees’ and/or Public School Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service Systems with at least three years of credited service from the most recent date of reemploymentre-employment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service in the State and/or Public School Retirement Systems or (3) Other retirement with at least 25 years of credited service in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the Retired Employees Health Program prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during shall change thereafter in accordance with the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percentage of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree active employee contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3) (4), (45) or (56) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 15 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 9 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement retirement, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement Memorandum between the Employer and the Fundfund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees retirees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least (20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age age, and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age age, and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited serviceservice if retired on or after July 1, 2008), (c) an employee who leaves State employment prior to superannuation age age, and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 20072008, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 20072008, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July January 1, 2011 2013 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 2008 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees officers hired on or after August 1, 2003: If the spouse of an employee officer is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees officers hired before August 1, 2003: If the spouse of an employee officer covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee a contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee officer under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee officer is deemed retired when the employee officer applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 17 Section 7.b.(17.a. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (53) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (64) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, TIAA- CREF or other approved retirement systems. b. Employees Officers who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits to elect coverage in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time benefits, which has been modified to conform to the medical and prescription benefits in effect for the active employees/officers. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees . Officers who retire on or after July January 1, 20072013, and who elect REHP coverage coverage, shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly coverage at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employeeofficer’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree Said contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from shall remain at three percent (3%) during the use term of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be usedthis agreement. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) salary when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. c. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The d. For officers who retire prior to January 1, 2013, the Employer shall continue to pay the entire cost of coverage for officers who retire under (1), (2), (3) or (4) below and who have elected REHP coverage. For officers who retire on or after January 1, 2013, the Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees officers who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage:. (1) Retirement at or after superannuation age with at least 20 years of credited service, except that: (a) an employee officer who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee officer who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee officer who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply,. (d) an employee officer who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee officer had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless service, egardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement retirement, with at least 25 years of credited service, except that an employee officer who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP REHP, prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes Retirement at Superannuation age with at least 20 years of eligibility for REHP coverage under service in positions included within this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Programbargaining unit.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during shall change thereafter in accordance with the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percentage of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree active employee contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3) (4), (45) or (56) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who have at least 15 years of credited service as of June 30, 2008, or who have 13 years of credited service and are within one year of superannuation age as of June 30, 2008, whether it has been purchased as of that date or eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For UC Claims Intermittent Intake Interviewers in the Department of Labor and Industry who are treated as permanent employees for benefits purposes, entitlement to the REHP will require an additional six months of credited service for each five (5) years of credited service established in (1), (2), (3) and (4) above. (6) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. Section 7. When an employee dies as a result of a work-related accident, the Fund shall continue to provide medical plan benefits and supplemental benefits, as determined and extended by the Fund, to the spouse and eligible dependents of the employee until the spouse remarries or becomes eligible for coverage under another employer's health plan. Annual certification of non- coverage will be required. The medical plan benefits and supplemental benefits will be converted to the REHP at the time when the employee would have reached age 60. Section 8. The parties will evaluate the health plans offered under the Fund, and take action as necessary, in order to ensure that a tax and/or penalty is not assessed against the Commonwealth pursuant to the Affordable Health Care Act as a result of the impact upon employees of any such plans.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement retirement, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement Memorandum between the Employer and the Fundfund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service, (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age age, and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age age, and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service, (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age age, and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer Employer-paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after prior to July 1, 2007, and who elect REHP coverage, 2004 shall be eligible for to elect coverage in the medical and prescription REHP plan of benefits in effect for active employeeson June 30, provided that 2003, as modified by the Employer from time-to-time. Effective July 1, 2004, the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Employees retiring on or after July 1, 2004, shall be eligible to elect coverage in the modified REHP plan of benefits. Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-to- time. c. Employees For those who retire prior to July 1, 2005 and elect REHP coverage, the Employer shall continue to pay the full cost of coverage under the REHP. Those who retire on or after July 1, 20072005, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage one percent (1.0%) of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefitsservice, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, coverage subject to the required retiree contribution ratesannuitant shares, for employees annuitants who retire under (1), ) (2), (3), (4) or (53) below and who have elected REHP coveragecoverage : (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. Howeverif retired on or after July 1, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage 2008) in the REHP prior to the most recent rehire period, this three year requirement will not apply,State (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System.after July 1, (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan benefit plans to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service service, equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, coverage subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. Howeverif retired on or after July 1, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage 2008) in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2d) Disability retirement, which requires at least five an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with service (20 or more years of credited service if retired on or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participantsafter July 1, the disability retirement application must be approved by the Office of Administration using the same criteria as 2008) in the State Employees’ and/or Public School Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service Systems with at least three years of credited service from the most recent date of reemploymentre- employment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service in the State and/or Public School Retirement Systems or (3) Other retirement with at least 25 years of credited service in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the Retired Employees Health Program prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after prior to July 1, 2007, and who elect REHP coverage, 2004 shall be eligible for to elect coverage in the medical and prescription REHP plan of benefits in effect for active employeeson June 30, provided that 2003, as modified by the Employer from time-to-time. Effective July 1, 2004, the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Employees retiring on or after July 1, 2004, shall be eligible to elect coverage in the modified REHP plan of benefits. Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees For those who retire prior to July 1, 2005 and elect REHP coverage, the Employer shall continue to pay the full cost of coverage under the REHP. Those who retire on or after July 1, 20072005, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage one percent (1.0%) of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefitsservice, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution ratesannuitant shares, for employees annuitants who retire under (1), (2), (3), (4) or (53) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned All employees who are age 60 or over on or after July March 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as 1992 and also have at least five years of credited service under the retirement systems’ rules in effect from time Retirement Code, whether it has been purchased as of that date or eligible to time. Employees hired on or after July 1be purchased as of that date, 2007 who have earned will be "grandfathered in" and the total years of service requirement for fully state paid REHP coverage for those employees will be ten years of credited service under the retirement systems’ rules with another employer rather than fifteen. The three-year rehire rule will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior apply to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Programemployees.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coveragecover- age, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority authori- ty of the Board of Trustees to modify or adopt these or other spousal eligibility rules. Section 6. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited serviceservice if retired on or after July 1, 2008 in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems.be b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that: (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement SystemSystems. (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees officers hired on or after August 1, 2003: If the spouse of an employee officer is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees officers hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee officer covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees Officers who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees Officers who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employeeofficer’s final annual gross salary at the time of retirement from State service equal to the active employee officer contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees officers who retire on or after July 1, 2011 2012 shall be three percent (3%) of the employeeofficer’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2013, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees officers who retired on or after July 1, 2007 through June 30, 2011 2012 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2013, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee officer who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee officer who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee officer who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee officer who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee officer had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee officer who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee officer returns during the recall period, this three year requirement will not apply. If the employee officer had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All officers who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such officers. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees Officers hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement Memorandum for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The Effective January 1, 2012, the methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, effective January 1, 2012, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 11, Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-TIAA- CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees who retire under (1), (2), (3), (4) or (54) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, service except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this SectionParagraph, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, coverage shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-and one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that: (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP Retired Employees Health Program prior to the most recent rehire period, this three year requirement will not apply. For purposes of this Subsection, superannuation under TIAA-CREF shall be 60 years of age. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless in the State and/or Public School Retirement Systems (For purposes of age. For this Subsection, retirement under TIAA- CREF with at least five years of service as a State Employees Defined Contribution Plan participants, the employee should be considered as disability retirement application must be approved by if the Office of Administration retiree is granted fully state-paid Retired Employees Health Program (REHP) coverage using the same criteria as the State Employees’ Retirement System.procedure established in Appendix J), (3) Other retirement retirement, with at least 25 years of credited service, service in the State and/or Public School Retirement Systems except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP REHP, prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one one-and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited serviceservice if retired on or after July 1, 2008, in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Article 6 Section 7.b.(17.b. (1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees who are eligible for Medicare will participate in Medicare medical and prescription plans, and those retirees who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) will be reduced to one and-one-half percent (1.5%) of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees retirees who retire under (1), (2), (3), or (4) or (5) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 20 years of credited service, service except that: (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited service, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 20 or more years of credited service, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 20 or more years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited service, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 20 or more years of credited service or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as the State Employees’ Retirement System. (3) Other retirement with at least 25 years of credited service, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.

Spousal Eligibility. a. For employees hired on or after August 1, 2003: If the spouse of an employee is covered by any PEBTF health care plan, and he/she is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, which shall be the spouse’s primary coverage, as a condition of the spouse’s eligibility for coverage by the PEBTF plan(s), without regard to whether the spouse’s plan requires cost sharing or to whether the spouse’s employer offers an incentive to the spouse not to enroll. b. For employees hired before August 1, 2003: If Effective October 1, 2003, if the spouse of an employee covered by any PEBTF health plan also is eligible for coverage under another employer’s plan(s), the spouse shall be required to enroll in each such plan, provided that the plan in question does not require an employee contribution by the spouse or the spouse’s employer does not offer an incentive to the spouse not to enroll. Once covered by another employer’s plan, that plan will be the spouse’s primary coverage, and the PEBTF plan will be secondary. c. Nothing herein shall be construed to limit the authority of the Board of Trustees to modify or adopt these or other spousal eligibility rules. a. The Employer shall allow each individual who was eligible as an active employee under the Fund’s health benefits plan to elect coverage upon retirement under the Retired Employees Health Program (hereinafter REHP). In addition, dependency coverage shall be allowed where the dependents of the retiree annuitant qualify under such Program. The following phrases shall be defined as: (1) For State Employees’ Retirement System or the Public School Employees’ Retirement System members, an employee is deemed retired when the employee applies for and receives retirement benefits. (2) For State Employees Defined Contribution Plan participants, an employee is deemed retired when they receive a full distribution from their defined contribution plan. (3) Superannuation age, for the express purposes of this Section and Recommendation 14 Section 7.b.(1) only, shall be defined as follows: a. For State Employees Defined Contribution Plan participants, it shall be 67 years old. b. For State Employees’ Retirement System or the Public School Employees’ Retirement System members it is defined by the State Employees Retirement Code. (4) For State Employees Defined Contribution Plan participants, credited service will be determined in the same manner as State Employees’ Retirement System members. (5) The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program. (6) The phrase “retirement system” shall be limited to the State Employees’ Retirement System and or Public School Employees’ Retirement System, TIAA-CREF, State Employees Defined Contribution Plan, or other approved retirement systems. b. Employees who retire on or after July 1, 2007, and who elect REHP coverage, shall be eligible for the medical and prescription benefits in effect for active employees, provided that the Employer will modify the REHP plan of benefits from time-to-time to conform to the medical and prescription benefits in effect for the active employees. Retirees Annuitants who are eligible for Medicare will participate in Medicare supplemental medical and prescription plans, and those retirees annuitants who are eligible to enroll in Medicare Part B will not receive benefits through the REHP for benefits which are provided by Medicare Part B. It is understood that the REHP plan of benefits may be amended or modified by the Employer from time-to-time. c. Employees who retire on or after July 1, 2007, and elect REHP coverage shall be required to contribute to the cost of coverage. The annual retiree contribution rate shall be a percentage of the employee’s final annual gross salary at the time of retirement from State service equal to the active employee contribution rate in effect on the date of retirement and will be payable monthly at the rate of one-twelfth of the annual retiree contribution rate. The annual retiree contribution rate for employees who leave state employment during the term of this agreement for employees who retire on or after July 1, 2011 shall be three percent (3%) percent of the employee’s final average salary at the time of retirement, as determined by the methodology utilized by the State Employees’ Retirement System to calculate pension benefits, and will be payable monthly at the rate of one-one- twelfth of the annual retiree contribution rate. The methodology utilized by the State Employees’ Retirement System to calculate pension benefits will also be applied to determine the annual retiree contribution rate for employees who retired on or after July 1, 2007 through June 30, 2011 in those situations where said methodology results in a lower retiree contribution rate than results from the use of final gross annual salary; in situations where use of final gross annual salary yields a lower contribution rate for such former employees, it shall continue to be used. Further, the annual retiree contribution rate for all present and future Medicare eligible retirees who have a contribution rate of three percent (3%) percent will be reduced to one one-and-one-half percent (1.5%) percent of the appropriate base (final gross annual salary or final average salary) when a retiree becomes eligible for Medicare coverage, and will be payable monthly at the rate of one- one-twelfth of the annual retiree contribution rate. d. The REHP is developed and administered in a cost effective and beneficial manner by the Fund, subject only to the prior approval of the Office of Administration and in accordance with the terms and conditions of the REHP Participation Agreement between the Employer and the Fund. e. The Employer shall continue to pay the cost of coverage, subject to the required retiree contribution rates, for employees annuitants who retire under (1), (2), (3), (4), (5) or (56) below and who have elected REHP coverage: (1) Retirement at or after superannuation age with at least 15 years of credited service (20 years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, except that (a) an employee who leaves State employment prior to superannuation age and subsequently retires at or after superannuation age must have 25 years of credited serviceservice in the State and/or Public School Retirement Systems, (b) an employee who is furloughed prior to superannuation age and subsequently retires at or after superannuation age during the recall period must have 15 or more years of credited service (20 or more years of credited serviceservice if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems, (c) an employee who leaves State employment prior to superannuation age and is subsequently rehired and then retires at or after superannuation age must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply, (d) an employee who leaves State employment subsequent to superannuation age and is subsequently rehired and then retires must have 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (2) Disability retirement, which requires at least five years of credited serviceservice in the State and/or Public School Retirement Systems, except that, if an employee had previously qualified based on an approved disability retirement, then returns and retires under a normal or early retirement, he or she must retire at or after superannuation age with 15 or more years of credited service (20 or more years of credited service if retired on or after July 1, 2008) in the State and/or Public School Retirement Systems or 25 years of credited service regardless of age. For State Employees Defined Contribution Plan participants, the disability retirement application must be approved by the Office of Administration using the same criteria as in the State Employees’ and/or Public School Retirement System.Systems or (3) Other retirement with at least 25 years of credited serviceservice in the State and/or Public School Retirement Systems, except that an employee who leaves State employment, is subsequently rehired and retires must have at least 25 years of credited service in the State and/or Public School Retirement Systems with at least three years of credited service from the most recent date of reemployment. However, if the departure from State employment was due to furlough and the employee returns during the recall period, this three year requirement will not apply. If the employee had qualified, other than through disability retirement, for Employer paid coverage in the REHP prior to the most recent rehire period, this three year requirement will not apply. (4) All employees who had at least 15 years of credited service as of June 30, 2008, or who had 13 years of credited service and were within one year of superannuation age as of June 30, 2008, whether it had been purchased as of that date or was eligible to be purchased as of that date, shall be eligible to elect REHP coverage upon reaching superannuation age with 15 years of credited service rather than 20. The three-year rehire rule will not apply to such employees. (5) For UC Claims Intermittent Intake Interviewers in the Department of Labor and Industry who are treated as permanent employees for benefits purposes, entitlement to the REHP will require an additional six months of credited service for each five (5) years of credited service established in (1), (2), (3) and (4) above. (6) For purposes of eligibility for REHP coverage under this Section, credited service earned on or after July 1, 2007, will be limited to service as a Commonwealth employee which otherwise counts as credited service under the State and/or Public School Retirement, TIAA- CREF or other approved retirement systems’ rules in effect from time to time. Employees hired on or after July 1, 2007 who have earned credited service under the State and/or Public School Retirement, TIAA-CREF or other approved retirement systems’ rules with another employer will not have that service counted for purposes of eligibility for REHP coverage, unless they were employed by the Commonwealth prior to July 1, 2007. If it is determined by the retirement system State and/or Public School Retirement Systems that a Commonwealth employee is eligible for additional credited service for military service, such credited service will be included in the determination of eligibility for REHP coverage. For State Employees Defined Contribution Plan participants, the Office of Administration will determine if a Commonwealth employee is eligible for additional credited service for military service using the same criteria as the State Employees’ Retirement System. The phrase “Commonwealth employee” shall be limited to service earned through an employing agency eligible to participate in the Commonwealth’s Life Insurance Program.