MERIT INCENTIVE SUPPLEMENTAL RETIREMENT INCOME PLAN
Exhibit
10.23
January
1996
This
plan constitutes an agreement
between Tennessee Valley Authority (TVA) and its managerial employees who are
subject to it. The primary purpose of this plan is to provide
managerial employees with income to supplement retirement benefits received
from
the TVA Retirement System, the Civil Service Retirement System, or the Federal
Employees Retirement System. The plan also provides for hardship
withdrawals subject to conditions set forth below.
Section
1 Definitions
"Manager"
includes any officer or
employee of TVA who at any time during the fiscal year is employed in a Vice
President or Senior Manager Pay Group position in TVA's Manager and Specialist
Schedule or any other employee designated by the Board, but not including the
members of the TVA Board of Directors.
"Interest"
is the computed average
interest rate payable by the U.S. Treasury upon its total marketable public
obligations as of the beginning of the fiscal year as calculated by the United
States Department of the Treasury pursuant to Section 15d of the TVA
Act.
"Account"
includes each calendar year
subaccount within the account.
"Retirement"
includes termination of
service for any reason by a TVA manager who has five years of TVA service or
without regard to length of service if the manager is receiving a disability
retirement allowance under
the
TVA
Retirement System or a disability retirement annuity under the Civil Service
Retirement System or the Federal Employees Retirement System.
"Board"
means the Board of Directors of
TVA.
"Committee"
means a group of three
persons consisting of the Senior Vice President, Human Resources, who will
chair
the Committee, and two additional members appointed by the Board.
"Return"
means the change in the value
of the mutual fund or funds designated by the manager, as calculated by the
recordkeeper.
"Recordkeeper"
means the organization
selected by the Senior Vice President, Human Resources, to provide and
administer the investment return alternatives from which the managers may
choose.
Section
2 Retirement Credits
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A.
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There
shall be established for each manager an account on TVA's books in
the
name of the manager. Each manager's account may consist of a
1979-1980 Subaccount, and such additional calendar year subaccounts
as TVA
may establish from time to time.
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B.
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From
time to time the Board or the Board's designee, in the sole discretion
of
the Board or its designee, shall determine the amount, if any, to
be
credited to each individual manager's account. Amounts so
credited prior to January 1, 1981, shall be credited to the 1979-1980
Subaccount. Xxxxxxx so credited during subsequent calendar
years shall be credited to the respective calendar year
subaccount.
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C.
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The
Board (or its designee) may consider such factors as the following
in
determining the amounts to be
credited:
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1.
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meritorious
performance;
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2.
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the
feasibility of providing a basic management-wide pension credit,
taking
into account each manager's basic
salary;
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3.
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providing
TVA managers with total compensation equivalent to prevailing rates
in
corporate, professional, and other public
organizations;
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4.
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the
need to use pension credits for recruitment
purposes;
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5.
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lost
annual leave; and
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6.
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such
other factors as may be deemed
appropriate.
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D.
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Interest
on the balance of each subaccount in each manager's account shall be
credited to each subaccount at the end of each month through
March 31, 1996, and at the end of each business day
thereafter.
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E.
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Beginning
effective April 1, 1996, in lieu of the interest provided in 2.D
above, each manager may elect to have all or a portion of their account
adjusted by the return as of the end of each business day in accordance
with the funds selected by the manager under procedures established
by the
Recordkeeper, provided, however that each manager who retired prior
to
January 1, 1996, and who is owed payments under this plan shall
continue to receive payments calculated based on accrued interest
and not
return. TVA is not responsible for the effect of decisions by
any manager who elects to receive the return provided
herein. Such decisions shall be the sole responsibility of the
manager.
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Section
3 Benefits
The
total amount credited to each
manager's account or accounts shall be paid by TVA in the following
manner.
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A.
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Retirement
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1.
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Upon
a manager's retirement the balance of each of the manager's subaccounts
shall, as elected by the manager
pursuant to section 3.A.2., be paid to the manager in a
lump sum or in 5, 10, or 15 annual
installments.
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a.
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As to the subaccounts
the manager has elected to receive in a lump sum, the balance in
each
subaccount, including all accrued interest and return, shall be paid
to
the manager not later than the last day of the first full calendar
month
following retirement.
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b.
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As to the subaccounts
the manager has elected to receive in installments, the balance
in each subaccount shall be paid in the following
manner. On the last day of the first full calendar month
following retirement the manager shall be paid a sum equal to balance
in
the subaccount divided by the number of annual installments elected
by the
manager pursuant to section 3.A.1 including all accrued interest and
return. Further installments shall be paid on the same date in
each of the succeeding years. The amount of each installment
shall be determined by dividing the balance
in
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the
subaccount, including all accrued interest and return as of that date, by the
number of payments remaining to be made.
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2.
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A
manager's election of a retirement benefit pursuant to section 3.A.1.a.
or
3.A.1.b. filed before January 1, 1981, shall apply to amounts
credited to the manager's 1979-1980 Subaccount and is irrevocable
and
effective pursuant to the terms of this plan in effect at the time
the
election was filed. Effective on and after January 1,
1981, prior to TVA crediting any amount to a manager's current calendar
year subaccount, each manager may irrevocably elect in writing to
have the
balance of the manager's current year subaccount paid to the manager
pursuant to either section 3.A.1.a. or 3.A.1.b. In the absence
of an election, the balance of the manager's subaccount shall be
paid
pursuant to section 3.A.1.a. Notwithstanding any other
provision of this plan, each manager as of January 1, 1996, may make
a one-time irrevocable election in accordance with the conditions
established by the Senior Vice President, Human Resources, to change
any
election of retirement benefit executed prior to that
date.
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3.
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Any
manager whose account balance is $25,000 or less at the time he or
she
retires shall be paid that balance in a lump sum not later than the
last
day of the first full calendar month following
termination.
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B.
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Termination Prior to Retirement
- Upon the termination for any reason (other than disability) of
a manager
who does not have five years of TVA service, the balance of the manager's
account, including accrued interest and return, shall be paid to
the
manager in a lump sum not later than the last day of the first full
calendar month following the
termination.
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C.
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Death Benefits
- Upon receipt of proper proof of the death of a manager who shall
have
died in service, or a former manager who had been receiving payments
under
section 3.A.1.b. above, the balance remaining in the manager's account,
including accrued interest and return, shall be paid in a lump sum
to such
person or persons, if any, as the manager shall have nominated by
written
designation filed with the Treasurer prior to the manager's
death. In the absence of any designation of beneficiary,
payment shall be made in the following order of
precedence:
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1)
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to
the widow or widower of the
manager,
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2)
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if
there is no widow or widower, to the child or children of the manager
and
descendants of deceased children by
representation,
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3)
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if
none of the above, to the parents of the manager or the survivor
of
them,
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4)
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if
none of the above, to the duly appointed legal representative of
the
estate of the manager,
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5)
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if
none of the above, to the person or persons entitled to it under
the laws
of the domicile of the manager at the time of
death.
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Payment
shall be made on the last day of the first full calendar month following the
manager's death.
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D.
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Financial
Hardship - In the event of a financial hardship, a manager may apply
to withdraw all or part of the total amount credited to the Manager's
account. The withdrawal shall be granted upon a determination
of the Committee, in the Committee's sole discretion that the amount
withdrawn is reasonably required to satisfy the hardship
need. This determination shall be final and conclusive as to
all parties. A financial hardship shall mean immediate and
heavy financial needs occurring in the personal affairs of a manager
such
as:
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1)
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need
for housing;
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2)
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need
for the education of the manager, the manager's spouse, or
children;
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3)
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need
due to destruction of property;
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4)
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need
due to accident, sickness, or temporary disability affecting the
manager
or any member of the manager's immediate
family;
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5)
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need
due to a death in the manager's immediate
family.
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Financial
hardship withdrawals will be credited against the subaccounts in a manager's
account in chronological order, starting with the earliest
subaccount.
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X.
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Xxxx-Sum
Cash Out of Certain Accounts - TVA may in its sole discretion pay
any
retired manager whose account balance on January 1, 1996, is $25,000
or less, the entire amount of that balance in a lump
sum.
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Section
4 Administration of Plan
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A.
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The
Board shall have control over and responsibility to oversee the general
administration of the plan; the Board or the Board's designee shall
approve all credits to managers' accounts. The Board shall
authorize all amendments to the plan. The Committee shall
approve all hardship withdrawals.
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B.
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As
requested, each Vice President shall annually recommend amounts to
be
credited to the account of each manager within that office, based
on the
factors listed in 2.C. above. In making such recommendations,
Vice Presidents shall describe the basis for
them.
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C.
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The
Treasurer shall maintain an account in the name of each manager and
credit
to each account interest, return, and such other amounts as may be
approved. The Treasurer shall make payments to managers and
beneficiaries pursuant to this
plan.
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D.
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The
Senior Vice President, Human Resources, shall have sole and exclusive
responsibility for resolving any dispute regarding this plan as it
affects
any manager below the level of Vice President. The Board shall
have exclusive responsibility for resolving any such dispute as it
affects
any Vice President. The decisions of the Board or the Senior
Vice President, Human Resources, as appropriate, in these matters
and the
decision of the Board or the
Board's
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designee
in all other matters pertaining to the plan's operation shall be final and
conclusive as to all parties.
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E.
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As
necessary, the Office of the General Counsel shall provide legal
advice
pertaining to the plan.
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Section
5 Restoration to Service After Retirement
If
a manager who has retired is
restored to full-time service
with TVA, the manager's pension payments under section 3.A. of this plan shall
be suspended and the amount, if any, remaining in that manager's account shall
continue to accrue interest or return, and shall be credited with any subsequent
amounts that may be approved, until that manager's termination from
service. At such subsequent retirement, pension payments under 3.A.
shall resume. Part-time employment, or employment under a personal
services contract, shall not affect the payment of a manager's benefits under
section 3.A.
Section
6 Assignments Prohibited
No
transfer, assignment, pledge,
seizure, or other voluntary or involuntary alienation or encumbrance of any
benefit provided under the plan will be permitted or recognized other than
as
specifically provided in this plan. In the event of any such
attempted alienation or encumbrance (including specifically, but without
limitation, any attempted attachment, levy, execution, garnishment, or other
legal process affecting such benefit), the Board may in its uncontrolled
discretion declare the said benefit to be temporarily or permanently forfeited
by the manager and, in lieu of paying the same to or for the manager, may in
its
uncontrolled
discretion
pay or apply such benefit temporarily or permanently to or for the use of any
persons who are dependents of, or are related by blood, by marriage, or by
adoption to, such manager, or the Board may in its uncontrolled discretion
cause
such benefit to revert to the general funds of TVA.
TVA
may offset amounts owed to it by a
manager against amounts payable to a manager under this plan.
Section
7 No Trust is Created
No
trust in favor of any manager is
created by this plan, and in the absence of any attempted assignment prohibited
under section 6, managers shall have the rights of general creditors of TVA
with
respect to amounts credited their accounts established by this
plan.
Section
8 Amendments to Plan
This
plan may be amended as authorized
by the Board from time to time as it deems appropriate.
