Condell Health Network
Retirement Plan
(the “Condell Pension Plan”)
Condell Health Network
Retirement Plan Participant Summary
Advocate Condell Medical Center Associates
Advocate Health Care Network (“Advocate”) offers
the Condell Health Network Retirement Plan (the
“Condell Pension Plan” or “Plan”) as part of its
retirement program for associates of Advocate
Condell Medical Center. Advocate assumed
sponsorship of the Plan from Condell Medical
Center (the “Medical Center”) as of December
1, 2008, when the Medical Center became a part
of Advocate’s network of health care providers.
The Plan was frozen to new participation and to
benefit accruals effective December 31, 2007.
401(k) Plan and the Pension Plan cover you if
you are an active employee who has met the
eligibility requirements of those plans)—helps
you prepare for your future financial security.
The amount of the pension benefit you will
receive under the Plan is based upon certain
factors, including your Credited Service with
the Medical Center, your Average Monthly Pay
from the Medical Center, and your Covered
Compensation. The meaning of these terms,
as well as the Plan’s formula for determining
pension benefits, are explained in this booklet.
The Condell Pension Plan—in combination
with Social Security, the Advocate Health Care
Network Retirement Savings Plan—401(k) (the
“401(k) Plan”), and the Advocate Health Care
Network Pension Plan (the “Pension Plan) (the
As it is important for you to understand this
pension benefit and all of its key features, we
are providing you with this booklet summarizing
the terms and features of the Plan. You will want
to keep this booklet handy for future reference.
Important Information
This summary describes the Plan’s terms that are in effect as of December 1, 2011. This booklet
is intended to describe the major features of the Condell Pension Plan. Full details of the Plan
are contained in the official Plan documents, which legally govern the Plan. Every effort has
been made to accurately describe the terms of the Plan. However, because this booklet is only
a summary, it cannot describe all Plan rules or how the rules will apply to every person in every
situation. In the event of any discrepancies between information in this booklet and the Plan
documents, the Plan documents will govern.
If you have any questions regarding your pension benefit under the Plan, visit Advocate
Benefits at www.advocatebenefits.com or call 1.800.775.4784.
The Plan Administrator has absolute discretionary authority to determine eligibility for benefits
and to construe the terms of the Plan.
Advocate reserves the right to amend, modify or terminate the Condell Pension Plan at any
time, for any reason. If a material amendment is made or termination occurs, you will be
notified promptly according to applicable law.
This booklet is not a contract of employment and nothing in the Plan gives any associate the
right to be retained in the service of Advocate or any of its affiliated companies (Advocate and its
affiliated companies are sometimes referred to in this summary as the “Advocate companies”).
Any of the Advocate companies may discharge or discipline an associate at any time.
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Plan Highlights
• Pension Benefit. Your pension benefit, which is expressed as a monthly payment for the term of
your life after you retire, is based on your Credited Service, Average Monthly Pay, and Covered
Compensation.
• The Condell Pension Plan was frozen with respect to additional benefit accruals and participation,
effective as of December 31, 2007 (the “Freeze Date”). This means that service you provided to the
Medical Center (or any other Advocate company) after this date, and compensation you earned for
that service, are not taken into account in determining your Credited Service and Average Monthly
Pay under the Plan. Covered Compensation was also frozen as of December 31, 2007.
• Vesting. You are fully vested when you have five years of Vesting Service or attain age 65
while actively employed.
• Distributions. Normal retirement occurs at age 65. However, you generally may begin receiving
your pension benefit at any time after you terminate employment and reach age 55 if you have five
or more years of Vesting Service. The Plan offers several payment options. You may elect a lump
sum payment, or you may receive monthly payments for your lifetime only, or for your life and
that of your surviving spouse or other beneficiary.
• Plan Cost. Advocate pays the full cost of the Plan, and prior to December 1, 2008, the Medical
Center paid the full cost. No associate contributions are required or allowed. The Plan is funded
through a trust. All contributions to the Plan are held and invested by a trustee appointed by
Advocate. The money in the trust can be used only to pay benefits and administrative costs of the
Plan, and cannot be returned to Advocate until all benefits have been paid. Plan pension payments
are processed by a third party administrator appointed by Advocate.
Please contact Advocate Benefits if you have any questions after reading this booklet.
Advocate Benefits – At Your Service
Advocate Benefits Service Center is Advocate’s benefits information resource center. You can call
Advocate Benefits at 1.800.775.4784. Representatives are available from 8 am to 6 pm Central Time,
Monday through Friday. By calling the toll-free number, you can request a pension application form
for an estimate of your benefit.
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Your Condell Health Network Retirement Plan
Who is Eligible and When Participation Begins. . . . . . . . . . . . . . . . . . . . . 4
Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Vesting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
How Your Benefit is Determined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
When Benefits are Paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
How You Receive Plan Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
If You Should Die Before Beginning Payments.. . . . . . . . . . . . . . . . . . . . . 13
Taxes on Your Benefits.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
How to Apply for Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Other Important Information.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Administrative Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ERISA Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Who is Eligible and When
Participation Begins
Service
Your period of employment with the Medical
Center (and other Advocate companies, if
applicable) is referred to as your Service. Your
Service generally is measured by the Hours
of Service you complete during the time you
work for the Medical Center and the Advocate
companies. Prior to the Freeze Date, your
Service was used to determine if you satisfied
the eligibility requirements for participation (as
described above) and whether you earned a year
of Credited Service in a particular calendar year.
After the Freeze Date, your Service continues to
be credited for the purpose of determining your
vested interest (i.e., a nonforfeitable, permanent
right) to your pension benefit under the Plan.
Eligibility
The Plan was frozen to new participation
effective December 31, 2007, and no associate
or employee of the Medical Center or any of
the Advocate companies that was hired or
rehired after this date is eligible to participate
in the Plan. Also, no associate or employee who
first completed a year of Eligibility Service (as
described on page 5) after the Freeze Date is
eligible for Plan participation.
Prior to the Freeze Date, you became eligible to
participate in the Plan if you:
•• were an employee of the Medical Center;
•• had reached the age of 21;
•• had completed a year of Eligibility
Service; and
•• were not a “leased employee,” as defined in
the Internal Revenue Code.
Credited Service
Prior to the Freeze Date, you received a year of
Credited Service for each calendar year in which
you completed at least 1,000 Hours of Service. No
service you perform for the Medical Center or any
other Advocate company after December 31, 2007
will be counted toward your Credited Service.
Participation
Prior to the Freeze Date, you generally became
a participant in the Plan as of the first day of the
first month on or after which you satisfied all
the above criteria for Plan participation. If you
first completed a year of Eligibility Service after
your first year of employment, you became a
participant in the Plan as of the first day of the
following calendar year.
For periods of employment with the Medical
Center from January 1, 1989 through the Freeze
Date of December 31, 2007, Credited Service
was measured only in full, completed years,
meaning that if you did not perform 1,000 Hours
of Service in a calendar year, you received no
Credited Service for that year. However, if you
were already employed by the Medical Center
on January 1, 1989, you also received credit for
both full and partial years of Credited Service
performed prior to this date, in accordance with
the terms of the Plan that were then in effect.
Statements
You may contact Advocate Benefits at
1.800.775.4784 to receive an estimate of your
benefits from the Plan. Your pension estimate
will show your frozen December 31, 2007
accrued benefit.
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Eligibility Service
You also earn an Hour of Service for each hour
of back pay that is awarded or agreed to by the
Medical Center or another Advocate company
(with no duplication of hours for hours already
credited). However, you cannot be credited with
more than 501 Hours of Service for any one
period where you do not perform any job duties,
unless you were on a qualified military leave and
you return within the time frame required by law.
Prior to the Freeze Date, you were required to
perform one year of Eligibility Service to begin
participating in the Plan. A year of Eligibility
Service was determined in one of two ways:
•• You earned a year of Eligibility Service if you
completed at least 1,000 Hours of Service in
the first 12-consecutive-month period from
your date of hire, or
•• If you didn’t complete 1,000 Hours of Service
during the first 12-consecutive-month period
from your date of hire, you earned a year of
Eligibility Service once you completed 1,000
Hours of Service during a subsequent
calendar year.
One-Year Break in Service
If, prior to the Freeze Date, you left the
Medical Center, you incurred a one-year
“Break in Service” if you earned less than 501
Hours of Service in a calendar year. If you later
returned to work for the Medical Center prior to
the Freeze Date, you again became eligible for
Plan participation if you were eligible before
the Break(s) occurred. If you were not
previously eligible for Plan participation, to
commence participation you had to satisfy
the Plan’s eligibility requirements as if you
were a new employee.
Because the Plan is frozen to new participation, no
service you perform for the Medical Center or any
other Advocate company after December 31, 2007
will be counted toward your Eligibility Service.
Vesting Service
Vesting Service is measured in full, completed
years. You receive one year of Vesting Service
for each calendar year in which you complete
at least 1,000 Hours of Service for the Medical
Center or any other Advocate company. This
means that your future service with the Medical
Center or any other Advocate company will
count for purposes of vesting under the Condell
Pension Plan.
The rules below describe how your previous
Credited Service and Vesting Service was treated
for Plan purposes if you left the Medical Center
and were later rehired prior to the Freeze Date:
•• If you were rehired prior to having a Oneyear Break in Service:
All your previous Credited Service and Vesting
Service was restored once you were rehired.
You will not be entitled to any pension benefit
until you are fully vested in the Plan. See Vesting
on page 6 for an explanation of when you
become fully vested.
•• If you had one or more Breaks in Service, but
were previously vested in your pension benefit:
If you were vested in your pension benefit
before your Break(s) in Service, meaning
that you had already earned at least five
years of Vesting Service, your previous
Vesting Service was reinstated when you
were rehired, and your pension benefit
based on your previous Credited Service was
not forfeited, since it was already vested.
Of course, to the extent you received your
pension benefit and were later rehired,
upon your subsequent termination date any
further pension benefit you might receive
would be reduced by the value of the benefit
you previously received.
Hours of Service
You earn an Hour of Service for each hour you
work (or have worked) for the Medical Center
or any other Advocate company for pay. You
also earn Hours of Service for hours you’re paid
while away from work for such things as:
•• Paid time off (vacation, illness and incapacitation)
•• Layoff
•• Military duty
•• Jury duty
•• Approved leave of absence
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Vesting
•• If you had one or more Breaks in Service,
and were not previously vested in your
pension benefit:
If you had no vested interest in your pension
benefit before your Break(s) in Service,
meaning that you had not yet completed
five years of Vesting Service, your previous
Credited Service and Vesting Service was
reinstated only if the number of consecutive
one-year Break(s) was less than (i) five, or
(ii) your years of service before the Break(s),
whichever was greater. In this circumstance,
your previous Credited Service and Vesting
Service was only reinstated after you
completed one year of service after returning
to work.
You will become fully vested in your pension
benefit—meaning you will have a 100% nonforfeitable right to your benefit—if you are a
participant in the Plan, and any of the following
events occur while you are employed by the
Medical Center or any other Advocate company:
•• You accrue five years of Vesting Service
•• You retire, terminate employment, or die on
or after reaching age 65.
How Your Benefit is
Determined
The rules described above also apply if you
leave the Medical Center or the Advocate
companies after December 31, 2007 and are
subsequently rehired; however, because you
are no longer receiving Credited Service due
to the Plan freeze, the rules are only relevant
for Vesting Service. The rules described
above will also be used to determine your
Vesting Service if you left the Medical Center
and were participating in the Plan prior
to December 1, 2008 and you have been
subsequently hired by the Medical Center
or any of the Advocate companies.
Your Plan benefits are determined according to
a formula which expresses the amount of your
pension benefit as a monthly annuity payment
for your life.
There are several factors that are considered
in determining the amount of your monthly
pension benefit, including your years of Credited
Service, Average Monthly Pay, and Covered
Compensation. Because the Plan was frozen
effective December 31, 2007, these factors are
determined by taking into account only your
service for the Medical Center and your pay
received from the Medical Center on or prior to
the Freeze Date.
Maternity/Paternity Leave
Solely to prevent a one-year Break in Service,
you may still earn Hours of Service if you are
away from Advocate because of:
•• Your pregnancy.
•• The birth or adoption of your child.
•• Caring for your child immediately following
birth or adoption.
Pension Benefit Formula
If you had 25 or more years of Credited Service
as of December 31, 2007, your monthly pension
benefit is the sum of:
35% of your Average Monthly Pay
You can receive up to 501 hours of service for
such an absence.
Plus
12.5% of your Average Monthly Pay that
exceeds 1/12 of your Covered Compensation
If you are eligible for maternity/paternity leave,
you must provide the Plan Administrator the
information necessary to verify your leave and
establish the number of working days missed.
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If you had less than 25 years of Credited Service
as of December 31, 2007, your monthly pension
benefit is determined according to the same
general formula, but it is reduced in proportion
to the number of years of Credited Service you
had as of December 31, 2007 divided by 25.
Joe’s pension benefit would be:
35% of his Average Monthly Pay of $4,000,
which is $1,400
MULTIPLIED BY
20/25 (Joe’s years of Credited Service divided by
25), which is 80%
Minimum Benefits
At normal retirement age the Plan has a
minimum benefit provision for people who
were Plan participants on December 31, 1988. If
you were a participant in the Plan on this date,
your pension benefit will not be less than the
pension benefit you accrued as of December 31,
1988, applying the terms of the Plan that were in
existence on that date.
Based on these assumptions, Joe’s monthly
pension benefit would be $1,400 x 80% = $1,120.
Average Monthly Pay
Effective January 1, 2006, for determining your
Average Monthly Pay, the five years in which you
received the most Pay are taken into consideration,
regardless of whether the years are consecutive,
but no Pay for a year in which you did not perform
at least 1,000 Hours of Service is taken into account.
If you have not received Pay in each of five calendar
years, your Average Monthly Pay is determined
according to the total Pay you have received
divided by the number of months you worked and
received Pay. However, pay earned after the Freeze
Date of December 31, 2007 is not taken into account
for purposes of computing your Average Monthly
Pay. A different method of determining Average
Monthly Pay was in effect prior to January 1, 2006.
AND
Your pension benefit will also not be less than
$1,000 per year.
EXAMPLES OF PENSION BENEFIT DETERMINATIONS
Example 1:
Assume that Judy is retiring in 2011 at age 65 with
25 years of Credited Service. For this example,
assume that Judy’s Average Monthly Pay is $5,000
and 1/12 of her Covered Compensation is $4,200
(i.e., her Covered Compensation is $50,400).
Judy’s pension benefit would be:
EXAMPLE OF HOW AVERAGE MONTHLY PAY
IS DETERMINED
35% of her Average Monthly Pay of $5,000,
which is $1,750
Example for a participant who is actively
employed after January 1, 2006:
Assume that Mary is retiring in 2012 at age 65,
and that Mary’s highest five calendar years of
Pay are 2001, 2002, 2003, 2006 and 2007 (her five
highest years of Pay are not consecutive):
PLUS
12.5% of $800 (the portion of her $5,000 Average
Monthly Pay that exceeds 1/12 of her Covered
Compensation of $4,200), which is $100
•• 2007 Pay: $80,000 and Mary completed at
least 1,000 Hours of Service
•• 2006 Pay: $80,000 and Mary completed at
least 1,000 Hours of Service
•• 2003 Pay: $80,000
•• 2002 Pay: $75,000
•• 2001 Pay: $75,000
•• $390,000 / 60 months = $6,500 Mary’s Average
Monthly Pay
Based on these assumptions, Judy’s monthly
pension benefit under the Plan would be $1,750
+ $100 = $1,850.
Example 2:
Assume that Joe is retiring in 2011 at age 65 with
20 years of Credited Service. For this example,
assume that Joe’s Average Monthly Pay is $4,000
and 1/12 of his Covered Compensation is $4,200.
Joe’s Average Monthly Pay therefore does not
exceed 1/12 of his Covered Compensation.
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Pay
Compensation you received after the Freeze
Date of December 31, 2007 is not taken into
account as Pay for purposes of determining
your pension benefit.
Your Pay is the compensation you received
from the Medical Center during a particular
calendar year. Specifically, “Pay” includes any
compensation you received from the Medical
Center that was reported on your Form W-2,
including salary, wages, overtime, and similar
amounts, plus any contributions you may have
made to a 401(k) plan, cafeteria benefit plan, or
qualified transportation benefit plan maintained
by the Medical Center.
Covered Compensation
Your Covered Compensation is the average, rounded to the nearest $600, of the Social Security
taxable wage bases (SSTWBs) in effect under the Social Security Act for each year during the
35-year period ending on the date you reach Social Security retirement age. However, Covered
Compensation was frozen effective December 31, 2007, and will not be adjusted for future years.
The SSTWB in effect for a particular year is the maximum amount of pay that is subject to Social
Security taxes. The SSTWB is determined each year by the Social Security Administration.
Following is the SSTWB history through 2007:
Year
Wage Base
Year
Wage Base
Year
Wage Base
1937 – 50
$3,000
1982
$32,400
1998
$68,400
1951 – 54
3,600
1983
35,700
1999
72,600
1955 – 58
4,200
1984
37,800
2000
76,200
1959 – 65
4,800
1985
39,600
2001
80,400
1966 – 67
6,600
1986
42,000
2002
84,900
1968 – 71
7,800
1987
43,800
2003
87,000
1972
9,000
1988
45,000
2004
97,900
1973
10,800
1989
48,000
2005
90,000
1974
13,200
1990
51,300
2006
94,200
1975
14,100
1991
53,400
2007
97,500
1976
15,300
1992
55,500
1977
16,500
1993
57,600
1978
17,700
1994
60,000
1979
22,900
1995
61,200
1980
25,900
1996
62,700
1981
29,700
1997
65,400
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When Benefits are Paid
EXAMPLES OF HOW TO CALCULATE COVERED
COMPENSATION
For this example, assume that Joe was born in
1941, his Social Security retirement age is 65,
and Joe decided to retire in 2006 at age 65.
Joe would follow these steps to calculate his
Covered Compensation:
•• Add all the wage bases for the 35 years up to
(and including) 2006
•• Divide by 35 to get the average
•• Round to the nearest $600
•• Joe’s Covered Compensation = $48,500
As you approach retirement, you will need
to make two decisions that affect your actual
monthly benefit payment: when to retire and
the form of payment of your pension benefit.
Generally, you cannot begin receiving your
benefits under the Plan until you have reached
age 55. The section below summarizes how
different types of retirement (e.g., normal
retirement, late retirement, early retirement, and
disability retirement) may affect your monthly
benefit payment. The following section (How You
Receive Plan Benefits, see page 11) describes the
forms of payment available. You should consult
your personal financial advisor and/or tax advisor
for assistance in determining when and how to
take your Condell Pension Plan benefit.
However, the calculation is different for an
individual who reaches his or her Social Security
retirement age after December 31, 2007 (the
Freeze Date), because Covered Compensation
was frozen as of the Freeze Date.
Assume that Mike was born in 1947, his Social
Security retirement age is 65, and Mike decides
to retire in 2012 at age 65. Because Covered
Compensation was frozen effective December
31, 2007, Mike’s Covered Compensation is
calculated by counting the years up to (and
including) 2007.
Normal Retirement: Age 65
Your normal retirement age under the Plan is 65.
If you reach your normal retirement age while
still employed, you may begin receiving your
normal retirement benefit under the Plan as
of the first day of the month following (i) your
retirement, or (ii) the month that you perform
less than 40 Hours of Service.
•• Add all the wage bases for the 35 years up to
(and including) 2007
•• Divide by 35 to get the average
•• Round to the nearest $600
•• Mike’s Covered Compensation = $51,600
Late Retirement: After Age 65
You may choose to continue working after you
reach age 65. If you reach the age of 65 on or
after January 1, 2011 and continue performing
40 or more Hours of Service per month, your
pension benefit will be suspended until you
actually retire, at which point you will begin
receiving your normal retirement benefit.
If you reached the age of 65 prior to January
1, 2011, and you continued performing 40 or
more Hours of Service per month, your pension
benefit upon your actual date of retirement will
be the greater of (i) your normal retirement
benefit, as determined by applying the Plan’s
benefit formula, or (ii) your normal retirement
benefit actuarially increased to reflect the fact
that it will be paid over a lesser period of time.
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Early Retirement: Age 55 through 64 with
Five Years of Vesting Service
If You End Your Employment Before Age
55 with 5 Years of Service
You may take early retirement at any time after
age 55 if you have at least five years of Vesting
Service. Your early retirement date will be the
first day of the month following the date you
leave the Medical Center and all other Advocate
companies. Early retirement benefit payments
may begin on your early retirement date or
you can elect to have payments begin on the
first day of any month following the month you
retire, up to the month you reach age 65.
If you leave the Medical Center and all other
Advocate companies for any reason after
completing five or more years of Vesting Service
but before your reach early retirement age (age
55), you will receive a deferred vested benefit
beginning at age 65. However, you may elect
to have payments begin on the first day of any
month following the month you reach age 55, up
to the month you reach age 65. If you begin your
payments before age 65, your monthly benefit
will be reduced by one half of one percent (0.5)
for each whole calendar month by which your
first deferred vested benefit payment precedes
your 65th birthday, to reflect the fact that it will be
paid over a longer period of time.
If you elect to take early retirement, your normal
pension benefit will be reduced by:
•• two-tenths of one percent (0.2%) for each
whole calendar month by which your first
early retirement benefit payment precedes
your 65th birthday, up to a maximum of 36
months, and
•• four-tenths of one percent (0.4%) for each
whole calendar month by which your first
early retirement benefit payment precedes
your 62nd birthday.
Disability Retirement
After the freeze date, if you have five years of
Credited Service and retire from the Medical
Center and all other Advocate companies due to
being “totally and permanently disabled,” you
will be eligible for disability retirement. You are
considered “totally and permanently disabled”
if you are eligible to receive long term disability
benefits under Advocate’s Disability Income
Protection Plan. Following your retirement, you
may elect to commence payment of your Condell
pension benefit once you reach early retirement
age (age 55). If you begin your payments before
age 65, your monthly benefit will be reduced
by one half of one percent (0.5) for each whole
calendar month by which your first payment
precedes your 65th birthday to reflect the fact that
it will be paid over a longer period of time. If you
choose to wait until age 65 before beginning your
payments, your payments will not be reduced.
EXAMPLE OF EARLY RETIREMENT REDUCTION
Example:
Assume that John begins receiving early
retirement benefit payments on his 61st birthday,
and his normal pension benefit payable at age 65
is $2,000 per month. John’s retirement benefit,
which he is beginning to receive 48 months
before his 65th birthday, will be reduced by:
36 months x 0.2% x $2,000 = $144
PLUS
12 months x 0.4% x $2,000 = $96
Prior to the Freeze Date, Disability retirement
payments were determined according to the
Plan’s normal benefit formula, but taking into
account Credited Service that would have been
earned if a disabled associate had continued
to work until age 65 (assuming he or she is still
disabled at that time). After the Freeze Date,
Disability retirement payments are determined
Therefore, John’s monthly early retirement
benefit payments will be reduced by ($144 +
$96) = $240 in total, and he will therefore receive
$1,760 per month.
10
according to the Plan’s normal benefit formula,
but will not take into account any Credited
Service that would have been earned if a
disabled associate had continued to work until
age 65.
Internal Revenue Service ($195,000 for 2011 and
$200,000 for 2012) which may be adjusted for
the cost of living, and (ii) 100% of your average
compensation for your three highest paid
consecutive calendar years with the Medical
Center or any other Advocate company.
If You Return to Work After
Benefits Begin
How You Receive
Plan Benefits
If you had been receiving monthly benefits and
then returned to work at the Medical Center
or another Advocate company, your benefit
payments may be suspended. You will receive a
notice on the impact to your monthly benefits.
The way benefits are paid may be as important
to you as the amount you receive. Because
individual retirement income needs differ, the
Plan allows you to decide how your benefits
will be paid. There are several payment options
available to you. Some the options may not
be available when you retire, depending
on your marital status and your age when
payments begin. You should consult your
personal financial advisor and/or tax advisor for
assistance in determining when and how to take
your Condell Pension Plan benefit.
Benefits payable to you under the Plan when
you terminate employment again will be
re-determined based on the Plan terms then
in effect, and taking into account the benefits
previously paid to you. In no case will your
re-determined benefits be less than what
you were receiving immediately prior to
your re-employment.
You should contact Advocate Benefits if you
have questions about your monthly benefits
during your re-employment.
You need to contact Advocate Benefits to
receive a Pension Plan Benefit Application
and then file your completed application with
Advocate Benefits in order to request benefit
payment-related documents. You will receive
these documents at least 30 days (but not more
than 180 days) before your benefit payments
begin. If you would like to begin receiving your
benefits before the end of this 30-day period,
you can waive the election period, provided your
benefits do not begin until at least eight days
after you receive the documents.
Required Benefit Commencement
If you are not actively employed at age 70-1/2,
under IRS rules, payments must begin no later
than April 1 of the calendar year following the
calendar year you reach age 70-1/2.
If you are actively employed at age 70-1/2, you
may elect to commence payment of your Plan
benefit on April 1 of the calendar year following
the calendar year you reach age 70-1/2 or on
the first day of any subsequent calendar month
prior to your termination of employment.
The payment option you elect becomes
effective on the date payments start. You may
choose or change your payment option at any
earlier time. Once your payments begin, you
cannot change your payment option.
Maximum Benefits
The IRS imposes certain maximum limits on
annual benefits. The Plan Administrator will
notify you if you are affected. In very general
terms, an annual pension is limited to the
lesser of (i) a dollar amount specified by the
11
Payment Options
If you are married, this is your normal payment
form. If you want to elect another payment
option, you and your spouse must reject this
form in writing and specify a different payment
option (and beneficiary, if applicable).
Generally, the Condell Pension Plan offers five
benefit payment options, as described below:
• Single Lump Sum. This payment option will
provide you the full value of your vested
benefit in a single payment. Once this payment
is made from the Plan, no further benefits
will be paid. If the total value of your vested
pension benefit is $1,000 or less, determined
actuarially, it will be distributed automatically in
this form. For more detail, please see the section
entitled Cash-Out of Benefits Valued at $1,000 or
Less on page 13. If you are entitled to a single
lump sum payment, you may be able to make
a rollover to an Individual Retirement Account
(IRA) or another employer’s tax qualified plan
(see Rollover Rights on page 14.) You may
also elect to receive your pension benefit as a
combination of a single lump sum payment and
one of the annuity forms described below.
• Ten-Year Certain & Life—Level Annuity.
This payment option will provide you monthly
annuity payments beginning on your annuity
start date and continue for your life. If you die
before receiving payments for 120 months
(ten years), payments will continue to your
designated beneficiary for the rest of the 120month period. The monthly payments your
beneficiary will receive will be equal to 96%
of the monthly payments you received during
your life.
• 50%, 75%, or 100% Joint & Surviving
Beneficiary—Level Annuity. This payment
option will provide you reduced monthly
annuity payments beginning on your annuity
start date and continuing for your life. When
you die, 50%, 75%, or 100% (according to
your election) of your reduced benefit will
continue to be paid to your spouse or other
designated beneficiary for his or her life, if
your designated beneficiary survives you (See
Designating Your Beneficiary on page 13).
• Life Only—Level Annuity. This payment
option will provide you monthly annuity
payments beginning on your annuity start
date and continue for your life. After you die,
no additional payments will be made to any
other person.
If you are single, this is your normal form
of payment. If you want to elect another
payment option, you must reject this form
in writing and specify the option and the
beneficiary, if applicable.
• Qualified 50% Joint & Surviving Spouse—
Level Annuity. This method of payment
will provide you reduced monthly annuity
payments beginning on your annuity start date
and continue for your life. When you die, 50% of
your reduced benefit will continue to be paid to
your surviving spouse. Only the spouse to which
you were married for at least one year at the time
pension benefit payments began (or your death,
if earlier) will be considered a surviving spouse.
If your spouse dies before you, benefit payments
will continue to be paid to you until you die
and your payment amount will not change.
12
If You Should Die Before
Beginning Payments but
After Making Elections
When You Make Your Election
If you are married, you must obtain your
spouse’s written consent to elect anyone other
than your spouse as beneficiary or to elect
any form of payment other than the Qualified
50% Joint & Surviving Spouse–Level Annuity.
However, you may revoke a non-spouse
beneficiary designation at any time without your
spouse’s consent.
This special part of the Plan gives your spouse
or other beneficiary financial protection if you
should die before retirement.
Benefits if You are Married
If you have a vested pension benefit under the
Plan, have been married for at least one year,
have not (with your spouse’s consent) designated
someone other than your spouse to be your
designated beneficiary, and die before your
benefit payments start, your surviving spouse
will be entitled to receive a lifetime monthly
benefit in the form of an annuity. This is payable
for as long as the surviving spouse lives, with no
further payments due after the surviving spouse’s
death. Payments will begin on the first day of the
month following the month in which you would
have reached your earliest retirement date (i.e.,
age 55), although your surviving spouse may also
elect to defer the start of payments.
If you are not married and you elect a form of
payment other than the Life Only–Level Annuity,
you may designate a beneficiary to receive
benefits if you should die before you receive all
of your pension benefits from the Plan.
Spousal Consent
For all purposes under the Plan that require
spousal consent, such consent must be in
writing and acknowledged by a notary public.
Your spouse is the person to whom you have
been legally married for at least one year when
you begin receiving your retirement benefits, or
your death, if earlier.
Cash-Out of Benefits Valued at $1,000
or Less
If you die after reaching the age of 55, the amount
of the lifetime payments your surviving spouse
will receive pursuant to the above paragraph will
be equivalent to those that he or she would have
received under the Plan’s Qualified 50% Joint
& Surviving Spouse annuity assuming you had
retired the day before your death. If you die before
reaching age 55, this amount will be determined
assuming you terminated your employment on
your date of death, survived to age 55, retired with
a 50% Joint & Surviving Spouse annuity, and died
the day after you reached age 55.
If the total value of your benefit is $1,000 or less,
you will automatically receive a cash distribution
of your benefit in a single lump sum payment
as soon as administratively feasible. This
payment will be subject to the 20% mandatory
withholding tax, but you may roll it over to
another employer’s qualified plan or an IRA
within 60 days.
Benefits if You are Single
If you are single with a vested pension benefit
under the Plan, and you die after selecting
an optional form of payment (other than a
single Life Only annuity) but before receiving
any payments, your designated beneficiary
will receive the benefit he or she would have
been entitled to if you had lived to commence
receiving your benefits.
13
Taxes on Your Benefits
If You Receive Payment as a
Monthly Annuity
Taxes are deferred on your pension benefit until
you receive payment from the Plan. However,
when benefits are paid to you, that money will be
considered taxable income. The way your benefit
is taxed will depend on whether you receive
payment as a lump sum or monthly annuity.
If you receive a monthly annuity, your payments
will be taxable when you receive them.
Generally, the 10% penalty tax does not apply
to benefits paid on a monthly basis on or after
age 55. Federal tax law requires Advocate to
withhold taxes automatically on these benefits
unless you request otherwise. The amount
withheld will depend on your filing status and
the number of exemptions you claim.
If You Receive Payment in a Lump Sum
Special rules may apply if you receive your
benefit in a lump sum. Advocate cannot give
you tax advice. You should get professional tax
advice before your benefits are paid. Here is
some general information about how a lumpsum payment is taxed under current law.
If you choose not to have taxes withheld from
your benefits, you’ll be responsible for the taxes
due when you file your tax return. If no taxes
are withheld, or if the amount withheld is not
enough to cover the actual taxes due, you may
be required to make estimated tax payments.
•• Federal tax law requires Advocate to
automatically withhold 20% of a lump sum
payment for federal income taxes before it is
paid to you. Federal taxes are not withheld
on checks made payable directly to an IRA
(other than a Roth IRA) or another employer’s
qualified plan.
•• Since the Plan is meant for retirement, the
IRS imposes a 10% penalty tax on some
payments made before age 59½. (This early
withdrawal penalty is in addition to any
income taxes that may be due.) However, the
10% penalty tax may not apply if payment
is made on account of your total and
permanent disability or death, for medical
expenses deductible on your federal income
tax return, or because of a qualified domestic
relations order (QDRO).
•• You may be able to defer paying federal
income taxes, and the 10% early withdrawal
penalty, if applicable, on your lump-sum
payment by rolling it over to an Individual
Retirement Account (IRA) or into the qualified
retirement plan of another employer.
(See Rollover Rights across).
Rollover Rights
If you are entitled to a single lump-sum payment
from the Plan, you may be able to postpone
payment of federal taxes on your lump sum
benefit payment by choosing a direct or
conventional rollover to an IRA (other than a
Roth IRA) or to another employer’s tax-qualified
plan. The IRS requires that 20% of the lump-sum
payment be withheld for federal income taxes
unless you elect a direct rollover. Amounts that
are directly rolled over are not taxable to you until
distributed from the IRA or employer-sponsored
plan. If you receive a single lump-sum payment
from the Plan, you can make a deposit into an IRA
or another employer’s tax-qualified plan within 60
days of the date you receive the check from the
Plan. However, 20% of such lump-sum payment
will be withheld for federal income taxes. Further,
any amounts that you receive directly may
also be subject to an IRS-imposed 10% early
withdrawal penalty if they are not rolled into
an IRA or another employer’s tax-qualified plan
within 60 days of distribution.
14
You can also rollover your lump sum payment
to a Roth IRA. You will be taxed on the amount
rolled over, but the 10% penalty tax for early
withdrawal will not apply as long as you do not
take a distribution from the Roth IRA for 5 years.
Later distributions from the Roth IRA, including
subsequent earnings, will not be taxed if certain
requirements are satisfied, such as having a Roth
IRA for 5 years and taking a distribution after
death, disability or attainment of age 59-1/2.
Appeal of a Denied Claim
During the 180-day period before your lump sum
benefit is paid, you will receive written details
on your rollover options and their effect on your
income tax withholding.
Within 60 days after receiving a denial
notification, you or your authorized
representative may request a review by
the Plan Administrator by submitting your
request, in writing, at the address listed in the
Administrative Facts section on page 18. During
this 60-day period, you may review pertinent
documents and submit issues and comments to
the Plan Administrator.
You will be notified in writing in 90 days (180
days in the case of special circumstances) if your
claim for benefits is denied, in whole or in part.
The notification will include the specific reason
for denial, reference to specific plan provisions
upon which the denial is based, a description
of any additional materials or information
necessary to process the claim and your rights
to have the claim reviewed.
Because these federal tax rules can be
complicated, you are strongly encouraged to
consult a tax adviser about your options for
receiving a single lump-sum payment. You will
also be provided with a copy of the “Special
Tax Notice” that summarizes the various tax
consequences of your payment option.
You will usually receive written notice of a
review decision within 60 days of your request.
In unusual circumstances, the Plan Administrator
may need another 60 days to reach a decision.
You will be given specific reasons for the
decision, with specific references to the
pertinent plan provisions on which the decision
is based.
How to Apply for Benefits
To receive benefits from the Plan, you must
request the appropriate forms from Advocate
Benefits Service Center. It may be necessary for
you to supply additional information along with
the forms before the Plan pays your benefits.
Contact Advocate Benefits at 1.800.775.4784.
Special rules apply if you become entitled to
receive a distribution of your pension benefit
due to disability. In that case, your initial claim
for benefits will generally be determined
within 45 days, except that this period may be
extended by up to two additional 30-day periods
if necessary due to circumstances beyond the
Plan Administrator’s control. In the event your
initial claim is denied, you will have 180 days
to request a review in writing, and the Plan
Administrator’s final decision will generally be
communicated to you within 45 days, except that
this period may be extended by an additional 45
days if necessary.
If you die, your designated beneficiary
should contact Advocate Benefits to begin
the payment process.
If you don’t keep your most recent address
on file and Advocate can’t locate you, benefit
payment from the Plan may be delayed.
15
Military Leave
When writing about the Plan, identify the Plan
both by name and the Employer Identification
Number and Plan Number (see Administrative
Facts on page 18).
If you take a leave of absence from Advocate
Condell Medical Center for military service,
special rules may apply to you. If you will be
taking military leave, please contact Advocate
Benefits (visit www.advocatebenefits.com or call
1.800.775.4784) for additional information about
these special rules.
If you disagree with the Plan Administrator’s
decision, you may file a lawsuit for benefits
or actions under the Plan, but you must first
exhaust the Plan’s appeals procedures described
above. If you do not file a claim or follow the
Plan’s appeals procedures (such as appeal a
denied claim or follow the above time limits
for responding), you will give up legal rights,
including your right to file a suit in court, as
you will not have exhausted your internal
administrative appeal rights. In addition,
any lawsuit you file must be filed within the
applicable statute of limitations period, and
in no event, no more than two years after the
date on which the Plan Administrator issued its
final decision on your claim. Any such lawsuit
must be filed in the U.S. District Court for the
Northern District of Illinois, Eastern Division.
W-2 Reporting
Current federal law requires that the “Retirement
Plan” box on the Form W-2 be marked if you are
covered by a retirement plan (such as a 401(k)
plan, a 403(b) plan, or a pension plan), regardless
of whether you receive a benefit from the plan.
In most cases, this affects eligibility to make
Individual Retirement Account (IRA) contributions.
For more information on how this may affect you,
please contact your personal tax advisor.
Assignment of Benefits
In most cases your rights and accrued benefits
under the Plan cannot be attached, garnished
or otherwise taken over by a creditor. Similarly,
you don’t have the right to alienate, anticipate,
commute, pledge, encumber or assign any of the
benefits or rights that you expect to receive.
Other Important Information
This section provides additional details
regarding the Condell Pension Plan, including
administrative information.
However, under certain court orders (for example,
qualified domestic relations orders (“QDROs”)),
the Plan Administrator may be required to pay
some of your benefits to someone else—your
former spouse or your children, for example. As
soon as you’re aware of any court proceeding
that may affect your benefit, contact your Human
Resources Department. QDROs must be accepted
and approved by the Plan Administrator (or its
delegate) before any payment is made to someone
other than you. Participants and beneficiaries can
obtain sample QDROs and a copy of the Plan’s
QDRO procedures upon request from the Plan
Administrator without charge.
All formal documents relating to the Plan are
available for your inspection from the Senior
Vice President, Human Resources of Advocate
Health Care Network. Advocate Benefits can
make arrangements for you to see them during
normal business hours. You may also obtain a
copy upon the payment of a reasonable fee to
cover the cost of reproduction. Your request (in
writing) should be sent to:
Senior Vice President, Human Resources
Advocate Health Care Network
2025 Windsor Drive
Oak Brook, IL 60523
1.630.572.9393
If you (or your beneficiary) are unable to care
for your own affairs, any payments due may be
paid to someone who is authorized to manage
your affairs. This may be a relative or a courtappointed guardian.
16
No Guarantee of Employment Rights
If the Plan is merged or consolidated with another
plan, or if your accrued benefit is transferred
to another plan, your current accrued benefit
under the new plan would, immediately after the
change, at least equal the amount you would be
entitled to if the Plan had been terminated before
the change.
Nothing in the Plan gives any associate the right
to be retained in the service of Advocate Condell
Medical Center. Nor does it interfere with the
right of Advocate Condell Medical Center to
discharge or discipline any associate at any time.
Top-Heavy Plan Rules
Pension Benefit Guaranty Corporation
If, in any plan year, a plan is determined to
be a “top-heavy plan”—that is, the sum of
cumulative accrued benefits or account balances
(as applicable) for certain associates (those that
are considered “key employees” under IRS rules)
under all of Advocate’s defined benefit plans or
defined contribution plans (as applicable) exceed
60% of the total accrued benefits and account
balances for all associates—certain minimum
vesting or benefit accrual rules (as applicable) may
apply. If the Plan ever becomes top heavy, you will
be advised of the effect, if any, on your benefits.
Your pension benefits under this Plan are
insured by the Pension Benefit Guaranty
Corporation (PBGC), a federal insurance agency.
If the Plan terminates (ends) without enough
money to pay all benefits, the PBGC will step in
to pay pension benefits. Most people receive
all of the pension benefits they would have
received under their plan, but some people may
lose certain benefits.
The PBGC guarantee generally covers:
(1) normal and early retirement benefits;
(2) disability benefits if you become disabled
before the Plan terminates; and
(3) certain benefits for your survivors.
Plan Administrator’s Decisions
The Plan Administrator is the Benefit Plan
Administrative Committee for Non-Church Plans.
The Plan Administrator has the discretionary
authority to interpret the Plan to make eligibility
and benefit determinations as it may determine
in its sole discretion. The Plan Administrator
also has the discretionary authority to make
determinations as to whether any individual is
entitled to receive any benefits under the Plan.
The decisions of the Plan Administrator will be
final and conclusive.
The PBGC guarantee generally does not cover:
(1) benefits greater than the maximum
guaranteed amount set by law for the year in
which the Plan terminates; (2) some or all of
benefit increases and new benefits based on
Plan provisions that have been in place for fewer
than five years at the time the Plan terminates;
(3) benefits that are not vested because you
have not worked long enough for your employer;
(4) benefits for which you have not met all of the
requirements at the time the Plan terminates;
(5) certain early retirement payments (such
as supplemental benefits that stop when you
become eligible for Social Security) that result
in an early retirement monthly benefit greater
than your monthly benefit at the Plan’s normal
retirement age; (6) lump sum benefits that
exceed $5,000, and (7) non-pension benefits,
such as health insurance, life insurance, certain
death benefits, vacation pay, and severance pay.
Plan Amendments or Termination
Advocate expects the Plan to continue without
change. However, Advocate reserves the right to
amend, modify, or terminate the Plan at any time
for any reason. If material changes are made
in the future, you will be told about them. Any
changes made to the Plan will not take away any
vested accrued benefits you have earned.
If the Plan is terminated, or if there is a partial
termination affecting you, you immediately
will be 100% vested as of the date of such
termination or partial termination.
17
Administrative Facts
Even if certain of your benefits are not
guaranteed, you still may receive some of those
benefits from the PBGC depending on how
much money your Plan has and on how much
the PBGC collects from employers.
Information regarding the administration of the
Condell Pension Plan is provided in the following
table:
For more information about the PBGC and
the benefits it guarantees, ask your Plan
Administrator or contact the PBGC’s Technical
Assistance Division, 1200 K Street N.W., Suite
930, Washington, D.C., 20005-4026 or call
202.326.4000 (not a toll-free number). TTY/TDD
users may call the federal relay service toll free
at 1.800.877.8339 and ask to be connected to
202.326.4000. Additional information about the
PBGC’s pension insurance program is available
through the PBGC’s website on the Internet at
http://www.pbgc.gov.
18
Plan Name
Condell Health Network
Retirement Plan
(formerly called the Medical
Center of Lake County
Retirement Plan)
Employer
Identification
Number (EIN)
36-2167779
Plan Number
010
Type of Plan
Defined Benefit Pension Plan
Plan Year
January 1 – December 31
Plan Sponsor
Advocate Health Care Network
2025 Windsor Drive
Oak Brook, IL 60523
1.630.572.9393
Plan
Administrator
Benefit Plan Administrative
Committee for
Non-Church Plans
Advocate Health Care Network
2025 Windsor Drive
Oak Brook, IL 60523
1.630.572.9393
Plan Trustee
JPMorgan Chase Bank, N.A.
1111 Polaris Parkway, Suite 3J
OH1-0634
Columbus, OH 43240
Agent for
Service of
Legal Process
Plan Administrator
Funding
Arrangement
Trust Fund
ERISA Rights
Prudent Actions by Plan Fiduciaries
In addition to creating rights for the Plan
participants, ERISA imposes duties upon the
people who are responsible for the operation
of the Plan. The people who operate the Plan,
called “fiduciaries” of the Plan, have a duty to
do so prudently and in the interest of you and
other Plan participants and beneficiaries. No one,
including your employer or any other person may
fire you or otherwise discriminate against you in
any way to prevent you from obtaining a pension
benefit or exercising your rights under ERISA.
As a participant in or beneficiary of the Plan you
are entitled to certain rights and protections
under the Employee Retirement Income Security
Act of 1974 (“ERISA”). ERISA provides that all
plan participants shall be entitled to:
Receive Information About Your Plan
and Benefits
•• Examine, without charge, at the Plan
Administrator’s office and at other specified
locations such as work sites and union halls,
all documents governing the Plan, including
insurance contracts, collective bargaining
agreements and a copy of the latest annual
report (Form 5500 series) filed by the Plan
with the U.S. Department of Labor and
available at the Public Disclosure Room of the
Employee Benefits Security Administration.
•• Obtain, upon written request to the Plan
Administrator, copies of documents
governing the operation of the Plan,
including insurance contracts and collective
bargaining agreements, and copies of the
latest annual report (Form 5500 Series) and
updated summary plan description. The Plan
Administrator may make a reasonable charge
for the copies.
•• Receive a summary of the Plan’s annual
financial report. The Plan Administrator is
required by law to furnish each participant a
copy of this summary annual report.
•• Obtain a statement telling you whether you
have a right to receive a benefit and if so,
what your benefits would be if you stop
working under the Plan now. This statement
must be requested in writing and is not
required to be given more than once every 12
months. The Plan must provide the statement
free of charge.
Enforcing Your Rights
If your claim for a benefit is denied or ignored,
in whole or in part, you have a right to know
why this was done, to obtain copies of the
documents relating to the decision without
charge, and to appeal any denial, all within
certain time schedules.
Under ERISA, there are steps you can take to
enforce the above rights. For instance, if you
request a copy of Plan documents or the latest
annual report from the Plan and do not receive
them within 30 days, you may file suit in a
federal court. In such a case, the court may
require the Plan Administrator to provide the
materials and pay you up to $110 a day until you
receive the materials, unless the materials were
not sent because of reasons beyond the control
of the Plan Administrator. If you have a claim for
benefits which is denied or ignored, in whole
or in part, you may file suit in state or federal
court. In addition, if you disagree with the Plan’s
decision or lack thereof concerning the qualified
status of a domestic relations order, you may
file suit in federal court. If it should happen that
Plan fiduciaries misuse the Plan’s money, or if
you are discriminated against for asserting your
rights, you may seek assistance from the U.S.
Department of Labor, or you may file suit in
federal court. The court will decide who will pay
court costs and legal fees. If you are successful,
the court may order the person you have sued to
pay these costs and fees. If you lose, the court
may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.
19
Assistance with Your Questions
Conclusion
If you have any questions about the Plan,
you should contact the Plan Administrator. If
you have questions about this statement, or
about your rights under ERISA, or if you need
assistance in obtaining documents from the Plan
Administrator, you should contact the nearest
Area Office of the Employee Benefits Security
Administration, U.S. Department of Labor listed
in your telephone directory or:
Several important Plan provisions such as
participation, benefits, and distributions are
highlighted in this summary. This summary,
however, cannot answer everyone’s questions.
Continuous changes in the law affect the rules
governing your benefits and unanticipated
situations may arise. If there is any conflict
between this summary and the provisions of
the Plan, the Plan documents will govern. The
Plan Administrator has absolute discretionary
authority to determine eligibility for benefits and
to construe the terms of the Plan.
The Division of Technical Assistance and
Inquiries, Employee Benefits Security
Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
You may also obtain certain publications about
your rights and responsibilities under ERISA by
calling the publications hotline of the Employee
Benefits Security Administration.
20
Notes
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© Advocate Health Care
6/12