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Retirement Plan (401a)

General Information

Summarized below are the principal features of the AUI Retirement Plan and the Voluntary Tax-Deferred Retirement Program. These plans are designed to assist you in developing a broad financial base for your retirement years: the AUI Plan by providing lifetime monthly payments; the Voluntary Program by offering alternative ways to supplement basic retirement benefits.

Outline of the AUI Retirement Plan

The AUI Retirement Plan guarantees lifetime retirement income or death benefits for you and your family. To ensure that no circumstance can deprive you of your retirement income, the annuities being purchased for this sole purpose are nonassignable and may not be borrowed or used as loan collateral.

Under the AUI Regular Retirement Plan participants have a choice of investing in 20 different funds managed by two prominent investment organizations. These organizations and the funds approved for retirement investment are:

Vesting and Transferability of Benefits

Vesting (full ownership) and transferability of retirement benefits are of crucial importance to your future security. The AUI Retirement Plan, unlike most pension plans, gives you immediate vesting of retirement and survivor benefits purchased in your name by AUI. These benefits remain yours, no matter when or at what age you leave AUI's employ.

Who is Eligible?

All employees scheduled to work at least 1000 hours per year are eligible to participate in the AUI Retirement Plan at the earlier of (1) attainment of age 21 with 2 years of continuous service or (2) attainment of age 30 with 3 months of continuous service.

Individuals with Guest or Visiting Appointments are not eligible to participate. Employees who are not eligible to participate in the AUI Retirement Plan may elect to make contributions to a Voluntary Tax-Deferred Retirement Program; however, no contributions will be made by AUI.

Contributions

AUI contributes an amount equal to 10% of each participant's base salary. Participating employees may allocate this contribution between any of the 20 funds approved for the AUI Regular Retirement Plan, as explained in the next section.

Allocation of Contributions - Selection of Funds

Each new participant, or any current participant who wishes to change his/her allocation, must complete an "Allocation of Retirement Contributions" form, which is available from the Human Resources Office. This form authorizes AUI to send contributions to any or all of the investment organizations selected by the employee. The employee then selects the particular fund or funds he/she desires within each organization and completes the necessary account application. After an account has been established with each investment organization, transfers between funds and changes in the amount of contribution to a given fund may be made by contacting the investment organization directly.

Statements

Each organization in which you invest your AUI Annuity contributions will send you periodic statements showing your accumulations in each fund you have selected.

Transfers Between Funds

Participants are permitted to transfer partial or total accumulations among and between the various approved CREF and Fidelity investment funds. Transfers can be made into the TIAA Traditional Annuity from all other investment funds. Withdrawals out of the TIAA Traditional Annuity can only be made over a ten-year period, with the amount the participant wants to transfer being moved into a TIAA "Transfer Payout Annuity" account. For detailed information regarding TIAA transfer policy, refer to the "TIAA-CREF: Retirement Annuities" booklet which is available from the Human Resources Office.

What Are Your Retirement Options

Age 55 or Over - Any employee who is age 55 or older at the time of retirement may request a cash withdrawal of up to 100% of the total amount accumulated in his/her AUI Retirement Plan. Funds may be withdrawn in one or more cash payments. The initial lump sum withdrawn must occur prior to receiving benefits through an annuity. Presently, cash withdrawals under this provision are not permitted from any TIAA account.

Retirement Transition Benefit - At the time your annuity payments begin from TIAA-CREF you may request a single sum payment of up to 10% of your retirement accumulation.

Systematic Withdrawals - Terminated employees may request systematic withdrawals in amounts of at least $100 from any CREF account or from the TIAA Real Estate account. Such withdrawals can be made on a monthly, quarterly, semi-annual, or annual basis. Withdrawals made before age 59½ are generally subject to a 10% tax (early withdrawal penalty) and an automatic 20% Federal tax withholding.

Annuity Options - All funds which are not received under the options described above are paid to you as a regular retirement annuity by TIAA-CREF. These annuity payments can begin at any time following your termination and at any age you desire. You may receive your retirement annuity income under any of the following options:

Single Life Annuity - The Single Life Annuity option provides a larger monthly income than other options, with all payments ceasing at your death. If you have no dependents at retirement you may wish to elect this option.

Survivor Annuity - The Survivor Annuity option ensures that a spouse who outlives the annuitant will continue to receive an income for life. The amount continuing to the survivor depends on the choice you make at the time you retire among three joint life options (half, two thirds, or full benefits). Each joint life option has a 10, 15, or 20 year guaranteed period in case both you and your spouse do not survive your normal life expectancies.

Life Income With a 10, 15 or 20 Year Guaranteed Period - This option pays regular annuity income during the first 10, 15, or 20 years, as selected. However, if you live beyond the guaranteed period, payments continue through your lifetime; but should death occur during the guaranteed period, payments go on without change to your beneficiary for the balance of the guaranteed period.

Interest Payment Retirement Option (IPRO) - TIAA Only - f you are between the ages of 55 and 69½, you may receive payments of the interest that would otherwise be credited on your TIAA accumulation, postponing your selection of an irrevocable lifetime annuity option. IPRO is available for all of your TIAA accumulation or any portion of at least $10,000.

Payments for a Fixed Period - CREF Only - You can receive your TIAA and CREF accumulations in payments over a fixed period. If you die during the period, payments go to your beneficiary for the rest of the fixed period or can be paid in a lump sum. Your choice of fixed periods for any CREF accumulations is limited by federal tax law and will depend on your age or the ages of you and your beneficiary. Your TIAA accumulation is available only under a ten year term.

Death Benefits  - If you die before retirement, the full current value of your annuity accumulation is payable to your beneficiary. Your beneficiary may elect either a lump sum payment or one of several income plans.

Disability Benefits - If you become disabled, the AUI Group Long Term Disability Insurance Plan will continue contributions to the Retirement Plan as long as you continue receiving disability income benefits.

Spouse's Benefit Rights - Federal law has established certain spousal rights that affect the AUI Retirement Plan with respect to repurchase, retirement, and death benefits, as described below:

Cash Withdrawals Upon Termination - A married employee who requests any form of cash settlement available under the plan must furnish their spouse's written consent, together with an acknowledgment that the cash payment is in satisfaction of all rights to a retirement or death benefit with respect to the sum withdrawn.

Retirement Benefits - All married employees must receive retirement annuities in the form of a joint and survivor annuity with the spouse as the second annuitant, unless the employee waives the benefit and the spouse consents to the waiver. The annuity selected by the employee must provide a lifetime survivor income to his or her spouse that will be equal to at least 50% of the benefit amount which will be received while both are alive. Therefore, married employees may not receive payment under income options such as the "Single Life Annuity" or designate a second annuitant who is not the spouse, unless the employee waives the benefit and the spouse consents to the waiver in writing.

Death Benefits - All pension plans are required to provide an employee's spouse with a qualified preretirement survivor benefit, unless the benefit is waived by the employee and the spouse consents to the waiver in writing. The survivor benefit must be at least 50% of the account balance of the employee at the time of the employee's death.

The AUI Retirement Plan automatically provides that 50% of a married employee's death benefit is payable only to the surviving spouse, unless the benefit is waived by the employee and the spouse consents to the waiver in writing. Without the waiver no other beneficiary may receive more than 50% of a married employee's accumulation, regardless of whom the employee has designated as his or her primary beneficiary.

The preretirement death benefit may be waived beginning on the first day of the plan year during which the participant attains age 35 and ending on the date of the participant's death or on the date the annuity benefits begin, whichever comes first. The waiver may be revoked any time during that period. The preretirement death benefit cannot be waived for spouses of employees under age 35, unless the employee terminates employment. In that case the employee can elect to waive the benefit, with spousal consent, from the date of termination until the date of death or the date annuity benefits begin, whichever comes first.

Options Upon Termination of Employment - Participants may begin receiving annuity income payments from their Regular Retirement Plan at any age following termination of employment. To avoid a 10 percent federal penalty tax, participants should either request a lifetime annuity payment or wait until they reach age 59½ before electing one of the following payment options:

1.  Up to 100% of the total retirement accumulation may be withdrawn in one or more cash payments if the participant is age 55 or older. The entire accumulation must be available through (or transferred to) CREF and the initial lump sum withdrawn must occur prior to receiving benefits through an annuity. (Funds accumulated in TIAA accounts are payable only as a lifetime retirement annuity, except for a 10 percent cash payment at the time annuity payments begin.)

2. Terminating employees who have participated in the Plan less than 5 years may request a single sum payment of all funds in their retirement accounts with Fidelity, or all funds from TIAA-CREF accounts that were established before January 1, 1992. Employees enrolled in TIAA-CREF on or after January 1, 1992 may request a single sum payment upon termination, regardless of their length of participation, if their TIAA accumulation does not exceed $2000 or if their combined TIAA-CREF accumulation, or CREF accumulation alone, does not exceed $4000.

Terminating employees may elect to defer receiving cash settlement or income from their retirement program until they reach age 70½. In such cases, the retirement account will remain active and continue to accrue interest and/or participate in the investment experience of the funds or accounts in which contributions have been invested.

Qualified Domestic Relations Orders - If a court issues a judgment, decree, or a qualified domestic relations order, such an order will preempt the usual requirement that the spouse of the participant be considered the participant's primary beneficiary for a portion of the plan. Under a qualified domestic relations order a court may designate an "alternative payee", who will be entitled to receive a portion or all of a participant's retirement benefits.

Individual Counseling - Individual retirement counseling is always available from TIAA-CREF and Fidelity. The Human Resources Office must be notified at least two months prior to your planned retirement date. You are also encouraged to contact TIAA-CREF or Fidelity, the companies that will be paying your retirement annuity incomes, to obtain general information about the annuity income process or to discuss your situation in particular.

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