Document:

Exhibit 10.1

Exhibit 10.1

FEDERAL HOME LOAN BANK OF DES MOINES

THIRD AMENDED AND RESTATED

BENEFIT EQUALIZATION PLAN

Effective January 1, 2009

 

 

 

FEDERAL HOME LOAN BANK OF DES MOINES

BENEFIT EQUALIZATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II. MEMBERSHIP
	 	 	6	 
	 
	 	 	 	 
	ARTICLE III. AMOUNT AND PAYMENT OF PENSION BENEFITS
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV. AMOUNT AND PAYMENT OF DEFERRED COMPENSATION BENEFITS
	 	 	15	 
	 
	 	 	 	 
	ARTICLE V. DIRECTOR BENEFITS
	 	 	23	 
	 
	 	 	 	 
	ARTICLE VI. SOURCE OF PAYMENT
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VII. DESIGNATION OF BENEFICIARIES
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VIII. ADMINISTRATION OF THE PLAN
	 	 	31	 
	 
	 	 	 	 
	ARTICLE IX. AMENDMENT AND TERMINATION
	 	 	33	 
	 
	 	 	 	 
	ARTICLE X. GENERAL PROVISIONS
	 	 	33	 

 

 

 

FEDERAL HOME LOAN BANK OF DES MOINES

BENEFIT EQUALIZATION PLAN

Effective January 1, 1994, the FEDERAL HOME LOAN BANK OF DES MOINES (the “Bank”) established a
Benefit Equalization Plan (the “Plan”) for its eligible employees. The Plan was restated on May
23, 2002 and on December 11, 2003. The Bank now wishes to amend and restate that Plan for a third
time as set forth in this document. On and after the Effective Date set forth herein, this
document shall supersede all previous Benefit Equalization Plan documents, and all questions
regarding Plan eligibility, administration and benefits shall be decided pursuant to the provisions
of this document.

INTRODUCTION

The purposes of this Benefit Equalization Plan are (a) to provide to certain employees of the Bank
the benefits which would have been payable under the Comprehensive Retirement Program of the
Financial Institutions Retirement Fund (the “Retirement Fund”), but for the limitations placed on
benefits for such employees by Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended, (b) to allow certain employees of the Bank the opportunity to defer payment of portions of
their Base Salary and annual Incentive Compensation, which opportunity shall exist simultaneously
with the opportunity to participate in the Financial Institutions Thrift Plan and (c) to allow
non-employee members of the Bank’s Board of Directors the opportunity to defer payment of their
directors’ fees.

This Plan is intended to constitute a nonqualified unfunded deferred compensation plan for a select
group of management or highly compensated employees (a “Top Hat” plan) under Title I of the
Employee Retirement Income Security Act of 1974, as amended. All benefits payable under this Plan
shall be paid from the general assets of the Bank. Benefits payable under this Plan shall not be
payable by the Retirement Fund or its assets or by the Thrift Plan or its assets.

This Plan is intended to comply with Internal Revenue Code Section 409A and should be interpreted
and administered to comply with that Code section and all IRS guidance thereunder.

Revised 2008

 

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ARTICLE 1. DEFINITIONS

	1.01	 	“Account” means the trust or other account established and maintained under Article IV
hereunder to record the contributions made by the Member and the Bank, as well as the increase
(or decrease) in value attributable to the investment of such contributions, all as described
hereafter. A Member may also have a separate Account for the installment payment of his
Article III benefits as further provided in Section 3.02(g) below. When used in Article V
pertaining to Directors, “Account” means the Account established and maintained under Article
V to record the contributions made by each Director as well as the increase (or decrease) in
value attributable to the investment of such contributions.

	1.02	 	“Actuary” means the independent consulting actuary retained by the Bank to assist the
Committee in its administration of the Plan. The Actuary may also provide actuarial services
to the Retirement Fund.

	1.03	 	“Bank” means the Federal Home Loan Bank of Des Moines.

	1.04	 	“Base Salary” means the annual gross salary which is payable without regard to attainment of
any corporate or individual performance goals and which is paid in regular installments
through the Bank’s payroll system.

	1.05	 	“Beneficiary” means the beneficiary or beneficiaries designated in accordance with Article
VII of the Plan to receive the benefit, if any, payable upon the death of a Member of the
plan.

	1.06	 	“Board of Directors” means the Board of Directors of the Bank.

	1.07	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any
successor thereto.

	1.08	 	“Code Limitations” means the cap on compensation taken into account by a tax-qualified plan
under Code Section 401(a)(17) and the overall limitations on contributions and benefits
imposed on qualified plans by Code Section 415, as such provisions may be amended from time to
time, or replaced by similar successor provisions of federal tax law.

 

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	1.09	 	“Committee” means the committee or other entity charged with the administration of the Plan.
The committee shall consist of the Bank’s General Counsel, a financial officer of the Bank and
a Member of the Bank’s human resources staff. The Board of Directors may change the
composition of the Committee or limit the scope of the Committee’s authority or name a
different entity to administer the Plan.

	1.10	 	“Deferral Agreement” means the written agreement under which a Member elects to defer
compensation under the Plan in accordance with the provisions of Section 4.03. When used in
Article V, “Deferral Agreement” means the written agreement under which a Director elects to
defer all (but not less than all) of his Director Fees in accordance with the provisions of
Section 5.01.

	1.11	 	“Director” means a sitting member of the Bank’s Board of Directors who is not an employee of
the Bank.

	1.12	 	“Director Fees” means the total amount of the fees paid by the Bank to a Director in a
calendar year to compensate that Director for service on the Bank’s Board of Directors.
Director Fees shall not include expense reimbursements, fringe benefits (whether taxable or
non-taxable) or contributions to any welfare benefit plan.

	1.13	 	“Disability” means that a Member (a) is unable to engage in any substantial gainful activity
by reason of a medically determinable physical or mental impairment that can be expected
either to result in the Member’s death or to last for a continuous period of at least twelve
(12) months or (b) that a Member has received income replacement benefits for at least three
months under an accident and health plan covering Bank employees, due to a medically
determinable physical or mental impairment that can be expected to result in the Member’s
death or to last for a continuous period of at least twelve (12) months. 

	1.14	 	“Effective Date” means January 1, 2009 for all purposes of this Third Amended and Restated
Plan.

 

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	1.15	 	“Eligible Executive” means the President of the Bank and certain key Bank officers who are
listed below. Although listing specific officer titles in this Plan, the Bank recognizes
that such titles may change over the life of the Plan. The Bank therefore directs the
Committee to interpret the listed officer titles in light of such changes so that the Plan
covers all such successor Bank Officers who occupy identical or analogous positions. The
Board of Directors shall be entitled to add additional officer positions to the definition
of Eligible Executive.

Chief Business Officer

General Counsel and Chief Risk Officer

Chief Capital Markets Officer

Chief Financial Officer

	1.16	 	“Incentive Compensation” means bonuses, gain sharing and other incentive compensation
payments which are dependent on the attainment of certain individual and/or corporate goals
and which are typically paid in a single payment. All references to Members’ “Incentive
Compensation” shall mean only payments made to Members pursuant to the Bank’s annual Incentive
Compensation Plan and shall not mean payments made to Members pursuant to the Bank’s long-term
incentive compensation plan.

	1.17	 	“Member” means any person included in the membership of the Plan as provided in Article II.

 

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	1.18	 	“Retirement Fund” means the Comprehensive Retirement Program of the Financial Institutions
Retirement Fund, a qualified and tax-exempt defined benefit pension plan and trust under
Sections 401(a) and 501(a) of the Code, as adopted by the Bank.

	1.19	 	“Plan” means the Federal Home Loan Bank of Des Moines Benefit Equalization Plan, as set forth
herein or as it may be amended or restated from time to time.

	1.20	 	“Termination of Employment” means the complete cessation of a Member’s services to the Bank
which both the Bank and the Member reasonably anticipate to be permanent. A Member’s
rehiring (on either an interim or a permanent basis) shall not indicate that the Member’s
Termination of Employment was not anticipated to be permanent if facts and circumstances
indicate that the Member’s rehiring was not anticipated at the time of his termination.

	1.21	 	“Thrift Plan” means the Financial Institutions Thrift Plan, a qualified and tax-exempt
defined contribution plan and trust under Sections 401(a) and 501(a) of the Code, as adopted
by the Bank.

 

5

 

ARTICLE II. MEMBERSHIP

	2.01	 	Each Eligible Executive of the Bank shall become a Member of the Plan for purposes of Article
III on the date of his appointment to one of the officer positions set out in Section 1.15 of
this Plan or, if applicable, on the date his officer position is added to Section 1.15 by the
Board of Directors. Once an Eligible Executive becomes a Member of this Plan for purposes of
Article III, he shall continue as a Member for Article III purposes until such time as his
Article III benefits, if any, have been fully paid. Those Members who are Members of the Plan
on the Effective Date shall continue as Members of the Plan.

	2.02	 	Each Eligible Executive of the Bank shall become a Member of the Plan for purposes of Article
IV on the date of his appointment to one of the officer positions set out in Section 1.15 of
the Plan or, if applicable, on the date his officer position is added to Section 1.15 by the
Board of Directors. Once an Eligible Executive becomes a Member of this Plan for purposes of
Article IV, he shall continue as a Member for Article IV purposes (whether or not he continues
to make deferrals pursuant to Article IV) until the date on which his Article IV benefits, if
any, have been fully paid. Those Members who are Members of the Plan on the Effective Date
shall continue as Members of the Plan.

	2.03	 	Each Director of the Bank shall become a Member of the Plan for purposes of Article V on the
date he elects to defer his Director Fees after having been elected to the Board of Directors.
Once a Director becomes a Member of this Plan for purposes of Article V, he shall continue as
a Member for Article V purposes until the date on which his Article V benefits have been fully
paid. Directors who currently have Reserve Accounts in the Bank’s Directors Deferred
Compensation Plan shall become Members in this Plan (whether or not still serving as
Directors) on the earlier of (a) the Effective Date or (b) the date on which the Bank
transfers their Reserve Account balances from the Directors Deferred Compensation Plan to this
Plan.

	2.04	 	A benefit under Article III of the Plan shall be payable only upon the Member’s Disability,
death, or other Termination of Employment with the Bank. Benefits under Article IV and
Article V shall be payable at the time chosen by the Member (even if the Member is still
serving as an Eligible Executive or a Director of the Bank) or as provided in subsections
4.03(f) or 5.05 below.

 

6

 

ARTICLE III. AMOUNT AND PAYMENT OF PENSION BENEFITS

	3.01	 	The amount, if any of the annual pension benefit payable to or on account of a Member
pursuant to the Plan shall equal the excess of (a) over (b) as determined by the Actuary,
where:

	 	(a)	 	is the annual pension benefit (as calculated by the Retirement Fund or the
Actuary on the basis of the Regular Form of payment as defined by the Retirement Fund)
that would otherwise be payable to or on account of the Member by the Retirement Fund
if its provisions were administered

	 	(i)	 	by ignoring the Code Limitations of Sections 401(a)(17) and 415;

	 	(ii)	 	by defining “Base Salary” or “Salary” for each year of the
Member’s participation in this Plan to include both the Member’s Base Salary
and the Member’s Incentive Compensation (without reducing either for any
deferrals made pursuant to this plan or the Thrift Plan and without increasing
either by counting any portion of the Member’s Base Salary or Incentive
Compensation more than once);

	 	(b)	 	is the annual pension benefit (as calculated by the Retirement Fund on the
basis of the Regular Form of payment) that is payable to or on account of the Member
under the Retirement Fund.

For purposes of this Section 3.01, “annual pension benefit” includes any applicable “Active
Service Death Benefit”, “Retirement Adjustment Payment”, and “Post Retirement Increment” if
the Bank provides such benefits for its employees at the time the Member’s pension benefit
first becomes payable.

 

7

 

Although the formulation described above shall govern the computation of Article III
benefits in most cases, the Board of Directors may deviate from such formulation in order to
increase or decrease a Member’s Article III benefits. If the Board of Directors approves a
deviation which decreases a Member’s Article III benefits, such deviation shall only apply
prospectively. If the Board of Directors approves a deviation which increases a Member’s
Article III benefits, the Board shall decide whether such deviation shall operate
retroactively or prospectively and whether there are any preconditions to the implementation
of such deviation.

	3.02	(a)	 	The Member’s Article III pension benefit shall be calculated pursuant to Section 3.01
above at the time the Plan commences payment of the Member’s Article III benefits. In
determining the amount payable by the Retirement Fund pursuant to subparagraph 3.01(b), the
Actuary shall use the following assumptions if payment of the Member’s Article III pension
benefits and payment of the Member’s Retirement Fund benefits do not begin at the same time.

	 	(i)	 	If the Member’s Article III pension benefits begin before the
Member’s Retirement Fund benefits begin, the Actuary shall calculate the amount
payable by using the Early Reduction Factor appropriate to the Member’s age at
the time the Article III benefits begin and by further adjusting the benefit
for any optional form of payment chosen by the Member.

 

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	 	(ii)	 	If the Member’s Article III pension benefits begin after the
Member’s Retirement Fund benefits begin, the Actuary shall calculate the amount
payable by the Retirement Fund as follows: First, the Actuary shall calculate
the Member’s annual pension benefit under the Retirement Fund using the date on
which the Member’s Retirement Fund benefits actually commenced and using the
Regular Form of payment; then the Actuary shall bring that benefit to age 65 by
dividing the monthly benefit amount thus obtained by the Early Reduction Factor
appropriate to the Member’s age at the time he began receiving payments from
the Retirement Fund. Then if the Member does not take his Article III pension
benefits in the Regular Form, the Actuary shall determine the equivalent
actuarial value of other forms of payment using the Early Reduction Factor
appropriate to the Member’s age at the time his Article III pension benefits
begin. In calculating the value of a lump sum payment, the Actuary shall use
the Retirement Fund’s rules for determining lump sum payments as such rules
exist on the date of the lump sum payment calculation under this Plan and as
such rules would then be applied to someone who has attained the same age the
Member has attained on the date his Article III benefits begin.

	 	(b)	 	The Member’s Article III benefits may be paid in any of the optional forms
offered by the Retirement Fund or in any other form acceptable to the Committee. The
form of benefit chosen shall provide benefits of equivalent actuarial value to the
benefits calculated using the Regular Form pursuant to Section 3.01 above. Equivalent
actuarial value shall be determined by the Actuary using the actuarial factors and
assumptions used by the Retirement Fund in calculating the Member’s payments under the
Retirement Fund’s optional forms of benefit and those set out in Section 3.02(a) above.
If the Actuary cannot calculate the actuarial equivalence of a proposed form of
benefit, that form shall not be an acceptable form for payment of the Member’s benefit.

 

9

 

	 	(c)	 	Each new Member shall elect the form for payment of his Article III benefits
within thirty days of the date on which he first becomes an Eligible Executive.
Members who were Members for Article III purposes on the Effective Date were given the
opportunity to elect a payment date and form of payment under previous versions of the
Plan. If a Member made such an election, that election will govern the date and form
of payment of that Member’s Article III pension benefits unless it is changed pursuant
to paragraph (e) below.

If a Member (who was a Member for Article III purposes on the Effective date) did
not make such an election, the Member’s Article III pension benefits will be paid in
a single lump sum payment on the later of (i) the March 15 following the calendar
year containing such Member’s Termination of Employment or (ii) the March 15
following the calendar year containing the Member’s 55th birthday.
Notwithstanding the foregoing, such Member may elect to postpone receipt of his
Article III benefits until a date on or after the later of (i) the March 15
following the calendar year containing the fifth anniversary of such Member’s
Termination of Employment or (ii) the March 15 following the calendar year
containing the Member’s 60th birthday. Such election must be made before
the Member attains the age of 54. If the Member’s employment with the Bank
terminates for any reason within 12 months of the making of this election, the
election shall be disregarded, and payment of the Member’s Article III benefits will
be made on the March 15 following the calendar year in which the Member’s
termination occurs (or the March 15 following the calendar year containing the
Member’s 55th birthday if later).

 

10

 

	 	(d)	 	The election referred to in subparagraph (c) above shall set out (i) the
starting date for payment of the Member’s Article III benefits, (ii) the form in which
the benefits are to be paid and (iii) if applicable, the frequency and/or duration of
the benefit payments. The starting date may be defined with reference to the Member’s
Termination of Employment or the Member’s attainment of a certain age. The starting
date may not be defined with reference to any event whose timing is uncertain other
than the Member’s death, Disability or Termination of Employment. Except as provided
in Section 3.03 below (dealing with Disability) and Section 3.04 below (dealing with a
Member’s death), benefit payments may not begin prior to the later of (i) the Member’s
Termination of Employment or (ii) the Member’s 55th birthday, and benefit
payments must begin by the later of (i) the Member’s Termination of Employment or (ii)
the Member’s 70th birthday. Periodic non-annuitized benefit payments shall
not be made on any schedule other than monthly, quarterly or annual payments, and they
shall not extend beyond the Member’s anticipated life expectancy (or if applicable the
joint life expectancy of the Member and the Member’s contingent annuitant under the
Retirement Fund). Once a Member’s benefit payments begin, they shall continue as
originally elected, even if the Member should return to interim or permanent employment
with the Bank.

 

11

 

	 	(e)	 	Subject to the provisions of this paragraph, a Member’s Article III benefit
payment election may be changed at any time, and the election in effect at the time of
the Member’s separation from service shall govern the payment of the Member’s Article
III benefits. Notwithstanding the foregoing, a Member’s benefit payments shall not
commence within twelve months of any change to the Member’s election unless the
commencement of the Member’s benefit payments is due to the Member’s death or
Disability. Nor may a Member change an election within twelve months of the Member’s
then-effective distribution commencement date. Any election change which extends the
time for commencement of a Member’s benefit payments must extend the Member’s benefit
commencement date for at least five years, measured from the earliest benefit
commencement date in the election being superseded to the earliest benefit commencement
date in the new election. Thus, a Member who had elected to commence benefit payments
at age 65 could revoke that election and instead elect to commence benefits at age 70
but not at any earlier age. Finally, no election change can accelerate a Member’s
receipt of his benefits. For purposes of this subparagraph, a series of installment
payments shall be considered one payment commencing on the date of the first
installment.

	 	(f)	 	If the Actuary is unable to calculate the Member’s benefit payments or if the
Member has not made an election, or if the Member’s election is ineffective for any
reason, then the Member shall receive his entire Article III pension benefit in a
single lump sum payment made on the later of (i) the March 15 following the calendar
year containing the Member’s Termination of Employment or (ii) the March 15 following
the calendar year containing the Member’s 55th birthday. If the calculation
of the Member’s benefit payment depends upon the life expectancy of a contingent
annuitant, the Member may name a new contingent annuitant at any time before benefit
payments begin. The Member may also change from one life annuity form to another life
annuity form as long as (i) payments of the Member’s benefits have not yet started,
(ii) the annuity forms are actuarially equivalent, and (iii) the change does not cause
a change in the starting date of the Member’s annuity payments.

 

12

 

	 	(g)	 	If a Member elects an installment payment of his Article III benefits, the
installment payments shall be calculated as follows. First, the Committee shall direct
the Actuary to calculate the Member’s lump sum payment amount pursuant to Sections
3.02(a) and 3.02(b) above. Then the Plan shall deposit the lump sum amount thus
calculated into a separate Article III Account for the Member. Such account shall be
administered pursuant to Section 6.03 below. The Plan shall then calculate and make
the first Article III installment payment by dividing the Member’s lump sum amount by
the number of monthly, quarterly or annual installment payments elected by the Member.
At the first month (for a Member electing monthly installment payments), third month
(for a Member electing quarterly installment payments), or one year (for a Member
electing annual payments) anniversary of that first payment, the Plan shall revalue the
Account (as further set out in Section 604(a) below) and then calculate and make the
second installment payment by dividing the amount then comprising the Member’s Article
III Account by the number of installment payments then remaining. This process shall
continue until all installments have been paid or until the Member’s earlier death or
Disability when payment shall be made pursuant to Section 3.03 or 3.04 below as
appropriate.

	3.03	 	If a Member suffers a Disability prior to the time his Article III pension benefits become
payable or during the installment payout of the Member’s Article III benefits, the Member
shall receive his entire Article III pension benefit (or the entire amount then comprising the
Member’s Article III account as further set out in Section 3.02(g) above) in a single lump sum
payment made on March 15 of the year following the calendar year in which the Member suffers
the Disability. The provisions of this section shall override any election by the Member or
any contrary provision contained in this Article.

 

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	3.04	 	If a Member dies after having elected an annuity form for payment of his plan benefits, the
only death benefit payable in respect of said Member shall be the amount, if any, payable
under the form of payment which the Member elected. If a Member dies prior to electing a form
for payment of his benefits, (or prior to receipt of a lump sum benefit elected pursuant to
Section 3.02 above) the Member’s Beneficiary shall receive a death benefit equal to the
greatest of (a) the lump sum benefit which would have been payable had the Member so elected,
(b) the excess of (i) the Active Service Death Benefit which would be payable under the
Retirement Fund if the Retirement fund were administered as provided in subsection 3.01(a)(i)
and 3.01(a)(ii) above over (ii) the Active Service Death Benefit payable under the Retirement
Fund or (c) the excess of (i) the lump sum Retirement Death Benefit which would be payable
under the Retirement Fund if the deceased Member was eligible for such benefit and if the
Retirement fund were administered as provided in subsections 3.01(a)(i) and 3.01(a)(ii) above
over (ii) the lump sum Retirement Death Benefit payable under the Retirement Fund. Such
payment shall be made on March 15 of the year following the year of the Member’s death. If a
Member dies after having elected an installment payment of his Article III benefits, the Bank
shall pay out the entire amount then comprising the Member’s Article III account (as further
provided in Section 3.02(g) above) in a lump sum payment on March 15 of the year following the
year of the Member’s death.

	3.05	 	Notwithstanding any other provision of this Plan, if, on the date payment under the Plan
would otherwise commence, the form of payment selected by the Member is the actuarial
equivalent of a lump sum payment less than or equal to the amount then in effect under Code
Section 402(g)(1)(B), the Plan shall pay the Member’s entire benefit in the form of a lump sum
on the date on which the Member’s payment is scheduled to commence.

 

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ARTICLE IV. AMOUNT AND PAYMENT OF DEFERRED COMPENSATION BENEFITS

	4.01	 	At the end of each calendar year (referred to herein as Year 1), each Member may elect to
defer a percentage of his Base Salary for the next calendar year (referred to herein as Year
2) pursuant to the procedure set forth in Section 4.03 below. If a Member so elects, his Base
Salary earned during Year 2 shall be reduced in accordance with his deferral election. The
Bank shall effectuate the Member’s deferral ratably throughout Year 2 in accordance with its
usual payroll practices. The Bank shall contribute the deferral amounts to the Participant’s
Account where they shall remain until the Account is paid to the Member or his beneficiary as
provided in this Article. Deferral elections made pursuant to this Section 4.01 shall be
independent of, and shall be effectuated concurrently with, the Member’s elections, if any,
under the Financial Institutions Thrift Plan. The making or not making of deferral elections
under this Plan shall have no effect on the Member’s participation in the Financial
Institutions Thrift Plan, and participation or non-participation in the Financial Institutions
Thrift Plan shall have no effect on the Member’s participation in this Plan.

	4.02	 	At the end of Year 1, each Member may elect to defer a percentage of his annual Incentive
Compensation earned during Year 2 and payable during Year 3 pursuant to the procedure set
forth in Section 4.03 below. If a Member so elects, his annual Incentive Compensation earned
during Year 2 and payable during Year 3 shall be reduced in accordance with his deferral
election. The percentage of annual Incentive Compensation deferred pursuant to this section
need not be identical to the deferral percentage of Base Salary chosen by the Member pursuant
to Section 4.01 above. The Member must make the annual Incentive Compensation deferral
election on or before December 31 of Year 1 for annual Incentive Compensation earned during
Year 2 and payable in Year 3. The Bank shall contribute the annual Incentive Compensation
thus deferred to the Participant’s Account where it shall remain until the Account is paid to
the Member or his beneficiary as provided in this Article.

 

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	4.03	 	A Member’s election under Sections 4.01 and 4.02 shall be made in accordance with the
following provisions:

	 	(a)	 	The Plan shall provide each Member with a Deferral Agreement at least 30 days
prior to the commencement of each year. All year-end Deferral Agreements shall provide
for separate elections with respect to Base Salary deferrals under Section 4.01 and
annual Incentive Compensation deferrals under Section 4.02. If a Member (or an
Eligible Executive) does not make a timely written deferral election with respect to
either or both of Base Salary or annual Incentive Compensation, he shall be deemed to
have elected to defer zero dollars ($0) and zero percent (0%). Except as provided in
paragraph (b) below, a timely election must be made on or before the last day of the
calendar year next preceding the calendar year in which Base Pay or annual Incentive
Compensation is earned. Annual Incentive Compensation is earned during the calendar
year preceding the year in which it is paid.

	 	(b)	 	Notwithstanding the above, if an Eligible Executive first becomes eligible to
participate in this Plan in a month other than December, he shall be entitled to
execute a mid-year Deferral Agreement within 30 days of the date he becomes eligible to
participate. That mid-year Deferral Agreement shall apply only to Base Salary earned
by the Member on or after the date such Deferral Agreement is submitted. If that
mid-year agreement is submitted on or after July 1, it shall not affect or defer the
Member’s annual Incentive Compensation earned during the year in which the Member first
becomes eligible to participate in this Plan (and paid during the following year). If
that mid-year Deferral Agreement is submitted on or before June 30 (and if the Member
has been continuously employed by the Bank since January 1 of the year in which the
mid-year Deferral Agreement is submitted) and the Incentive Compensation otherwise
meets the requirements for “performance based compensation” under Code Section 409A and
the regulations and guidance promulgated thereunder, it shall apply to annual Incentive
Compensation earned during the year in which the mid-year agreement is submitted (and
paid during the following year).

 

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Notwithstanding the foregoing, if the Eligible Executive is a new employee of the
Bank who has not yet performed any services for which annual Incentive Compensation
may be payable, the Member may make a deferral election for both Base Salary and
annual Incentive Compensation within 30 days of the date on which he becomes
eligible to participate pursuant to Section 2.02 above. However, that election
cannot defer any Base Salary or annual Incentive Compensation attributable to the
portion of the calendar year beginning on the date on which the Member commenced
employment with the Bank and ending on the date the Member submits his written
deferral election.

	 	(c)	 	An Eligible Executive’s elections in his Deferral Agreement shall be
irrevocable as of the last day of the calendar year in which the Deferral Agreement is
submitted to the Bank.

	 	(d)	 	All deferral elections shall be expressed as whole percentages. No Member may
elect to defer less than two percent of his Base Salary or annual Incentive
Compensation, and no Member may elect to defer more than one hundred percent of his
Base Salary or annual Incentive Compensation.

 

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	 	(e)	 	The Deferral Agreement shall also allow the Member to elect the form of payment
for his Article IV benefits. The Member must elect the same payment form for Base
Salary deferrals and annual Incentive Compensation deferrals. The Member’s election
shall set out (i) the starting date for payment of the Member’s Article IV benefits,
(ii) whether benefits are to be paid in a lump sum or in installments and (iii) the
frequency or duration of any installment payments. The starting date may be defined
with reference to the Member’s Termination of Employment with the Bank or the Member’s
attainment of a certain age. The starting date may not be defined with reference to
any event whose timing is uncertain other than the Member’s death, Disability or
Termination of Employment. Benefit payments must commence by the later of the Member’s
Termination of Employment or the Member’s attainment of age 70. If a Member fails to
elect a form and time for payment of his Article IV benefit payments, he shall receive
all of his Article IV benefits in a lump sum payment on the March 15 of the year
following the year containing the Member’s Termination of Employment.

Any installment payments shall not extend over a period longer than the member’s
anticipated life expectancy, and must be made monthly, quarterly or annually. If
the Member’s Account contains less than the amount in effect under Code Section
402(g)(1)(B) on the date of the Member’s Termination of Employment, then the
Member’s payment election shall be disregarded, and the Member’s Article IV benefits
shall be paid in a single lump sum payment on March 15 of the year following the
year containing the Member’s Termination of Employment.

	 	(f)	 	If a Member dies or suffers a Disability either prior to the time his Article
IV benefits become payable or while his Article IV benefits are being paid in
installments, the Member (or his Beneficiary) shall receive his entire Article IV
Account in a single lump sum payment made on March 15 of the year following the year in
which the Member dies or suffers the Disability. The provisions of this section shall
override any election by the Member.

 

18

 

	 	(g)	 	Members who were Members for Article IV purposes before the Effective Date were
given the opportunity to elect a payment date and a form of payment under prior
versions of this Plan. If a Member made such an election, that election will govern
the date and form of payment of his Article IV benefits. If a Member (who was a Member
for Article IV purposes before the Effective Date) did not make such an election, the
Member’s Article IV benefits will be paid in a single lump sum payment on March 15 of
the year following the year containing the Member’s Termination of Employment. Once a
Member has elected a date and form for payment of his Article IV benefits, such
election shall govern the payment of all Article IV deferrals made by the Member unless
the election is changed by the Member in a subsequent Deferral Agreement. Any
subsequent Deferral Agreement shall govern all of the Member’s Article IV benefits, and
shall be subject to the requirements set out in the remainder of this subparagraph (g).

A subsequent Deferral Agreement can also change the automatic payment timing set out
in this paragraph (lump sum payment on March 15 of the year following the year
containing the Member’s Termination of Employment) for Members who have not made
payment elections. However, such subsequent Deferral Agreement must extend the
commencement of the Member’s benefit payments to a date on or after March 15 of the
year following the year containing the fifth anniversary of the Member’s Termination
of Employment. If a Member’s Termination of Employment occurs within twelve months
of the subsequent Deferral Election described herein, the subsequent Deferral
Election shall be disregarded, and the Member’s Article IV benefit payments shall
commence on March 15 of the year following the year containing the Member’s
Termination of Employment.

 

19

 

A Member’s Article IV benefit payments shall not commence within twelve months of
any subsequent Deferral Agreement unless the Member dies or suffers a Disability.
Nor may a Member execute a subsequent Deferral Agreement within twelve months of the
Member’s then-effective distribution commencement date. In addition, any subsequent
Deferral Agreement which extends the time for commencement of a Member’s Article IV
benefit payments must extend the Member’s benefit commencement date for at least
five years, measured from the benefit commencement date in the election being
superseded to the benefit commencement date in the new election. Thus, a Member who
had elected to commence Article IV benefit payments at age 65 could revoke that
election and instead elect to commence Article IV benefits at age 70 but not at any
earlier age. Finally, no election change can accelerate a Member’s receipt of his
Article IV benefits. For purposes of this paragraph, a series of installment
payments shall be considered one payment commencing on the date of the first
installment.

	4.04	 	For each elective contribution addition credited to a Member’s Account under Section 4.01,
such Member shall also be credited with a matching contribution under this Plan in the
percentage set forth in Section 4.05 below. For each Incentive Compensation contribution
credited to a Member’s Account under Section 4.02, such Member shall also be credited with a
matching contribution under this Plan in the percentage set forth in Section 4.05 below. The
matching contribution percentage shall be determined with reference to the Member’s years of
service with the Bank. For purposes of this section, a year of service means a 12-month
period during which the Member has been continuously employed by the Bank on a full-time basis
regardless of whether or not the Member was then a participant in this Plan. The first
12-month period shall begin on the first day of the month coincident with or immediately
following the date the Member began his employment with the Bank. Each subsequent 12-month
period shall begin on the first day of the month in which the Member began his employment with
the Bank.

 

20

 

	4.05	 	No Member shall be entitled to a matching contribution with respect to any deferrals made
during his first year of service. Therefore, if a Member begins both his employment with the
Bank and his participation in the Plan in the middle of a calendar year, that Member will not
be entitled to a matching contribution with respect to any amounts deferred into the Plan for
the remainder of that calendar year. Similarly, he will not be entitled to a matching
contribution with respect to any amounts deferred into the Plan for the period beginning on
January 1 of the following calendar year and ending on the last day of the month containing
the anniversary of the date on which the Member began his employment with the Bank. During
the Member’s second and third years of service (which will each begin on the first day of the
month in which the Member began his employment with the Bank), the Bank will make a matching
contribution equal to fifty percent (50%) of the deferrals made by the Member, regardless of
whether such deferrals are deferrals of Base Salary or deferrals of annual Incentive
Compensation. During the Member’s fourth and fifth years of service (which will each begin on
the first day of the month in which the Member began his employment with the Bank), the Bank
will make a matching contribution equal to seventy-five percent (75%) of the deferrals made by
the Member, regardless of whether such deferrals are deferrals of Base Salary or deferrals of
annual Incentive Compensation. During the Member’s sixth year of service and all years of
service thereafter (which will each begin on the first day of the month in which the Member
began his employment with the Bank), the Bank shall make a matching contribution equal to one
hundred percent (100%) of the amount deferred by the Member, regardless of whether such
deferrals are deferrals of Base Salary or deferrals of annual Incentive Compensation.
Notwithstanding the foregoing, the Bank’s matching contribution shall not exceed six percent
(6%) of the Member’s Base Salary (if the Member has deferred six percent or more of his Base
Salary) and/or six percent (6%) of the Member’s annual Incentive Compensation (if the Member
has deferred six percent or more of his annual Incentive Compensation).

 

21

 

	4.06	 	The Plan shall maintain an Article IV Account for each Eligible Executive who is a Member by
reason of amounts credited under Sections 4.01, 4.02, and 4.05. Such amounts shall be
credited to the Member’s Account as soon as practical after the date that the deferred
compensation would otherwise have been paid to the Member. Such Account shall be further
administered as provided in Section 6.03 below.

	4.07	 	If a Member has elected an installment payment of his Article IV Accounts, the installment
payments shall be made as follows. On the date of the first installment payment, the Plan
shall divide the Member’s Article IV Account by the number of monthly, quarterly or annual
installment payments elected by the Member. At the first month (for a Member electing monthly
installment payments), third month (for a Member electing quarterly installment payments), or
one year (for a Member electing annual payments) anniversary of that first payment, the Plan
shall determine the next installment payment amount by revaluing the Member’s Article IV
Account as provided in Section 6.03 below and dividing the revalued Account by the number of
installment payments then remaining. This process shall continue, subject to Section 4.03(f)
above, until the Member’s entire Article IV Account has been paid out or until the Member’s
death or Disability, if earlier, as provided in subsection 4.03(f). Once a Member’s
installment benefit payments begin, they shall continue as originally elected, even if the
Member should return to interim or permanent employment with the Bank.

	4.08	 	Notwithstanding any other provision of this Plan, if, on the date the Member is scheduled to
begin the installment payout of his Article IV Account), such Account is less than or equal to
the amount then in effect under Code Section 402(g)(1)(B), the Plan shall pay the Member’s
entire Article IV Account in a lump sum payment on that date.

 

22

 

ARTICLE V. DIRECTOR BENEFITS

	5.01	 	At the end of each calendar year, each Director may elect to defer all (but not less than
all) of his Director Fees for the next calendar year pursuant to the procedure set forth in
Section 5.02 below. If a Director so elects, the Bank shall contribute his Director Fees to
his Account under this Plan. The Director shall receive no current Director Fees if he makes
this election.

	5.02	 	A Director’s election under Section 5.01 shall be made in accordance with the following
provisions:

	 	(a)	 	The Plan shall provide each Director with a Deferral Agreement at least 30 days
prior to the commencement of each year (provided that the Director will continue to
serve as a Director for the following calendar year). Each Director shall execute and
deliver the Deferral Agreement no later than the last business day of the year.

	 	(b)	 	Notwithstanding the above, if a Director first becomes eligible to participate
in this Plan in a month other than December, he shall be entitled to execute a mid-year
Deferral Agreement within 30 days of the date he becomes a Director. That mid-year
Deferral Agreement shall apply only to Director Fees earned after the date such
Deferral Agreement is submitted.

	 	(c)	 	A Director’s election shall be irrevocable for the calendar year for which the
deferral is elected.

 

23

 

	 	(d)	 	The Deferral Agreement shall also allow the Director to elect the form of
payment for his Account. The Director’s election shall set out (i) the starting date
for payment of his Account, (ii) whether benefits are to be paid in a lump sum or in
annual installments and (iii) the duration of any installment payments. The starting
date may be defined with reference to the Director’s separation from service (as such
term is defined under Code Section 409A) with the Bank or the Director’s attainment of
a certain age. The starting date may not be defined with reference to any event whose
timing is uncertain other than the Director’s death, Disability or separation from
service with the Bank. Benefit payments must commence by the time the Director attains
the age of 70. Installment payments may only be made annually. They may not be made
quarterly or monthly. Installment payments shall not extend over a period longer than
ten years.

	 	(e)	 	All Directors who were Directors before the Effective Date were previously
given an opportunity to elect a payment date and a form of payment. If a Director made
such an election, the Director’s election will govern the date and form of payment of
his deferred compensation and his account under this Plan. If a Director (who was a
Director before the Effective Date) did not make such an election, his benefits will be
paid on March 15 of the year following the year in which his separation from service
occurs, unless the Director executes a subsequent Deferral Election pursuant to
paragraph (f) below.

 

24

 

	 	(f)	 	The election made by the Director pursuant to subparagraph (e) above or the
election made by a new Director pursuant to subparagraph (b) above shall also apply to
the Director’s subsequent deferrals unless the election is changed by the Director in a
subsequent Deferral Agreement. Any subsequent Deferral Agreement shall comply with
paragraph (g) below. If a Director has not made an election (so that his deferred
compensation will be paid on March 15 of the year following the year in which his
separation from service occurs), he may extend the payment date in a subsequent
Deferral Agreement. The new payment date must be on or after March 15 following the
year containing the fifth anniversary of his separation from service. If the
Director’s service ends within twelve months of his making his subsequent Deferral
Election, his subsequent Deferral Election shall be disregarded and his deferred
compensation shall be paid on March 15 of the year following his separation from
service.

	 	(g)	 	A Director’s benefit payments shall not commence within twelve months of his
execution of a subsequent Deferral Election unless the commencement of the Director’s
benefit payments is due to death or Disability. Nor may a Director execute a
subsequent Deferral Election within twelve months of his then-effective distribution
commencement date. In addition, any subsequent Deferral Election which extends the
time for commencement of a Director’s benefit payments must extend the benefit
commencement date for at least five years, measured from the benefit commencement date
in the election being superseded to the benefit commencement date in the new election.
Thus, a Director who had elected to commence benefit payments at age 65 could revoke
that election and instead elect to commence benefits at age 70 but not at any earlier
age. Finally, no subsequent Deferral Election can accelerate a Director’s receipt of
his benefits. For purposes of this paragraph, a series of installment payment shall be
considered a single payment made on the date of the first installment.

 

25

 

	5.03	 	The Plan shall maintain an Account for each Director who is a Member by reason of amounts
credited under Section 5.01 above. Such amounts shall be credited to the Director’s Account
as soon as practical after the date that the deferred Directors Fees would otherwise have been
paid to the Director. The Plan shall also maintain an Account for any Director whose deferred
compensation has been transferred to this Plan from the Bank’s Director’s Deferred
Compensation Plan. All such accounts shall be further administered as provided in Section
6.03 below.

	5.04	 	If a Director has elected an installment payment of his Account, the installment payments
shall be made as follows. On the date of the first installment payment, the Plan shall divide
the Director’s Account by the number of annual installment payments elected by the Director.
At the one year anniversary of that first payment, the Plan shall determine the next
installment payment amount by revaluing the Member’s Account as provided in Section 6.03 and
dividing the revalued Account by the number of installment payments then remaining. This
process shall continue until the Director’s entire Account has been paid out or until the
Director’s death or Disability, if earlier. Once installment payments have begun, they shall
continue as scheduled, even if the Director is subsequently reelected to the Board.

	5.05	 	If a Director dies or suffers a Disability prior to receiving the balance credited to his
Account, the balance in his Account shall be paid in a lump sum payment on March 15 of the
year following the year containing the Director’s date of death or the year in which the
Director suffers the Disability.

	5.06	 	If a Director’s Account contains less than the amount in effect under Code Section
402(g)(1)(B) on the date of the Director’s separation from service with the Bank, then the
Director’s payment elections shall be disregarded, and the Director’s Article V benefits shall
be paid in a single lump sum payment on March 15 of the year containing such cessation of
Board service.

 

26

 

ARTICLE VI. SOURCE OF PAYMENT

	6.01	 	All payments of benefits under the Plan shall be paid from, and shall only be a general claim
upon, the general assets of the Bank, notwithstanding that the Bank, in its discretion, may
establish a bookkeeping reserve or a “Rabbi” or grantor trust (as such term is used in Code
Sections 671 through 677) to reflect or to aid it in meeting its obligations under the Plan
with respect to any Member. No benefit provided by the Plan shall in any circumstances be
payable from the assets of the Retirement Fund or the Thrift Plan.

	6.02	 	No Member shall have any right, title or interest whatsoever in or to any investments. which
the Bank may make or any specific assets which the Bank may reserve to aid it in meeting its
obligations under the Plan. To the extent that any person acquires a right to receive payments
from the Bank under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Bank.

	6.03	 	The Accounts established by the Plan to hold the Members’ Article IV deferrals and the Bank’s
matching contributions or the Accounts established to hold Director deferrals pursuant to
Article V above shall be held in trust and the trust shall have its situs within the United
States. The trust shall at all times qualify as a “Rabbi Trust.” To that end it shall be a
grantor trust, the net income from which shall be taxable to the Bank and the assets of which
shall be available to the Bank and its creditors in the event of the Bank’s insolvency. The
trust’s status as a grantor trust shall not be affected by changes in the Bank’s financial
condition.

	 	(a)	 	The Bank may establish a benchmark investment product or a benchmark financial
index or a benchmark derived with reference to the Bank’s own financial reporting for
purposes of crediting earnings to a Member’s Article IV or Article V Account. If the
Bank does establish such a benchmark, it shall be used for purposes of determining
earnings on Members’ Accounts. The Bank may establish a benchmark, change any
benchmark or suspend use of any benchmark at any time.

	 	(b)	 	At any time when there is no benchmark being used to credit earnings, each
Member may direct the investment of his Article IV or Article V Account in and among
various mutual funds or other investment vehicles chosen by the Rabbi Trust Trustee.
The performance of the investment vehicles chosen by the Member will establish the rate
of return on the Member’s Article IV or Article V Account.

	 	(c)	 	Other than as set forth in the preceding subparagraphs, no Member shall be
entitled to any guaranteed rate of return, nor shall any investment vehicle or index be
deemed to be the measure of investment performance for any Member’s Article IV or
Article V Account.

 

27

 

	6.04	 	The Bank may also use the Rabbi Trust to fund its Article III obligations, in whole or in
part, and such trust shall comply with the requirements of the initial paragraph of Section
6.03. However, no Member shall have any right to direct (or even monitor) the investment of
the funds contributed to the Trust for such purpose. The Bank may direct the investment of
all or part of such funds, or may rely upon the trustee to invest all or part of such funds.
Except as provided in paragraph (a) below, the Bank shall have no obligation to set aside
funds to help meet its Article III obligations.

	 	(a)	 	In the event a Member elects to have his Article III benefits paid in
installments, the Plan shall establish a separate Article III Account within the Rabbi
Trust to hold such benefits during the installment period. The Trust and the Account
shall comply with the requirements of the initial paragraph of Section 6.03 above. The
Account shall be credited with earnings pursuant to subsections 6.03(a) and 6.03(b)
above. Notwithstanding the foregoing, the Bank may establish different earnings
benchmarks for Accounts held pursuant to this subsection. The Bank may also establish
different earnings benchmarks for Accounts holding Article IV benefits than for
Accounts holding Article V benefits. The same earnings benchmarks need not apply to
funds held pursuant to Article IV, Article V and this subsection 6.04(a). Similarly,
the Bank may institute an earnings benchmark for Article IV or Article V Accounts or
for Accounts held pursuant to this subsection without instituting benchmarks for
Accounts held under all three of those sections.

	6.05	 	In the event the Member becomes unable to direct the investment of his Account as
contemplated by subsection 6.03(b) above, such direction may be given by the Member’s spouse,
conservator or attorney-in-fact. The Trustee may also invest the Member’s Account without any
direction. The investment direction alternatives contemplated by this section shall begin
when the Plan receives credible evidence of the Member’s inability to direct his Account and
shall end when the Account is distributed to the Member (or Beneficiary) as provided in
Sections 3.03, 3.04, 4.03(f) or 5.05 above.

 

28

 

ARTICLE VII. DESIGNATION OF BENEFICIARIES

	7.01	 	For purposes of calculating the benefits payable under Article III of this Plan, the Member’s
designated beneficiary shall be deemed to be the same individual or entity designated by the
Member to receive benefits under the Retirement Fund in case of the Member’s death. The
Member may change his designated beneficiary at any time before payment of his benefits
begins. The Member shall not be required to obtain the consent of any family member or
previously designated Beneficiary before designating a beneficiary for any Article III
benefit.

	7.02	 	For purposes of benefits payable under Article IV or Article V hereof, each Member may file a
written designation of one or more individuals or entities as the Beneficiary, and such person
or entity shall be entitled to receive the amount, if any, payable under the Plan upon the
Member’s death. The Member may, from time to time, revoke or change his Beneficiary
designation (without the consent of any prior Beneficiary or any other person) by filing a new
designation. The last beneficiary designation received shall be controlling. However, no
designation, or change or revocation of Beneficiary shall be effective unless actually
received by an appropriate Plan representative prior to the Member’s death.

 

29

 

	7.03	 	If no Beneficiary designation is in effect at the time of a Member’s death, or if no
designated Beneficiary survives the Member, or if, in the opinion of the Plan, any beneficiary
designation conflicts with applicable law or is unenforceable in any other way, the Member’s
estate shall be deemed to be the Member’s Beneficiary and shall receive the amount, if any,
payable under the Plan upon the Member’s death. If the Plan is in doubt as to the right of any
person to receive such amount, the Plan may retain such amount, without liability for any
interest thereon, until the rights thereto are determined. The Plan may also pay such amount
to any court of appropriate jurisdiction and such payment shall be a complete discharge of the
liability of the Plan and the Bank therefor.

	7.04	 	This Plan shall be bound by any Qualified Domestic Relations Order accepted by the Retirement
Fund, and shall be cognizant of such Order in calculating the Member’s Article III benefits
under this Plan so that the Qualified Domestic Relations Order does not cause an increase in
the benefits payable to the Member pursuant to Article III of this Plan. This Plan shall
receive, analyze and be bound by domestic relations orders pertaining to Member’s Article IV
or Article V benefits using rules similar to those set out in Code Section 414(p).

 

30

 

ARTICLE VIII. ADMINISTRATION OF THE PLAN

	8.01	 	The Committee shall have general authority over and responsibility for the administration and
interpretation of the Plan. The Committee shall have full power and discretionary authority to
interpret and construe the Plan, to make all determinations considered necessary or advisable
for the administration of the Plan and the calculation of the amount of benefits payable
thereunder, and to review claims for benefits under the Plan. Unless arbitrary or capricious,
the Committee’s interpretations and constructions of the Plan and its decisions and actions
thereunder shall be binding and conclusive on all persons for all purposes.

	8.02	 	The Committee shall arrange for the services of the Actuary, and if the Committee deems it
advisable, it shall arrange for the services of legal counsel and certified public accountants
(who may also be counsel or accountants for the Bank), and for other consultants, agents and
clerical or other personnel whose services may be necessary for purposes of the Plan. The
Committee may also utilize the services of agents and clerical or other personnel regularly
employed by the Bank. The Committee may rely upon the written opinions of such Actuary,
counsel, accountants and consultants, and upon any information supplied by the Retirement Fund
for purposes of the Plan. The Committee may delegate to any agent or to any sub-committee or
Committee member its authority to perform any act hereunder, including without limitations
those matters involving the exercise of discretion; provided, however, that such delegation
shall be subject to revocation at any time at the discretion of the Committee. The Committee
shall report to the Board of Directors, or its designee, at such intervals as shall be
specified by the Board or such designee.

	8.03	 	No Committee member shall be entitled to participate in any decision or action relating
solely to his own membership or benefits under the Plan.

	8.04	 	Each Committee member shall be reimbursed by the Bank for any reasonable expenses incurred in
connection with his services to the Plan. No bond or other security shall be required of the
Committee or any member thereof, unless required by applicable law.

 

31

 

	8.05	 	All claims for benefits under the Plan shall be submitted in writing to the Committee.
Written notice of the Committee’s decision on each such claim shall be furnished with
reasonable promptness (and in any event within 90 days of the Committee’s receipt of the
claim) to the Member or his Beneficiary, such individual or entity being referred to herein as
the Claimant. Such notice shall provide (a) the specific reasons for denial of the claim, (b)
specific references to the plan provisions on which the denial is based, (c) a description of
any material necessary to perfect the claim and an explanation of the need for such material,
and (d) appropriate information about submitting the claim to the Board of Directors for
further review, including the Claimant’s right to appeal to the Board of Directors, the
Claimant’s right to review pertinent documents and the Claimant’s right to make a written
submission. The Claimant may request a review by the Board of Directors of any Committee
decision denying all or part of a claim. Such request shall be made in writing and shall be
filed with the Committee within 60 days of such denial. A request for review shall contain
all additional information which the Claimant wishes the Board of Directors to consider and
the Board of Directors shall not be obligated to undertake any review until it has received
the Claimant’s completed request for review.

The Board may hold any hearing or conduct any independent investigation which it deems
useful in rendering its decision. The decision on review shall be made within 60 days after
receipt of the completed request for review unless an extension is necessary because of the
difficulty of convening the entire Board of Directors. Written notice of the extension
shall be given to the Claimant before the end of the initial 60-day period, and the
extension shall not last for more than 60 additional days. Written notice of the decision
on review shall be furnished to the Claimant.

	8.06	 	All expenses incurred in the administration of the Plan shall be paid by the Bank.

 

32

 

ARTICLE IX. AMENDMENT AND TERMINATION

	9.01	 	The Board of Directors may amend, suspend or terminate the Plan, in whole or in part, without
the consent of the Committee or any Member, Beneficiary or other person. However, no
amendment, suspension or termination shall retroactively impair or otherwise adversely affect
the rights of any Member, Beneficiary or other person to benefits which have accrued under the
Plan prior to the date of such action unless such amendment is necessary to bring the Plan
into compliance with Code Section 409A or other applicable law.

ARTICLE X. GENERAL PROVISIONS

	10.01	 	The Plan shall be binding upon and inure to the benefit of the Bank and its successors, and
assigns and the Members, and their beneficiaries, successors, and assigns. The Plan shall
also be binding upon and inure to the benefit of any successor bank or organization succeeding
to substantially all of the assets and business of the Bank, but nothing in the Plan shall
preclude the Bank from merging or consolidating into or with, or transferring all or
substantially all of its assets to, another bank which assumes the Plan and all obligations of
the Bank hereunder. The Bank agrees that it will make appropriate provision for the
preservation of Members’ rights under the Plan in any agreement or plan into which it may
enter to effect any merger, consolidation, reorganization or transfer of assets. In case of
such a merger, consolidation, reorganization or transfer of assets, the term “Bank” shall
refer to the surviving or acquiring entity which shall assume the Bank’s obligations under the
Plan, and the Plan shall continue in full force and effect with no diminution in accrued Plan
benefits.

	10.02	 	Neither the Plan nor any action taken thereunder shall be construed to give any Member the
right to be retained in the employ of the Bank or affect the Bank’s right to terminate the
employment of any Member or to remove any Member from an Eligible Executive position. Neither
the Plan nor any action taken thereunder shall affect the Bank’s right to determine the Base
Salary and annual Incentive Compensation, if any, of any Bank employee, including any Member
of this Plan. Neither Article V of the Plan nor any action taken thereunder shall be
construed to give any Director the right to be retained in office as a member of the Bank’s
Board of Directors.

 

33

 

	10.03	 	The Bank shall withhold or cause to be withheld all federal, state, or other taxes which the
Bank is required to withhold from Plan payments.

	10.04	 	No right or interest of a Member under the Plan may be assigned, sold, encumbered,
transferred or otherwise disposed of, other than by a Qualified Domestic Relations Order. Any
attempted disposition of such right or interest shall be null and void. Further, no right or
interest of a Member may be reached by any creditor of the Member.

	10.05	 	If the Committee should find that any person to whom any amount is due under the Plan is
unable to care for his affairs because of illness or accident or legal incapacity, then any
payment due to such person may be paid to such person’s spouse, child or other relative, or to
an institution maintaining or having custody of such person, or to any other person whom the
Committee determines to be appropriate to receive payment on behalf of such person. Any such
payment shall be a complete discharge of the liability of the Plan and the Bank therefor, and
the Committee shall have no obligation to inquire regarding the recipient’s application of
such payment.

	10.06	 	All elections, designations, requests, notices, instructions, and other communications from
a Member, Beneficiary, or other person to the Plan or the Committee shall be in such form as
is prescribed from time to time by the Plan or the Committee and shall be mailed by
first-class mail or sent by telefacsimile or email or hand-delivered to such location as shall
be specified by the Plan or the Committee. Such documents shall not be deemed to have been
given and delivered until the actual receipt thereof by a Committee Member or appropriate Plan
Representative. All Members (and Beneficiaries of deceased Members) shall keep the Plan
apprised of their current mailing addresses.

 

34

 

	10.07	 	The benefits payable under the Plan shall be in addition to all other benefits provided for
employees or Directors of the Bank, and Plan benefits shall not be deemed salary or other
compensation for the purpose of computing benefits to which a Member may be entitled under any
other plan or arrangement of the Bank.

	10.08	 	No Committee member or Plan representative shall be personally liable on account of any
instrument executed by him or on his behalf, or any action taken by him for any mistake of
judgment made in good faith in connection with service to the Plan. The Bank shall indemnify
and hold harmless each Committee member, Plan representative, employee, officer or director of
the Bank, or the Retirement Fund to whom any duty, power, function or action in respect of the
Plan may be delegated or assigned or from whom any information is requested for plan purposes
against any cost or expense (including fees of legal counsel) and liability (including any sum
paid in settlement of a claim or legal action with the approval of the Bank) arising out of
anything done or omitted to be done in connection with the Plan, unless such liability arises
out of such person’s fraud or bad faith.

	10.09	 	As used in the Plan, the masculine gender shall be deemed to refer to the feminine, and the
singular person shall be deemed to refer to the plural, wherever appropriate.

	10.10	 	The captions preceding the Articles and Sections of the Plan have been inserted solely as a
matter of convenience and shall not in any manner define or limit the scope or intent of any
provisions of the Plan.

 

35

 

	10.11	 	Notwithstanding anything herein to the contrary, if a Member is a “specified employee” as
such term is defined under Code Section 409A and the regulations and guidance promulgated
thereunder, any payments shall be delayed for a period of six (6) months following the
Member’s Termination of Employment to the extent and up to an amount necessary to ensure such
payments are not subject to the penalties and interest under Code Section 409A.

	10.12	 	The Plan shall be construed according to the laws of the State of Iowa unless such laws are
superseded by applicable federal law. It is the Bank’s intent that the plan be classified as
a non-qualified deferred compensation plan for income tax purposes so that no Member is
obligated to include Plan benefits in taxable income prior to the Member’s actual receipt of
such Plan benefits. It is also the Bank’s intent for this Plan document and the actual
operation of the Plan to meet the requirements of Code Section 409A at all times from and
after the Effective Date.

The Plan is also intended to qualify as a “Top Hat” Plan for purposes of the Employee
Retirement Income Security Act. The Plan shall be construed and administered to effectuate
such intentions.

 

36Exhibit 10.2

Exhibit 10.2

Summary Plan Description

Pentegra Defined

Benefit Plan for

Financial Institutions

as adopted by:

FEDERAL HOME LOAN BANK OF

DES MOINES

PENTEGRA RETIREMENT SERVICES

 

 

 

SUMMARY PLAN DESCRIPTION 

for

FEDERAL HOME LOAN BANK

OF DES MOINES

Des Moines, Iowa

PENTEGRA DEFINED BENEFIT PLAN FOR

FINANCIAL INSTITUTIONS

108 Corporate Park Drive

White Plains, NY 10604

 

 

 

Important Notice

This booklet contains a summary in English of your plan rights and benefits under the Federal Home
Loan Bank of Des Moines Defined Benefit Plan. If you have difficulty understanding any part of this
booklet, Contact the plan administrator at his/her office: 515-281-1000.

Aviso Importante

Este Resumen contiene un resumen en inglés de los derechos y beneficios bajo el Plan the Federal
Home Loan Bank of Des Moines. Si tiene dificultad para entender cualquier parte de este folleto,
comuniquese con el administrador del plan en su oficina: 515-281-1000.

 

 

 

TO OUR MEMBERS:

We are pleased to present your Summary Plan Description. This Summary has been prepared to help you
understand the retirement plan which is provided by Federal Home Loan Bank of Des Moines through
its participation in the Pentegra Defined Benefit Plan for Financial Institutions (formerly known
as the Financial Institutions Retirement Fund) (the “Pentegra DB Plan”).

The Pentegra DB Plan is a large, non-profit, tax-exempt pension trust which was created in 1943. It
is administered by a professional staff under the direction of a Board of Directors comprised of
presidents of Federal Home Loan Banks and officers of various participating employers.

The Pentegra DB Plan enables financial institutions and other organizations serving them to provide
for the security of their employees. It invests the contributions made to it and, under its Comprehensive Retirement Program (a defined benefit pension Plan), it pays out retirement,
disability and death benefits.

This Summary highlights the main benefit features of your retirement plan. The Pentegra DB Plan
Regulations contain the governing provisions and should be consulted as official text in all cases.
If there is any conflict between this Summary Plan Description and the Pentegra DB Plan=s
Regulations, the Pentegra DB Plan=s Regulations will control. Either your employer or the Pentegra
DB Plan will provide you with a copy of the Regulations at your request.

Finally, please note that wherever the masculine pronoun is used in this Summary, it is intended to
include the feminine pronoun.

	 	 	 	 	 
	 

	 	Board of Directors
	 	 
	 

	 	Pentegra Defined Benefit Plan for	 	 
	 

	 	Financial Institutions	 	 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Employee Eligibility
	 	 	1	 
	Service and Salary
	 	 	2	 
	- Benefit Service
	 	 	2	 
	- Vesting Service
	 	 	2	 
	- Salary
	 	 	2	 
	Vesting
	 	 	3	 
	Retirement Benefits
	 	 	4	 
	- General
	 	 	4	 
	- Normal Retirement
	 	 	4	 
	- Late Retirement
	 	 	4	 
	- Early Retirement for Employees Hired Prior to January 1, 2004
	 	 	5	 
	- Early Retirement for Employees Hired on or After January 1, 2004
	 	 	6	 
	- Disability Retirement
	 	 	7	 
	- Retirement Adjustment Payment
	 	 	8	 
	- Post-Retirement Increments
	 	 	8	 
	- Post-Retirement Increments upon attainment of Early Retirement:
	 	 	9	 
	- Upon attainment of Early Retirement for Employees hired prior to January 1, 2004
	 	 	9	 
	- Upon attainment of Early Retirement for Employees hired on or after January 1, 2004
	 	 	10	 
	Death Benefit
	 	 	11	 
	- Death Benefit in Active Service
	 	 	11	 
	- Death Benefit in Retirement
	 	 	11	 
	Optional Forms of Retirement Benefit
	 	 	12	 
	Paying for Your Benefits
	 	 	13	 
	Your Personal Annual Statement
	 	 	13	 
	Reinstatement of Membership and Service
	 	 	14	 
	Leaves of Absence
	 	 	15	 
	Limitations on Benefits
	 	 	16	 
	Insurance of Benefits
	 	 	17	 
	Disputed Claims Procedure
	 	 	17	 
	Qualified Domestic Relations Orders (“QDROs”)
	 	 	17	 
	Statement of ERISA Rights
	 	 	18	 
	Other Plan Information
	 	 	19	 

 

 

 

ELIGIBILITY

Each employee must become a Member when eligible and will be enrolled by his employer at that time.
An employee will be eligible for membership in the Comprehensive Retirement Program on the first
day of the month following satisfaction of his employer’s waiting period, if any. Your employer’s
current waiting period for new employees is:

One year of service and attainment of age 21

If an employee is expected to complete 1,000 hours of service in the 12 consecutive months
following his enrollment date, he will be enrolled as an active Member and, as such, will be
entitled to all the benefits described in this Summary. If the employee is not expected to complete
1,000 hours of service in this 12 consecutive month period, he will be enrolled as an inactive
Member and, as such, will not accrue or be entitled to any retirement or death benefits (see
Article X, Section 3 of the Regulations). Subsequently, the Member will be active or inactive
depending on whether or not he completes 1,000 hours of service in each calendar year.

In counting hours, an employee will be credited with an hour of service for every hour for which he
has a right to be paid. This includes vacation, sick leave, jury duty, etc., and any hours for
which back pay may be due.

NOTE: Regardless of the above, an employee will not be eligible for membership while he is in a
class of employees which his employer has obtained permission to exclude (see Article II, Section 2
of the Regulations). Any such classes which your employer now excludes are listed directly below.
(If none are listed, this Note may be disregarded.)

 

1

 

SERVICE AND SALARY

Your benefits are based on your Benefit Service and Salary. The period of Benefit Service is the
number of years and months of employment upon which benefits are determined under the Plan.

Benefit Service includes:

Prior Service — any or all employment prior to the date your employer joined the Pentegra DB
Plan for which your employer has purchased credit.

plus

Membership Service (or future service) — period of employment as an active Member (see Page 1)
from enrollment to retirement, death or other termination.

For example, suppose a person joined his employer at age 35. Then 10 years later, when he was 45,
his employer joined the Pentegra DB Plan and purchased credit for his 10 years of prior service.
After 20 years of membership service he will reach the Plan’s normal retirement age (65) and will
then have 30 years of Benefit Service:

	 	 	 	 	 	 	 	 	 
	Prior Service

	 	+
	 	Membership Service
	 	=
	 	Benefit Service
	10 Years
	 	+
	 	20 Years
	 	=
	 	30 Years

The easy way to approximate how much Benefit Service you would have upon retirement at age 65 is to
subtract from 65 whatever age you were when your Benefit Service began.

Vesting Service is the period used to determine whether or not an employee is vested and eligible
for early retirement. It is your period of employment measured from the first day of the month in
which you were hired (but not before the earliest date your employer provided credit under any
pension plan) to the last day of the month in which you terminate employment. (Refer to Page 3
describing Vesting.)

Salary is your total taxable compensation as reported on your Internal Revenue Service Form W-2
(exclusive of any compensation deferred from a prior year). Salary includes any pre-tax
contributions to a Section 401(k) plan and, unless the employer elects otherwise, pre-tax
contributions to a Section 125 cafeteria plan as well as Qualified Transportation Fringe benefits
as defined under Section 132(f) of the Internal Revenue Code.

NOTE: Effective January 1, 2009, any payments made under a long-term incentive
compensation plan shall be excluded from the definition of Salary.

 

2

 

VESTING

“Vested” means that you have a nonforfeitable right to a retirement benefit which you will not lose
if you terminate your employment. A Member will become vested in accordance with the following
schedule:

	 	 	 	 	 
	Completed Years	 	Vested	 
	of Employment	 	Percentage	 
	Less than 5
	 	 	0	 
	5 or more
	 	 	100	%

Any Member who has reached age 65 is automatically 100% vested, regardless of the number of years
of employment he has completed.

Any Member who terminates service after becoming fully or partially vested is entitled to receive a
retirement benefit (see the “Retirement Benefits” section). If, for example, he is 100% vested upon
termination of employment, he would be entitled to a retirement allowance at age 65 equal to 100%
of the allowance accrued to his termination date. If he is not vested at termination, he will not
be entitled to any retirement benefit.

NOTE: See Reinstatement of Membership and Service explained later.

 

3

 

RETIREMENT BENEFITS

General:

The regular form of all retirement benefits provides a retirement allowance (see normal, early and
disability retirement formulas) plus a retirement death benefit (explained later). Instead of
choosing the regular form, you may select one of the optional forms as described in the “Optional
Forms of Retirement Benefit” section of this Summary.

All retirement allowances are in addition to Social Security, and are payable in monthly
installments for life. In addition, all retirement allowances must begin as of the April 1st of the
calendar year following the later of (i) the calendar year in which you reach age 701⁄2, or (ii) the
calendar year in which you retire (“Required Beginning Date”). However, if you are a 5% owner, your
Required Beginning Date is the April 1st of the calendar year following the calendar year in which
you reach age 701⁄2, even if you are still working.

Normal Retirement:

Upon termination of employment at or after age 65, you will be entitled to a normal retirement
benefit. The formula for determining your normal retirement allowance is:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Years of	 	 	 	 	 	 	High-3	 	 	 	 	 	 	Regular	 
	 	 	 	 	 	 	Benefit	 	 	 	 	 	 	Average	 	 	 	 	 	 	Annual	 
	2.25%
	 	 	X	 	 	Service	 	 	X	 	 	Salary	 	 	=	 	 	Allowance

Example: A Member had 30 years of vesting and Benefit Service at termination of employment and his
average annual Salary for the three (3) consecutive years of highest Salary during Benefit Service
(“High-3 Average Salary”) was $32,000. His annual retirement allowance would be determined as
follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Years of	 	 	 	 	 	 	High-3	 	 	 	 	 	 	Regular	 
	 	 	 	 	 	 	Benefit	 	 	 	 	 	 	Average	 	 	 	 	 	 	Annual	 
	 	 	 	 	 	 	Service	 	 	 	 	 	 	Salary	 	 	 	 	 	 	Allowance	 
	2.25%
	 	 	X	 	 	30 yrs. (=67.5%)	 	 	X	 	 	$	32,000	 	 	 	=	 	 	$	21,600	 

If you do not continue in your employer’s service after age 65, you may begin your normal
retirement allowance as described above or you may defer commencement of your allowance until any
time up to your Required Beginning Date, in which case your normal retirement allowance will be
increased actuarially.

Late Retirement:

If you continue in employment beyond the Plan’s normal retirement age (65), you will receive a
benefit determined under the employer’s benefit formula based on Salary and Benefit Service earned
beyond age 65 until actual termination of employment (regardless of age) without any increase for
delayed payment. However, the benefit will not be less than the benefit you would have had at age
(65) actuarially increased.

NOTE: Special rules apply to Members who reached age 65 prior to July 1, 1988 and continued
in employment beyond that date.

 

4

 

Early Retirement for Employees Hired Prior to January 1, 2004:

If you leave your employer prior to age 65, after having become fully or partially vested (see Page
3), you will be entitled to an early retirement benefit. The retirement allowance payable at age 65
is equal to the vested amount of the normal retirement allowance accrued to your termination date.
Payment may be commenced as early as age 45, in which case the allowance otherwise payable at age
65 is reduced by applying an early retirement factor based on your age when payments begin (see
below). Payment may also be deferred to any time up to your Required Beginning Date, in which case
the retirement allowance payable at age 65 will be increased actuarially.

Suppose, for example, a member terminates employment at age 54 after 12 years of benefit service
(rather than at age 65 after 30 years), and that his High-3 Average Salary over such a period is
$28,000. His annual retirement allowance commencing at age 65 would be:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Years of	 	 	 	 	 	 	High-3	 	 	 	 	 	 	Regular	 
	 	 	 	 	 	 	Benefit	 	 	 	 	 	 	Average	 	 	 	 	 	 	Annual Allowance	 
	 	 	 	 	 	 	Service	 	 	 	 	 	 	Salary	 	 	 	 	 	 	Payable at Age 65	 
	2.25%
	 	 	X	 	 	12 yrs. (=27%)	 	 	X	 	 	$	28,000	 	 	 	=	 	 	$	7,560	 

If, on the other hand, the member elected to have his retirement allowance commence immediately,
the allowance payable at age 65 would be reduced as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Annual	 	 	 	 	 	Early	 	 	 	 	 	 	Regular Annual	 
	Allowance	 	 	 	 	 	Retirement	 	 	 	 	 	 	Allowance Payable	 
	Payable at Age 65	 	 	 	 	 	Factor (Age 54)	 	 	 	 	 	 	Immediately (Age 54)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$7,560
	 	 	X	 	 	 	47	%	 	 	=	 	 	$	3,553	 

NOTE: The reduction in allowance takes into account that the allowance to a younger person will
probably be payable for a longer period of time. The factor is calculated by subtracting 6% for
each year between age 60 and 65, 4% for each year between age 55 and 60 and 3% for each year
between age 45 and 55. At age 55 the early retirement factor is 50%. (Interpolation shall be made
to the nearest month.)

FURTHER NOTE: For members enrolled prior to January 1, 2004, the benefit you accrued through
December 31, 2003 will be subject to the Rule of 70 early retirement reduction factors.
Accordingly, if the total of your age and years of vesting service at termination of employment is
at least 70, your early retirement allowance which you accrued prior to January 1, 2004, will be
reduced by 1.5% for each year you are under age 65 when your allowance begins. If your age and
years of vesting service at termination of employment are not equal to or greater than 70, then the
portion of your benefit which you accrued prior to January 1, 2004 shall be reduced by 3% for each
year you are under age 65 when your allowance begins. The portion of your benefit which you accrue
subsequent to December 31, 2003 shall be subject to the early retirement reduction factors
illustrated above.

 

5

 

Early Retirement For Employees Hired On or After January 1, 2004:

If you leave your employer prior to age 65, after having become fully or partially vested (see Page
3), you will be entitled to an early retirement benefit. The retirement allowance payable at age 65
is equal to the vested amount of the normal retirement allowance accrued to your termination date.
Payment may be commenced as early as age 55, in which case the allowance otherwise payable at age
65 is reduced by applying an early retirement factor based on your age when payments begin (see
below). Payment may also be deferred to any time up to your Required Beginning Date, in which case
the retirement allowance payable at age 65 will be increased actuarially.

Suppose, for example, a member terminates employment at age 61 after 20 years of benefit service,
and that his High-3 Average Salary over such a period is $28,000. His annual retirement allowance
commencing at age 65 would be:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Years of	 	 	 	 	 	 	High-3	 	 	 	 	 	 	Regular	 
	 	 	 	 	 	 	Benefit	 	 	 	 	 	 	Average	 	 	 	 	 	 	Annual Allowance	 
	 	 	 	 	 	 	Service	 	 	 	 	 	 	Salary	 	 	 	 	 	 	Payable at Age 65	 
	2.25%
	 	 	X	 	 	20 yrs. (=45%)	 	 	X	 	 	$	28,000	 	 	 	=	 	 	$	12,600	 

If, on the other hand, the member elected to have his retirement allowance commence immediately,
the allowance payable at age 65 would be reduced as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Annual	 	 	 	 	 	Early	 	 	 	 	 	 	Regular Annual	 
	Allowance	 	 	 	 	 	Retirement	 	 	 	 	 	 	Allowance Payable	 
	Payable at Age 65	 	 	 	 	 	Factor (Age 61)	 	 	 	 	 	 	Immediately (Age 61)	 
	 
	 	 	 	 
	$12,600
	 	 	X	 	 	 	76	%	 	 	=	 	 	$	9,576	 

NOTE: The reduction in allowance takes into account that the allowance to a younger person will
probably be payable for a longer period of time. The factor is calculated by subtracting 6% for
each year between age 60 and 65 and 4% for each year between age 55 and 60. At age 55 the early
retirement factor is 50%. (Interpolation shall be made to the nearest month.)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age When	 	 	 	 	 	Age When	 	 	 	 
	Allowance	 	 	 	 	 	Allowance	 	 	 	 
	Begins	 	Factor	 	 	Begins	 	 	Factor	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	55
	 	 	50	%	 	 	60	 	 	 	70	%
	56
	 	 	54	%	 	 	61	 	 	 	76	%
	57
	 	 	58	%	 	 	62	 	 	 	82	%
	58
	 	 	62	%	 	 	63	 	 	 	88	%
	59
	 	 	66	%	 	 	64	 	 	 	94	%
	 
	 	 	 	 	 	 	65	 	 	 	100	%

(Interpolation is made to the nearest month.)

 

6

 

Disability Retirement:

If, after completing one year of membership service or having been credited with five (5) years of
Benefit Service (not counting service during a leave of absence) but before reaching age 65, you
have to stop working because of a disability, you may be entitled to a disability retirement
benefit. First, you must file an application with the Pentegra DB Plan within 13 months after the
date you had to stop working. Second, you must satisfy either Test A or B below:

Test A — Certification by doctors designated by the Pentegra DB Plan that your disability (i)
prevents you from doing the kind of work for which you are fitted or trained, and (ii) is expected
to last at least 12 months from the date you had to stop working or to result in death.

or

Test B — Proof that you are eligible for disability insurance benefits under Title II of the
Federal Social Security Act.

Generally, the annual disability retirement allowance payable immediately, and for as long as you
are disabled, is the higher of (i) an amount equal to the normal retirement allowance accrued to
your termination date, or (ii) 30% of average annual Salary for the five (5) highest paid
consecutive years of Benefit Service (“High-5 Average Salary”). However, it cannot be more than
what your normal retirement allowance would have been if you had stayed in service to age 65.

You may be required to provide evidence as often as annually that you continue to be disabled.

NOTE: Notwithstanding the foregoing, if you are on a medical leave of absence which directly
results in a subsequent disability, you may be entitled to a disability benefit.

 

7

 

Retirement Adjustment Payment:

(Applicable only to those enrolled prior to July 1, 1983)

If you retire after age 55 (whether normal, early or disability retirement), you will be entitled
to a one-time Retirement Adjustment Payment. Please note that under the provisions of the plan, you
are deemed to be retired upon your termination of employment with a deferred vested benefit. The
Retirement Adjustment Payment is a single lump sum equal to three months’ regular retirement
allowance payable when your allowance begins.

To illustrate, the annual allowance upon normal retirement would be calculated as shown on Page 4.
Assume the annual retirement allowance was $9,300, then in addition to such allowance, the Member
would receive a Retirement Adjustment Payment as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Regular	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Retirement	 
	Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Adjustment	 
	Allowance	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Payment	 
	 
	$9,300
	 	 	÷	 	 	 	12	 	 	 	=	 	 	$775 (per month)	 	 	X 	 	3 	 	=	 	 	$	2,325	 

Post-Retirement Increments:

Effective June 1, 2004, as a retiree, other than a disability retiree, who is receiving allowance
payments you will be entitled to a payment of 2% of your annual retirement allowance at the end of
the calendar year in which you attain age 66. This is a cumulative increment so that the following
year, when you are 67, the payment will be 4%, then 6%, then 8%, etc. Such increasing payments will
continue to be made as long as you live. For example:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Incremental	 
	Your	 	Increment	 	 	Annual	 	 	Payment at	 
	Age	 	Rate	 	 	Allowance	 	 	Year End	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	66
	 	 	2	%	 	$	9,300	 	 	$	186	 
	67
	 	 	4	%	 	$	9,300	 	 	$	372	 
	68
	 	 	6	%	 	$	9,300	 	 	$	558	 

If you terminated prior to June 1, 2004, the Post-Retirement Increment is 1% of your annual
retirement allowance at the end of the calendar year in which you attain age 66. Accordingly, the
following year when you are 67, the payment will be 2%, then 3%, then 4%, etc.

Please Note: You always measure your age at the end of the calendar year back to age 65 to
determine your applicable rate.

NOTE: Each Post-Retirement Increment is based on the retirement allowance you actually receive.
Similarly, it would continue in the same manner to your surviving contingent annuitant if you had
elected such an optional form of retirement benefit (see Article VI of the Regulations) based on
the contingent annuitant’s allowance.

 

8

 

Post-Retirement Increments upon attainment of Early Retirement:

FOR EMPLOYEES HIRED PRIOR TO JANUARY 1, 2004: If you are an active member of the Pentegra DB Plan
as adopted by the Federal Home Loan Bank of Des Moines on or after June 1, 2004 and you retire upon
the attainment of your early retirement age (age 45) you will receive a 1% Post-Retirement
Increment commencing at the end of the calendar year following the later of the calendar year in
which you attain age 46 or the calendar year in which you commence receipt of your benefit. The
increment will be increased to 2% for each year following the calendar year in which you attain age
65. For example, suppose you begin to receive your benefit at age 45, your increment would increase
as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Incremental	 
	Your	 	Increment	 	 	Annual	 	 	Payment at	 
	Age	 	Rate	 	 	Allowance	 	 	Year End	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	46
	 	 	1	%	 	$	9,300	 	 	$	93	 
	47
	 	 	2	%	 	$	9,300	 	 	$	186	 
	58
	 	 	13	%	 	$	9,300	 	 	$	1,209	 
	59
	 	 	14	%	 	$	9,300	 	 	$	1,302	 
	66
	 	 	22	%	 	$	9,300	 	 	$	2,046	 
	67
	 	 	24	%	 	$	9,300	 	 	$	2,232	 

Suppose you begin to receive your benefit at age 50, your increment would increase as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Incremental	 
	Your	 	Increment	 	 	Annual	 	 	Payment at	 
	Age	 	Rate	 	 	Allowance	 	 	Year End	 
	 
	51
	 	 	1	%	 	$	9,300	 	 	$	93	 
	52
	 	 	2	%	 	$	9,300	 	 	$	186	 
	63
	 	 	13	%	 	$	9,300	 	 	$	1,209	 
	66
	 	 	17	%	 	$	9,300	 	 	$	1,581	 
	68
	 	 	21	%	 	$	9,300	 	 	$	1,953	 

NOTE: Each Post-Retirement Increment is based on the retirement allowance you actually receive.
Similarly, it would continue in the same manner to your surviving contingent annuitant if you had
elected such an optional form of retirement benefit (see Article VI of the Regulations) based on
the contingent annuitant’s allowance.

 

9

 

Post-Retirement Increments upon attainment of Early Retirement:

FOR EMPLOYEES HIRED ON OR AFTER JANUARY 1, 2004: If you are an active member of the Pentegra DB
Plan as adopted by the Federal Home Loan Bank of Des Moines on or after June 1, 2004 and you retire
upon the attainment of your early retirement age (age 55) you will receive a 1% Post-Retirement
Increment commencing at the end of the calendar year following the later of the calendar year in
which you attain age 56 or the calendar year in which you commence receipt of your benefit. The
increment will be increased to 2% for each year following the calendar year in which you attain age
65. For example, suppose you begin to receive your benefit at age 55, your increment would increase
as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Incremental	 
	Your	 	Increment	 	 	Annual	 	 	Payment at	 
	Age	 	Rate	 	 	Allowance	 	 	Year End	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	56
	 	 	1	%	 	$	9,300	 	 	$	93	 
	57
	 	 	2	%	 	$	9,300	 	 	$	186	 
	65
	 	 	10	%	 	$	9,300	 	 	$	930	 
	67
	 	 	14	%	 	$	9,300	 	 	$	1,302	 
	69
	 	 	28	%	 	$	9,300	 	 	$	2,604	 

Suppose you begin to receive your benefit at age 60, your increment would increase as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Incremental	 
	Your	 	Increment	 	 	Annual	 	 	Payment at	 
	Age	 	Rate	 	 	Allowance	 	 	Year End	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	61
	 	 	1	%	 	$	9,300	 	 	$	93	 
	62
	 	 	2	%	 	$	9,300	 	 	$	186	 
	66
	 	 	7	%	 	$	9,300	 	 	$	651	 
	70
	 	 	15	%	 	$	9,300	 	 	$	1,395	 

NOTE: Each Post-Retirement Increment is based on the retirement allowance you actually receive.
Similarly, it would continue in the same manner to your surviving contingent annuitant if you had
elected such an optional form of retirement benefit (see Article VI of the Regulations) based on
the contingent annuitant’s allowance.

 

10

 

DEATH BENEFIT

In Active Service:

If a vested Member dies in active service, his beneficiary would be entitled to a lump sum death
benefit equal to 100% of the Member’s last 12 months’ Salary, plus an additional 10% of such Salary
for each year of Benefit Service until a maximum of 300% of such Salary is reached for 20 or more
years, plus a refund of his own contributions, if any, with interest.

Example: A Member dies after 15 years of Benefit Service and his last 12 months’ Salary is $32,000.
His beneficiary would get:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Last 12 Months	 	 	 	 	 	 	Lump Sum	 
	 	 	 	 	 	 	Salary	 	 	 	 	 	 	Death Benefit	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	250%
	 	 	X	 	 	$	32,000	 	 	 	=	 	 	$	80,000	 

Either the Member or beneficiary may elect to have his benefit or the retirement death benefit
described below paid in the form of installments over a period of up to 10 years or a lifetime
annuity. (See the Regulations for further explanation.)

If a Member dies after becoming eligible for early retirement, his beneficiary would receive the
higher of (i) the active service death benefit described above, or (ii) the retirement death
benefit described below (as if the Member had retired on the first day of the month in which he
died).

In Retirement:

The regular form of all retirement benefits (normal, early or disability) includes not only a
retirement allowance, but also a lump sum retirement death benefit which is 12 times the annual
retirement allowance less the sum of such allowance payments made before death. Please note that
this death benefit does not apply in the event you elect to receive your benefit under one of the
“Optional Forms of Retirement Benefit” (see Page 9) in lieu of the regular form.

Example: A Member dies two (2) years after retirement. His regular annual retirement allowance was
$10,000. The Member’s death benefit is illustrated below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Annual	 	 	 	 	 	 	 	 	 	 	 	 	 	Initial Death	 	 	 	 	 	 	Allowance	 	 	 	 	 	 	 	 
	Retirement	 	 	 	 	 	 	 	 	 	 	 	 	 	Benefit At	 	 	 	 	 	 	Payments	 	 	 	 	 	 	Lump Sum	 
	Allowance	 	 	 	 	 	 	 	 	 	 	 	 	 	Retirement	 	 	 	 	 	 	For 2 Years	 	 	 	 	 	 	Death Benefit	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$10,000
	 	 	X	 	 	 	12	 	 	 	=	 	 	$	120,000	 	 	less	 	$	20,000	 	 	 	=	 	 	$	100,000	 

All retirement allowances continue for life, even though under the regular form there would be no
death benefit payable after 12 years.

NOTE: If a retiree should die before his allowance payments start (as in the case of an early or
normal retiree with deferred allowance), the death benefit would be 12 times the regular annual
allowance which would have been payable had his allowance commenced as of the first day of the
month in which he died.

FURTHER NOTE: Where death occurs prior to a Member’s benefit commencement, in no event shall the
death benefit be less than the amount payable under the lump sum option (refer to Page 10).

 

11

 

OPTIONAL FORMS OF RETIREMENT BENEFIT

At any time before your retirement allowance begins, you may elect to convert your regular
retirement allowance and death benefit (described previously) to an optional form of benefit. The
amount of each Option in which you are interested will be determined and communicated to you at
retirement.

These Options are:

	1 —	 	A higher allowance payable for life and no further benefit upon death.
	 
	2 —	 	A joint and survivor allowance which would continue at the rate of 100% to your contingent
annuitant if he or she survives you. If both you and your contingent annuitant die before 120
monthly installments have been paid, the commuted value of such unpaid installments would be
paid in a lump sum to your beneficiary.
	 
	3 —	 	 A joint and survivor allowance which would continue at the rate of 50% to your contingent
annuitant if he or she survives you.
	 
	4 —	 	A revised retirement allowance during your life with some other benefit payable upon your
death, subject to certain limitations and approval of the Pentegra DB Plan.
	 
	5 —	 	A single lump sum settlement in lieu of any monthly allowance and death benefit. This
Option may be elected if you retire after reaching age 45, or if you are an early retiree and
defer commencement of your benefit until such age. The election of this Option requires the
written consent of your spouse, if any. Please note that benefits accrued on or after January
1, 2004 shall not be available in the form of a single lump sum.
	 
	6 —	 	A partial lump sum settlement equal to 25%, 50% or 75% of the total benefit and a monthly
allowance for the remainder of the benefit which must commence at the time of the partial lump
sum settlement. This Option may be elected if you retire after reaching age 45 or if you are
an early retiree and defer commencement of your benefit until such age. The election of this
Option requires written consent of your spouse, if any. Please note that benefits accrued on
or after January 1, 2004 shall not be available in the form of a single lump sum.

NOTE: The death benefit of a deceased retiree or Member who was eligible for early retirement, who
(i) is survived by a spouse, and (ii) has not made any election with respect to his death benefit
or retirement benefit, will be paid to the surviving spouse in an amount equal to a lifetime
annuity of at least 50% of the retiree’s allowance had he elected Option 3 above. This benefit may
be paid in the form of a lump sum or in installments of equivalent value.

FURTHER NOTE: Effective January 1, 2004, you may not take the portion of your benefit which you
accrued on or after January 1, 2004 in the form of a single lump sum settlement or a partial lump
sum settlement. The single lump sum settlement and the partial lump sum settlement options are not
available to members hired on or after January 1, 2004.

FURTHER NOTE: Where death occurs prior to a member’s benefit commencement, in no event shall the
death benefit be less than the amount that would have been payable if your employer provided a lump
sum payment option and you elected to receive your accrued benefit in the form of a lump sum.

 

12

 

PAYING FOR YOUR BENEFITS

All contributions made to the Plan on your behalf are actuarially determined. Your employer has
elected to pay the full cost of your benefits. You, as an employee, do not contribute while on the
“non-contributory basis.”

Special Note to any Member who has “Accumulated Contributions” with the Pentegra DB Plan:

If you made personal contributions to the Pentegra DB Plan while your present or previous employer
was on the contributory basis and if those contributions have not been refunded to you, you are
fully vested in the value of such contributions plus interest (“accumulated contributions”). This
means that if you terminate employment, you may request a refund of such accumulated contributions.
If you terminate before becoming fully or partially vested in a retirement benefit, the refund will
be in lieu of all other benefits. If you terminate after becoming fully or partially vested in an
early or normal retirement benefit (refer to Page 3 describing Vesting), the refund will be in lieu
of that portion of your retirement benefit which is attributable to your accumulated contributions.
The remaining portion, attributable to your employer’s contributions, will be payable as a reduced
retirement benefit.

Your accumulated contributions will be shown on your Personal Annual Statement (see below).

YOUR PERSONAL ANNUAL STATEMENT

(Keeping You Informed)

Every year the Pentegra DB Plan prepares a Personal Annual Statement for each Member. This
statement shows as of each January 1 your periods of accrued Vesting Service and Benefit Service
and the status of your retirement and death benefits. These statements are sent to your employer
for distribution in or about the following March.

 

13

 

REINSTATEMENT OF MEMBERSHIP AND SERVICE

If you leave employment before becoming vested (see Page 3), but become reemployed by the same or
another employer participating in this Program, you will be reenrolled immediately.

If the period of your break in service (i.e., the period between your termination and reemployment)
was not longer than 60 months, your previous Vesting Service will be reinstated upon your
reemployment. If your break in service was not longer than 12 consecutive months, your previous
Vesting Service will be reinstated upon your reemployment. In addition, you will also receive
Vesting Service credit for the period of your break. If the period of your break in service
exceeded 60 months but was not longer than the period of your Vesting Service before becoming
vested, your previous Vesting Service will be reinstated upon your reemployment. If the period of
your break in service was equal to or exceeded the greater of 60 consecutive months or your
previous Vesting Service, upon reemployment you will be treated as a new employee upon
reemployment. In other words, no prior Vesting Service will be credited to you.

The following chart should assist you in understanding your options:

	 	 	 	 	 
	Length of Break in Service for a	 	Vesting Service Prior to the	 	 
	Non-Vested Member	 	Break in Service	 	Period of the Break in Service
	 
	 	 	 	 
	Less than 60 consecutive months

	 	Will be reinstated upon a
Member’s reemployment.
	 	Credit will not be given for the
period of break in service.
	 
	 	 	 	 
	Less than 12 consecutive months

	 	Will be reinstated upon a
Member’s reemployment.
	 	Credit will be given for the period
of the break in service.
	 
	 	 	 	 
	More than 60 consecutive
months, but not more than total
Vesting Service up to the break in
service

	 	Will be reinstated upon a
Member’s reemployment.
	 	Credit will not be given for the
period of the break in service.
	 
	 	 	 	 
	More than the greater of:

	 	Will NOT be reinstated upon a
Member’s reemployment.
	 	Credit will not be given for the
period of break in service.
	 
	 	 	 	 
	a) 60 consecutive months; or
	 	 	 	 
	 
	 	 	 	 
	b) Total Vesting Service prior to
the break in service

	 	 	 	Upon reemployment, the Member
will be considered a new
employee.

Upon reinstatement of your Vesting Service, your previous Benefit Service will also be reinstated
if you repay within five years of your reemployment or the date you incurred a break in service of
at least 60 months, any accumulated contributions which were refunded to you with interest to the
date of such repayment.

For example, if you terminated service and had completed one year (i.e., 12 months) of Vesting
Service, you would not be vested in a retirement benefit and would be entitled only to a refund of
your own contributions, if any, plus interest. However, if you returned to service with any
participating employer within 60 months, your previous Vesting Service would be reinstated and your
previous Benefit Service would also be reinstated if you repaid with interest any contributions
that had been refunded to you.

If you leave employment with a vested benefit, commence receiving benefits, and then are reemployed
as an active Member by a participating employer, you will be reenrolled immediately and given the
option, within six months following reemployment as an active Member, to make an
irrevocable election to continue to receive the payment of your Retirement Allowance or to suspend
the payment until subsequent termination of service. If no election is made, the payment of your
Retirement Allowance will continue in the form of payment previously chosen. Upon your subsequent
retirement, your retirement benefit will be based upon your Benefit Service before and after your
prior retirement and your Salary during that service, but will be actuarially reduced for any such
benefit already paid.

 

14

 

LEAVES OF ABSENCE

There are four types of approved leaves of absence which may be granted on a uniform basis by your
employer while you are a Plan Member.

	 	 	 
	Type 1

	 	Non-military leave granted to a Plan Member for up to one year during which all
contributions continue. Both Vesting Service and Benefit Service continue to accrue
during this leave.
	 
	 	 
	Type 1-A

	 	Military leave granted to a Plan Member who is subject to qualified military service
pursuant to an involuntary military call-up in the Reserves of the U.S. Armed Services.
During this leave, contributions continue to be made. In addition, Vesting Service and
Benefit Service continue to accrue. To qualify for benefits under Type 1-A, a Member
must return to the service of his employer within 90 days of his discharge from military
service.
	 
	 	 
	Type 2

	 	Non-military granted to a Plan Member for up to one year during which all
contributions are discontinued. During this leave, Vesting Service continues to
accrue, but Benefit Service does not. The accrual of Benefit Service will resume when
your leave terminates and your contributions resume.
	 
	 	 
	Type 3

	 	Military leave to a Plan Member during which all contributions are discontinued.
During this leave, Vesting Service continues to accrue, but Benefit Service generally
does not. The accrual of Benefit Service will resume when your leave terminates and
your contributions resume.

The following Table will assist you in understanding the Plan’s Leave of Absence provisions as
described above.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Vesting	 	Benefit
	Type of Leave	 	Duration	 	Contributions	 	Service	 	Service
	 
	 	 	 	 	 	 	 	 
	NON-MILITARY 

LEAVE:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	1

	 	Up to one year
	 	Will continue to
be made
	 	Will continue to
accrue
	 	Will continue to
accrue
	 
	 	 	 	 	 	 	 	 
	2

	 	Up to one year
	 	Will be

discontinued
	 	Will continue to
accrue
	 	Will not
continue to
accrue
	 
	 	 	 	 	 	 	 	 
	MILITARY LEAVE:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	1-A

	 	Can vary
	 	Will continue to
be made
	 	Will continue to
accrue
	 	Will continue to
accrue
	 
	 	 	 	 	 	 	 	 
	3

	 	Can vary
	 	Will be

discontinued
	 	Will continue to
accrue
	 	Will not
continue to
accrue

 

15

 

LIMITATIONS ON BENEFITS

	•	 	No benefit is payable by the Pentegra DB Plan unless the required contributions and application
forms have been received by the Plan.
	 
	•	 	Internal Revenue Service (IRS) requirements impose certain limitations on the amount of benefits
that may be paid under this and other qualified retirement plans. (See Article XI of the Pentegra
DB Plan Regulations.) These limitations normally affect only the highest-paid employees and are
subject to adjustment in accordance with IRS regulations. The dollar limit on annual benefits
payable from a defined benefit plan is $195,000 in 2009, actuarially reduced for benefits
commencing before age 62 and increased for benefits commencing after age 65. If an employee has
less than 10 years of Vesting Service or is under age 65 when he retires, or if his employer has
two (2) plans in effect, his benefits are subject to further restrictions.
	 
	•	 	If an employer should withdraw from the Pentegra DB Plan (see Article XII of the Regulations),
and establish a comparable defined benefit plan as a qualified successor plan, all liabilities of
such employer under the Pentegra DB Plan must be transferred to the qualified successor plan. If an
employer should withdraw from the Pentegra DB Plan without establishing a qualified successor Plan,
all liabilities of the employer under the Pentegra DB Plan must be annuitized through an insurance
company selected by the Pentegra DB Plan. Limits may be imposed upon the benefits of certain
higher-paid employees if an employer withdraws from the Pentegra DB Plan within 10 years after the
later of its commencement date or the effective date of any change which increases benefits. (See
Article XI, Section 1(c) of the Regulations).
	 
	•	 	Amounts payable by the Pentegra DB Plan may not be assigned, and if any person entitled to a
payment attempts to assign it, his interest in the amount payable may be terminated and held for
the benefit of that person or his dependents.
	 
	•	 	Your employer’s continued participation is subject to IRS approval and any requirements it may
impose.

 

16

 

INSURANCE OF BENEFITS

Benefits under the Plan are insured by the Pension Benefit Guaranty Corporation (PBGC) if the
Pentegra DB Plan terminates. Generally, the PBGC guarantees most vested normal retirement age
benefits, early retirement benefits, and certain disability and survivor pensions. However, the
PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit
protection is subject to certain limitations.

The PBGC guarantees vested benefits at the level in effect on the date of Plan termination.
However, if prior to the termination of a plan, the employer has been participating for less than
five (5) years, or if benefits have been increased within the past five years, the whole amount of
the vested benefits or the vested increase may not be guaranteed. In addition, there is a ceiling
on the amount of monthly benefit the PBGC guarantees, which is adjusted periodically. A withdrawal
of your employer from participation in the Pentegra DB Plan is not a plan termination under this
paragraph, and only those benefits provided under Article XII of the Pentegra DB Plan Regulations
are payable in the event of such a withdrawal.

For more information on the PBGC insurance protection and its limitations, ask the Plan
Administrator or the PBGC. Inquiries to the PBGC should be addressed to 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/TTD 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.

DISPUTED CLAIMS PROCEDURE

If you disagree with the Pentegra DB Plan with respect to any benefit to which you feel you are
entitled, you should make a written claim to the President of the Pentegra DB Plan. If your claim
is denied, you will receive written notice from him explaining the reason for the denial within 90
days after the claim is filed.

The President’s decision will be final unless you appeal such decision in writing to the Retirement
Committee of the Board of Directors of the Pentegra DB Plan at 108 Corporate Park Drive, White
Plains, New York 10604, within 60 days after receiving the notice of denial. The written appeal
should contain all information you wish to be considered. The Retirement Committee will review the
claim within 60 days after the appeal is made. Its decision will be in writing, and will include
the reason for such decision. The Committee’s decision will be final.

QUALIFIED DOMESTIC RELATIONS ORDERS (“QDROS”)

A QDRO is a judgment, decree or order which has been determined by the Pentegra DB Plan, in
accordance with the procedures established under the Pentegra DB Plan’s Regulations, to constitute
a QDRO under the Internal Revenue Code.

To obtain copies of the Pentegra DB Plan’s Model QDRO and QDRO Procedures free of charge, please
contact the Plan Administrator. (Please refer to the “Other Plan Information” section of this
Summary to obtain the Plan Administrator’s address and telephone number).

 

17

 

STATEMENT OF ERISA RIGHTS

As a Member in the Comprehensive Retirement Program, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that
all Members will be entitled to:

	 	•	 	Examine, without charge, at the Plan Administrator’s office or at other specified locations all
plan documents, and copies of all documents filed by the Plan Administrator with the U.S.
Department of Labor such as detailed annual reports and plan descriptions.
	 
	 	•	 	Obtain copies of all plan documents and other plan information upon written request to the Plan
Administrator. The 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 Member with a copy of this summary annual report.
	 
	 	•	 	Obtain, without charge, a statement telling you whether you have a vested right to receive a
pension at normal retirement (age 65) and if so, what your benefits would be at that time if you
stop working under the Plan now. If you do not have a vested right to a pension, the statement will
tell you how many more years you have to work to get such a right. This type of statement is
provided automatically to each Member once a year (see “Your Personal
Annual Statement” as described earlier).

In addition to creating rights for Plan Members, ERISA imposes duties upon the people who are
responsible for the operation of the Plan. The people who operate your Plan, called “fiduciaries,”
have a duty to do so prudently and in the interest of you and other Plan Members, retirees and
beneficiaries. No one, including your employer, may fire you or otherwise discriminate against you
in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA.
If your claim for a pension benefit is denied in whole or in part you will receive a written
explanation of the reason for the denial. As already explained, you also have the right to have
your claim reconsidered.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request
materials from the Plan Administrator and do not receive them within 30 days, you may file suit in
a federal court. In such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive them, unless such materials were not sent
for reasons beyond the Administrator’s control. If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or federal court.

In addition, if you disagree with the Plan Administrator’s decision (or lack thereof) concerning
the qualified status of a domestic relations order subsequent to the 18 month period prescribed in
Section 414(p) of the Code, after you have complied with the remedies prescribed in the Pentegra DB
Plan’s QDRO Procedures and the Disputed Claims Procedure outlined in this Summary Plan Description,
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,
after you have complied with the Disputed Claims Procedure outlined in this Summary Plan
Description, you may file suit in a federal court. The court will decide who should pay court costs
and legal fees. If you are successful, the court may order the person you have sued to pay these
costs and fees. If you lose, the court may order you to pay these costs and fees (for example, if
it finds your claim is frivolous).

If you have any questions about your Plan, you should contact the Plan Administrator. If you have
any questions about this statement or your rights under ERISA, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory or 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.

This Statement of ERISA Rights is required by federal law and regulation.

 

18

 

OTHER PLAN INFORMATION

Employer:

Federal Home Loan Bank of Des Moines 

801 Walnut Street, Ste 200 

Skywall Level 

Des Moines, IA 50309-3501

Telephone Number: 515-281-1000

Plan Sponsor:

The Comprehensive Retirement Program is sponsored by the —

Pentegra Defined Benefit Plan for Financial Institutions

108 Corporate Park Drive 
White Plains, New York 10604

Telephone Number: 914-694-1300

Employer Identification Number — 13-5645888

Plan Number — 001

Plan Year End — June 30

Plan Administrator:

The Plan Administrator is the President of the Pentegra DB Plan, whose place of business is the
office of the Pentegra Defined Benefit Plan for Financial Institutions. The President is also the
person designated as agent for service of legal process. Service of legal process may also be made
upon a Plan Trustee.

Board of Directors:

The composition of the Board changes from year to year, but you may refer to the most recent Annual
Report (which is furnished to your employer) for a current listing of Directors and their places of
business.

Participating Employers:

Upon receipt of a written request for information regarding whether a particular employer is a
Member of this multiple employer arrangement, we will provide you with a statement as to whether
such employer is a Member and, if so, the employer’s address.

 

19

 

	 	 	 	 	 
	

	 	Our difference is your advantage
	 	Pentegra Retirement Services 

108 Corporate Park Drive 

White Plains, NY 10604 

(800) 872-3473 

www.pentegra.com

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