Document:

Exhibit 10.5

 

Exhibit 10.5

Federal Home Loan Bank of Pittsburgh

Supplemental Executive Retirement Plan

 

 

Table of Contents

	 	 	 	 	 	 	 
	Article

	 	 	 	Page

	

	 	Preamble
	 	 	1	 
	 
	 	 	 	 	 	 
	I.  

	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 
	II. 

	 	Participation and Vesting
	 	 	3	 
	 
	 	 	 	 	 	 
	III.

	 	Amount and Payment of Supplemental Benefits
	 	 	4	 
	 
	 	 	 	 	 	 
	IV.

	 	Administration of the Plan
	 	 	6	 
	 
	 	 	 	 	 	 
	V. 

	 	General Provisions
	 	 	8	 

 

 

Preamble

The Federal Home Loan Bank of Pittsburgh (the “Bank”) participates in the Financial Institutions
Retirement Fund (“Retirement Fund”), a defined benefit retirement plan qualified under the Internal
Revenue Code (the “Code”) for employees of the Federal Home Loan Bank of Pittsburgh. The Retirement
Fund provides benefits to employees based upon age at retirement, years of service, and high three
year average salary.

However, as a result of the limitations imposed upon the aggregate amount of benefits that a
Participant may receive from the Retirement Fund under Section 415 and other sections of the Code,
such limitations causing a reduction in the benefits otherwise provided to certain of the Bank’s
executives, the Bank has adopted this non-qualified, unfunded Supplemental Executive Retirement
Plan (“Plan”). The purpose of this Plan is to allow certain executives whose benefits under the
Retirement Fund would otherwise be significantly restricted by the terms of the Retirement Fund
itself or the Code to receive benefits under the Plan in order to make up the benefits lost under
the Retirement Fund.

1

 

Article I

Definitions

	1.1  	“Bank” means the Federal Home Loan Bank of Pittsburgh.
	 
	1.2  	“Board” or “Board of Directors” means the Board of Directors of the Federal Home Loan Bank of
Pittsburgh.
	 
	1.3  	“FIRF Beneficiary” means the person or persons designated by a Participant under the provisions
of the Retirement Fund to receive his benefits in the event of his death prior to receipt of all
benefits hereunder.
	 
	1.4  	“SERP Beneficiary” means the person or persons designated by a Participant under the provisions
of the Supplemental Executive Retirement Plan to receive his benefits in the event of his death
prior to receipt of all benefits hereunder.
	 
	1.5  	“Compensation” means the annual base salary plus incentive compensation (excluding any long
term incentive compensation) which would be payable to a Participant for services rendered to the
Bank (before reductions or deductions for any reason) on account of his employment with the Bank.
	 
	1.6  	“Effective Date” means January 1, 1991.
	 
	1.7  	“Human Resources Committee” means the Human Resources Committee of the Board of Directors.
	 
	1.8  	“Participant” means an executive who has been recommended by the Bank President, and confirmed
by the Board, as eligible to participate in the Plan.
	 
	1.9  	“Plan Administrator” means an officer(s) of the Bank who has been appointed by the Human
Resources Committee of the Board as set forth in Section 4.1 of the Plan.
	 
	1.10  	“Retiree” means a Participant who has retired under the terms of the
Retirement Fund on a normal retirement benefit, an early retirement benefit, or a total and
permanent incapacity benefit.
	 
	1.11  	“Supplemental Thrift Plan” means the Federal Home Loan Bank of Pittsburgh Supplemental Thrift
Plan.
	 
	1.12  	“Supplemental Benefits” means the benefits under this Plan.

2

 

Article II

Participation and Vesting

	2.1  	Participation. An executive shall become eligible for Plan participation on the later of
the first day of the calendar month coincident with or next following the date participation is
approved by the Board or the Effective Date. Once selected as a Participant, a Participant shall
continue to be a Participant until the Board determines otherwise. No executive shall have the
right to be continued as a Participant in the Plan. Upon designation as a Participant, the
Participant will be given a copy of the Plan.
	 
	2.2  	Termination of Participation. A Participant’s eligibility for Supplemental Benefits under the
Plan, if any, shall terminate if his employment with the Bank terminates; unless, at that time the
Participant is entitled to a vested benefit from the Retirement Fund. A Participant’s Supplemental
Benefits under this Plan may be subject to Forfeiture for Cause, at any time, as defined in Section
5.6.
	 
	2.3  	Vesting of Supplemental Benefits. Supplemental Benefits in this Plan shall vest when benefits
vest under the Retirement Fund subject to the Forfeiture for Cause as defined in Section 5.6.

3

 

Article III

Amount and Payment of Supplemental Benefits

	3.1  	Obligation to Pay the Supplemental Benefits. The Supplemental Benefits under this Plan
shall be payable by the Bank only with respect to Retirees who die, or who terminate with vested
benefits from the Retirement Fund. Consistent with Section 5.2, such Supplemental Benefits shall be
payable only from the general assets of the Bank.
	 
	3.2  	Amount of Supplemental Benefits. The amount, if any, of the annual Supplemental Benefits shall
be equal to the excess of (a) minus (b), where:

	 	(a)  	is the annual benefit that would be payable as calculated by the Retirement Fund (for
services to the Bank) on the basis of the form of payment elected under the Retirement Fund
to, or on account of the Participant in the Retirement Fund, if the provisions of the
Retirement Fund were administered:

	 	(i)  	without regard to the limitations imposed by Section 401(a)(17) and Section 415
of the Internal Revenue Code;
	 
	 	(ii)  	with benefit service calculated from date of hire with the Bank;
	 
	 	(iii)  	with restoration of Compensation reduced as a result of the Participant’s deferral of such Compensation under the terms of the
Supplemental Thrift Plan; and
	 
	 	(iv)  	using the Compensation definition in this Plan.

	 	(b)  	is the annual benefit as calculated by the Retirement Fund (for services to the Bank),
on the basis of the form of payment elected under the Retirement Fund, payable to or on
account of the Participant in the Retirement Fund.

	3.3  	Form and Timing of Payment of Supplemental Benefits. If a Participant has elected to
participate in the Bank’s Split-Dollar Life Insurance Program (by executing an applicable
Split-Dollar Agreement with the Bank) and has filed a valid Advance CSV Election (as defined by the
Split-Dollar Agreement), then the Supplemental Benefits payable under this Plan shall be payable at
such time and in such form as indicated on the Advance CSV Election.
	 
	   	If a Participant has not elected to participate in the Split Dollar Life Insurance Program
or has failed to file a valid Advance CSV Election, then a Participant must file a written
election with the Plan Administrator indicating the beginning payment date, and the form of
payment of Supplemental Benefits under this Plan; provided, however, that any election made
within one year of the first day of the calendar year in which the Participant would become
eligible for Supplemental Benefits under this Plan shall not be effective, and the election
in

4

 

effect immediately prior to the election(s) made within such one year period shall
be deemed to be the election of the Participant. If a Participant fails for any reason to
have a valid and effective written election, Supplemental Benefits under this Plan shall
begin to be paid on the first of the month following the later of the month in which the
Participant retires or attains age 65 and shall be paid in the form of a lump sum payment.
Payment of Supplemental Benefits under this Plan shall begin no earlier than the time
provided for the payment of benefits under the Retirement Fund. The available form of
payment for the Supplemental Benefits payable under this Plan shall be the same as the
forms of payment under the Retirement Fund, except that in the event an annuity option is
selected for payment of the Supplemental Benefits, such annuity payments will be made
annually.

	3.4  	Death Benefit. In the event of the death of a Participant while in active service, but prior to
becoming a Retiree, the death benefit will equal the excess of (a) minus (b) where:

	 	(a)  	is the death benefit (as calculated by the Retirement Fund) that would otherwise be
payable to the FIRF Beneficiary under the Retirement Fund, if the provisions of the
Retirement Fund were (i) administered without regard to the limitations imposed by Sections
401(a)(17) and 415 of the IRC and (ii) calculated from the date of hire. For purposes of
determining the annual benefit under this subsection (a), (i) any deferrals made by or on
account of the Participant to the Supplemental Thrift Plan are to be included as
Compensation and (ii) Compensation shall be defined as under this Plan.
	 
	 	(b)  	is the death benefit, as calculated by the Retirement Fund.

	3.5  	Restoration of Employment. If a Retiree is restored to employment with the Bank, the payments
under the Plan shall be discontinued. Upon subsequent retirement from employment with the Bank, the
Participant’s Supplemental Benefits under the Plan shall be recomputed in the manner of the
applicable provisions of this Plan and the Retirement Fund, and shall again become payable to such
Participant in accordance with the provisions of the Plan, but be reduced by the amounts already
paid to the Participant under the Plan.

5

 

Article IV

Administration of the Plan

	4.1  	Human Resources Committee. The Board has delegated to the Human
Resources Committee authority over, and responsibility for, the interpretation and
administration of the Plan; except that, the power to determine eligibility for
participation in the Plan pursuant to Section 2.1, is reserved to the Board. The Human
Resources Committee shall interpret and construe the Plan and have the responsibility to
ensure that its provisions are carried out. The Human Resources Committee shall exercise
such power and responsibilities in its sole and absolute discretion. The Human Resources
Committee shall designate an officer(s) of the Bank to act as administrator of the
operations of the Plan.
	 
	4.2  	Plan Administrator. The Plan Administrator shall:

	 	•  	act as the point of contact for submission of claims for Supplemental Benefits under the
Plan;
	 
	 	•  	calculate the Supplemental Benefits due under the Plan or arrange for the calculation of
Supplemental Benefits;
	 
	 	•  	inform Participants of the terms of the Plan and respond to their questions regarding
the Plan;
	 
	 	•  	review and process claims for the payment of Supplemental Benefits under the Plan;
	 
	 	•  	provide necessary reporting to Bank management, Participants, the Human Resources
Committee, the Board, and others, as necessary; and
	 
	 	•  	take such other action as required to perform the tasks listed hereunder or otherwise
administer the terms of the Plan. In fulfilling the responsibilities in this section the
Plan Administrator may use other Bank staff, other agents or engage contractors.

	4.3  	Claims Procedure. All claims for Supplemental Benefits shall be in writing and shall be filed
with the Plan Administrator. If the Plan Administrator wholly or partially denies a Participant’s
or SERP Beneficiary’s claim for Supplemental Benefits hereunder, the Plan Administrator shall,
within 90 days after the Plan’s receipt of the claim, give the claimant written notice setting
forth in understandable language:

	 	(i)  	the specific reason(s) for the denial;
	 
	 	(ii)  	specific reference to pertinent Plan provisions on which the denial is based;
	 
	 	(iii)  	a description of any additional material or information which must be

6

 

submitted to perfect the claim, as well as an explanation of why such material
or information is necessary; and

	 	(iv)  	an explanation of the Plan’s review procedure.

The claimant shall have 60 days after the day on which such written notice of denial is handed or
mailed to him, in which to apply (in person or by authorized representative), to the Human
Resources Committee, in writing, for a full and fair review of the denial of his claim. In
connection with such review, the claimant (or his representative) shall be afforded reasonable
opportunity to review pertinent documents, and may submit issues and comments in writing.

The Human Resources Committee shall issue its decision on review promptly and within 60 days after
the Plan’s receipt of the request for review, unless special circumstances require an extension to
not later than 120 days after receipt of the request for review. (Written notice of any such
extension shall be furnished to the claimant before the commencement of such extension.) The
decision shall be in writing and shall be in understandable language setting forth specific
reasons for the decision and specific references to pertinent Plan provisions on which the
decision is based.

7

 

Article V

General Provisions

	5.1  	Rights to Employment. The establishment of the Plan, and selection of an executive for
inclusion as a Participant in the Plan, shall not be construed as conferring any legal rights upon
any Participant or other person for the continuation of employment, nor shall it interfere with the
rights of the Bank to discharge any Participant and to treat him without regard to the effect such
treatment might have upon him as a Participant in the Plan.
	 
	5.2  	Source of Funding—Participant as General Creditor. The Bank shall not be required to establish
any form of trust or funded account for the purpose of providing the Supplemental Benefits under
this Plan. The Bank, in its sole discretion, may choose to establish funding arrangements with
respect to the Plan on such terms and conditions as the Bank deems appropriate; provided, however,
that the assets of the Bank held pursuant to any such arrangement shall remain subject to the
claims of the Bank’s general creditors. Any Participant who may have or claim any interest in or
right to any Supplemental Benefits payable hereunder, shall rely solely upon the unsecured promise
of the Bank as set forth herein, for the payment of the claim. Nothing herein contained should be
construed to give to or vest in any Participant, now or at any time in the future, any right,
title, interest or claim in or to any specific asset, fund, reserve, account or property of any
kind whatever owned by the Bank, or in which the Bank may have any right, title or interest, now or
at any time in the future. The Plan is not intended to be a qualified plan within the meaning of
Section 401(a) of the Internal Revenue Code and the Bank shall not be required to qualify the Plan
under the Internal Revenue Code.
	 
	5.3  	Incapacity. In the event that the Human Resources Committee shall find that a Participant is
unable to care for his affairs because of illness or accident, the Human Resources Committee may
direct that any Supplemental Benefits payment due him, unless claim shall have been made therefore
by a duly appointed legal representative, be paid to his spouse, a child, a parent or other blood
relative, or to a person with whom he resides, and any such payment so made shall be a complete
discharge of the liabilities of the Plan therefore.
	 
	5.4  	Taxes. The Bank shall have the right to deduct from each Supplemental Benefits payment to be
made under the Plan any required withholding taxes and shall withhold or cause to be withheld from
all payments or accruals of Supplemental Benefits under the Plan (if applicable), all federal,
state or local taxes required to be withheld by law. The Participant shall be liable for the
payment of all taxes on the Supplemental Benefits under the Plan that are the Participant’s
responsibility under the laws establishing such taxes.
	 
	5.5  	Alienation of Supplemental Benefits under the Plan. Supplemental Benefits payable under this
Plan shall not be subject in any manner to anticipation,

8

 

alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether
voluntary or involuntary, including any such liability which is for alimony or other
payments for the support of a spouse or former spouse, or for any other relative of the
Participant, prior to actually being received by the person entitled to the Supplemental
Benefits under the terms of the Plan, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void; nor shall any such
distribution or payment be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such distribution or payment.
If any Participant or SERP Beneficiary is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any such distribution or
payment voluntarily or involuntarily, the Bank, in its discretion, may hold or cause to be
held or applied such distribution or payment or any part thereof to or for the benefit of
such Participant or SERP Beneficiary in such manner as the Bank shall direct.

	5.6  	Forfeiture for Cause. The Supplemental Benefits otherwise payable under the Plan to a
Participant may be subject to forfeiture for cause at any time. “Cause” shall mean:

	 	(i)  	the perpetration by a Participant of a defalcation involving the Bank or any affiliate;
	 
	 	(ii)  	willful, reckless or grossly negligent conduct of a Participant entailing a
substantial violation of any material provision of the laws, rules, regulations or orders
of any governmental agency applicable to the Bank or an affiliate;
	 
	 	(iii)  	the repeated and deliberate failure by a Participant to comply with reasonable
policies or directives of the Board; or
	 
	 	(iv)  	the breach by a Participant of a noncompetitive covenant or agreement with the Bank or
affiliate.
	 
	 	Whether the facts in any case amount to “Cause” shall be determined by the Board of
Directors.

	5.7  	Compliance with Laws. The provisions of the Plan shall be construed, administered and governed
under the laws of the United States and, to the extent they defer to state law, the laws of the
Commonwealth of Pennsylvania.
Whenever any words are used herein in the masculine gender, they shall be construed as
though they were also used in the feminine gender in all cases where they would so apply,
and whenever any words are used herein in the singular form, they shall be construed as
though they were also used in the plural form in all cases where they would so apply.
Titles of Articles and Sections hereof are for convenience of reference only and are not to
be taken into account in construing the provisions of this Plan. In case any provision of
the Plan shall be held illegal or invalid for any reason, said illegality or invalidity
shall not affect the remaining parts of the Plan, but the Plan shall be construed and
enforced as if said illegal and invalid provision had never been inserted

9

 

herein.

	5.8  	Amendment and Termination. The Bank specifically reserves the right, in the sole and unfettered
discretion of its Board, at any time, to amend, in whole or in part, any or all of the provisions
of the Plan and to terminate the Plan in whole or in part; provided, however, that no such
amendment or termination shall reduce or eliminate the rights of a Participant accrued hereunder to
the date of such amendment or termination.
	 
	5.9  	Binding on Successors. The Plan shall be binding upon and inure to the benefit of the Bank and
its successors and assigns. The Plan shall also be binding upon and inure to the benefit of any
successor 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 organization which assumes the Plan
and all obligations of the Bank hereunder. The Bank agrees that it will make appropriate provision
for the preservation of Participants’ rights under the Plan in any agreement or plan which it may
enter into to effect any merger, consolidation, reorganization or transfer of assets. Upon such a
merger, consolidation, reorganization, or transfer of assets and assumption of Plan obligations of
the Bank, the term “Bank” shall refer to such other organization and the Plan shall continue in
full force and effect.

10Exhibit 10.6

 

EXHIBIT 10.6

DIRECTORS’ FEE POLICY

2005

GENERAL

Section 918.2 of the Rules and Regulations of the Federal Housing Finance Board requires the Board
of Directors to adopt a written policy to provide for the payment of reasonable compensation to
Bank Directors for the performance of their duties as members of the Board of Directors. Pursuant
to that regulation, this Directors’ Fee Policy (“Policy”) sets forth the activities and functions
for which attendance is necessary and appropriate and may be compensated, and sets forth the
methodology for determining the amount of compensation to be paid. This Policy shall be reviewed
annually by the Governance Committee.

TOTAL COMPENSATION AND STATUTORY LIMITS

In no event shall the compensation paid to Directors exceed the limits set forth in the Federal
Home Loan Bank Act, as adjusted by the Federal Housing Finance Board to reflect the percentage
increase in the preceding year’s Consumer Price Index. The statutory limits for 2005 are $28,364
for the Chair, $22,692 for the Vice Chair, and $17,019 for each of the other directors.

BOARD MEETING FEES

In order to compensate Directors for their time while serving as Directors, each Director that
attends a meeting of the Board of Directors (including participating by telephone) shall be paid a
Board Meeting Attendance Fee. The amount of the Board Meeting Attendance Fee varies depending on
the role served at the meeting. The following Board Meeting Attendance Fees shall be paid to
Directors in attendance at Board of Director’s meetings (including telephonic Board meetings):

	 	 	 	 	 
	Chairman

	 	$	1,500	 
	Vice Chair

	 	$	1,250	 
	All other Directors

	 	$	1,000	 

In the absence of the Chairman, the Acting Chairman, whether it be the Vice Chairman or Chairman
Pro Tem, shall receive the Chairman Board Meeting Attendance Fee. Board Meeting Attendance Fees
are paid per meeting day.

 

 

STANDING COMMITTEE MEETING FEES

In order to compensate Directors for their time while serving as Directors, each Director that
attends a Standing Committee meeting (including participating by telephone) shall be paid a
Standing Committee Meeting Attendance Fee. The amount of the Standing Committee Meeting Attendance
Fee does not vary among Directors in attendance at the meeting. The following Standing Committee
Meeting Attendance Fees shall be paid to Directors in attendance at Committee Director’s meetings:

	 	 	 	 	 
	All Directors

	 	$	1,000	 

Committee Meeting Attendance Fees are paid per meeting day, not per Committee meeting. No
Committee Attendance Fee will be paid if a Board Meeting Attendance Fee is paid for the same day.

AD HOC COMMITTEES, TASK FORCE MEETINGS, AND OTHER SERVICE

In order to compensate Directors for their time while serving the Bank in attendance at Ad Hoc
Committee meetings, Task Force meetings, or otherwise serving the Bank on official Bank business,
each Director that attends such a meeting (including participating by telephone) may be paid a
Special Meeting Attendance Fee with the approval of the Board. The amount of the fee does not vary
among Directors in attendance at the special meeting. Each Director that attends a special meeting
approved by the Board shall be paid the following Special Meeting Attendance Fee:

	 	 	 	 	 
	All Directors

	 	$	1,000	 

Special Meeting Attendance Fees are paid per meeting day.

SYSTEM MEETINGS

In order to compensate Directors for their time while serving the Bank in attendance at Bank System
meetings including meetings of the Council of the Federal Home Loan Banks, each Director that
attends a Bank System meeting (including participating by telephone) shall be paid a Bank System
Meeting Attendance Fee. The amount of the fee does not vary among Directors in attendance at the
meeting. Each Director that attends a Bank System meeting shall be paid the following Bank System
Board Meeting Attendance Fee:

	 	 	 	 	 
	All Directors

	 	$	1,000	 

Bank System Attendance Meeting Fees are paid per meeting day. The Finance Board, the Board of
Directors, the Chairman or the President may from time to time designate individual Directors to attend Bank System meetings on behalf of the
Board.

 

 

AFFORDABLE HOUSING ADVISORY COUNCIL MEETINGS

In order to compensate Directors for their time while serving the Bank in attendance at Affordable
Housing Advisory Council meetings, each Director that attends an Affordable Housing Advisory
Council meeting (including participating by telephone) shall be paid an AHAC Meeting Attendance
Fee. The amount of the fee does not vary among Directors in attendance at the meeting. Each
Director is encouraged to attend at least one Affordable Housing Advisory Council meeting per year.
Each Director that attends an Affordable Housing Advisory Council meeting shall be paid the
following AHAC Meeting Attendance Fee:

	 	 	 	 	 
	All Directors

	 	$	1,000	 

AHAC Attendance Meeting Fees are paid per meeting day.

TRAVEL

The Directors shall be reimbursed for travel, subsistence and other related expenses incurred in
connection with the Directors duties under the terms and conditions of the Bank’s Travel and
Expense Policy; provided, however, a Director may not be paid or reimbursed for gift or
entertainment expenses.

DISCLOSURE

The Bank shall disclose in its annual report the following items:

	 	 	 
	(i)
	 	the sum of the
total actual compensation paid to Directors;
	 
	(ii)
	 	the sum of the total actual expenses
paid to Directors; and
	 
	(iii)
	 	a summary of this Policy.

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