EXHIBIT 10.8
FEDERAL HOME LOAN BANK OF
SEATTLE
RETIREMENT FUND BENEFIT
EQUALIZATION PLAN
Effective as of
November 23, 1991
Revised as of January 1,
2005
RETIREMENT FUND BENEFIT
EQUALIZATION PLAN
INTRODUCTION
The amendment and restatement of
this Retirement Fund Benefit Equalization Plan has been authorized
by the Board of Directors of the Federal Home Loan Bank of Seattle
(the “Employer”) solely for the purpose of providing
benefits to certain employees selected by the Employer, which
benefits would have been payable under the Regulations governing
the Comprehensive Retirement Program of the Financial Institutions
Retirement Fund, as they may be from time to time amended and as
adopted by the Employer, but for the limitations placed on benefits
for such employee by Sections 401(a) (17) and 415 of the
Internal Revenue Code of 1986, as amended from time to time, or any
successor thereto (“Code”).
This Plan is intended both to
provide benefits in excess of the limitations on benefits imposed
by the Code and to provide certain other supplemental benefits for
eligible employees whose benefits payable under this Plan shall be
paid solely from the general assets of the Employer and/or a
grantor trust established by the Employer to pay such benefits. No
benefits under this Plan shall be payable from the assets of the
Financial Institutions Retirement Funds. The Employer intends that
this restated Plan will comply with Code Section 409A and will
be administered and interpreted consistently with that
intention.
ARTICLE 1.
DEFINITIONS
When used in the Plan, the following
terms shall have the following meanings:
1.01 “Actuary” means the independent
consulting actuary retained by the Employer to assist the Committee
in its administration of the Plan.
1.02 “Employer” means the Federal Home
Loan Bank of Seattle.
1.03 “Beneficiary” means the beneficiary
or beneficiaries designated in accordance with Article 5 of the
Plan to receive the benefit, if any, payable upon the death of a
Member of the Plan.
1.04 “Board of Directors” means the Board
of Directors of the Employer.
1.05 “Committee” means the Retirement
Fund Benefit Equalization Plan Committee appointed by the Board of
Directors to administer the Plan.
1.06 “Effective Date” means
January 1, 2008. The original Effective Date was
November 23, 1991.
1.07 “Fund” means the Pentegra Defined
Benefit Plan for Financial Institutions (formerly Financial
Institutions Retirement Fund), a qualified and tax-exempt pension
plan and trust under Sections 401(a) and 501(a) of the
Code.
1.08 “Code” means the Internal Revenue
Code of 1986, as amended from time to time, or any successor
thereto.
1.09 “Member” means a Highly-Compensated
Employee of the Employer as that term is defined in the Fund who
has been selected to be a Member by the Board of Directors. The
Fund was closed to new members effective for employees hired on or
after January 1, 2004.
1.10 “Plan” means Federal Home Loan Bank
of Seattle Retirement Fund Benefit Equalization Plan, as set forth
herein and as amended from time to time, plus any administrative
rules adopted by the Committee.
1.11 “Pre-2005 Benefit Accruals” means
the portion of the Member’s benefit under Section 3.01
that accrued prior to January 1, 2005, as determined by the
Actuary.
1.12 “Regulations” means the Regulations
governing the Comprehensive Retirement Program of the Fund as from
time to time amended, and as adopted by the Employer.
ARTICLE 2.
MEMBERSHIP
2.01 Each employee of the Employer who is selected as
a Member in this Plan and who is included in the membership of the
Fund shall be enrolled as a Member of the Plan on the date he is
selected as a Member by the Board of Directors.
2.02 If the Member is no longer entitled to
participate in the Fund, his membership in the Plan shall terminate
on such date.
2.03 A benefit shall be payable under the Plan to or
on account of a Member only upon the Member’s retirement,
death or other termination of employment with the
Employer.
ARTICLE 3. AMOUNT OF
BENEFITS
3.01 The amount, if any, of the annual benefit
payable to or on account of a Member pursuant to the Plan shall
equal the excess of (i) over (ii), adjusted as provided in
(iii), as determined by the Committee, where:
i. is the annual benefit (as calculated by the Fund
on the basis of a lump sum form of Payment) that would otherwise be
payable to or on account of the Member by the Fund on the first day
of the month on or after the Member’s date of termination of
employment under the Regulations if the provisions of the
Regulations were administered without regard to the limitations
imposed by Sections 401(a)(17) and 415 of the Code; and on the
basis of salary unreduced by elective contributions under the
Employer’s Thrift Plan Benefit Equalization Plan;
and
ii. is the annual benefit (as calculated by the Fund
on the basis of a lump sum form of payment ) that is or would be
payable to or on account of the Member by the Fund on the first day
of the month on or after the Member’s date of termination of
employment under the Regulations after giving effect to any
reduction of such benefit required by the limitations imposed by
Sections 401(a)(17) and 415 of the Code;
iii. The lump sum resulting from i – ii will be
adjusted to an actuarial equivalent benefit in the form of payment
elected by the Member pursuant to Section 4.2 if applicable
and 4.3, or if none was elected in the Regular Form of payment,
using the same actuarial factors and assumptions then used by the
Fund to determine actuarial equivalence under the
Regulations.
For the purposes of this
Section 3.01, “annual benefit” includes any
“Active Service Death Benefit”, “Retirement
Adjustment Payment”, “Annual Increment” and
“Single Purchase Fixed Percentage Adjustment” which the
Employer elected to provide its employees under the Regulations.
For purposes of this Section 3.01, the annual benefit as
calculated by the Fund is determined on the basis of the definition
of Salary included in the Fund’s qualified retirement plan
document, which determines Salary before any salary reduction
contributions to the Employer’s 401(k) Plan, to the
Employer’s Internal Revenue Code Section 125 flexible
benefits plan, and to the Employer’s Internal Revenue Code
Section 132(f) qualified transportation fringe benefits
plan.
3.02 For purposes of the Plan the “Regular
Form” of payment means an annual benefit payable for the
Member’s lifetime and the death benefit described in
Section 3.04 below.
3.03 If a Member had elected an optional form of
payment and dies after the date his benefit payments under the Plan
had commenced, the only death benefit, if any, payable under the
Plan in respect of said Member shall be the amount, if any, payable
under the optional form of payment which the Member had elected
under the Plan. If a Member had elected an optional form of payment
and dies before the date his benefit payments under the Plan
commence, the election of an optional form of benefit shall be
inoperative.
3.04 Upon the death of a Member who had not elected
an optional form of payment , or who died before his benefit
payments under the Plan commenced, a death benefit shall be paid to
the Member’s beneficiary in a lump sum equal to the excess,
if any, of (i) over (ii), where
i. is an amount equal to 12 times the annual
benefit, if any, payable under Section 3.02 above,
and
ii. is the sum of the benefit payments, if any,
which the Member had received under the Plan.
3.05 If a Member is restored to employment with the
Employer after payment of his benefit under the Plan has commenced,
all payments under the Plan shall thereupon be discontinued. Upon
the Member’s subsequent retirement or termination of
employment with the Employer, his benefit under the Plan shall be
recomputed in accordance with Sections 3.01, 3.02, 3.03 and 3.04,
but shall be reduced by the actuarial equivalent value of the
amount of any benefit paid by the Plan in respect of his previous
retirement or termination of employment, and such reduced benefit
shall be paid to the Member in accordance with the provisions of
the Plan. For purposes of this Section 3.05, the actuarial
equivalent value to the benefit paid in respect of a Member’s
previous retirement or termination of employment shall be
determined by the Actuary utilizing for that purpose the same
actuarial factors and assumptions then used by the Fund to
determine actuarial equivalence under the Regulations.
ARTICLE 4. TIME AND ELECTION OF
BENEFIT PAYMENTS
4.01 Except for an allowed acceleration of payment
pursuant to Section 4.04, a Member will receive or begin to
receive payment of his benefits under the Plan within 60 days after
termination of employment. Termination of employment shall be
determined under Treasury Reg.
Section 1.409A-1(h)(ii).
4.02 A Member may, at any time prior to the
Member’s retirement or termination of employment, irrevocably
elect the form of payment of the portion of the Member’s
benefit consisting of the Member’s Pre-2005 Benefit Accruals.
The Member’s Pre-2005 Benefit Accruals will be converted by
the Actuary to any optional form of payment permitted under the
Regulations, using as nearly as possible the same actuarial factors
and assumptions then used by the Fund to determine actuarial
equivalence under the Regulations. If no such election is made, the
Member’s Pre-2005 Benefit Accruals will be paid in the
Regular Form.
4.03 A Member may, no later than December 31,
2008, irrevocably elect the form of payment of the Member’s
benefit that accrued after December 31, 2004 (“Post-2004
Benefit Accruals”). Such portion of the Member’s
benefit will be converted by the Actuary to any optional form of
payment permitted under the Regulations, using as nearly as
possible the same actuarial factors and assumptions the
