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To All Employees Covered Under The PACE Local 2-286 Pension Plan We are pleased to present you with this booklet, which provides a descriptive summary of the Pension Plan for Employees represented by PACE Local 2-286. The Plan has been amended several times since the previous booklet was printed. Although many of the changes were made to comply with the new Federal laws, several other significant changes were made as a result of negotiations. The purpose of this booklet is to give you an understanding of how the Plan works and how it affects you personally. To make reading easier, we have left out legal and technical terms wherever possible. However, it is not intended that this booklet modify or change in any manner the complete official text of the Plan or Trust Agreement upon which this booklet is based. Therefore, in the event of any discrepancies between the booklet and the official text of the Plan and Trust Agreement, the Official Plan text and/or Trust Agreement will govern. Complete copies of all Plan documents are available for your inspection, during normal business hours, at the office of the Board of Trustees, 410-24 North 8th Street, Philadelphia, PA 19123, or a copy can be obtained by writing to the Board. The Plan rules summarized in this booklet generally apply to Participants who were in covered employment on or after January 1, 1999. If you left covered employment prior to 1999, the provisions of the respective plans in effect when you left apply to you. It is our sincere hope that the benefits you will receive from this Plan, together with your Social Security benefits, will enable you to look forward to your retirement years with confidence and assurance.

THE BOARD OF TRUSTEES

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Table of Contents Page General Information Concerning Your Retirement Plan. . . . . . . . . . . . .

1

Description of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What is the Plan? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How do I join the Plan? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Do I pay anything into the Plan?. . . . . . . . . . . . . . . . . . . . . . . . . . . . How much does the Participating Employers contribute?. . . . . . . . .

4 4 4 4 4

Eligibility for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 When am I eligible for normal retirement? . . . . . . . . . . . . . . . . . . . . 5 What will my retirement benefit be? . . . . . . . . . . . . . . . . . . . . . . . . 5 What happens if I continue working beyond age 65? . . . . . . . . . . . . 9 May I retire before I reach my normal retirement date? . . . . . . . . . . 9 What will my benefits be if I retire early? . . . . . . . . . . . . . . . . . . . . . 9 What will my benefit be if I leave before retirement? . . . . . . . . . . . 10 What happens if I become disabled? . . . . . . . . . . . . . . . . . . . . . . . 10 Is there any way I can lose my monthly benefit?. . . . . . . . . . . . . . . . 11 Earning Credit for Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How is service credited under the Plan?. . . . . . . . . . . . . . . . . . . . . . How do I accumulate "Vesting Service"? . . . . . . . . . . . . . . . . . . . . . . What is an "Hour of Service"? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How do I accumulate "Credited Service"? . . . . . . . . . . . . . . . . . . . . . Can my service be lost or cancelled? . . . . . . . . . . . . . . . . . . . . . . . .

12 12 12 12 12 13

Form of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How will my benefit be paid to me?. . . . . . . . . . . . . . . . . . . . . . . . . What is the Guaranteed Annuity? . . . . . . . . . . . . . . . . . . . . . . . . . . . What is a Qualified Joint and Survivor Annuity with Pop-up? . . . . . . What other forms of payment are available? . . . . . . . . . . . . . . . . . . .

15 15 15 15 15

Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What happens if I die after I retire? . . . . . . . . . . . . . . . . . . . . . . . . . What if I die before I begin receiving benefits?. . . . . . . . . . . . . . . . . How do I designate a beneficiary? . . . . . . . . . . . . . . . . . . . . . . . . . .

17 17 17 18

Work After Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What happens if I return to work in covered employment after I retire? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What happens if I fail to give proper notice of re-employment? . . . . . . When I stop working, when will my retirement benefit be resumed? . . Will there be any adjustment in my retirement benefits following a period of re-employment? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 19 19 19 20

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Table of Contents (continued) Page Applying for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . When will I begin receiving benefits?. . . . . . . . . . . . . . . . . . . . . . . . How do I apply for my benefits?. . . . . . . . . . . . . . . . . . . . . . . . . . . . What if my claim for benefits is denied? . . . . . . . . . . . . . . . . . . . . . . How are my benefits taxed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Can my pension benefit be assigned to another person?. . . . . . . . . . What about my social security benefits? . . . . . . . . . . . . . . . . . . . . . .

21 21 21 21 22 23 23

Amendment and Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . 24 Pension Benefit Guaranty Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 25 Your Rights Under ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

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General Information Concerning Your Retirement Plan Type of Plan The Plan is a Defined Benefit Plan, which means that your pension is based on a formula which takes into account your years of covered employment. There are no individual accounts established to which portions of the Employers contributions are credited. No member or beneficiary has any right, title or interest in or to the Fund other than to the benefits provided in the Plan. Plan Sponsor and Administrator The Plan is sponsored by the Board of Trustees of the PACE Local 2-286 Pension Plan, 410-24 North 8th Street, Philadelphia, Pennsylvania 19123. Telephone (215) 829-9212. The Board is made up of Union Trustees designated by the Union and Employer Trustees designated by the Paper Converter Industry. These members serve without pay and presently include: Employer Trustees

Union Trustees

Mitchell Marks (Co-Chairman) Royal Pioneer Industries 2345 Castor Avenue Philadelphia, PA 19134

Joseph Liberatore (Co-Chairman) PACE Local 2-286 410-24 North 8th Street Philadelphia, PA 19123

Theodore H. Seidenberg McLean Packaging Corp. 3450 Salmon Street Philadelphia, PA 19134

Mario Tatom PACE Local 2-286 410-24 North 8th Street Philadelphia, PA 19123

Aaron Green Case Paper Co. 499 E.Tioga Street Philadelphia, PA 19134

John Corabi PACE Local 2-286 410-24 North 8th Street Philadelphia, PA 19123

Morton Simkins Simkins Paper Box Company 2824 North Second Street Philadelphia, PA 19133

Luis Pagan PACE Local 2-286 410-24 North 8th Street Philadelphia, PA 19123

John Townsley Packaging Coordinators, Inc. 3001 Red Lion Road Philadelphia, PA 19114 Alan Gelman American Mailwell Envelope 633 Dunksferry Road Bensalem, PA 19020

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The responsibilities of the Plan Administrator are with the Board of Trustees. The Board is charged with carrying out the provisions of the Plan. They reserve the right to continue and interpret the terms and provisions of the Plan. In the discharge of its duties, the Board is aided and advised by legal, actuarial, accounting and investment advisory services, as well as administrative personnel who are responsible for all Plan and Fund records and communications. The Board of Trustees and/or its duly authorized designee(s) has the exclusive right, power, and authority, in its sole and absolute discretion, to administer, apply and interpret the Plan, including this booklet, the Trust Agreement and any other Plan documents, and to decide all matters (including factual matters) arising in connection with the operation or administration of the Fund or Trust, including the sole and absolute discretionary authority to: • Take all actions and make all decisions (including factual decisions) with respect to the eligibility for, and the amount of, benefits payable under the Plan; • Formulate, interpret and apply rules, regulations and policies necessary to administer the Plan in accordance with the terms of the Plan; • Decide questions (including legal or factual questions) relating to the calculation and payment of benefits under the Plan; • Resolve and/or clarify any ambiguities, inconsistencies and omissions (including factual determinations) arising under this booklet, the Plan, the Trust Agreement or other Plan documents; • Process and approve or deny benefit claims; and • Determine the standard of proof required in any case. All determinations and interpretations (including factual determinations) made by the Board of Trustees and/or its duly authorized designee(s) shall be final and binding upon all participants, beneficiaries and any other individuals claiming benefits under the Plan. The day-to-day business of the Plan is handled by: Carlo Simone, Sr. PACE Local 2-286 410-24 North 8th Street Philadelphia, PA 19123 Any questions pertaining to the Plan should be directed to the Fund Office. Plan Year The records of the Plan are kept on a January 1 through December 31 basis.

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Identification Numbers The Employer Identification Number is 23-6530051. The Plan Number is 001. Agent for Service of Legal Process Process can be served on the Board of Trustees (the Plan Administrator), 41024 North 8th Street, Philadelphia, PA 19123. Service of legal process may be made upon each Plan Trustee. Contributing Employers The Plan is financed by employer contributions made in accordance with the terms of collective bargaining agreements between PACE Local 2-286 and the Participating Employers. Copies of the agreements covering participants of the Plan, or a complete list of the Employers contributing to the Plan may be obtained by written request to the Fund Office. You may also inquire as to whether a particular employer contributes to the Plan by contacting the Fund Office in writing. A reasonable fee may be charged for the photocopying of any documents that are provided to you. Investments Funds contributed to the Plan are invested by the Trustees. These funds and the income earned from their investment are used exclusively to provide benefits for members of the Plan and to pay the costs of maintaining the Plan. The Trustees have engaged the services of an independent investment consultant to help them manage and invest the Plan's assets.

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Description of the Plan What is the Plan? The Pension Plan is a defined benefit plan, whose primary purpose is to provide you with a lifetime income during your retirement years. The Participating Employers contribute to a trust fund that is maintained for the exclusive benefit of the eligible employees. The Trustees invest the money until it is time to pay out retirement benefits. At retirement, your benefit is based upon your years of Credited Service and the applicable monthly benefit levels in effect on your last day of covered employment. How do I join the Plan? You automatically become a Plan member when the first contribution for you is made by an Employer who has agreed with PACE Local 2-286 to make contributions to the Pension Fund for your work. Please see the Office Manager, Carlo Simone, Sr., if you have questions about your coverage. Do I pay anything into the Plan? No. The Participating Employers pay the entire cost of the Plan. How much do the Participating Employers contribute? The amount contributed to fund the Pension Plan is subject to negotiation and is included in each collective bargaining agreement. The level of your Employer's contribution determines the benefits payable to you.

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Eligibility for Benefits The following types of pensions are provided under the Plan: • Normal Retirement • Deferred Vested Retirement • Early Retirement • Disability Retirement • Late Retirement When am I eligible for Normal Retirement? You are eligible to retire with a Normal Retirement Pension if you terminate covered employment on or after your normal retirement age (age 65). What will my retirement benefit be? The amount of your retirement benefit on or after your Normal Retirement Date depends upon the rate of contributions being paid by your Employer and the Years of Credited Service you earned at the time you retire. The following table gives an illustration of the amount of Normal Retirement benefit payable under various contribution rates for several different periods of Credited Service: Hourly Contribution Rate 5¢ 11¢ 14¢ 18¢ 21¢ 24¢ 30¢ 36¢ 41¢ 42¢ 46¢ 48¢ 54¢ 60¢ 75¢ 78¢ 81¢ 84¢ 87¢ 90¢

Monthly Pension Payable at Age 65 Monthly if Your Years of Credited Service Equal Pension for each Year of 10 15 20 25 30 35 Credited Service 5 $ 2.60 4.00 5.00 6.00 7.00 8.00 10.00 12.00 14.00 14.00 16.00 16.50 18.00 20.00 25.00 26.00 27.00 28.00 29.00 30.00

$ 13 $ 26 $ 39 $ 52 $N/A $N/A $N/A 20 40 60 80 100 120 140 25 50 75 100 125 150 175 30 60 90 120 150 180 210 35 70 105 140 175 210 245 40 80 120 160 200 240 280 50 100 150 200 250 300 350 60 120 180 240 300 360 420 70 140 210 280 350 420 490 70 140 210 280 350 420 490 80 160 240 320 400 480 560 82 165 247 330 413 495 577 90 180 270 360 450 540 630 100 200 300 400 500 600 700 125 250 375 500 625 750 875 130 260 390 520 650 780 910 135 270 405 540 675 810 945 140 280 420 560 700 840 980 145 290 435 580 725 870 1,015 150 300 450 600 750 900 1,050

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Hourly Contribution Rate

Monthly Pension for each Year of Credited Service

93¢ 96¢ 99¢ $1.02 $1.05 $1.08 $1.11 $1.14 $1.17 $1.20 $1.23 $1.26 $1.29 $1.32 $1.35 $1.38 $1.41 $1.44 $1.47 $1.50 $1.53 $1.56 $1.59 $1.62 $1.65 $1.68 $1.71 $1.74 $1.77 $1.80 Each additional 3¢

$31.00 32.00 33.00 34.00 35.00 36.00 37.00 38.00 39.00 40.00 41.00 42.00 43.00 44.00 45.00 46.00 47.00 48.00 49.00 50.00 51.00 52.00 53.00 54.00 55.00 56.00 57.00 58.00 59.00 60.00 $ 1.00

Page 9

Monthly Pension Payable at Age 65 if Your Years of Credited Service 5

10

15

$155 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 235 240 245 250 255 260 265 270 275 280 285 290 295 300 $ 5

$310 320 330 340 350 360 370 380 390 400 410 420 430 440 450 460 470 480 490 500 510 520 530 540 550 560 570 580 590 600 $ 10

$465 480 495 510 525 540 555 570 585 600 615 630 645 660 675 690 705 720 735 750 765 780 795 810 825 840 855 870 885 900 $ 15

20

25

30

35

$ 620 640 660 680 700 720 740 760 780 800 820 840 860 880 900 920 940 960 980 1,000 1,020 1,040 1,060 1,080 1,100 1,120 1,140 1,160 1,180 1,200 $ 20

$ 775 800 825 850 875 900 925 950 975 1,000 1,025 1,050 1,075 1,100 1,125 1,150 1,175 1,200 1,225 1,250 1,275 1,300 1,325 1,350 1,375 1,400 1,425 1,450 1,475 1,500 $ 25

$930 960 990 1,020 1,050 1,080 1,110 1,140 1,170 1,200 1,230 1,260 1,290 1,320 1,350 1,380 1,410 1,440 1,470 1,500 1,530 1,560 1,590 1,620 1,650 1,680 1,710 1,740 1,770 1,800 $ 30

$1,085 1,120 1,155 1,190 1,225 1,260 1,295 1,330 1,365 1,400 1,435 1,470 1,505 1,540 1,575 1,610 1,645 1,680 1,715 1,750 1,785 1,820 1,855 1,890 1,925 1,960 1,995 2,030 2,065 2,100 $ 35

If you complete an Hour of Service on or after January 1, 1999, the benefits otherwise payable under the Plan shall be increased by the following factors:

1. 110% for that portion attributable to your Years of Credited Service earned before 1985. 2. 120% for that portion attributable to your Years of Credited Service earned between January 1, 1985 and December 31, 1994. 3. 130% for that portion attributable to your Years of Credited Service earned on or after January 1, 1995.

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Example Joe works for an Employer contributing 30¢ per hour and has a total of 29 Years of Credited Service as follows: Years of Credited Service: Before 1985 1985 through 1994 After 1995 Total

-

14.50 8.75 5.75 29.00

Joe's monthly benefit, payable at his Normal Retirement Age of 65, would be calculated as follows: 14.50 8.75 5.75

x x x

$10.00 $10.00 $10.00

x x x

110% 120% 130%

= = =

$159.50 105.00 74.75 $399.25

Special rules will be applied if you retire within one year after your Employer's contribution rate increases, you transfer from one Employer to another Employer with a different rate of contribution, or your Employer reduces its contribution rate. Also, in no event will any pension be paid until your Employer has been obligated to contribute to the Fund for at least one year, unless the Board of Trustees makes a specific exception. Following are several examples of these special rules: Rule 1: If your employer increases the hourly contribution rate, your benefit will also increase only if the following two conditions are met: (1) You continue to work for at least three months following the contribution rate increase, and (2) Your employer continues the increased contribution rate for at least 12 months.

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Example Joe's employer increases its hourly contribution rate from 30¢ to 36¢ on February 1, 2000. Joe completes more than three months of service following his employer's contribution rate increase, and retires with a Normal Retirement Pension on June 1, 2000. The Fund Office calculates Joe's monthly pension to be $339.25 per month (based on the $10.00 benefit rate associated with a 30¢ hourly contribution). Joe's employer continues to make contributions to the Plan at 36¢ per hour through February 1, 2001. At that time, the Fund Office increases Joe's monthly pension to $407.10 (based on the $12.00 benefit rate associated with a 36¢ hourly contribution). If Joe's employer fails to contribute to the Plan at 36¢ per hour for at least one year, Joe's monthly pension will remain at $339.25.

Rule 2: If you leave covered employment and incur one or more Breaksin-Service and then return to work with the same or a different contributing employer at a higher contribution rate, you must complete at least two Years of Credited Service before the higher contribution rate is applied to your service before the Break. Example John leaves covered employment in January 2000 and does not return until July 2002.At the time John leaves, his employer is contributing to the Plan at the rate of 30¢ per hour, and John has accrued a monthly benefit of $180.00 (based on the $10.00 benefit rate associated with a 30¢ hourly contribution). Because the present value of John's benefit exceeds $5,000, he does not receive a single sum distribution. When John returns to work, his employer's contribution rate has increased to 36¢ per hour. The benefit John earns after his return will be calculated based on the 36¢ contribution. However, the $180.00 monthly benefit John earned up through January 2000 will not be increased to reflect the 36¢ contribution rate until John completes an additional two Years of Credited Service. At that time, the $180.00 will be increased to $216.00 (based on the $12.00 benefit rate associated with a 36¢ hourly contribution).

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What happens if I continue working beyond age 65? If you continue working more than 40 hours per month beyond your Normal Retirement Date, you will receive a benefit based upon the rate of contribution paid by your Employer and your Years of Credited Service up to your Late Retirement Date. Regardless of whether you are retired, your benefit will begin as of the April 1 following the year in which you turn age 701/2. May I retire before I reach my Normal Retirement Date? Yes. If you attain age 55 and are vested, you are eligible to retire early with a reduced pension. What will my benefits be if I retire early? Your Early Retirement Pension will be determined in the same manner as the Normal Retirement Benefit, except that the benefit will be reduced by 0.6% for each of the first 60 months and by 0.3% for each of the next 60 months that the pension payments begin before your normal retirement age. This reduction is to reflect the fact you will be receiving payments over a longer period of time than if the payments had started at age 65. For example, if you retire at age 65, you will receive 100% of your monthly benefit, but if you retire at age 55, you will only receive 46% of the monthly benefit that you would have received had you chosen to retire at age 65 with the same amount of service. This reduced amount is not increased once you reach your normal retirement age. Below is a table of early retirement reduction factors at various ages: Age at Retirement

Percentage of Monthly Benefit Received at age 65

65 64 63 62 61 60 59 58 57 56 55

100.0% 92.8% 85.6% 78.4% 71.2% 64.0% 60.4% 56.8% 53.2% 49.6% 46.0% 9

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Example Assume, in the first example above, that Joe elects to retire at age 59. Joe's monthly pension payable immediately would be calculated as follows: $339.25 x 60.4% = $204.91

What will my benefit be if I leave before retirement? You become entitled to a Deferred Vested Pension if you have at least 5 Years of Vesting Service. You will receive a benefit beginning at age 65 based upon the contribution rate being paid by your Employer and the number of your Years of Credited Service at the time you separated from employment. If you are vested, you may elect to receive your Deferred Vested Benefit as early as age 55, in which case your benefit will be reduced for Early Retirement to reflect the fact that you will be receiving payments over a longer period of time than if the payments had started at age 65. If the present value of your deferred vested pension is determined to be less than $5,000, you will receive a single sum distribution in lieu of any other benefit payable from the Plan. What happens if I become disabled? If your Employer is contributing at least 18¢ per hour and you become totally and permanently disabled after having earned 10 or more Years of Credited Service, you will be entitled to receive a monthly Disability Benefit of $150.00, which will begin with the later of: 1. the seventh month following the date of the onset of your disability, or 2. the month following the month in which your application is filed. You will be deemed "totally and permanently disabled" only if you have been awarded and continue to receive disability benefits from the Social Security Administration. There may be a waiting period between your disability and the necessary certification. Upon recovery before age 65, if you return to work for a Participating Employer, you will be reinstated in the Plan with all of your prior credits up through your date of disability. If you do not return with a Participating 10

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Employer, then it will be assumed that you terminated employment on your date of disability, and you will be eligible for a Deferred Vested Pension at age 65 or earlier, if eligible. IT IS IMPORTANT THAT YOU APPLY FOR DISABILITY BENEFITS FROM THE PLAN AS SOON AS POSSIBLE AFTER YOU BECOME DISABLED. OTHERWISE, THE DISABILITY BENEFIT PAYABLE FROM THE PLAN MAY BE DELAYED. The Disability Benefit is payable until the earlier of your death, date of recovery or the time you begin to receive either an Early or Normal Retirement Pension.

Example Jan becomes disabled in January and applies for Federal Social Security disability benefits.The Social Security Administration awards her a disability pension in July. In order for Jan to begin receiving her disability pension from the PACE Local 2-286 Pension Plan at the earliest possible date, she must apply for her disability benefit from the Plan by June. Instead, Jan delays her application until August (after she is awarded her Federal Social Security disability pension). Her first disability payment will commence in September, and she will not be able to receive retroactive payments from the Local 2-286 Plan.

Is there any way I can lose my monthly benefit? The only ways you can lose your benefit are (i) terminating your employment or dying before completing five years of Vesting Service (ten Years of Vesting Service if your last day of covered employment was before 1999 and you are a collectively bargained employee), or (ii) if the Plan terminates and there are insufficient amounts to cover benefits above those guaranteed by the Pension Benefit Guaranty Corporation.

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Earning Credit for Pensions How is service credited under the Plan? Service is credited in two different ways under the Plan depending upon the purpose for which it is being measured. The credit received for purposes of determining your entitlement to a benefit such as an Early Retirement of Deferred Vested Pension is called "Vesting Service." The credit received for purposes of determining the amount of your benefit is called "Credited Service." How do I accumulate "Vesting Service"? You will receive one Year of Vesting Service for each calendar year during which you complete 375 Hours of Service with a participating Employer. If you transfer to a non-union position with your current Employer, your service with that Employer will continue to be counted in this Plan for vesting purposes. What is an "Hour of Service" An Hour of Service is each hour for which you are paid or entitled to be paid by a participating Employer. These hours include non-working periods such as holidays, vacations, sickness, etc., if you are paid for such periods. The Fund Office verifies this information from the payroll records of Participating Employers or, if the payroll records are not available, Social Security records. How do I accumulate "Credited Service"? There are two types of Credited Service. They are called "Past Service" and "Future Service." Past Service means your service before January 1963 with an Employer that now contributes to this Plan, did contribute to the Plan in the past or, if the Employer went out of business before January 1, 1963, was a party to a collective bargaining agreement with PACE Local 2-286, the United Paperworkers International Local 282 or their predecessor(s) at the time it closed. Your Past Service is determined to the nearest quarter of a year from the payroll records of your Employer(s) or, if not available, Social Security records. Future Service means your service after January 1, 1963 with an Employer that contributed to the Plan for you. 12

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Your Future Service is determined each calendar year based on the number of hours that your Employer contributes for you as follows: Hours Contributed for You During Calendar Year

Years of Credited Service

1,500 or more

1 full year

1,125 – 1,499

3/4

750 – 1,124

1/2

375 – 7491,

1/4

Less than 375

None

If your employer contributes at the 5¢ rate, your Credited Service is limited to 20 years. If you transfer to a non-union position with your current Employer, no further Credited Service will be earned under this Plan even though your Vesting Service continues. Can my service be lost or cancelled? If you are entitled to a Deferred Vested Pension, you cannot lose the service credits that you had accumulated. If you are not entitled to a Deferred Vested Pension, there is a rule for determining whether you lose your service credits. If you work fewer than 375 Hours of Service in a calendar year, you will incur a One Year Break-inService. The basic rule is that you lose your service if you have consecutive One Year Breaks-in-Service that exceed the greater of (i) five years or (ii) the amount of your accumulated Years of Vesting Service prior to your Break-inService. For example, if you have:

You will lose your service if you incur Breaks-in-Service for:

1 Year of Vesting Service

5 consecutive years

2 Years of Vesting Service

5 consecutive years

3 Years of Vesting Service

5 consecutive years

4 Years of Vesting Service

5 consecutive years

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You should keep in mind, however, that these rules apply only to Breaks-inService that occur after January 1, 1999. For periods before January 1, 1999, Breaks-in-Service are determined by the Plan rules then in effect. If you are absent from work due to pregnancy, childbirth or adoption, or due to prenatal child care which immediately follows childbirth or adoption, you will be credited with sufficient Hours of Service in order to avoid a Breakin-Service in the current Plan Year or the next following Plan Year in which the absence begins. In order to receive this credit, you must return to work following your absence. These special rules apply to Vesting Service only. During your absence from work for one of the reasons stated above, no Credited Service will be earned under this Plan.

Example Jane leaves covered employment in July 2000 due to her pregnancy, after completing 1,100 Hours of Service. She returns to work in November 2001 and completes 320 Hours of Service through the December 31, 2001. Under the terms of the Plan, Jane is credited with an additional 55 Hours of Service in 2001 in order to avoid a One Year Break-in-Service. However, because she only completed 320 Hours of Service while in covered employment during 2001, she does not earn any benefit credit for the year.

Example Mary leaves covered employment in January 2001 due to her pregnancy, after completing 80 Hours of Service, and does not return to work. Because she does not return to work following her pregnancy, Mary is not credited with additional Hours of Service for Vesting in 2001 and therefore incurs a One Year Break-in-Service. Mary does not earn any vesting or benefit credit for 2001.

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Form of Payment How will my benefit be paid to me? There are two basic forms of payment. Both are monthly payments that continue for your lifetime. If you are married on the date benefit payments commence, the law requires that you receive a Qualified Joint and Survivor Annuity unless you specifically, with the written consent of your spouse, elect another form of benefit offered by the Plan. If you are not married, you will receive the Guaranteed Annuity unless you elect another form of benefit offered by the Plan. The optional forms of payment are described below. However, if the present value of your benefit is determined to be $5,000 or less, you will receive a one-time cash payment instead of an annuity. What is the Guaranteed Annuity? This form of payment provides you with the full monthly benefit payable for your lifetime. In the event of your death before 60 monthly payments have been made, your designated beneficiary will receive the same monthly benefit you had been receiving until the 60 payments have been completed. If you receive 60 or more payments prior to your death, there will be no monthly benefit payable to your designated beneficiary under this option. What is a Qualified Joint and Survivor Annuity with Pop-up? A Qualified Joint and Survivor Annuity is a reduced benefit payable during your lifetime with 50% of the reduced amount payable after your death to your surviving spouse for your spouse's lifetime. The person who receives the benefit after your death must be the person who was your spouse on the date your benefit payments first started. Because a Joint and Survivor annuity is payable for as long as either of two persons are alive, it provides a smaller monthly benefit than the Guaranteed Annuity. If your spouse dies before you, your monthly benefit will "pop-up" to the amount of benefit you would have received had you originally elected the unreduced Guaranteed Annuity. What other forms of payment are available? You also have the option to elect (with your spouse's consent, if applicable) one of the following forms of payment: • Life annuity with 120 months guaranteed - Under this form of benefit, you will receive reduced monthly payments for as long as you live, but if you die before you receive payments for 120 months, monthly payments will continue to your designated beneficiary for the remainder of the 120-month period. 15

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• Joint and 100% survivor annuity with pop-up - Under this option, you will be able to receive a reduced monthly benefit for as long as you live and upon your death your spouse will continue to receive 100% of your benefit for his/her life. Under this form, if your spouse should die before you, your benefit will be increased to the amount you would have received if your benefit had been paid as a Guaranteed Annuity.

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Death Benefits What happens if I die after I retire? If you die after benefit payments have begun, the method of payment that you elected governs if any benefits are to continue after your death. What if I die before I begin receiving benefits? The Plan provides a pre-retirement death benefit in the event you die before retirement. 1. If you are vested and married at the time of your death, your spouse will be entitled to a monthly benefit payable for life. This benefit is payable whether or not you are working in Covered Employment at the time of your death. Payments of the monthly benefit will begin on the later of the first day of the month coincident with or next following the date of your death, or the first date on which you would have become eligible to retire. The amount of this monthly benefit is equal to the amount your spouse would have been entitled to receive under a 100% joint and survivor annuity if you survived to your earliest retirement age. The actual amount of the survivor annuity is based on the benefit you earned under the Plan through the date of your death. If the single sum value of the surviving spouse benefit is $5,000 or less, your spouse will receive a one-time cash payment equal to the value of the benefit instead of a life annuity. If the value of the survivor annuity is determined to be less than $10,000, your spouse will also receive a single sum payment equal to the difference between $10,000 and the value of the survivor annuity. 2. If you are vested and not married and eligible for an immediate Pension (age 55 or older) at the time of your death, your designated beneficiary will receive a single sum payment equal to the greater of $10,000 or 60 times the monthly Normal or Early Retirement Pension you would have received had you retired the day before your death. This benefit is payable whether or not you are working in Covered Employment at the time of your death. If you are vested and not married and not eligible for an immediate Pension at the time of your death, your designated beneficiary will receive a single sum payment of $10,000. This benefit is payable whether or not you are working in Covered Employment at the time of your death.

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3. If you are not vested and have at least one year of Credited Service at the time of your death, your designated beneficiary will receive a single sum payment of $10,000. This benefit is only payable if you are working in Covered Employment at the time of your death. How do I designate a beneficiary? If you are married, your spouse is automatically your beneficiary under the Plan. If you are not married, you may designate a beneficiary or beneficiaries to receive benefits payable upon your death. At the time benefit payments begin, you may be required to complete another beneficiary designation, depending on the type of annuity you choose. If you are not married and fail to designate a beneficiary, or if your designated beneficiary dies prior to your death, the death benefit will be paid to your estate. Beneficiary designation forms can be obtained from the Fund Office.

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Work After Retirement What happens if I return to work in covered employment after I retire? If you are over age 65 and receiving a retirement pension and return to work for 40 or more hours in any calendar month with an Employer who contributes to this Plan, your pension benefits will be suspended for those months. If you are receiving a retirement pension and return to work prior to age 65, your pension benefits will be suspended for any month you work for an Employer who contributes to this Plan, regardless of the hours worked. THESE SUSPENSION RULES APPLY TO ANY WORK WITH A CONTRIBUTING EMPLOYER, REGARDLESS OF WHETHER OR NOT YOUR POSITION IS CONSIDERED COVERED EMPLOYMENT UNDER THIS PLAN. If you return to work, you are required to give timely notice to the Fund Office of your re-employment with a Covered Employer. Notice given within 10 days following a return to work shall be considered timely and in compliance with this requirement. If you are uncertain as to whether the job you are returning to might affect your pension payments, contact the Fund Office before you go back to work. Regardless of the number of hours you may be working, your pension will commence on the April 1 following the year in which you become age 701/2. What happens if I fail to give proper notice of re-employment? Any payments made by the Plan during a calendar month in which you are re-employed and working 40 or more hours will be deducted from the benefit payments made after termination of employment. The Fund Office will notify you during the first month in which a payment is withheld. When I stop working, when will my retirement benefit be resumed? If, after you retire, your benefits are suspended due to re-employment, you must file a written "Notice of Termination of Employment" with the Trustees immediately upon termination of such employment. Upon receipt of such "Notice of Termination of Employment" at the Fund Office, your monthly benefit payments will resume.

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Will there be any adjustment in my retirement benefits following a period of re-employment? Upon again retiring, you will be entitled to an adjustment in your original monthly retirement benefits for those months of employment. Such adjustment will be based upon the contribution rate during such period of reemployment and the number of your Years of Credited Service you completed. If you return to work prior to age 65, your original Early Retirement Pension shall also be adjusted to reflect your later age at the time you re-retire.

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Applying for Benefits When will I begin receiving benefits? Benefits will begin on the first day of the month following actual retirement or application for disability, except in the case of deferred vested benefits. How do I apply for my benefits? You (or your spouse/beneficiary in the case of your death) may apply for benefits by filing an application at the Pension Fund Office, 410-24 N. 8th Street, Philadelphia, PA 19123-3903.To make sure your benefit payments are not delayed, you must file an application at least one month before the date you want your benefit payments to begin. The rules of the Plan require that your application be filed in advance, and you are urged to file as soon as you decide on your intended retirement date. Early filing will help avoid delays in the processing of your application and payment of benefits. Application forms are available at the Fund Office. When applying for your benefit, you may be requested to provide proof that you are entitled to receive benefits. How do I elect to receive a form of payment? When you are about to retire, a representative from the Fund Office will explain the forms of payment available to you in greater detail. You will also be provided with an application for benefits to complete. This application will allow you to choose the form of benefit you desire. During the election period before your pension is to begin, you will be given the option of electing not to receive the automatic form of payment. YOUR SPOUSE MUST CONSENT IN WRITING TO AN ELECTION TO RECEIVE AN OPTIONAL FORM THAT DOES NOT PROVIDE AT LEAST A 50% SURVIVOR ANNUITY. You may revoke any election prior to the date you begin receiving pension payments. What if my claim for benefits is denied? The Trustees will initially review your application and make a decision within 90 days of receiving it. Under special circumstances, within 90 days of the receipt of the application, you may be notified in writing, by the Trustees that an additional 90-day extension is needed to process your application and the reason needed for the extra time. If you do not receive notice of a denial or extension of time within the first 90 days after the receipt of your application by the Trustees, your application will be deemed to be denied (referred to as a "Default Denial"), and you may proceed directly to the review stage at that point if you so desire.

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Benefits under the Plan may be denied, in whole or in part, in instances where a claim is filed improperly, a claim is not covered under the Plan or the individual is not eligible to receive the benefit claimed. If your application for a benefit is denied, in whole or in part, you will be sent written notice explaining: • the specific reasons for the denial; • the exact Plan provision(s) on which the decision was based; • what, if any, additional material or information is needed to process your application and why such material or information is needed; and • what procedure you should follow to get your application reviewed again by the Board of Trustees. If your application is denied by the Trustees, you have the right to request that your application be reconsidered. You must request this in writing within 60 days after you receive the application denial notice (or within 60 days of a Default Denial). Your resubmitted application may include any additional information you believe relevant to your application. You may also ask to review any pertinent documents the Trustees have that concern your application, such as copies of the Plan document or special information relating to your application. If the Trustees, in their sole and absolute discretion, allow a hearing, you and/or your representative or attorney may choose to appear in person before the Board of Trustees or designated subcommittee, before the application is re-considered. The Board of Trustees or subcommittee must reach a final decision at its next regularly scheduled meeting following receipt of your review request (unless such request is received less than 30 days prior to such meeting, in which case the final decision must be rendered at the second regularly scheduled meeting following receipt of your review request). If there are special circumstances which require an extension of time, you will be notified in writing. The final decision must be made in writing, clearly stating the reasons for the decision and the provisions of the Plan upon which the decision is based. The decision of the Trustees is final and binding. How are my benefits taxed? Whenever you receive a distribution from the Plan, it will normally be subject to income taxes. However, if you or your surviving spouse receive a single sum payment, you may request that a direct transfer of all or a portion of the distribution be made to either an Individual Retirement Account (IRA) or another qualified retirement plan willing to accept the transfer. A direct transfer will result in no tax being due or withheld until you withdraw funds from the IRA or other qualified plan. 22

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Whenever you receive a distribution that is eligible for a direct rollover, the Fund Office will deliver to you a more detailed explanation of this option. Before you receive a distribution from the Plan, you should consult your tax advisor concerning your tax liability. Information will be given to you concerning withholding of income tax when you apply for your annuity benefit. Can my pension benefit be assigned to another person? No. Benefits cannot be sold, assigned or pledged to anyone, nor can they be used as security for a loan. Furthermore, they are not subject to attachment or execution under any judgment or decree of a court prior to distribution. There is an exception, however, to this general rule. The Plan Administrator must honor a Qualified Domestic Relations Order issued by a court that obligates you to pay child support or alimony, or otherwise allocates a portion of your assets in the Plan to your spouse, former spouse, child or other dependent. You may obtain a copy of the Plan's procedures for determining whether a court order is a Qualified Domestic Relations Order by contacting the Fund Office. What about my Social Security benefits? The Social Security benefits to which you may be entitled are payable in addition to any benefits provided under this Plan.

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Amendment and Termination of the Plan The Board of Trustees reserves the right to amend the Plan. Except for unusual circumstances approved by the government, the rights of participants, pensioners, and beneficiaries cannot be adversely affected by any amendment. While it is expected and intended that the Plan will continue indefinitely, the Trustees do have the right to terminate the Plan in accordance with the Trust Agreement between the Union and the Participating Employers. If the Plan is terminated, you will not accrue any further benefit under the Plan. However, the benefit that you have already accrued will become vested to the extent it can be funded by the plan assets allocated to such benefits.

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Pension Benefit Guaranty Corporation Benefits under this Plan are covered by the Pension Benefit Guaranty Corporation (PBGC) financial assistance program if the Plan is insolvent and unable to pay guaranteed benefits when due. The PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit protection is subject to certain limitations. For more information on the PBGC multiemployer program and its limitations, ask your Plan Administrator or the PBGC. Inquires to PBGC should be addressed to: Office of Program Operations Pension Benefit Guaranty Corporation 2020 K Street NW Washington, DC 20006 The PBGC Office may be reached by calling: (202) 326-4040

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Your Rights Under ERISA As a participant in the PACE Local No. 2-286 Pension Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled to: 1. Examine, without charge, at the Plan Administrator's office, all Plan documents, including insurance contracts and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions. 2. Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. A reasonable charge may be applied for the copies. 3. Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. 4. Obtain a statement telling you whether you have a right to receive a benefit under the Plan at your Normal Retirement Age and, if so, what your benefit would be at Normal Retirement Age if you stop working under the Plan now. If you do not have a right to a benefit, the statement will tell you how many more years you have to work to get a right to a benefit. The statement must be requested in writing and is not required to be given more than once a year. The Plan must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your Employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA. If your claim for a benefit is denied, in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan review and reconsider your claim. Under ERISA there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless

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the materials were not sent because of reasons beyond the control of the Administrator. 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. If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in 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 if, for example, 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 about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administration (PWBA), U. S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, PWBA, U. S. Department of Labor, 200 Constitution Avenue, N.W.Washington, D.C., 20210.

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