The eligibility and enrollment rules for the U

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Retiree Health Care SPD Effective January 1, 2012 COST OF RETIREE HEALTH CARE COVERAGE The cost of retiree health care coverage for participants in the Program is based on claims experience and medical expense projections. The cost is generally adjusted on an annual basis and changes on January 1. The cost could, however, in U.S. Bank’s discretion, be changed more frequently. All retirees who satisfy the criteria set forth in the “Eligibility and Enrollment” section can enroll themselves and any covered dependents (spouse/domestic partner/children or grandchildren) in retiree health care coverage by paying the full cost established by the Program for coverage for that year. Retiree Health Care Credits Eligible employees who satisfy age and Years of Service requirements described below are deemed eligible to earn up to a maximum of 15 years of retiree health care “credits” that can be applied toward the cost of their retiree health care coverage under the Program. Effective January 1, 2002, the credits replace the subsidy structure in place under the West Retiree Health Care Program (West employees retiring in 2002 may have a choice between the fixed subsidy option and the health care credits option – please see the section labeled “Special Transition Rule for West Employees Retiring in 2002”) and, effective January 1, 2003, replace the current subsidy formula in effect for employees of the former Mercantile. Here is how the retiree health care credits work: Eligibility for Retiree Health Care Credits While you are working for U.S. Bank, you are eligible (unless you are classified as a U.S. citizen working abroad as discussed below) to accumulate credits at the earlier of the date on which you are at least: • Age 45 with 15 “Years of Service”; or • Age 50 with 10 “Years of Service”. See “Years of Service” in the “Glossary of Terms” section in this SPD for more information about how Years of Service are calculated. Any year that you are employed by U.S. Bank but do not have a Year of Service (for example a year in which you work less than 1,000 hours) will not count as a Year of Service for eligibility to begin accumulating credits. Accumulating Retiree Health Care Credits If you have satisfied the 45/15 age and Years of Service rule or the 50/10 age and Years of Service rule explained above, you begin to accumulate credits. You get a $1,200 “credit” for that year and each subsequent year in which you have a Year of Service and are employed by U.S. Bank on the last business day of the year. (For example, if you have a Year of Service but terminate on December 15, you will not receive credits for that year.) You can receive up to a maximum of 15 years of retiree health care credits. 120
Retiree Health Care SPD Effective January 1, 2012 If you accumulate credits and then continue to work for U.S. Bank but do not earn a Year of Service in a particular year, you will retain your previously accumulated credits but will not accumulate credits for that year. Future employment in which you have a Year of Service will result in additional credits, up to the 15-year maximum. U.S. Bank has reserved the right to increase or decrease the amount of the retiree health care credit. Nature of Retiree Health Care Credits and Reservation of Rights to Change Credits The credits you accumulate toward retiree health care coverage are not like accounts in a 401(k) or pension plan. No trust holds these credits, and there is no bank account in which the credits are deposited. This means that as long as U.S. Bank keeps the credits structure in place in its Retiree Health Care Program, it will, for bookkeeping purposes, keep a record of any credits you accumulate. Then, if you are eligible for and enroll in the Program when you terminate, you can apply the accumulated credits toward retiree health care coverage for yourself and any covered dependents. If, however, you do not elect U.S. Bank retiree health care coverage at the time of your termination or you are not eligible for retiree health coverage when you terminate (for example if you are not a participant in the active employee Health Care Program at the time of your termination), your credits are forfeited under all circumstances. Once forfeited, retiree health care credits are never recovered or restored even if, for example, you return to work for U.S. Bank. Also credits cannot be paid out to you or used for any other purpose than payment toward U.S. Bank retiree health care coverage under the Program. Additionally, U.S. Bank is not obligated to continue either the Program or the retiree health care credits toward the cost of the coverage. U.S. Bank could, before or after your termination of employment, terminate the coverage altogether or could amend the Program to eliminate or change (including reducing) the credits – including any credits you have already accumulated. This is because retiree health care coverage is not a ‘vested’ benefit and U.S. Bank has retained its full authority and discretion to amend or terminate the Program. Interest on Retiree Health Care Credits Credits are deemed to receive interest payments of 5.5% annually. For example, if you are 45 with 15 years of service as of December 31, 2011, and have a Year of Service in 2011, you have a $1,200 credit as of December 31, 2011. At the end of 2012, your $1,200 credit from 2011 is deemed to increase an additional 5.5% ($66) to $1,266. (If you had a Year of Service in 2012 and were employed on the last business day of the year, you would also be deemed to receive an additional $1,200 contribution on December 31, 2012.) U.S. Bank has reserved the right to increase or decrease the interest rate. If you terminate your employment with U.S. Bank and enroll in the Program, your remaining credit balance (after deductions from the account toward the cost of coverage) as of each December 31 will be deemed to gain interest at the established interest rate. If you do not enroll in the Program at termination or if you leave U.S. Bank before you are eligible for retiree health care coverage, your credits and any deemed interest are lost. 121
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