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BNSF Retirement Plan (Pension Plan for Salaried Employees)2CONTENTSHOW THE RETIREMENT PLAN WORKS IN BRIEF . 4A Sound Foundation for Your Retirement . 4BNSF Pays the Full Cost . 4Joining the Plan . 4Receiving Your Benefit After You Retire . 4Vesting . 4Getting Your Retirement Started . 5PURPOSE OF THIS SPD . 5Your “User’s Guide” . 5Limitations of this Summary. 5INTRODUCTION TO THE BNSF RETIREMENT PLAN . 6PARTICIPATING IN THE PLAN. 6Who Is Eligible? . 6When Does Participation Start?. 6HOW THE PLAN WORKS. 7How Service Is Counted . 7When You Become Eligible for Benefits . 9How Retirement Benefits Are Calculated . 9Benefit Payment . 19How to Elect an Optional Payment Method . 21How to Apply for a Benefit . 23OTHER INFORMATION YOU SHOULD KNOW . 24Benefit Limitations . 24“Top-Heavy” Provisions . 24Death . 24Military Service. 24Ownership of Benefits . 25Qualified Domestic Relations Order (QDRO) . 25THE FUTURE OF THE BNSF RETIREMENT PLAN . 25Plan Continuation and Termination . 25Insured Benefits . 26WHOM TO CALL ABOUT YOUR BENEFITS . 27DEFINED TERMS . 28APPENDIX. 30Service Credit Following Termination and Rehire by BNSF . 30If You Are Rehired by the Company After Retiring . 31Early Retirement Benefits for Former Participants of the BNI Plan . 31Refunds of Employee Contributions to Southern Pacific Retirement Plan . 32Employees of Santa Fe Pacific Pipelines, Inc. . 32ADMINISTRATIVE INFORMATION . 32Plan Administrator . 32Name of Plan . 32Type of Plan . 32Plan Number . 33Name and Address of Plan Sponsor . 33Employer Identification Number of Plan Sponsor . 33Name of Trust . 33Name and Address of Trustee . 33Title, Address and Telephone Number of Plan Administrator . 33To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)3Agent for Service of Legal Process . 33Plan Year . 33YOUR RIGHTS UNDER ERISA . 34OFFICES OF THE EMPLOYEE BENEFITS SECURITY ADMINISTRATION, U.S. DEPARTMENT OFLABOR . 35FREQUENTLY ASKED QUESTIONS AND ANSWERS . 36To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)4BURLINGTON NORTHERN SANTA FE (BNSF)RETIREMENT PLAN(PENSION PLAN FOR SALARIED EMPLOYEES)The Big PictureAn Overview of the BNSF Retirement PlanEffective July 1, 2011HOW THE RETIREMENT PLAN WORKS IN BRIEFA Sound Foundation for Your RetirementThe BNSF Retirement Plan provides you with apre-determined monthly income benefit atretirement, based on your pay and coveredBNSF service. When added to retirementincome from your savings, including incomefrom the 401(k) Plan for salaried employees, andyour income from your Railroad RetirementBoard (RRB) benefit, the BNSF Retirement Plangives you the security and peace of mind to planfor your retirement with confidence.Defined terms: For the meaning of terms inblue, click to see the Defined Terms section.Links: Click on blue italic items to linkdirectly to the section or chapter indicated.Previous view: Return to your previouspage by right clicking and selecting the“previous view” option. See Navigation Tipsto activate this handy tool.BNSF Pays the Full CostBNSF funds your pension benefit. You do notmake contributions to the Plan.Unreduced benefits can start at age 62, if youhave at least 30 years of BNSF benefit service asdefined by the Plan.Joining the PlanYou automatically start participating in the Planafter you have completed one year of BNSFsalaried service (or at age 21, if later).VestingReceiving Your Benefit After You RetireNormally, pension benefits begin when you turnage 65 and retire. However, a reduced earlyretirement benefit is possible as early as age 55,if you have at least 10 years of vesting service 1.1 You become “vested” (gain 100 percentownership) in your BNSF Retirement Planbenefit after five years of vesting servicewith BNSF1, or when you reach age 65. A vested benefit is payable when you reachretirement age, even if you have left thecompany.Vesting service typically begins on the date you arehired as a BNSF employee. Vesting serviceincludes your years of scheduled service if any.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)Getting Your Retirement StartedIf you're thinking about retiring, go to BNSF'sRetirement Guide and Checklist at BenefitsOnline (or call the Retirement Team at 877-4512363) to request a benefit calculation and learnhow the retirement process works. You shouldrequest a retirement kit at least 60 days beforethe last day you intend5to work. Also, you should contact the closestRRB office 60-90 days in advance to apply foryour RRB benefit.Estimate Your Benefit with Pension Online EstimatorWith BNSF’s simple-to-use Pension Online estimator, you can input a range of pay and retirement agevariables to model the value of your pension benefit when you retire – or when you would like toretire.This easy tool can help you answer questions such as: How much of a pension benefit can I expect if I retire at age 65? How much might my pension benefit be if I retire early? How will my pension benefit change if my pay increases?To access the estimator, go to the Benefits Online page of employee.bnsf.com and select PensionOnline in the section titled Tools for Maximizing Benefit Value.PURPOSE OF THIS SPDThis is the Summary Plan Description (SPD)explaining the main features of the BNSFRetirement Plan, also referred to in thisdocument as the Pension Plan for salariedemployees, or the Plan. Except as otherwisenoted, this SPD describes the Plan in effect as ofJuly 1, 2011.Your “User’s Guide”The SPD is a detailed guide tounderstanding and effectively using yourBNSF pension benefits. Please read thissummary carefully so that you understandthe retirement benefits provided to you byBNSF and how they contribute towardyour family’s financial security.Limitations of this SummaryThe Plan is fully described in a legal PlanDocument that covers a wide range ofcircumstances and defines the terms of the Plan.It is the intent of this SPD to describe accuratelythe benefits and related provisions of the Plan.However, if there is any inconsistency betweenthis SPD and the Plan Document, the terms ofthe Plan Document govern. A copy of thecomplete Plan Document is available from theBNSF Benefits Center at 877-451-2363.Participation in the Plan does not guarantee youremployment with BNSF or any affiliatedcompany.Keep in mind that some of the information iscomplex because of the technical nature of thesubject matter and the legal aspects. You arewelcome to call the BNSF Benefits Center at877-451-2363 if you have questions.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)6INTRODUCTION TO THE BNSF RETIREMENT PLANThe BNSF Retirement Plan is a qualified, defined benefit pension plan, that provides retirement incomebenefits to eligible salaried employees of Burlington Northern Santa Fe, LLC (BNSF) and its affiliatedcompanies that elect to participate in the Plan. This Plan amends, combines and replaces both the priorSanta Fe Pacific Retirement Plan and the prior Burlington Northern Inc. Pension Plan. The prior Santa FePacific Retirement Plan is referred to in this summary as the “Santa Fe Plan,” the prior BurlingtonNorthern Inc. Pension Plan is referred to as the “BNI Plan,” and together these two plans are referred toas the prior plans.PARTICIPATING IN THE PLANWho IsEligible?The Retirement Plan provides retirement income benefits to eligible salariedemployees who: Retired under a prior plan before Oct. 1, 1996, or Retire on or after Oct. 1, 1996, or Left employment before Oct. 1, 1996, and were vested under one of the priorplans, or Leave employment on or after Oct. 1, 1996, and after five years of vestingservice.If you participated in a prior plan and you left employment with Santa Fe PacificCorporation or Burlington Northern Inc. or any affiliated company before Oct. 1,1996, your benefit is determined under the provisions of the applicable prior plan ineffect on your date of termination from salaried employment.When DoesParticipationStart?If you were a participant in a prior plan on Sept. 30, 1996, and remained in coveredemployment, you automatically became a participant in the Plan on Oct. 1, 1996.If you begin covered employment as a salaried employee on or after Oct. 1, 1996,you are eligible and begin participating in this Plan on the first day of the month afterthe latest of: The first anniversary of your employment or any following Oct. 1 (provided youwere paid by BNSF for at least 1,000 hours during the preceding 12 months), or Your 21st birthday, or The date you began covered employment.Covered employment does not include providing services to BNSF: Under an arrangement that BNSF considers to be leased or contract employment,or As a non-resident alien who receives no earned income from U.S. sources.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)7Example of When Participation StartsAssume that you first work for BNSF on March 13, 2011, and that you are paid formore than 1,000 hours during the period of March 13, 2011 to March 12, 2012. Youwill become a participant on April 1, 2012, assuming you are at least age 21 and arein covered employment at that time.However, if you are paid for less than 1,000 hours during the period of March 13,2011 to March 12, 2012, but for more than 1,000 hours during the period of Oct. 1,2011 to Sept. 30, 2012, you will become a participant on Oct. 1, 2012, assuming youare at least age 21 and in covered employment at that time.HOW THE PLAN WORKSHow Service IsCountedYour length of service with BNSF, as described below, determines your eligibilityfor benefits and is used in calculating the amount of your benefit.Vesting ServiceVesting service is used to determine, among other things, your right to receive abenefit and your eligibility for early retirement. Vesting service is the sum of: Your vesting service, if any, as of Dec. 31, 1995 under the Santa Fe Plan, plus Your vesting service, if any, as of Dec. 31, 1995 under the BNI Plan, plus Your vesting service under this Plan, which is the number of years after 1995 forwhich you are compensated by BNSF for at least 1,000 hours. For any calendarmonth in which you were compensated or on leave of absence for at least onehour of service you will be credited with a minimum of 190 hours of vestingservice.Benefit ServiceBenefit service, up to 40 years, is used to calculate the amount of your benefit. It isthe sum of: Your benefit service, if any, as of Sept. 30, 1996, under the Santa Fe Plan, plus Your benefit service, if any, as of Sept. 30, 1996, under the BNI Plan (called“credited service” under the BNI Plan), plus Your benefit service under this Plan, including fractional years (which is thenumber of calendar months for which you are compensated for at least one dayof covered employment).Santa Fe Plan Special RuleIf you were a participant in the Santa Fe Plan on Sept. 30, 1996, benefit servicegenerally includes Santa Fe service in non-covered employment before Oct. 1,1996, provided you had five consecutive years of benefit service after the periodof non-covered employment.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)8Santa Fe Plan Special Rule – ExampleAssume that you began work for Santa Fe in non-covered employment onMarch 1, 1978 and you transferred to covered employment with Santa Fe andbecame a participant in the Santa Fe Plan on Sept. 1, 1991. If you continued incovered employment for the five-year period through Aug. 1, 1996, you willreceive benefit service credit for your 13 years and six months of non-coveredemployment. However, if you became a participant in the Plan on or afterOct. 1, 1996, you do not receive benefit service credit for your non-coveredemployment.BNI Plan Special RulesThe BNI Plan contains the following special rules for crediting benefit serviceprior to Oct. 1, 1996, to employees who are transferred from scheduled tosalaried employment: If you transferred from scheduled to salaried employment prior toJan. 1, 1979, you receive benefit service credit for your prior service as ascheduled employee. However, you may not receive credit for service beforea break in service. If you transferred from scheduled to salaried employment betweenJan. 1, 1979, and Aug. 31, 1985, you receive benefit service credit for yourprior service as a scheduled employee if you have completed five years ofservice as a salaried employee. However, you may not receive credit forservice before a break in service. If you transferred from scheduled to salaried employment on or afterSept. 1, 1985, you will not receive benefit service credit for prior service as ascheduled employee.Service Credit During Disability and Leaves of AbsenceIf you are disabled and receiving benefits under a long term disability (LTD)insurance program maintained by a participating company or you are on an approvedleave of absence, you remain a participant in the Plan.During a Leave of Absence (other than during disability)You continue to earn vesting service and benefit service credit as if you hadremained in covered employment while on an approved leave of absence.During Disability If you have 20 or more years of vesting service when you begin receivingLTD benefits, you continue to earn vesting service and benefit service creditas if you had remained in covered employment throughout the period thatyou receive LTD benefits. If you begin receiving LTD benefits before you have 20 years of vestingservice, you will receive benefit service credit for a maximum of one year.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)When YouBecomeEligible forBenefits9Becoming Vested After you complete five years of vesting service, you are vested in a benefit.Vested means you own the benefit. 2 Even if you have less than five years of vesting service, you become vested in abenefit if you reach age 65 while participating in the Plan.When Pension Benefit Payments StartYou may choose to: Begin your unreduced benefit on the first of the month after you have retired andreached age 65 (your Normal Retirement Date). Begin an unreduced benefit the first of the month after you have retired andreached age 62 with 30 years of benefit service. Begin a reduced early retirement benefit as early as the first of the month afteryou have retired and reached age 55 with at least 10 years of vesting service atthat time. Receive a lump-sum benefit only if your benefit has a present value of not morethan 25,000.If you terminate your employment prior to reaching eligibility for early retirementunder this Plan, you forfeit your eligibility, if any, for BNSF medical and lifeinsurance benefits as a retiree.Payment DateWhile your retirement under the Plan takes effect on the first day of a month, benefitpayments are paid near the end of that month. The earliest date that your retirementcan take effect is the first day of the month following your last day of employment.Example: If your last day is June 15, the earliest your retirement can take effectis July 1, and your first payment will be made on or about July 31.HowRetirementBenefits AreCalculatedThe amount of your retirement pension benefit is based on your: Plan compensation, Years of benefit service, Age when your benefits begin, and Method of payment.How Plan Compensation Is DeterminedYour plan compensation is your average monthly compensation for your 60consecutive highest paid months of salaried employment in the 10-year periodimmediately prior to the termination of your salaried employment.2If you were a participant in a prior plan and terminated covered employment between Jan. 1, 1995, andSept. 30, 1996, you are vested in your benefit regardless of your years of vesting service.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)10Plan CompensationCurrently, your plan compensation includes your base salary for salariedemployment (including a paid leave of absence), and cash-only bonuses paidunder the Incentive Compensation Plan, up to a maximum compensation set bythe federal government. For example, the 2011 compensation limit is 245,000.Call the BNSF Benefits Center at 877-451-2363 for the current amount. Plancompensation includes: Your before-tax contributions to the BNSF Investment and Retirement Plan(401(k) Plan) and to flexible benefit programs (such as your contributions forhealth benefits), Contributions to any non-qualified salary deferral plan, Sales commissions and similar sales-based cash compensation, and For participants in salary bands 34 and below, compensation that wasexchanged for a grant under the BNSF Incentive Compensation Bonus StockProgram or similar program.Plan compensation does not include: Automobile allowances, Imputed income under any group term life insurance program, Moving expenses or other reimbursements, Fringe benefits, Severance payments, Lump-sum payments in lieu of merit increases or similar items, Accrued but unused vacation, whether or not paid in cash, or Income resulting from the exercise of stock options or the vesting ofrestricted stock or restricted stock units or any other form of stock-basedcompensation.Plan Compensation Prior to Oct. 1, 1996For periods prior to Oct. 1, 1996, compensation is determined under theapplicable prior plan.Plan Compensation During DisabilityIf you begin receiving a benefit under BNSF’s Long Term Disability InsuranceProgram on Oct. 1, 1996 or later, your Plan benefits are calculated based on yourplan compensation and Railroad Retirement and Social Security pay levels ineffect as of the date your disability began.Different rules apply if you began receiving BNSF Long Term DisabilityInsurance Program benefits prior to Oct. 1, 1996, as follows: For prior Santa Fe Plan participants, plan compensation is projected based onyour plan compensation in effect at the time of the disability, and RailroadRetirement and Social Security pay levels in effect when you retire.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)11 For prior BNI Plan participants, plan compensation is projected based onyour plan compensation in effect at the time of the disability, and RailroadRetirement and Social Security pay levels in effect when you becamedisabled.Plan Compensation During Leave of AbsenceIf you are on an approved leave of absence that began on or after Oct. 1, 1996,your Plan benefits are calculated based on your plan compensation and RailroadRetirement and Social Security pay levels in effect at the time of your leave.Different rules may apply for leaves commencing prior to Oct. 1, 1996: For prior Santa Fe Plan participants, benefits are based on your base rate ofpay and Railroad Retirement and Social Security pay levels in effect at thetime of the leave. For prior BNI Plan participants, earnings are projected based on your baserate of pay in effect at the time of the leave and Railroad Retirement andSocial Security pay levels in effect at the time of your leave.Benefit FormulaYour monthly retirement benefit under the Plan is calculated using your years ofbenefit service and your plan compensation in the formula below. The Plan benefitformula is the sum of the following percentages of portions of your plancompensation.Portion of Plan CompensationRetirement Benefit as a % of PlanCompensation Per Year of BenefitService Up to Social Security pay level(first 4,950/month) 3 From Social Security pay level 4,950/month) to RailroadRetirement pay level 6,280/month)(i.e., next 1,330/month)3 Above Railroad Retirement pay level(over 6,280/month)330.3% (.003)0.8% (.008)1.4% (.014)These are 2011 pay level amounts. Amounts are adjusted annually.To SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)12Pay level amounts are adjusted annually. The following table shows the monthlyamounts that applied in prior years. YearSocial Security PayLevelAmount BetweenSS Pay Level andRR Pay Level1985 ,3405,84020104,7001,3756,07520114,9501,3306,280To SPD Chapter List and Search 880 Railroad RetirementPay LevelTo Table of Contents 2,130To Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees)13Example of Monthly Benefit CalculationSuppose your plan compensation is 90,000 annualized, or 7,500 per month,you have 20 years of benefit service and you terminate employment in 2011.Your monthly pension would be calculated as follows:.3% (.003) times 4,950.8% (.008) times 1,330 ( 6,280 - 4,950)1.4% (.014) x 1,220 ( 7,500 - 6,280)SubtotalTimes 20 years of benefit serviceTotal 14.85 10.64 17.08 42.57x20 851.40per monthPrior Year-end Minimum BenefitFor retirements on or after July 1, 2010, your accrued benefit at retirement iscompared to your accrued benefit as of each prior December 31 going back to2009 using your final average earnings on your termination date for each of thesecalculations, and you will be eligible for the highest benefit.Because the Social Security pay level and/or the Railroad Retirement pay levelmay change in January of each year, the year-end calculations ensure your finalaccrued benefit has not decreased solely due to the changes in these pay levels.Minimum BenefitYour normal retirement benefit will not be less than 37 per month for each year ofbenefit service (or not less than 24 per month for each year of benefit service if yourservice as a salaried employee ended before July 1, 2010).If you were a participant in a prior plan, you may also be entitled to one of thefollowing minimum benefits: Former Participants Under Either Prior Plan – Your benefit under this Planwill not be less than your accrued benefit under either prior plan as ofSept. 30, 1996, as adjusted under the prior plans if your benefit begins beforeyour normal retirement date. Former Santa Fe Plan Participants – If you were a participant in the Santa FePlan on Sept. 30, 1996, and you were at least age 45 on Oct. 1, 1996 (or onNov. 1, 1996, if you were a participant employed by Santa Fe Pacific Pipelines,Inc.), you receive the greater of: The benefit provided under this Plan, or The benefit you would have received had the definitions of vesting service,benefit service and accrued benefit and the special provisions for members ofpredecessor plans under the Santa Fe Plan stayed in effect until yourretirement. Former BNI Plan Participants – If you were a participant in the BNI Plan onSept. 30, 1996, and you were at least age 45 on Oct. 1, 1996, your benefit is thegreater of: The benefit provided under this Plan, orTo SPD Chapter List and SearchTo Table of ContentsTo Defined Terms
BNSF Retirement Plan (Pension Plan for Salaried Employees) 14The benefit you would have received had the following remained in effectthrough your retirement: accrued benefit, normal retirement benefit, earlyretirement benefit, deferred retirement benefit and certain provisions dealingwith Northern Lines merger protection rights, El Paso Companiesgrandfather provisions, Burlington Northern Railroad grandfather provisions,Pilots, the 1981 Supplemental Pension, the 1986 Supplemental Pension, thePreservation of Frisco Plan Benefits and Post-Retirement Spouse’
Santa Fe Pacific Retirement Plan and the prior Burlington Northern Inc. Pension Plan. The prior Santa Fe Pacific Retirement Plan is referred to in this summary as the "Santa Fe Plan," the prior Burlington Northern Inc. Pension Plan is referred to as the "BNI Plan," and together these two plans are referred to as the prior plans.
