EMPLOYEES'

RETIREMENT INCOME

PLAN

PITNEY-BOWES, INC.May 1, 1948

INSTITUTE OFI"DUSTRIAL REATIONS MAR I I 2

One of a series of booklets describing

THE PITNEY -BOWESEMPLOYEE SECURITY PROGRAM

consistng of

* REREMENT INCOME PLAN

* GROUP LIFE INSURANCE

* GROUP HOSPITALIZATION INSURANCE

Published by

*31 PITNEY - BOWES, INC.STAMFORD, CONN.

October 28, 1949

Printed in U.S.A. EP-10-49-6M

PITNEY-BOWES, INC.El Stamford, Connecticut

TO OUR EMPLOYEES:

This booklet is your guide to our Retirement Income Plan, effectiveMay 1, 1948, which replaced our former Retirement Annuity Plan.It differs from that plan in two important ways:

First: it becomes a definite plank in our profit-sharing program,with the entire cost born by the Company, unlike the former Plan towhich both the employee and Company contributed.

Second: it covers all Pitney-Bowes employees and assures all whoretire a larger annual income.

You will find the Plan's full details, including approximate esti-mates of payments in different earnings and age groups, on the pagesthat follow. This Plan, as you would expect, was devised after the mostcareful study. We believe it compares with the best retirement pro-grams in the nation.

Although this booklet must be somewhat detailed, we have tried tomake it clear to all. If, however, there are any parts of it that seempuzzling, please don't hesitate to see or write the Personnel Departmentfor an explanation.

Sincerely yours,

W. H. Wheeler, Jr.President

October 1, 1949

THE PITNEY-BOWES

EMPLOYEES' RETIREMENT INCOME PLAN

I NTRODUCTION

This booklet explains the Pitney-Bowes Employees' RetirementIncome Plan. The Plan extends and increases the benefits of theformer Retirement Annuity Plan, under which many employees con-tributed up to May 1, 1948, when the present Plan became effective.The new Plan does not require contributions by employees.

Briefly, the Plan provides all regular employees with a retire-ment income at age 65. Age 65 is also the age when the regularSocial Security benefits start. The retirement income under the Plan,when added to your Federal Social Security benefits, is designed togive you a total retirement income equal to approximately 1V2 percent of your average annual compensation during the 10 consecutiveyears of your highest earnings, multiplied by the number of years ofyour service with the Company. Federal Social Security benefits dependupon the number of years you and the Company and your otheremployers have contributed to the Federal Social Security Plan, start-ing not earlier than January 1, 1937.

The following pages of this booklet describe the provisions of thePlan in greater detail.

P A R T I C I P A T I O N

The Plan includes all regular employees of the Company less thanage 65 on date of employment.

Employees who did not contribute to the former RetirementAnnuity Plan are nevertheless included under this Plan from May 1,1948 with full credit for all previous service. However, employeeswho did contribute before May 1, 1948 had the option of gettingtheir money back or receiving additional annuities based on theircontributions to the former Plan.

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COMPENSATION AND CREDITABLE SERVICE

The amount of an employee's retirement income from the Planwill depend upon his average final compensation and years of credit-able service completed before retirement.

Average final compensation means the average annual total salaryor wages, including bonuses, overtime and any other special pay,during the 10 complete consecutive calendar years of service duringwhich such compensation was the highest. If employed for less than10 years at retirement date, it will be the average of such annual salaryor wages during all the complete calendar years of service.

Service dates from the time of original employment, except whenbroken without leave of absence.

NORMAL RETIREMENT

The normal retirement date is the first day of the month nearestto an employee's 65th birthday. In the interest of maintaining a highdegree of employee efficiency and opening avenues of advancementto younger employees, an employee may be continued in service beyondhis normal retirement date only if it is clearly in the interest of theCompany to do so. Service rendered during such a continuation willnot increase an employee's retirement income under the Plan. Noemployee may be required to continue in service beyond the normalretirement age of sixty-five if he desires to retire.

The formula for the normal retirement income from the Planpayable each year is:

(a) 1% of average final compensation up to $3,000; plus(b) 1 ½y% of the part, if any, of average final compensation over

$3,000 but not over $10,000; plus(c) 1% of the part, if any, of average final compensation over

$10,000;(d) all multiplied by the number of years of service, not exceeding

30, up to an employee's normal retirement date; plus3

(e) if the employee has service in excess of 30 years, amounts equalto one-half the amounts under (a), (b) and (c), multipliedby the years of service over 30.

If you were a participant in the former Retirement Annuity Planon May 1, 1948, the benefits due you thereunder on account of Com-pany contributions to that Plan will be offset against the abovebenefits, but any of your own contributions left under the former Planwill be used to provide an additional benefit for you at retirement.

The formula is used to calculate your retirement income from thePlan exactly, when you reach age 65 and retire. However, you mayestimate your future retirement income from all sources by usingthe work sheet on Page 11 of this booklet.

EARLY RETIREMENT AND OTHER BENEFITS

Under the Plan, every employee who reaches 50 years of age,and who has ten or more years of service with the Company, hasdefinite rights and benefits.

If you should leave the Company for any reason whatsoever afteryou become 50, and if you had ten or more years' service here, youwould be entitled to receive, beginning at age 65, a retirement incomebased on the credits built up for you during the time you worked here.

If the Company retired you involuntarily on your part, or laidyou off through no fault of your own, before you were age 65 but afteryou were 50 and had ten years or more service, you could have yourretirement income begin at once, instead of at the age of 65. Inthat case, of course, the payments would be smaller because of thelonger time over which they would be payable.

Even should you leave the Company of your own volition afterreaching 50 and having ten years or more of service, you may receivean income beginning at an age earlier than 65 (reduced to take ac-count of such earlier age), should you become permanently disabled.

For an example of a reduced retirement income to start beforeage 65, take the case of an employee who retires at age 60 and whose

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annual income calculated like a normal retirement income would be$1,000 commencing at age 65. The early retirement income com-mencing at age 60 would be reduced to approximately $650 to takeaccount of the earlier retirement age and, therefore, the longer lifeexpectancy over which the amount would normally be paid.

OPTIONAL FORMS OF RETIREMENT INCOME

The regular form of retirement allowance provides an income tothe retired member only. If you have a dependent not adequatelyprovided for by insurance or other means (your Company GroupLife Insurance, as you know, is reduced to $500 on the normal retire-ment age of 65) you may wish to elect to have the funds availablefor your regular retirement income applied under one of the followingoptions, but you must make your election before retirement incomecommences.

Option 1. A retirement income payable during your life in a re-duced amount, with the provision that it will be continued after yourdeath, for the life of the beneficiary designated by you at retirement, ifsuch beneficiary survives you.

Option 2. A retirement income payable during your life in a re-duced amount, with the provision that it will be continued after yourdeath, at one-half of the rate paid to you, for the life of the beneficiarydesignated by you at retirement, if such beneficiary survives you.

For example, take the case of an employee whose regular retirementincome is $1,000 a year at age 65 and who elects Option 1. The exactamount of the income will depend on the age of the designated bene-ficiary. Suppose the employee designates his wife and she is also age 65.Then, the retired employee would receive approximately $700 a year,and after his death $700 a year would be paid to his wife if she sur-vived him.

Suppose the same employee takes Option 2 instead of Option 1. Theretired employee would receive approximately $820 a year, and afterhis death his wife would receive $410 a year if she survived him.

An employee electing an option does not have to pass a physicalexamination. However, except in case of retirement at age 65, for theelection to be effective he must live at least 30 days after applying forretirement.

PAYMENTS BY THE COMPANY

The Company makes all payments for benefits under the Plan, andno contributions are required from employees. Company payments takethe form of profit-sharing declarations into the Plan's trust fund madequarterly by the Board of Directors at the same meetings at whichdividends to stockholders and employees are considered.

While it is the Company's firm intention to make its paymentsquarterly in sufficient amounts to fully maintain the Plan's scheduleof retirement income payments to employees, it is of course necessaryfor the Company to reserve the right to end the Plan or to reduce orsuspend payments if it should be necessary to the security of theCompany to do so. However, all Company payments, as soon as theyare made, are held in trust to be used exclusively for the benefit ofemployees and retired employees, according to the provisions of thisPlan.

ADMINISTRATION OF PLAN

The Plan is administered by the Administrative Committee, whichconsists of six members who are appointed by the Board of Directorsof the Company. The Committee arranges for all retirements andgenerally supervises the operation of the Plan. An employee memberof the Industrial Relations Council advises and works with the Com-mittee.

INVESTMENT OF FUNDS

All moneys are set aside in trust and can be used only for the benefitof employees and retired employees or their beneficiaries under thePlan. The Chase National Bank of the City of New York is the desig-nated Trustee to which all contributions are paid for safekeeping andinvestment.

6

QUESTIONS AND ANSWERS

The main provisions of the Retirement Plan have been outlined inthe preceding text. The following questions and answers, however, maybe helpful in answering specific questions which may occur to you.

P A R T I C I P A T IO N

1. Who is included in the Retirement Plan?

All regular employees, except those over age 65 when employed.Anyone employed on or after May 1, 1948 will automatically be-come a member as soon as he is employed.Anyone employed before May 1, 1948 was included on that date,whether or not he had contributed under the former RetirementAnnuity Plan.

2. Does an employee have to pass a medical examination to join thePlan?No.

3. Do all employees participate?

Yes. In order that all employees be treated uniformly and share inthe benefits, the Plan provides that every employee shall parici-pate unless he is age 65 or over when first employed. As theCompany makes all payments, the Plan involves no cost toany employee.

BENEFITS

4. When can an employee retire?

Any employee can retire any time after he has attained age 50and has completed ten years of service. However, his retirement

7

income will not commence until he reaches sixty-five unless theCompany has agreed to his earlier retirement.

5. Must an employee retire at age 65?The normal retirement will be age 65. In the interest of main-taining a high degree of employee efficiency and opening avenuesof advancement to younger employees, extensions in service be-yond normal retirement date may be permitted only if it is dearlyin the interest of the Company to do so. The amount of your re-tirement income when finally payable will not be increased onaccount of any period of work beyond your normal retirementdate. No employee may be required to continue in service be-yond age 65 if he desires to retire.

6. Suppose, at the request of the Company, an employee agrees to re-main in service beyond age 65. May he retire whenever he pleasesthereafter?Yes. He may apply for retirement to take place on the first dayof the calendar month next following the date of filing his appli-cation.

7. How are retirement incomes paid?

By checks mailed to the retired employee monthly as long as heis alive, and ending with the last check received before death.

8. What if I leave the Company before reaching normal retirementage of 65?Under the Plan, every employee who reaches 50 years of age, andwho has ten or more years of service with the Company, wouldhave definite rights and benefits. Details of this are covered underthe heading "Early Retirement and other Benefits" on Pages 4and 5 of this booket.

9. If an employee dies after he has retired, is there any further pay-ment of benefits?

8

No; unless an optional form of retirement income has beenelected as described below.

10. What is meant by optional benefits?

At any time before his retirement income payments begin, anemployee may elect to take a smaller retirement income for him-self, in order that his wife or other beneficiary may receive an in-come after his death. These benefits, providing for payments toa beneficiary after your death, are known as "optional benefits".

11. If an employee elects an optional benefit, will his own retirementincome be the same?

No; it will be less, because of the cost of providing the supple-mental benefits to the beneficiary named under the option.

12. May an employee revoke or change an optional election?

Yes, but not later than 30 days before the date his retirementincome payment is to become effective.

MISCELLANEOUS

13. What contributions are made by employees?

None. The Company makes all the payments to provide thebenefits and pays all the administrative expenses of the Plan.

14. Who manages the Retirement Plan?

The Retirement Plan is supervised by an Administrative Com-mittee of six members who are appointed by the Board of Di-rectors of the Company. An employee member of the IndustrialRelations Council advises and works with the Committee.

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15. Are all employees, including officers, treated on the same basisunder the Plan?

Yes, except that the benefits are reduced on that part of com-pensation in excess of $10,000 per year.

16. What assurance does an employee have that the Plan will con-tinue to operate successfully?

All moneys are set aside in trust and can be used only for thebenefit of employees and retired employees or their beneficiariesunder the Plan. The Chase National Bank of the City of NewYork is the designated Trustee to which all payments are madefor safekeeping and investment. The payments of the Com-pany are set on the basis of actuarial computations, to provide thefull benefits under the Plan and create reserve funds to assure thepayment of all benefits. The Company hopes and expects to con-tinue the Plan indefinitely, but it reserves the right to change ordiscontinue the Plan if unforseen circumstances arise.

NOTE: This brief booklet is not intended to be a substitute for theformal document that is the Plan and controls its operation. Theformal document, however, is available at the office of the Company'sSecretary to any employee who wishes to read it. Its provisions willbe controlling, of course, in case of any conflict with this booklet.

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How to Estimate Your Benefits at Age 65IMAGINARY

INCOME FOR FIRST 30 YEARS' SERVICE EXAMPLE YOURSELF1. Expected average annual total pay during

the 10 consecutive years before age 65 that itwas the highest. ................................ 3400 ....................

2.1%(.01) of line (1) up to $3,000 .......... 30 ....................

3. 1½% (.015) of line (1) between $3,000and $10,000 . ................................$ 6 ....................

4. 1% (.01) of line (1) over $10,000 - ....................

5.Add lines (2), (3) and (4). ......$ ....................

6. Number of years of service, not over 30, toage 65 .......30 ....................

7. Multiply line (5) by line (6) to obtain in-come for first 30 years of service underCompany Plan ................$................ 1,080 ....................

ADDITIONAL INCOME IF YOU HAVE OVER30 YEARS OF SERVICE8. Take one half the amount under line (5) $ 18 ....................

9. Years of service over 30 to age 65 ....... 3 ....................10. Multiply line (8) by line (9) to obtain

allowance for service over 30 years . ......$ ....................

SOCIAL SECURITY BENEFIT11. Expected average earnings per year, not over

$3,000, while covered under Social SecurityfromJanuary 1, 1937 to age 65 .............$..... 2,900 ....................

12. Add $180 to 1/10 of line (11). 470 ....................

13. Number of years while covered under SocialSecurity from January 1, 1937 to age 65 28 ....................

14. Multiply 1% (.01) of line (12) by line(13) . 131.60 ....................

15. Add line (12) and line (14) . 601.60 ....................

YOUR TOTAL RETIREMENT INCOME16. Company income for service up to 30 years

fromline (7) ................................. $1,080....................17. Company income for service in excess of 30

years from line (10) .$................................. ..5 ....................

18. Social Security benefit from line (15). 601.60 ....................

Total retirement income to you. $1,73.................... .60 ....................

Additional Social Security Benefit if wifeliving and age 65 or over (½2 of line 18).... $ 300.80 ....................

COMBINED INCOME $2,036.40 ....................

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Table for Estimating YourANNUAL PITNEY-BOWES RETIREMENT INCOME

YEARS OF SERVICE AT AGE 65

15 YES. 20 YRS.

$ 270

300

375

450

562

675

900

1,125

1,575

2,025

$ 360

400

500

600

750

900

1,200

1,500

2,100

2,700

25 YRS. 30 YRS. 35 YRS.

$ 450

500

625

750

938

1,125

1,500

1,875

2,625

3,375

$ 540

600

750

900

1,125

1,350

1,800

2,250

3,150

4,050

$ 585

650

813

975

1,219

1,463

1,950

2,438

3,413

4,388

40 YES. 45 YERS

$ 630

700

875

1,050

1,313

1,575

2,100

2,625

3,675

4,725

675

750

938

1,125

1,406

1,688

2,250

2,813

3,938

5,063

NOTE:

The above table is to be used only for making estimates. It will not be usedfor calculating the exact amount of your Retirement Income. When you reachage 65, the exact amount of your Retirement Income will be calculated.

The estimated Retirement Incomes shown in the above table do not indudeyour Old-Age Benefit payable under the Federal Social Security Act. See thefollowing page for a table enabling you to estimate your Federal SocialSecurity benefit.

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Average AnnealEarnings During10 HighestConsecaswe Years

$ 1,800

2,000

2,500

3,000

3,500

4,000

5,000

6,000

8,000

10,000

Table for Estimating YourANNUAL FEDERAL SOCIAL SECURITY BENEFITS

YEARS COVERED UNDER FEDERAL SOCIAL SECURITY ACT(Since January 1, 1937)

A : 15 YES. 20 YRS. 25 YRS. 30 YES. 35 YES. 40 YES. 45 YES.Ewwrrngs

$ 1,800 S 414 S 432 $ 450 S 468 $ 486 $ 504 $ 522

2,000 437 456 475 494 513 532 551

2,500 495 516 538 559 581 602 624

3,000 552 576 600 624 648 672 696

3,500 552 576 600 624 648 672 696

4,000 552 576 600 624 648 672 696

5,000 552 576 600 624 648 672 696

6,000 552 576 600 624 648 672 696

8,000 552 576 600 624 648 672 696

10,000 552 576 600 624 648 672 696

NOTE:Federal Social Security benefits depend upon the number of years you andPitney-Bowes, Inc., and your other employers, have contributed to the FederalSocial Security Plan, since the program began, January 1, 1937. The estimatedFederal Social Security benefits shown in above table are only the benefitspayable to the retired employee. If any retired employee's wife is living andis also at least age 65, the Federal Social Security benefits will be increased50 per cent.

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LIFE BEGINS AT 65Start planning now to enjoy securitythat new retirement plan offers you

(Reprinted from the Pitney-Bowes BULLETIN of May-June, 1948)

JOSEPH SMITH smiled as he worked at his bench in the machineshop of a small manufacturing industry. Next week at this time he

would be home, with nothing to do but loaf, scratch around his garden,and sleep. He was retiring at the end of the week. He'd have a prettygood pension - not as much as he'd been earning, of course, but, withSocial Security, enough to live comfortably. His house was paid for, hischildren grown, and his wants simple.

Six months later, Joe Smith's wife wore a worried look. Joe was irri-table, and paced endlessly around the house watching her do the house-work, frowning and muttering. His children and grandchildren couldn'tunderstand what was wrong, and began to make excuses why theycouldn't drop by on Sunday.

6 The New Yorker Magazine, Inc.

"Poor Father doesn't know what to do withhimself since he's retired."

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The next summer Joe died. The doctor wrote the Latin name for anordinary disease on the death certificate. He should have written"BOREDOM."

For that's what made Joe's retirement a failure, and his days ofleisure full of frustration. The truth of the matter is Joe had neverconsidered what it would be like when he quit work. He knew hewould have to quit at 65, and had supposed it would be a pleasure, butit hadn't worked out that way, because Joe had no other interest excepthis job.

Joe's case is worth remembering. With our new Retirement IncomePlan, a lot of us may feel that our problems at 65 are solved. Theyaren't. Joe Smith's tragic experience is repeated time and again, yearafter year. And it needn't ever happen at all.

Doctors, psychiatrists, and retirement personnel experts all agree-the man who has outside interests when he retires finds retirement thehappiest time of his life. Perhaps he has developed an interest in woodcarving over the years, and spends his years after 65 making and repair-ing furniture, or making model boats. Perhaps he takes a job clerkingin a neighborhood grocery store half a day, not because he needs themoney, but because he loves to meet and talk to people, and the workisn't hard.The interest isn't important, so long as it's there. For without it,

the experts insist, the man or woman who has worked for years willbe miserable with nothing to do but loaf and rest. And, having nointerest in life, the chances are that he or she will die too soon.

Now that our new Retirement Income Plan has gone into effect, wehave one of the best retirement programs in the country. Its generousprovisions, when added to Social Security payments, will give us anannual income equal to about 50 per cent of our average earnings duringour highest paid consecutive ten years with the company (more if weaverage less than $3500, less if we average more than that amount).By planning now to develop outside interests, we stand a good

chance of enjoying that income after we retire. Life can begin at 65,too, you know.

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NOTES

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AL

A MARK OF PRODUCr EXCELLENCE

A PLEDGE OF POSTAL SERVICE