IBM CANADA LTD HUMAN RESOURCES PROGRAMS FOR IBM …

[Pages:23]IBM CANADA LTD HUMAN RESOURCES PROGRAMS

FOR IBM REGULAR EMPLOYEES

Effective on January 1, 2015

This brochure is intended to provide an overview of certain plans and programs in which you may participate. The information in this brochure is based on the official plans and program documents, contracts, and administrator's manuals/guides, as well as information residing in the Employee and Manager's Reference database and the You and IBM Canada Intranet site. If there happens to be any difference between this summary and the listed documents, the above listed sources will be followed. Detailed information on these programs can be found on the You and IBM Canada Intranet site at:

The company reserves the right, in its sole discretion, to modify (includes change, discontinue, suspend or improve) any of its plans or programs at its discretion, and the company's decision on all matters relating to the operation, administration and interpretation of its plans and programs shall be final. The Plan Administrator retains the exclusive authority and discretion to interpret the terms of the plans and programs described herein. This statement applies to all IBM employees (regular full-time, special/regular part-time, assignees, on-leave), individuals receiving Short or Long-Term Medical Disability Income, Retirees and Survivors. Nothing contained in this document shall be construed as creating an express or implied obligation on the part of the Company to maintain such benefit plans, programs, practices, or policies. Eligibility to participate in a plan or program does not constitute a promise or right of continued employment or render any person an employee of IBM.

INSIDE

Your Compensation ............................................................................................ 4 Your Flexible Benefits ......................................................................................... 6 Your Pension and Saving Plans ........................................................................... 13 Other Benefits / Services .................................................................................... 15 Your Flexible Work Arrangements ...................................................................... 18 Some important things you should know ........................................................... 20 Contacts & Resources ......................................................................................... 22

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YOUR COMPENSATION

IBM Canada's compensation program ensures you are paid appropriately for your skills, contribution/leadership, and impact on the business/scope. The program supports key business success factors by focusing on skills, differentiation, accountability, responsibility, global teaming and affordability. In turn, employees have the opportunity to be rewarded, based on the success of the company and how they have contributed to that success.

Compensation Design IBM's total compensation is designed to support the following key business success factors: ? high-performance culture, ? growth in shareholder value, and ? global teaming.

We need your help to achieve this by contributing to those activities and areas of focus which are critical to the success of our business. In return, IBM offers a challenging, exciting and successful working environment, backed by a comprehensive compensation system, designed to properly recognize your contribution, relative to the marketplace.

Cash Components IBM Canada's pay objective is to provide compensation that will attract and retain an outstanding, highly motivated work force and meet the business challenges of the future. To help achieve this objective, our pay program will be:

? strongly influenced by the results you deliver, ? driven by overall business objectives, and ? competitive with leading companies in the marketplace.

When the business exceeds its plan and you perform at the highest level, you will have an earnings opportunity that places you among the best in the marketplace.

IBM Canada's compensation program is designed to provide employees with rewards that are competitive in the marketplace relative to their contributions to the business. Cash compensation can consist of the following components:

? Base Pay The fixed portion of your cash compensation paid on a bi-weekly basis.

? Employee Salary Program This program can provide increases to your base salary based on your performance and contributions to the success of the company.

? Incentive / Commissions For eligible employees in sales and some services roles, these plans are driven by key corporate objectives such as revenue and profitability.

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YOUR COMPENSATION

? Additional Compensation Additional compensation may include overtime, shift premiums, standby premiums, etc. and is designed to compensate eligible employees for work beyond normal working hours, primarily based on provincial legislation requirements.

Employee Stock Purchase Plan (ESPP) You may participate in the IBM Employee Stock Purchase Plan (ESPP) through payroll deductions. When you purchase IBM shares through the ESPP, you receive an automatic discount of 5% off the market price on the date your shares are purchased.

The plan is built around two offering periods ? a block of time during which participants purchase shares ? January 1 to June 30 and July 1 to December 31. Eligible employees may enroll at any time during the offering period. To enroll, you must be on the IBM payroll on or before the first day of the offering period in which you are enrolling. When you enroll, you authorize the deduction of a portion of your compensation (you may contribute 1% to 10% in any whole percentage of your pay, up to certain plan and regulatory limits). Once enrolled in the plan, you do not have to reenroll for the following offering period as your participation continues automatically (unless you are suspended for selling shares bought in the current offering period) until you process a change.

The plan rules limit you to purchasing a maximum of $25,000 worth of shares in any calendar year or 1,000 shares in any offering period. You may also increase or reduce your contribution, add or delete a joint owner, or withdraw from the plan at any time during an offering period. If you withdraw from the plan, you may re-enter at any time, during the same offering period or a subsequent one.

Growth Driven Profit-sharing (GDP) program To support IBM's global focus on profitable growth, the Growth Driven Profit-sharing (GDP) program returns a portion of year over year revenue and net income growth back to IBMers, in the form of a single, worldwide "one IBM" profit sharing pool. Payments under this program vary and are based on your job role, job level, IBM's financial results and your individual performance.

Eligibility for payment is dependent upon your being continuously employed by IBM through to the end of the calendar year. Employees in sales or services incentive roles are not eligible for the GDP Program.

Awards IBM values and supports a culture of recognition and appreciation and makes a practice of encouraging and recognizing special and significant achievements through a number of companywide individual and team award programs and may include cash and/or participation in a special event, etc.

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YOUR FLEXIBLE BENEFITS

IBM's suite of employee benefits ranges from flexible benefits and pension to voluntary employee services programs. IBM's Flexible Benefits Plan allows you to design a benefits package that is best suited to meet the needs of you and your family. IBM currently offers the following Flexible Benefits: ? Supplemental Health ? Dental ? Personal Emergency Travel Assistance Plan (Medi-Passport) ? Employee / Spouse/Partner / Children's Life Insurance ? Employee / Spouse/Partner / Children's Accidental Death & Dismemberment Insurance ? Long Term Disability Insurance (LTD) ? Health Care Spending Account (HCEA) ? Taxable Cash

Eligibility As a Regular Full-time and Regular Part-time employee (RPT), you and your eligible dependents are eligible for coverage under the IBM Flexible Benefits Plan.

You will initially be assigned IBM's Standard Benefits Package with single coverage (You Only). However, you will have a one time 30-day opportunity to enroll and customize your benefits and add your eligible dependents and/or change your coverage options effective your hire date.

Active Regular Full-time and RPT employees are eligible to participate in the Annual Flexible Benefits Enrollment. Employees on a non-legislated Leave of Absence (e.g. personal, education, pre-retirement and disability leaves) are not eligible to enroll.

How Flexible Benefits Work Flexible benefits provide you with the opportunity to tailor a benefits package that is best suited to you and your eligible family members. You will choose your benefits from a variety of options that range from extensive coverage to basic, or no coverage. The choice is yours!

The tool you will use to enroll in your benefits is the Your Benefits ResourcesTM (YBR) Web site. YBR is a third-party web site customized for IBM. IBM's HR team continues to manage the Flexible Benefits Plan.

IBM will provide you with flex dollars to help pay for your benefits. You receive flex dollars towards Supplemental Health, Dental, Employee Life Insurance and Long Term Disability Insurance. You can purchase Optional Employee Life Insurance and additional Long-Term Disability Insurance.

Each benefit option will have a price tag - this is the cost to you for that benefit option. You also have some flexibility in choosing who you cover under your Supplemental Health and Dental options.

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YOUR FLEXIBLE BENEFITS

In addition, IBM will deposit money directly into each eligible employee's Health Care Expense Account (HCEA).

The dollar amount is based on the supplemental health and/or dental options selected during enrolment. These dollars cannot be used to offset the cost of your benefits choices and cannot be taken as taxable cash.

The money deposited your HCEA can be used to reimburse yourself for a wide range of healthrelated expenses as per Canada Revenue Agency guidelines. You have the flexibility to determine how you spend this money, as long as the expenses meet the guidelines.

The benefits coverage categories are: ? You only ............................. Coverage for you (employee only) ? You plus one ....................... Coverage for you (employee and one eligible dependent) ? You plus two or more .......... Coverage for you (employee and two or more eligible dependents)

The coverage you select for Supplemental Health may be different from the coverage category you select for Dental. If your coverage category is "You Only", and you have just added your Spouse as an eligible dependent, then you can select either "You Only" or "You Plus One" as your coverage category. If you have more than one eligible dependent (your spouse and children), you may not choose the "You plus one" coverage category. You must choose between "You Only" or "You Plus 2 or More". When you have more than two eligible dependents in your profile, the "You Plus One" category will not be available to you to select.

Once you have made your benefit selections, your flex dollars will be pooled together and will be used to pay for your benefits in the most tax effective manner. This means you will have payroll deductions to pay for all your life insurance options and if selected, for LTD option 4. In addition, any remaining costs that are not offset by your total flex dollars will be paid through payroll deductions.

If you have flex dollars remaining after the tax effective allocation, you will need to allocate them towards a Health Care Expense Account (HCEA) and/or Taxable Cash. The HCEA allows you to use your excess flex dollars to pay for other eligible health care expenses not covered by the IBM Flexible Benefits plan or provincial health insurance plans. The Taxable Cash Plan allows you to take the flex dollars, less any applicable taxes, and have the cash deposited into your bank account on each bi-weekly pay. You may choose one of these or a combination of the two.

Opting Out A big advantage of flexible benefits is that you can opt out of either the Supplemental Health or Dental Plan if you don't need the level of coverage available through the program. If you do decide to opt out, you will receive a specified amount of flex dollars to be used somewhere else. Your pool of flex dollars will be used to pay for any other flexible benefits options in the most tax effective manner and any excess flex dollars can be taken as taxable cash and/or deposited into an HCEA.

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YOUR FLEXIBLE BENEFITS

Why would you consider opting out? If, for example, your spouse or partner has comprehensive benefits coverage through his or her employer, you likely will not need to duplicate coverage through IBM. Or, if you are relatively healthy and have few medical or dental expenses beyond what provincial health insurance covers, you can opt out and put your excess flex dollars in the HCEA to pay for any miscellaneous health care expenses that do come up.

Important: ALL Quebec residents MUST participate in a drug insurance plan that provides a reimbursement level of at least 68%. For IBM employees living in Quebec, this means you must enroll in either Option 2 or 3 of IBM's Supplemental Health Plan unless you have coverage elsewhere (i.e., spouse's coverage). Quebec employees who elect Option 0 (Opt-out) or Option 1 (20% Coverage) of the IBM Supplemental Health Plan are required to provide evidence of coverage elsewhere. You will be advised by mail what information you will be required to provide.

Standard Benefits Package for New Hires The following benefit coverage is assigned to you as a "New Hire" until you enroll using the YBR Web site and select your own benefit options and add your eligible dependents for coverage. The applicable payroll deductions and taxable benefits (for Quebec residents) for this coverage will be applied to your bi-weekly pay.

? Supplemental Health - Option 2 (plan reimbursement level at 80%) - "You Only" coverage

Benefit Prescription Drug Deductible Lowest Cost Alternative Drug

(often referred to as generic drug substitution.)

If no generic drug available: ? Reimbursement Level for Drugs on the National Formulary ? Reimbursement Level for Drugs not on the National Formulary

Hospital Maximum Vision Maximum Hearing Maximum

Reimbursement Level = Dispensing Fee 80 % company paid

80 % company paid

60 % company paid

Semi-private room at 80% up to $150/day $250 for contacts/frames/lenses every 2 years $500 every 3 years

? Dental - Option 2 (plan reimbursement level at 80%) - "You Only" coverage

Benefit Routine Major Restorative

Orthodontia

Reimbursement Level 80 % 60 %

80 %

Maximum Unlimited $1,300/year maximum $2,400/lifetime

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