Benefits Handbook

If your Grandfathered BEP Benefit is not a small benefit, generally, it will be paid to you at the same time and in the same form of payment that you elect under the tax-qualified Retirement Plan. See "When Benefits Commence" and "How Benefits are Paid" in the Marsh & McLennan Companies Retirement Plan section for details.

For a description of how the Grandfathered BEP Benefit is determined see "Determining the Grandfathered BEP Benefit." Historically, the Company purchased annuity contracts to secure all or a portion of a vested BEP benefit. This practice was discontinued for BEP benefits accrued on or after January 1, 2003.

A Grandfathered BEP Benefit that is secured with an annuity contract will be paid at the same time and in the same form of payment that you elect under the tax-qualified Retirement Plan.

To the extent your Grandfathered BEP Benefit is not secured with an annuity contract, you have the option to receive all or a portion of your unsecured Grandfathered BEP Benefit in an actuarially equivalent single sum payment. See "Electing a Single Sum Payment."

You also have the option to elect to have a Grandfathered BEP Survivor Benefit paid to an eligible opposite-sex Spouse in an actuarially equivalent single sum payment. See "Electing a Single Sum Survivor Benefit for a Grandfathered BEP Benefit."

To elect to receive a single sum payment for all or a portion of your Grandfathered BEP Benefit, you must complete the Marsh McLennan BEP/SRP Grandfathered Benefit Distribution Election Form and return the form as the form instructs.

If your election for a single sum payment has been on file with the Plan Administrator for at least 12 months at the time your grandfathered BEP benefit commences, the portion of your Grandfathered BEP Benefit that is not secured by an annuity contract will be paid according to that election.

If you do not have a valid election on file when your Grandfathered BEP Benefit commences, you will be deemed to have elected payment in the form of a monthly annuity, and the portion of your Grandfathered BEP Benefit that is not secured by a purchased annuity will pay in the same form as you elect for the payment of your benefit under the Retirement Plan.

If you make an election, or a change a prior valid election within 12 months of the date your Grandfathered BEP Benefit commences, that portion of your Grandfathered BEP Benefit that is not secured by a purchased annuity will be subject to a 6% penalty reduction.

Generally, if you make an election for a single sum payment and it has been on file with the Plan Administrator for at least 12 months at the time your grandfathered BEP benefit commences, you will receive a single sum payment that is actuarially equivalent to the portion of your Grandfathered BEP Benefit that is not secured with a purchased annuity when you commence. You may still elect to change the form of payment for this portion of your Grandfathered BEP Benefit from a single sum payment to a monthly annuity at the time your Grandfathered BEP Benefit commences, however, the portion of your Grandfathered BEP Benefit that is not secured with a purchased annuity will be subject to a 6% penalty reduction and the monthly benefit payment amount will be reduced.

If all or a part of your Grandfathered BEP Benefit is not secured with a purchased annuity, you may also elect to have your eligible opposite-sex Spouse receive the survivor benefit payable with respect to that portion of your Grandfathered BEP Benefit as a single sum payment in the event that you die before your vested Grandfathered BEP Benefit commences. If you wish to have your eligible opposite-sex Spouse receive a single sum distribution of the portion of your Grandfathered BEP Benefit that is not secured with a purchased annuity you must complete the Marsh McLennan BEP/SRP Grandfathered Benefit Distribution Election Form and return the form as the form instructs.

Your eligible opposite-sex Spouse may not change your election after your death.

For more information about the Grandfathered BEP Survivor Benefit see "Grandfathered Survivor Benefits."

The interest rate used to calculate single sum payments under the BEP will be based on the same interest rate used to calculate single sums from tax-qualified plans under IRC Section 417(e). For the BEP, these rates are updated quarterly. The quarterly rate used to calculate your single sum payment will be based on the monthly rate two months before the quarter of your payment commencement date. For example, for benefits commencing in January, February, or March, the rate used will be the monthly rate for the preceding November.

Generally, if interest rates are higher, the single sum value will be lower. This is because you will need less money up front, since that single sum value is assumed to earn more interest. Conversely, if interest rates are lower, the single sum value will generally be higher. This is because you need a greater up-front amount as the interest earned on that will be less.

Note: Since an elective single sum payment under the BEP (with respect to Grandfathered BEP Benefits) may be paid at a different time than a mandatory single sum payment of other benefits, the interest rates used to calculate each of those payments may vary.

If you have a valid election on file to pay the portion of your Grandfathered BEP Benefit that is not secured by a purchased annuity in a single sum at commencement, the single sum payment amount will be determined using the BEP's interest rate and your age when the benefit commences.

A sample single sum calculation is shown below:

If you elect a single sum form of payment of the portion of your Grandfathered BEP Benefit that is not secured with a purchased annuity, your single sum payment will be paid on the last business day of the month in which you receive your first payment from the Retirement Plan.

If the value of your Grandfathered BEP Benefit, when expressed as a single life annuity starting at age 65, is a small benefit, a mandatory single sum will be paid to you as soon as practicable following your termination of employment.

Because the BEP is not a Tax-Qualified Plan, a single sum distribution cannot be rolled over to an IRA or other retirement plan eligible to receive rollovers.

If you had accrued a BEP benefit for service performed prior to January 1, 2003, all or a portion of your BEP benefit may have been secured through the purchase of annuity contracts from various insurance companies. Pursuant to the terms of these contracts, your annuity will be paid at the same time and in the same form that you elect when you commence your benefit under the tax-qualified Retirement Plan. The annuities do not have a cash surrender value.

Generally, you make an election to commence a Grandfathered BEP Benefit when you elect to commence a benefit under the tax-qualified Retirement Plan. See "Commencing a Benefit" of the Marsh & McLennan Companies Retirement Plan section for details. Generally, your Grandfathered BEP Benefit will pay in the same form as you elect for payment of your benefit under the tax-qualified Retirement Plan when you terminate employment.

If you opt to have your Grandfathered BEP Benefit direct deposited, it will be direct deposited on the last business day of the month.

Any single sum payments that are made to you will be made in the form of a check. Single Sum payments, cannot be deposited directly into your checking or savings account.