Dow Looks to Future with New U.S. Retirement Program

In an effort to attract and retain next generation employees, The Dow Chemical Company (“Dow”) has announced plans to modernize its U.S. retirement program. Beginning in 2008, eligible new salaried employees in the U.S. will be offered a new plan, called the Personal Pension Account, which provides an annual accumulation of funds at five percent of pay, plus interest. The Personal Pension Account will be offered in addition to the company’s existing retiree health care assistance plan and 401(k) plan, which has been enhanced for employees.

“Dow has a history of offering very competitive, company-funded retirement benefits to our employees,” said Julie Fasone Holder, corporate vice president, Marketing & Sales, Human Resources and Public Affairs. “Dow’s approach to updating our retirement program will be a competitive advantage in the market. The new program, plus our total rewards approach to competitive pay, comprehensive benefits, a rewarding work environment and ongoing development opportunities are key to our ability to attract the best and the brightest.”

Under the new retirement program, Dow will provide eligible U.S. salaried employees a company-paid retirement benefit, a matching 401(k) plan and a tax-free way of saving for medical premiums incurred during retirement. Those benefits for new employees hired after January 1, 2008 will be:

* Personal Pension Account - Each year, Dow will contribute five percent of pay, plus interest, into this pension account. Employees will be able to take the value of their pension account as a lump sum whenever they leave the company - at retirement or earlier. The pension vesting requirement is 3 years.

* 401(k) plan - Dow will change the company match design to encourage participation in the plan. The overall match will remain at four percent of pay. Dow will implement new automatic features to help new employees save and invest. The company will also offer a new Roth 401(k) feature in addition to its existing contribution options.

* Retirement Health Care Assistance Plan - Eligible employees may put aside dollars today to pay for medical premiums in retirement. Dow will match these employee contributions dollar for dollar to pay retiree medical premiums.

With the implementation of these changes, employees hired after January 1, 2008 will not be eligible for retiree medical and retiree life insurance.

Modernizes Plans for Next Generation of Employees

“We know that prospective employees want benefits that accumulate throughout their career rather than concentrate on the last years of their careers,” said Janet VanAlsten, Global Benefits Director. “They also want to be able to take the funds with them if they choose to leave the company. That’s exactly the need our new program satisfies and why we’re taking this next step in our benefits evolution.”

Dow began to evaluate the full spectrum of retirement options available after the U.S. government passed the Pension Protection Act last summer. The company chose this new method of retirement delivery because it allows Dow to maintain its benefit at a competitive level yet dampen pension expense volatility.

Effect on Current Employees and Retirees

These changes to the pension plan do not affect current eligible U.S. retirees or active U.S. salaried employees hired before 2008. Changes for bargained-for employees will be managed per the terms and conditions of the collective bargaining agreements.

Starting in January 2008, the 401(k) savings plan changes will affect all eligible employees and company contributions will be made only to accounts of participating employees.