Flextronics International USA, Inc. 401(k) Plan Safe Harbor Notice Plan Year 2014
Transcription
Flextronics International USA, Inc. 401(k) Plan Safe Harbor Notice Plan Year 2014
Flextronics International USA, Inc. 401(k) Plan Safe Harbor Notice Plan Year 2014 The Flextronics International USA, Inc. 401k Plan (the “Plan”) will be treated as a “safe harbor” plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, for the plan year that begins January 1, 2014 and ends December 31, 2014. A “safe harbor” plan is required to satisfy certain requirements. This notice summarizes the required provisions. This notice relates only to the plan year that begins January 1, 2014 and ends December 31, 2014. The Plan may or may not be treated as a safe harbor plan for future years. You should consider the information in this notice as you decide how much, if any, of your Compensation (as defined below) you wish to defer under the Plan for the 2014 plan year. Pre-Tax Contributions The Plan permits you to contribute up to 100% of your “Compensation” to the Plan; however the actual amount of your contribution can never exceed your net paycheck after all of your voluntary and mandatory withholdings and deductions are subtracted (for example, your medical and dental premiums, dependent care deductions, FICA taxes, income taxes, and garnishments). These contributions are known as Pre-Tax Contributions. You can elect to begin making Pre-Tax Contributions on your date of hire or on any business date thereafter. Your Pre-Tax Contributions will begin as of the next payroll period that begins as soon as administratively practicable after you make your election. For 2014, the maximum amount of Pre-Tax Contributions is pending announcement by the IRS for 2014 . If you are age 50 or over or if you will attain age 50 on or before December 31, 2014, you may make additional PreTax Contributions known as Catch-up Contributions. For 2014, the maximum amount of Catch-up Contributions is pending announcement by the IRS for 2014 . If you are eligible to make Catch-up Contributions, your overall Pre-Tax Contributions limit will equal the 2014 Pre-Tax Contribution limit plus the 2014 Catch-up Contribution limit, or pending announcement by IRS for 2014. You do not have to make a separate election to make Catch-up Contributions; however, you will not be treated as making Catch-up Contributions until you have reached the 2014 Pre-Tax Contribution limit. Compensation For purposes of contributions to the Plan, “Compensation” generally means your wages, salary, overtime, any type of bonuses or incentive pay, and any amounts received from Flextronics actually taxable to you. “Compensation” includes your Pre-Tax Contributions and your contributions toward health coverage premiums, medical flexible spending account, and dependent care spending account. However, “Compensation” excludes certain taxable benefits, expense allowances, severance pay and amounts realized from the exercise of a nonqualified stock option or from the sale, exchange or other disposition of Flextronics International USA, Inc. 401(k) Plan 1 stock acquired under a qualified stock option. “Compensation” also excludes amounts realized when restricted stock or property becomes freely transferable or is no longer subject to a substantial risk of forfeiture. Compensation in excess of the 2014IRS Compensation limit is disregarded in determining contributions to the Plan. The 2014 IRS Compensation limit is pending announce by IRS for 2014. Elections To contribute to the Plan, you must elect: (1) the percentage of Compensation you want withheld from your paychecks and contributed to the Plan as Pre-Tax Contributions and (2) the types of Compensation to which you want that percentage applied (for example, base pay and bonuses). The Plan permits you to have Pre-Tax Contributions withheld on all types of pay included in the definition of Compensation. However, for example, you may want to have your Pre-Tax Contribution percentage applied only to base pay. You may elect to increase or decrease the percentage of your Pre-Tax Contributions to the Plan by contacting Fidelity Investments at 1-800-890-4015 or by using the Fidelity Investments website at https://www.401k.com under NetBenefits. Your new election will become effective as soon as administratively practicable following the date the election is made. Safe Harbor Matching Contributions Under the safe harbor matching contribution method, Flextronics will make Safe Harbor Matching Contributions to the Plan on your behalf in an amount equal to 100% of your Pre-Tax Contributions to the extent these contributions do not exceed 3% of your Compensation, plus 50% of your Pre-Tax Contributions for the next 2% of your Compensation. This means that if you elect to make Pre-Tax Contributions of 5% of your Compensation, Flextronics will make Safe Harbor Matching Contributions on your behalf equal to 4% of your Compensation. In addition, employees will be eligible to receive Safe Harbor Matching Contributions immediately upon enrolled participation. Safe Harbor Matching Contributions are made on the basis of Pre-Tax Contributions that you make each payroll period. Pre-Tax Contributions in excess of 5% of your Compensation will not be matched. This means the maximum Safe Harbor Matching Contribution that you can receive is 4% of your Compensation each payroll period (up to the maximum IRS Compensation limit for 2014). Since the Safe Harbor Matching Contribution is based on Compensation paid each payroll period, it is important for you not to “frontload” your Pre-Tax Contributions in order to maximize the Safe Harbor Matching Contributions you will receive. In 2014, the maximum amount of Safe Harbor Matching Contributions that a participant could receive for 2013 was $10,200 (4% of $255,000) (match amount pending maximum compensation limit announcement change by IRS for 2014). Flextronics International USA, Inc. 401(k) Plan 2 Example of Safe Harbor Matching Contributions: Pre-Tax Contribution Rate Amount of Safe Harbor Matching Contribution 1% of Compensation 1% of Compensation 2% of Compensation 2% of Compensation 3% of Compensation 3% of Compensation 4% of Compensation 3.5% of Compensation 5% of Compensation 4% of Compensation 6% or more of Compensation 4% (maximum) of Compensation Safe Harbor Matching Contributions made to the Plan on your behalf for 2014 and related investment earnings will be held in a Plan account entitled Safe Harbor Match. Discretionary Matching Contributions In addition to the Safe Harbor Matching Contributions described above, the Plan allows Flextronics to declare an additional “Discretionary Matching Contribution” each year following the end of Flextronics’ fiscal year. If a Discretionary Matching Contribution is declared for the 2014 plan year, the Discretionary Matching Contribution will be calculated on a payroll period basis based on your Pre-Tax Contributions made during 2014, but the Discretionary Matching Contributions would likely be contributed to the Plan in the second quarter of 2015. If you are eligible to receive Safe Harbor Matching Contributions for a plan year, you will also be eligible to receive any Discretionary Matching Contributions for that plan year. Each year, Flextronics will decide whether or not to declare a Discretionary Matching Contribution and the amount of any such Discretionary Matching Contribution, which could range from a fraction of a percent to 4% of Compensation. Discretionary Matching Contributions made to the Plan on your behalf for 2014, if any, and related investment earnings will be held in a Plan account entitled Discretionary Match. Vesting Schedule You are always 100% vested in all amounts credited to your account, except as follows. Employer match amounts under the Solectron 401(k) Retirement Savings Plan on December 31, 2008 vest 25% per year of service, and will be 100% vested after 4 years of service or reaching age 59½ while employed with Flextronics. Employer match amounts under the Multek Flexible Circuits, Inc. Employee Savings Plan on Flextronics International USA, Inc. 401(k) Plan 3 December 31, 2010 vest 33% per year of service, and will be 100% vested after 3 years of service or reaching age 55 while employed with Flextronics. Withdrawal Provisions You may request a distribution of your Plan account balance following your termination of employment for any reason. You may also withdraw any portion of your account once you attain age 59 ½ regardless of your employment status. If you have a rollover account, you may make a withdrawal from that account at any time. You may also withdraw a portion of your account if you have a financial hardship, as defined in the plan document. If you are on long-term military duty, you may withdraw from your pre-tax contributions account. If you have a “disability” (as defined in the plan), you may withdraw from your vested accounts other than safe harbor, qualified nonelective, qualified matching, and prior pension transfer accounts. Also, employer match amounts transferred from the Multek Flexible Circuits, Inc. Employee Savings Plan may be withdrawn after age 55. For additional information about the Plan, please review the Summary Plan Description. You can obtain a copy of the Summary Plan Description online through the Human Resources website or by contacting Fidelity Investments at 1-800-890-4015 or by using the Fidelity Investments website at https://www.401k.com under NetBenefits. This Notice reflects the provisions of the Plan effective as of 2012. The Plan consists of a formal plan document and a trust agreement, both of which are intended to be "qualified" under the Internal Revenue Code. From time to time, the IRS may require that certain changes be made to the Plan or the trust agreement. In addition, the Employer may amend the Plan at any time. You will be advised if there are changes that significantly affect the information in this Notice. It is important for you to understand that because this Notice is only a summary, it cannot cover all the details of the Plan or how the rules will apply to every person in every situation. All of the specific rules governing the Plan are contained in the official plan document and trust agreement. You can get copies of the plan document and trust agreement from the Plan Administrator. There may be a minimal charge for copying costs. Every effort has been made to accurately describe the complicated provisions of the Plan. In the event there is any conflict between this Notice (or the SPD) and the plan document and trust agreement, the official plan documents will always be followed in the actual determination of your benefits or rights. Flextronics International USA, Inc. 401(k) Plan 4