Plan website: What s Inside. 1. About Fees and Expenses

Transcription

1 Fee Disclosure Statement Important Information About Your Options,, and Other Expenses for the Packaging Corporation of America Retirement Savings Plan for Salaried Employees Effective 03/01/2018 The Packaging Corporation of America Retirement Savings Plan for Salaried Employees (the 401(k) Savings Plan or Plan ) is a great way to build savings for your future. Through the 401(k) Savings Plan you get: The convenience of automatic savings through payroll deductions and the opportunity for tax advantages through before-tax and Roth 401(k) contributions Contributions from Packaging Corporation of America that match a portion of your savings A flexible, comprehensive investment line-up that is monitored by the Plan s Committee You ll want to make sure you are taking full advantage of the 401(k) Savings Plan by choosing a savings rate and investments in the Plan to meet your long-term retirement needs. Use the tools available on the Plan s website to explore how your savings and investing decisions impact your long-term savings goals. Review this statement to learn more about fees and expenses, the Plan s investment options, and where to go for more information or to take action. To learn more about the Plan, please see the Summary Plan Description available upon request by contacting the PCA Benefits Center at Representatives are available from 8:00 a.m. to 5:00 p.m., Central Time, Monday through Friday. What s Inside 1. About and Expenses 2. The Plan s Options 3. -Related Information 4. Terms You Should Know 1. About and Expenses As with other investments, many fees and expenses for the 401(k) Savings Plan are paid by investors; in this case, participants in the Plan. You have administrative fees that result in a separate fee being charged to your account and individual fees that result in charges due to activity you have requested. (See the next page to learn more about administrative and individual fees.) When you decide to invest in any of the investment options in the 401(k) Savings Plan, there are no upfront sales loads or charges. and expenses are important because they can reduce the growth of your account over the long term. You can find an example that illustrates this concept on the Department of Labor s website, but, fees and expenses are still only one of several factors to consider when making investment decisions. You also should carefully consider other key factors, including asset class and investment risk, 1 IMS # H Last Updated 03/01/2018

2 investment objectives, principal investment strategies, and historical performance when selecting investment options. Administrative and Individual in the 401(k) Plan Administrative fees: The plan is charged fees for plan services such as trustee, legal, recordkeeping, and accounting services. As a participant, you are charged $20 per quarter to cover these costs. Professional Management program fees: If you sign up for the Professional Management Program offered by Alight Financial Advisors, you will be charged a fee that is based on the size of your account: Up to the first $100, % of assets The next $100,001 to $250, % of assets $250,001 or more 0.30% of assets The fee is calculated based on the average amount of assets under management for the calendar quarter, and is debited from your account as the start of the following quarter. Self-directed brokerage window fees: If you establish a self-directed brokerage window account within the plan, you are charged a maintenance fee of $20 per quarter. This fee is deducted from other assets you have in the plan rather than directly from your self-directed brokerage window account. Depending upon the investments purchased and sold in the self-directed brokerage window, other commissions and fees may apply and will be charged within your selfdirected brokerage window account. 2. The Plan s Options As a participant in the 401(k) Savings Plan, you re responsible for investing your account in one or any combination of the Plan s investment options. Section 3 provides more specific information about the investment options which include: Target Retirement Date Funds and the Core Funds that primarily provide you with investments that have returns that can change as the market goes up and down. A Self-Directed Brokerage Window, which provides access to a marketplace of retail investment options. The self-directed brokerage window is designed for participants who have a strong knowledge of the investment marketplace; want greater flexibility to create a more customized portfolio; and have the ability, time, and desire to personally research and evaluate different investments. The platform is provided through Alight Financial Services, a broker- dealer subsidiary of Alight Solutions LLC and member FINRA/SIPC. Note: The plan s Committee will not review the investments available through the self-directed brokerage window. You are solely responsible for your investments in the self-directed brokerage window. There is information available to all investors in these retail investments, for example a mutual fund prospectus. You can request that a copy of a fund prospectus be sent to you from the website, by contacting an Alight Financial Services representative at , or by going to the fund's website directly. There may be individual account maintenance fees applicable to the self-directed brokerage window and paid from the Core Funds as noted in the box on page 2. In addition, depending upon the investments purchased and sold in the self-directed brokerage window, other commissions and fees may apply and will be charged within your self-directed brokerage window account. Before you purchase or sell securities through the selfdirected brokerage window you should find out about any fees associated with the purchase or sale of the particular investment you are trading. You can obtain a fee schedule of applicable trading fees and commissions online by logging into your account at or by contacting an Alight Financial Services representative at You may enroll in the self-directed brokerage window at any time. A minimum investment of $1,000 is required and all subsequent transfers into the brokerage window also require a minimum transfer amount of $1,000. While participating in the brokerage window a minimum of $500 must remain in the core investment funds. 2

3 s in PCA company stock are not permitted within the brokerage window. You may change your investment elections as often as you like on any day the market is open. But keep in mind that some investments within the self-directed brokerage window may be subject to regulatory and fund company trading restrictions. Choosing Your Strategy Ultimately, how you invest should depend on your age, lifestyle, accumulated wealth, years to retirement, and comfort level around risk. This statement only provides some information about your investment choices like fees, expenses and historical returns. Your decisions should be based on the full picture, taking into account your individual situation, not just the information in this statement. To Learn More About the Options. To learn more about the investment options offered and fees and expenses that apply to these options, visit the 401(k) Savings Plan web site at You can find investment option facts, investment option performance, and other investment option information. You can also receive more information about the investment options, including paper copies of the information that is provided online, by calling the PCA Benefits Center at Representatives are available from 8:00 a.m. to 5:00 p.m., Central Time, Monday through Friday. Some of the information you can find on the website or request copies of includes: Copies of summary prospectuses or similar documents for investment options that are not federally registered. Copies of any financial statements or reports, such as statements of additional information and shareholder reports, and of any other similar materials relating to the Plan s investment options, to the extent such materials are provided to the Plan. A statement of the value of a share or unit of each investment option as well as the date of the valuation. A list of the assets comprising the portfolio of certain investment options and the value of such assets (or the proportion of the investment which such assets comprise). To Enroll or Make Changes to Your s. You can enroll in the 401(k) Savings Plan or make changes to your investments at any time by logging on to the Plan s website. Once you have logged on you can: Enroll simply go to Savings and Retirement > Contributions > Start Saving Change your current investment mix or your investment elections for future contributions go to Savings and Retirement > Manage s > Change s and follow the instructions on the website To help you create an investment strategy, PCA has designated Alight Financial Advisors, LLC (AFA), an independent Registered Advisor, to provide fiduciary investment services to plan participants. An Online Advice tool can help you fine-tune your investing strategy, and the Professional Management program offers personalized portfolio management from professional investment advisors. apply for the Professional Management program; see the Administrative and Individual in the 401(k) Savings Plan box in Section 1. Note, AFA has hired Financial Engines Advisors L.L.C. (FEA) to provide sub-advisory services. AFA is a federally registered investment advisor. FEA is a federally registered investment advisor and is an independent company that is not affiliated with AFA. Neither AFA nor FEA guarantees future results. If you are unable to log on to the website you may also enroll or change investment options by calling the PCA Benefits Center at Representatives are available from 8:00 a.m. to 5:00 p.m., Central Time, Monday through Friday. 3

4 3. -Related Information The following table provides you with information on the investment options that have a variable rate of return. In the table, you ll find three things: 1. General information about the type of investment option 2. Fee and expense information including asset-based fees (often called the expense ratio) plus other shareholder-type fees or investment restrictions 2 3. Historical performance for the investment option and an appropriate benchmark for the same period of time Keep in mind, however, that past performance does not guarantee how the investment option will perform in the future. Your investments in these options could lose money. Information about an option s principal risks is available on the Plan s website. Some of the Plan's administrative expenses may have been paid by fees from one or more of the Plan's investment options (e.g. through revenue sharing arrangements, 12b-1 fees). These expenses are included in the expense ratio (total asset based fees) provided in the table below. General Information Fee Information Historical Performance Fund Name/ Core Options State Street Target Retirement Income 1 : Dow Jones Moderately Conservative Index Shareholder-Type and Restrictions Target Date 0.10% $1.00 If you transfer $5,000 or more out of this back into this fund for 30 calendar days. Average Return (Fund and ) 1 yr. 5 yr. 10 yr. to date 8.30% 10.91% 4.26% 5.60% 4.91% 6.48% 7.24% 1 The performance information for each of the State Street Target Retirement Non-Lending Series Funds - K (" K"), except for the 2060 Fund, for the period prior to its funding date of 9/30/2013 (the Funding Date ) is the performance of the corresponding State Street Target Retirement Non-Lending Series Fund - A (" A") but adjusted to reflect the Operating Expense Ratio ("TER") for W of.12% ( A has a TER of.03%). This modeled performance information is provided for illustrative purposes only and the actual performance for K (assuming an earlier Funding Date) for the performance period presented may have been different. The inception date set forth in the modeled performance information refers to the inception date of the applicable A Fund. 4

5 State Street Target Retirement : Dow Jones Target 2015 TR Shareholder-Type and Restrictions Average Return (Fund and ) 1 yr. 5 yr. 10 yr. to date 9.91% 5.76% 7.83% 7.59% 4.18% 4.01% 5.37% State Street Target Retirement : Dow Jones Target 2020 TR 13.10% 9.89% 7.47% 5.52% 4.41% 10.33% 7.61% State Street Target Retirement : Dow Jones Target 2025 TR 16.24% 12.02% 8.77% 6.93% 4.91% 9.84 % 7.61% 5

6 State Street Target Retirement : Dow Jones Target 2030 TR Shareholder-Type and Restrictions Average Return (Fund and ) 1 yr. 5 yr. 10 yr % 9.53% 14.64% 8.41% 5.42% to date 11.85% 10.28% State Street Target Retirement : Dow Jones Target 2035 TR 19.35% 16.99% 10.09% 9.64% 5.86% 10.56% 9.65% State Street Target Retirement : Dow Jones Target 2040 TR 20.36% 18.97% 10.59% 10.60% 6.26% 12.36% 12.11% 6

7 State Street Target Retirement : Dow Jones Target 2045 TR Shareholder-Type and Restrictions Average Return (Fund and ) 1 yr. 5 yr. 10 yr. to date 21.24% 10.81% 10.87% 20.36% 11.19% 6.56% 10.73% State Street Target Retirement : Dow Jones Target 2050 TR 21.23% 21.02% 10.80% 11.38% 6.65% 11.35% 11.34% State Street Target Retirement : Dow Jones Target 2055 TR 21.24% 21.06% 10.81% 11.39% 6.66% 9.09% 8.80% 7

8 State Street Target Retirement : Dow Jones Target 2060 TR Shareholder-Type and Restrictions Average Return (Fund and ) 1 yr. 5 yr. 10 yr % 21.06% 11.39% 6.66% to date 8.73% 8.83% JPMorgan Stable Value Fund : Hueler Stable Value Pooled Fund Index Stable Value 0.44% $4.40 You cannot transfer money directly from the JP Morgan Stable Value fund into the Self-Directed Brokerage Account. You must first transfer money into another investment option for at least 90 days before it is moved into the Self- Directed Brokerage Account. 1.49% 1.96% 1.35% 1.81% 1.98% 2.48% 4.69% 5.03% Metropolitan West Return Bond Fund P (MWTSX) : Barclays Capital U.S. Aggregate Bond TR Bond 0.38% $3.80 If you transfer $5,000 or more out of this 3.51% 3.54% 2.59% 2.10% 4.01% 3.93% 2.81% Templeton Global Bond R6 Fund (FBNRX) : Barclays Global Aggregate Index Bond 0.51% $5.10 If you transfer $5,000 or more out of this 2.79% 7.39% 0.79 % 3.09% 1.34% 1.69% 8

9 Invesco Diversified Dividend Fund R5 (DDFIX) 1 : Russell 1000 Value Index Large U.S. Equity Shareholder-Type and Restrictions 0.54% $5.40 If you transfer $5,000 or more out of this Average Return (Fund and ) 1 yr. 5 yr. 10 yr. to date 8.53% 13.03% 8.62% 8.83% 13.66% 14.04% 7.10% 7.89% NT Collective S&P 500 Index : S&P 500 TR Large U.S. Equity 0.02% $0.20 If you transfer $5,000 or more out of this 21.81% 21.83% 15.79% 8.50% 11.95% 11.98% Fidelity Growth Company Fund : Russell 3000 Growth TR Large U.S. Equity 0.43% $4.30 If you transfer out of this fund, then you are blocked from transferring any amount back into this fund for 60 calendar days % 29.59% 17.16% 9.93% 17.05% 13.72% Victory-Integrity Small Cap Value R6 (MVSSX) : Russell 2000 Value Index Small U.S. Equity 0.96% $9.60 If you transfer $5,000 or more out of this 12.59% 14.65% 14.75% 14.12% 8.71% 16.50% 15.66% 9

10 NT Collective Extended Equity Market Index Fund : Dow Jones U.S. Completion Stock Market Index Small U.S. Equity Shareholder-Type and Restrictions 0.05% $0.50 If you transfer $5,000 or more out of this Average Return (Fund and ) 1 yr. 5 yr. 10 yr % 14.36% 18.12% 14.43% 9.15% to date 14.69% 14.43% Dreyfus/Boston Small/Mid Cap Growth Fund (SDSCX) 1 : Russell MidCap Growth TR Small U.S. Equity 0.79% $7.90 If you transfer $5,000 or more out of this 26.52% 25.27% 14.91% 15.30% 9.08% 9.10% 12.24% 11.11% State Street International Index : MSCI EAFE NR USD International 0.09% $0.90 If you transfer $5,000 or more out of this 25.43% 25.03% 7.96% 7.90% 1.94% 9.62% 9.44% 10

11 EuroPacific Growth Fund R6 (RERGX) : MSCI EAFE Growth NR USD Shareholder-Type and Restrictions International 0.50% $5.00 If you transfer $5,000 or more out of this Average Return (Fund and ) 1 yr. 5 yr. 10 yr. to date 31.17% 9.21% 10.69% 28.86% 8.78% 2.67% 10.56% Principal Diversified Real I (PDRDX) 1 : Dow Jones Moderate Index Multiple 0.88% $8.80 If you transfer $5,000 or more out of this 10.17% 15.15% 1.99% 8.11% 5.75% 4.29% 8.42% PCA Common Stock (PKG) : S&P 500 TR Company Stock 0.00% $0.00 If you transfer $5,000 or more out of this 44.24% 21.83% 28.31% 15.79% 18.83% 8.50% 17.35% 5.35% 1 If you invest in the Dreyfus/Boston Small/Mid Cap Growth Fund, the Principal Diversified Real I or the Invesco Diversified Dividend Fund R5, the Plan will credit your account with a pro rata portion of all revenue sharing received from the fund managers. The annual revenue sharing for the Dreyfus/Boston Small/Mid Cap Growth Fund is.25% of the total fund balance, for Principal Diversified Real I is.10% of the average market value of the funds balance, and for Invesco Diversified Dividend Fund R5 is.35% of the average market value of the funds balance. Amounts will be credited to you based upon your fund balance at the end of each quarter if you have an opening balance in the fund on the date of allocation. The credit will appear as part of Gains/Losses on your quarterly plan statements. 11

12 Voting Rights for PCA Common Stock As a participant in the 401(k) Savings Plan, you can direct the manner in which the Trustee will vote the PCA Common Stock Shares that you have ownership interest in within your PCA Common Stock Fund account. The Trustee votes your Common Shares in accordance with the voting instructions received from you. If you fail to vote your Common Shares, those not voted shares are voted by GreatBanc Trust Company. 4. Terms You Should Know For more information about this statement, you may contact the PCA Benefits Center at or the Plan administrator: Benefits Administration Committee Packaging Corporation of America 1955 West Field Court Lake Forest, IL Federal regulations require plan sponsors to provide this statement. It includes important information to help you understand your retirement plan and compare the investment options offered to you. Most or all of the investment option information available in this statement is available to you by other means, and is provided by third parties. We have not independently verified the third-party information we are relaying in this statement. Additional definitions related to investments can be found on the Plan s website. You will find definitions in Savings and Retirement > Summary > Fund Detail. Here are a few key terms and concepts to help you understand the information described in this statement. Administrative fees: paid to the recordkeeper to cover expense for things like keeping data on participants, communication materials, Internet services, and assisting participants with transactions; fees paid to a trustee to manage some operations of the plan including trading and holding assets; plus fees paid for legal and accounting services. based fees: that are charged as a percent of holdings in an investment to cover investment management fees plus any asset-based administrative service fees. based fees are also referred to as the expense ratio, or, more technically, the fund s total annual operating expenses. class: A specific category of assets or investments (such as stocks, bonds, or cash) as well as certain types of stocks (such as international stocks, largecap stocks, etc.). s within the same class generally exhibit similar characteristics. : A standard against which the performance of a security, fund or investment manager can be measured. Generally, broad market and market segment stock and bond indexes are used to evaluate the performance of an investment Core Funds: Each of these funds represents a single asset class. A combination of Core Funds is needed to have a diversified portfolio that will provide the most optimal long-term investment experience. Designated Advisor: This is the individual or organization that manages investments for individuals who choose to participate in the Professional Management program. In this case, it s Alight Financial Advisors. Equity Wash: A transfer restriction for a stable value fund requiring monies transferred out to be invested in an equity fund or other non-competing fund for a specific period of time (usually 90 days) before the monies can be reinvested into a stable value fund or other competing fund. Professional Management program: You have the option to sign up for managed account services where the designated investment advisor will manage your investment mix for you. If you choose this service, the fees described in the Administrative and Individual in the 401(k) Plan box in Section 1 will apply. Purchase Block: This transfer restriction applies when money is moved out of a fund and then cannot be moved back into the fund for a specific period of time (usually 30 to 90 days). 12

13 Target date funds: These funds are premixed, diversified investment strategies that are designed to be a single investment solution. They have a mix of underlying investments that are generally appropriate for a given retirement date. 13