GREAT NEWHOME FOR YOUR RETIREMENT MONEY. Hexagon Employee Retirement Savings Plan

Transcription

1 AAGREAT GREAT NEW NEWHOME HOME FOR YOUR RETIREMENT MONEY Hexagon Employee Retirement Savings Plan

2 Your retirement plan is moving to a great new home At Hexagon, helping you achieve a comfortable retirement is one of our important priorities. Because we aim to make our retirement plan the best place for you to save for your future, we re making some key changes. In January 2017, your Intergraph Corporation SavingsPlus Plan will move to Vanguard for recordkeeping. The plan will be renamed the Hexagon Employee Retirement Savings Plan (Plan). Please review this newsletter for detailed information on the changes and how they will affect you. You can also visit vanguard.com/ hexagonintergraph for more information including key dates involved with the transition. 2

3 An important source of retirement income Whether you picture your retirement as quiet and simple or filled with travel and hobbies, chances are it won t come cheap. It s realistic to plan for a retirement lasting 30 years or more. And while Social Security may supplement your retirement income, your savings including those in your new Hexagon Employee Retirement Savings Plan account will most likely be your primary income source. When your account moves to Vanguard, you ll enjoy: Investment flexibility. You ll have access to an array of investments to meet your needs. Convenient account access. You can check your balance, make transactions, and use financial planning tools at vanguard.com/retirementplans. You can also go to vanguard.com/bemobile to download the Vanguard app so you can access your account on the go. Enhanced education and planning. You ll get a wealth of information from Vanguard about your Plan and how to invest for retirement. To get started, go to vanguard.com/education. 3

4 FEATURES OF THE HEXAGON EMPLOYEE RETIREMENT SAVINGS PLAN Employee contributions. You will be able to contribute 1% to 100% of your base salary, bonuses, and commissions to the Plan on a pre-tax or Roth 401(k) after-tax basis (or a combination of the two). Company match. When you contribute to the Plan, Hexagon will make matching contributions to help you save even more. For every $1 you contribute to the Plan up to 6% of your pay, Hexagon will contribute an additional $1. If you don t save at least 6% of your pay in the Plan, you aren t receiving the full match. Vesting. Vesting refers to your right to the ownership of the money in your account. You are immediately vested in all contributions, including company matching contributions, and earnings in your account. In other words, if you leave Hexagon in the future, you will not forfeit any of the money in your account. Automatic contribution increases. To help you save more, you can have your contribution rate automatically increased for you each year. Simply decide how much more you d like to save annually from one to three percentage points. You can set up automatic increases anytime. These annual increases can continue until your contributions reach the plan or the annual IRS limit, whichever is less. Plan administration fee. At Vanguard, the annual plan administration fee charged to participants will be reduced to $55 annually ($13.75 per quarter). Loans. Although the Plan is designed for long-term savings, you can borrow from your account. Keep in mind that your paycheck would be reduced to repay the loan with interest, and that you could owe taxes and a 10% federal penalty tax if you fail to repay on time or when you leave Hexagon. Here are the new loan provisions: > > Minimum amount: $1,000. > > Maximum amount: 50% of your vested account balance up to $50,000 (or less if you have had an outstanding loan in the past 12 months). > > Maximum outstanding loans: 2 (one general purpose loan and one loan for the purchase of a principal residence). > > Repayment: up to 5 years for a general purpose loan; up to 15 years for a loan taken to purchase a principal residence. > > Origination fee (per loan): $50. > > Maintenance fee (per year): $25. Catch-up contributions. If you are age 50 or older, you are allowed to contribute above the regular IRS contribution limit to your retirement plan by making catch-up contributions. At Fidelity, you needed to make separate elections for your regular contributions and your catch-up contributions. At Vanguard, you will only need to make one election. If you were making both regular pre-tax or Roth after-tax contributions and catch-up contributions, only your regular contribution rate will carry over to Vanguard. Catch-up contributions will begin once you reach the regular IRS contribution limit. For current contribution limits, visit vanguard.com/contributionlimits. Once the transition to Vanguard is complete, you may want to review your contribution rate to ensure that you will contribute the amount that you wish to contribute by the end of the year. 4

5 YOUR NEW INVESTMENT LINEUP How to invest your money among stocks, bonds, and short-term reserves now and as you grow older is one of your most important financial decisions. When your retirement plan moves to Vanguard, you will be able to choose investments according to your personal preference. That s because your Plan s fund lineup will be divided between three tiers all-in-one investments, index investments, and actively managed investments. You can also access other investments through a fourth tier, the Vanguard Brokerage Option. Whether you re an experienced or novice investor, you can create a portfolio that fits your investment objective, time horizon, and comfort with risk. Tier 1: All-in-one investments Vanguard Institutional Target Retirement Funds provide a professionally maintained, diversified mix of investments that shifts its emphasis to more conservative investments as the year of At Hexagon, retirement nears. helping you achieve a comfortable retirement is a priority. Because we aim to make our retirement plan the 2060 Fund (VILVX) best place for you to 2055 Fund (VIVLX) save for your future, we re 2050 making Fund (VTRLX) some key changes. Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date. Consider choosing the fund with the date that s closest to the year when you expect to retire. If you are already retired, consider choosing the Vanguard Institutional Target Retirement Income Fund. This fund seeks to provide current income and some capital appreciation to retirees Fund (VITLX) 2040 Fund (VIRSX) 2035 Fund (VITFX) 2030 Fund (VTTWX) Vanguard Institutional Target Retirement 2025 Fund (VRIVX) 2020 Fund (VITWX) 2015 Fund (VITVX) 2010 Fund (VIRTX) Income Fund (VITRX) 5

6 Tier 2: Index investments If you wish to create your own diversified investment mix, you may want to start with the funds in this tier. Index investments can provide low-cost access to broad segments of the stock and bond market. Index funds, also known as passively managed funds, generally use a buy-and-hold strategy to track the performance of a given market. Why would anyone invest in an index fund and earn just what the market earns? Because index funds generally cost less to run than actively managed funds, whose managers try to outperform the market. Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) Vanguard Institutional Index Fund Institutional Shares (VINIX) Vanguard Extended Market Index Fund Institutional Shares (VIEIX) Vanguard Total International Stock Index Fund Institutional Shares (VTSNX) Tier 3: Actively managed investments The funds in this tier can help you fine-tune your portfolio with more specialized investments. They can be useful if you want to invest in a specific segment of the stock or bond markets. Delaware SMID Cap Growth Trust DFA US Targeted Value Portfolio Institutional Class (DFFVX) Dodge & Cox International Stock Fund (DODFX) Dodge and Cox Stock Fund (DODGX) Harding Loevner International Equity Portfolio Institutional Class (HLMIX) MassMutual Diversified SAGIC II PIMCO Total Return Fund Institutional Class (PTTRX) T. Rowe Price Institutional Large Cap Growth Fund Institutional Class (TRLGX) Tier 4: Vanguard Brokerage Option The Vanguard Brokerage Option (VBO ) allows you to choose investments from outside your Plan's core investment lineup. You will have access to individual stocks, bonds, options, and thousands of mutual funds from hundreds of fund families. Keep in mind that the risks are substantially different with this strategy and that you ll have to pay commissions and other costs. A note about risk All investing is subject to risk, including the possible loss of the money you invest. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer s ability to make payments. The PIMCO Total Return Fund may invest in derivatives. Derivatives are subject to a number of risks, such as liquidity risk, interest rate risk, market risk, credit risk, and management risk. A fund investing in a derivative instrument could lose more than the principal amount invested. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Investments in stocks or bonds issued by non-u.s. companies are subject to risks including country/regional risk and currency risk. 6

7 WHAT THE TRANSITION MEANS TO YOU To ensure an orderly and accurate transition, activity in your account will need to be temporarily restricted. During this time you will not be able to: Move money between funds. Change which funds you invest your money in. Change how much of each paycheck you invest. Change the address on your account. Request a loan. Make unscheduled loan payments. Request withdrawals or distributions. Throughout the transition, bi-weekly contributions and scheduled loan payments will continue for employees actively working. If you no longer work for Intergraph Corporation, some information will not apply to you. KEY DATES November 28, 2016, to December 12, 2016 December 22, 2016, at 4 p.m., Eastern time December 30, 2016, at 4 p.m., Eastern time January 3, 2017 Week of January 15, 2017 Week of January 22, 2017 Brokerage enrollment window. If you have a brokerage account at Fidelity, you must contact Vanguard to open a new brokerage account. See "Important note about brokerage accounts" on page 10 for more information. Transition begins. Deadline to move money between funds or request contribution allocation changes, loans, withdrawals, and distributions. If you have a brokerage account at Fidelity, this is also the deadline to perform any transactions in that account. All assets in your account are valued at Fidelity, which then sells them and transfers the proceeds to Vanguard or transfers them in kind to Vanguard.* All assets are invested in the Hexagon Employee Retirement Savings Plan at Vanguard.* Your balance transfers to the same or similar funds. Transition ends. All non-brokerage account transactions are available through Vanguard. Brokerage restrictions end. Brokerage account transactions are now available through the VBO account at Vanguard. *Assets sold will be valued based on each fund s net asset value (NAV) at market close on December 30, 2016, and invested at Vanguard based on each fund s NAV at market close on January 3, Note: Assets moving to a Vanguard Institutional Target Retirement Fund, except for assets currently invested in a Fidelity Freedom Fund, will be temporarily invested in a short-term investment fund (STIF). Once your records have been reconciled, your money in the STIF will be invested in the Vanguard Institutional Target Retirement Fund with the target date closest to the year in which you will reach age 65. Any earnings accrued in the STIF will be allocated to your account on a prorated basis. From the time assets are sold by Fidelity until they are invested at Vanguard, your investments will be out of the market and will not receive any earnings or incur any losses based on market performance. The trade date is dependent upon timely receipt of the wire and good order of transfer documents from Fidelity. 7

8 Review your investments Because account activity will be on hold during the transition, it is important that you review your investments. For your long-term retirement needs, you should carefully consider the importance of a balanced and diversified investment portfolio, taking into account all your assets, income, and investments. Keep in mind that diversification does not ensure a profit or protect against a loss. WHAT WILL HAPPEN TO MY SAVINGS? To minimize the market effect on your money during the transition, your account balance and contributions will either remain in the same funds (an in-kind transfer) or move to funds similar to those in which you currently invest. Balances in the investments listed below will transfer to Vanguard in kind. Your contributions to these investments will continue after the move to Vanguard. PIMCO Total Return Fund Institutional Class (PTTRX) Dodge & Cox International Stock Fund (DODFX) Harding Loevner International Equity Portfolio Institutional Class (HLMIX) Your balances and contributions to all other investments will move to Vanguard as shown in the following table. YOUR MONEY WILL MOVE FROM HERE... TO HERE... Fidelity Puritan Fund (FPURX) Fidelity Balanced Fund (FBALX) Fidelity 500 Index Fund Institutional Class (FXSIX) Fidelity Total Market Index Fund Investor Class (FSTMX) Fidelity U.S. Bond Index Fund Institutional Class (FXSTX) Invesco Growth & Income Fund Class A (ACGIX) T. Rowe Price Retirement Balanced Fund (TRRIX) T. Rowe Price Retirement 2005 Fund (TRRFX) The Vanguard Institutional Target Retirement Fund with a target date closest to the year when you turn age 65 Vanguard Institutional Index Fund Institutional Shares (VINIX) Vanguard Total Bond Market Index Institutional Shares (VBTIX) Dodge and Cox Stock Fund (DODGX) Vanguard Institutional Target Retirement Income Fund (VITRX) T. Rowe Price Retirement 2010 Fund (TRRAX) Vanguard Institutional Target Retirement 2010 Fund (VIRTX) T. Rowe Price Retirement 2015 Fund (TRRGX) Vanguard Institutional Target Retirement 2015 Fund (VITVX) T. Rowe Price Retirement 2020 Fund (TRRBX) Vanguard Institutional Target Retirement 2020 Fund (VITWX) T. Rowe Price Retirement 2025 Fund (TRRHX) Vanguard Institutional Target Retirement 2025 Fund (VRIVX) T. Rowe Price Retirement 2030 Fund (TRRCX) Vanguard Institutional Target Retirement 2030 Fund (VTTWX) T. Rowe Price Retirement 2035 Fund (TRRJX) Vanguard Institutional Target Retirement 2035 Fund (VITFX) 8

9 YOUR MONEY WILL MOVE FROM HERE... TO HERE... T. Rowe Price Retirement 2040 Fund (TRRDX) Vanguard Institutional Target Retirement 2040 Fund (VIRSX) T. Rowe Price Retirement 2045 Fund (TRRKX) Vanguard Institutional Target Retirement 2045 Fund (VITLX) T. Rowe Price Retirement 2050 Fund (TRRMX) Vanguard Institutional Target Retirement 2050 Fund (VTRLX) T. Rowe Price Retirement 2055 Fund (TRRNX) Vanguard Institutional Target Retirement 2055 Fund (VIVLX) T. Rowe Price Retirement 2060 Fund (TRRLX) Vanguard Institutional Target Retirement 2060 Fund (VILVX) Fidelity International Index Fund Institutional Class (FSPNX) Goldman Sachs Mid-Cap Value Fund Institutional Class (GSMCX) Fidelity Low-Priced Stock Fund (FLPSX) American Beacon Small Cap Value Fund Institutional Class (AVFIX) Nuveen Winslow Large-Cap Growth Fund Class I (NVLIX) Prudential Jennison Mid Cap Growth Fund Class Z (PEGZX) Eagle Small Cap Growth Fund Class I (HSIIX) Vanguard Total International Stock Index Fund Institutional Shares (VTSNX) DFA US Targeted Value Portfolio Institutional Class (DFFVX) T. Rowe Price Institutional Large Cap Growth Fund Institutional Class (TRLGX) Delaware SMID Cap Growth Trust After the transition, you can move your money or redirect your contributions to another fund in the Plan s new lineup at any time. A word about Wells Fargo Stable Value Fund C Because of contractual obligations between the Plan and the Wells Fargo Stable Value Fund C, the fund cannot be fully liquidated at the time of the transition. Therefore, your balance in the Wells Fargo Stable Value Fund C (if any) will remain invested in this fund when the Plan moves to Vanguard. After the transition, you will be able to transfer money out of the Wells Fargo Stable Value Fund C at any time, but you cannot contribute new money to it, and therefore your contributions to the Wells Fargo Stable Value Fund C (if any) will be redirected to the MassMutual Diversified SAGIC II. The money remaining in the Wells Fargo Stable Value Fund C will automatically transfer to the MassMutual Diversified SAGIC II when the contractual obligations expire. This is expected to occur in April

10 IMPORTANT NOTE ABOUT BROKERAGE ACCOUNTS If you have a brokerage account in your Intergraph Corporation SavingsPlus Plan at Fidelity, your brokerage holdings will also move to a VBO account at Vanguard in kind. However, you must open a VBO account with Vanguard in order to purchase additional investments outside your Plan. If you do not submit an application by 4 p.m., Eastern time, on December 12, your brokerage assets will still transfer to Vanguard, but you will not be able to purchase new investments until a brokerage account application is completed and processed. A restricted VBO holding account will be established on your behalf for the assets that transfer. Until you submit an application to remove the restriction on your VBO account, you will only be able to sell brokerage assets. How to open a VBO account Follow these steps to apply for a VBO account online: 1. Register for immediate, secure online account access by going to vanguard.com/register and following the prompts. You will need your Plan number to sign up: If you hold multiple accounts with Vanguard, log on to your account at vanguard.com/retirementplans with your current user name and password and select Employer plans. 2. Click Manage my money to find the VBO application icon. 3. Review the brokerage account information, including standard trading commission fees and a prospectus for the money market settlement fund used to hold your money when it is not actively invested through your VBO account. 4. Follow the prompts for the application process. Complete all steps, then click Sign and Submit. You will receive a confirmation that your application has been submitted. You will receive a confirmation when the enrollment process is completed and your VBO account is established. Again, if you do not establish a VBO account online during the enrollment window, your brokerage assets will still transfer to Vanguard. However, you will be unable to place trades until you submit an application to open a VBO account. 10

11 CHECK YOUR BENEFICIARY DESIGNATION Your beneficiary designation for the Intergraph Corporation SavingsPlus Plan at Fidelity will carry over to the Hexagon Employee Retirement Savings Plan at Vanguard. Now may be a good time to check that your beneficiary designation listed on fidelity.com is still accurate or to name beneficiaries if you haven't done so yet. Before the transition to Vanguard, you can name or update your beneficiaries at fidelity.com. After the transfer to Vanguard, you can do so by logging on to your account at vanguard.com/retirementplans. SPECIAL ACTION REQUIRED FOR CERTAIN PARTICIPANTS If you are no longer working for Intergraph and are currently repaying a loan, or if you currently have a Power of Authority (POA) status, the following action is required: If you are no longer working for Intergraph and currently repaying a loan, your loan payment information will not transfer to Vanguard. To prevent your loan from defaulting (becoming a taxable distribution), contact Vanguard as soon as the transfer is over to reestablish your loan payments. If you are currently a Power of Attorney (POA), that status will not carry over to Vanguard. Plan participants will need to contact Vanguard as soon as the transfer has ended to request the POA paperwork. Vanguard's contact information has been included on the last page of this brochure contribution limits Employee pre-tax and Roth contributions to $18,000. Employee and employer contributions to $54,000 or 100% of your pay, whichever is less. If you are age 50 or older, or will turn 50 by year s end, and you contribute the maximum allowed, you may contribute an extra $6,000. This additional amount is allowed as a catch-up contribution. For more information, visit anguard.com/contributionlimits. 11

12 CONNECT WITH VANGUARD Once the transition to Vanguard is complete, you will be able to access your new Hexagon Employee Retirement Savings Plan in any of the following ways. Online. Log on to your account at vanguard.com/retirementplans for 24-hour access to information about your account, your investments, and Vanguard s advice services. On your mobile device. Go to vanguard.com/bemobile to download the Vanguard app so you can access your account on the go. By phone. Call to reach Vanguard s 24-hour interactive VOICE Network. You ll need your Social Security number and a personal identification number (PIN) to use VOICE. To create a PIN, follow the prompts when you call. Or you can speak with a Vanguard Participant Services associate Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time. Join the Vanguard community on our social media channels. You ll have access to Vanguard experts and be able to get up-to-the-minute news and views, attend live web events, participate in live chats, and interact with other Vanguard investors. In the meantime, if you wish to access your account prior to the transfer to Vanguard, contact Fidelity at fidelity.com or For more information, visit vanguard.com, or call for funds in your plan and for funds offered through Vanguard Brokerage Services, to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing. Vanguard, Connect with Vanguard, VBO, and VOICE are trademarks of The Vanguard Group, Inc. Collective trusts and separately managed accounts are not mutual funds. These investments are available only to tax-qualified plans and their eligible participants. Investment objectives, risks, charges, expenses, and other important information should be considered carefully before investing. Vanguard, Connect with Vanguard, VBO, Admiral, and VOICE are trademarks of The Vanguard Group, Inc Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, Member FINRA. Vanguard Marketing Corporation, Distributor of the Vanguard Funds. BBBBKXNL