Farm Credit Foundations Defined Contribution / 401(k) Plan

Transcription

1 Farm Credit Foundations Defined Contribution / 401(k) Plan Summary of Plan Provisions 2019

2 TABLE OF CONTENTS I. General Information 1.1 What is the official name of the Plan Who is the plan sponsor What is the history of the Plan What type of plan is the Plan Are benefits under the Plan guaranteed What are the advantages of participating in this Plan from a tax standpoint What are the advantages of making Roth after-tax contributions Am I permitted to make after-tax contributions other than Roth after-tax contributions If contributions have already been made on a pre-tax basis, is it possible to convert those contributions to Roth after-tax contributions If pre-tax contributions have been converted to Roth after-tax contributions, is it possible later on to undo the conversion...5 II. Plan Administration 2.1 Who is the Plan Administrator What responsibilities does the Plan Administrator have What is the address of the Plan Administrator Who is the Plan s recordkeeper What does the Plan s recordkeeper do How can I get more information on the Plan and my account in the Plan What information is available through John Hancock Who should I contact if I have questions about the Plan...7 III. Participation in the Plan 3.1 Who is eligible to participate in the Plan What persons are excluded from participating in the Plan Can a person who is excluded from participation in the Plan become a participant if his or her employment status changes Can I continue to participate in and/or make contributions to the Plan if my employment status changes When will I become a Participant in the Plan Are there special eligibility rules for former participants who are later rehired by a Participating Employer...9 Farm Credit Foundations 401(k) Plan Table of Contents SPP 01/01/19

3 IV. Contributions to the Plan 4.1 What types of contributions can be made to the Plan How do I contribute to the Plan If I don t do anything, will any of my money be contributed to the Plan How does automatic enrollment work Can I make changes to the amount I am contributing to the Plan Are there limits on how much I can contribute If I contribute, will my employer provide a matching contribution What contributions will be matched What is the amount of the matching contribution Is there a difference in how employer matching contributions are calculated based on the type of employee contribution (e.g., 401(k) elective deferral, Roth contribution, after-tax contribution, etc.) that is being matched Will the Participating Employers provide other contributions in addition to a matching contribution Are contributions subject to a vesting schedule How are years of service counted for vesting purposes If I die, what is the impact of my death on the vesting of my account balance What rules apply to rollover contributions to the Plan...15 V. Limits on Contributions 5.1 What limits does the Code apply to contributions under the Plan What limits does the Plan apply to amounts that I can contribute under the Plan What is the 402(g) limit What happens if the combined total of my pre-tax contributions and my Roth contributions equals the 402(g) limit for a particular year What are catch-up contributions What is the annual additions limit What is the definition of compensation for purposes of the Plan Is there a limit on the maximum amount of compensation that may be taken into account for purposes of the Plan...19 VI. Investments 6.1 How do I determine the best selection of investments for me How will the money in my account be invested Does the Plan allow participants to invest their account balances with a brokerage firm How will I know how my investment is doing How frequently are investment gains and losses posted to my account...21 Farm Credit Foundations 401(k) Plan Table of Contents SPP 01/01/19

4 VII. Plan Loans 7.1 Does the Plan permit me to borrow from my account...21 VIII. Distributions 8.1 When can I receive a distribution from the Plan What happens to my account if I am no longer employed by a Participating Employer In what situations will I be required to take distributions from my account What happens to my account if I die Can I receive a distribution once I am age 59½ if I am still working for a Participating Employer Can I receive a distribution if I am still working for a Participating Employer and I become disabled Can I receive a distribution if I am still working for a Participating Employer and I experience a hardship Can I receive a distribution from my account if I am called to active military service May I make withdrawals from the after-tax portion of my account May I withdraw rollover contributions I have made to the Plan Will I be required to take minimum distributions once I reach a certain age How will distributions be made Will I be able to roll my distributions over to an IRA or another qualified plan What if my request for benefits under the Plan is turned down...28 IX. Beneficiaries 9.1 How do I name a beneficiary Who will receive the money in my account if I die without naming a beneficiary...28 X. Divorce and Legal Separation 10.1 What rules apply to QDROs What happens if I name my spouse as my beneficiary and we later get divorced (or are legally separated)...29 XI. Plan Amendments/Termination 11.1 Can the Plan be amended Can the Plan be terminated...30 Farm Credit Foundations 401(k) Plan Table of Contents SPP 01/01/19

5 APPENDICES Appendix A - Employers Participating in the Farm Credit Foundations Defined Contribution/401(k) Plan... A-1 Appendix B - Employee Rollover Contributions Policy...B-1 Appendix C - Summary of Additional Employer Contributions (i.e., Non-Elective Contributions)...C-1 Appendix D - Loan Policy... D-1 Appendix E - Procedures Governing the Plan Administrator s Review of Claims... E-1 Farm Credit Foundations 401(k) Plan Table of Contents SPP 01/01/19

6 This Summary of Plan Provisions is intended to highlight and explain some of the more important provisions of the Plan. It is not, however, intended to be a complete summary of every provision of the Plan. If there is a conflict or any inconsistency between a statement in this Summary of Plan Provisions and the terms and provisions of the Plan, the terms and provisions of the Plan control. If you have any questions after reading this Summary of Plan Provisions, or if you would like to review a copy of the Plan document itself, please contact Farm Credit Foundations. I. General Information 1.1 What is the official name of the Plan? The official name of the Plan is the Farm Credit Foundations Defined Contribution / 401(k) Plan. 1.2 Who is the plan sponsor? The Plan is sponsored by the Farm Credit System employers that are part of Farm Credit Foundations. These employers are referred to as Participating Employers or, collectively, as the Employer. A complete list of Participating Employers is attached to this summary as Appendix A. 1.3 What is the history of the Plan? The Plan resulted from the merger of the Farm Credit Consolidated Benefit Plan 401(k) and Employer Contribution (also known as the Consolidated Plan ) into the Ninth Farm Credit District 401(k) Thrift Plan. This merger took place effective January 1, 2007, and the name of the merged plan was changed to the Plan s current name (that is, the Farm Credit Foundations Defined Contribution / 401(k) Plan). The Consolidated Plan resulted from an earlier merger of the Seventh Farm Credit District Retirement Savings Plan, The Eleventh Farm Credit District s Retirement Savings Plan, and the AgAmerica District Savings Plan. The merger of these three plans took place effective January 1, What type of plan is the Plan? The Plan is what is commonly referred to as a 401(k) profit sharing plan. It is intended to be qualified under Section 401(a) of the Internal Revenue Code (the Code ). It is also intended to be a single employer plan as that term is used in the Code and Treasury Regulations. Due to the fact that all of the employers in the Plan are members of the Farm Credit System, the Plan is also considered to be a governmental plan. As a governmental plan, the Plan is not subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 ( ERISA ). The Plan is subject to the provisions of the Code; however, certain provisions of the Code may not apply to governmental plans or they may not apply to governmental plans in the same way that they apply to the plans of private employers. Farm Credit Foundations 401(k) Plan 1 SPP 01/01/19

7 1.5 Are benefits under the Plan guaranteed? Under the Plan, there is no fixed dollar amount of retirement benefits. Your actual retirement benefit will depend on the amount of your account balance at the time of your retirement. Your account balance will reflect the amount that was contributed to your account, your vesting percentage, and your investment returns. 1.6 What are the advantages of participating in this Plan from a tax standpoint? A qualified retirement plan, such as this Plan, offers the following advantages under the Internal Revenue Code and under the income tax laws of most states: You will not be taxed on money that your employer contributes to the Plan until that money is actually distributed to you, which would normally be after you terminate your employment and begin taking distributions; You will not be taxed on money that you contribute to the Plan on a pre-tax basis until that money is distributed to you (although it will be included in your wages for purposes of FICA taxes); and You will not be taxed on the earnings for your account until that money has been distributed to you. Please note that the tax advantages differ somewhat if you make either Roth after-tax contributions or traditional after-tax contributions to the Plan. The distinction between Roth after-tax contributions and traditional after-tax contributions is described below. The tax advantages to these different types of contributions are also summarized below. 1.7 What are the advantages of making Roth after-tax contributions? If you contribute money to the Plan on a Roth basis (i.e., Roth after-tax contributions ), that money will be included in your taxable income and will be taxed before it is contributed. As a result, Roth after-tax contributions will not reduce your current tax liability. However, money that is contributed as part of Roth after-tax contributions will not be taxed when it is distributed to you. Additionally, when the money is distributed to you, the earnings on that money will not be taxed as long as the distribution is considered to be a qualified distribution. To qualify as a qualified distribution, the distribution must be made after you are at least age 59½, after you become disabled, or after your death. Additionally, the distribution must be made at least five years after the year in which you made your first Roth after-tax contribution to the Plan, another qualified plan, or an IRA. Farm Credit Foundations 401(k) Plan 2 SPP 01/01/19

8 The following should also be noted: The earliest date on which Roth after-tax contributions could be made to this Plan was January 1, Roth after-tax contributions were not permitted prior to this date. The rules regarding the taxation of Roth after-tax distributions are complicated. For this reason, we would encourage you to consult with your personal tax advisor if you have questions as to how those rules might apply to your specific situation. 1.8 Am I permitted to make after-tax contributions other than Roth after-tax contributions? Yes. In addition to Roth after-tax contributions, the Plan also permits traditional after-tax contributions. Although they share similarities, there are fundamental distinctions between Roth after-tax contributions and traditional after-tax contributions. Traditional after-tax employee contributions are similar to Roth after-tax contributions in the following ways: The amount of the contribution will be included in your taxable income and will be taxed before the contribution is made to the Plan; and The amount of the contribution itself will not be taxed when that amount is distributed to you by the Plan. Among the important differences between traditional after-tax employee contributions and Roth after-tax contributions are the following: Traditional after-tax employee contributions are not considered to be elective deferrals and thus are not subject to the dollar limits that apply to elective deferrals. Roth after-tax contributions, on the other hand, are considered to be elective deferrals and thus are subject to the annual limits applicable to elective deferrals. (These dollar limits are discussed in more detail in Q&A 5.1.); Traditional after-tax employee contributions are not subject to the distribution restrictions that apply to elective deferrals and may generally be withdrawn from the Plan at any time. Roth after-tax contributions, meanwhile, are subject to the distribution restrictions that apply to other elective deferrals; and In contrast to the earnings on Roth after-tax contributions, earnings on traditional aftertax employee contributions will be taxed when those earnings are distributed to you by the Plan. The concept of a qualified distribution does not apply to traditional aftertax employee contributions. The rules governing the taxation of traditional after-tax employee contributions can be complicated. For this reason, we would encourage you to consult with your personal tax advisor if you have questions as to how those rules might apply to your specific situation. Farm Credit Foundations 401(k) Plan 3 SPP 01/01/19

9 1.9 If contributions have already been made on a pre-tax basis, is it possible to convert those contributions to Roth after-tax contributions? Participants in the Plan may convert pre-tax contributions to Roth after-tax contributions beginning October 1, This is referred to as an In-Plan Roth Conversion. An In- Plan Roth Conversion is subject to the following: In-Plan Roth Conversions are limited to amounts in which a Participant is fully vested. The unvested portion of a Participant s account cannot be converted. A Participant is limited to no more than two In-Plan Roth Conversions per year. A Participant s ability to elect an In-Plan Roth Conversion may be limited in situations in which a proposed QDRO is pending or the Plan Administrator is anticipating the receipt of a proposed QDRO. If a Participant has an outstanding participant loan, the Participant s ability to elect an In-Plan Roth Conversion as to the dollar amount of that outstanding participant loan may be limited. If a Participant elects to convert less than his/her entire vested account balance, John Hancock may establish a hierarchy specifying the order in which a Participant s account will be converted. By way of example only, John Hancock could specify that employee after-tax contributions will be converted first, followed by non-roth rollover contributions, followed by 401(k) pre-tax elective deferrals, followed by employer matching contributions, and followed by employer non-elective contributions. If a Participant elects to convert traditional after-tax contributions, IRS rules generally require that Participant to include the earnings on those contributions in the amount that is converted. If the conditions for receiving a qualified distribution are satisfied at the time a distribution is made (see Q&A 8.5), the tax treatment of the amount that has been converted will be changed as a result of an In-Plan Roth Conversion. An In-Plan Roth Conversion will not, however, change the conditions that must be met in order to receive a distribution. This means that amounts that are converted will continue to be subject to whatever distribution restrictions existed as to those amounts at the time the conversion took place. To elect an In-Plan Roth Conversion or to request more information, you should call John Hancock at , or access your account through the John Hancock website at Farm Credit Foundations 401(k) Plan 4 SPP 01/01/19

10 1.10 If pre-tax contributions have been converted to Roth after-tax contributions, is it possible later on to undo the conversion? No. Although it is possible in some situations to undo a Roth conversion in an IRA, it is not possible do undo a Roth conversion in a 401(k) plan. II. Plan Administration 2.1 Who is the Plan Administrator? The Farm Credit Foundations Trust Committee serves as the Plan Administrator for the Plan. In carrying out its responsibilities as the Plan Administrator, the Trust Committee is assisted by Farm Credit Foundations and by the Plan s recordkeeper. 2.2 What responsibilities does the Plan Administrator have? The Plan Administrator is responsible for making sure that the Plan is administered according to its terms, for providing you and other participants with information about the Plan, for resolving any questions about participant eligibility and participant benefits, for serving as the trustee for the assets of the Plan that are being held in trust, and for making any other discretionary determinations that need to be made in order for the Plan to function. 2.3 What is the address of the Plan Administrator? Any communications that need to be sent to the Plan Administrator should be addressed as follows: Farm Credit Foundations Trust Committee c/o Farm Credit Foundations Attn: Vice-President, Employee Benefits 30 East 7 th Street, Suite 3000 St. Paul, Minnesota Who is the Plan s recordkeeper? John Hancock Retirement Plan Services ( John Hancock ) 2.5 What does the Plan s recordkeeper do? The recordkeeper provides services that are necessary for the day-to-day operation of the Plan, including the following: Accepting and processing employee elections for 401(k) deferrals, Roth after-tax contributions, traditional after-tax contributions, and catch-up contributions; Farm Credit Foundations 401(k) Plan 5 SPP 01/01/19

11 Keeping track of the investment elections made by each participant and making sure that any changes to a participant s investment elections are put into effect; Processing requests for participant loans, keeping track of the outstanding balance of a loan, and making sure that payments on a loan are properly applied; Processing requests for a distribution from a participant s account; Keeping track of the beneficiary (or beneficiaries) designated by each participant and making sure that any changes in the identity of the beneficiary designated by a participant are properly noted in the Plan s records; Providing required tax reporting to the Internal Revenue Service; and Responding to questions from participants about the Plan. The list above is merely a partial accounting of the responsibilities of the Plan s recordkeeper. The recordkeeper also has other responsibilities in addition to those listed above. 2.6 How can I get more information on the Plan and my account in the Plan? The Plan s recordkeeper, John Hancock, can provide you with information about the Plan s features as well as your individual account. You can access this information in two separate ways: through a toll-free telephone number at , or through the Internet at Most of the telephone services are available 24 hours a day, 7 days a week, through an automated voice response system. Participant Services Representatives are also available from 8:00 a.m. to 10:00 p.m. Eastern time on every business day (i.e., days on which the New York Stock Exchange is open) for help with other services. The Internet features are available 24 hours a day, 7 days a week. 2.7 What information is available through John Hancock? Through the John Hancock toll-free number or website, you can: Enroll in the Plan; Obtain information about your account, including the current balance and account history; Request an account statement; Change your contribution amount; Farm Credit Foundations 401(k) Plan 6 SPP 01/01/19

12 Change your current investment elections and reallocate your existing balance; Request Plan literature and fund prospectuses; Get historical fund prices and yields; Select or change the beneficiaries of your account; Initiate loans and distributions; and Access, via the John Hancock website, an array of financial calculators, planning tools, and other general retirement information. Requests for certain transactions (e.g., loans, withdrawals, transfers between investments, etc.) that are received after the close of the market (normally, 4 p.m. Eastern time) or on weekends or holidays will generally receive the next available closing price. Please note that the first time you call the John Hancock toll-free number or access your account through the John Hancock website, you will be asked to establish a personal identification number (PIN). You will then need your PIN each time you wish to access your account through either the toll-free number or the website. If you forget your PIN, you should either call the John Hancock toll-free number and speak to a Participant Services Representative, or click on the hyperlink labeled Forgot your User ID or PIN/Password at the John Hancock website. Whenever you process a transaction through the John Hancock toll-free number or website, you will also receive a written verification from John Hancock of the transaction that you executed. 2.8 Who should I contact if I have questions about the Plan? Questions about the Plan should be directed to a Participant Services Representative at John Hancock. Participant Services Representatives can be reached at III. Participation in the Plan 3.1 Who is eligible to participate in the Plan? You will be eligible to participate in the Plan if: You are employed as an employee by a Participating Employer; and You are not excluded from participating in the Plan (that is, you are not an Excluded Employee ). Farm Credit Foundations 401(k) Plan 7 SPP 01/01/19

13 3.2 What persons are excluded from participating in the Plan? You are specifically excluded from participating in the Plan if you are classified by your employer as any of the following: A Temporary Employee, that is, a person who is employed on a temporary or contract basis to meet unusual workloads or demands or to fill in while a regular employee is on leave; or A Part-Time Without Benefits Employee, that is an Employee who is regularly scheduled to work less than 20 hours per week and less than 1,000 hours per calendar year; or A Leased Employee, that is, a person who is employed by an employer that is not a Participating Employer in the Plan and who is providing services to a Participating Employer pursuant to a contract between that Participating Employer and the person s employer; or An Intern ; or A Nonresident Alien, that is, an Employee who does not receive earned income from the Employer which constitutes United States source income; or An Employee of an Entity Acquired by Foreclosure, that is, a person who is employed by an entity that is acquired by an Employer as a result of a foreclosure on an obligation. 3.3 Can a person who is excluded from participation in the Plan become a participant if his or her employment status changes? Yes, if you are no longer classified as an Excluded Employee and you satisfy the eligibility conditions for the Plan, you will become a participant in the Plan. Note that the following special rules may apply: If you work 1,000 hours or more during a calendar year while you are classified as a Temporary Employee or as a Part-Time Without Benefits Employee, you will be reclassified as an Eligible Employee as of the first day of the next plan year. If it is later determined that you should not have been classified as an Excluded Employee, you may participate in the Plan from that point forward (assuming you are still eligible to do so); however, a reclassified employee is not eligible to participate in the Plan on a retroactive basis. Farm Credit Foundations 401(k) Plan 8 SPP 01/01/19

14 3.4 Can I continue to participate in and/or make contributions to the Plan if my employment status changes? If you remain employed by a Participating Employer but your employment status changes so that you become an Excluded Employee, you will continue to be a participant in the Plan, and you will continue to be able to make contributions and to receive employer contributions as long as you are still employed. If you terminate your employment, you will no longer be able to contribute any money to the Plan nor will you receive any employer contributions; however, you will continue to be a participant in the Plan until your entire account balance is distributed. 3.5 When will I become a Participant in the Plan? If you are eligible to participate in the Plan, you will automatically become a participant in the Plan on the date you become an Eligible Employee. You will not, however, be able to contribute to the Plan until the first day of the first payroll period that begins after the date you become a participant in the Plan. Contributions to the Plan are discussed in more detail under Part IV of these Q&As. 3.6 Are there special eligibility rules for former participants who are later rehired by a Participating Employer? No. If you terminate your employment and are later rehired, either by your original employer or by another employer that is also a Participating Employer in this Plan, your participation in the Plan after you become reemployed will be subject to the same rules that apply to any other employees. IV. Contributions to the Plan 4.1 What types of contributions can be made to the Plan? The following types of contributions can be made to the Plan: Employee 401(k) elective deferrals that are taken from your paycheck on a pre-tax basis; Employee Roth after-tax contributions that are taken from your paycheck on an aftertax basis; Employee traditional after-tax contributions that are deducted from your paycheck on an after-tax basis; Employer matching contributions that your employer chooses to make on your elective deferrals, your Roth after-tax contributions, and/or your traditional after-tax contributions; Farm Credit Foundations 401(k) Plan 9 SPP 01/01/19

15 Additional employer contributions (also known as non-elective contributions ) that your employer chooses to make for the benefit of its employees; and Rollover contributions that you choose to rollover into the Plan from another qualified plan, from a conduit individual retirement account ( IRA ), from a governmental 457(b) plan, or from a 403(b) plan or 403(b) annuity. The rules that apply to these different types of contributions are discussed in more detail in the questions and answers below. The Rollover Policy is outlined in Appendix B. 4.2 How do I contribute to the Plan? If you want to contribute to the Plan, you should either call John Hancock at or access your account through the John Hancock website at Both options allow you to establish what percentage of your compensation you wish to contribute, and whether you wish to contribute by making pre-tax elective deferrals, Roth after-tax contributions, traditional after-tax contributions, or some combination of the three types of contributions. 4.3 If I don t do anything, will any of my money be contributed to the Plan? Yes. You will be automatically enrolled in the Plan unless you enroll on your own or you affirmatively elect to defer 0% of your compensation. 4.4 How does automatic enrollment work? If you are automatically enrolled in the Plan, a portion of your compensation for each payroll period will automatically be contributed to the Plan on a pre-tax basis unless and until you request that a different percentage amount be contributed or that no contributions be made. (The definition of compensation that is used for purposes of these contributions is summarized in more detail in Q&A 5.7.) If you are automatically enrolled, contributions will begin with the first payroll period that begins more than 45 days after you become a participant. They will continue unless and until you request a different percentage amount. If you do not wish to make deferral contributions to the Plan, you must affirmatively elect a deferral percentage of zero. The percentage amount that will be contributed if you are automatically enrolled depends on when you entered the Plan. If you entered the plan before January 1, 2013, the amount of the contributions that are automatically contributed will be equal to 3% of your compensation for each payroll period. If you entered the plan on or after January 1, 2013, the amount will be equal to 6% of your compensation for each payroll period. Farm Credit Foundations 401(k) Plan 10 SPP 01/01/19

16 Additionally, if you are automatically enrolled and you still have not elected your own deferral percentage, the amount of your pre-tax deferral percentage will automatically be increased each year by an amount equal to 1% of your compensation until your deferral percentage reaches 15% of your compensation. This annual increase will take effect with the first payroll period that begins on or after the anniversary of your participation in the Plan. Please note that individuals who became participants in the Plan before January 1, 2007, did not become subject to the Plan s automatic enrollment rules until January 1, If you became a participant in the Plan prior to January 1, 2007, but have not made your own deferral election, you will be treated for purposes of the automatic enrollment rules as if you were a new participant as of January 1, Example #1: Suppose you became a participant in the Plan on January 1, 2011, and were automatically enrolled in the Plan later that year but you still have not made a deferral election of your own. On January 1 of the following year (that is, January 1, 2012), the amount of your automatic deferral election will be increased from 3% to 4%. This increase will take effect with your first payroll period beginning after January 1, If you do not want this increase to take effect or if you want to defer some other amount, you must make a deferral election of your own. If you still do not make a deferral election of your own, the amount of your deferral election will be increased by an additional 1% on January 1 of each subsequent year until it reaches 15%. Example #2: Suppose that you become a participant on January 1, If you have not made a deferral election within the next 45 days (that is, by February 15, 2013), you will be automatically enrolled in the Plan. The automatic deferral election will take effect with your first payroll period beginning after February 15, Beginning with that payroll period, 6% of your compensation will be taken out of your pay on a pre-tax basis and contributed to the Plan as elective deferrals. If you still do not make a deferral election of your own, the amount of your deferral election will be increased by an additional 1% on January 1 of each subsequent year until it reaches 15%. Finally, in addition to the automatic enrollment provisions summarized above, the Farm Credit Foundations Plan Sponsor Committee may, from time to time, direct the Plan Administrator to implement an automatic enrollment sweep for those Participants who are not making any salary reduction contributions to the Plan, including Participants who have previously elected a deferral election of zero. If this is done, the Plan Sponsor Committee will also establish the default deferral election that will apply and advance notice will be provided to those Participants who will be subject to the automatic enrollment sweep. Those Participants who do not wish to be automatically enrolled as a result of the automatic enrollment sweep will then have the opportunity to opt out of the automatic enrollment sweep by making a new election of their own. Those Participants who are automatically enrolled as a result of an automatic enrollment sweep will then be subject to annual increases in their deferral percentage on the same basis as other Participants who have been automatically enrolled unless and until they make a new deferral election of their own. Farm Credit Foundations 401(k) Plan 11 SPP 01/01/19

17 Again, please remember that, unless a periodic automatic enrollment sweep is being conducted, the automatic enrollment provisions and the annual increases discussed in the examples given above will apply only if you do not make a deferral election of your own. You may make a deferral election of your own at any time, even if automatic enrollment has already taken place and the new election will apply from that point going forward. If you are automatically enrolled, your contributions will be invested in the Plan s default investment option unless and until you make a different investment election. The Plan s default investment option is discussed in more detail in Q&A 6.2. Also please note that, for purposes of these automatic enrollment rules, a participant who is reemployed as an Eligible Employee following a prior termination of employment will be treated as a new employee upon re-commencing employment. 4.5 Can I make changes to the amount I am contributing to the Plan? Yes. You may change your deferral election at any time by calling John Hancock at or by accessing your account via the John Hancock website at A change will take effect on the first administratively practicable payroll period after the date the change is requested. The change will apply on a go forward basis only. You may not make a change with respect to compensation that has already been paid to you or contributions that have already been made to the Plan. 4.6 Are there limits on how much I can contribute? Yes. There are several different limits that apply. These limits are discussed in more detail beginning with Q&A If I contribute, will my employer provide a matching contribution? Yes. Each Participating Employer will provide a matching contribution for its employees who are participating in the Plan. 4.8 What contributions will be matched? The following contributions will be matched: Employee 401(k) elective deferrals; Roth after-tax contributions; Employee 401(k) catch-up contributions ; and Employee traditional after-tax contributions. Catch-up contributions are discussed in Q&A 5.5 below. Farm Credit Foundations 401(k) Plan 12 SPP 01/01/19

18 4.9 What is the amount of the matching contribution? The amount of the employer matching contribution depends on whether or not you are also accruing benefits in one of the following defined benefit plans: AgriBank District Retirement Plan (formerly known as The Seventh Farm Credit District Retirement Plan); Ninth Farm Credit District Pension Plan; The Eleventh Farm Credit District Employees Retirement Plan; and/or Northwest Farm Credit Services Retirement Plan. If you are accruing benefits in one of these defined benefit plans, your contributions will be matched as follows: Any contributions you make up to (and including) 2% of your compensation will be matched by your employer at a rate of 100%; and Any additional contributions you make above 2% of your compensation, up to (and including) 6% of your compensation, will be matched by your employer at a rate of 50%. Example #1: Suppose your semi-monthly compensation amounts to $1,000. You elect to contribute 5% of your compensation into the Plan. Each payroll period, your employer will make a matching contribution of $35 to your account. The matching contribution calculation is as follows: [(2% x 100% x $1,000) + (3% x 50% x $1,000)]. Example #2: Suppose your semi-monthly compensation amounts to $1,000. You elect to contribute 10% of your compensation into the Plan. Each payroll period, your employer will make a matching contribution of $40 to your account. The matching contribution calculation is as follows: [(2% x 100% x $1,000) + (4% x 50% x $1,000)]. If you are not accruing benefits in one of these defined benefit plans, your contributions will be matched as follows: Any contributions you make up to (and including) 6% of your compensation will be matched by your employer at a rate of 100%. Example: Suppose your semi-monthly compensation amounts to $1,000. You elect to contribute 10% of your compensation into the Plan. Each payroll period, your employer will make a matching contribution of $60 to your account. The matching contribution calculation is as follows: (6% x 100% x $1,000). Farm Credit Foundations 401(k) Plan 13 SPP 01/01/19

19 4.10 Is there a difference in how employer matching contributions are calculated based on the type of employee contribution (e.g., 401(k) elective deferral, Roth after-tax contribution, traditional after-tax contribution, etc.) that is being matched? No. Matching contributions are provided each payroll period throughout the year based on the combined total of your 401(k) elective deferrals, your Roth after-tax contributions, and your traditional employee after-tax contributions. The fact that you might have been entitled to a greater matching contribution had the match been provided on an annual basis (instead of being provided each payroll period) is irrelevant. In other words, this Plan does not provide for a true up matching contribution Will the Participating Employers provide other contributions in addition to a matching contribution? Each Participating Employer will decide whether to provide additional contributions to its employee participants beyond its matching contributions. The amount (if any) of any such additional employer contribution may vary depending on when a participant was employed and how many years of service a participant has completed. For example, all participants who first commenced employment with a Participating Employer on or after January 1, 2007, will receive an additional employer contribution (i.e., on top of matching contributions) each payroll period in the amount of 3% of the participant s compensation. More information about the additional employer contribution (if any) that is being provided by your employer is summarized in the chart located in Appendix C Are contributions subject to a vesting schedule? You will be 100% vested in any contributions that you make to the Plan, along with any investment gains or losses thereon, including: 401(k) elective deferrals; Roth after-tax contributions; Traditional after-tax contributions; Catch-up contributions; and Money that you rollover into the Plan (see Q&A 4.15 below). In addition, if you participated in the Ninth Farm Credit District Pension Plan prior to January 1, 2007, you will be 100% vested in all employer matching contributions and all additional employer contributions. Similarly, you will be 100% vested in any excess paid leave contributions that are paid by certain Associations. However, for all other participants, any matching or additional employer contributions that you receive will be subject to a vesting schedule based on your years of service (see Q&A 4.13). The vesting schedule will be as follows: Farm Credit Foundations 401(k) Plan 14 SPP 01/01/19

20 0 years of service 0% vested 1 year of service 25% vested 2 years of service 50% vested 3 years of service 75% vested 4 years of service 100% vested 4.13 How are years of service counted for vesting purposes? The Plan uses the elapsed time method for measuring a Participant s service. Under the elapsed time method, the Plan Administrator essentially counts anniversaries. If you are still employed on your employment anniversary date, you will be credited with an additional year of service. If you terminate employment and are later rehired, the Plan Administrator will establish an adjusted employment date and will credit you with an additional year of service if you are employed on the anniversary of your adjusted employment date. If you have worked for other employers in the Farm Credit System, your service with those other employers will generally be counted for vesting purposes. In this situation, an adjusted employment date reflecting your prior service will also be established If I die, what is the impact of my death on the vesting of my account balance? If you die while employed by a Participating Employer, your entire account balance will become 100% vested upon your death. If you die while performing active military service, you will receive vesting service for the entire period of your military service What rules apply to rollover contributions to the Plan? A rollover contribution is essentially a transfer of assets from an IRA or other type of retirement plan to another IRA or retirement plan that is initiated by a participant. The rules that apply to rollover contributions to the Plan are set forth in the Plan s Employee Rollover Contributions Policy. This policy is outlined in Appendix B. Instructions on how to complete a rollover contribution are available through John Hancock, which you may call at or access through the internet at As part of the rollover process, you may be required to provide documentation showing that the requirements for a valid rollover contribution are satisfied. Farm Credit Foundations 401(k) Plan 15 SPP 01/01/19

21 V. Limits on Contributions 5.1 What limits does the Code apply to contributions under the Plan? Contributions are limited in several different ways: The Code limits the amount of your compensation that you may contribute to a qualified plan, such as the Plan, in a given year; and The Code also limits the total amount of contributions that may be added to your account in a year, including both the dollar amounts that you contribute and the dollar amounts that your employer contributes. Additionally, the Code limits the amount of compensation that may be taken into account for purposes of the Plan. If your actual compensation is greater than this limit, this limit will reduce the amount of your employer matching contributions and your employer nonelective contributions. These limits are explained in more detail below. 5.2 What limits does the Plan apply to amounts that I can contribute under the Plan? For any given payroll period, the total amount of your contributions to the Plan may not exceed the lesser of: The net amount of your paycheck after taxes have been paid or withheld and any deductions that you have authorized, or which are required by law, have been made; or 75% of your compensation for that payroll period. These limits apply to pre-tax elective deferrals, Roth after-tax contributions, and traditional after-tax contributions. Additionally, pre-tax elective deferrals and Roth after-tax contributions are subject to the 402(g) limit discussed below. 5.3 What is the 402(g) limit? The 402(g) limit refers to a provision of the Internal Revenue Code that limits the dollar amount you may contribute to a qualified plan in any given year as pre-tax elective deferrals and/or Roth after-tax contributions. It does not, however, limit the dollar amount of any traditional after-tax contributions you might make. The 402(g) limit is periodically adjusted by the Internal Revenue Service to reflect changes in the cost of living. You may obtain information on the current year s limit by calling John Hancock at or accessing the John Hancock website at Farm Credit Foundations 401(k) Plan 16 SPP 01/01/19

22 5.4 What happens if the combined total of my pre-tax contributions and my Roth after-tax contributions equals the 402(g) limit for a particular year? If and as soon as the combined total of your pre-tax contributions and your Roth aftertax contributions equals the 402(g) limit for a particular year, both types of contributions will be immediately suspended for the remainder of the year. Importantly, however, catch-up contributions (see Q&A 5.5) do not count against the 402(g) limit. If you are eligible to make catch-up contributions, you may do so without having to fill out any special forms or make any special elections. The Plan simply allows you to continue making contributions until you have reached the 402(g) limit, plus the applicable catch-up contribution limit. Additionally, any catch-up contributions will be included in the calculation of employer matching contributions. If you are eligible to make catch-up contributions, but do not want to do so after you have reached the 402(g) limit, you must arrange to have your pre-tax and/or Roth after-tax contributions cease as soon as you reach the 402(g) limit. You may arrange to have such contributions stop either by calling John Hancock at or accessing your account on the John Hancock website at What are catch-up contributions? Participants who will be age 50 or older by the last day of the year may make additional contributions that do not count against the 402(g) limit (or against the annual additions limit discussed below). These additional contributions are known as catch-up contributions. The catch-up contribution limit is periodically adjusted by the Internal Revenue Service to reflect changes in the cost of living. You may obtain information on the current year s limit by calling John Hancock at or accessing the John Hancock website at What is the annual additions limit? The annual additions limit is a limit established by law. The combined total of the following contributions may not exceed the annual additions limit: Pre-tax elective deferrals; Roth after-tax contributions; Traditional after-tax contributions; Employer matching contributions; and Additional employer contributions. Catch-up contributions and rollover contributions do not count against the annual additions limit. Farm Credit Foundations 401(k) Plan 17 SPP 01/01/19

23 The annual additions limit is periodically adjusted by the Internal Revenue Service to reflect changes in the cost of living. You may obtain information on the current year s limit by calling John Hancock at or accessing the John Hancock website at What is the definition of compensation for purposes of the Plan? The Plan defines compensation as the wages you are paid by your employer generally your base salary, any overtime and shift differentials (including, if applicable, any military differential pay that your employer might pay to you while you are on qualified military service), bonuses, and other long-term and short-term incentive payments including the amount of your elective contributions, but not including fringe benefits or any other amounts that are specifically excluded from the definition of compensation. Elective contributions include your pre-tax and/or Roth after-tax contributions to this Plan as well as your pre-tax salary reductions under the Farm Credit Foundations Flexible Benefits Plan. Compensation also includes wages that you earned prior to the termination of your employment if those wages are paid to you in your final regular paycheck. However, compensation does not include any other amounts that are paid to you after you terminate your employment, such as post-termination severance pay or pay in lieu of accrued vacation time. Additionally, compensation does not include any of the following: Business travel expenses, expense reimbursements, and/or other expense allowances; Signing bonuses/payments; Payments you receive from your employer as a substitute for your employer giving you adequate notice of your impending termination of employment; Payments for unused vacation, sick leave, and other paid time off that had been accumulated but not used as of the date you terminate your employment; Long-term disability payments; Benefit payments under the California State Disability Insurance Program, the Hawaii Temporary Disability Insurance Law, or any other state law requiring payments to be made to employees in the event an employee becomes disabled; Payments received from the Sacramento Valley Farm Credit, ACA Employee Retention Plan; Long-term incentive payments from Northwest Farm Credit Services; Payments made pursuant to an employer-sponsored employee wellness program; Farm Credit Foundations 401(k) Plan 18 SPP 01/01/19

24 Other nontaxable fringe benefits, whether paid in cash or in a noncash form, such as automobile compensation, tuition reimbursement, or moving and relocation expenses; Distributions or payments from a nonqualified deferred compensation plan; and/or Any contributions (whether by the employee or the employer) to a nonqualified deferred compensation plan. 5.8 Is there a limit on the maximum amount of compensation that may be taken into account for purposes of the Plan? VI. Investments The Internal Revenue Code limits the maximum amount of compensation that may be taken into account for Plan purposes. This limit is commonly known as the 401(a)(17) limit. Participants in this Plan who first became a participant in either the Consolidated Plan (including any plans that were subsequently merged into the Consolidated Plan) or the Ninth Farm Credit District 401(k) Thrift Plan, prior to January 1, 1996, are subject to a higher limit than other participants. The Internal Revenue Service periodically adjusts the 401(a)(17) limit to reflect changes in the cost of living. You may obtain information on the current year s 401(a)(17) limit by calling John Hancock at or accessing the John Hancock website at How do I determine the best selection of investments for me? Should you invest aggressively, looking for the largest possible capital growth? Or should you invest conservatively, aiming mostly to protect your principal? There is no one answer. You have to determine your own retirement needs, study your investment options, and choose an investment approach you feel comfortable with. Whether to be a conservative or aggressive investor will depend on your personal circumstances. Different people feel comfortable with different amounts of risk. You have to take into account your personality, your age, and your financial condition. A young investor, or an investor who is financially secure, may feel comfortable with more risk; one has time and the other has money. Most people have moderate amounts of time and money, and thus feel comfortable with moderate amounts of risk. The return on an investment is usually related to the investment s risk level. Risk can be defined as exposure to loss. Generally, the higher the level of risk, the greater the potential reward. Funds that invest primarily in common stocks have a higher degree of risk, for instance, than funds which invest primarily in money market securities. You should treat any investment in the Plan as a long-term investment. For most investors, it is time, rather than market timing, which makes their investments profitable. It is your responsibility to verify that the investment options you have selected reflect the degree of risk with which you are comfortable. Farm Credit Foundations 401(k) Plan 19 SPP 01/01/19