Milliken Retirement Plan Safe Harbor Plan Changes Overview

Transcription

1 Milliken Retirement Plan 2012 Safe Harbor Plan Changes Overview

2 Overview of safe harbor plan features changes Milliken Retirement Plan Overview of safe harbor plan design Change in vesting schedule Company match Elimination of automatic required contribution Auto enrollment feature More flexible investment change rules All of the above plan changes take effect on January 1,

3 Safe Harbor Plan Design Effective 1/1/12, Milliken will adopt a safe harbor plan design for the Milliken Retirement Plan Safe harbor plan design allows all associates to maximize before-tax contributions 2012 before-tax contribution limit = $17,000 ($22,500 if associate will be age 50 or older during the plan year) Reduces administration and need for IRS discrimination testing No blackout is required to make the change to safe harbor plan design 3

4 Change in vesting schedule Vesting: The portion of the MRP account that associates may take with them when they leave the Company or borrow from when they need a loan. Revised vesting schedule Current: 100% vested immediately in the 2% automatic required contribution and any voluntary contributions, 100% vested in Milliken s company contributions after 6 years of service. NEW: All active participants as of 1/1/12 will be immediately 100% vested in their total MRP account. 4

5 Company Contributions Beginning 1/1/12, the Company match will be changing Current: The Company makes a contribution equal to 1½% of the gross amount of your retirement eligible pay at the same time that the 2% required contribution is made. Milliken also makes a year-end contribution equal to 2½% of your retirement eligible total gross pay for the year if you are employed by the Company on December 31. NEW: Effective 1/1/12, the Company will contribute 200% on the first 2% made in voluntary contributions (2 to 1 ratio). For example: Voluntary Contributions Company Match 2% or higher 1% 0% 4% 2% 0% If you choose not to make any voluntary contributions, you will not receive any Company match The Company match will continue to be offered to associates beginning on their one year anniversary (or other applicable entry point). Beginning 1/1/12, the Company will contribute 200% on the first 2% deferred (2 to 1 ratio). All match contributions will be contributed to associates accounts each pay cycle The year-end employer contribution will no longer be made to associates accounts 5

6 Elimination of Automatic Required Contribution MRP will be moving to a new voluntary plan design and will no longer have an automatic required 2% contribution for associates reaching one year anniversary with Company (or other applicable entry point) Any associate not making voluntary before-tax contributions will remain at a 0% voluntary contribution for the plan, unless they choose to change their voluntary contribution elections. Remember, if you choose not to make any voluntary contributions, you will not receive any Company match All eligible associates will now be able to defer up to the before-tax limits (2012 beforetax contribution limit = $17,000; $22,500 if associate will be age 50 or older during the plan year). The Plan allows eligible associates to save up to 50% in before-tax voluntary contributions, subject to IRS limits. To receive the maximum Company match of 4%, associates must defer at least 2% in voluntary contributions In order to have the Company match effective with the first pay of 2012 and forward, salary deferral elections must be made between 9 a.m. EST on 12/26/11 and 4 p.m. EST on 12/30/11 To make a voluntary contribution election, go online to rps.troweprice.com or call T. Rowe Price at (MILL) 6

7 How to make a contribution election online From My Account, Click on Transactions 7

8 How to make a contribution election online Click on Change Contribution Amount Enter new voluntary contribution amount 8

9 Auto-Enrollment Feature Starting on 1/1/12, all newly eligible associates will be auto-enrolled at a 2% voluntary contribution rate in the plan at their one year anniversary (or other applicable entry point) with Milliken if they are not making voluntary contributions With automatic enrollment, 2% of the associate s before-tax pay will be automatically deducted and contributed to the MRP Investment default is an age-appropriate T. Rowe Price Retirement Date Trust and grace period to opt out is 30 days prior to the associate s eligibility date. Associates are encouraged to make their own investment elections. Auto-enrollment will be implemented for new joiners and eligible rehires A letter explaining details of auto-enroll feature will be sent to each associate 9

10 More Flexible Investment Change Rules Revised investment change rules Current: Only one investment change per week is allowed for future contributions, or existing account balance NEW: Restriction is eliminated (exchanges will still be limited by the excessive trading rules). To make an investment change, go online to rps.troweprice.com or call T. Rowe Price at (MILL) 10

11 How to make an investment change online From My Account, Click on Transactions 11

12 How to make an investment change online Click on Change Investment Election to change how your future contributions are invested Click on Change Current Balance to change how your current balance is invested 12

13 Key Action Items You should make sure you are contributing at least 2% in voluntary contributions per pay cycle to receive the maximum Company match. You need to make sure to spread your voluntary contributions, including your catch-up contributions (for those age 50 and older in 2012), over the entire calendar year. If you front load your contributions early in the year, you risk reaching the annual $17,000 voluntary contribution limit before the end of the year and, thus, receiving no matching contributions since you would not be able to contribute any more voluntary contributions for the remainder of the year. If you will be eligible to contribute catch-up contributions in 2012, be aware that you will no longer need to make a separate catch-up contribution election. Your voluntary contribution percentage request should include any desired catch-up contributions. 13

14 Questions?