2017 Benefits FAQs. 401(k)

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Oswald Daniel Knight
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1 401(k) 1: What is the employer match formula for 2017? A: Engility will match 50% of your contribution up to 8% of employee eligible compensation, which is up to 4% of employee eligible compensation. 2: Why are we changing the employer match formula from 4.5% to 4.0%? A: 401(k) was an area we heard the most about, and we reduced the match slightly, allowing us to make improvements in the match frequency and vesting schedules, which employees told us were most important to them. 3: What is the new employer match vesting schedule for 2017? A: The new vesting schedule for 2017 will be a 3 year stepped vesting. After 1 year of service, you will be 25% vested in your 2017 employer contributions; after 2 years of service, you will be 50% vested in your 2017 employer contributions, and after 3 years of service, you will be 100% vested in your 2017 employer contributions. 4. How does vesting work if I have been here for more than 1 year but less than 3 years? A: For legacy TASC employees, you re 100% vested in employer match prior to 1/1/16. The employer match for the period 1/1/16 through 12/31/16 has a 3 year cliff vesting and, starting 1/1/17 and forward, the employer match is 25%/50%/100% vesting, based on the 3 years from hire. Sample charts that show this in more detail are posted on the benefits website under 2017 Benefits. For legacy Engility employees, the employer match prior to 1/1/16 followed a 25%/50%/100% vesting schedule. The employer match for the period between 1/1/16 and 12/31/16 has a 3 year cliff vesting and, starting 1/1/17 and forward, the employer match again follows a 25%/50%/100% vesting schedule based on the 3 years from hire. Sample charts that show this in more detail are posted on the benefits website under 2017 Benefits. 5: Does this change impact my employee contributions? A: No. You are always 100% vested in your employee contributions. 6: Does this mean I need to earn 3 more years of service? A: No. Prior TASC and Engility service counts towards all 401(k) vesting. 7: Does this change the match formula or vesting for 2016 match contributions? A: No. This new match is for employer contributions for 2017, even though the 2016 Employer Match will not be funded until early : The 2016 match did not match on catch-up contributions. Will the 2017 match be on catch-up as well as regular contributions? A: Yes. For 2017, the match will be calculated on both regular and catch-up contributions to the plan, up to the 8% of employee eligible contribution cap. 9: Are all participants eligible to receive the (k) employer match? A: There has been no change in the eligibility to receive employer match. Benefit eligible employees (those who are normally scheduled to work 30 or more hours a week) that are in active status are eligible. Employees who are casual, temporary or are normally scheduled to work less than 30 hours per week, are not eligible for the 401(k) employer match but can still make employee contributions to the plan. 10: When will the employer Match be funded? A: Beginning in 2017, the employer Match will be funded quarterly, as soon as administratively practical after the end of the quarter. 1

2 401(k) 11: What happens if I leave the company before the quarterly match is funded? A: If you leave the company prior to the end of the quarter, you will not receive the employer match for that respective quarter. 12: Is Fidelity going to remain as our administrator? A: Yes. We have no change to our administrator, Fidelity. 13: If I have questions about the 401(k), who do I contact? A: If you have questions regarding your 401(k), please contact Fidelity at or online at If you require additional information, please contact Engility.Benefits@Engilitycorp.com. Maternity, Paternity and Parental Leave 1: What time-off benefits does Engility offer to new parents? A: Parents are eligible for up to 12 weeks in unpaid time off under FMLA. To qualify for this time off, you need to have worked 1,250 hours and have been employed for 12 months. This unpaid time can be supplemented with parental leave, PTO, floating holidays and, in the case of new mothers, disability leave. 2: What is the Parental Leave benefit? A: Engility offers all new parents (birth, adoption or foster placement) 3 days of paid leave. 3: How does the disability leave work for new mothers? A: New mothers who are recovering from child birth are generally approved for up to 6-8 weeks of disability leave to allow them to recover and have time to bond with their new child/children. Disability pay is paid as a percent of salary and is not paid through payroll. 4: What are the Maternity disability enhancements for 2017? A: Starting in 2017, we are shortening the 7-day unpaid waiting period and offering a stepped disability benefit that begins on day 4 at 80% of salary, and steps down to 66 and 2/3% of salary over the course of the 6 week period. Paid Time Off: PTO, Holiday & Bereavement 1: What are the changes to the PTO policy? A: All benefits eligible employees are able to accrue up to 2 times their annual accrual rate beginning August 6, : When will I see this change reflected on my paystubs? A: You will see any applicable changes on your August 26, 2016 paycheck. 3: How many hours will I be able to carry over to 2017 before I lose PTO? A: You will not lose any PTO. Once you hit the PTO cap of 2 times, you will stop accruing until your PTO balance falls below the new cap of 2 times your annual accrual rate. 4: I am an international employee. Will this PTO change affect my PTO accrual cap? A: Yes. This change applies to all employees eligible for PTO, unless local law or contracts require something different. 2

Holidays (except for SCA employees) will continue to be granted as six fixed holidays and four floating holidays.

3 Paid Time Off: PTO, Holiday & Bereavement 5: What will the new PTO policy look like, based on hours worked? A: Below is a breakdown of the standard 2017 PTO accruals: 6: Are holidays changing in 2017? A: No. Holidays (except for SCA employees) will continue to be granted as six fixed holidays and four floating holidays. 7: Will the Bereavement Leave benefit remain the same in 2017? A: The 3-day paid benefit will remain unchanged, with 2 more days available for international travel or if your PTO balance is less than 20 hours. 3

Medical Insurance: HSA, Wellness Incentives, Tobacco Surcharge 1: Are medical plans changing in 2017? A: Plan designs, deductibles, networks and providers will remain the same in 2017.

4 Medical Insurance: HSA, Wellness Incentives, Tobacco Surcharge 1: Are medical plans changing in 2017? A: Plan designs, deductibles, networks and providers will remain the same in However, there will be premium increases, ranging from $5 to $37 per pay period, based on plan and coverage level selection. 2: Why are medical premiums increasing in 2017? A: Medical costs across the country are rising at a rate of 8% annually and our year-to-date spend on medical claims is higher than we expected. Since we are self-insured, the company incurs all costs associated with medical claims. Engility has absorbed a significant portion of the cost increase and is asking employees to share in the cost increase. 3: Will I receive new medical, pharmacy and HSA cards in 2017? A: No. New cards will only be issued if you change or add plans. 4: What is ABA Therapy? A: Applied Behavior Analysis therapy is a treatment sometimes used for Autism and related disorders. While this treatment used to be considered to be unproven, due to several recent studies, it has gained the favor as an effective treatment in some cases and will be covered under our plan in : Are there any changes to the Pharmacy benefits? A: While there are no major changes to the pharmacy program, Express Scripts is updating their preventive and preferred drug lists based on updates in the market. Updated lists for 2017 have been posted to the benefits website. 6: Is Engility going to contribute to employees Health Savings Accounts? A: Engility will continue the company contribution of $500 for employee only coverage and $1,000 for employee + dependent coverage for eligible employees enrolled in the United Health Care (UHC) CHDP medical plans in : When will employees receive the HSA company contribution? A: In 2017, the company contributions will be provided in monthly installments ($41.67 and $83.33), as long as you are enrolled in a UHC CDHP medical plan on the 1 st of the month. 8: Will legacy TASC employees again receive an additional HSA contribution in 2017? A: No. The additional HSA contribution for legacy TASC employees was a one-time contribution to assist with significant medical premium increases for legacy TASC employees in 2016, as part of the transition to combine both companies and unify medical plans. Premium increases will be the same in 2017, regardless of legacy company. 9: Will HSA employee contribution elections roll over from year to year? A: No. Employee contributions must be re-elected each calendar year during open enrollment, and can be changed any time during the year. 10: Will the IRS HSA limits remain the same in 2017? A: Below is a breakdown of the 2017 HSA limits: 4

5 Medical Insurance: HSA, Wellness Incentives, Tobacco Surcharge 11: Do wellness incentives count towards the HSA IRS limits? A: Yes. Employee HSA contributions/deductions, employer HSA contributions and wellness incentives all count towards the IRS limits. 12: Will Engility offer Wellness Incentives again in 2017? A: Yes. Employees enrolled in the UHC CDHP medical plans will have the ability to earn more in wellness incentives in To further encourage healthy living, we are offering for the first time Spouses and Domestic Partners access to our wellness incentives. Below is a breakdown of these incentives: 13: How will the 2017 Tobacco Surcharge work? A: In addition to the medical premiums, UHC enrollees will pay $23.08 per pay period ($50 per month) in a tobacco surcharge for medical coverage unless they certify during open enrollment that they and their covered spouse or domestic partner are: 1) not tobacco users, or 2) that they are enrolled in an Optum tobacco cessation program. 14: What does tobacco include? A: Tobacco is defined as: the use of a tobacco product or products four or more times per week within the past 6 months. This includes all tobacco products and e-cigarettes and excludes religious or ceremonial uses of tobacco (for example, by American Indians and Alaska Natives). You will be asked to certify your tobacco status during open enrollment. Employees who do not respond or who respond that they are a tobacco user will be charged the extra amount. 15: If someone is a smoker and doesn t declare it during the open enrollment period, will they be at risk to lose their medical coverage? A: One of Engility s core values is earned trust. We earn our customers trust by delivering excellent performance in an ethical way and expect the same from our employees. If an employee does not declare their tobacco usage, this would be dishonest and that would be evaluated under our Ethics policies. 16: Does Engility offer any tobacco cessation program? A: Engility offers a free tobacco cessation program through Optum. More information regarding this program is posted on our website under Medical/Pharmacy>2017 Tobacco Surcharge. 17: Why will Engility charge employees for tobacco use? A: A tobacco surcharge across our industry has become a common practice and many of the companies in our peer group (CACI, Leidos, CSC, Northrop Grumman, Lockheed Martin) are already charging employees for tobacco use. While we recognize that this is a personal choice, we are focused on providing employees with the tools and incentives to encourage healthy living. We believe this surcharge, coupled with our free cessation program offered through Optum, serves as encouragement for tobacco users to quit using tobacco. 5

6 Dental, Vision, FSA, TRICARE Supplement, Life Insurance, Voluntary Plans 1: Are dental plans changing in 2017? A: There are no changes to the non-sca MetLife dental plan design, deductibles, or networks of providers in However, there will be premium increases (less than $4 per pay period), based on plan and coverage level selection. There will also be a new MetLife Low Dental Option available for those who want a lower premium option. This new plan will have the same deductibles and preventive coverage, but diagnostic services and treatment will vary based on the service provided. Basic and Major services will be covered at the 50% coinsurance level and the annual maximum will be $1,500. Also, orthodontia will not be covered on this new Low Dental plan. 2: Will we have Dental ID cards? A: No. Dental cards will not be automatically issued for dental coverage; however, you can print a paper ID card from 3: Will MetLife need social security numbers to verify eligibility and coverage in 2017? A: MetLife will move from requiring social security numbers to employee IDs. Your employee ID with three leading zeroes will be your ID. 4: Is the vision plan changing in 2017? A: There are no changes to the current vision option, but we will add a new plan for those looking for even more coverage, through the new VSP Vision High Option. With this new plan, you will have a frame allowance every year (as opposed to every other year) and you will be able to choose between a richer frame allowance, a richer contact lens allowance, anti-reflective coating or photochromics. 5: Will I get vision ID cards or will VSP need social security numbers to verify eligibility and coverage in 2017? A: No. VSP does not issue vision ID cards. We will move from requiring social security numbers to employee IDs. Your employee ID with three leading zeroes will be your ID. 6: Will there be any changes to the 2017 Flexible Spending Account limits? A: There will be no changes to the current plans, vendor or IRS annual limits. As in previous years, employees must re-elect these options during open enrollment. 7. Will I get a new Health Care FSA or Limited Purpose FSA card? A: No. Only new enrollees will get new FSA cards. 8: Will the TRICARE Supplement Plan be offered in 2017? A: Yes, and Engility will expand this offering to eligible Part Time employees working 20+ hours per week. 9: Will there be changes to the Group Basic Life Insurance plan? A: Employees will continue to receive company-paid life insurance at 1.5 times their annual salary, and there will be an improvement in the age reduction schedule, as follows: 6

7 Dental, Vision, FSA, TRICARE Supplement, Life Insurance, Voluntary Plans 10: Will there be changes to any of the voluntary plans? A: There will be no changes to the voluntary plans (premiums or plan designs). However, for the Critical Illness plan, MetLife will be collecting information on which of your dependents are to be covered. There will also be an enhancement to the Identity Theft Protection plan. This plan was first offered in 2016 but enrollment was through a second website. During Open Enrollment, you will be able to take advantage of this offering through the main enrollment portal. Finally, we will be offering a Long Term Care Insurance plan in February 2017, with a Caregiver network through Genworth/AGIS. Severance 1: What is the new Severance Policy starting January 1, 2017? A: Below the Director-level, employees will receive a 2-weeks notice period (working or pay in lieu of) and 2 weeks of severance. 2: If I worked for legacy TASC or another one of Engility s companies prior to merging and becoming Engility, will that company s severance policy be grandfathered? A: There will be no grandfathering of severance policies. This new consolidated policy, which will apply to all Engility employees, was reviewed as part of the entire benefits offering with a goal of offering a benefit in line with benchmark data. Other: Mid-year changes, Dependent Verification, Open Enrollment 1: If employees need to make changes to their benefits mid-year, will they still have 31 days to make these changes? A: Engility is moving from 31 days to a 60-day enrollment window due to a qualified life event like birth/adoption, marriage, divorce, death, job change, etc. 2: Will employees need to provide dependent documentation for already verified dependents? A: You will not need to re-verify your natural children if you have already verified them. However, there will be a reverification process of other dependents every three years. If you have verified your dependents less than three years ago, you will not need to re-verify them until the three year mark, and you will be notified when documentation is required. 3: What are the dates of Open Enrollment this year? A: Open Enrollment will begin on Monday, October 24 th and run through Wednesday, November 9 th, : What happens if I do nothing during Open Enrollment? A: a. Benefits will roll forwards at the applicable new rates for b. Tobacco surcharge will be added if you participate in an Engility medical plan. c. FSA and HSA deductions will not start. d. Short Term Disability will be at the Tax the Premium level. 7

Q & A Update 3/29/18. Additions/Reminders:

Q & A Update 3/29/18. Additions/Reminders: 3/29/18 1 Additions/Reminders: Q & A Update 3/29/18 Medical if you are currently in the PPO plan, you must elect medical coverage for 2018. Medical if a spouse is eligible for medical coverage through