Frequently Asked Questions and Answers (FAQs)

Transcription

1 Frequently Asked Questions and Answers (FAQs) Here are some answers to questions employees may have about changes to the retirement program. You will receive additional information and have opportunities to ask questions throughout the year. General G-1. Q. Why is the organization changing my retirement benefits? A. Allegheny Health Network (AHN) is increasing our financial commitment to your retirement program beginning in The new AHN retirement program will include employer contributions to eligible participants, plus, when you contribute, your employer will match eligible contributions dollar for dollar. Changing our approach will: Align retirement programs across Jefferson Hospital, Saint Vincent Hospital and West Penn Allegheny Health System. Provide AHN with the opportunity to further invest in our employees. Allow AHN to offer retirement benefits that better compete in the market. Enhance the value of our retirement program, a key component to retaining and recruiting employees. This new, more competitive approach to retirement benefits reflects how employees like you work and save today by helping you build financial resources regardless of where you are in your career. It also provides AHN with the opportunity to meet the diverse and varying benefits needs of our employees, even as those needs may change over time. G-2. Q. Am I losing my retirement benefits? A. You will not lose benefits you have earned through the date of the change. These retirement program changes will affect the way you earn benefits in the future. Our retirement program continues to represent a significant investment and is an important part of what we offer our employees. G-3. Q. What retirement plans are changing, and who will be affected? A. It is important for you to know the retirement plan changes will not impact everyone in the same way. The impact on your benefits will depend on the hospital you work for, along with your age, length of service and other criteria. The communications you have received and will receive in the future describe the retirement plan changes for AHN employees who work at: Jefferson Hospital ( Jefferson ) Saint Vincent Hospital ( Saint Vincent ) West Penn Allegheny Health System ( WPAHS )

2 G-4. Q. What does vesting or vested mean? A. It means the right to receive a benefit that cannot be taken away from you. G-5. Q. Do I need to take any action as a result of the changes? A. No, not at this time. In early November, you will receive more information about the AHN 401(k) Plan, including actions you need to take and information about early access to a website to review your information. Between now and then, you may want to consider your retirement planning needs, your savings goals for the years ahead, and plan to maximize the employerprovided retirement benefits that will be available to you. G-6. Q. Where do I go to learn more about the changes? A. Visit AHN.org/benefits/retirement. You can find additional contact information under each of your employer s retirement benefit programs. You will also receive additional information in your home mail in early November. Page 1

3 The New AHN 401(k) Plan A-1. Q. Is there one change that will affect employees who work at AHN hospitals? A. Yes. Beginning Jan. 1, 2018, employees at Jefferson, Saint Vincent and WPAHS will be offered the new AHN 401(k) Plan. Your employer will contribute to this new plan in two ways: with matching contributions plus an annual contribution. Matching Employer Contributions When you make contributions to the AHN 401(k) Plan, your account will automatically be credited with matching employer contributions. The matching contributions and yearly accumulation will be shown on your paycheck. For every $1 you contribute, your employer will also contribute $1 for the first 4% of your eligible pay. In other words, you can get free money just by contributing up to 4% of your eligible pay every year. Generally, if you satisfy the eligibility requirements for the new AHN 401(k) Plan by Dec. 31, 2017, you will begin participating on Jan. 1, Annual Employer Contribution Also, starting Jan. 1, 2018, you will be eligible for an annual employer contribution of 1% of your eligible pay. The first annual contribution will be made in 2019 for the 2018 calendar year, as long as: You are eligible for the AHN 401(k) Plan; You earn at least 1,000 hours during 2018; and You are employed by the Highmark Health enterprise on Dec. 31, 2018 (or terminate employment during the year due to death, disability or retirement). This annual 1% employer contribution will generally vest after three years of service (including service with your employer before 2018). You will receive this annual 1% employer contribution even if you do not make contributions to the AHN 401(k) Plan. A-2. Q. Do I need to contribute to the AHN 401(k) Plan in order to get the 1% annual contribution from my employer in 2019? A. No. Your employer will make the 1% annual contribution the first of which will be made in 2019, for the 2018 calendar year as long as you meet the following eligibility requirements: You are eligible for the AHN 401(k) Plan; You earn at least 1,000 hours during 2018; and You are employed by the Highmark Health enterprise on Dec. 31, (If you or terminate employment during the year due to death, disability or retirement (prior to Dec. 31, 2018) you will still receive the 1% annual contribution as long as you are eligible for the plan and have earned 1,000 hours). Page 2

4 A-3. Q. I m eligible to participate in the AHN 401(k) Plan. Can you show me how employer contributions would impact my retirement savings, whether I contribute or not? A. Sure! Employer contributions can have a positive impact on your retirement savings, whether or not you participate in the AHN 401(k) Plan. First, it is important to reiterate that you must contribute to the AHN 401(k) Plan in order to receive matching contributions from your employer. To receive the full employer match of 4%, you must contribute at least 4% of your eligible pay. So, if you re not contributing enough to get the full Company match, you re leaving free money on the table! Sometimes it helps to see the numbers. The chart below shows the additional savings potential with employer contributions. When you contribute Your employer contributes For a total contribution of 4% 5% 9% 3% 4% 7% 2% 3% 5% 1% 2% 3% 0% 1% 1% A-4. Q. What is a pre-tax contribution? A. It is a contribution you make to the AHN 401(k) Plan, determined before applicable taxes are calculated. A-5. Q. What is an after-tax contribution? A. It is a contribution you make to the AHN 401(k) Plan, determined after applicable taxes are calculated. A-6. Q. What is a matching contribution? A. It is a contribution you receive from your employer if you contribute to the AHN 401(k) Plan. A-7. Q. Who is eligible for the plan? A. Generally, if you satisfy the following eligibility requirements by Dec. 31, 2017, you will begin participating in the AHN 401(k) Plan on Jan. 1, You are an employee of one of the AHN hospitals; You are at least 21 years old; and You have completed 30 days of continuous employment with AHN or any affiliate. Page 3

5 Employees covered by a collective bargaining agreement, with the exception of represented employees of the Canonsburg Ambulance Service, Jefferson Hospital and AGH Suburban Campus Maintenance, may not be eligible for this program based on the terms and provisions for bargaining unit-specified retirement programs addressed in the respective collective bargaining agreements. A-8. Q. When am I vested in the plan? A. For the AHN 401(k) Plan, you are always 100% vested in the employer s matching contributions as well as your own contributions. As of Jan. 1, 2018, you will be 100% vested in the annual 1% employer contribution account if you are actively employed with AHN on Dec. 31, 2017 and you otherwise satisfy the eligibility provisions of the AHN 401(k) Plan. In general, this annual 1% employer contribution will vest after three years of service. Service with the company prior to Jan. 1, 2018 counts towards the three years of service requirement. You will receive this annual 1% employer contribution even if you do not make contributions to the AHN 401(k) Plan. A-9. Q. When can I enroll in the plan? A. To help make saving for your retirement easier, we will take care of the paperwork and enroll you in the AHN 401(k) Plan at a 3% pre-tax contribution rate. What this means is that beginning with your first paycheck in 2018 there s nothing you need to do! You may opt out of this feature, but we encourage you to consider remaining in the Plan, or even boosting your contribution to at least 4%, so you can take full advantage of the employer match. Information coming in early November will explain how to access the website in order to make changes to your contribution percentage and investment election. A-10. Q. What is the auto-increase feature? A. This feature raises your Plan contribution by 1% each year until you reach a contribution of 10% per year. You may opt-out of this feature at any time, but it can make it easier to reach your target. The first increase would take place in 2019 if you choose to keep this feature. A-11. Q. Who will be the plan administrator? A. AHN has selected Transamerica to provide administrative services for this plan. Transamerica is a full-service retirement plan provider that has worked with retirement plans for more than 80 years. Nearly 5 million people working for organizations across America currently invest their retirement assets through them. Transamerica has the technology, experience, tools, and resources to help you pursue your retirement savings goals. You will have access to online tools and services through Transamerica that can help you: Review and change your contribution election anytime. Protect what s important by designating beneficiaries. Set smart goals and identify ways you can meet those goals. Review and change your investments anytime. Page 4

6 A-11. Q. What are my choices for investing my money? A. There will be both pre-mixed portfolio funds and individual investment funds available for you to select. Create a diversified investment portfolio through a BlackRock LifePath Index Fund. This option may be right for you if you prefer the ease and convenience of a professionally diversified and managed fund. Pre-mixed funds are designed to provide you with a one-step approach to diversifying your investments. With access to 10 BlackRock LifePath Index Funds, you will have an opportunity to allocate your AHN 401(k) Plan contributions to the fund that most closely matches the year you are expecting to retire. Select from the individual investment options available in the Plan. This choice may be right for you if you prefer the freedom to create your own combination of investments and actively manage your own portfolio. Fund options include large cap and small cap growth funds, stable value funds and international stock funds. More details will be provided in early November about the actual fund choices and performance. Page 5

7 Jefferson Hospital Plan Changes J-1. Q. I work at Jefferson. Are there any other changes I should know about? A. Yes. The Jefferson Regional Medical Center Retirement Savings Plan (the Jefferson 403(b) Plan ) will be closing on Dec. 31, If you are currently participating, the following contributions will be added to your Jefferson 403(b) Plan account: Your 2017 contributions. The employer s 2% contribution for Your 2017 longevity match (if applicable). Any performance-based matching contribution for Once these amounts are added to your account, no additional contributions (from you or your employer) will be made to your Jefferson 403(b) Plan account for service after Dec. 31, Post-2017 contributions will be made to the new AHN 401(k) Plan. After Dec. 31, 2017, your Jefferson 403(b) Plan account will continue to realize gains or losses based on your investment elections. Your account will be available to you when you are ready to retire. Please Note: If you are not currently participating in the Jefferson 403(b) Plan, no new enrollments will be accepted after Dec. 31, J-2. Q. I am a represented employee of the Jefferson Teamsters. Do these changes affect me? A. Yes. The terms of your collective bargaining agreement state that your retirement benefits will be the same as those offered to non-union employees of the hospital. J-3. Q. I m in the Jefferson 403(b) Plan. How does a 403(b) plan differ from a 401(k) plan? A. Very little. A 403(b) and 401(k) serve the same purpose, as they both allow you to save for retirement with pre-tax and after-tax contributions. The plan names simply refer to the relevant section numbers of the IRS tax code. 403(b) plans are available to employees of tax-exempt organizations such as schools, hospitals and government agencies. 401(k) plans are offered more broadly by nonprofit organizations and for-profit companies. J-4. Q. What happens to my frozen benefit under the Jefferson 403(b) Plan? A. You are always 100% vested in your Jefferson 403(b) Plan account. After Dec. 31, 2017, your Jefferson 403(b) Plan account will be credited with investment gains or losses depending on your investment elections. Your benefit will be available to you when you are ready to retire. Page 6

8 J-5. Q. Will I be able to roll-over my balance in the Jefferson 403(b) Plan into the new AHN 401(k) Plan? A. Unfortunately, at this time, you cannot roll over your Jefferson 403(b) Plan balance into the new AHN 401(k) plan unless you are over age 59-1/2. Federal tax law does not allow the plan to pay you your benefit (which includes a rollover) while you are still employed by the hospital (or one of its affiliates) unless you are over age 59-1/2. If the opportunity to consolidate your account balances arises, we will let you know. J-6. Q. What is a longevity matching contribution? A. It is a pre-2018 contribution you received from your employer if you contributed to the Jefferson 403(b) Plan and satisfied the following conditions: You were a participant in the frozen Retirement Plan for Employees of Jefferson Regional Medical Center (the Pension Plan ) on Dec. 31, 2010; You had 25 years of service under the terms of the Pension Plan on Dec. 31, 2010; and You were a full-time employee on Dec. 31 of the plan year. If you were not full-time, a longevity matching contribution was made to your account if you were an employee on Dec. 31 and received credit for a year of service for that plan year. J-7. Q. I have a benefit in the Pension Plan which was frozen on Dec. 31, Will my benefit be affected by the changes described? A. No. Changes summarized in this mailer will not impact your frozen benefit under the Pension Plan. Your frozen Pension Plan benefit will be available to you when you are ready to retire. J-8. Q. Who should I contact if I have questions about my Jefferson 403(b) Plan account? A. If you have questions about your Jefferson 403(b) Plan account, please contact VALIC at J-9. Q. Who should I contact if I have questions about my Pension Plan benefit? A. If you have questions, please contact Boetger Retirement Plan Services at Page 7

9 Saint Vincent Hospital Plan Changes S-1. Q. I work at Saint Vincent. Are there any other changes I should know about? A. Yes. The current Saint Vincent Health System 401(k) Plan (the Saint Vincent 401(k) ) will be closing on Dec. 31, If you are currently participating, the following changes will take place: All contributions will be made to the Saint Vincent 401(k) through Dec. 31, No additional contributions (from you or your employer) will be made to your Saint Vincent 401(k) account for service after Dec. 31, Post-2017 contributions will be made to the new AHN 401(k) Plan. At the time the plan is frozen, your Saint Vincent 401(k) account will be merged into the AHN 401(k) Plan and your investments will be mapped to comparable investments under the AHN 401(k) Plan. Please Note: If you are not currently participating in the Saint Vincent 401(k), no new enrollments will be accepted after Dec. 31, S-2. Q. What happens to my Saint Vincent 401(k) Plan account as a result of merging into the AHN 401(k) Plan? A. Your Saint Vincent 401(k) Plan account will be merged into your new AHN 401(k) Plan account and the investment funds you are currently invested in will be mapped to comparable investment funds available under the AHN 401(k) Plan. So, you won t need to worry about separate accounts under the two programs we are putting everything into one account for you making it much easier for you to manage. S-3. Q. I have a benefit in The Saint Vincent Health System Pension Plan (the Pension Plan ) which was frozen on June 30, Will my benefit be affected by the changes described? A. No. Changes summarized in this mailer will not impact your frozen benefit under the Pension Plan. Your frozen Pension Plan benefit will be available to you when you terminate employment. S-4. Q. Who should I contact if I have questions about my Saint Vincent 401(k) account? A. If you have questions, please contact Transamerica at S-5. Q. Who should I contact if I have questions about my Pension Plan benefit? A. If you have questions, please contact Northwest Retirement Services at Page 8

10 West Penn Allegheny Health System (WPAHS) Plan Changes: Cash Balance The changes described below do not apply to those employees covered by a collective bargaining agreement, with the exception of union-represented employees of the Canonsburg Ambulance Service and AGH Suburban Campus Maintenance. Terms and provisions for bargaining unit-specific retirement programs will be negotiated and addressed in the respective collective bargaining agreements. W-1. Q. Can you tell me about the changes to the WPAHS cash balance pension plan? A. The following changes will affect you if you earn cash balance benefits in The Retirement Plan for Eligible Nonrepresented Employees of West Penn Allegheny Health System or The Retirement Plan for Eligible Represented Employees of West Penn Allegheny Health System known collectively as the WPAHS cash balance pension plan. Your benefits in the WPAHS cash balance pension plan will be frozen as of Dec. 31, You will no longer receive annual retirement credits in the WPAHS cash balance pension plan after Dec. 31, Beginning Jan. 1, 2018, you will continue to receive interest credits on your account balances in the WPAHS cash balance pension plan. It is also important to note that the WPAHS cash balance pension plan will close to new participants effective Jan. 1, W-2. Q. I am represented by a collective bargaining agreement. Do these changes apply to me? A. No, unless you are a represented employee of the Canonsburg Ambulance Service or the Allegheny General Hospital Suburban Campus Maintenance group, IUOE Local 95-95A. The terms of your collective bargaining agreement will outline the benefits available to you. W-3. Q. I am represented by IUOE Local 95-95A at Allegheny General Hospital Suburban Campus. How do these changes apply to me? A. The terms of your collective bargaining agreement will outline the benefits available to you. However, generally you will continue to participate in the Central Pension Fund and will have the option to make contributions of your own money into the AHN 401(k) Plan. You will not receive any employer contributions into the AHN 401(k) Plan. W-4. Q. I am a non-union employee and considering a union position. How will my retirement benefits be impacted? A. You should check the terms of the collective bargaining agreement for the union position you are considering. These program changes generally do not apply to represented employees, with the exception of represented employees of the Canonsburg Ambulance Service. Page 9

11 W-5. Q. What are my WPAHS cash balance pension plan account balance(s)? A. Your WPAHS cash balance pension plan accounts are the sum of the annual retirement credits and interest credits you earn under the plans. W-6. Q. What are annual retirement credits? A. They are the annual contributions made to your WPAHS cash balance pension plan account. An annual retirement credit is calculated by multiplying your compensation (up to the IRS annual limit - $270k for 2017) by a percentage (as outlined in the table below). You receive, based on your age or years of vested service in the pension plan, that contribution percentage that gives you the larger credit amount. This contribution takes into account your age on Dec. 31 of the plan year. No annual retirement credits will be added to your WPAHS cash balance pension plan accounts after Dec. 31, Age (on 12/31/17) YOVS* Credit % <36 and < % or % or % or % 61+ or 30+ 6% *Years of vested service in the pension plan W-7. Q. What are interest credits? A. They are credits to your cash balance pension plan account that are added each year. You earn interest at a specific interest rate on your account balance annually after Dec. 31, 2017 until the distribution of your retirement account begins. W-8. Q. What happens to my WPAHS cash balance pension plan accounts if I terminate employment after Dec. 31, 2017 but before my normal or early retirement date? A. Assuming you are vested in your WPAHS cash balance pension plan benefit, you can commence your benefits any time after you terminate employment. If you commence your benefits before your normal retirement date and you elect a monthly benefit (rather than a lump sum distribution), your monthly benefit may be smaller because it will be based on your age as of the date of commencement. W-9. Q. Will I still have the option of taking my WPAHS cash balance pension plan account as a lump sum? A. Yes. No changes have been made to the form of payment options available to you when you are ready to commence your benefit. Page 10

12 W-10. Q. How do I know if I am vested in my WPAHS cash balance pension plan accounts? A. Generally, you are vested in your account balance after three years of service. You earn a year of service if you work at least 1,000 hours. You also become vested in your account balance once you attain age 62. You will continue to earn vesting service after Dec. 31, 2017 as long as you remain employed. W-11. Q. Can you tell me about the changes to the West Penn Allegheny Health System (the WPAHS 403(b) Plan )? A. The Retirement Savings Plan for Employees of the WPAHS 403(b) Plan will also close on Dec. 31, If you are currently participating, your 2017 contributions will be added to the WPAHS 403(b) Plan account. Once these amounts are added to your account, no additional contributions will be made to your WPAHS 403(b) Plan account for service after Dec. 31, Post-2017 contributions will be made to the new AHN 401(k) Plan. After Dec. 31, 2017, your WPAHS 403(b) Plan account will continue to realize gains or losses based on your investment elections. Please Note: If you re not currently participating, no new enrollments will be accepted after Dec. 31, 2017, unless participation is required by a collective bargaining agreement. W-12. Q. I m in the WPAHS 403(b) Plan. How does a 403(b) plan differ from a 401(k) plan? A. Very little. A 403(b) and 401(k) serve the same purpose, as they both allow you to save for retirement with pre-tax and after-tax contributions. The plan names simply refer to the relevant section numbers of the IRS tax code. 403(b) plans are available to employees of tax-exempt organizations such as schools, hospitals and government agencies. 401 (k) plans are offered more broadly by nonprofit organizations and for-profit companies. W-13. Q. What happens to my frozen benefit under the WPAHS 403(b) Plan? A. You are always 100% vested in your WPAHS 403(b) Plan account. After Dec. 31, 2017, your WPAHS 403(b) Plan account will be credited with investment gains or losses depending on your investment elections. Your WPAHS 403(b) Plan account will be available to you when you are ready to retire. W-14. Q. Will I be able to roll over my balance in the WPAHS 403(b) Plan into the new AHN 401(k) Plan? A. Unfortunately, at this time, you cannot roll over your WPAHS 403(b) Plan balance into the new AHN 401(k) plan unless you are over age 59-1/2. Federal tax law does not allow the plan to pay you your benefit (which includes a rollover) while you are still employed by the hospital (or one of its affiliates) unless you are over age 59-1/2. If the opportunity to consolidate your account balances arises, we will let you know. Page 11

13 W-15. Q. Who should I contact if I have questions about my WPAHS cash balance pension plan accounts? A. If you have questions about your WPAHS defined benefit, please contact the WPAHS Retirement Center at W-16. Q. Who should I contact if I have questions about my WPAHS 403(b) Plan account? A. If you have questions about your WPAHS 403(b) Plan account, please contact your respective investment company. Fidelity Investments: or TIAA: Page 12

14 What s Next N-1. Q. Can you provide a summary of important dates so I know what will happen when? A. Here are some important dates to be aware of, though not all dates may apply to you: Important Dates for AHN Hospital Employees Dec. 31, 2017 Jan. 1, 2018 Dec. 31, 2020 The following plans will close and no new enrollments will be accepted: Jefferson 403(b) Plan Saint Vincent 401(k) WPAHS defined benefit plan WPAHS 403(b) Plan Employees begin participating in the new AHN 401(k) Plan (if enrolled) Retirement benefits (calculated under the pre-2018 plan provisions) will freeze for those WPAHS employees who choose to keep their current final average pay benefits (as of Dec. 31, 2017) N-2. Q. When will I be receiving additional information, and what will be included? A. See below. When What Where Ongoing Frequently Asked Questions (FAQs) Visit AHN.org/benefits/retirement October and November 2017 Communications regarding the new AHN 401(k) Plan including highlights, details on how the Plan works and actions you may want to consider for your future retirement planning Mailed to homes This document provides an overview of key plan provisions. The plans are governed by formal plan documents, and, in the event of any conflict, the formal plan documents will control. The Highmark Health enterprise reserves the right to amend all of its benefit plans, in whole or in part, at any time. Participation in these plans does not create any contractual or other right to receive any other benefits, nor does your participation or projections constitute a condition or right of future employment. Page 13