Power Your Retirement

Transcription

1 Power Your Retirement Your Savings Plan can help get you there. We know saving for the future is important. We also know that preparing for something as big as retirement can seem overwhelming, but it doesn t have to be. With a little research and planning and using the programs Danaher provides you can put yourself in a better place to enjoy your golden years. How Do You See Yourself in Your Retirement? Potential Retirement Income 401(k) Social Security Personal Savings Health Savings Account What Does a Retirement Plan Look Like? Know your source of income. For most people, your income in retirement will be a mix of your 401(k), Social Security and any personal savings you have. If you participate in Danaher s Health Plus Plan with the Health Savings Account (HSA), you can use the HSA as another source of retirement income. Use it to pay for health expenses as you age, which is traditionally one of the largest areas of expense in retirement. Sipping tea on my front porch. Sitting on a beach in the south of France. Don t put all your eggs in one basket. The ideal 401(k) account includes a mix of different investments, which helps protect you from the ups and downs of the stock market. To select your investments, you can utilize investing assistance already available to you via the BlackRock Life Path Funds or Fidelity s Portfolio Advisory Service at Work service, which offers you the chance to have your Plan investments managed by professionals. Talk to a consultant. More family vacations! Finally taking that cooking class. You can also talk with an experienced, highly trained workplace planning and guidance consultant to help with everything from managing your investments, to building a plan, to learning how to make your money last through retirement. Call Fidelity at and ask to speak to a planning and guidance consultant to get started. Save! Buying the boat I ve always wanted. Learning to play golf. If any of these options sound like a nice way to pass the time or helped you think of your own ideal way to spend your retirement start saving now. This step is often the hardest one for most people. One of the easiest ways to save is to increase what you contribute to your 401(k) plan by just 1% of your current pay. You won t miss the money, and even a small increase can have a big impact on your retirement savings over time.

2 Are Roth 401(k) Contributions Right for You? How you answer the following questions can guide you to the right combination of contributions. Do you think your income level and/or tax rate when you retire will be higher than what it is today? Do you have a long time until you retire? NEW! Roth 401(k) Option Available in 2015 Starting January 1, 2015, Danaher will add a Roth 401(k) option to the Danaher Savings Plan (for non-union associates in the USA) to provide another way for you to save for retirement. The Roth 401(k) option is very similar to other associate contributions in the Danaher Savings Plan in how it works enrolling, how much you can contribute, eligibility for Company matching contributions and resources from Fidelity but with two key differences: If yes, a Roth 401(k) contribution option may be right for you. If no, you may be better off with the benefits of making traditional, pretax contributions to the 401(k) plan. 1 2 Contributions are not pretax. That means you get taxed on your full paycheck amount before your Roth contribution amount is invested in the Danaher Savings Plan. You are not taxed on your Roth contributions and related earnings when you take money out for use in retirement provided it s a qualified distribution (i.e. the account is held for five years and distribution is made due to disability, death or after you reach age 59½). The Roth 401(k) option is only available to those enrolled in the Danaher Savings Plan. Those in the Puerto Rico Savings Plan are not eligible because the Roth 401(k) option is not recognized under the Puerto Rico tax code. More Power to You: Save for retirement with the HSA, too Those in the Danaher Health Plus Plan have an extra way to save for health care related expenses that may be incurred during retirement the Health Savings Account (HSA). With the HSA, you get: Free money from Danaher. It s yours to keep through retirement, even if you change jobs or leave Danaher. You can invest your balance if desired (if 2,000 or greater), allowing funds in the account to grow. Roth 401(k) Contributions You can continue to contribute on a pretax basis to your Danaher Savings Plan, even if you also choose to make Roth contributions to the Plan. Just know that your total contributions including both pretax and Roth contributions cannot exceed the Plan limit and the annual IRS limit in any given year. The Danaher Savings Plan allows you to contribute up to 75% of your pay (including both pretax and Roth contributions) subject to the annual IRS limit of 17,500 for 2014 (as indexed for inflation). Additionally, if you are age 50 or older, you may also contribute up to 5,500 for 2014 (as indexed for inflation) in catchup contributions each year. For example, if you are age 48 and currently contribute 6,000 a year to the Danaher Savings Plan in traditional, pretax contributions, then you can contribute up to 11,500 for Roth contributions because the IRS limit in 2014 for all pretax and Roth contributions combined is 17,500 for participants under age 50 (or up to 23,000 if age 50 or older). That s right we re also adding a Roth catch-up contribution option. For example, if you are age 52 and currently contribute 3,000 a year as pretax catch-up contributions, you would only be able to contribute an additional 2,500 in Roth catch-up contributions (based on the 2014 IRS catch-up limit of 5,500). Roth contributions are eligible for matching contributions in the same manner as traditional pretax contributions. Calculating Your Take Home Pay It s important to understand how the choice of 401(k) contributions whether they are pretax or post-tax can affect your take home pay. So, let s do the math. Traditional 401(k) Pretax vs. Roth 401(k) Post-tax Annual Hypothetical Income 65,000 65,000 Annual Hypothetical Pretax Contribution (5,000) 0 Taxable Income 60,000 Tax Rate 28% Taxes (16,800) 65,000 28% (18,200) Annual Hypothetical Roth Contribution 0 (5,000) Take Home Pay 43,200 41,800 2

3 Traditional vs. Roth 401(k) Impact at Distribution Tom and Elaine are both 45 years of age. They each have 5,000 to contribute to their savings plan for one year Tom picks a traditional 401(k) pretax contribution and Elaine elects the new Roth contribution option. With interest, returns and tax rates being equal, here s how their balances grow over 30 years. Traditional 401 (k) vs. Roth 401 (k) Tom Age: 45 Contribution: 5,000 Elaine 27,404 In 30 years, their after-tax total will be: 38,061 This hypothetical example is for illustrative purposes only. It assumes a 30-year investing time horizon and compounds investments annually at a rate of 7% in the Roth and Traditional 401(k) accounts. Marginal tax rates are assumed to be 28% in the contribution year and in the year of withdrawal. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI It may be appropriate to make both traditional, pretax and Roth 401(k) contributions if you can, giving you taxable and tax-free withdrawal options if you decide that s appropriate for your needs. Financial planners call this tax diversification, and it s generally a smart strategy. More Danaher Savings Plan & Puerto Rico Savings Plan Changes Participants Immediately Eligible for Matching Contributions on January 1, 2015 Currently, new plan participants have to wait one year from hire date to be eligible for matching contributions from Danaher. That requirement will be removed starting January 1, 2015, for all Danaher Savings Plan and Puerto Rico Savings Plan participants from that date forward. However, the Plans will still retain the one-year wait for the base (2%) Company retirement contribution. Here are a couple of examples of how that would work for participants: Automatic Enrollment for Certain Associates After January 1, 2015 Any new, rehired or otherwise newly eligible participants starting January 1, 2015 or later will automatically be enrolled in the applicable Plan at a 5% rate, if they don t otherwise make an election on their own during their (45 day) notification period. This Plan change will encourage new participants to be active savers under the Plan and to receive the Company match once enrolled Hire Date Date eligible for Match 11/15/ /01/2015* 11/15/2015* 03/01/ /01/2015* 03/01/2016* Date eligible for company retirement *First pay period beginning on or after these dates. Investment Option Change for Small Cap Equity Funds Effective December 1, 2014 Given the size of Danaher s (U.S.) Plans, it becomes challenging to find true small cap equity investment managers who can offer access to their funds for plans of our size without placing an asset cap on them. As a result of our Plans growth in assets, we are quickly approaching the cap we have in place with the investment manager for the Geneva Small Cap Growth Strategy (currently offered in the Danaher Savings Plan). Rather than adding a variety of individual small cap equity funds, we will add one new fund structure for active small cap equity investments under the Danaher Savings Plan. This change means that all balances in and investment allocations for future contributions to our two current small cap equity funds the American Beacon Small Cap Value Fund Class Institutional ( American Beacon ) and the Geneva Small Cap Growth Strategy ( Geneva ) will be consolidated as underlying investments into one new fund, the Active Small Cap Equity Fund, on December 1, 2014, after 4 p.m. EST. Geneva seeks long-term capital appreciation by investing in small cap growth stocks. American Beacon seeks long-term capital appreciation and income by investing in small cap value stocks. The new Active Small Cap Equity Fund will invest in both small cap growth and small cap value stocks by targeting an equal weighting to American Beacon and Geneva. The new Fund s investment objective will be long-term capital appreciation. 3

4 IMPORTANT! Review/Update Your Beneficiaries Be prepared for life s unexpected changes. Having your beneficiary information updated now will help smooth the way for your loved ones later. We made changes to the 401(k) beneficiary designation process back in December 2010, which was communicated to participants at that time in an annual Savings Plan newsletter, as well as through other Plan-related communications. We want to remind you again of the right way to elect your Plan beneficiary(ies): Any beneficiary designation made via paper form with Human Resources at your operating company in the past was considered null and void effective December 31, 2011 (as previously communicated) and is overruled by whatever designation you have on file with Fidelity currently. If you do not have a designation on file with Fidelity at the time of your death, then your account will be transferred per the Plan s default rules as follows. If you re married, your account will go to your spouse. If you re not married, it will go to your estate. If you previously designated your beneficiary via 401k.com, you can log in to review and update your beneficiary at any time. However, if you previously completed a paper beneficiary designation form and returned it to Fidelity, you will need to call Fidelity at in order to confirm your election. We strongly encourage you to take time to review your elections on file with Fidelity. If you still need to designate a beneficiary because there are none on file at Fidelity, you can log into 401k.com and make your election there. Or, if you prefer to complete a paper beneficiary designation form, you can call Fidelity at , request that a beneficiary designation form be sent to you for completion, and then return the completed and signed form to Fidelity. Fund 1 Year* 5 Year* 10 Year* Life of Fund (Inception Date) Geneva Small Cap Growth Strategy -1.38% Not Applicable Fund Inception Date July 9, % Fund Inception Date July 9, 2013 American Beacon Small Cap Value Fund Class Institutional NEW! Active Small Cap Equity Fund 7.11% 15.10% 8.54% 10.89% Fund Inception Date December 31, 1998 This is a new fund so historical return information is not yet available. There are risks inherent in investing in equity securities and small cap growth and small cap value investments, including: Limited liquidity Greater volatility than larger cap stocks and the equity market in general * Average annual return as of September 30, 2014 On and after close of market on December 1, 2014, all remaining balances in the American Beacon and Geneva funds and investment allocations for future contributions after that date will be transferred into the new consolidated Active Small Cap Equity Fund as indicated below. Old Investment Option Geneva Small Cap Growth Strategy Style: Small Cap Growth Objective: long-term capital appreciation Fund Code: TDPB Ticker Symbol: N/A Expense Ratio: 0.71% American Beacon Small Cap Value Fund Style: Small Cap Value Objective: long-term capital appreciation and income Fund Code: OSHB Ticker Symbol: AVFIX Expense Ratio: 0.84% New Investment Option Active Small Cap Equity Fund Style: Small Cap Core Objective: long-term capital appreciation Fund Code: TDI2 Ticker Symbol: N/A Estimated Expense Ratio* Range: 0.77% 0.79% * The Estimated Expense Ratio is a function of the underlying investment fund expenses and third-party custody fees. The underlying investment funds may deviate from the target allocation due to market movements and cash flows. The transfer of balances will appear as an exchange on your account history and quarterly statement. Please contact Fidelity before 4 p.m. EST on Monday, December 1, 2014, to make an alternate investment choice if you do not want any portion of current American Beacon or Geneva funds assets transferred to the Active Small Cap Equity Fund or do not want your future contributions to be invested in this new consolidated Active Small Cap Equity Fund. Log on to 401k.com or call with any questions about this change. 4

5 More Power to You: Your Retirement Savings Checklist Visit 401k.com, and log in to your account. Review your contribution rate annually. Contribute as much as you can, but be sure to get the full Company match (if eligible) by contributing at least 5% each pay period. Don t Leave Free Money on the Table Danaher matches up to 4% of your pay when you participate in the Danaher Savings Plan or Puerto Rico Savings Plan and contribute 5% of your own pay each pay period (currently after one year of service). Put savings increases on autopilot with the auto-increase feature. Each year, you can automatically increase your pretax contribution by the percentage you choose, up to a max of 4%. Just be sure not to elect a contribution rate so high that you max out your contributions (i.e. hit the IRS deferral limit) too early in the year. Look at your investments you have many choices for how to invest your money. Choose what s best for you. Update your account profile make sure you have a current beneficiary designation on file through Fidelity. Get help Fidelity has a lot of information and many planning tools available to you at 401k.com or Good News! Great Savings! Danaher was able to allocate 738,285 back to Danaher Savings Plan participants on a pro-rata account balance basis on September 11, 2014 (as a reverse fee, which is shown as a positive amount). This allocation back to participants results in more than a 50% reduction in total annual Plan administrative fees to participants (on average) for 2013! In future years, we will target this review and possible excess revenue sharing allocation to occur in the April timeframe (for the preceding Plan year). We were able to save you money by controlling expenses during the prior Plan year (2013) compared to incoming revenue sharing credits from some investments for that same period. Please note that a similar allocation to participants was not applicable in 2014 to Puerto Rico Savings Plan participants, as that Plan s investments and participants did not generate enough credits to cover all expenses. As a result, the balance of any expenses incurred were paid directly by Danaher Corporation. More Power for You: Online Tools and Tips When you log on to 401k.com, you have access to a variety of online tools and resources that can help you get the most out of your Danaher Savings Plan. Fidelity has recently revamped its participant website with a highly visual design, with distinct regions intended to drive deeper engagement by participants. There are three distinct sections to the page. The Engager section is designed to lead to targeted participant action (i.e. enroll/save, asset allocation/ diversification and goal setting/tracking). The Account and Benefit Tiles section provides you a clear snapshot of your employer-sponsored accounts, as well as Quick Links for a deeper look and where to go to take action on your account. Via these Quick Links, you can view transaction history and statements, review investment performance and research, and locate important Plan information and documents. The Make the Most of Your Benefits section of the page provides you access to participant education and various guidance tools. There are additional messages and educational tools located within the Featured Resources, Financial News, Tools and Life Events tabs, too. Here are a few examples of the tools available to you and how to find them: Retirement Income Planner located on the Tools tab, or click on Planning at the top of the page and scroll down. Annual Financial Check-up located on the Life Events tab. Retirement Quick Check click on the Planning tab at the top of the page and scroll down. Portfolio Review located on the Tools tab, or click on Planning at the top of the page and scroll down. Income Simulator located on the Tools tab, or click on Planning at the top of the page and scroll down. 5

6 Power Your Future Open to learn about upcoming changes to your Danaher Savings Plan. Let s Make Money Together! What Danaher will do: Continue to provide benefit plan options so you can save for your future. Give you access to retirement planning resources. Keep you updated on plan changes and enhancements. What you can do: Participate start or continue to actively save for your retirement. Maximize your matching contributions under the Plan. Update your Plan beneficiaries through Fidelity. Get help if you need it. dan-svg-pln-14 About this newsletter Nothing in this newsletter is intended to create or imply a contract of employment. If questions arise, all decisions will be based on the actual Plan provisions of the applicable Plan documents, which in all cases will be the final authority. Copies of the Plan documents, with all amendments, are available for your inspection during regular business hours. Although the Company intends to continue this Plan, Danaher s Appointing Committee generally has the right to amend the Plan. Danaher s Board of Directors does retain certain amendment rights, including the right to terminate the Plan, at any time for any reason. This newsletter is intended to be a Summary of Material Modifications (SMM) for the Danaher Corporation & Subsidiaries Savings Plan (referred to herein as the Danaher Savings Plan or Plan ) and the Danaher Corporation & Subsidiaries Puerto Rico Savings Plan (referred to herein as the Puerto Rico Savings Plan or Plan ) and collectively referred to herein as the Savings Plans or Plans. The information contained herein has been provided by Danaher Corporation and is solely the responsibility of Danaher Corporation and its Benefits Committee. Printed October