Important changes to your Danfoss Power Solutions Employees Savings Plan are coming!

Transcription

1 Important changes to your Danfoss Power Solutions Employees Savings Plan are coming! Effective January 2, 2018, the Danfoss Power Solutions Employees Savings Plan, among other Danfoss company savings plans, will be combined into one Danfoss USA Savings Plan. The new service provider for the combined plan will be Empower Retirement. We chose Empower because of their leading technology, unique user experience and service. Empower currently serves more than 36,000 retirement plans with over 8 million participants. Danfoss Power Solutions Employees Saving Plan Hago Manufacturing Co., Inc. Retirement Plan Danfoss USA Savings Plan Danfoss Employee Savings and Retirement Plan Vacon, Inc. 401(k) Plan Propulsys, Inc. Employee 401(k) Profit Sharing Plan What is changing? 3% base employer contribution 3% employer match ($0.50 for every $1 you contribute for the first 6% of your eligible pay) A benefit increase. Your annual bonus payments will be eligible for you to save more and receive company base contribution and match!

2 What is changing? (continued) More contribution type choices: pretax, Roth and after-tax. Please refer to the Contributions at a Glance chart below for more information about the different contribution types. Your company match and automatic contributions will be pretax money regardless of how you choose to save. The investment lineup will change in Administrative Fee In the past, the company has paid the administrative account fee on your behalf. Balancing the benefit increase to you and aligning to market practice, a $14.75 quarterly administrative fee will be deducted from your account. The plan will have a new website, and phone number, Changes to your investment lineup The investment lineup is changing. Log on to for additional information about the Danfoss USA Savings Plan features and investment lineup. Empower Retirement, its parent company and/or any of its subsidiaries have not reviewed or approved the material on the additional website provided by your Plan Sponsor, and are not responsible for the content and/or updates with respect to the material. We ve created Log on to for additional information about your plan features and investment lineup. this temporary site to provide you with a convenient place to obtain important information about the transition to Empower. It s an informational site that does not require a user ID or password so feel free to share the link with your spouse, partner, trusted friends and even your personal financial planner. If you do not make an investment election between December 6 and December 20, 2017, by visiting your account balance will transfer to the age-appropriate Retirement Trust target date fund based on an assumed retirement age of 65. Generally, the asset allocation of each target date fund will gradually become more conservative as the fund nears the target retirement date. The date in a target date fund s name is the approximate date when investors plan to start withdrawing their money (generally assumed to be at age 65). The principal value of the fund(s) is not guaranteed at any time, including at the time of the target date and/or withdrawal. For more information, please refer to the fund prospectus and/or disclosure document. Please refer to Appendix A at the end of this document. Any balances in your current 401(k) will be temporarily invested in the Putnam Government Money Market Fund. Once balances are reconciled at the end of the blackout period, those funds will be re-allocated to the age-appropriate Trust target date fund, or the fund(s) you selected during the enrollment period. If you re currently enrolled in managed accounts you ll have the option to enroll in the new Managed Account service at Empower after the transfer. You can select new investment elections between December 6 and December 20 or allow your account balance to automatically transfer to one of the Trust target date funds by taking no action. Then, enroll in the Managed Account service after the transfer.

3 Contributions at a glance What s the difference between pretax, Roth 401(k) and after-tax contributions? All three are great tools to help you save for your retirement. The table below highlights the primary differences in how they can benefit you. Description Pretax Roth 401(k) After-tax Contributions Taken out of your paycheck before you pay taxes. Your money grows tax deferred. Taken out of your paycheck after you pay taxes. Taken out of your paycheck after you pay taxes. Your taxable income and take-home pay Taxes on a distribution/withdrawal Contribution option may be appealing to: You lower your current taxable income during the year the contributions are made. You have more takehome pay compared with Roth 401(k) or after-tax contributions. If not rolled over, the entire distribution is taxed as current income in the year paid, and a 10% penalty could apply in addition to current income tax. People who will be in a lower income tax bracket during retirement and want to take advantage of the tax break on current income. You do not lower your current taxable income during the year contributions are made; take-home pay is lower compared to making pretax contributions. If a qualified distribution, contributions and earnings are tax-free.* If not rolled over and not a qualified distribution, earnings are taxed as current income in the year paid, and a 10% penalty could apply in addition to current income tax. People who will be in the same or higher income tax bracket during retirement and can afford to pay taxes on contributions now to get tax-free earnings in the future. You do not lower your current taxable income during the year contributions are made; take-home pay is lower compared to making pretax contributions. Contributions are tax-free Earnings are taxed as current income; 10% early withdrawal penalty may apply. People who want to contribute over the pretax and Roth 401(k) combined IRS contribution limits. Investments May be a good option for younger people who have a longer time to invest their retirement savings. You can invest in any of the funds, regardless of what contribution options you choose. *If a qualified distribution, contributions and earnings are tax-free. Withdrawals may be subject to ordinary income tax. Withdrawals made prior to the investor reaching age 59½ may incur a 10% early withdrawal penalty.

4 Frequently asked questions Q: What is a blackout period? A: It is the period of time when you will not be able to transact on your account. Records are transferred from your current service provider and fully loaded and reconciled by Empower. Please refer to the enclosed newsletter for the applicable dates for your current service provider. During this reconciliation period, you will not have access to your account. Transactions, including changes to deferral rates and investment options, will not be allowed. Q: What should I consider before the blackout period begins? A: Contact your current service provider to process any transactions you may want to request prior to the blackout period. Q: What should I expect when we go live the week of January 14? A: You ll be notified in the mail once the plan goes live. At any time, you may attempt to log into your account to confirm account access. However, if you are not able to log in at that time, the plan may still be under blackout. Once the blackout is removed from the plan, your account will be available to log into through or by calling to conduct transactions and change deferral elections. Q: Will I have to update my beneficiary information with Empower, or will it transfer? A: Every effort will be made to transfer your current beneficiary to Empower. Some beneficiary elections can be complex and are not transferrable. You will be notified if your beneficiary election needs to be updated. Q: Will I have to update my contribution percentage with Empower, or will it transfer? A: You will not need to update your contribution percentage as that information will transfer to Empower. If you want to contribute on a Roth or an after-tax basis, you will have the opportunity to make that election when your Empower account is live in January. Q: What new online tools will be available? A: The Empower online experience lets you: Easily see how saving more may affect your outcome, and make changes with a single click Quickly view the percentage of income you re projected to replace in retirement Receive an estimate of what your healthcare costs may be in retirement, because healthcare budgeting plays a major part in retirement planning See how your savings compare with those of other Empower participants in your age group and salary range

5 After the transition don t forget to: Register on the new website, 1. Log on to the website at 2. Select the I do not have a PIN tab. 3. Follow the prompts to enter your personal information and create a username and password. 4. If you have another account with Empower, you will need to call us for a temporary PIN to access your new account. Then be sure to: Make your savings rate elections if you want to change them. Provide your address to sign up for electronic communications. Confirm your beneficiary information. Consider rolling over accounts from your previous employer retirement plans. If you are a participant who is age 50+, your catch-up contribution elections will not transition to Empower, and you can elect to contribute on a catch-up basis once the plan is live in January. Empower also has a mobile app for iphone and iwatch available to download through the Apple App Store. Q: What are the browser requirements for this new website? A: The minimum browser requirements are: Internet Explorer 11 Firefox version 43 Chrome version 48 Safari version 9.0 Questions? Call Empower with any questions you may have about the transition at weekdays between 8 a.m. and 10 p.m. Central time.

6 Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information about investments offered through your plan, you may obtain mutual fund prospectuses for registered investment options and/or disclosure documents from your registered representative or plan website. Read them carefully before investing. You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. Empower Retirement refers to the products and services offered in the retirement markets by Great-West Life & Annuity Insurance Company (GWL&A), Corporate Headquarters: Greenwood Village, CO; Great-West Life & Annuity Insurance Company of New York, Home Office: NY, NY; and their subsidiaries and affiliates. The trademarks, logos, service marks and design elements used are owned by their respective owners and are used by permission. Core securities, when offered, are offered through GWFS Equities, Inc. and/or other broker-dealers. GWFS Equities, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. Representatives of Empower Retirement do not offer or provide investment, fiduciary, financial, legal or tax advice or act in a fiduciary capacity for any client unless explicitly described in writing. Please consult with your investment advisor, attorney and/or tax advisor as needed. Unless otherwise noted, investments are not deposits, not insured by the FDIC or any Federal government agency, not bank guaranteed and may lose value. Access to the website may be limited or unavailable during periods of peak demand, market volatility or systems upgrades/maintenance or for other reasons. iphone and iwatch are registered trademarks of Apple Inc. Apple Inc. is not affiliated with Empower Retirement. IMPORTANT: The projections, or other information generated by the Empower Participant Experience regarding the likelihood of various investment outcomes, are hypothetical in nature. They do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time Great-West Life & Annuity Insurance Company. All rights reserved. ERRFP-OWD AM

7 Asset class Fund name Ticker symbol Stable Value Intermediate- Term Bond Intermediate- Term Bond Multisector Bond Large Value Large Blend Large Growth Mid-Cap Blend Stable Value Common Trust A Appendix A: New Investment Lineup* Inception Date Expense ratio 1 YR 3 YR 10YR/Inception N/A 9/12/ % PIMCO Total Return Instl PTTRX 5/11/ % Vanguard Total Bond Market Index Adm Loomis Sayles Strategic Income N Vanguard Equity-Income Adm Vanguard Institutional Index I Instl Large Cap Growth SSgA Russell Small/Mid Index NL Cl C VBTLX 11/12/ % NEZNX 2/1/ % VEIRX 8/13/ % VINIX 7/31/ % TRLGX 10/31/ % N/A 7/1/ % Small Value DFA US Targeted Value I DFFVX 2/23/ % Small Growth Foreign Large Value Foreign Large Blend Foreign Large Growth Foreign Small/Mid Growth Diversified Emerging Mkts Commodities Broad Basket Global Real Estate Retirement Eagle Small Cap Growth R6 HSRUX 8/15/ % Templeton Foreign R6 FTFGX 5/1/ % Vanguard Total Intl Stock Index Admiral Invesco International Growth R6 International Discovery I Oppenheimer Developing Markets I PIMCO Commodity Real Ret Strat Instl Invesco Global Real Estate R6 Retirement Balanced Trust F Retirement 2005 Trust F Retirement 2010 Trust F Retirement 2015 Trust F VTIAX 11/29/ % IGFRX 9/24/ % TIDDX 12/17/ % ODVIX 12/29/ % PCRIX 6/28/ % FGREX 9/24/ % N/A 4/7/ % N/A N/A 6.24 N/A 4/7/ % N/A N/A 6.78 N/A 4/7/ % N/A N/A 7.54 N/A 4/7/ % N/A N/A 8.70

8 Asset class Fund name Ticker symbol Inception Date Expense ratio 1 YR 3 YR 10YR/Inception Trust F 2025 Trust F 2030 Trust F 2035 Trust F 2040 Trust F 2045 Trust F 2050 Trust F 2055 Trust F 2060 Trust F N/A 4/7/ % N/A N/A 9.77 N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A N/A 4/7/ % N/A N/A 8.48 Mutual fund data provided by Morningstar. Non-registered fund data provided by respective fund company. Fund data as of 9/30/2017. The performance quoted is past performance and is not a guarantee of future results. Mutual funds are subject to certain market risks. Investment returns and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data shown. For performance current to the most recent month-end, please call Equity securities of small and mid-size companies may be more volatile than securities of larger, more established companies. Equity securities of companies located in emerging markets involve greater risks than investments in more established markets, including currency fluctuations, political developments and share illiquidity. Foreign investments involve special risks, including currency fluctuations, taxation differences and political developments. A bond fund s yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa. Real estate securities and trusts involve greater risks than other non-diversified investments including, but not limited to: declining property values, varying economic conditions, changes in zoning laws or losses from casualty. Real estate securities that invest in foreign real estate involve additional risk, including currency fluctuations and political developments. The value of commodity-linked investments may be affected by financial factors, political developments and natural disasters. As such, investment options that invest primarily in commodities may experience greater volatility than investments in traditional securities. Investing involves risk, including possible loss of principal. Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds. For more information, see the prospectus and/or disclosure documents. A collective trust stable value fund is offered by a bank or trust company. These investments have interest rate, inflation and credit risks associated with the underlying assets owned by the portfolio or fund. The strength of the wrap contracts, which provide book-value guarantees associated with a fund, depends on the financial strength of the financial institutions issuing the contracts. Expense ratios provided are the funds total annual operating expense ratios, gross of any fee waivers or expense reimbursements. Managed account service provided by Advised Assets Group, LLC (AAG), a registered investment adviser and a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. *If a PUT is exercised on the Invesco Stable Value fund, Mass Mutual Guaranteed Fund, Stable Value Fund, John Hancock Stable Value Fund, and/or Prudential Guaranteed Interest Fund assets will remain invested in the Invesco Stable Value fund, Mass Mutual Guaranteed Fund, Stable Value Fund, John Hancock Stable Value Fund, and/or Prudential Guaranteed Interest Fund, respectively, for a period of time as determined by the investment provider in accordance with the investment documents. New monies will be invested in the Stable Value Common Trust fund. Any future allocations to the Invesco Stable Value fund, Mass Mutual Guaranteed Fund, T. Rowe Price Stable Value Fund, John Hancock Stable Value Fund and/or Prudential Guaranteed Interest Fund will be mapped to the Stable Value Common Trust Fund.