VMware International Ltd. Retirement & Death Benefits Plan

Transcription

1 VMware International Ltd. Retirement & Death Benefits Plan Explanatory Booklet

2 Contents Benefits Summary 1 General Information 4 Key Terms 5 Joining the Plan 6 Plan Contributions/Costs 7 Retirement Benefits 8 Death in Service Benefits 11 Leaving Service Benefits 13 Miscellaneous 14 Please note that this booklet is accurate as 1 st August The booklet may need to be revised from time to time because of changes taking place in the legal framework and practice. You should check with the Human Resources Department to make sure you have the most up-to-date version. Aon Explanatory Booklet August l 2018

3 Benefits Summary Membership Death in Service Benefits Permanent employees under age 70 are eligible to be covered for Death in Service Benefits from their date of joining the Company. Retirement Benefits Permanent employees under age 70 are eligible to join the Plan for Retirement Benefits from their date of joining the Company. Employees who waive their option to join the Plan for Retirement Benefits, or who join and subsequently opt out of the Plan, will remain covered for Death in Service Benefits. Retirement Benefits Type of Plan This Plan is a Defined Contribution Plan and consequently an individual Retirement Account, under the control of the Trustees, is established for each member to fund his/her Retirement Benefits. Normal Pension Date 70 th birthday, with provision for an earlier Normal Pension Date from your 60 th birthday with the Company s consent. Plan Salary Your basic salary in a pay period. On Target Earnings (OTE) Your annual rate basic salary plus the target bonus or target commission as advised to you by the Company. Retirement Benefits Contributions (% of Plan Salary) On the basis that you contribute a minimum of 3% of your Plan Salary, the Company will contribute in accordance with the following table: Member (% of Plan Salary) Company (% of Plan Salary) Total (% of Plan Salary) 3% 5% 8% 4% 6% 10% 5% 7% 12% 6% or greater 8% 14% Members may also pay Additional Voluntary Contributions (AVCs) i.e. in excess of 6% to the Plan within Revenue Limits. Member Contributions (including AVCs) qualify for Income Tax Relief subject to the following limits which are based upon your age attained during the Tax Year and your taxable remuneration from the Company (subject to an earnings cap, which is currently 115,000): Under age 30 = 15% Age 50 to 54 =30% Age 30 to 39 = 20% Age 55 to 59 = 35% Age 40 to 49 = 25% Age 60 & over=40% Company also pays the cost of members Death in Service Benefits and the cost of administering the Plan. Investment costs are payable from members Retirement Accounts Transfer Payments The Plan can accept Transfer Payments from other Revenue approved Pension Arrangements. Aon 1

4 Benefit Payments Your benefits at retirement will depend upon the accumulated value of your Retirement Account and must be administered by the Trustees within the rules of the relevant Taxation and Pensions Legislation. Your Benefit Options may include a Retirement Lump Sum, Member s Pension and Dependant s Pensions. Leaving Service Benefits Member Options (i) Refund of your Member Contributions (if you have completed less than 2 years Qualifying Service), or (ii) Deferred Retirement Benefits (if you have completed at least 2 years Qualifying Service or are leaving due to redundancy), or, (iii) Transfer Payment of your entitlements under (i) and (ii) above to your New Company s Plan, Personal Retirement Bond or PRSA (subject to certain legislative requirements). Benefit Entitlement to the Company's Contributions (i.e. Vesting) You qualify for a vested right to the Company's Contributions to your Retirement Account after you have completed at least 2 years Qualifying Service or on leaving service due to redundancy. Note: If you have completed less than 2 years' Qualifying Service and you do not complete a Benefit Options Form within 3 months of Aon issuing your Leaving Service Benefit Options, you will receive a refund of the value (at the date of payment) of your Member Contributions/AVCs paid to the Plan. Death in Service Benefits Lump Sum 4 times your annual On Target Earnings (OTE) at your date of death together with the value of Member Contributions/AVCs, if any, to your Retirement Account. OTE for the purposes of the Lump Sum Death Benefit is your annual rate of basic salary plus target bonus or target commission as advised to you by the Company. This benefit will be administered by the Trustees within the rules of the relevant Taxation and Pensions Legislation and the rules of the Plan. Spouse's/Civil Partner's/Dependant's Pension 4/9 ths of your annualised Plan Salary More detailed information on the payment of the Spouse's/Civil Partner's/Dependant's Pension is provided on pages 11 & 12 of this Explanatory Booklet. Non-married employees who do not have a civil partner and who do not complete the application process for a Nominated Dependant's Pension Death in Service Benefit will not be considered for payment of a Dependant's Pension. Miscellaneous Constitution The VMware International Ltd. Retirement & Death Benefits Plan is set up under an irrevocable trust and consequently the Plan s assets are segregated from those of the Company. Trustees Kieran Barry-Murphy, John Dolan, Anthony McCoy, Jennifer O'Sullivan and Patrycja Wanat. Aon 2

5 MyLife Benefits Portal: VMware Benefits Members for Retirement Benefits Aon Pension Plan Website Employees may apply and update their VMware Benefits profile via the MyLife Benefits Portal at Permanent employees may Enroll in Retirement Benefits Plan: - select preferred contribution rate - select initial investment strategy Nominate Beneficiaries for the Lump Sum Death Benefit Apply for Dependants Pension Death Benefits Revise personal contribution rates Members who join the Retirement Benefits Plan have on-line access via the Aon Pension Plan Website. Members have direct access to their Retirement Plan Records covering Personal Details, Contributions Paid, Current Values, Current Investment Options, Annual Benefit Statement, Personalised Benefit Projections, Explanatory Literature and Forms. Details on accessing your personal on-line account will be ed directly to you. Aon 3

6 General Information Purpose of Booklet The purpose of this Explanatory Booklet is to give a summary of the principal features of the VMware International Ltd. Retirement & Death Benefits Plan. Exact details are to be found in the Definitive Deed and Rules governing the Plan which take precedence in the event of any conflict with this booklet - the Definitive Deed and Rules may be inspected by arrangement with the Trustees. The booklet is effective from 1 st August Plan Benefits The Plan is funded by contributions from both the Company and Plan members and provides a wide range of benefits including:- Retirement Benefits Death in Service Benefits Leaving Service Benefits Revenue Approval and Pensions Authority Registration The Plan is designed to be approved by the Revenue Commissioners as an Exempt Approved Scheme under Part 30 Chapter I of the Taxes Consolidation Act 1997 (SF 89976) and will be registered with the Pensions Board as a Defined Contribution Plan (Pensions Board Reference Number PB230246). Defined Contribution Plan The principal features of a Defined Contribution Plan can be summarised as follows: an individual Retirement Account, under the control of the Trustees, is established for each Plan member to fund his/her Retirement Benefits. the annual contribution to a member s Retirement Account is defined in the rules of the Plan. the Retirement Benefits which the member receives depends upon the accumulated value of his/her Retirement Account and the manner in which he/she draws down his/her benefits at retirement. Queries If you have any queries on this Explanatory Booklet or any aspect of the Plan you should refer, in the first instance, to the Plan Administrators. The Plan is administered for the Company and the Trustees by: Aon Hibernian House, Building 5200, Cork Airport Business Park, Cork myfutureme@aon.ie This booklet has been drafted based on current Taxation and Pensions Legislation and the current rules of the Plan. In the event of a change in this legislation or the rules it may be necessary to review some aspects of this booklet and the Plan. Aon 4

7 Key Terms The following terms where used throughout this Explanatory Booklet shall mean: Company: VMware International Ltd. VMware International Marketing Ltd. Normal Pension Date: Your 70 th birthday, with provision for an earlier Normal Pension Date from your 60 th birthday with the Company s consent. Retirement Account: That part of the Pension Fund determined by the Trustees to be equal to your interest therein, which shall be calculated having regard to:- the Retirement Benefits Contributions paid to the Plan by you and by the Company on your behalf; the amount of any Transfer Payments received by the Trustees on your behalf from another plan; the investment return; any liabilities, costs, charges or expenses which may have to be deducted in connection with the operation of the Plan. Plan Salary: Your basic salary in a pay period On Target Earnings (OTE): Your annual rate basic salary plus the target bonus or target commission as advised to you by the Company. Trustees: Kieran Barry-Murphy, John Dolan, Anthony McCoy, Jennifer O'Sullivan and Patrycja Wanat. Dependants: (a) your spouse or civil partner; (b) subject to the terms of any insurance policy, your children who are (i) under age 18, (ii) under age 23 if in full-time education or in vocational training or (iii) permanently physically or mentally handicapped; (c) any person who is financially dependent upon you. Beneficiaries: A wide class of persons including your Dependants, relatives either by blood or marriage, any beneficiary under your Will, and any person nominated by you via the MyLife Benefits Portal at: (refer to pages 11 & 12). Employee: Any person employed by the Company but excluding self-employed contractors, agency workers, persons employed during vocational training or apprenticeship schemes, employees employed under a public training or retraining programme and employees working less than 20% of normal working hours. Renewal Date: 1 st April each year Aon 5

8 Joining the Plan Death in Service Benefits Permanent employees under age 70 are eligible to be covered under the Plan for Death in Service Benefits from their date of joining the Company. Your inclusion in the Plan is subject to acceptance by the underwriting Insurance Company. Retirement Benefits Permanent employees under age 70 are eligible to join the Plan for Retirement Benefits from the 1 st day of the next payroll cycle. Notes on Joining the Plan (i) Membership and benefits are subject to the completion of such enrolment procedures and the provision of such information, particulars and evidence as may be required by the Trustees from time to time. (ii) Eligible employees joining the Plan for Retirement Benefits are required to complete the enrolment process online via MyLife Benefits Portal at advising both the Company and the Trustees of (i) their consent to deduct Member Contributions from Salary/Wages and (ii) the Pension Funds they wish to choose for their Retirement Accounts. (iii) Any member wishing to subsequently opt out of the Plan may only do so by reviewing their membership profile via the MyLife Benefits Portal at (iv) Employees who waive their option to join the Plan for Retirement Benefits, or who join and subsequently opt out of the Plan, will remain covered for Death in Service Benefits (v) Non-married employees who do not register for the Dependants Pension Death Benefits via MyLife Benefits Portal at will not be considered for payment of a Dependant's Pension on their death in service. (vi) Married employees or employees with a civil partner who do not update their civil status via the MyLife Benefits Portal at will not be considered for payment of Spouse's/Civil Partner's Benefit on their death in service. Aon 6

9 Plan Contributions/Costs Retirement Benefits Contributions (% of Plan Salary) Eligible employees joining the Plan must contribute a minimum of 3% of your Plan Salary. On the basis that you contribute a minimum of 3% of your Plan Salary, the Company will contribute in accordance with the following table: Member (% of Plan Salary) Company (% of Plan Salary) Total (% of Plan Salary) 3% 5% 8% 4% 6% 10% 5% 7% 12% 6% or greater 8% 14% Additional Voluntary Contributions (AVCs) You may pay AVCs to the Plan, in excess of 6% of Plan Salary, within the maximum limits allowed under tax rules and legislation. You select your AVC via the MyLife Benefits Portal at Income Tax Relief Under current legislation and tax rules, contributions made by you to the Plan qualify for full relief against your Income Tax provided that your total contributions (to this or any other pension arrangement) do not exceed the following limits which are based on your age attained during the Tax Year and your taxable remuneration from the Company (subject to an earnings cap, which is currently 115,000): Member Contributions will be deducted from your salary and cease at Normal Pension Date or the earlier date of leaving the Company. The Company also pays the full cost of insuring members Death in Service Benefits and the cost of administering the Plan. Investment management fees are payable from members' Retirement Accounts. Revising your Contribution Rates You may revise your personal contribution rates, subject to you contributing a minimum of 3% of your Plan Salary at any time via the MyLife Benefits Portal at Revisions will be implemented in the next monthly payroll cycle. Transfer Payments The Plan may accept Transfer Payments from other Revenue approved Pension Arrangements. Any members wishing to transfer pension entitlements from previous arrangements should, in the first instance, refer the matter to Aon, the Plan Administrator. Temporary Absence In the event of a member being temporarily absent from work both Company and Member Contributions will be maintained for so long as he/she remains in receipt of salary from the Company or as otherwise required under any applicable legislation. Under age 30 = 15% Age 50 to 54 =30% Age 30 to 39 = 20% Age 55 to 59 = 35% Age 40 to 49 = 25% Age 60 & over=40% Aon 7

10 Retirement Benefits Investment Options for your Retirement Account The Trustees decide upon the range of Pension Funds which should be made available to members to invest their Retirement Accounts. Members may adopt individual investment strategies to suit their own personal investment philosophies from the range of Pension Funds selected by the Trustees. Alternatively, members may select, or default to, the Default Option formulated by the Trustees. More detailed information on the Investment Options available to you for your Retirement Account can be viewed on My Documents section of the Pension Plan Website for your review. The My Documents section is accessed under Knowledge Centre. Retirement Account Valuations You will be notified annually, after the Renewal Date, of the accumulated value of your Retirement Account. Plan Benefits a lump sum (see Retirement Lump Sums below); a pension payable to yourself for life (see Extended Retirement Options on page 9); a Spouse s, Civil Partner's or other Dependant s pension payable after your death. Retirement Lump Sums With the consent of the Trustees, you may receive part of your Retirement Account in the form of a Retirement Lump Sum. The maximum Retirement Lump Sum you may receive at Normal Pension Date (taking account of any Retirement Lump Sums you are entitled to from any other pension arrangement) is 1½ times your Final Remuneration, if you have completed at least 20 years service with the Company (unless you avail of the Extended Retirement Options see below and page 9). For members with shorter service, or who leave before Normal Pension Date, a lower limit is imposed by Revenue. Your benefits under the Plan will be dependent upon the accumulated value of your Retirement Account (at the date of payment of the benefit). Your benefits will normally be paid to you from your Normal Pension Date. You may, with the Company s consent, retire early at any time on grounds of incapacity due to ill-health or injury (as to which the Trustees must be satisfied) or for any other reason after you have attained age 50. Within the limits allowed by Revenue you may, with the agreement of the Trustees, decide the pattern of your benefits to suit your personal circumstances at the time of your retirement. The benefits which may be purchased with your Retirement Account at your retirement include:- Alternatively, if you choose to avail of the Extended Retirement Options provided for under the Finance Act 2011 (to invest in ARFs/AMRFs), the maximum Retirement Lump Sum is restricted to 25% of your Retirement Account. Additionally, it should be noted that Finance Act 2013 imposes the following monetary limits on your Retirement Lump Sum: The maximum tax-free sum you may receive is restricted to 200,000 The next 300,000 will be subject to the standard rate of tax (20%) Any excess over 500,000 will be taxed at the higher rate (40%) Amounts in excess of 500,000 will also be subject to the USC. Aon 8

11 If you are retiring due to exceptional circumstances of serious ill-health (as to which both the Trustees and the Revenue must be satisfied) you may be able to exchange your entire pension for a lump sum but tax would be payable on the amount in excess of the normal limit referred to above. Extended Retirement Options Finance Act 2011 provides for members of Defined Contribution Plans to secure their post retirement income by means of (i) annuity purchase or (ii) investing in Approved Retirement Funds (ARFs)/Approved Minimum Retirement Funds (AMRFs), subject to certain conditions which are summarised hereunder: The specified or guaranteed income limit for exemption from investing in an AMRF is currently 12,700. The specified income requirement, if not satisfied at the time of retirement may be satisfied at any time after retirement, at which time the AMRF will become an ARF. The set-aside amount for investment in an AMRF, where one is not in a position to satisfy the "specified income" limit, is currently 63,500 or the remainder of the member's Retirement Account having taken his/her Retirement Lump Sum (which cannot exceed 25% of his/her Retirement Account). The facility to invest in an AMRF/ARF now applies in respect of the totality of a member's Retirement Account whereas pre Finance Act 2011 it only applied in respect of AVCs. Approved Retirement Fund (ARF) An ARF is an investment contract for the proceeds of a Defined Contribution/AVC Plan that are not taken in the form of a lump sum or pension on retirement. Certain qualifying conditions must be met to be eligible to take out an ARF. Money is invested with a Qualifying Fund Manager (which is typically an insurance company or stockbroker) and accumulates taxfree. Income tax is payable (USC & PRSI may also be payable) on any money you withdraw from the ARF. Finance Act 2014 provides for the following mandatory annual imputed distributions (income drawdowns) from an ARF: Year in which age attained ARF Value of 2m or less Less than 61 0% 0% 61 to 70 4% 6% 71 & over 5% 6% ARF Value of more than 2m Approved Minimum Retirement Fund (AMRF) An AMRF is like an ARF except that you cannot withdraw annually more than 4% of the value of your AMRF on the 1 st February in that year. An AMRF ceases and automatically converts to an ARF on reaching age 75, death or receiving a specified income (currently 12,700 p.a.). Annuity An annuity is normally secured by payment of a single premium to an insurance company in return for a guaranteed retirement income for life paid at stated intervals until a particular event occurs. Annuity payments usually end on the death of the annuitant but can be designed to be paid during the lives of more than one person. Aon 9

12 Payment of Pensions Pension payments will be subject to Income Tax and the Universal Service Charge (USC) and be paid under the PAYE system. Standard Fund Threshold The Standard Fund Threshold (SFT) is 2.0m with effect from 1 st January 2014 the Minister for Finance reserves the right to review the SFT at his/her discretion. Pension Fund Assets in excess of the SFT will be subject to additional taxation. Aon 10

13 Death in Service Benefits Benefit on Death in Service before Normal Pension Date There will be available the sum of:- (a) Lump Sum 4 times your annual rate of On Target Earnings (OTE) at the date of your death together with the value (at the date of payment of the benefit) of your Member Contributions/AVCs to your Retirement Account. OTE for the purposes of this Lump Sum Death in Service Benefit is annual basic salary plus target bonus or target commission as advised to you by the Company. (b) Spouse s/civil Partner's/Dependant s Pension 4/9 ths of your annual rate of Plan Salary at the date of your death. If you are a married member or have a civil partner, you will be automatically covered for this benefit provided you have notified the Company of your marital/civil partnership status. You can update your civil status via the MyLife Benefits Portal at If you are a non-married member and don't have a spouse/ civil partner but you have an eligible Dependant (refer Nominated Dependant's Pension Application Form), you may apply to the Company to provide a Dependant's Pension in respect of such person. In this event you need to submit a complete Dependant's Pension Application process via the MyLife Benefits Portal at With regard to payment of the Spouse's/Civil Partner's/Dependants Pension, this pension will be paid to your spouse/civil partner/nominated dependant unless the Trustees have been notified or become aware that you are living apart, in which event they have discretion to pay all or part of the pension to another Dependant. Pension Payments Any pensions payable will be paid by monthly instalments and will commence with effect from the date of your death. The Spouse's/Civil Partner's/Dependant's Pension will be reduced if your spouse/civil partner/nominated dependant is more than 10 years younger than you. Dependant Children's Pensions cease on attainment of age 18 or 23 if in full time education. Notes on Death in Service Benefits: (i) The amount payable in the form of a Cash Sum on your death in service (from this or from any other pension or death benefits arrangement) is subject to a limit imposed by Revenue which is currently 4 times your annualised remuneration from the Company and a refund of the value of any Member Contributions paid by you to the Plan. The balance of any Death in Service Benefits remaining will be applied to provide pensions for any one or more of your Dependants as the Trustees shall decide. (ii) The Cash Sum available on death in service will be used to make provision for your Beneficiaries or paid to your estate in such proportions as the Trustees shall decide. In this regard you should record your preferred Beneficiaries to assist the Trustees in administering the Cash Sum Aon 11

14 payable on your death in service. You can record your Beneficiaries via the MyLife Benefits Portal at (iii) You should notify the Company of any Dependant you wish to be considered for payment of a Dependant's Pension. In this regard you should complete the application process via the MyLife Benefits Portal at (iv) You should update your member profile immediately of any change in your marital/civil partnership status via the MyLife Benefits Portal at (v) Any alteration in your Death in Service Benefits due to a change in your marital/civil partnership status or the provision of a Dependant s Pension will be effective from the date of acceptance of such alteration in benefit by the underwriting Insurance Company. (vi) Any benefits payable in the form of a Cash Sum are free of Income Tax but may be subject to Capital Acquisitions Tax. Pension payments will be subject to Income Tax and the Universal Social Charge. (vii) Death in Service Benefits are secured under insurance contracts and consequently no benefit will arise under the Plan unless a corresponding benefit is secured from the underwriting Insurance Company. Your benefits on joining and any subsequent increases are subject to you satisfying any requirements of the underwriting Insurance Company - if you are unable to satisfy these requirements it may be necessary to restrict your Death in Service Benefits. Aon 12

15 Leaving Service Benefits Deferred Retirement Benefits If you are leaving service: Refund of Member Contributions having completed at least 2 years Qualifying Service, or due to redundancy you will be entitled to a Deferred Retirement Benefit from the Plan. This means that the total value of your Retirement Account (including the value of both Company and Member Contributions) will continue to be held under the Plan until your retirement to provide you with Retirement Benefits (refer to pages 8 & 9). If you have not completed at least 2 years' Qualifying Service or you are not leaving service due to redundancy, you will not be entitled to Deferred Retirement Benefits and instead would only be entitled to a Refund of Member Contributions. Qualifying Service means service as a member of the Plan for Retirement Benefits together with such service under (i) every other plan relating to the same employment and (ii) any other plan from which a transfer payment has been received by the Plan in respect of you. If you are leaving service voluntarily having completed less than 2 years Qualifying Service you will receive a refund of the value (at the date of payment of the benefit) of any Member Contributions/AVCs paid by you to the Plan. Any refund will be subject to tax. You should also note that, as an alternative to a Refund of Member Contributions, you may apply for a Transfer (as outlined herein) within 3 months of Aon issuing your Leaving Service Benefit Options. Transfer Payment You may apply to the Trustees, in writing, requesting a transfer of your benefit entitlements as outlined herein to:- (a) another Revenue approved pension arrangement, or (b) a Personal Retirement Bond (PRB) approved by Revenue, or (c) a Personal Retirement Savings Account (PRSA), subject to certain legislative requirements. The Trustees may also, in certain circumstances, transfer your Deferred Retirement Benefits to a Personal Retirement Bond (PRB) on your behalf, without requiring consent from you. You will receive notification of such a transfer. Aon 13

16 Miscellaneous Non-Assignability of Benefits It should be noted that benefits from the Plan cannot be assigned by members (e.g. they cannot be given as security for a loan). Benefits must be administered by the Trustees in accordance with the Definitive Deed and Rules. Limitations on Benefits In order to comply with the Revenue Commissioners requirements for approval of the Plan, it may be necessary to limit the benefits of certain members, normally those whose potential service with the Company is short. You will be notified if your benefits have to be restricted. Pension Adjustment Orders (PAO) In the event of a member's judicial separation or divorce, a court application for a Pension Adjustment Order covering benefits payable to or in respect of a married member may be made. Further information about the operation and impact of Pension Adjustment Orders may be obtained from the Pensions Authority. Internal Disputes Resolution (IDR) Procedures As required by the Pensions Act and Pensions Ombudsman, the Trustees have drawn up a set of procedures for dealing with complaints from actual or potential beneficiaries under the Plan. Further information about these IDR Procedures is available from the Company or the Pension Plan Website. Data Protection In performing the service of administrators to the Plan, Aon is furnished with certain personal information about you (from the Company) on behalf of the Trustees. In certain circumstances you may be required to submit to the underwriting Insurance Company, through Aon, a medical form in order to underwrite your insured Death in Service Benefits. Aon is required to hold and process this information solely to perform the services necessary to administer the Plan. All personal information which Aon processes is subject to the Data Protection Acts, Amendment or Termination of the Plan Although VMware International Ltd. intends to continue the Plan indefinitely, it must as a matter of ordinary business prudence, reserve the right to amend or terminate it at any time. The power to amend the provisions of the Plan is vested in the Company with the consent of the Trustees. This booklet has been drafted based on current Taxation and Pensions Legislation and the current rules of the Plan. In the event of a change in this legislation or the rules it may be necessary to review some aspects of this booklet and the Plan. Aon 14

17 Aon Hewitt Registered in Ireland No Registered office: Block D Iveagh Court Harcourt Road Dublin 2, Ireland This report and any enclosures or attachments are prepared on the understanding that it is solely for the benefit of the addressee(s). Unless we provide express prior written consent no part of this report should be reproduced, distributed or communicated to anyone else and, in providing this report, we do not accept or assume any responsibility for any other purpose or to anyone other than the addressee(s) of this report. Aon Hewitt(Ireland) Limited trading as Aon Hewitt is regulated by the Central Bank of Ireland. Copyright 2018 Aon. All rights reserved.