ALBERT EINSTEIN COLLEGE OF MEDICINE, INC. 403(b) RETIREMENT INCOME PLAN SUMMARY PLAN DESCRIPTION As in Effect as of January 1, 2017
TABLE OF CONTENTS Page HOW THE PLAN WORKS... 1 Overview... 1 What is a 403(b) Retirement Income Plan?... 1 What are the benefits of the Plan?... 1 Who provides services to the Plan?... 2 ELIGIBILITY AND PARTICIPATION... 3 Who is eligible?... 3 When can I participate?... 3 How can I participate?... 4 How is pay defined?... 5 Can I change my election to participate?... 5 CONTRIBUTIONS TO THE PLAN - IN GENERAL... 7 EMPLOYEE CONTRIBUTIONS TO THE PLAN... 7 Limits on Pre-Tax and After-Tax Roth Employee Contributions... 8 Catch-up contributions... 9 Can I change my deferral percentage?... 9 Make-up contributions for qualified military service... 9 Leave of absences... 10 Rollover contributions... 10 Can I get a tax credit for my participation?... 10 EMPLOYER CONTRIBUTIONS TO THE PLAN... 11 INVESTMENTS AND FEES... 12 What are my investment options?... 12 Can I choose how much to invest in each investment option?... 12 Can I change my investment elections?... 12 How should I invest the retirement funds in my account?... 12 What if I don t make an investment choice?... 12 Plan not responsible for investment decisions... 13 Does my account incur any fees?... 13 How do I know how much is in my account?... 13 i
VESTING... 15 LOANS... 17 Who can request a loan?... 17 How do I request a loan?... 17 What kind of loan can I have?... 17 How many loans can I have outstanding?... 17 How much can I borrow?... 17 Do I pay interest on the loan?... 17 Will I be subject to penalties or taxes if I take a loan from the Plan?... 18 Is there a fee for processing loans?... 18 How do I pay back the loan?... 18 What if I take out a loan and then leave Einstein?... 18 When does a default occur and what happens?... 18 IN-SERVICE WITHDRAWALS... 19 Rollover withdrawal... 19 Age 59½ withdrawal... 19 Hardship withdrawal... 19 Do I have to pay any penalties or taxes on an in-service withdrawal?... 20 How do I request an in-service withdrawal?... 20 In what form can I request a withdrawal?... 20 Do I have to repay the money?... 20 DISTRIBUTIONS... 21 Overview... 21 What happens if I die?... 21 When can I or my beneficiary get a distribution?... 21 How do I get my account distributed when I leave?... 22 Do I have to take my account balance out of the Plan when I leave?... 24 What happens if I die before receiving my benefits?... 24 What happens if I die after I start receiving my benefits?... 24 Direct rollover of distributions... 24 When do I have to begin paying taxes on my account?... 25 Social Security benefits... 25 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO)... 26 What is a QDRO?... 26 What are the procedures for processing a QDRO?... 26 When are amounts distributable under a QDRO?... 26 What happens when the order is deemed a QDRO?... 26 Where should I send a domestic relations order?... 26
TAXATION OF DISTRIBUTIONS... 27 CLAIMS PROCEDURES... 29 Overview... 29 Adverse Benefit Determination... 29 Appeal... 30 Adverse Determination on Appeal... 30 IMPORTANT FACTS... 32 What legal rights do I have as a participant in this Plan?... 32 Can the Plan be amended?... 33 Can the Plan be terminated?... 33 Are my benefits guaranteed by the Pension Benefit Guaranty Corporation?... 33 Under what circumstances could I lose my benefits or my benefits be reduced?... 34 Can my benefits be assigned?... 34 REFERENCES... 35 Formal Plan name... 35 Plan type... 35 Employer identification number... 35 Plan identification number... 35 Effective date of the Plan... 35 Plan year... 35 Plan sponsor... 35 Service of legal process... 35 Plan custodian and record keeper... 36 Funding mediums... 36
ALBERT EINSTEIN COLLEGE OF MEDICINE, INC. 403(b) RETIREMENT INCOME PLAN SUMMARY PLAN DESCRIPTION HOW THE PLAN WORKS Overview Albert Einstein College of Medicine, Inc. maintains the Albert Einstein College of Medicine, Inc. 403(b) Retirement Income Plan, referred to throughout this document as the Plan. Albert Einstein College of Medicine, Inc. is referred to throughout this document as Einstein. This document constitutes the Summary Plan Description ( SPD ) for the Plan, as required by the Employee Retirement Income Security Act of 1974, as amended ( ERISA ) and describes the Plan as in effect as of January 1, 2017. The purpose of this SPD is to give you a general overview of the main provisions and features of the Plan, your rights, obligations, and benefits under the Plan, as well as certain details about how the Plan works. The complete terms of the Plan are set forth in the Plan document. If there are any questions regarding the interpretation of any Plan provisions or if there are any conflicts between this SPD and the Plan document, the Plan document is the governing document in all cases. Nothing in the Plan or in this SPD gives you any rights of continued employment with Einstein. Your membership in the Plan does not prohibit changes in the terms of (or the termination of) your employment with Einstein. The Plan may be amended or terminated at any time, as discussed later in this SPD. What is a 403(b) Retirement Income Plan? A 403(b) retirement income plan is an employer-sponsored savings plan that offers special tax advantages to employees who save for their retirement. It allows you to make voluntary contributions (on a pre-tax and/or Roth after-tax basis) through payroll deductions up to a Federally-specified annual limit. These contributions are referred to as Employee Contributions or as elective deferrals. This Plan also provides for Employer Contributions to eligible employees that are described in more detail below. Your Employee Contributions and Employer Contributions can go into various investments. This Plan provides you with a vehicle for retirement savings and the opportunity to invest in a variety of investment options. What are the benefits of the Plan? The Plan allows you to save for retirement by: Contributing a percentage of your pay to the Plan as Employee Contributions through employee pre-tax contributions and/or after-tax Roth contributions; Receiving Employer Contributions as a percentage of your pay;
Deferring taxes on Employer Contributions and any earnings until you receive them later as benefits; Investing your Employee and Employer Contributions in a tax-advantaged manner; and Choosing among several different ways to receive your benefits. If you are already contributing to the Plan, you are on your way to a more secure financial future. If you are not contributing, don t wait any longer. Who provides services to the Plan? Einstein is the Plan Administrator for the Plan and the Albert Einstein College of Medicine, Inc. Retirement Plan Committee (the Committee ) is the named fiduciary of the Plan. Cammack LaRhette Consulting is the investment consultant for the Plan. Fidelity Management Trust Company ( Fidelity ) is the custodian and record keeper for the Plan. 2
ELIGIBILITY AND PARTICIPATION Who is eligible? You are eligible to participate in the Plan (an Eligible Employee ) if you are an employee of Einstein that is a participating employer in the Plan, unless you are a/an: leased employee; independent contractor; student (including pre-doctoral fellows and M.D./Ph.D. students); with respect to Employer Contributions, a post-doctoral research fellow not supported by a training grant; with respect to Employer Contributions, a visiting scientist; with respect to Employer Contributions, a research trainee; with respect to Employer Contributions, a casual staff instructor; with respect to Employer Contributions, an employee who is a member of the 1199 Service Employees International Union or, effective July 1, 2016, a member of the New York State Nurses Association; or with respect to Employer Contributions, an employee covered by any other collective bargaining agreement, unless such collective bargaining agreement expressly provides for inclusion in the Plan with respect to such contributions. If you are classified as a post-doctoral research fellow who is supported by a training grant or as an affiliate faculty member, you will not be eligible to participate in the Plan, as you are not considered an employee of Einstein. When can I participate? If you are an Eligible Employee, you may elect to enroll in Employee Contributions upon your date of hire or re-hire. With respect to Employer Contributions: If you are an Eligible Employee normally scheduled to work at least twenty (20) or more hours per week, you can participate on the first day of the pay period coinciding with or next following the first day of the month upon the latest of: (i) 3
your date of hire, (ii) the date you become an Eligible Employee, or (iii) the date you attain age 21. If you are an Eligible Employee who is not normally scheduled to work at least twenty (20) or more hours per week, you can participate on the first day of the pay period coinciding with or next following the latest of: (i) the date you complete one (1) Year of Service, (ii) the date you become an Eligible Employee, or (iii) the date you attain age 21. You earn one (1) Year of Service for each computation period in which you complete 1,000 hours of service. A computation period is the twelve (12) consecutive month period beginning on your first day of work at Einstein and each anniversary of that date. If you are an Eligible Employee who transferred directly from YU to Einstein between September 9, 2015 and June 30, 2016 in connection with Montefiore Medicine Academic Health System, Inc. s acquisition of an interest in Einstein, you will receive vesting service credit under the Plan for your eligibility service under the Yeshiva University Retirement Income Plan. Also, if you are an Eligible Employee whose transfer of employment from YU to Einstein was delayed pending Einstein s receipt of degree-granting authority by Federal and State Departments of Education, you will receive eligibility service credit under the Plan for your eligibility service under the Yeshiva University Retirement Income Plan upon transfer of employment directly to Einstein from YU. How can I participate? You can affirmatively elect to contribute by contacting Fidelity via phone at 1-855-498-7283 or online at www.403b.com. The Plan also has a feature called automatic enrollment. Effective April 1, 2017, if you have not made an affirmative election as of March 15, 2017 to enroll or not enroll during the 30-day optout period described below, you will be automatically enrolled in the Plan. Additionally, if you are newly hired or re-hired on or after April 1, 2017, you will be automatically enrolled in the Plan as soon as administratively feasible after the opt-out period ends. Automatic enrollment means you will be deemed to have elected to contribute 4% of your pay on a pre-tax basis to the Plan. Before you are automatically enrolled, however, you will be notified and have an opportunity to opt-out. The opt-out period is the 30-day period beginning on your date of hire or rehire. During this opt-out period, you may elect not to make contributions to the Plan or you make choose a different percentage of your pay to defer to the Plan and/or elect to make after-tax Roth Contributions. If you make any of these choices, you will not be automatically enrolled in the Plan. If you miss the 30-day opt out period and are automatically enrolled, you will have a 90-day window in which to undo the automatic enrollment and get your contributions back. Contact 4
Fidelity at 1-855-498-7283 to have your contributions returned (adjusted for any investment gains or losses) in a check from Fidelity. The amount returned is taxable income. If you are an Eligible Employee who is part of a unit of employees covered by a collective bargaining agreement, a post-doctoral research fellow not supported by a training grant, a casual staff member, a part-time faculty member, a casual staff instructor, a visiting scientist or a research trainee, you are not eligible for automatic enrollment. If you do not wish to be automatically enrolled, or if you wish to contribute a different amount and/or make after-tax Roth Contributions, please contact Fidelity at 1-855-498-7283 or logon to your account at www.403b.com. How is pay defined? For purposes of calculating Employer Contributions, your pay is defined as basic cash compensation from Einstein for your services, including (1) elective contributions to any plans, and (2) differential pay during qualified military service. However, your pay will exclude the following: (1) bonuses, (2) shift differential, (3) overtime pay, (4) incentive payments, (5) deferred compensation, (6) contributions to (or payments from) any employee benefit plans, and (7) payment for accrued but unused vacation time upon termination of employment. For purposes of calculating Employee Contributions, your pay is defined as your total cash compensation from Einstein for services performed, including (1) private practice income, (2) overtime, (3) bonuses, (4) compensation not reported as wages due to an election under Code Section 125, (5) parsonage allowances excludable from gross income under Code Section 107, and (6) differential pay during qualified military service. However, your pay will exclude the following: (1) tuition reimbursement, (2) expense reimbursement, (3) deferred compensation, and (4) contributions to (or payments from) any employee benefit plans. Additionally, postseverance compensation paid after your employment will not be treated as pay under the Plan unless such compensation is paid within 2½ months after your severance from employment or, if later, the end of the Plan Year that includes the date of your severance from employment. Can I change my election to participate? Eligible employees can enroll in the Plan at any time and may also cancel participation at any time by contacting Fidelity via phone at 1-855-498-7283 or online at www.403b.com. If you are automatically enrolled in the Plan, you will receive an annual notice 30-90 days before the beginning of each calendar year that explains the automatic election and your right to change your rate of employee elective (pre-tax and Roth after-tax) contributions. The notice shall include the procedure for exercising those rights and the timing for implementing such elections. You may change the percentage you are contributing, cancel your participation, and/or choose 5
your investment options at any time by contacting Fidelity via phone at 1-855-498-7283 or online at www.403b.com. 6
CONTRIBUTIONS TO THE PLAN - IN GENERAL The Plan makes it easy to save through payroll deductions. Depending on the amount of your contributions and how you decide to invest them, these contributions can grow over time and provide you and your family with valuable retirement income. There are a variety of types of contributions available through the Plan: Pay limits Employee Contributions, including: Pre-tax Elective Deferral Contributions Roth (after-tax) Elective Deferral Contributions Catch-up Contributions Rollover contributions Employer Contributions Matching Contributions spun-off from the Yeshiva University Retirement Income Plan as of December 30, 2015. The law limits the amount of pay that may be used to determine Employee Contributions each year. The 2017 limit is $270,000. This limit is subject to change each year for cost of living changes. Under the Plan terms, the determination of Employer Contributions is limited to $265,000 of pay each year. 415 limits The law also limits the amount of annual contributions that can be made by you (or on your behalf) to all of Einstein s 403(b) plans to the lesser of 100% of pay or $54,000 for 2017 (this limit is subject to change each year for cost of living changes). EMPLOYEE CONTRIBUTIONS TO THE PLAN You can make Employee Contributions to the Plan on either a pre-tax or Roth after-tax basis. If you contribute to the Plan on a pre-tax basis, your Pre-tax Elective Deferral Contributions are deducted from your paycheck before federal and (depending on where you live) state and local income taxes are subtracted. You lower your taxable income, which means that you pay less in current income taxes. You don t pay taxes on your pre-tax contributions or any investment earnings on those contributions until you receive a distribution from the Plan. However, you are still required to pay Social Security taxes on any pre-tax contributions you make to the Plan. If you contribute to the Plan on a Roth after-tax basis, your Roth (after-tax) Elective Deferral Contributions are deducted from your paycheck after taxes are withheld. Roth contributions are subject to Social Security taxes and federal, state and local income taxes when contributed. Upon distribution, Roth contributions are not subject to additional taxation. Furthermore, if your Roth contributions are distributed as a qualified distribution, the accumulated earnings will not be taxable. To be a qualified distribution, the distribution must be made after you: (1) attain 7
age 59½, become disabled or die; and (2) complete five years of participation with respect to Roth contributions. The five-year period required for a qualified distribution is the period of five consecutive calendar years that begins with the first calendar year in which you make a Roth contribution. This period continues to run even if you do not make any further Roth contributions. Election Procedures/Automatic Enrollment To begin making Employee Contributions, follow the procedures established by the Plan Administrator, including entering into a Salary Reduction Agreement. Effective April 1, 2017, if you have not made an affirmative election as of March 15, 2017 you are automatically enrolled to defer 4% of your pay as pre-tax contributions to the Plan as detailed above, unless you opt-out or elect a different contribution percentage. If you are newly hired or re-hired on or after April 1, 2017, you will be automatically enrolled as soon as administratively feasible after the opt-out period ends. If you have been automatically enrolled and wish not to be, you have 90 days after contributions start to contact Fidelity at 1-855-498-7283 and have your contributions returned (adjusted for any investment gains or losses) in a future paycheck. See How can I participate? above for more information about automatic enrollment. Automatic Escalation If you were automatically enrolled and have not opted out or made a different deferral election, the Plan automatically increases your pre-tax elective deferral percentage by 1% each January 1st until you are contributing 8% of your pay to the Plan (referred to as automatic escalation ). You may opt-out of automatic escalation at any time. You will not be subject to automatic escalation as of the January 1st following your date of hire or rehire if you were hired or rehired on or after the preceding July 1st. In this scenario, the first automatic escalation will be the second January 1 st following your hire or rehire date. If your Employee Contributions to the Plan are suspended following a hardship withdrawal or during an approved leave of absence on a January 1st when automatic escalation is scheduled to take effect, your pre-tax elective deferral percentage will set at 0%. You must affirmatively reenroll in the Plan if you wish to continue participating after the suspension of your Employee Contributions is over. Limits on Pre-Tax and After-Tax Roth Employee Contributions Regardless of your hire date, you may elect to defer up to 80% of your pay (in whole percentages only) to the Plan on a pre-tax basis, Roth after-tax basis or a combination of the two. The law limits the amount you may defer to the Plan as Employee Contributions (both pre-tax and/or after-tax Roth contributions) in any tax year. For 2017, the limit is $18,000 plus any catch-up (pre-tax and/or Roth after-tax) contributions (see below). For years after 2017, the limit is subject to change for cost of living adjustments. If you are also a participant in an unrelated employer s plan, the contribution limit above applies on an aggregate basis between the Plan and the unrelated employer s plan. If your contributions 8
exceed the limit, you may request that the Plan pay any excess to you. Only amounts over the limit may be paid to you. You must tell the Plan Administrator by March 1 of the following year if you want any excess paid to you. A distribution of excess elective deferrals will include your pre-tax and/or after-tax Roth contributions as you specify in your request for distribution. If you do not so specify, your after-tax Roth contributions will be distributed first. Catch-up contributions Age 50 catch-up If you will attain age 50 by the end of the year, you may increase your elective deferrals (pre-tax and/or Roth after-tax) by making pre-tax and/or Roth after-tax catch-up contributions. For 2017, the maximum catch-up (pre-tax and/or Roth after-tax) contribution is $6,000. For years after 2017, the maximum is subject to change for cost of living adjustments. Special catch-up election If you have 15 or more years of service with Einstein, you may defer more than the dollar limit on elective deferrals which is otherwise in effect for the year ($18,000 in 2017). The dollar limit may be increased by the least of the following: 1. $3,000; 2. $15,000, minus amounts not included in your gross income in prior years under this catch-up election; or 3. $5,000 times your years of service with Einstein minus prior employee elective deferrals to all plans of Einstein. You must submit copies to the Plan Administrator of the W-2 statements that you received during each of the 15 years prior to the year that you want to take advantage of the 15 years of service catch-up election. If you are eligible for both types of catch-up contributions described above, the dollars that you contribute as catch-up contributions will first be treated as 15 years of service catch-up contributions to the maximum extent permissible, then as age 50 catch-up contributions. Can I change my deferral percentage? You may change your deferral percentage or stop it at any time by contacting Fidelity at 1-855- 498-7283 or on-line at www.403b.com. Changes to deferral percentages will begin as soon as administratively possible. Make-up contributions for qualified military service You may be eligible to make up missed elective deferral contributions to the Plan when you return to work for Einstein after a period of qualified military service as required by law. Please contact the Plan Administrator for more information. 9
Leave of absences Your participation will continue during an authorized leave of absence. If Einstein continues to pay you during the leave, you can continue contributing to the Plan. Rollover contributions Under certain circumstances, you may roll over an amount from another plan to this Plan. The amount comes from contributions made because of your past participation in that other plan. This allows you to continue to defer paying taxes on this money until you withdraw it. The rollover contribution may come from: qualified plans (including after-tax employee contributions) other tax sheltered annuity plans (including after-tax employee contributions) governmental 457 plans individual retirement account(s) ( IRA ) if the amounts are pre-tax Rollover contributions must meet Federal rules so please contact Fidelity at 1-855-498-7283 if you are interested in knowing more about them. You decide how to invest your rollover contributions among the investment options offered under the Plan. To the extent any rollover contributions consist of after-tax Roth Contributions, such amounts and the earnings and losses, expenses, distributions and withdrawals attributable to such amounts, shall be separately accounted for in the rollover contribution component of your account under the Plan. To make a rollover contribution, please contact Fidelity at 1-855-498-7283 or logon to your account at www.403b.com. Can I get a tax credit for my participation? Depending on your adjusted gross income level and your filing status (if it is less than: $31,000 if you are filing as single; $46,500 if you are filing as a head of household; or $62,000 if you are filing jointly) you may be eligible for a tax credit of up to $1,000 on your Federal income taxes equal to a percentage of your contributions. A tax credit reduces the Federal income tax you pay dollar-for-dollar. 10
JOINT FILERS: ADJUSTED GROSS INCOME HEAD OF HOUSEHOLD: ADJUSTED GROSS INCOME OTHERS: ADJUSTED GROSS INCOME CREDIT % CREDIT MAX $0 - $37,000 $0 - $27,750 $0 - $18,500 50% $1,000 $37,001 - $40,000 $27,751 - $30,000 $18,501 - $20,000 20% $400 $40,001 - $62,000 $30,001 - $46,500 $20,001 - $31,000 10% $200 OVER $62,000 OVER $46,500 OVER $31,000 0% $0 Please consult your tax advisor for further information. The income levels for which the tax credit is available may be indexed for cost of living increases after 2017. EMPLOYER CONTRIBUTIONS TO THE PLAN If you are an Eligible Employee, Einstein will make a contribution equal to 7.5% of your pay up to $265,000. (See How is pay defined? above for more information on how pay is determined). Employer Contributions generally are funded each payroll period. 11
INVESTMENTS AND FEES Contributions to the Plan will be remitted to a custodial account held with Fidelity, the Plan custodian. The Plan offers a wide range of investment options with varying strategies and levels of risk. It s up to you to develop a personal investment strategy and decide which options are best for you. The Plan allows you to manage your investment options so you can meet the retirement income needs for you and your family. What are my investment options? You are able to direct the investment of your retirement account balance by choosing among the investment options offered by the Plan as selected by the Committee. A list of the investment options available can be found at www.403b.com. Since you have a number of options from which to choose, you will want to consider which of these options best meet your investment needs. Each investment option provides different investment opportunities for you, and each has different risk and earnings characteristics. A prospectus or other description of each option is available from Fidelity, who you may contact at 1-855-498-7283 to request additional information. The Committee may change the number and type of investment options that are available from time to time. Can I choose how much to invest in each investment option? To invest the retirement funds in your account, select a percentage of your contributions, from 0% to 100%, to be directed to each investment option. Your investment election percentages must total 100%. Any contributions made to your account after you make your investment elections will be invested in accordance with your investment elections on file. Your elections remain in effect until changed in the manner described below. Can I change my investment elections? You may change your investment elections in the Plan at any time by contacting Fidelity at 1-855-498-7283 or online at www.403b.com. Changes to investment elections will begin as soon as administratively possible. How should I invest the retirement funds in my account? It is up to you to develop the investment strategy that s right for you and your family. Once you develop your strategy, the Plan will help you put it in action. It offers a wide selection of investment options with varying degrees of risk and potential return so you can invest in a way that helps you meet the future retirement income needs for you and your family. What if I don t make an investment choice? If you do not make an investment choice, your contributions will be invested in the Fidelity Freedom Index Fund that has a targeted retirement date nearest the year in which you turn age 65. 12
If you do not direct the investment of your Plan account, then your account will be invested in the target date retirement fund most appropriate for your age, but you can always elect otherwise at any time by contacting Fidelity at 1-855-498-7283 or logging onto your account at www.403b.com. Plan not responsible for investment decisions The Plan is intended to qualify as an ERISA Section 404(c) plan. As a result, the Committee (and any other fiduciary of the Plan), Einstein and the custodian will not be liable for losses incurred as a result of you exercising (or not exercising) control over the investment of your account. Since the investment choices under the Plan are your own responsibility, it is important that you carefully read the prospectuses describing, and other information relating to, the investment options available before you make or change any investment election. For detailed information about your investment options in the Plan (including prospectuses), please visit Fidelity at www.403b.com or call 1-855-498-7283. If you do not make an investment choice, your contributions will be invested in the Fidelity Freedom Index Fund that has a targeted retirement date nearest the year in which you turn age 65. Does my account incur any fees? Fees can impact your account and fall into three basic categories: investment fees; plan administration fees; and transaction-based fees. Investment Fees: Investment fees are generally assessed as a percentage of assets invested, and are deducted prior to calculating the investment option s published rate of return. These fees cover the costs to manage the investment option, such as investment management, operations and legal expenses of the investment option. Administration Fees: Allowable plan administration fees to maintain the Plan, such as for recordkeeping, accounting, legal and custodial services, are currently paid by revenue sharing. Revenue sharing comes from an investment option s investment fees (described above). Revenue sharing is paid by the investment manager to Fidelity in connection with the administration services it provides to the Plan. Each investment option may pay different revenue sharing amounts, and some investment options do not pay any revenue sharing. Redemption, transfer or exchange fees may apply when you withdraw amounts from the investment options under the Plan or transfer amounts between the investment options under the Plan. The fees change from time to time, and information concerning the amount of these fees is contained in each fund s prospectus (available from Fidelity) and in the annual fee disclosures. How do I know how much is in my account? 13
You will receive quarterly statements from Fidelity for your account, showing the number of units/shares of each investment account, the market value, and investment gains or losses as of that period. You will receive these statements electronically unless you request a paper copy. You can view and print your account information at any time online at www.403b.com. 14
VESTING Vesting refers to that portion of your account that you are entitled to receive when you leave Einstein. You are always 100 percent vested in your Employee Contributions, and earnings on those contributions, under the Plan. Your Employer Contributions, and earnings thereon, will vest according to the following schedule: Years of Vesting Service Less than 3 0% 3 or more 100% Vested Percentage However, if while employed you: (1) reach age 65, (2) become disabled (which, for this purpose, means a determination of disability by the Social Security Administration or qualification for disability benefits under a long term disability plan sponsored by Einstein), or (3) die, you will be 100% vested in the balance of your Employer Contributions subaccount, regardless of your years of vesting service. Further, contributions that were made under the Yeshiva University Retirement Income Plan and spun-off to this plan as of December 30, 2015 are at all times 100% vested. How do I determine my years of vesting service? A year of vesting service means a period of 365 days of service which starts when you begin working for Einstein and ends on the earlier of the date you stop working (you quit or are discharged) or the date you are absent from work for one year. Any period of time of less than one year when either you are not working for Einstein, or you are absent from work because of vacation or some other reason, will count for vesting purposes. If you are an Eligible Employee who transferred directly from YU to Einstein between September 9, 2015 and June 30, 2016 in connection with Montefiore Medicine Academic Health System, Inc. s acquisition of an interest in Einstein, you will receive vesting service credit under the Plan for your vesting service under the Yeshiva University Retirement Income Plan. Also, if you are an Eligible Employee whose transfer of employment from YU to Einstein was delayed pending Einstein s receipt of degree-granting authority by Federal and State Departments of Education, you will receive vesting service credit under the Plan for your vesting service under the Yeshiva University Retirement Income Plan upon transfer of employment directly to Einstein from YU. Does all of my service count for vesting purposes? Yes, unless you incur five consecutive one-year periods of severance. 15
What is a one-year period of severance? A one-year period of severance means a 12 consecutive month period during which time you are not credited with an hour of service. A period of severance begins on the date that your employment ends (or are otherwise absent from employment) and ends on the date that you again perform an hour of service with Einstein. If you quit, retire or are discharged (or are otherwise absent from employment) and then perform an hour of service with Einstein within 12 months of the date that your employment ends (or the initial date of such absence), the period of severance will be treated as a period of service. Federal law delays a one-year period of severance for your pregnancy, birth of your child, placement of a child with you by reason of your adoption of such child, or your caring for such child following such birth or placement. What happens if I incur a period of severance? If you are vested in your account and you are reemployed after a period of severance, Employer Contributions (and earnings thereon) credited to your account before such severance will remain vested. Employer Contributions (and earnings thereon) credited to your account following your reemployment shall also be vested. If you are not vested in your account and you are reemployed before five or more consecutive one-year periods of severance, your service before such severance will count for vesting purposes with respect to Employer Contributions (and earnings thereon) credited to your account both before and after your severance. If you are not vested in your account and you are reemployed after five or more consecutive one-year periods of severance, you will not be entitled to vest in the Employer Contributions (and earnings thereon) credited to your account before such severance, regardless of the length of your subsequent service after reemployment. Your service before such severance also will not count for vesting purposes with respect to Employer Contributions (and earnings thereon) credited to your account after such severance. What happens to my employer contributions if I leave before my account is vested? If you terminate employment with Einstein and are not vested in your account, your Employer Contributions (and earnings thereon) will be forfeited as of such date. Any forfeitures occurring during the plan year shall first be made available to reinstate previously forfeited accounts of rehired former participants, if any (see below), and any remaining forfeitures will be used to reduce employer contributions to the Plan or pay Plan expenses. Can a forfeiture be restored? Yes. If you are reemployed by Einstein before incurring five consecutive one-year periods of severance, the amount that you forfeited will be recredited to your account. The amount recredited will thereafter be determined under the terms of the Plan as if no forfeiture had occurred. 16
LOANS As an active employee, you may be eligible to borrow against your account balance subject to the following terms and conditions, including the spousal consent requirements described in the next section. The terms and conditions are intended to help make sure your money is available to you when you retire, since the Plan s primary purpose is to provide retirement income for you. Who can request a loan? You must be an active participant in the Plan to request a loan; no loans are allowed after you terminate employment. All requests for loans from the Plan will be processed as soon as administratively feasible. How do I request a loan? To request a loan from the Plan, contact Fidelity directly via the website at www.403b.com or at 1-855-498-7283 for further details. What kind of loan can I have? You can borrow money for any reason, including the purchase of a new home. If you use the loan amount for the purchase of a home, you can take up to 20 years to repay it. Proof of a home purchase is required for home loans. For all other loans, you must pay the money back within five years. How many loans can I have outstanding? You may have one loan outstanding under the Plan at any given time. If you already have an outstanding loan, you will not be eligible to take out a new loan until the outstanding loan is repaid. How much can I borrow? You can borrow money from your account as long as your account balance is at least $2,000. The minimum loan amount is $1,000, and the maximum amount you can have outstanding is 50% of your account balance or $50,000, whichever is less. Your highest outstanding loan balances under all 403(b) arrangements sponsored by Einstein or available through employment with Einstein reduce the $50,000 maximum in the previous 12 months, even if amounts have been repaid. Any amounts you borrow as a loan will be taken pro-rata from your investment options. This means that if you have an equal account balance in four investment options, 25% of the loan amount will be from each investment option. Do I pay interest on the loan? Yes. When you borrow from your account, you pay it back with interest to your own account. The interest makes up, in part, for the time your money was not earning investment returns in the Plan. This type of interest is not tax-deductible. Interest payable on these loans will be based on the prime rate plus 1%. 17
Will I be subject to penalties or taxes if I take a loan from the Plan? You will not be subject to penalties or taxes unless you do not pay back the loan. See What if I take out a loan and then leave Einstein for additional information. Is there a fee for processing loans? Currently there are no set-up or loan application fees. How do I pay back the loan? Your repayments, including interest, will be paid by electronic debit from your bank account directly to Fidelity. You pay back both the principal and interest directly to the account held for you in the Plan. You may pay off the entire outstanding loan balance at any time, without penalty, by contacting Fidelity. Partial pre-payments are also permitted. What if I take out a loan and then leave Einstein? When you cease to be an employee you may continue to make loan payments, though you will not be permitted to initiate a new loan. However, if the balance of any outstanding loan is not paid within the timeframes set forth below, you will be considered in default on the loan and the outstanding balance will become a taxable distribution. Refer to When does a default occur and what happens? below. When does a default occur and what happens? A default occurs upon the following: You fail to pay any required installment of principal and/or interest within 90 days after the end of the calendar quarter in which the installment was due; You die and the outstanding balance of your loan is not repaid, in full, within 90 days after the end of the calendar quarter in which your death occurs; or The Plan is terminated. If you are entitled to a distribution under the Plan, any defaulted loan will be offset against the amount of such distribution. However, your loan will not be considered in default, and no offset will occur, if after termination of your employment, you have not received a distribution from your account, and you continue to make required installment payments of principal and/or interest. If you terminate employment with Einstein, your loan will not be considered to be in default if an eligible retirement plan of your successor employer agrees to accept the promissory note in a direct rollover or in a trustee-to-trustee transfer, and such note is so rolled over or transferred. Upon default, the entire principal loan balance at the time of default and interest shall become immediately due and payable. The amount of the outstanding loan will be treated as a distribution and will be taxable to you. To recover the amount due, the Plan may reduce a part of your account available for distribution to you. 18
IN-SERVICE WITHDRAWALS Rollover withdrawal You may withdraw all or any part of your account resulting from rollover contributions. You may make such a withdrawal at any time, subject to the spousal consent requirements described in the next section. Age 59½ withdrawal If you are age 59½ or older, you may withdraw all or any part of your account balance resulting from your Employee Contributions (pre-tax and/or Roth after-tax). You may make such a withdrawal at any time, subject to the spousal consent requirements described in the next section. Hardship withdrawal If you have a financial hardship, you may be able to withdraw all or any part of your account, subject to the spousal consent requirements described in the next section. Financial hardship means hardship due to immediate and heavy financial need. Federal rules allow hardship withdrawals for these reasons: To pay medical expenses that would be tax deductible (without regard to whether the expenses exceed 7.5% of adjusted gross income) for you, your spouse, your dependents (as defined in the Plan), or your primary beneficiary under the Plan. To purchase your primary home (excluding regular mortgage payments). To stop your eviction from your primary home, or stop foreclosure on such home. To pay tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for you, your spouse, your children, your dependents (as defined in the Plan), or your primary beneficiary under the Plan. To pay funeral or burial expenses for your deceased parent, spouse, child, dependent (as defined in the Plan), or your primary beneficiary under the Plan. To pay expenses to repair damage to your primary home that would be tax deductible (without regard to whether the expenses exceed 10% of adjusted gross income). Any other distribution which is deemed by the Commissioner of the Internal Revenue Service ( IRS ) to be made on account of immediate and heavy financial need as provided in the Treasury regulations. Your primary beneficiary under the Plan is an individual who is named as a beneficiary under the Plan and has an unconditional right to all or a portion of your account balance upon your death. You may have a withdrawal for financial hardship only if you have received all other withdrawals or loans available to you under the Plan and other plans maintained by Einstein. You may not withdraw more than the amount of your immediate and heavy financial need. The amount of the withdrawal may include the amount of taxes that will result from the withdrawal. 19
After the withdrawal, you may not contribute to this Plan or any other qualified or non-qualified plans maintained by Einstein for six months. Prior to the end of your suspension period, you will receive a letter from Fidelity notifying you when your suspension will end. Your contributions will not be automatically reinstated after your suspension period ends. To resume contributions, you can either call Fidelity at 1-855-498-7283, or log onto to www.403b.com, and enter your contribution percentages. Do I have to pay any penalties or taxes on an in-service withdrawal? Generally, withdrawals are subject to ordinary income tax, unless you rollover the withdrawal. Hardship withdrawals are not eligible for rollover. If you take money out of the Plan before reaching age 59½, you may also be subject to a 10% Federal tax penalty for early distribution on the taxable part of your withdrawal. This penalty is paid when you file your yearly tax return. You should consult your tax advisor for more information. How do I request an in-service withdrawal? To request an in-service withdrawal, contact Fidelity directly via the website at www.403b.com or call at 1-855-498-7283. In what form can I request a withdrawal? You can request your rollover withdrawal or age 59½ withdrawal in any of the same forms of distribution that are available as if you had terminated employment and had attained at least age 59½. See Normal Form of Distribution and Optional Forms of Distribution in the next section. A hardship withdrawal is payable in a lump sum. Do I have to repay the money? No. A withdrawal is considered a taxable distribution or income to you not a loan. 20
DISTRIBUTIONS Overview Choosing how to receive your benefits is an important decision. You should consider how much money you will need each month, any death benefits you wish to provide to beneficiaries, and your tax situation. The value of your account balance will be paid to you (or your beneficiary in the case of your death) upon your termination of employment, only if requested. There are several options available to you with respect to how you will receive your benefits. The amount of the payments will depend on the amount of your account balance, your age, the age of your beneficiary, and the optional form you choose. What happens if I die? You will need to complete a Beneficiary Designation Form, available online at www.403b.com. You may also request a paper copy from Fidelity. If you complete the paper copy, the completed form must be returned to Fidelity to be kept on file. In the event of your death, your account balance will be paid to your beneficiary. A beneficiary is the person you have named to receive the value of your accounts in the Plan if you die before receiving your entire distribution. If you are married, your spouse is automatically your beneficiary. You may name a different beneficiary if your spouse provides consent in a written, notarized statement. You may change your beneficiary at any time but you must complete a new Beneficiary Designation Form. When can I or my beneficiary get a distribution? A distribution of your account balance can be made for the following reasons: Termination of employment or retirement; Death; Disability; or You meet the requirements for an in-service withdrawal. If you are a member of the 1199 Service Employees International Union, you are considered disabled if you are eligible for disability payments from the Social Security Administration or if, in the discretion of the Plan Administrator or the Committee, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. If you are not a member of the 1199 Service Employees International Union, you are considered disabled if you are eligible for disability payments from the Social Security Administration or if you are eligible for benefits under Einstein s long-term disability program. 21
If you die, your account balance will be paid to your designated beneficiary or beneficiaries. To request a distribution when you die, your beneficiary must show proof of your death. How do I get my account distributed when I leave? The main features of distributions are timing (when the distribution begins) and method (whether the distribution is made in a lump sum or installments). Timing of distribution Under the Plan, your distribution will begin as soon as administratively feasible after you request a distribution following your termination of employment. You should contact Fidelity to request a distribution. Normal form of distribution If you have a spouse, your normal form of distribution will be a 50% qualified joint and survivor annuity with installment refund. This payment form provides monthly payments to you for life and, in the event you die, provides a 50% survivorship annuity to your spouse for life. In the event of the death of both you and your spouse before an amount equal to or greater than the balance of your account at the time the annuity commenced, the balance is paid to your contingent beneficiary in a lump sum. If you do not have a spouse, your normal form of distribution will be a single life annuity with 10 years certain. This payment form provides monthly payments to you for life, and in the event you die within 10 years, your designated beneficiary would receive monthly payments for the remainder of the 10-year period. If you live beyond the 10-year period, no payments will be made to your beneficiary following your death. You may also choose from the optional forms of distribution listed below. Optional forms of distribution The following are the optional forms of distribution available to you upon your termination of employment: A single sum payment equal to all or a portion of your account. If you elect to receive a single sum for a portion of your account, the remaining portion may be received in one of the other optional forms set forth in this list. Life annuity with no period certain. This form of payment can be based on all or a portion of your account balance. No benefits are payable after your death. Substantially equal periodic payments for the joint lives or life expectancies of you and a contingent annuitant that you name. You may make changes to this form of payment after the later of the date that you attain age 59½ or the date that is five years from the first installment payment. A joint and survivor annuity. This form of payment can be based on all or a portion of your account balance. You will receive monthly benefits for your life. Upon your death, a contingent annuitant that you name will receive a percentage 22