Plan Highlights MassMutual Thrift Plan These are the highlights of the MassMutual Thrift Plan. For additional information, read your Thrift Plan Summary Plan Description (SPD) found on FieldNet. (Click on My Practice in the blue bar, then Benefits, then Summary Plan Descriptions (SPDs), and scroll down to the Thrift Plan SPD.) If any information here conflicts with the terms of the Plan, the Plan document governs. The MassMutual Thrift Plan is the retirement savings plan that is funded by you and MassMutual. You are immediately eligible to enroll in the Plan the date your career contract is endorsed. Automatic Enrollment The Plan includes an Automatic Contribution Arrangement (ACA). If you take no action, you will be automatically enrolled in the Thrift Plan deferring 5% of your eligible compensation per commission period on a before-tax basis beginning 30 days after your first day of contract endorsement. If after you read these Plan Highlights you would like to enroll immediately (instead of waiting 30 days), you may elect to contribute up to 100% of your eligible W-2 compensation, including after-tax Roth 401(k) or after-tax non-roth contributions, up to certain limits. Until you make an investment selection, all of your contributions including any company match, will be invested in the age-appropriate Vanguard Institutional Target Retirement default investment option. This option is based on your anticipated retirement date (assumed age 65) and the date stated in the investment option name. These investment options (or portfolios) change their asset allocations and associated risk levels or to become more conservative over time. An investment in a Vanguard Institutional Target Retirement investment option is not guaranteed and you may experience losses including losses near, at or after the target date. There is no guarantee that the investment will provide adequate income at or through your retirement. You may choose a different target date or other investment selection to be more conservative or aggressive depending on your risk tolerance. Until you elect a beneficiary, your beneficiary will be your federally recognized spouse or your estate (if not married). (Please see the Beneficiary Designation instructions near the end of these Plan Highlights). What if I do not want to be automatically enrolled? If you do not want to participate in the Plan, you must decline Automatic Enrollment. (See the How to Make Changes at the end of this document). Note: Once contributions have been deferred to the Plan, the amount cannot be withdrawn until termination of career agent contract occurs; however, in-service withdrawals, loans and hardship withdrawals are permitted under certain circumstances. continued
How much may I contribute to the Plan? You may make before-tax 401(k) and/or after-tax Roth 401(k) deferrals totaling from 1% to 100% of your eligible W-2 compensation. However, there are two types of Internal Revenue Service (IRS) limits limits on compensation and on contributions. The qualified Plan IRS compensation limit is $275,000 in 2018. Once your compensation reaches this limit, contributions must end, even if you have not reached the IRS contribution limit. The IRS contribution dollar limit (adjusted annually for inflation) applies to 401(k) deferrals (before-tax 401(k) and after-tax Roth 401(k)). That limit is $18,500 in 2018. If you are age 50 or older, or turning age 50 in 2018, you may contribute additional before-tax 401(k) or after-tax Roth 401(k) catch-up contributions of up to $6,000 in 2018. If you are eligible to make catch-up contributions, they will automatically begin once you reach the $18,500 limit. You don t need to make a separate election. Other limits may apply. Note: Any before-tax 401(k) or after-tax Roth 401(k) contributions you may have contributed to a prior employer s plan in 2018 apply toward these annual limits. You may also make after-tax non-roth contributions ranging from 1% to 8% of your eligible W-2 compensation, up to IRS limits. You may stop your contributions or increase or decrease your contribution percentage at any time. Changes to contributions will begin as soon as administratively possible. If you have an existing employer s retirement plan, conduit IRA or traditional IRA (excluding SEP IRAs or rollovers from Roth 403(b) accounts), you may be eligible to roll over that account into the Thrift Plan. By doing so, you avoid current income-tax liability on the amount rolled over and you consolidate your retirement savings. Will MassMutual contribute to the Plan?* If you meet certain production requirements (see Company Memo 2017-009 or its successor available on FieldNet), MassMutual will provide a 100% (dollar-for-dollar) match on the first 5% of eligible W-2 compensation you contribute on a before-tax 401(k), after-tax Roth 401(k) or after-tax non-roth basis each commission period, up to the IRS compensation limit. Once your compensation reaches this limit, the company match must end. Eligibility for the company match is based on your weighted commission credits from the prior year s measuring period defined in Company Memo 2017-009 or its successor. If you reach or exceed the Enhanced Benefit Production Threshold in 2018, you will be eligible for the match for the period April 2019 through March 2020. Note: The company match is contributed each commission period. In order to receive the maximum company match, you need to contribute a minimum of 5% of compensation on a before-tax 401(k), after-tax Roth 401(k) or after-tax non-roth basis each commission period. If you reach the IRS 401(k) contribution limit ($18,500 if under age 50 or $24,500 if age 50 or older in 2018) prior to the last commission period of the year, the company match will stop unless you have made a minimum 5% after-tax non-roth election. The MassMutual company match is a before-tax contribution regardless of the type of contributions you make to the Plan. * General Managers are not eligible for MassMutual company match contributions. 2
How do I become vested in my Plan account? Vesting refers to your right to receive a benefit. You are always 100% vested in your own Plan contributions (including any rollover contributions), adjusted for any gains or losses. MassMutual s contributions to the Plan, adjusted for any gains or losses, are vested as follows: Your vesting service begins on your career contract endorsement date. You become 100% vested in all company contributions if you retire, die or reach the normal retirement age of 65 while under an active career contract. Completed service Vested status Less than 1 year 0% 1 year 40% 2 year 80% 3 year 100% How will my contributions be invested? You direct the investment of your plan account, choosing from investment options provided under the Plan by logging on to www.retiresmart.com or calling 1-800-743-5274. If you do not make an investment election, your contributions will be invested in the age appropriate default investment option listed below. Participant contributions are defaulted into the Vanguard Institutional Target Retirement option closest to their assumed age-65 retirement date, as follows: Default age-appropriate investment options** Vanguard Institutional Target Retirement Income For those who attained age 65 before 2013 or hired at age 65 or older Vanguard Institutional Target Retirement 2015 For those who attained age 65 or will attain age 65 between 2013-2017 Vanguard Institutional Target Retirement 2020 For those who will attain age 65 between 2018-2022 Vanguard Institutional Target Retirement 2025 For those who will attain age 65 between 2023-2027 Vanguard Institutional Target Retirement 2030 For those who will attain age 65 between 2028-2032 Vanguard Institutional Target Retirement 2035 For those who will attain age 65 between 2033-2037 Vanguard Institutional Target Retirement 2040 For those who will attain age 65 between 2038-2042 Vanguard Institutional Target Retirement 2045 For those who will attain age 65 between 2043-2047 Vanguard Institutional Target Retirement 2050 For those who will attain age 65 between 2048-2052 Vanguard Institutional Target Retirement 2055 For those who will attain age 65 between 2053-2057 Vanguard Institutional Target Retirement 2060 For those who will attain age 65 in 2058 or after **The Vanguard Institutional Target Retirement options are model portfolios designed to provide varying degrees of long-term appreciation and capital preservation through a mix of equity and fixed income exposures based on your age and target retirement date. These portfolios change their asset allocations and associated risk levels over time with the objective of becoming more conservative (i.e., decreasing risk of losses) with increasing age. These portfolios assume a retirement age of 65. 3
Description of default investment. The description of the default investment options including investment strategy, risk and return characteristics, and fees and expenses are shown on the Investment Profiles. Right to alternative investment. Even if some or all of your contributions are invested in a default investment option, you have the continuing right to direct the investment of your current account balance and new contributions in one or more of the other investment choices available to you under the Plan. Generally, you may change your investments at any time. You are entitled to invest in any of the alternative investment choices without incurring a financial penalty. The description of all of the investment options including investment strategy, risk and return characteristics, and fees and expenses are also shown on the Investment Profiles. Asset Classes Most investments fall into one of three main categories, or asset classes. It s good to know a little about each of these asset classes. Most retirement plan investment options are categorized as pooled investments where the contributions of many people are pooled and invested together in a selection of other investments by a professional portfolio manager. An individual s contributions typically purchase a fractional portion of all the investments owned by the pooled investment option at the time of contribution. Don t forget to consider your Pension Plan benefit in setting your asset allocation plan for the Thrift Plan. Asset Allocation Investment Option Asset allocation investment options, such as Vanguard Institutional Target Retirement series, offer professional management and monitoring as well as diversification all in one investment. Named to coincide with a particular retirement date, each investment option has an automatic process that invests more conservatively as retirement nears. Stable Value Investments (Cash) Stable value investments, such as Money Market accounts, Certificates of Deposit (CDs), and U.S. Treasury Bills, are essentially loans to a bank or financial institution. You are paid interest for the use of your money. Because the borrowers are considered creditworthy, your investment is generally viewed as a safe one. Stable value investments are one of the most conservative asset classes, so they typically earn lower returns (how much money an investment earns during a period of time) than other types of investments. Investors who prefer lower risk, are nearing retirement, or may need access to their money within a short period of time (one to five years), may wish to consider this asset class. Stable value investments are not FDIC insured. Any guaranteed payments are based on the claims paying ability of the issuing company. Bonds (Fixed Income) Bonds are loans issued by government entities or companies. Investors who buy bonds are, in effect, lending money to the government or a corporation. In return, investors are paid in the form of interest. The full amount of the bond is repaid when the bond matures. Historically, bonds have been more stable than stocks, but they are not without risk. The primary risk associated with bond investing is that bond prices move up and down, primarily in response to interest rate fluctuations. In addition, another risk is that the bond issuer may not be able to repay the debt. These types of funds are not guaranteed and you may experience losses. 4
Stocks (Equity) When you buy stock in a corporation you are actually buying ownership, or shares, in that company. As an owner you share in both the profits and losses of that company. This results in the value of your share increasing or decreasing. The returns on stocks can rise and fall in the short term, sometimes dramatically. This fluctuation in value, or volatility, is why stocks are typically considered risky investments. Stock investors, especially long-term investors, are typically willing to assume this risk because the stock market has, on average, outpaced inflation in the long run. For the investor looking for long-term growth, stocks have historically been an excellent addition to a diversified portfolio, although there are no guarantees that past performance is indicative of future results and you may experience losses. Types of Stocks There are specific types of stock you may want to know more about before making your investment selections. Here are a few of the major ones: Large Capitalization (Large Cap) Stocks in large, well-established companies ( Blue Chips ), generally with assets over $10 billion, are usually less volatile and often pay regular dividends. Mid Capitalization (Mid Cap) Stocks in mid-sized companies, with assets between $2 billion and $10 billion, tend to be slightly more volatile than large cap stock and have the potential to see more growth in the long term. Mid market capitalization investing generally involves greater risk than large capitalization investing. Small Capitalization (Small Cap) Stocks in small companies, with less than $2 billion in assets, typically are more volatile than both large and mid cap. The trade-off is that growth in small cap investments may be greater than their large and mid cap counterparts. Small market capitalization investing generally involves greater risk than large capitalization investing. Global/International Although historically considered to be volatile, stocks in non-u.s. companies are not necessarily linked to the direction of U.S. markets. This makes them worth considering as a means to diversify a portfolio. International investing can involve special risks such as political changes and currency fluctuations. These risks are heightened in emerging markets. Investment Style This term refers to the way professional money managers select securities within a specific asset class, such as stocks. Usually, they pick stocks based on two styles: Growth Style Growth style means stocks that are expected to produce above-average earnings growth. Value Style Value style means stocks that are considered to be under valued or overlooked by the general investing community and the company s stock price will likely rise. 5
Investment Risk Investment risk is the chance that an investment will lose money or have a negative return. All investing involves some risk, but not investing for your retirement, or investing too conservatively, could be even riskier. There are three main types of investment risk you ll want to consider. Inflation Risk If your investments do not earn more than the rate of inflation, your money could actually be worth less each year. Social Security is a source of retirement income that is adjusted for inflation. Some investments have been better at beating inflation. For example, stock and bond investments have historically outperformed stable value investments as well as inflation. Past performance is not indicative of future results. Interest-Rate Risk The value of most securities changes in response to interest rates. Bond investments are especially vulnerable to interest rate fluctuations. The price of bond investments will generally decline when interest rates rise and increase when interest rates fall. Bond investments typically invest in a range of investment vehicles with varying interest rates and dates of maturity, which in general helps to moderate interest-rate risk. Market Risk The price of a security can fluctuate with changing market conditions; this market risk is the chance that an investment will not increase in value or may lose money. It is also the primary risk people typically think of when they invest in the stock market. Asset Allocation Stocks, bonds, and stable value (e.g. cash) investments respond differently to changing market conditions. Sometimes stock investments perform better; sometimes bond investments do. Stable value investments are affected less by market conditions and tend to grow at a steady, but slower, pace. Diversifying among these asset classes (otherwise known as Asset Allocation) allows you to increase your return potential and helps reduce the overall risk to your portfolio classes. Short Term Conservative Moderate Aggressive Ultra Aggressive 100% Cash/Bond 0% Stocks 70% Cash/Bond 30% Stocks 40% Cash/Bond 60% Stocks 15% Cash/Bond 85% Stocks 0% Cash/Bond 100% Stocks Above investment charts were designed by MassMutual and do not represent a recommendation or endorsement of any particular investment or investment style. Past performance does not guarantee future results 6
Where to go for further investment information. You can obtain further information about the Plan s investment options mentioned in these Plan Highlights, online at www.retiresmart.com or by contacting the Participant Information Center at 1-800-743-5274. The Thrift Plan is intended to comply with ERISA Section 404(c) and offers a variety of risk/return options. It provides investment information sufficient to make informed investment decisions regarding the assets in your plan account. You exercise control over the investments in your Plan account. You choose which investment options to put your money in and can change them as needed. This allows you to invest in the way that best meets your personal goals. MassMutual and other fiduciaries will not be liable for any losses that your account may experience as a result of your investment choices. When may I take money out of the Plan? The Plan is designed to help you save for retirement. The IRS has placed restrictions on when money may be withdrawn from the Plan. You may withdraw money from your plan account upon: Termination You may receive your vested account balance. Additional requirements may apply including tax penalties. See the SPD for more information. Normal Retirement (age 65) Disability determined based on the company s long-term disability plan Death Your account balance will be paid to your designated beneficiary The Thrift Plan allows withdrawals of certain contributions and investment earnings while you have an active career contract. Your Thrift Plan SPD provides more details about distributions, including important tax information and information on the forms of benefit the Plan offers. May I take out loans from the Plan? Yes, you may borrow money from your Thrift Plan account, subject to certain plan limitations. See your Thrift Plan SPD for more details. Participant Statements You will receive Thrift Plan account statements by email for quarters ending 3/31, 9/30, and 12/31. You will receive your 6/30 account statement by mail, unless you choose to receive it electronically. You can obtain a Thrift Plan statement at any time by logging on to www.retiresmart.com. You may need to have Adobe Acrobat viewer software installed on your computer. This software is available for download, free of charge, from the Adobe website. If you do not have the ability to access and retain PDF documents on your personal computer, then you should consider receiving paper statements via U.S. mail. Disclaimers The Plan Highlights contain an overview of various MassMutual plans and policies that may apply to career agents of MassMutual. In the event of any difference between these descriptions and an actual Plan, the Plan documents shall prevail. This booklet is not an Employee Retirement Income Security Act (ERISA) Summary Plan Description and is intended only to provide general information, guidance and a brief introduction to benefits that may be available to MassMutual career contract agents. Eligibility for any MassMutual benefit is subject to the 7
provisions of the Plan document and administrative policies relating to that benefit. Receipt of this material does not imply eligibility for any one or all of the plans and programs described. MassMutual reserves the right to amend, modify, revoke, change, suspend or terminate all or any part of the plans, programs, policies, benefits or services described in this booklet at any time or from time to time. MassMutual and other fiduciaries are not and will not be liable for any losses that your account may experience as a result of your investment choices. Beneficiary Designation Do this electronically by logging on to www.retiresmart.com (unless married and choosing a beneficiary other than your spouse). Or do it manually by completing and returning the Beneficiary Form which is available on www.retiresmart.com. Until you elect a beneficiary (via a paper form or online on www.retiresmart.com), your beneficiary will be your spouse (if married, as recognized by Federal law) or your estate (if not married). How to make changes: Workday To elect or change your contribution percentage, visit Workday. https://www.myworkday.com/massmutual/login.htmld RetireSmart To update your beneficiary and choose investment options, create an account at www.retiresmart.com. 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com. RS5137 1217 C:RS-43807-00