The Cash Match portion of the Program defines how Company matching contributions determined in accordance with the formula under the 401(k) Plan are paid once IRS limits on 401(k) contributions are met. Matching contributions to the 401(k) Plan are based upon eligible year-to-date compensation that you defer to your 401(k) account, up to a maximum of 4% of eligible earnings as determined under the 401(k) Plan.
The Company will cease making matching contributions to the 401(k) Plan and instead pay them to you in cash if the following occurs:
Your earnings as a Management co-worker for the year exceed the IRS total annual compensation limit (e.g., $265,000 in 2016; $270,000 in 2017) under Section 401(a)(17) of the Internal Revenue Code and you have made pre-tax and/or Roth contributions totaling the elective deferral limit (e.g., $18,000 in 2016 and 2017) under Section 402(g) of the Internal Revenue Code, or
Contributions for the year to your 401(k) account (the total of your contributions and the Company’s) reach the IRS total annual contribution limit (e.g., $53,000 in 2016; $54,000 in 2017) under Section 415(c) of the Internal Revenue Code.
Your “earnings” are determined in accordance with the 401(k) Plan and only include amounts earned while a Management Employee. Please note that if you are eligible to make Catch-up Contributions to the 401(k) Plan, you are not required to make such contributions in order to qualify for Cash Match payments under the Program.
EXAMPLE: Using the 2016 limits for example purposes only, assume that your 2016 earnings were $300,000 and that you have made pre-tax and/or Roth contributions totaling the elective deferral limit of $18,000 to the 401(k) Plan. $300,000 minus $265,000 is $35,000. $35,000 is multiplied by your matching contribution percentage under the 401(k) Plan, which is 4%. Thus, you would receive a Cash Match payment of $1,400.
The timing of Cash Direct and Cash Match payments is determined by the Company, provided that they shall be made no later than March 15th of the year following the calendar year earned. You do not have the option to accelerate or defer payment, and these amounts are taxable in the year paid.
If you cease employment during the calendar year (other than termination for cause), you are eligible for Cash Direct and/or Cash Match payments based upon your actual earnings for the calendar year, and your payment will be made at the same time that other Management Employees receive their payments. If you are terminated for cause, you are not eligible for Cash Direct or Cash Match payments. You are considered to be terminated for cause for purposes of this Program if you are determined to be ineligible for severance benefits due to termination for cause under the applicable severance plan in which you participate (or, if applicable, your individual employment agreement).
No interest accrues between the time a Cash Direct or Cash Match payment is earned and the time it is paid by the Company.
Cash Direct and Cash Match payments count as earnings under the 401(k) Plan for purposes of calculating your Section 415 limitation (the maximum amount that can be contributed per plan year) but not for any other purposes.
How to Request
It is not necessary to file a claim in order to receive payments under the Program. They are paid automatically. The Company has the sole discretion to determine whether any amount is payable under the terms of the Program, and the Company’s determination is final. If you believe that the Company has failed to pay you an amount owed under the Program (or miscalculated your payment), please contact Rainier Villatuya, Managing Director -Benefits.