Target Corporation Pension Purchase Program

Target Corporation Pension Purchase Program

Lifetime Income from the Target Pension Plan

TGT-H000235562-9/20

The Pension Purchase Program, formerly known as the "Target 401(k) to Pension Rollover", provides you the opportunity to roll over money from your Target 401(k) account to the Target Pension Plan, giving you greater flexibility in how you receive your retirement income. The amount you roll over will be used to "purchase" lifelong monthly benefit payments from the Pension Plan.

Target is offering the Pension Purchase Program to encourage 401(k) participants to consider many options in their retirement planning. It also gives participants the opportunity to turn their 401(k) balance into a lifelong stream of monthly payments without paying insurance commissions or fees. The Pension Purchase Program has been designed to be "cost neutral," so the Pension Plan does not make or lose money by offering this Program.

You are eligible for the Pension Purchase Program regardless of whether you are currently a participant in the Pension Plan. You must no longer be employed by Target or its affiliates to be eligible. Target 401(k) Beneficiaries and Alternate Payees under a Qualified Domestic Relations Order are not eligible to participate in this Program.

What are the advantages of choosing a Pension Purchase?

? It converts your 401(k) balance into a lifetime monthly benefit payment--you cannot outlive your benefit payments.

? It saves you money, since no insurance commissions or fees are charged. If you purchase an annuity outside of the Target Pension Plan, a portion of your purchase includes commissions or fees that reduce the monthly benefit payment amount.

? It transfers investment risk to the Pension Plan. The amount of your monthly benefit payment will not change once you have made your Purchase. You will no longer have the potential of investing in higher-risk investments that could provide higher returns. However, you are also protected from any downturns in the stock and bond markets.

? It provides flexibility. You can choose to roll over all or a portion of your taxable 401(k) balance. You may make a Pension Purchase more than once. Each Purchase must be at least $50,000 and can be up to 100 percent of your taxable 401(k) balance.

Pension Purchase Process and Tax Considerations

If your Pension Purchase amount will be your entire 401(k) balance or close to it, you may want to consider transferring your balance to the Money Market Option or the Intermediate-term Bond Index Fund investment option prior to your Purchase. This will lower the risk of market losses and preserve the balance that you will be using to make the Purchase.

Your request for a Pension Purchase may be made no earlier than 90 days before the date you want payments to begin. Your signed forms must be received at least 30 days prior to the date monthly benefit payments begin. Forms received later than that will be processed as soon as possible, but your first payment may be delayed and include a retroactive payment. Once your Purchase is complete, your payments begin immediately and cannot be deferred.

Only a Target 401(k) balance can be used for a Pension Purchase, and only the before-tax balance in your Target 401(k) account may be used.

The following amounts are not eligible to be used in a Pension Purchase:

? After-tax and Roth balances. These funds may remain in your 401(k) account.

? Required minimum distributions payable upon reaching age 72 (or age 70? if you reached age 70? prior to 2020).

You will not be taxed at the time of the Pension Purchase. Monthly benefit payments are taxable in the year they are received. You will provide tax withholding elections and direct deposit information during the benefit payment commencement process.

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Target Corporation Pension Purchase Program

Your Pension Purchase will be paid in cash. The value of any investments in the Target Corporation Common Stock Fund will not be distributed in shares of Target common stock.

If you have retirement balances with a former employer, such as a 401(k) or 403(b) account, or a traditional IRA account, you may roll over these balances to your Target 401(k) account only while you are actively employed at Target or its affiliates. By combining your retirement balances into your Target 401(k) account, you can:

? Take advantage of the low fee investment options offered in the Target 401(k).

? Receive expert investment advice from Alight Financial Advisors (AFA).

? Use tools like Automatic Rebalance to maintain the mix of investment options you chose.

? Consider using some or all of your balance after you leave Target for a Pension Purchase.

Payment Options Available

Your Pension Purchase is permanent. Once you choose to roll over any money from your 401(k) account to the Pension Plan, you are committed to the payment option choice you make. Some payment options also provide lifetime monthly payments for a second person, such as a surviving spouse, if you die first. The following payment options are available:

? Single Life Annuity Monthly benefit payments are made for your life only. When you die, payments stop.

? 50 Percent Qualified Joint and Survivor Annuity Monthly benefit payments are made to you for your lifetime. When you die, your designated joint annuitant receives 50 percent of the monthly benefit payment you were receiving for as long as he or she lives.

? 75 Percent Qualified Joint and Survivor Annuity Monthly benefit payments are made to you for your lifetime. When you die, your designated joint annuitant receives 75 percent of the monthly benefit payment you were receiving for as long as he or she lives.

? 100 Percent Qualified Joint and Survivor Annuity Monthly benefit payments are made to you for your lifetime. When you die, your designated joint annuitant receives 100 percent of the monthly benefit payment you were receiving for as long as he or she lives.

? Single Life Annuity with Guaranteed Return of Principal Monthly benefit payments are made to you for your lifetime. If you die before your total rollover amount is paid out to you, your beneficiary will receive a lump sum payment of your remaining rollover amount.

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Target Corporation Pension Purchase Program

Additional Payment Information

You may select a different payment option and a different joint annuitant for your Pension Purchase than for your regular pension benefit.

The monthly benefit payment amount you receive will depend on your age (and the age of your joint annuitant, if applicable) on the date of your Pension Purchase, the balance amount you roll over, interest rates at the time of your Pension Purchase and the life expectancies of you and your joint annuitant.

The amount of your monthly benefit payment generated from your Purchase will not change once the Purchase is made.

If you choose one of the joint and survivor annuity options and your joint annuitant dies before you do, payments will stop at your death.

If you are married and obtain your spouse's notarized consent, you may choose the Single Life Annuity or the Single Life Annuity with Guaranteed Return of Principal options, or you may choose a Qualified Joint and Survivor Annuity option with a joint annuitant other than your spouse. If you do not obtain your spouse's notarized consent, you must choose from the 50 percent, 75 percent or 100 percent Qualified Joint and Survivor Annuity options, with your spouse designated as your joint annuitant.

Please note that federal regulations require a participant's benefits be paid in such a manner that the majority of the benefit is paid to the participant and not to a survivor. Therefore, the age differences between the participant and an allowable non-spouse joint annuitant are limited, as shown in the following table. No age difference restrictions apply if the joint annuitant is your spouse.

Joint and Survivor Annuity Form

Joint and 100% Survivor Joint and 75% Survivor Joint and 50% Survivor

Maximum Allowable Age Difference between Participant and Non-Spouse Joint Annuitant

19 years 10 years No limit

The table below is an estimate of the Single Life Annuity option, based on a 4 percent interest rate, generated by various Pension Purchase amounts. If you select a different payment option, the monthly amount will be less.

Purchase Amount $50,000

$100,000

Age at Start of Monthly Payments

55 62 65

70 55 62 65 70

Monthly Payment

$248 $289 $312

$364 $497 $578 $625 $727

Purchase Amount $200,000

$500,000

Age at Start of Monthly Payments

55

62 65 70 55 62 65 70

Monthly Payment

$994

$1,155 $1,249 $1,455 $2,484 $2,888 $3,124 $3,637

Next Steps

For more information or to learn about next steps, call the Target Benefits Center at 800-828-5850. Tell a Pension representative you are interested in the Pension Purchase Program and request an estimate of your monthly benefit payments.

Log on to to model different scenarios. The tool is located on the Savings & Retirement tab. Select Financial Education, then Lifetime Income Options. Or use the key words Pension Purchase when you search on the website.

Additional information about the Target Pension Plan may be found in its Summary Plan Description on . You may ask a Target Benefits Center representative to mail you a copy of this booklet.

As with all investment decisions, be sure to talk with your tax advisor, financial advisor or attorney to review your financial considerations for retirement.

?2020 Target Stores. Target and the Bullseye Design are registered trademarks of Target Brands, Inc.

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