LAST REVISED ON SEPTEMBER 2, 2021 SUMMARY OF …

[Pages:6]LAST REVISED ON SEPTEMBER 2, 2021 SUMMARY OF MATERIAL MODIFICATIONS TO THE SUMMARY PLAN DESCRIPTION

FOR VANGUARD RETIREMENT AND SAVINGS PLAN SEPTMEBER 2, 2021

This Summary of Material Modifications (SMM) describes certain material changes to the Vanguard Retirement and Savings Plan (RSP or Plan). This SMM supplements the Summary Plan Description (SPD) for the RSP dated January 1, 2019, and supersedes any information contained within the SPD regarding the changes described below. Please review this SMM carefully in its entirety as these changes may affect your RSP benefit.

If this SMM has been delivered to you electronically, you have the right to receive a written SMM and may request a paper copy of this SMM at no charge by contacting CrewCentral at Ext. 1CREW or 844-VGI-CREW (844-841-2739) (see additional contact information below).

Vanguard Human Resources Dept., M-20 P.O. Box 876 Valley Forge, PA 19496 Telephone: (610) 669-6377

This summary of material modifications ("SMM") describes two changes to the RSP relating to hardship withdrawals and the Infosys outsourcing. In addition, this SMM updates the table describing the RSP contributions on page 3 of the 2019 Summary Plan Description to reflect the 2021 IRS limits, includes tips provided by the U.S. Department of Labor to help plan participants protect the online security of their retirement plans, as well as more detailed information regarding how service with Vanguard entities outside the U.S. is counted for purposes of eligibility to participate and vesting.

1. Changes to the Hardship Withdrawal rules effective January 1, 2020 (see pages 28- 30 of the 2019 SPD)

1. Effective January 1, 2020, investment returns attributable to the Employee Pre-Tax Contributions and Employee Roth Contributions you have deferred to the Plan are now available for hardship withdrawal. The description of hardship withdrawals on page 28 in the 2019 SPD now reads as follows:

Hardship Withdrawal - Before age 59?, you may withdraw your Employee Pre-Tax Contributions and Employee Roth Contributions for specific reasons of financial hardship ("Hardship Reasons"), including any of these contributions that have been converted to Roth in a Roth In-Plan Conversion. Effective January 1, 2020, investment returns attributable to the Employee Pre-Tax Contributions and Employee Roth Contributions you have deferred to the Plan are available for hardship withdrawal, including investment returns attributable to Employee Pre-Tax Contributions made on or before December 31, 1988. A 10% federal penalty tax might apply to the withdrawal. See below for additional details about this type of withdrawal including the Hardship Reasons approved by the Plan.

Similarly, the description in the section titled "How much you can withdraw as a hardship withdrawal" on page 29 in the 2019 SPD is revised, effective January 1, 2020 to reflect that investment returns on Employee Pre-Tax Contributions and Employee Roth Contributions can now be withdrawn and reads as follow:

The maximum amount that you may withdraw as a hardship withdrawal is generally limited to the amount of your Employee Pre-Tax Contributions and Employee Roth Contributions to the Plan, including any amount converted to Roth in a Roth In-Plan Conversion. Effective January 1, 2020, you may withdraw investment returns on your Employee Pre-Tax Contributions and Employee Roth Contributions. You still may not withdraw any of Vanguard's Matching or Retirement Plan Contributions to the Plan on your behalf, including any amount converted to Roth in a

Page 1 of 6

LAST REVISED ON SEPTEMBER 2, 2021 Roth In-Plan Conversion. One exception to this rule is that if you were a participant in the Vanguard Thrift Plan before 1989, you may withdraw for hardship any amounts--including investment returns--credited to your accounts for Employee Pre-Tax Contributions and Employer Matching Contributions as of December 31, 1988. The amount of your hardship withdrawal may not exceed the amount that is necessary to relieve your immediate and heavy financial need, including any taxes reasonably expected to result from the withdrawal, and that is not reasonably available to you from other financial resources.

2. Effective January 1, 2020, the definition of immediate and heavy financial need is expanded to include the new safe harbor reason for hardship withdrawal--federal disasters declared by FEMA as set forth in the IRS regulations. The list of Hardship Reasons that qualify as an immediate and heavy financial need on page 29 in the 2019 SPD now reads as follows:

Expenses for medical care previously incurred by the you, your spouse, or any of your dependents necessary for these persons to obtain medical care that would be deductible under IRC ?213(d);

Costs directly related to the purchase of your principal residence (not including mortgage payments);

Payments for tuition, related educational fees, and room and board expenses, for the next 12 months of postsecondary education for you, your spouse, your children, or your dependents;

Payments necessary to prevent eviction from your principal residence, or to prevent foreclosure on the mortgage on that residence;

Payments for burial or funeral expenses for your deceased parent, spouse, children, or dependents;

Expenses for the repair of damage to your principal residence that would qualify for the casualty deduction under IRC ?165 (determined without regard to whether the loss is the result of a federally declared disaster or exceeds 10% of adjusted gross income); and

New effective January 1, 2020: Expenses and losses (including loss of income) you incur as a result of a disaster declared by the Federal Emergency Management Agency (FEMA) or any successor agency, as long as your principal residence or principal place of employment was located in the area designated by FEMA as a disaster area at the time of the disaster and that FEMA designates as eligible for individual assistance.

3. Effective January 1, 2020, you no longer need to certify that you cannot meet this immediate and heavy financial need by: (1) borrowing from a bank or other commercial lender on reasonable terms; (2) reimbursement or compensation by insurance, or (3) stopping your Employee Pre-Tax or Employee Roth Contributions to the Plan.

The section titled "Other conditions that apply to hardship withdrawals" on page 30 in the 2019 SPD now reads as follows:

You may only take one hardship withdrawal in a twelve-month period. To be eligible for a hardship withdrawal, you (i) must have taken the maximum amount available as a loan under the Plan, (ii) must have withdrawn all amounts credited to your Employee After-Tax Contribution, Rollover Contribution and Roth Rollover Accounts (if any), including any amounts converted to Roth in a Roth In-Plan Roth Conversion, and (iii) taken all other available distributions under any other plan of deferred compensation, if any, maintained by Vanguard, whether qualified or non-qualified. You must also sign a statement certifying that you do not have enough cash or other liquid assets reasonably available to satisfy your immediate and heavy financial need.

Page 2 of 6

LAST REVISED ON SEPTEMBER 2, 2021 You must also include evidence of your immediate and heavy financial need, such as copies of medical bills, tuition bills, purchase agreement for a principal residence, etc.

4. Effective January 1, 2020, your deferrals (e.g., Employee Pre-Tax Contributions and Employee Roth Contributions) will no longer be suspended for six months following a hardship withdrawal. This is a legally required change. Effective, January 1, 2020, the section on page 30 in the 2019 SPD titled "The consequences of taking a hardship withdrawal" is deleted.

2. Infosys transaction. Participants in RSP who: (i) terminated employment with Vanguard on or after October 11, 2020, (ii) accepted employment with Infosys on or after October 12, 2020 and on or before April 1, 2021 and (iii) meet certain eligibility provisions, each as provided under the terms of an outsourcing agreement between Vanguard and Infosys are 100% vested in their Retirement Plan (the 10%/15.7% Vanguard) contributions as of October 11, 2020.

3. Cybersecurity. In June 2021, the United States Department of Labor issued guidance in the form of online security tips regarding steps that plan participants can take to reduce the risk of fraud and loss to their retirement accounts, such as the Vanguard Retirement and Savings Plan. These basic rules are described below:

REGISTER, SET UP AND ROUTINELY MONITOR YOUR ONLINE ACCOUNT ? Maintaining online access to your retirement account allows you to protect and manage your investment. ? Regularly checking your retirement account reduces the risk of fraudulent account access. ? Failing to register for an online account may enable cybercriminals to assume your online identity.

USE STRONG AND UNIQUE PASSWORDS ? Don't use dictionary words. ? Use letters (both upper and lower case), numbers, and special characters. ? Don't use letters and numbers in sequence (no "abc", "567", etc.). ? Use 14 or more characters. ? Don't write passwords down. ? Consider using a secure password manager to help create and track passwords. ? Change passwords every 120 days, or if there's a security breach. ? Don't share, reuse, or repeat passwords

USE MULTI-FACTOR AUTHENTICATION ? Multi-Factor Authentication (also called two-factor authentication) requires a second credential to verify your identity (for example, entering a code sent in real-time by text message or email).

KEEP PERSONAL CONTACT INFORMATION CURRENT ? Update your contact information when it changes, so you can be reached if there's a problem. ? Select multiple communication options.

CLOSE OR DELETE UNUSED ACCOUNTS ? The smaller your on-line presence, the more secure your information. Close unused accounts to minimize your vulnerability. ? Sign up for account activity notifications.

BE WARY OF FREE WI-FI

Page 3 of 6

LAST REVISED ON SEPTEMBER 2, 2021 ? Free Wi-Fi networks, such as the public Wi-Fi available at airports, hotels, or coffee shops pose security risks that may give criminals access to your personal information. ? A better option is to use your cellphone or home network.

BEWARE OF PHISHING ATTACKS ? Phishing attacks aim to trick you into sharing your passwords, account numbers, and sensitive information, and gain access to your accounts. A phishing message may look like it comes from a trusted organization, to lure you to click on a dangerous link or pass along confidential information. Common warning signs of phishing attacks include:

? A text message or email that you didn't expect or that comes from a person or service you don't know or use. ? Spelling errors or poor grammar. ? Mismatched links (a seemingly legitimate link sends you to an unexpected address). Often, but not always, you can spot this by hovering your mouse over the link without clicking on it, so that your browser displays the actual destination. ? Shortened or odd links or addresses. ? An email request for your account number or personal information (legitimate providers should never send you emails or texts asking for your password, account number, personal information, or answers to security questions). ? Offers or messages that seem too good to be true, express great urgency, or are aggressive and scary. ? Strange or mismatched sender addresses. ? Anything else that makes you feel uneasy.

USE ANTIVIRUS SOFTWARE AND KEEP APPS AND SOFTWARE CURRENT ? Make sure that you have trustworthy antivirus software installed and updated to protect your computers and mobile devices from viruses and malware. Keep all your software up to date with the latest patches and upgrades. Many vendors offer automatic updates.

KNOW HOW TO REPORT IDENTITY THEFT AND CYBERSECURITY INCIDENTS ? The FBI and the Department of Homeland Security have set up valuable sites for reporting cybersecurity incidents:

? ?

4. Treatment of non-US service (this is not a change--just more detailed information). Page 5 (YOS for eligibility to participate) and Page 25 (YOS for vesting) of 2019 RSP SPD. If you are employed by a non-U.S. affiliate that is wholly owned (or at least 80% owned) by the Vanguard Group, Inc. ("Non-U.S. Controlled Group Service") and then transfer to Vanguard in the U.S., your Non-U.S. Controlled Group Service will count as service for purposes of eligibility for the match. You will need to complete 1,000 Hours of Non-U.S. Controlled Group Service during the applicable 12 month period to earn a Year of Service under the Plan. Similarly, your Non-U.S. Controlled Group Service prior to transferring to Vanguard in the U.S. will count as service for purposes of vesting in your Retirement Plan Contributions. You will need to complete 1,000 Hours of Non-U.S. Controlled Group Service in a calendar year to earn a Year of Service for vesting purposes under the Plan. Finally, if you terminate employment with Vanguard in the U.S. and are then re-employed by or transferred to a non-U.S. affiliate that is wholly owned (or at least 80% owned) by The Vanguard Group, Inc. your Non-U.S. Controlled Group Service will count towards vesting in your Retirement Plan Contributions. You will need to complete 1,000 hours of Non-U.S. Controlled Group Service in a calendar year to earn a Year of Service for vesting in your Retirement Plan contributions.

Page 4 of 6

LAST REVISED ON SEPTEMBER 2, 2021 Additional information If you have any questions, you should refer to the RSP Summary Plan Description, found on CrewNet and CrewNet External under Crew CentralTM Total Rewards. You may also contact Crew Central at Ext. 1CREW (or (844)-VG1-CREW (844-841-2739)). You may also request information in writing by sending a letter to The Vanguard Group, Inc., Human Resources Dept., Mailport M22, P.O. Box 876, Valley Forge, PA 19496.

Legal Notices & Disclaimers This SMM supplements the SPD for the RSP. Please remember that this SMM is a summary of certain material changes to the RSP. It is not the RSP plan document itself. Your rights under the RSP are governed exclusively by the RSP plan document and its related trust agreement. If there is any conflict between this SMM and the RSP plan document, the RSP plan document will control. The Plan Administrator retains exclusive authority and discretion to interpret the terms of the RSP. The Vanguard Group, Inc. ("Vanguard") reserves the right, in its sole discretion, to amend, change, suspend or terminate the RSP, at any time. Vanguard does not have any obligation to ? and nothing contained in this SMM or the SPD shall be construed as creating an express or implied obligation or promise on the part of Vanguard to ? maintain or continue to offer the RSP. Eligibility to participate in the RSP or the receipt of RSP benefits does not constitute a promise or right of continued employment or render any person a crew member of Vanguard or constitute any commitment by Vanguard to continue the RSP.

Page 5 of 6

LAST REVISED ON SEPTEMBER 2, 2021

Contribution Eligibility Vesting

Employee Pre-Tax/Roth

Catch up Contribution (not match eligible)

4% Vanguard Match

10%/15.7% Retirement Plan

First day of employment as an eligible Vanguard employee Calendar year eligible Vanguard employee reaches age 50 After one year service anniversary as an eligible Vanguard employee (if credited with 1,000 hours of service) First day of employment as an eligible Vanguard employee

Immediate Immediate Immediate

6 year graded vesting schedule

Percent of RSP Eligible Pay

Up to 50% of RSP Eligible Pay

Maximum Contribution in dollars in 2021

$19,500 (IRC Section 402(g) limit on employee contributions in 2021)

N/A

$6,500 (IRC Section 402(g)

limit in 2021)

Dollar for dollar match on Employee PreTax/Roth Contributions up to 4% of RSP Eligible Pay

$11,600 (based on IRC Section 401(a)(17) limit on RSP Eligible Pay for 2021)

10% up to Social Security Taxable Wage Base (SSTWB)/15.7% above SSTWB

$37,390.40 (based on IRC Section 401(a)(17) limit on RSP Eligible Pay for 2021)

Total combined employee and Vanguard employer contributions

See above

See above

Vanguard makes this contribution even if you do not contribute to the Plan

$58,000 (based on IRC Section 401(a)(17) limit on RSP Eligible Pay for 2021, for employees age up to 49.

$64,500 for 2021 for employees age 50 and older.

Page 6 of 6

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download