401(K)

Agenda

Fidelity Contact Information

www.401k.com

In English: 800-890-4015

In Spanish: 800-587-5282

From Japan: 00-539-111-877-833-9900

International Collect: 508-787-9902

Eligibility: Who Can Join?

At least 18 years of ageRFT or RPT NAF employee who is scheduled to

work for twenty (20) or more hours per weekU.S. citizen Non- U.S. citizen employee that is employed on U.S.

PayrollHas a SSN or Individual Tax Identification Number

(TIN) Subject to U.S. Income TaxNot subject to a Status of Forces Agreement

Provision that precludes eligibility

Eligibility: Who Cannot Join?

Under the age of 18

Flexible status employee

Non- U.S. citizen employee

Does not have a SSN or Individual Tax Identification Number (TIN)

Is not subject to U.S. Income Tax

Subject to a Status of Forces Agreement Provision that precludes eligibility

Enrollment

Eligible employees may join the Plan at any time

No waiting period

Retroactive enrollments are prohibited.

To participate:

Complete Quick Enrollment Form within the first pay period of eligibility or;

Contact Fidelity Directly after participant receives an enrollment kit via mail

Pick your choice of funds on the left, OR one Freedom Fund on the Right

Quick Enrollment Form

Highlighted = required

Activity= Activity # (not department name)

Signature Date= on/after Date of Hire

Must be received by Noon (EST) Friday before the Pay Period End Date (email, fax, mail)

Quick Enrollment Form Timeline

OctoberSun Mon Tue Wed Thur Fri Sat

9

PP Begin Date

10 11

Jane Doe Hired

12

*Submit QE Form

13 14 15

16 17 18 19 20 21

Deadline to submit QE form

22

PP End Date

23 24

On Reverse Feed

25 26 27 28

Payday (401k deducted)

29

*Jane Doe was set up in PeopleSoft Before QE Form was sent

*QE Form was received before Noon on Friday during the pay period that she became eligible

Enrollment Kit

If an employee does not complete a quick enrollment, s/he may enroll directly with Fidelity after the waiting period.

An employees indicative data is sent to Fidelity after pay day “Friday”.

Once Fidelity receives the information from PeopleSoft, an enrollment kit is mailed directly to the employee.

PP Begin Date

PP End Date

Check Date

Data sent to Fidelity

Mailed Enrollment Kit

06/03/12 06/16/12 06/22/12 06/22/12 06/25/12-06/29/12

Beneficiaries

Beneficiary forms should be completed with the Quick Enrollment Forms HR Office Should Mail Beneficiary Form to Fidelity

• 401(k) Beneficiaries should NOT be keyed into PeopleSoft

Otherwise the employee should call Fidelity or log on to the Fidelity website to submit online

The employee should acknowledge on the new hire checklist that s/he completed the form, or will designate a beneficiary through Fidelity

Beneficiaries

If married, spouse must be the primary beneficiary per IRS regulations

For a beneficiary other than a spouse, or split primary beneficiaries, spousal consent must be signed and notarized

Contingent beneficiaries can also be listed

A contingent beneficiary is someone other than your spouse that is entitled to your 401(k) account in the event that your spouse is also deceased

Employer Match

Additional 1% employer match to the 401(k) account if actively participating in both the defined benefit (pension) and 401(k) plans.

The maximum MCCS employer contribution is 5%

EMPLOYEE DEFERRAL EMPLOYER MATCH

If actively enrolled in 401(k) & Retirement Plans:

1% incentive employer contribution plus:

1% 1%

2 % 2 %

3 % 3 %

4 % 3.5 %

5-100 % 4 %

Vesting

100% vested in employee contributions and rollover funds from the day the employee begins contributing to the Plan

The vesting period for the employer match is one (1) year from date of active enrollment

Must be actively contributing to the plan for one year

If the employee terminates prior to the one year vesting period, the employer match is forfeited

Account Changes for Active Employees

Deferral changes- contact Fidelity directly via phone or internet.

Beneficiary Change- contact Fidelity directly via phone or internet.

Address / Name Change – Employee updates via PeopleSoft Self Service or through the local HR office. Information keyed into PeopleSoft is sent electronically to Fidelity during the next payroll file

Headquarters will not make manual changes to a Fidelity account (names, change of addresses, etc.) unless the change is already keyed in PeopleSoft

Loans

Eligibility

Participate in the Plan for at least one year

$1,000 minimum vested account balance

Cannot have any outstanding loans, including previous unpaid loan in default

Participants can only have one (1) loan at a time

Minimum Loan Amount- $500

Maximum Loan Amount- lesser of $50,000 or 50% of vested account balance

Loans

Apply for a loan at www.401k.com, or by calling Fidelity at 800-890-4015

Loans may be repaid in as little as 1 month, or as long as 60 months (5 years)

Loan information is automatically loaded into PeopleSoft by Fidelity every Monday (Reverse Feed report)

Loan payments are made through payroll deductions

Will receive a Loan coupon book from Fidelity Investments to continue making loan payments if terminated/ retired/on LWOP/ turned flexible status

Hardship Withdrawals

Must have a current outstanding 401(k) loan

Proof that a financial hardship exists

Amount of request must not exceed the amount of financial hardship.

Must certify with official documentation that there is an immediate and heavy financial obligation that cannot be met by a loan or any other available distributions from the Plan.

Sent directly to Fidelity for approval

Hardship Withdrawals

The Plan only allows hardship withdrawals for one of the following reasons: Post-secondary tuition expenses & related educational

fees for the next 12 months for participant, spouse, or dependents.

Purchase of a primary residence Un-reimbursed medical expenses To prevent eviction or foreclosure on the mortgage of

primary residence. Payment of Funeral Expenses for Participants’ deceased

parent, spouse, child or dependents. Payment for repair of damage to principal residence due

to casualty loss

Hardship Withdrawals

Subject to mandatory 20% Federal Income Tax withholding. Federal Tax will be withheld at the 10% rate established by the Internal Revenue Service, unless you elect out of withholding.

Required to discontinue deferrals into the Plan for six (6) months after the date of the hardship distribution. It is the employees responsibility to reinstate

deferrals after the six-month suspension periodMoney is removed from the employees account,

and the employee is not required to pay it back.Apply for a withdrawal online at www.401k.com,

or by calling Fidelity at 800-890-4015

Minimum Required Distributions

Beginning the calendar year after the year you turn 70½, you are generally required to withdraw a minimum amount of money from your tax–advantaged 401(k) account each year. This amount is called a minimum required distribution, or MRD

Retirees that attain age 70 ½ must begin MRDs by April 1 of the following year.

Active employees that attain age 70 ½ have the option to delay their MRD until April 1 of the calendar year after the year they retire.

All MRDs will be subject to $25 fee per withdrawalCalculate/Apply online at www.401k.com, or by

calling Fidelity at 800-890-4015

Minimum Required Distributions

MRDs are subject to a tax withholding MRDs are taxed as ordinary income for the tax year in

which they are taken and will be taxed at your applicable individual federal income tax rate.

MRDs may also be subject to state and local taxes. If you made non–deductible contributions to your IRA, you

must calculate your MRD based on the total balance, but your taxable income may be reduced proportionately for the after–tax contributions.

Please consult a tax advisor to learn more.

Failure to elect the MRD may result in significant IRS imposed penalties (generally equal to 50% of the amount of the MRD not taken)

401(k) Contributions & Catch Up Limits

2012 individual pre-tax contribution maximum set by the IRS is $16,500 & $17,000 respectively

Employees aged 50 and up can defer an additional $5,500 into the Plan on a pre-tax basis (for 2012), provided they have reached the annual max

Eligibility starts in the calendar year they turn 50

Automatically placed into the payroll system that allows the additional catch up contribution

No paperwork needed

Roll Over's (Into the Plan)

Employees may roll their funds from another qualified employer plan, “conduit” IRA, or TSP into Fidelity Investments.

Request the distribution check from the previous financial institution

Fidelity does not accept wire transfers of funds.

Checks should be mailed directly to the employee

Rollover must be completed within 60 days of receipt of the distribution check

Roll Over's (Into the Plan)

Complete the Fidelity incoming rollover application & designate investment elections

Roll-in forms can be found in the back of the employee enrollment kit or at http://crossroads/MRG/401k_Documents/401(k)%20Roll-in%20form.pdf

Mail the Roll-in form and the check to Fidelity

Please note: Fidelity Investments will not accept any checks without the Roll-in form completed and signed by the employee

Roll Over's (Out of the Plan)

Upon termination, employees may elect to roll over all or a part of their distribution directly into an IRA, conduit IRA, Roth IRA, or other qualified retirement plan. Direct Rollover must be at least $500, or if less, the

entire eligible rollover distribution. Cannot roll over a total distribution of less than $200.

For most financial institutions, it is required that the losing employer complete the necessary forms indicating that the funds are indeed from a qualifying employer plan. If this is the case, please forward all forms to Carolyn

Woodson at WoodsonC@usmc-mccs.org /703-432-0436

Death

When a participant is deceased, the following information must be provided to set up the “Death Benefit Transfer”Death CertificateCompleted Beneficiary Designation formCurrent Address of Beneficiary

Account will be set up via Fidelity under the Beneficiary's name and Social Security Number

If the Beneficiary elects to receive a lump sum distribution, he or she will have to pay applicable federal tax withholdings. The Beneficiary is exempt, however, from being assessed the 10% penalty if under age 59 ½.

Terminations

A Distribution Application is sent to the employee directly from Fidelity after the termination code is received via the interface file

Fidelity will E-mail (participant-provided e-mail address) or print mail as well as a proactive call to discuss distribution options

Account balance of $1,000 or less

60 days to contact Fidelity and elect a direct rollover into another qualified retirement plan, IRA, or IRA conduit account or;

Automatic taxable lump sum distribution check mailed to address on file

Terminations

Account balance greater than $1,000

Funds may be left in Fidelity account

Funds will continue to be vested

Participants may change funds, but may not contribute new funds or take out loans

If an employee is not vested upon termination, s/he is not entitled to the employer match, only your contributions made while in the plan.

What Can Be Done Online

Change Deferral Percentage

Change investment elections

Review statements and account balances

Update Beneficiary information

Request loans

Request hardship distributions

Read up on latest investment news

Fidelity Contact Information

www.401k.com

www.Fidelity.com

In English: 800-890-4015

In Spanish: 800-587-5282

From Japan: 00-539-111-877-833-9900

International Collect: 508-787-9902