Plan Provisions
In addition to the details presented so far, there is some other important information we want you to know about the Plan.
Vesting
The term "vesting"' refers to your nonforfeitable right to the money in your Account.
Vesting Schedule
If you have at least one day of service (see "Definition of Day of Service" for more information) on or after January 1, 2008, and you are a Participant, you will vest in your Plan benefits based on the following schedule:
| YEARS OF SERVICE |
% VESTED |
| Less than 3 |
0% |
| 3 or more |
100% |
In addition, you will become 100% vested in these amounts if, while you are still an Employee of the Company or a Company affiliate, you reach age 65 (i.e., the Plan's normal retirement age).
Definition of Year of Service
You will be credited with a Year of Service for each 365 days of service credited to you after you attain age 18. In general, you are credited with service commencing on the date you are hired and ending on the date you quit, are discharged, retire, or die. However, the following special rules may apply:
- If you leave employment with the Company and its affiliates for a reason other than your quitting, discharge, retirement, or death, you will usually be credited with an additional Year of Service, but never a period beyond the date you quit, are discharged, retire, or die.
- If you are reemployed within twelve months of your termination of employment (for example, if you terminate on December 5, 2011, and are reemployed on or before December 4, 2012), you will be credited with Years of Service as if you were employed by the Company or an affiliate of the Company during the entire period of your absence from employment.
Special service crediting rules may apply to you if you were:
- Employed at the toner manufacturing facility of Minnesota Mining & Manufacturing Company in Mitchell, South Dakota and became an Employee on October 2, 1986;
- Employed by Toshiba Semiconductor (U.S.A.), Inc. and became an Employee of Toshiba America, Inc. on April 1, 1988;
- Employed by Toshiba America Medical Systems, Inc. or Toshiba America MRI, Inc. on March 31, 1990; or
- Employed by Vertex Semiconductor Corporation and became an employee of Toshiba America Electronic Components, Inc. on November 1, 1994
You can contact the Toshiba America, Inc. Retirement Plans Office at 912-444-0071 for more information.
Forfeitures
If you are not vested when your employment with the Company and its affiliates terminates, your Cash Balance Account will be immediately forfeited and you are no longer a Participant.
If you are reemployed by the Company or an affiliate of the Company after your Cash Balance Account is forfeited but before you have incurred five consecutive one-year periods of severance (as defined below), your Cash Balance Account will be restored with Interest Credits from the date of forfeiture through your date of reemployment.
If, however, you are reemployed after your Cash Balance Account is forfeited and after incurring five consecutive one-year periods of severance, your pre-rehire Cash Balance Account balance will have been permanently forfeited and your Years of Service after reemployment will not enable you to vest in your pre-rehire forfeited Cash Balance Account balance.
A period of severance generally begins on the day you quit, are discharged, retire, or die. However, if you terminate employment for any other reason, the period of severance begins either on the first anniversary of the date of your termination of employment (or the date you quit, are discharged, retire, or die, if earlier than the first anniversary of the date of your termination of employment), or, if your termination of employment and continuing absence is due to qualifying maternity or paternity leave, the second anniversary of the date of your termination of employment.
Distribution of Benefits
You may not request a distribution of your Cash Balance Account while employed by the Company or a Company affiliate (unless you have reached age 701/2).
If you are vested when your employment with the Company and its affiliates terminates, you are eligible to receive a distribution of your Cash Balance Account. If the balance in your Cash Balance Account is not more than $5,000, your benefit will be distributed as described in the section titled "Special Rules for Account Balances That Are $5,000 or Less" below. Otherwise, you may usually elect to leave your Cash Balance Account in the Plan until you reach age 65.
Commencement of Distributions
The distribution options available to you will depend on when you begin receiving a distribution of your Cash Balance Account. You may elect to begin receiving your Cash Balance Account on one of the following dates:
- Normal Retirement. You become eligible to receive a normal retirement benefit on the first day of the month coinciding with or next following your 65th birthday if you have terminated your employment. This date is referred to as your normal retirement date.
- Early Retirement. If you work at least one hour on or after January 1, 2008, you become eligible to receive an early retirement benefit on the first day of the month coinciding with or next following the date you have terminated your employment (or the first day of any month after that date) if you are at least age 55 and have 3 or more Years of Service and are vested. You must give the Plan Administrator three months' notice in order to elect an early retirement benefit. This date is referred to as your early retirement date.
- Late Retirement. If you are still employed after your 65th birthday, you become eligible to receive a late retirement benefit on the first day of the month coinciding with or next following the date you terminate your employment. This date is referred to as your late retirement date. Please note, if you are still employed when you reach age 70½, you will have the option to begin your distribution of benefits on the April 1 following the calendar year in which you reached age 70½, or on the first day of any calendar quarter thereafter, or on your late retirement date.
- Vested Retirement. Even if you have not satisfied the requirements for a normal, early, or late retirement, you are entitled to a retirement benefit if you are vested in your Cash Balance Account when you terminate employment.
Updating Records and Applying for Benefits
Please note, your benefit payments may be delayed if you do not apply for benefits, fail to provide information requested by the Plan Administrator, or fail to keep your current address on file with the Plan Administrator. You will need to complete forms available from the Toshiba America, Inc. Retirement Plans Office to commence payment of your Plan benefit.
Marital Status
Federal law requires that only opposite-sex couples be considered "married" for most Plan-purposes, regardless of any state law provisions to the contrary. Unless specifically stated to the contrary in this SPD, the terms "marriage", "married", "husband", "wife", and "spouse" refer only to an opposite sex partner whose marriage under the Internal Revenue Code after application of the Defense of Marriage Act of 1996. If you are married, in a civil union, or in another domestic partner arrangement that is not recognized as a marriage under the Defense of Marriage Act of 1996, you must be considered single for plan purposes unless otherwise stated to the contrary in this SPD.
Distribution of Benefits Prior to Early, Normal, or Late Retirement
If you are vested when your employment with the Company and its affiliates terminates, and you begin distribution of your vested benefits prior to reaching your early, normal, or late retirement dates, you are entitled to distribution of your retirement benefit. The following options for benefit payments are available to you:
- Lump sum payment
- 50% or 75% joint and survivor annuity (married Participants only)
- Single life annuity (single Participants only)
Distribution of Benefits Due to Your Early, Normal, or Late Retirement
If your employment with the Company and all Company affiliates terminates, and you begin distribution of your benefits on your early, normal, or late retirement dates, you are entitled to a vested retirement benefit. The following options for benefit payments (as explained further below) are available to you:
- Lump sum payment
- Single life annuity
- Life annuity with a 5 or 10-year period certain
- 50%, 75%, 100% joint & survivor annuity
- Level income annuity (early retirement only)
Default Payment Form
If you are married, your default form of benefit is a 50% joint and survivor annuity (as explained below).
Your spouse must consent in writing to the payment of your benefit in any other form of benefit on a form provided by the Plan Administrator. Your spouse's written consent must be notarized or witnessed by a representative of the Plan Administrator for your election to take effect. You will be notified at the proper time of the availability of the election and how to make it. The spousal consent rules do not apply if you elect a 75% or 100% joint and survivor annuity with your spouse as your beneficiary or receive a mandatory cash out of your Plan benefit that is worth $5,000 or less.
If you are single, your default form of benefit is a single life annuity (as explained below).
Description of Forms of Distribution
As described above, your distribution options depend on whether you choose an Early, Normal, Late, or Vested Retirement.
Lump Sum Payment
A lump sum payment is a single payment of your entire Plan benefit. You may elect to receive your benefits in the form of a lump sum payment, equal to the balance in your Cash Balance Account. Lump sum payments are payable as of the first day of the third month following the calendar quarter in which you terminate your employment with the Company and its affiliates (or as of the first day of any subsequent month until you reach age 65) or, if you choose an Early Retirement, Normal Retirement, or Late Retirement, the first day of any month as soon as administratively practicable after you terminate employment with the Company and its affiliates (or as of the first day of any subsequent month until you reach age 65, if you terminate prior to such date).
If you die after you receive your lump sum payment, your surviving spouse or your beneficiary will not be entitled to any additional benefits from the Plan.
Joint and Survivor Annuity
A joint and survivor annuity is a benefit payment option where you will receive actuarially reduced monthly benefit payments during your lifetime and, following your death, a specified percentage (50%, 75% or 100%) of the monthly benefit paid to you prior to your death continues to be paid to your beneficiary for his or her life. As noted in the default payment form section above, if you are married, and are receiving your default payment form, your spouse is automatically treated as your beneficiary under a 50% joint and survivor annuity.
Single Life Annuity
A single life annuity is a benefit payment option were you will receive monthly benefit payments during your lifetime. Once you die, however, all payments stop and no income will be continued to anyone, including your spouse, your beneficiary, or your estate. As noted in the default payment form section above, if you are single, the single life annuity is your default payment form.
Life Annuity With a Period Certain
A life annuity with a period certain is an actuarially reduced single life annuity with a guaranteed number of monthly benefit payments. If the guaranteed number of payments have not been made before your death, the remaining payments will be made to a beneficiary selected by you. You may elect 60 or 120 guaranteed monthly payments.
Level Income Annuity
A level income annuity is a single life annuity that initially provides a greater monthly benefit and a lesser monthly benefit once you begin receiving Social Security benefits. The form of benefit is only available to you if your employment terminates at or after Early Retirement and you begin to receive your benefit before Normal Retirement. Your life annuity will be based on your estimated Social Security benefit, which you must provide to your Benefits Department. Your life annuity is intended to produce a relatively level amount of total income to you during your retirement. Once you die, however, all payments stop and no income will be continued to anyone, including your spouse, your beneficiary, or your estate.
Eligible Rollover Distributions
You (or your surviving spouse beneficiary) may roll over any portion of your distribution that is an "eligible rollover distribution" (i.e., most payments that are not "required minimum distributions" or annuity payments) to an IRA or another employer's qualified plan (including a 401(k) plan), 403(a) annuity plan, 403(b) plan, or governmental 457(b) plan, if it accepts rollover contributions). Subject to special Internal Revenue Code rules that the Plan Administrator is not responsible for ensuring that you meet, a rollover may also be made to a Roth IRA. Lump sum distributions are usually "eligible rollover distributions." However, annuities do not usually qualify. You may roll over your eligible rollover distribution by:
- Receiving a distribution of your Plan benefit in cash and then contributing the amount distributed (or a portion of this amount) to an IRA or the other employer's plan; or
- Having your distribution directly rolled over (a "direct rollover") to an IRA or the other employer's plan.
If you elect to have your distribution paid to you and then want to roll it over to an IRA or another tax-qualified retirement plan, you must generally roll over the distribution within 60 days of receipt.
If your beneficiary is not your surviving spouse, your beneficiary may only make a direct rollover to an IRA or Roth IRA that will be treated as an inherited IRA for purposes of the Internal Revenue Code.
Any taxable distribution paid directly to you (i.e., amounts that are not after-tax) will be subject to mandatory Federal income tax withholding of 20% of the requested distribution (a direct rollover will not be subject to this Federal income tax withholding). You will receive 80% of the taxable distribution and the other 20% will be sent to the IRS as Federal income tax withholding for that year. If you want to make an indirect rollover (i.e., a rollover of an eligible rollover distribution first paid to you) of 100% of the taxable distribution, you will need to replace the 20% the Plan sent to the Internal Revenue Service. You cannot elect out of this tax withholding. This withholding is not a penalty but rather a prepayment of your Federal income taxes.
You will pay income tax on the amount of any taxable distribution you receive from the Plan unless it is rolled over into an IRA or another tax-qualified plan.
A 10% IRS premature-distribution penalty tax may also apply to your taxable distribution if it is made prior to your reaching age 591/2 (or age 55 if you have terminated employment) unless it is rolled over into an IRA or another tax-qualified plan. The 20% Federal income tax withheld under this section may not cover your entire income tax liability. Please contact your individual tax advisor for more information on this issue.
Amount of Benefit When You Leave Employment
If you are eligible for benefits under the Plan, and you choose the lump sum option, your benefit will be the balance in your Cash Balance Account. If you are eligible for benefits under the Plan, and you choose an annuity, your benefit will be the actuarial equivalent of your Cash Balance Account.
Regardless of whether you elect a single life annuity, a joint and survivor annuity, a level income benefit, or a life annuity with period certain option, the value of your benefit will be actuarially equivalent to the value of your Cash Balance Account on the date your benefits are calculated.
Payments Commencing Prior to Early, Normal And Late Retirement
If you choose to begin to receive your annuity payments prior to Early Retirement (or Normal Retirement, if you are not eligible for Early Retirement), the amount will be determined using an annual interest rate which is the average annual yield on 30-year Treasury bonds (for the third month preceding the calendar quarter in which your annuity payments begin) and a mortality table specified by the Internal Revenue Service.
Payments Commencing on or After Early, Normal, or Late Retirement
If you choose to begin to receive your annuity payments on or after Early, Normal or Late Retirement:
- And you choose to receive a single life annuity, the amount will be determined using an annual interest rate which is determined in accordance with section 417(e)(3) of the Internal Revenue Code and a mortality table specified by the Internal Revenue Service.
- And you choose to receive an annuity form other than a singlelife annuity, the amount will be determined based on the life annuity described above, converted to an optional form based on the actuarial equivalency factors specified in the Plan document. These factors are available from the office of the Plan Administrator.
Special Rules for Account Balances That Are $5,000 or Less
If the value of your vested Cash Balance Account balance at the time you terminate employment is $5,000 or less, your Cash Balance Account will be paid out of the Plan as soon as administratively practicable after your termination of employment as long as your vested Account balance is still $5,000 or less at the time of actual distribution. You will not be eligible to elect to defer payment of your vested Plan benefit until a later date. The manner in which your vested Cash Balance Account balance will be paid out depends on the total value of your vested Cash Balance Account as follows:
- If the total value of your vested Cash Balance Account is $1,000 or less, or you are over age 65, you may elect to have your Cash Balance Account balance paid directly to you in cash or rolled over to an IRA or eligible retirement plan of your choice. If you do not make an election, the entire amount will be distributed to you in a single payment of cash within a reasonable period of time after your employment ends.
- If the total value of your vested Cash Balance Account is more than $1,000 and you are under age 65, you may elect to have your Cash Balance Account balance paid directly to you in cash or rolled over to an IRA or eligible retirement plan of your choice. If, however, under these circumstances, you do not make an election, your entire vested Cash Balance Account will be automatically rolled over directly to an IRA established in your name by the Plan Administrator.
If an IRA is established in your name by the Plan Administrator, your IRA will be invested in an investment option which is designed but not guaranteed to preserve your principal account balance, provide a reasonable rate of return, and maintain liquidity. Fees and expenses charged for the establishment and maintenance of your IRA will be paid directly from your IRA. You can contact the Toshiba America, Inc. Retirement Plans Office at 912-444-0071 for more information.
Required Distributions
You are required by law to start receiving minimum required distributions from the Plan no later than April 1 of the calendar year following the calendar year in which you turn 701/2 or terminate your employment, whichever is later. Once you start receiving minimum required distributions you should receive them at least annually. Also distributions to beneficiaries must commence within certain periods required by the Internal Revenue Code. Please contact your individual tax advisor for more information on this issue.
If you are vested, and you die before you begin receiving benefits under the Plan, your surviving spouse, or your beneficiary (if there is no surviving spouse or your surviving spouse has waived the benefit), will receive a pre-retirement death benefit.
Beneficiary Elections
The Plan's pre-retirement death benefit will be paid to the following beneficiary:
- If you are married at the time of your death, your beneficiary will generally be your surviving spouse.
- If you are unmarried at the time of your death, the beneficiary you have designated will receive the vested value of your Cash Balance Account if you die before your benefits begin.
- If you are unmarried at the time of your death, and you have not designated a beneficiary (or your beneficiary has predeceased you), the pre-retirement death benefit will be paid in a lump sum to your issue per stirpes or if none, your living parent or parents equally, or if none, your estate. For example, if your spouse dies before you and you have one surviving child named Phil (of two children—Phil and Justine), and the deceased child (Justine) has two children (who are your grandchildren), then Phil will receive 50%, and each of Justine's two children will receive 25% each (a payment to your issue per stirpes).
You may designate a beneficiary by completing the form required by the Plan Administrator. If you are married, spousal consent to the designation of a non-spouse beneficiary will usually be required. If required, such consent must be irrevocable and your spouse's signature must be witnessed by a notary public. If you are designating a trust as beneficiary you will be required to provide a copy of the trust document identifying the trustees and successor trustees (if any) under the trust.
If you are married, you may designate a non-spouse beneficiary before attaining age 35, however, the beneficiary designation will become null and void on the first day of the calendar year in which you reach age 35 or you terminate employment. You may also designate a non-spouse beneficiary beginning on the earlier of January 1 of the calendar year in which you reach age 35 or the date you have a termination of employment (for benefits accrued before the termination of employment). If you designation of a non-spouse beneficiary becomes null and void, you must complete a new beneficiary designation if you want to designate a beneficiary other than your spouse.
You have the right to designate, revoke, and re-designate your beneficiary by written election submitted to the Plan Administrator. In general, you may change your beneificary designation at any time prior to the earlier of the date your benefits are to commence or your death. You may revoke your designation of a non-spouse beneficiary, which will have the effect of restoring your spouse' right to receive a benefit if you die while married. However, you may not substitute another beneficiary for the one you originally designated without your spouse's further consent.
If you have any questions about how to designate a beneficiary, please contact the Toshiba America, Inc. Retirement Plans Office at 912-444-0071 for more information.
Payment Options
If you die before you begin receiving benefits, and are married, your surviving spouse (if you are married when you die) or your beneficiary (if you are not married when you die) will receive 100% of the vested balance in your Cash Balance Account. Your surviving spouse may choose to receive this amount in the form of:
- A lump sum payment, or
- A single life annuity
A surviving spouse may elect, prior to the date of benefits are to begin, to postpone receiving benefits to the first day of any month on or before the day you would have reached Normal Retirement. However, a non-spouse beneficiary's distribution must begin no later than the end of the calendar year following the calendar year in which your death occurs.
If the balance in your Cash Balance Account is not more than $5,000, your surviving spouse or beneficiary will automatically receive a lump sum payment promptly following notice of death to the office of the Plan Administrator.
If you are not vested at the date of your death, your surviving spouse, beneficiary, or estate will not receive any benefits.