|MEDTRONIC PLC filed this Form 11-K on 10/26/2017|
The net appreciation in the fair value of the Master Trust investments for the year ended April 30, 2017, including gains and losses on investments purchased and sold, as well as unrealized gains and losses on those held during the year, related to all investments reported at fair value above. The Medtronic GIC is reported at contract value. See Note 3 for further information regarding fair value measurements.
5. Related Party Transactions and Party-In-Interest Transactions
The Plan’s investments consist of the Plan's interest in the Master Trust, which includes shares of registered investment companies, collective trusts managed by Vanguard Trust, and Medtronic plc common stock. All investment transactions are managed by the co-trustees and qualify as party-in-interest transactions, which are exempt from the prohibited transactions rules. These transactions are allowed by the Plan and the Puerto Rico Internal Revenue Code of 1994 (the Code). In addition, as previously noted, the Master Trust invests in the ordinary shares of the Parent Company. The Plan's investment in ordinary shares of Medtronic plc at April 30, 2017 and 2016 was $6,519 and $5,938, respectively.
During the year ended April 30, 2017, the Plan had transactions with BNY Mellon and Aon Hewitt, the Plan's Trustee and Recordkeeper, respectively. Prior to July 1, 2016, the Plan also had transactions with Vanguard Trust, the Plan’s recordkeeper during that period. These transactions are allowed by the Plan and the Code, and qualify as party-in-interest transactions, which are exempt from prohibited transaction rules.
At April 30, 2017 and 2016, the Plan had notes receivable from participants of $7,980 and $4,973, respectively. These transactions qualify as party-in-interest transactions, which are exempt from prohibited transaction rules.
6. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
7. Tax Status
The Plan received a favorable determination letter, effective January 26, 2015, from the Puerto Rico Treasury Department. The Puerto Rico Treasury Department has determined that the Plan and the related trust are designed in accordance with Section 1081.01 of the Code and are, therefore, exempt from Puerto Rico income taxes. Although the Plan has been amended since receiving the determination letter, the Plan Administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
U.S. GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Puerto Rico Treasury Department. The Plan has not recognized any interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
8. Subsequent Events
Effective May 1, 2017, Aon plc, Aon Hewitt's parent company, sold its benefits administration business to Blackstone. As a result, they have changed their name from Aon Hewitt to Alight Solutions.