|MEDTRONIC PLC filed this Form 11-K on 10/26/2017|
The Plan provides a regular savings program for the employees of the Company under which participants may contribute 2% to 75% of their eligible compensation to the Plan through pre-tax payroll deductions, subject to statutory limits. Employees are automatically enrolled at a contribution rate of 6% of their eligible compensation, unless elected otherwise by the employee. This automatic enrollment occurs 60 days after the employee becomes eligible to participate, as defined above. The participant contribution rate will increase annually at a rate of 1% until the participant reaches a maximum contribution rate of 10%, subject to statutory limits. Employees who do not wish to participate in the Plan have the option to opt out within the 60 days prior to automatic enrollment in the Plan.
Participants direct their contributions into various investment options offered by the Plan. The participants may change their investment decisions at any time by contacting the Recordkeeper. However, any funds exchanged out of the Interest Income Fund (which is included in the Master Trust) must remain invested in another investment alternative for a period of at least three months before being moved to the Vanguard Inflation-Protected Securities Fund: Institutional Shares. In addition, participants who exchange any amount out of a mutual fund must wait 60 calendar days before exchanging back into the same fund.
Employer matching contributions are based on each participant's contributions, up to 6% of eligible compensation and are made each pay period in the amount of 50% of these contributions. Participants direct the investment of their Company matching contributions into the same investment options available for their elective contributions. This employment requirement does not apply to those participants that prior to the end of the fiscal year have died or have had termination of employment either on or after the participant (i) attained age 55 and completed ten years of service or (ii) attained age 62 regardless of years of service. Participants who have attained age 50 before the end of the calendar year are eligible to make catch-up contributions. The Company’s matching cash contributions to participants’ accounts were $3,195, net of forfeitures, for the year ended April 30, 2017.
For eligible employees hired before May 1, 2016, the Company contributes an amount equal to 5% of eligible compensation to participant accounts each pay period. These participants are eligible for RPA contributions after having completed one year of service, as defined by the Plan document. Participants direct the Company contributions to any of the RPA investment choices consisting of the same investment options offered under the Traditional Component. For the year ended April 30, 2017, the Company contributed $5,509 through the RPA.
For participants hired on or after May 1, 2016, and employees previously employed by Covidien, the Company contributes an amount equal to 3% of eligible compensation to participant accounts each pay period. These participants are immediately eligible for the MCC and direct the Company contributions to any of the MCC investment choices consisting of the same investment options offered under the Traditional Component. For the year ended April 30, 2017, the Company contributed $479 through the MCC.
Subject to prior discretionary approval of the Plan Administrator and subject to Plan provisions, a participant may contribute amounts to the Plan from another qualified plan (rollover contributions).
Vesting and Forfeitures
Participants are 100% vested in their contributions and RPA contributions, including earnings and losses thereon, at all times. Under the Traditional Component, active participants vest in Company matching contributions, including earnings and losses thereon, at a rate of 20% per year and become fully vested in all Company matching contributions after three years. Under the MCC Component, active participants vest in Company contributions, including earnings and losses thereon, after completion of three years of service. Participants also become fully vested upon normal retirement date, death, total disability, termination of the Plan, or complete discontinuance of employer contributions.
Nonvested account balances of terminated employees are forfeited. However, the employer contributions are restored if a terminated employee returns to the Company within five years of termination. The balances of forfeited nonvested accounts at April 30, 2017 and 2016 were $49 and $130, respectively. Forfeited nonvested accounts may be used at the Plan Administrator’s election to reduce any reasonable administrative expenses of the Plan or reduce employer contributions. During the year ended April 30, 2017, forfeited nonvested accounts of $104 were used by the Plan Administrator for these items.