AMERICAN MARITIME OFFICERS 401(k) PLAN · 2018. 8. 3. · Maersk Line Ltd. 2510 Walmer Ave Suite C Norfolk, VA 23513 Daniel E. Shea National Executive Vice President American Maritime

AMERICAN MARITIME OFFICERS

401(k) PLAN

Summary Plan Description

2018 Summary Plan Description

AMO 401(k) Plan Summary Plan Description 2

IMPORTANT INFORMATION ............................................................................................. 4

BOARD OF TRUSTEES ........................................................................................................... 5

PARTICIPATION

1. What is the Plan? ................................................................................................................ 6

2. How does the Plan work? ................................................................................................... 6

3. What are the advantages of participating? ....................................................................... 6

4. Am I eligible to participate? ................................................................................................ 8

5. When do I participate? ........................................................................................................ 9

6. How do I enroll? ................................................................................................................... 9

7. When do I become vested? .................................................................................................. 9

CONTRIBUTING

8. What is my individual account? ..................................................................................... 10

9. What may I contribute to my individual account? ....................................................... 10

10. What does my employer contribute to my individual account? .................................. 11

11. Are there limits on contributions made to my individual account? ........................... 12

12. May I make a rollover contribution to my individual account? .................................. 13

13. What if I take military leave? ......................................................................................... 14

INVESTING

14. How do my benefits increase? ......................................................................................... 15

15. Who determines how I invest my individual account? ................................................. 15

16. What are my investment options? .................................................................................. 15

17. How does the Plan pay expenses? ................................................................................... 16

18. How do I change my investment option? ....................................................................... 18

19. What information will I receive? .................................................................................... 18

20. When is my individual account valued? ........................................................................ 18

BENEFITS

21. When can I receive my benefits? .................................................................................. 19

22. How are my benefits distributed? ................................................................................. 20

23. May I borrow money from my individual account? ................................................... 21

24. How do I apply for benefits or take out a loan? ......................................................... 21


25. How do I designate a beneficiary? .................................................................................. 22

26. Can I assign my benefits? ................................................................................................ 22

27. What are the procedures for a domestic relations order? ......................................... 22

28. Are my benefits taxable? .............................................................................................. 23

29. Can I roll my benefits to another plan? ...................................................................... 23

YOUR RIGHTS

30. Can the Plan be amended? ........................................................................................... 25

31. What happens if the Plan pays benefits in error? ....................................................... 25

32. How do I appeal a denied benefit? ................................................................................. 25

33. What are my rights under ERISA? .............................................................................. 27

34. What other information should I know? ..................................................................... 29

IMPORTANT INFORMATION


This Summary Plan Description (“SPD”) is furnished to you pursuant to the requirements of federal law, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This SPD is intended to explain how the American Maritime Officers 401(k) Plan (“Plan”) is administered, the requirements for eligibility to participate, the manner in which contributions are determined and made, the amount and type of benefits provided, the procedure for filing claims for benefits, and other aspects of the Plan.

Although this SPD attempts to describe the principal features of the Plan accurately, the explanation is in nontechnical terms and does not cover every aspect of the Plan or every situation that might arise. It is not a copy of the official rules and regulations (“Plan Document”) and should not be relied upon as though it were. The Plan Document is the only official legally-binding statement of your benefits, rights, and obligations under the Plan. You may examine the official Plan Document if you wish, as explained in this SPD. Should there be any conflict between the terms of this SPD and those of the Plan Document, the terms of the Plan Document will control in all cases.

Please note that no one except the Board of Trustees (“Board” or “Trustees”) has the authority to interpret and construe the terms of the Plan Document, including this SPD, to make any promises to you about it, or to change the provisions of the Plan. The Board has the exclusive right and power, in their sole and absolute discretion, to interpret the Plan document and decide all matters under the Plan, including, without limitation, the right to make all decisions with respect to eligibility for and the amounts of benefits payable under the Plan, and the right to resolve any possible ambiguities, inconsistencies or omissions concerning the Plan. All determinations of the Trustees (or its duly authorized designees) are final and binding on all persons and will be given full force and effect.

The Plan, including the Plan Document and this SPD, is not an employment contract between you and your employer. It does not guarantee you the right to be continued in your employer’s employment, nor does it limit the employer’s right to discharge you. Upon termination of employment, you will have no right to or interest in any of the Plan’s assets except for the benefits to which you are entitled under the Plan. It should also be understood that the Plan is a defined contribution plan and, as such, your benefits are not insured by the Pension Benefit Guaranty Corporation.

ERISA and the Internal Revenue Code, as amended (“Code”), as well as all corresponding regulations, govern withdrawals and distributions from the Plan. The income tax consequences from a Plan withdrawal or distribution can be intricate. This SPD is not provided to you as tax advice; it only provides general tax information to help you understand potential tax liabilities from a withdrawal or distribution from the Plan. You should consult your tax advisor to evaluate any special tax considerations that may apply before you request a withdrawal or distribution from the Plan or make a rollover contribution to the Plan.

Please read this booklet carefully and retain it for future reference. If you have any questions, the Plan office will assist you in answering them.


BOARD OF TRUSTEES

As of January 1, 2018, the Board is made up of the following Trustees, consisting of an equal number of union and employer trustees that administer the Plan:

UNION TRUSTEES EMPLOYER TRUSTEES

Paul Doell National President American Maritime Officers 601 S. Federal Highway Dania Beach, FL 33004

F. Anthony Naccarato Chairman/Secretary 490 L’Enfant Plaza East SW, Suite 7204 Washington, DC 20024

Joseph Z. Gremelsbacker (Pro Tem) National Vice President, Deep Sea American Maritime Officers 601 S. Federal Highway Dania Beach, FL 33004

Edward Hanley (Pro Tem) Vice President, Labor Relations Maersk Line Ltd. 2510 Walmer Ave Suite C Norfolk, VA 23513

Daniel E. Shea National Executive Vice President American Maritime Officers 1121 7th Street, Second Floor Oakland, CA 94607

Todd Johnson President and Chief Executive Officer Pacific-Gulf Marine, Inc. 401 Whitney Avenue, Suite 511 Gretna, LA 70056

T. Christian Spain (Alternate) National Assistant Vice President Government Relations American Maritime Officers 490 L’Enfant Plaza East SW, Suite 7204 Washington, DC 20024

Melissa Serridge (Alternate) Director, Human Resources and Labor Relations Tote Services, Inc. 10550 Deerwood Park Blvd Ste 602 Jacksonville, FL 32256

Thomas Heaton (Alternate) Controller American Maritime Officers 601 S. Federal Highway Dania Beach, FL 33004

Ira Douglas (Alternate) Director of Marine Personnel Crowley Maritime Corporation 9487 Regency Square Blvd. Jacksonville, FL 32225


PARTICIPATION 1. What is the Plan?

The American Maritime Officers 401(k) Plan is a multi-employer profit sharing plan with a section 401(k) cash-or-deferred arrangement intended to satisfy the tax qualification requirements of section 401(a) of the Code. It is subject to the reporting, disclosure, and fiduciary requirements of ERISA. The Plan, in general, provides retirement benefits, savings opportunities, as well as funds to you or your beneficiaries in the event of a disability or death by allowing you to defer the taxation of a portion of your compensation and, if applicable, your vacation pay, into future tax years.

2. How does the Plan work?

You choose 1% to 75% of your eligible pay to contribute from each paycheck to your account in the Plan.

Your contributions may come from your pay before federal (and most state and local) income taxes are figured, but they are subject to FICA taxes.

You may choose to make after-tax or Roth contributions instead of or in addition to your before-tax contributions; both offer different tax advantages.

Your employer may also contribute to your account in the Plan, depending on the applicable collective bargaining agreement or participation agreement.

You may invest up to 20% of your Plan account and 20% of future contributions through your own broker in mutual funds and individual securities separate from the “core” investment options available through the Plan.

The investment earnings credited to your Plan account are tax-deferred – most are taxable only when you take money from the Plan, and some are not taxed at all.

3. What are the advantages of participating?

Two major benefits of the Plan are: (1) tax deferral, and (2) employer matching contributions. Depending on your collective bargaining agreement, you may be entitled to either one or both of these benefits. Consult the collective bargaining agreement applicable to you or contact the Plan office for more details.

Tax Deferral The tax deferral mechanism of 401(k) plans allows you to generate more net income today because your gross income is reduced by Traditional Elective Contributions (described in Question 9 below). For example, if you are in a 35% tax bracket, every $100 you elect as a Traditional Elective Contribution reduces your federal income tax by $35 for the current taxable year; or by $6,475 should you contribute the maximum allowed by federal law (discussed in Question 11 below).


There are additional benefits for both Traditional Elective Contributions and Roth Elective Contributions (described in Question 9 below) as well. The earnings on both Traditional Elective Contributions and Roth Elective Contributions are also tax free until you receive a distribution, a year in which you may be in a lower tax bracket due to your future retirement. Importantly, however, all or a portion of the money that you contribute to the Plan is accessible to you depending on your circumstances and your individual account balance. You are not obligated to wait for retirement to access your money. For example, you can borrow 50% of your individual account balance (not to exceed $50,000) for any reason, provided you don’t have an outstanding loan from the Plan. Furthermore, the interest paid on this loan goes back into your individual account in the Plan rather than paid to a lender.

You may also access your individual account if you suffer a heavy financial need, such as when you purchase a home or attend school. Contact the Plan office to explore your options about how to access your money prior to your retirement.

Employer Matching Contributions Depending on your collective bargaining agreement, your employer may match your contributions to the Plan up to a certain percentage of your compensation. If so, you effectively have the opportunity to give yourself a raise. Returning to the Tax Deferral example above, if your employer matches your contributions up to 4% of your compensation and your compensation is $100,000, you could earn an additional $4,000 in compensation in addition to the $6,475 you save with tax deferral.

Example 1: The Effect on your Paycheck

The Benefit of Pre‐Tax Investing

Pre‐Tax Contributions Tax‐Deferred Account

After‐Tax Savings Account

Annual Pay $75,000 $75,000

Annual Contribution/Savings $6,000 $6,000

Taxable Income $69,000 $75,000

Federal Income Taxes at 15% $10,350 $11,250

Take‐Home Pay $58,650 $57,750

The Increase in Take‐Home Pay after Contributions $900


Example 2: Saving for Retirement and a Home

4. Am I eligible to participate?

You may participate in the Plan if you are an eligible employee of a participating employer. You are an eligible employee of a participating employer if your employer has a collective bargaining agreement, or a participation agreement that has been approved by the Trustees, that obligates your employer to contribute to the Plan on your behalf. You are also an eligible employee if you are an official or an employee of American Maritime Officers, American Maritime Officers Service, American Maritime Officers Master Operating Trust Fund, District 2A Transportation, Technical, Warehouse, Industrial and Service Employees Union, or other present or future affiliates of American Maritime Officers.

Certain employees of the Master Operating Trust Fund must meet additional requirements to become eligible for the Plan. You should consult the collective bargaining agreement or participation agreement applicable to you regarding your eligibility for the Plan.

You may receive, free of charge, information as to whether your employer is a participating employer of the Plan as well as a complete list of contributing employers. Copies of the applicable collective bargaining agreements or participation agreements are available to you by contacting the Plan office.

Jack is 32 years old, married, and in a 35% tax bracket. Jack earns $100,000 and is a participant in the Plan. Over the next five years, Jack contributes to the Plan the full $18,500 allowable by federal law. Assuming Jack earns 7% in investment earnings each of the five years he is a participant in the Plan, his account balance at the end of the five years is $110,112. Because federal income tax is deferred on both the compensation he used to contribute to the Plan, as well as the investment earnings therefrom, Jack has deferred $38,539 of federal income tax after five years. This means Jack has $38,539 more to invest for retirement after his fifth year of participation in the Plan. Moreover, Jack may take a $50,000 loan from the Plan to purchase a home and still have $60,112 left in the Plan for retirement. All the principal and interest payments Jack makes in repaying the loan restore his account balance for his retirement. Additionally, if Jack worked for an employer that matched his contributions up to 4% of his compensation, he would have an additional $23,808 in the Plan for retirement at the end of five years. Note that the employer matching contributions do not reduce the allowable $18,500 of contributions Jack may defer each year. Note further, that not all employers match your contributions. Consult your collective bargaining agreement for more details.


5. When do I participate? Eligible employees may participate in the Plan as of the first day of the payroll period following commencement of employment with a participating employer, provided that employment is for at least 30 days. You will become a participant in the Plan on the first day of the payroll period coinciding with or following the date of receipt by the Plan office of a written application form that includes a wage reduction agreement signed by you and your employer, and/or the Vacation Plan, if applicable.

6. How do I enroll?

You will receive an application and an election form to enroll from your employer when you become an eligible employee. When you enroll, you may choose: (1) the percentage of eligible pay you want to contribute to the Plan each pay period, and (2) how to invest your individual account. Submit the completed application form and election form to your employer. The form will be forwarded to the Plan office for processing.

You may change the percentage you contribute and how you invest your individual account at any time. Any change is effective with the following payroll period after the request is received by the Plan office.

7. When do I become vested?

“Vesting” means your right to receive the value of a sub-account in the Plan as a Plan benefit. You are one hundred percent (100%) vested in all your sub-accounts in the Plan – your contributions, employer contributions, if any, and all associated investment earnings.


CONTRIBUTING

8. What is my individual account?

The Plan creates an individual account for you. This individual account is a bookkeeping account in your name. You contribute to this individual account to build your benefits. In addition to your own contributions, your participating employer may also contribute to your individual account by matching your own contributions depending on the terms of the applicable collective bargaining or participation agreement with American Maritime Officers. You should consult the collective bargaining agreement or participation agreement applicable to you regarding your employer’s obligation to contribute to the Plan.

9. What may I contribute to my individual account?

Subject to certain limitations set forth below, you may contribute up to a 75% of your eligible pay in one or more of the following ways:

Contributions from Eligible Pay

Pre-Tax Contributions After-Tax Contributions

Traditional Elective Contributions Roth Elective Contributions

Catch-up Traditional Elective Contributions Catch-up Roth Elective Contributions

After-Tax Elective Contributions

Traditional Elective Contributions

Traditional Elective Contributions to the Plan come out of your compensation before federal income taxes are deducted. You do not pay federal income taxes on these contributions or any investment earnings on these contributions until you withdraw them or receive a distribution from your individual account. Because pre-tax savings are deducted from your pay prior to taxes being deducted, they reduce the amount of your taxable compensation so that you may pay lower federal income taxes for the taxable year in which you made the contribution.

Roth Elective Contributions

Roth Elective Contributions to the Plan come out of your compensation after federal income taxes have been deducted. Roth Elective Contributions are, however, not taxable when you withdraw them or receive a distribution from your individual account. Investment earnings on Roth contributions are also not taxable so long as you wait to withdraw these earnings five tax years from the end of the year of your first Roth Elective Contribution and, at the time of the withdrawal, you are either: (1) age 59½ or older; (2) disabled; or (3) deceased. If you are under the age of 59½, earnings are taxed at your personal income tax rate and an additional 10% tax for the premature distribution may be imposed.


After-Tax Elective Contributions

After-Tax Elective Contributions do not have the same tax advantages as either Traditional Elective Contributions or Roth Elective Contributions. After-tax Elective Contributions come from your pay after taxes are deducted. However, when you withdraw or receive a distribution from your individual account, you pay taxes on the investment earnings attributable to your after-tax contributions.

Catch-Up Contributions

If you are age 50 or older at any point during the calendar year, you can make contributions known as “catch-up” contributions. Catch-Up Contributions are contributions that you can make on either a pre-tax (Traditional Elective Contribution) or after-tax (Roth Elective Contribution) basis once you have exceeded any limits applicable to Traditional Elective Contributions or Roth Elective Contributions for the taxable year.

Withdrawals or distributions attributable to Catch-Up Contributions are taxed in the same way as withdrawals or distributions attributable to Traditional Elective Contributions and Roth Elective Contributions.

10. What does my employer contribute to my individual account? Your participating employer may contribute to your individual account depending on the applicable collective bargaining agreement or participation agreement. There are two types of employer contributions your employer can make:

Employer Contributions

Elective Matching Contributions

Non-Elective Contributions

Elective Matching Contributions

Elective Matching Contributions are based on amounts you contribute to your individual account as Traditional Elective Contributions, Roth Elective Contributions, or After Tax Elective Contributions. Rollover contributions do not receive Elective Matching Contributions.

Consult the collective bargaining agreement or participation agreement applicable to your participating employer to determine whether you are entitled to Employer Matching Contributions or you may contact the Plan office.

Non-Elective Contributions

Non-Elective Contributions are additional employer contributions determined independently of your contributions to the Plan.


Consult the collective bargaining agreement or participation agreement applicable to your participating employer to determine whether you are entitled to Non-Elective Contributions or you may contact the Plan office.

11. Are there limits on contributions made to my individual account? Your contributions and your participating employer contributions are limited by federal law. They are subject to the limitations listed on the following page.

2018 Limitations

Type Amount Description Limit Reached

Tax Deferral Limit $18,500 Age 50

Limit on combined Traditional Elective Contributions & Roth Elective Contributions

Additional contributions are After-Tax Elective Contributions.

Refunded to the member

$24,500 Age 50 & Older

Total Contribution Limit

$55,000 Limit on combined employee and employer contributions to your individual account

Additional contributions are refunded

Compensation Limit $275,000 Maximum amount of compensation that may be considered eligible pay for contributions

Contributions cease for the remainder of the plan year

Tax Deferral Limit

Traditional Elective Contributions and Roth Elective Contributions are considered tax deferral contributions because they defer the obligation to pay federal tax on either your compensation or investment gains into future tax years. Federal law thus limits these contributions to $18,500 for the 2018 taxable year ($24,500 if you are age 50 or over as described in the Catch-Up Limit section below). When applying this limit, Traditional Elective Contributions and Roth Elective Contributions are combined. After the 2018 taxable year, the limit will be indexed for inflation.

This limit is an individual level limitation and therefore it applies to all 401(k) plans to which you make contributions for the taxable year.

Total Contribution Limit

Your contributions to the plan, including your Traditional Elective Contributions, Roth Elective Contributions, After-Tax Elective Contributions, as well as employer contributions to your


individual account cannot exceed the lesser of 100% of your compensation or $55,000 in the 2018 taxable year. After the 2018 taxable year, the limit will be indexed for inflation. If you are a “highly compensated employee,” earning $120,000 or more in 2018, you may be further limited in order for the Plan to meet antidiscrimination tests. You will be notified if you are affected. After the 2018 taxable year, the definition of “highly compensated employee” will be indexed for inflation.

Catch-Up Limit

If you are age 50 or older (or will attain age 50 during the calendar year), you may contribute an additional $6,000 in Catch-Up Contributions as Traditional Elective Contributions or Roth Elective Contributions. As such, participants eligible to make Catch-Up Contributions can make up to $24,500 in contributions that defer the obligations to pay income tax on either compensation or investment gains into future years. After the 2018 taxable year, the limit will be indexed for inflation.

This limit is an individual level limitation and therefore applies to all 401(k) plans to which you make contributions.

Compensation Limit

As set forth above, the Plan limits your contributions to 75% of your eligible pay. Federal law, however, further limits your compensation to $275,000 for purposes of what constitutes eligible pay for the 2018 taxable year. After the 2018 taxable year, the limit will be indexed for inflation.

12. May I make a rollover contribution to my individual account? The Plan accepts both direct rollovers (i.e., your previous plan transfers funds directly to the Plan) and indirect rollovers (i.e., your previous plan makes a distribution to you and you write a check to the Plan). You may rollover all or part of an eligible rollover distribution that you have received from another eligible tax qualified plan or eligible individual retirement account, subject to certain conditions, provided that you make the rollover deposit within the time period prescribed by law and provide satisfactory evidence that the deposit qualifies as a rollover in the case of an indirect rollover.

Direct rollovers can be more advantageous to you since indirect rollovers are subject to 20% withholding. Therefore, in the case of an indirect rollover, you would have to contribute the 20% withheld by your previous plan with other funds if you wished to rollover 100% of your previous plan’s benefit. If you did not do so, you would be subject to federal income tax on any amount not rolled over. Direct rollovers do not pose this problem, since they are not subject to withholding.

The Plan only accepts cash payable by check. The Plan does not accept any other kind of payment. Your rollover contribution must be made via direct rollover or, in the case of an indirect rollover, by check made payable to the Plan. If possible, have the previous plan transfer funds


directly to this Plan. Otherwise, if your previous plan makes the distribution directly to you, you must make your rollover contribution to the Plan within 60 days of receiving the distribution.

The following chart summarizes rollover contributions accepted by the Plan:

13. What if I take military leave? If you return to active employment with a participating employer after a period of military service of less than five years, the Uniformed Services Employment and Reemployment Rights Act (USERRA) allows you to have a period equal to three times your period of military service, but no more than five years, to make up the elective contributions you could have made to the Plan during that time.

If you make up your elective contributions, and your collective bargaining agreement allows for employer contributions, your employer will make contributions equal to the amount you would have received if you worked during your military service. You are not, however, credited with past investment earnings for those made-up contributions.

Rollovers

Rolled From Plan Acceptance

Roth IRA No

Traditional IRA Yes

SIMPLE IRA Yes, after two years

SEP-IRA Yes

Governmental 457(b) Yes

403(b) Plan Yes

Qualified Plan (e.g., 401(k)) Pre-Tax Contributions Yes

Qualified Plan (e.g., 401(k)) Roth Contributions Yes, if a direct rollover


INVESTING

14. How do my benefits increase? The Plan establishes an individual account in your name. The amount in your individual account will increase on account of the contributions made to the Plan by you and your participating employer and on account of any earnings allocated to your individual account. Your account may also decrease on account of any losses allocated to your individual account.

15. Who determines how I invest my individual account? You decide how to invest your individual account. The Plan cannot take this investment responsibility from you. The Plan offers you a diversified lineup of investment options, including funds with different investment goals and objectives. Four asset allocation models are also available to you. Please read the prospectuses and other financial information about these investment options before choosing the funds or models that meet your financial objectives and goals. Investment earnings are reinvested in the same fund in which they are earned and are not taxable while they remain in your individual account.

Please note that the value of your individual account depends on the investments you choose. If you do not select an investment option, the entire balance of your individual account and all future contributions will be invested in the Plan’s default investment option until you select a different investment option.

There are no guarantees against losses for any investment option. The Trustees cannot give you investment advice or guarantee the performance of any investment option you choose. When making investment decisions, you should consider a number of factors, including, but not limited to, the length of time until you retire, your risk tolerance, your other investments, as well as your investment allocation. The fact that a particular fund is offered should not be viewed as a recommendation for investing in that fund.

The Plan is intended to fulfill the requirements of section 404(c) of ERISA and the corresponding federal regulations. This means that fiduciaries of the Plan may not be liable for losses that are the direct result of your exercise of control over your individual account. It is your responsibility to be aware of your investment decisions. You may wish to seek independent investment advice prior to making your decision regarding an investment option.

16. What are my investment options? The investment options – including, mutual funds as well as four asset allocation models – have been selected by the Plan’s Trustees after careful consideration, review, and consultation with the Plan’s investment consultant. The Trustees may change the investment options from time to time if they believe a change will benefit participants. Detailed information about the current investment options is available to you by logging into your individual account at www.newportgroup.com. You may also contact the Plan office or speak with a service


representative at Newport Group (the Plan’s record keeper) at 1-800-650-1065, or Morgan Stanley (the Plan’s financial consultant) at 1-800-975-7061, to hear the most current investment options at any time or to request information about any investment option.

The Plan may add, replace, or eliminate existing investment funds from time to time. If you are invested in an investment option that is replaced or eliminated, you will be notified at least 30 days in advance of such action being taken. Otherwise, your choice of an investment option continues until you ask Newport Group or the Plan office to change it.

The Plan also offers four asset allocation models, each with its own degree of investment risk: (1) conservative; (2) moderate; (3) moderate aggressive; and (4) aggressive. Each asset allocation model is based on assumptions relating to the historical risk and returns of each asset class and is not intended to constitute investment advice. Each model is composed of equities and fixed income securities, with the actual allocation among different types and classes determined by the nature of the model. You may select any of these asset allocation models and request a prospectus for your choice from Newport Group or from Morgan Stanley. To obtain additional information about these asset allocation models, please contact Morgan Stanley at 1-800-975-7061.

You may also invest up to 20% of your individual account and 20% of your future contributions through your own broker. Contact the Plan office for more details regarding these investment options, investment models, and your ability to invest with an outside broker.

17. How does the Plan pay expenses? A number of the investment options offered through the Plan are “no load” mutual funds. This means that there is no charge when the Plan buys or sells shares in a mutual fund. The mutual fund managers, however, are paid a management fee. The mutual fund may also charge sub-transfer agent (shareholder servicing) fees or 12b-1 (marketing or distribution) fees. All three of these fees (management, sub-transfer agent, and 12b-1) are automatically deducted from the assets of the mutual fund and are reflected in the mutual fund’s expense ratio. Each mutual fund’s expense ratio is published annually and is available to you free of charge online as well as available to you in some print publications. More information about these fees is available to you within each mutual fund’s prospectus, summary prospectus, or factsheet, which are also available to you from Newport Group or Morgan Stanley. You may contact Newport Group at 1-800-650-1065, or Morgan Stanley at 1-800-975-7061, for more details.

Some of the Plan’s service providers, as well as a portion of the Plan’s administration expenses, may be paid with sub-transfer agent fees and 12b-1 fees returned to the Plan by some of the mutual funds within the Plan’s investment options. All other remaining administration fees are paid for by the Plan with employer contributions. Other fees, such as loan administration fees or self-directed brokerage account fees may be charged to your account.


Understand Investment Risk

The information provided in this SPD regarding the investment options available to you is not provided as investment advice, but only to help you understand the investment options available. By providing this general information, the Trustees do not suggest any particular investment strategy, nor can they guarantee that your investments will be successful. Past performance of an investment option is not a guarantee of future results.

You assume all risk in connection with any decrease in the value of your account invested in accordance with your direction. Some investment options have greater risk than more conservative options, and your needs and tolerance for risk are specific to your individual situation. Therefore, you should carefully review the materials and prospectuses provided concerning the available mutual funds and asset allocation models and consider the amount of risk you are willing to take. If you do not direct that your account be invested in a particular investment option, your account will remain the Plan’s default investment option. The Plan fiduciaries are not liable for any losses caused by your investment decisions.


18. How do I change my investment option? You can change your investment option at any time by logging into your individual account at www.newportgroup.com. You may also speak to a service representative at Newport Group at 1-800-650-1065 on business days from 8:00 a.m. to 8:00 p.m. Eastern Standard Time. Transaction requests received prior to 4:00 p.m. Eastern Standard Time on business days will be completed on that day based on the closing price. Transaction requests received after 4:00 p.m. Eastern Standard Time, or on weekends and holidays, will be completed the following business day based on that day’s closing price.

19. What information will I receive? You will be provided notices containing a meaningful presentation of data for each investment option annually. Information about all of the investment options is also available to you at any time by logging into your individual account at www.newportgroup.com.

You will also be provided individual account statements detailing your individual account balance quarterly. Information about your individual account is also available to you at any time by logging into your individual account at www.newportgroup.com.

To avoid a delay in providing this information to you, please check that your current home address and beneficiary designations are on file with all your participating employers and the Plan office. If you prefer, you may provide the Plan office with a written authorization to provide certain documents to you electronically. Contact the Plan office for more details.

20. When is my individual account valued? Many of the underlying investment options in which you invest are valued daily. Investment fees for mutual funds are reflected in the daily price of the mutual fund. The value of each fund is published daily in most newspapers and online, listing the price per share at the close of the preceding business day. You may also find each fund’s price per share by logging onto your account at www.newportgroup.com. The value of your individual account, for purposes of making a distribution, is determined on the last business day of each month. On such date, your individual account is adjusted to reflect contributions, investment gains or losses and distributions which have occurred since the last valuation date.

You will receive an individual account statement showing the balance of your individual account balance and the changes that have occurred each quarter. In addition to this, your individual account balance is available to you online by contacting Newport Group or logging onto your account at www.newportgroup.com.


BENEFITS

21. When can I receive my benefits? Your individual account is distributable to you at any time on or after the occurrence of any of the following events: (1) your attainment of age 59½; (2) your disability; (3) your death; (4) your termination from employment; and (5) a hardship. You may also take a loan from your individual account or withdraw certain contributions made to the Plan, and the earnings therefrom, prior to reaching the age of 59½.

Attainment of Age 59½

Although the Plan’s normal retirement age is 65, you may withdraw from your individual account at age 59½ in an amount of no less than $500. All or a portion of this distribution may be taxable as ordinary income and federal law requires that the Plan withhold 20% of this amount to pay applicable taxes in most instances. Generally, all distributions are subject to federal income tax with the exception of the portion attributable to After-Tax Elective Contributions and Roth Elective Contributions.

You may allow your benefit to remain in the Plan by deferring distribution of your benefit past age 59½. However, the distribution of your benefits generally cannot be delayed beyond April 1 of the year following the later of the year in which you reach age 70½, or if you are still employed at age 70½, April 1 of the year following your retirement.

Disability

If you become disabled, then you will be entitled to receive 100% of the amount allocated to your individual account, regardless of your age. Disability means that you are deemed to be disabled by the Social Security Administration and you are unable to perform substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. All or a portion of this distribution may be taxable as ordinary income and federal law requires that the Plan withhold 20% of this amount to pay applicable taxes in most instances.

Death

If you become deceased, then your beneficiary will be entitled to receive 100% of the amount allocated to your individual account. All or a portion of this distribution may be taxable as ordinary income and federal law requires that the Plan withhold 20% of this amount to pay applicable taxes in most instances.

Termination from Employment

If your employment is terminated with any and all participating employers, then you are entitled to receive 100% of the amount allocated to your individual account. All or a portion of this distribution may be taxable as ordinary income and federal law requires that the Plan withhold


20% of this amount to pay applicable taxes in most instances. If you receive this distribution amount before age 59½, then you may also be required to pay an additional 10% tax on the premature distribution.

Hardship

You may apply for a withdrawal if you experience a hardship. A hardship is a set of circumstances resulting in immediate and heavy financial needs, such as deductible medical expenses, deductible casualty losses, an eviction, a mortgage foreclosure, a purchase of a principal residence, or paying for a college education. The amount of a hardship withdrawal cannot exceed the amount required for your immediate financial need and cannot be reasonably available to you from other sources, such as insurance, loans (including loans from the Plan), cessation of making contributions to the Plan and liquidation of other assets (to the extent that such liquidation would not itself cause an immediate and heavy financial need).

Only your contributions may be withdrawn. No investment earnings or employer contributions may be withdrawn. In addition, all elective contributions will cease for a period of six months and you will need to submit a new enrollment form to the Plan office in order to recommence your elective contributions.

The Plan will determine whether your application satisfies the requirements for a hardship withdrawal. You may be required to submit sufficient evidence of your circumstances. The determination of whether your circumstances constitute hardship will be made on the merits of your case; provided, however, that all determinations will be made consistently for all participants in similar circumstances. Hardship withdrawals before age 59½ may be subject to an additional 10% tax imposed on the premature distributions. You should consult a professional tax advisor before considering making a hardship withdrawal.

Withdrawals Before Age 59½

You may withdraw any After-Tax Elective Contributions and any rollover contributions, as well as the income derived therefrom, prior to attaining the age of 59½, provided that such withdrawal is $500 or more. In general, any withdrawal (other than rollover contributions transferred from other Roth accounts and that constitute qualified distributions) attributable to contributions made after January 1, 1987 will be subject to federal income taxation.

22. How are my benefits distributed?

The plan generally distributes benefits in a single lump sum payment, but you have the option to receive benefits annually or in more frequent payments up to a period of 10 years. Special rules apply in the following circumstances.

Death

Normally, your benefits will be paid to your beneficiary as soon as practicable after your death. However, no distribution will be made without a properly executed application of benefits. Your spouse may also elect to further defer the distribution of your benefit until December 31st of the calendar year in which you would have reached 70½.


Termination from Employment

You may apply to receive your benefit from the Plan when your employment with any and all participating employers ends or you may simply leave your money in the Plan and continue to direct how it is invested.

Currently Married and Received Contributions Prior to 1991

If you received employer contributions prior to 1991, your benefit must be paid in the form of an annuity. An annuity pays a monthly benefit for as long as you live. Upon your death, the Plan pays a reduced monthly benefit to your spouse if your spouse survives you. You must choose that your surviving spouse receive a qualified joint and survivor annuity, where your spouse receives 50% of the monthly benefit after your death, or a 75% joint and survivor annuity, where your spouse receives 75% of the monthly benefit after your death. In the event that you survive your spouse, all benefits will end upon your death.

You must elect one of these survivor benefits at least 30 days, but no more than 180 days, in advance of your distribution. To receive your benefit in any other form than a survivor annuity, your spouse must give written notarized consent.

23. May I borrow money from my individual account?

The Plan allows you to borrow money from your account and make payments with interest back to your account. You are eligible to take a loan from the Plan account if you are a participant in the Plan. If you are eligible, you can borrow a minimum of $500 and up to a maximum of 50% of your individual account balance, not to exceed $50,000. You may have only one outstanding loan at a time.

A loan may be repaid over a period of up to five years. If the loan is being used to purchase or acquire a home that, within a reasonable period of time after the loan is made is to be used as your principal residence, you may elect to repay the loan over a longer period of time, which is determined by the Plan. You must provide sufficient evidence that the loan is to be used for this purpose in order to be eligible for a loan with a repayment period that exceeds five years.

The interest rate is 1% above the prime lending rate determined on the first business day of the month in which the loan was made. The rate will not change during the term of your loan and you can pay off your entire outstanding loan balance at any time without penalty. If you fail to make an installment payment when due, your loan will be considered to be in default and it will be considered a taxable distribution.

24. How do I apply for benefits or take out a loan?

To apply for benefits or a loan from the Plan, contact the Plan office by phone at 1-800-348-6515 ext. 14 or by email at [email protected].

You may be required to execute documents, furnish information, or provide sufficient evidence to determine your or your beneficiary’s right to a Plan benefit. If you or your beneficiary fails to


submit the requested information or proof, makes a false statement, or furnish fraudulent or incorrect information, you or your beneficiary’s benefits under the Plan (and participation in the Plan, even if you or your beneficiary would otherwise meet the eligibility requirements) may be denied, suspended, or discontinued at any time and for any length of time (including permanently) by a duly authorized representative of the Plan or any of its designees in its sole and absolute discretion.

If you are married and received employer contributions prior to 1991, your spouse must provide written notarized consent with your application to receive benefits or a loan.

25. How do I designate a beneficiary?

You may designate a beneficiary or beneficiaries to receive your benefits in the event of your death by executing and filing the prescribed form with the Plan office. You may request such form by contacting the Plan office at 1-800-348-6515 ext. 14 or at [email protected].

If you are married at the time you are eligible to receive your benefit from the Plan, then your spouse is automatically named as your primary beneficiary. Your spouse must provide a written notarized consent if you designate someone other than your spouse as your primary beneficiary.

If you die with no designation in effect, your benefit will be paid, in order of succession, to your: (1) surviving spouse, if any; (2) your children equally, if any; (3) your parents equally, if any; (4) your estate, if any; or (5) at the discretion of the trustees, to any other person who is an object of your natural bounty.

If you are married and received employer contributions prior to 1991, your spouse must give written notarized consent to name anyone other than your spouse as your beneficiary for an amount greater than 50% of your individual account. If you were under the age of 35 when your spouse consented to naming someone else as your beneficiary, that consent is revoked on the first day of the year in which you turn 35, and your spouse is automatically renamed as your beneficiary.

26. Can I assign my benefits?

You or your beneficiary may voluntarily assign up to 10% of your future benefits once the benefits are in pay status, so long as the assignment is revocable. Neither you, nor your beneficiary, may assign, pledge, encumber, or otherwise transfer any other rights or interests in your benefits under the Plan.

The Plan will, however, comply with a qualified domestic relations order (i.e., a “QDRO”) as required by law.

27. What are the procedures for a qualified domestic relations order?

A “qualified domestic relations order” is a court order, judgment, settlement, or decree in connection with a decision regarding alimony, marital property rights, or child support that meets certain requirements under ERISA. If the Trustees determine that such a domestic relations order meets all the criteria of the law to be “qualified,” the Plan will make the required distributions to


the person covered by the order, such as your child or spouse.

The Trustees have delegated QDRO administration to the Plan office. You may obtain a copy of the Plan’s QDRO procedures at no charge by contacting the Plan office.

28. Are my benefits taxable?

All or a portion of your withdrawals or distributions may be taxable as ordinary income to the recipient, depending on how the contribution was made. Traditional Elective Contributions are generally taxable, whereas Roth Elective Contributions are generally not taxable. The income attributable to After-Tax Elective Contributions is generally taxable, whereas the principal contribution is not. The Plan is required to withhold 20% on most distributions for federal income taxes. Distributions made to you prior to reaching age 59½ may also be subject to a 10% additional tax for premature distributions. Loans that are kept current are not subject to federal taxation. Loans in default are considered a taxable distribution.

You should consult a tax advisor to evaluate your specific situation before you request a withdrawal or distribution from the Plan or make a rollover contribution to the Plan.

29. Can I roll my benefits to another plan?

If your employment ends for any reason and you receive a distribution from the Plan before age 70½, you have the option to roll over your Plan benefit to another employer’s tax-qualified plan, or to an individual retirement account.

There are two ways to make a rollover to another plan.

Direct Rollover

Also known as a “trustee-to-trustee” or “plan-to-plan” rollover, the Plan transfers your vested benefit directly to an eligible retirement plan. A direct rollover allows you to avoid having taxes withheld, and 100% of your Plan benefit continues to grow tax-deferred.

An eligible retirement plan includes an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 402(a) of the Code, or a qualified trust described in section 401(a) of the Code that accepts an eligible rollover distribution, any annuity contract described in section 403(b) of the Code, and an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state which agrees to separately account for amounts transferred into such plan from this Plan.

Contact the Plan office or Newport Group if you would like to make a direct rollover prior to receiving your distribution.


Indirect Rollover

If you receive a distribution from the Plan, you have 60 days to rollover your distribution to an eligible retirement plan. Making an indirect rollover allows your Plan benefit to continue to grow tax-deferred. If you do not complete your indirect rollover within 60 days, your entire Plan distribution becomes taxable to you.

In order to defer taxes on the full value of your Plan distribution, you must roll over 100% of your vested Plan benefit within 60 days. Because 20% of your Plan benefit may be withheld for taxes, you must use funds from another source to complete the rollover of 100% of your Plan benefit. If you do not replace the withheld funds, 20% of your Plan distribution will be taxable to you in the year of your distribution.


YOUR RIGHTS

30. Can the Plan be amended?

The Board reserves the right to amend or terminate the Plan at any time. An amendment may be retroactive if it is appropriate and legal. However, any amendment will not reduce any accrued benefits that you have already received in your individual account. Depending on the subject matter of the amendment, you may or may not be notified of the amendment.

31. What happens if the Plan pays benefits in error?

If the Plan makes payment for benefits that are in excess of what you or your beneficiary is entitled due to error, fraud, or for any other reason (including, for example, the Plan receiving incorrect information), the Plan reserves the right to recover such overpayment plus interest and costs, through whatever means necessary, including, without limitation, legal action or by offsetting future benefit payments to you, your beneficiary, or your or your beneficiary’s heirs, assigns, or estate.

32. How do I appeal a denied benefit?

If a person files a claim for benefits which is wholly or partially denied, the Plan office shall, within ninety (90) days of the date the claim for benefits was filed, forty five (45) days in the case of a claim based on disability, provide notice in writing to such claimant setting forth the specific reason or reasons for denying payment of the benefits, which reasons shall be stated in as clear a manner as possible and in a fashion calculated to be understood by the claimant. If special circumstances require additional time for processing the claim, written notice of this extension of time shall be sent to the claimant within the 90 day (or 45 day) period. The notice will include a description of the special circumstances and the date by which the Plan office expects to render a decision. In the case of a disability claim the notice will also explain the standards upon which entitlement to benefits is based, describe any unresolved issues, and allow you 45 days to provide information to resolve such issues. Such extension shall not exceed ninety (90) days (thirty (30) days in the case of a disability claim), provided, however, that in the case of a claim based on disability, a second 30 day extension may be taken if special circumstances require, in which case you will be notified of the additional extension.

Any notice sent by the Plan office denying, in whole or in part, any claim shall also make reference to the specific and pertinent provisions of the Plan Document, if any, upon which the denial is based, and, if appropriate, shall also describe any additional material or information necessary for the claim to be honored, along with an explanation of why such material or information is necessary. Such notice shall also include a statement that the claimant has a right within ninety (90) days (one hundred eighty (180) days in the case of a claim based on disability) of written notification of the denial of the claim, in whole or in part, to request in writing a review


by the Trustees of the decision denying the claim, and that the claimant has a right to bring a civil action under Section 502(a) of ERISA if the claim is denied.

A claimant whose application for benefits is denied in whole or in part by the Plan office shall have the right to file a request for review of the denied claim within ninety (90) days (one hundred eighty (180) days in the case of a claim based on disability) after receipt of the written notification of denial. The claimant or his duly authorized representative shall have the right to review and request copies of pertinent documents concerning the claim free of charge and to submit issues and comments in connection with the appeal in writing.

A review of the denied claim will take into account all comments, records and other information submitted by the claimant or his/her duly authorized representative, without regard to whether such information was submitted or considered in the initial benefit determination. In the case of a claim based on disability, the person who conducted the initial review or such person’s subordinate will not conduct the review. If denial was based on a medical judgment, the Trustees will consult a medical expert trained in the medical field involved who is not the person consulted in the original denial or such person’s subordinate. Any medical experts consulted by the Trustees will be identified to you.

All such requests for review shall be referred by the Plan office to the Chairman and Secretary of the Board of Trustees, who shall be authorized to hear and determine the appeal, or who may, in their sole discretion, refer the claim to two (2) Trustees, one of whom shall be a American Maritime Officers designated Trustee and one of whom shall be an employer designated Trustee, who shall be authorized to hear and determine the appeal.

A decision on a request for review shall be made within sixty (60) days (forty five (45) days in the case of a claim based on disability) after the Plan office’s receipt of the request, unless special circumstances require an extension of time for the processing of the claim for review. In such event, a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days (ninety (90) days in the case of a disability claim) after receipt of the request for review, unless the claimant requests additional time. Written notice of the extension of time for the making of a decision on the request for review shall be furnished to the claimant prior to the extension and will include a description of the special circumstances and the date by which the Trustees expect to render a decision.

The decision of the Trustees, or the Trustees to whom authority is delegated to reach a decision on a request for review, shall be in writing and shall be final and binding on all parties. The decision shall include specific reasons for the denial or grant of the claim and specific references to the provisions of the Plan Document, if any, upon which the decision is based and include a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA if the claim is denied. Any lawsuit must be brought within one (1) year of the decision on appeal. The Plan requires that if you decide to file suit in a state or federal court that you file your suit in the appropriate state court sitting in Broward County, Florida, or, the United States District Court for the Southern District of Florida.


The Trustees have the sole power and discretionary authority to construe, interpret and apply the terms of the Plan Document and no individuals have authority to interpret the Plan Document or to make any representations to you about the Plan.

33. What are my rights under ERISA?

As a participant in the Plan, you are entitled to certain rights and procedures under ERISA.

Receive Information about Your Plan and Benefits

ERISA provides that all Plan participants are entitled to:

Examine, without charge, at the Plan office and at other specified locations, such as union halls, all documents governing the Plan, including the Plan Document, insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

· Obtain, upon written request to the Plan office, copies of documents governing the

operation of the Plan, including the Plan Document, insurance contracts and collective bargaining agreements and copies of the latest annual report (Form 5500 Series) and updated SPD. The Plan office may make a reasonable charge for the copies.

· Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each Participant with a copy of this summary annual report, which is done by publishing the summary annual report in the union’s newspaper.

Prudent Action by Plan Fiduciaries

In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and beneficiaries.

No one, including your employer, American Maritime Officers, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.

Enforce Your Rights

If your claim for a plan benefit is denied in whole or in part, you must receive written explanation of the reason for denial. You have a right to have your claim reconsidered and reviewed in accordance with the Plan’s appeal procedure.

Under ERISA, there are legal steps you can take to enforce these rights. For instance, if you request materials from the Plan and do not receive them within thirty (30) days, you may file suit in Federal court. In such case, the court may require the Plan to provide the materials and pay you


up to one hundred ten dollars ($110.00) a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in state or federal court. In addition, if you disagree with the Plan decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court.

If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, however, and, for example, the court finds your claim is frivolous, the court may order you to pay these costs and fees.

Any claim that you may have relating to or arising under the Plan may only be brought in the United States District Court for the Southern District of Florida. No other court is proper venue for your claim. The United States District Court for the Southern District of Florida will have personal jurisdiction over you and any other participant or beneficiary named in the action.

Assistance with Your Questions

If you have any questions about your Plan, you should contact the Plan office.

If you have any question about this statement or about your rights under ERISA, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, DC 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.


34. What other information should I know?

Name of Plan American Maritime Officers 401(k) Plan

Plan Sponsor Board of Trustees American Maritime Officers 401(k) Plan 2 West Dixie Highway Dania Beach, Florida 33004 954-922-7539, ext. 14 or 800-348-6515, ext. 14

Employer Identification Number (EIN)

11-2978754

Plan Number 002

Plan Year January 1 to December 31

Type of Plan Defined Contribution / 401(k) Plan

Type of Administration Trustee Administered

Plan Funding Contributions by certain employers with a participation agreement approved by the Trustees or collective bargaining agreement

Plan Administrator Board of Trustees American Maritime Officers 401(k) Plan 2 West Dixie Highway Dania Beach, Florida 33004 954-920-4247 or 800-348-6515

Record keeper Newport Group 1350 Treat Boulevard, Suite 300 Walnut Creek, California 94597 800-650-1065

Custodian/Agent for Investment Transactions

Matrix Trust Company 2800 North Central Avenue, Suite 900 Phoenix, Arizona 85004 800-458-9269

Consultant Morgan Stanley – The Atlantic Group 595 South Federal Highway, 4th Floor Boca Raton, Florida 33432 800-975-7061

Agent for

Service of Process

American Maritime Officers 401(k) Plan Office of General Counsel 2 West Dixie Highway Dania Beach, Florida 33004

Alternatively, any Trustee at the addresses specified in this SPD

Documents

AMERICAN MARITIME OFFICERS 401(k) PLAN · 2018. 8. 3. · Maersk Line Ltd. 2510 Walmer Ave Suite C Norfolk, VA 23513 Daniel E. Shea National Executive Vice President American Maritime