HII Ingalls Shipbuilding Inc. Hourly Employees ... - Benefits Connect

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HII Ingalls Shipbuilding Inc. Hourly Employees’ Retirement Plan Summary Plan Description March 2011 Refund of Your After-Tax Contributions If you leave the Company, you can ask for a refund of any after-tax contributions (with interest) to the Plan as a single lump sum payment, which will be paid as soon as administratively possible. If the amount of your after-tax contributions with interest is equal to or greater than $5,000, your spouse must provide notarized written consent in order for you to receive a lump sum. If you are vested in your accrued benefit when you leave the Company, you can elect to withdraw your after-tax contributions (with interest) in the form of a lump sum, straight life annuity if you’re single, or joint and survivor annuity if you are married. The remaining accrued benefit is determined by offsetting the annuity equivalent of your withdrawn after-tax contributions (with interest) and is payable on or after your early retirement age. If you elect an annuity form of payment, and the amount of your after-tax contributions (with interest) and your rolled-over pre-tax FSSP Retirement Account deposits remaining in the Plan is greater than the total benefit paid to you and/or your surviving spouse (or designated beneficiary with spousal consent) over your lifetime(s), at the time of death the excess amount is paid as a lump sum to your spouse, contingent beneficiary or estate, as applicable. No other payments are made from the Plan. 13048086v.6 35
HII Ingalls Shipbuilding Inc. Hourly Employees’ Retirement Plan Summary Plan Description March 2011 Tax Considerations Maximum Benefits for Tax Purposes Plan benefits are limited to an annual maximum by federal law. In addition, federal tax law limits the amount of compensation that may be used to calculate your benefits. Those limits may be raised in accordance with Internal Revenue Service (IRS) regulations. When You Pay Taxes Generally, when you receive your monthly retirement benefit payments, you are subject to federal income tax and, in some states, state and local income tax.* If you receive a lump sum payment of your benefit before you have reached age 55, the payment may be subject to a 10% penalty tax in addition to the federal ― and, if applicable, state and local ― tax. You can delay paying taxes on your lump sum distribution — and avoid the additional 10% tax — by rolling over your lump sum payment to an individual retirement account (IRA) or another employer’s retirement plan within 60 days of your lump sum payment date. The additional 10% tax does not apply in the following situations: • If your beneficiary receives a lump sum distribution as a result of your death • If you receive a disability benefit in the form of a lump sum. * Does not apply to after-tax contributions to the Plan. Taxes were withheld prior to contributions being made. 13048086v.6 36
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