PEOPLES UNITED BANK, N.A. 401(k)
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2019 and 2018
The interest rate for each loan, which remains fixed through the duration of the loan, is the
Prime lending rate as listed in The Wall Street Journal in effect on the first business day of the month in which the participant requests the loan, plus 1%. Loans granted at different times may bear different interest rates. Interest begins to
accrue on the date the loan proceeds are disbursed to the participant and will continue to accrue until the entire loan balance is paid in full, whether before or after maturity or default. Loan rates ranged from 4.25% to 8.50% at December 31,
2019 and 2018.
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Employer and Participant Contributions
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Effective January 1, 2009, participating employees could contribute from 1% to 50% of their
pre-tax earnings (as defined) and allocate their contributions to the Plans various investment funds. Participant contributions may not exceed a specified base amount, adjusted annually for cost-of-living increases, as determined by the Internal Revenue Service (the IRS). The base amount per participant was $19,000 in 2019 and $18,500 in 2018.
Participants who are age 50 and older at any time during the Plan year may make catch up contributions in that year. These
contributions are additional tax deferred contributions that eligible participants are permitted to make in excess of annual IRS tax-deferred contribution limits. For 2019 and 2018, the maximum amount of
catch up contributions permitted to have been made to the Plan was $6,000. Peoples makes matching contributions equal to 100% of a participants contributions (excluding catch up contributions) up to and including 4% of the
participants earnings.
The Plan also allows for Roth contribution options.
All eligible employees hired on or after January 1, 2015 are automatically enrolled in the Plan with a 1% deferral percentage (increased
to 4% effective March 1, 2017), unless the employee elects a different percentage, including 0%.
During 2006, the Plan was amended
to allow employees hired on or after August 14, 2006 to receive an additional annual contribution equal to 3% of their eligible pre-tax earnings (as defined) in lieu of participation in The Peoples
United Bank, N.A. Employees Retirement Plan (the ERP), which was closed to new participants effective August 14, 2006. In July 2011, Peoples amended the ERP to freeze, effective December 31, 2011, the
accrual of pension benefits for participants in that plan.
In conjunction with the ERP amendment, Peoples amended the Plan to
provide for contributions to the Plan on behalf of all ERP participants, effective January 1, 2012, in an annual amount equal to 3% of the employees eligible pre-tax earnings (as defined). At
December 31, 2019 and 2018, the Plan recorded additional employer contributions receivable totaling $12,249,468 and $11,179,572, respectively, representing amounts due from Peoples as a result of these Plan amendments.
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