Participant Investment Account Options
Investment account options available include various funds and common stock of the Company. Each participant has the option of directing his contributions into any of the separate investment accounts and may change the allocation daily.
Participant Accounts
Each participant’s account is credited with the participant’s contribution, the Bank’s contribution, and plan earnings, and is charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are immediately vested in their voluntary contributions plus earnings thereon. Bank matching contributions and ESOP source contributions are vested at a rate of 20% per year of service beginning with completion of the second year of service. A participant becomes fully vested with completion of their sixth year of service. The non-vested balance is forfeited upon termination of service. Forfeitures are used to reduce Bank contributions.
Payment of Benefits
Under the terms of the Plan, participants are entitled to receive the amount credited to their accounts upon normal retirement at the age of 65 or disability retirement. Participants terminating employment prior to retirement are entitled to receive that portion of their account that is vested. In the event of death, the participant’s account becomes fully vested and is paid to the designated beneficiary. Distributions under the Plan are payable in a lump sum or through installments. Payments through installments are only available to Participants with a vested account balance in excess of $5,000 who terminate at normal retirement age or later. At June 30, 2021 and 2020, Plan assets included no amounts allocated to accounts of terminated or retired participants who have elected to withdraw from the Plan but which had not yet been paid.
The CARES Act allowed participants who self-certify that they meet applicable requirement to request penalty-free distributions (Coronavirus-related distributions, or “CRDs”) of up to $100,000 for qualifying coronavirus-related reasons. CRDs were allowed through December 31, 2020.
Forfeited Accounts
At June 30, 2021 and 2020, forfeited non-vested accounts totaled $30,085 and $24,686, respectively. These accounts will be used to reduce future Bank contributions. Also, in 2021, employer contributions were reduced by $25,365 from forfeited non-vested accounts.
Notes Receivable from Participants
The Plan Document includes provisions authorizing loans from the Plan to active eligible participants. Loans are made to any eligible participant demonstrating a qualifying need. The minimum amount of a loan shall be $1,000. The maximum amount of a participant’s loans is