Notes to Financial Statements
December 31, 2018 and 2017
1. Description of Plan
The following
description of the Boise Paper Holdings, L.L.C. Retirement Savings Plan (the Plan) provides general information. The Plan Sponsor is Packaging Corporation of America (the Company or PCA). Participants should refer
to the plan document for a more complete description of the Plans provisions.
General
The Plan is a defined contribution plan, established on February 21, 2008, and is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The Plan covers certain hourly union employees, subject to collective bargaining arrangements as defined in the Plan, and
non-union
hourly employees
of PCA. The Benefits Administration Committee is responsible for oversight of the Plan. The Investment Committee determines the appropriateness of the Plans investment offerings and monitors investment performance. Both committees are
appointed by the Board of Directors of the Company.
Alight, formerly Aon Hewitt, is the Plans record keeper. Northern Trust is the
Plans trustee and custodian. The Pavilion Advisory Group is the investment advisor to the Plan. On May 1, 2018, Pavilion became a §388 investment advisor.
Contributions
Eligible new employees in
the Plan get a pretax contribution rate of 3% with contributions automatically invested in an appropriate target retirement date fund. They may opt out of participation, adjust their contribution rate or their investment selections at any time.
Generally, participants may contribute up to 50% pretax of their annual compensation, as defined in the Plan, with such contributions limited to $18,500 and $18,000 in 2018 and 2017, respectively, for employees under age 50 and $24,500 and $24,000
in 2018 and 2017, respectively, for employees age 50 and older. Contributions may be made on a
pre-tax
basis or on a Roth
after-tax
basis, or a combination of the two.
Participants may also contribute amounts representing distributions from other qualified defined contribution plans. Company contributions for hourly employees, including Company match and nonmatching contributions, vary by location and union
contract.
Participant Accounts
Each
participants account is credited with the participants contributions, Company contributions, and an allocation of Plan earnings or losses. The benefit to which a participant is entitled is the benefit that can be provided from the
participants account.
Vesting
Participants are immediately vested in their contributions plus earnings thereon. Company contributions and earnings thereon vest after three
years of service. However, regardless of a participants years of service or contribution, a participant is 100% vested upon his or her 65th birthday, death or disability while employed. Forfeited
non-vested
accounts are applied to reduce future Company contributions.
Investment Options
Participants may elect to invest their account balances in any of the available investment options provided by the Plan. Participants may
change their investment options on any business day, subject to short-term trading restrictions outlined in the plan document.
The
portion of the Plan currently invested in the PCA Common Stock Fund, and any future employee or employer contributions used to acquire PCA common stock, is invested in an Employee Stock Ownership Plan (ESOP). Plan participants have the
ability to instruct the Plans trustee to distribute directly to them future cash dividends paid on shares of PCA common stock credited to their PCA common stock ESOP. The election to receive cash dividends is made through the PCA Benefits
Center, and dividends will be reported as taxable income.
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