Transcription
Medtronic Retirement PlanJune 2016DB1/ 87293516.15
Medtronic Retirement PlanTABLE OF CONTENTSRetirement Plan Highlights. 1Introduction . 3Who Is Eligible? . 3When Am I Eligible? . 3How Do I Become Vested? . 3How Is the Final Average Pay Pension Benefit Calculated? . 4How Is the Personal Pension Account Benefit Determined? . 7What Happens If I Leave Employment with Medtronic and I Am Later Rehired? . 7What Compensation Is Used in Calculating My Benefit? . 8When Is My Retirement Plan Benefit Payable? . 8What Benefit Payment Options Are Available? . 9Starting Benefit Payments . 11How Are Distributions Taxed? . 11What Happens to My Retirement Benefit If ? . 11Benefits upon Death of Participant . 13Protection of Plan Benefits/Qualified Domestic Relations Order (QDROs) . 14No Employment Rights . 14Funding the Plan . 14Disputes Regarding Your Benefits . 14Statute of Limitations/Lawsuit . 15Burden of Proof Regarding Records. 15Loss of Benefits . 15Pension Benefit Guaranty Corporation . 16Mistakes and Recoupment . 16Benefit Restrictions . 16Administrative Information . 17Your ERISA Rights . 17Assistance With Your Questions . 18Termination of the Plan . 18Interpretation of the Plan . 19DB1/ 87293516.15i
The following is a summary of the Medtronic Retirement Plan (“Plan”), generally effective as of May 1, 2013, andany amendments made through June 2016. It is intended to give you general information about your rights andresponsibilities under the Plan. However, it does not include all the detailed Plan provisions and may not coverprovisions that only apply to a small number of participants. These provisions are defined in the legal Plandocument, which is available for review through the Plan Administrator. If there is any discrepancy between thissummary and the legal Plan document, the legal Plan document governs. Capitalized words in this document havethe meanings set forth in this summary, or if none is given, the meanings in the Plan document. The information inthis document serves as the Summary Plan Description (“SPD”) for the Plan. Additional information about the Planand its administrators may be obtained by writing to Medtronic, Inc., Attn: Plan Administrator, 710 MedtronicParkway, LC 245, Minneapolis, MN 55432-5604.DB1/ 87293516.15ii
MEDTRONIC RETIREMENT PLAN HIGHLIGHTSWhat are the components of thePlan?When can I start participating in thePlan?Who pays for my retirement benefit?How is the Final Average PayPension benefit determined?How is the Personal Pension Accountbenefit determined?When is the benefit mine?When can I start receiving benefitsfrom the Plan?DB1/ 87293516.15The Plan consists of two types of benefits, the “Final AveragePay Pension” benefit and the “Personal Pension Account”benefit. If you were hired before May 1, 2005, you couldelect to receive either type of benefit (or you could elect toparticipate in the Medtronic Savings and Investment Plan’sPersonal Investment Account feature). If you were hired orrehired on or after May 1, 2005, you were eligible to receivethe Personal Pension Account benefit (or you may haveelected to participate in the Medtronic Savings andInvestment Plan’s Personal Investment Account feature). Ifyou were hired on or after January 1, 2016, you are noteligible for the benefits described in this SPD.If you became a participant in the Plan prior to January 1,2016 and previously elected to receive a Personal PensionAccount Plan benefit, you began participating immediately.No employees hired on or after January 1, 2016 mayparticipate in the Plan.Medtronic pays the entire cost of your retirement benefit. Youdo not contribute to the Plan.Generally, the Final Average Pay Pension benefit is an annualamount payable to you during your lifetime and is determinedusing the following formula:40% of your final average payMinusYour Social Security allowanceTimesYour years of credited service 30Your Personal Pension Account benefit is determined usingthe amount credited to your Account upon your termination.Your “Account” is a hypothetical account established forrecordkeeping purposes so that you and Medtronic candetermine the approximate lump sum value of your benefit atany given time. Your benefit is always recalculated at the timeyou commence your retirement benefit and is based on yourpay history, pay credits and interest credits, as well as thePlan provisions in effect when you terminate employment.Your Account starts with a zero balance and is creditedannually with 5% of your eligible compensation while you areemployed with Medtronic or a participating employer. YourAccount also earns interest annually based on the 10-yearU.S. Treasury Constant Maturities regardless of youremployment status.If your only benefit under the Plan is a Final Average PayPension benefit, your benefit becomes nonforfeitable afteryou complete five years of vesting service or when you reachage 62, provided you are employed by Medtronic at that time.If you have a Personal Pension Account benefit, your benefit(including any Final Average Pay Pension benefit you areentitled to) becomes nonforfeitable after you complete threeyears of vesting service or when you reach age 62 or die,provided you are employed by Medtronic at that time.You can generally receive any Final Average Pay Pensionbenefit from the Plan if you retire from Medtronic at age 551
What happens if I die before I retire?What happens if I become disabled?DB1/ 87293516.15and you have 10 years of vesting service, or if you retire at orafter age 62. A Personal Pension Account benefit is payableupon your termination of employment at any age. Paymentsgenerally do not begin automatically. To start your benefitunder the Plan, contact the Retirement Service Center usingthe contact information found in the To Apply for Benefitsor if you Have Questions, Contact Section.If you die before you retire and you are vested in your benefit,your spouse or documented domestic partner will receivebenefits under the Plan. In order for an individual to be a“domestic partner” for purposes of the Plan, you must haveregistered your domestic partnership in accordance with stateor local law or have filed the required affidavit with the PlanAdministrator before January 1, 2016. If you have a PersonalPension Account benefit, you may designate a beneficiaryother than your spouse or documented domestic partner, butyour spouse must consent to such designation.If you elected the Final Average Pay Pension benefit and youbecome disabled and are entitled to receive disability incomefrom Medtronic’s Long-Term Disability Plan, you willcontinue to earn credited service and vesting servicethroughout your period of disability. If you elected thePersonal Pension Account benefit and you become disabledand are entitled to receive disability income from Medtronic’sLong-Term Disability Plan, no additional contribution creditswill be made to your account during your period of disability;however, you will continue to earn interest credits and vestingcredit.2
INTRODUCTIONMedtronic provides the Plan as a part of itscommitment to your future financial security.Together with your other retirement benefits andindividual savings and investments, this Planprovides a solid foundation on which you canbuild a financially secure retirement. The Plan provides two types of benefits – the“Final Average Pay Pension” benefit and the“Personal Pension Account” benefit.WHO IS ELIGIBLE?WHEN AM I ELIGIBLE?You are an eligible employee if you are a UnitedStates citizen or resident, and are employed byMedtronic, Inc. or a participating division orsubsidiary (hereinafter referred to as“Medtronic”), but excluding: If you were hired before May 1, 2005, you wereentitled to elect to receive either the FinalAverage Pay Pension or the Personal PensionAccount. If you were hired or rehired on or afterMay 1, 2005 but prior to January 1, 2016, youwere only eligible to receive the PersonalPension Account benefit or elect to participate inthe Medtronic Savings and Investment Plan’sPersonal Investment Account feature. Noemployees hired on or after January 1, 2016 maybecome eligible to participate in the Plan. If youare rehired on or after January 1, 2016 after youwere separated from Medtronic for more thanone year, you will not be eligible to earnadditional benefits under the Plan, unless youwere eligible to retire at the time you terminatedemployment. If you were hired or rehired priorto January 1, 2016 and if you met the eligibilityrequirements and were classified as other than aregular full-time or part-time employee, youwere eligible to participate once you completed aone-year period of service.An employee hired on or after January 1,2016.An employee rehired on or after January 1,2016 after more than one year of separationfrom Medtronic, except that an employeewho reached age 62 at the time oftermination (or age 55 with 10 years ofvesting service) will be an eligibleemployee.An individual who is a leased employee.A nonresident alien who receives no earnedincome from Medtronic or any affiliatedcompanies so that the nonresident alien hasno U.S. source of income.An employee who is employed as areplacement employee to replace anotheremployee who is absent due to vacation,sickness, disability, leave of absence, ormaternity or paternity leave, or who isemployed as an intern or for a specificproject of limited duration.An employee covered under a collectivebargaining agreement where retirementbenefits were the subject of good faithbargaining, unless the collective bargainingagreement provides for participation.An employee who is a resident of PuertoRico and is performing services for andreceiving payment from Medtronic PuertoRico Operations Company or any otherMedtronic affiliate located in Puerto Rico.An employee who is eligible to participatein a retirement plan or arrangement inanother country sponsored by a companyaffiliated with Medtronic.DB1/ 87293516.15Any person performing services forMedtronic who is classified as anindependent contractor, regardless ofwhether such person is ever determined tobe an employee for purposes of the FederalInsurance Contribution Act or any otherfederal or state law.An individual who was employed byCovidien LP or an affiliate on or beforeJanuary 26, 2015, or who was eligible forany benefit plan sponsored by Covidien LPor an affiliate.HOW DO I BECOME VESTED?You earn a nonforfeitable right to your Planbenefit though a process called vesting. If theonly benefit you have under the Plan is a FinalAverage Pay Pension benefit, you are vested inyour benefit after you complete five years ofvesting service with Medtronic. If you have aPersonal Pension Account benefit under thePlan, you are vested in your Personal PensionAccount benefit (and any Final Average PayPension benefit you are entitled to) once youcomplete three years of vesting service withMedtronic. No benefit is payable if you leaveMedtronic before you have satisfied the vestingrequirement. You are automatically vestedregardless of your years of service if you are stillworking for Medtronic when you reach age 62.3
If you die while employed by Medtronic, youwill become fully vested in your PersonalPension Account regardless of your years ofservice.when your earnings were at their peak. If youretire at age 62 or later and have less than fiveyears of vesting service with Medtronic, yourfinal average pay will be based on all of youryears with Medtronic. Here is an example ofhow final average pay is determined for aparticipant who had 12 years of service withMedtronic:Generally, vesting service includes your years ofservice beginning on your hire date and endingon your termination date. However, if youbecome an eligible employee as a result of anacquisition, you may be given vesting credit foryour service with the acquired employer.Approved leaves of absence due to sickness,injury, layoff or military duty may be counted.In addition, years of vesting service includeservice with companies affiliated with Medtronicthat are not participating employers in the Planor service with Medtronic or an affiliatedcompany when you were not otherwise aneligible employee.Years withMedtronic123456789101112HOW IS THE FINAL AVERAGE PAYPENSION BENEFIT CALCULATED?The Final Average Pay Pension benefit is asingle life annuity commencing at age 65 and isdetermined using the following formula:Your fiscalyear earnings 31,000 32,000 33,000 34,000 35,000 36,000 37,000 38,000 39,000 40,000 41,000 18,000Five highestconsecutiveyearsPartial year40% of your final average payIn this example, the employee’s final five fullyears of employment with Medtronic are the fivehighest consecutive years of earnings. Theaverage of these five years is 39,000; thus, theemployee’s final average pay is 39,000.MinusYour Social Security allowanceTimesYour service ratio(years of credited service 30)Social Security AllowanceYour Social Security allowance is identified intables published each year by the InternalRevenue Service (the “IRS”) and is based on theyear you were born. The tables represent theaverage compensation taken into account forSocial Security benefit purposes. Your SocialSecurity allowance will be based on the table ineffect when you retire from Medtronic, but it willnot exceed 18% of your final average pay. YourSocial Security allowance is not the same as yourSocial Security benefit. The following chartshows the applicable Social Security allowancesfor 2015. (If you commence your benefitbetween January 1, 2016 and April 30, 2016,your Social Security allowance will be based onthe table for 2015.)If you have more than 30 years of creditedservice, the 40% is increased by ½% for eachyear of credited service in excess of 30 years.For example, an employee with 34 years ofcredited service would use 42% (40% plus fouryears times ½%) in the above calculation. Inaddition, if you have more than 30 years ofcredited service, your service ratio will be 1.If your benefit at age 65, determined using theformula above, produces a benefit of less than 100 per month, you will receive a benefit of 100 per month beginning at age 65 rather thanthe smaller benefit.Final Average PayIf you terminated employment after May 1,2001, your final average pay is the average ofyour five highest consecutive fiscal yearearnings. By using the average of your fivehighest consecutive years of earnings, the Planrelates your benefit to the time in your careerDB1/ 87293516.154
employment with the DLP division prior toJanuary 1, 1995, and periods of severance, evenif the periods would qualify for purposes of yearsof vesting service. If you are rehired byMedtronic after January 1, 2016 more than oneyear after your previous employment withMedtronic terminated, you will not receive yearsof credited service after you are rehired (unlessyou were age 62 (or age 55 with 10 years ofvesting service) at the time your employmentterminated).Your Year of Birth*Social Securityallowance1931 or before 4,9641932 5,2751933 5,6031934 5,9511935 6,3181936 6,6981937 7,1001938 7,9191939 8,3421940 8,7871941 9,2431942 9,7111943 10,1931944 10,6681945 11,1391946 11,6211947 12,1151948 12,5991949 13,0741950 13,5321951 13,9751952 14,4011953 14,8151954 15,2221955 15,9991956 16,3771957 16,7401958 17,0861959 17,4201960 or later 17,744* Your Social Security allowance will not exceed18% of your final average pay.Early Retirement ReductionIf you have 10 years of vesting service withMedtronic, you can retire and start benefitpayments as early as age 55. When you startbenefit payments early under the Final AveragePay Pension, your benefit will be reduced toaccount for the fact that it is beginning earlier.The reduction amount depends on your age atretirement. This is demonstrated in thefollowing chart:Age at retirement6564636261605958575655Years of Credited ServiceGenerally, you will receive credit for the numberof whole and partial years of service you workbeginning on your date of hire as an eligibleemployee (see the Section titled Who IsEligible?) and ending on the date you terminateemployment. If you become an eligibleemployee as a result of an acquisition, you willnot receive credited service for your service withthe acquired employer.If you start receiving benefits between the agesshown, the reduction amount will be calculatedto the nearest completed month.ExamplesIn the following examples, the benefit amount isbased on a life annuity form of payment thatprovides you a monthly benefit for life. Thisbenefit will be lower if payments are receivedvia another payment option, such as a joint andsurvivor annuity. More information aboutpayment options is available later in this SP
The following is a summary of the Medtronic Retirement Plan (“Plan”), generally effective as of May 1, 2013, and any amendments made through June 2016. It is intended to give you general information about your rights and responsibilities under the Plan. However, it does not include all the detailed Plan provisions and may not coverFile Size: 253KB
