NOTES TO FINANCIAL STATEMENTS
The OGE Energy Corp. Employees' Stock Ownership and Retirement Savings Plan ("Plan"), originally the Oklahoma Gas and Electric Company Employees' Thrift Plan, was adopted in 1981 and became effective January 1, 1982. By action of OGE Energy Corp.'s Board of Directors taken on July 15, 1998, the Oklahoma Gas and Electric Company Employees' Stock Ownership Plan ("ESOP") and participants' ESOP accounts thereunder were merged into the Plan effective October 1, 1998. The Plan is a defined contribution trusteed plan. Fidelity Management Trust Company ("Fidelity") serves as the Trustee of the Plan and is responsible for the safekeeping and investment of all contributions made to the trust in accordance with the Trust Agreement between OGE Energy Corp. ("Company") and the Trustee. The following description of the Plan describes the terms of the Plan on
December 31, 2016
, unless otherwise noted, and provides only general information about the Plan's provisions. Participants should refer to the Plan document for a more complete description of the Plan's provisions.
General
Participation in the Plan is voluntary. The Plan is administered by the Company's Plan Administration Committee, which consists of at least three members appointed by the Company's Benefits Oversight Committee. The Plan Administration Committee is responsible for the general administration of the Plan including, among other things, appointing the Plan administrator, establishing Plan procedures and governmental reporting and disclosures for the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Eligibility
Each regular full-time employee of the Company or a participating affiliate is eligible to participate in the Plan immediately. All other employees of the Company or a participating affiliate are eligible to become participants in the Plan after completing one year of service, as defined in the Plan. The following individuals are not eligible to participate in the Plan: leased employees, individuals classified by the employer as independent contractors and employees covered by a collective bargaining agreement that does not provide for their participation in the Plan.
Participant Contributions
Each pay period, participants may contribute any whole percentage between two percent and 19 percent of their compensation, as defined in the Plan, for that pay period. Participants may change contribution percentages in advance of any pay period. Contributions of the first
six percent
of compensation (or, in certain cases beginning on or after January 1, 2010, the first
five percent
of compensation where the Company only matches contributions not in excess of five percent of compensation) are defined in the Plan as "Regular Contributions," and any contributions in excess of Regular Contributions are defined in the Plan as "Supplemental Contributions." Participants may designate, at their discretion, all or any portion of their Regular and Supplemental Contributions to the Plan as: (i) a salary reduction contribution under Section 401(k) of the Internal Revenue Code ("Code") subject to the limitations thereof; or (ii) a contribution made on a non-Roth after-tax basis. The portion of the participant's contribution that is designated as a salary reduction contribution may be designated as a "Tax-Deferred Contribution," which is not subject to Federal income tax until such portion is withdrawn or distributed from the Plan or effective April 1, 2014, as an after-tax "Roth Contribution," which is subject to Federal income tax at the time the employee would have otherwise received the amount in cash but earns income tax-free if certain conditions are met or a combination of these types of contributions.
Participants who have attained age 50 before the close of a calendar year are allowed to make additional contributions, defined in the Plan as "Catch-Up Contributions," for the year in accordance with and subject to the limitations of Section 414(v) of the Code. Catch-Up Contributions may be designated as Tax-Deferred or Roth Contributions. All contributions are subject to certain limitations of the Code.
Participants can direct that their contributions be invested in multiples of one percent in any one or all of the investment options available, including the OGE Energy Corp. Common Stock Fund which invests exclusively in the Company's common stock. Participants may change investment allocations of contributions on any business day. A managed account option is offered under the Plan which provides participants an option, for a fee, to have funds in their account invested by an investment manager among the investment options available under the Plan (excluding the OGE Energy Corp. Common Stock Fund and self-directed brokerage option). Under the managed account option, the amounts invested by an investment manager exclude amounts participants elect to be retained in the OGE Energy Corp. Common Stock Fund. The investment manager appointed for this
purpose is Strategic Advisers, Inc., an affiliate of the Trustee. Another option available to participants is Fidelity Brokerage Link, which is a self-directed brokerage option that allows an electing participant to invest in individual stocks and bonds as well as mutual funds beyond the current Plan investment options. A participant's self-directed brokerage account is adjusted solely to reflect dividends, earnings, losses, gains, expenses and changes attributable to their self-directed brokerage account. Any investments held in a participant's self-directed brokerage account for which the participant does not provide investment direction will be invested in the Fidelity Freedom K® Income Fund until the participant makes a proper direction.
Eligible employees who do not affirmatively elect to either participate or not participate in the Plan are automatically enrolled in the Plan to contribute three percent of their compensation per pay period as a Tax-Deferred Contribution. Enrollment is effective as of the 30th day following the date the eligible employee satisfies the eligibility requirements of the Plan. In the absence of an investment election, the participant's Tax-Deferred Contributions will be invested in the applicable Fidelity Freedom K® Fund based upon the participant's date of birth. If an eligible employee ceases to be eligible by reason of termination of employment or otherwise, the automatic enrollment will not apply to such eligible employee on any subsequent re-employment with the Company or on otherwise again becoming an eligible employee.
A participant may elect, in accordance with the Plan's procedures, to have his or her rate of Tax-Deferred Contributions automatically increased annually on a date and in an amount as specified by the participant in such election, which amount will be one percent, two percent or three percent of his or her compensation per pay period. Such election will remain in effect until cancelled by the participant in accordance with the Plan's procedures.
The Plan also allows rollovers from other eligible retirement plans, defined in the Plan as "Rollover Contributions." Participants may invest their Rollover Contributions into the OGE Energy Corp. Common Stock Fund or any of the other investment options available under the Plan.
Employer Contributions
The Plan was amended to provide that, on and after January 1, 2010, for any employee whose employment or re-employment date occurs on or after
December 1, 2009
, the Company will contribute
200 percent
of the participant's Regular Contributions, up to
five percent
of compensation. For employees whose employment or re-employment date occurred before
December 1, 2009
, the Company will contribute, depending on certain elections made by the employees with respect to their participation in the Company's qualified defined benefit retirement plan ("Pension Plan"), the amounts described below.
For participants whose employment or re-employment date occurred before February 1, 2000 and who elected to continue to earn additional benefits under the Pension Plan, the Company contributes to the Plan each pay period an amount equal to 50 percent of the participant's Regular Contributions up to
six percent
of compensation if the participant has less than 20 years of service, as defined in the Plan, and an amount equal to 75 percent of the participant's Regular Contributions up to
six percent
of compensation if the participant has 20 or more years of service, as defined in the Plan. If such participants elected to freeze their accruals under the Pension Plan, depending on the freeze options they elected, the Company contributes either
100 percent
of the participant's Regular Contributions up to
six percent
of compensation or
200 percent
of the participant's Regular Contributions up to
five percent
of compensation.
For participants whose employment or re-employment date occurred on or after February 1, 2000 and before
December 1, 2009
, the Company contributes
100 percent
of the participant's Regular Contributions up to
six percent
of compensation if the participant elected to participate in the Pension Plan or
200 percent
of the participant's Regular Contributions up to
five percent
of compensation if the participant elected not to participate in the Pension Plan.
For purposes of the Company's contributions, "compensation" does not include overtime payments, pay-in-lieu of overtime for exempt personnel, special lump-sum recognition awards and lump-sum merit awards included in compensation for determining the amount of participant contributions. The Company's contributions may be directed to any available investment option in the Plan. In the absence of an investment election, the participant's Company matching contributions will be invested in the applicable Fidelity Freedom K® Fund based upon the participant's date of birth. During
2016
, there were no non-cash Company contributions made to the Plan.
Vesting
Participants' Regular Contributions, Supplemental Contributions, Rollover Contributions and Catch-Up Contributions are fully vested and non-forfeitable, as are participants' ESOP contribution accounts. Participants become 20 percent vested in their Company contribution account after two years of service and become fully vested after three years of service. In addition, participants fully vest when they are eligible for normal or early retirement under the Company's Pension Plan, in the event of their termination due to death or permanent disability or upon attainment of age 65 while employed by the Company or its affiliates.
Participants who die while performing qualified military service will be treated as if they had resumed and then terminated employment on account of death.
Participants' non-vested balances are forfeited upon termination of employment. Such forfeitures can be used to reduce employer contributions or plan administrative expenses. During 2016, forfeited non-vested participant balances of
$260,073
were used to reduce the Company's contributions. At
December 31, 2016
and
2015
, there were no forfeited and unallocated assets. Forfeitures are reinstated if the participant is re-employed by the Company or an affiliate thereof within five years of the date of termination.
Withdrawals
During employment, participants may not withdraw Tax-Deferred Contributions, Roth Contributions or Catch-Up Contributions and income earned thereon until attainment of age 59½, except in the event of financial hardship where a participant may withdraw the participant's Tax-Deferred Contributions, Roth Contributions and Catch-Up Contributions exclusive of earnings after 1988 and except in the event of a "permissible withdrawal" as described below. Withdrawals are made in cash. Participants can generally make one withdrawal per calendar year for no less than either $300 or 100 percent of the participant's after-tax contribution account, whichever is less. Subject to the foregoing, a withdrawal can be comprised of after-tax contributions, vested Company contributions, Catch-Up Contributions and Tax-Deferred Contributions, Roth Contributions and any income earned thereon. Hardship withdrawals must be approved by the Plan Administration Committee. As of the last business day of any quarter, participants may also withdraw in cash or in Company common stock all amounts allocated to their ESOP accounts. Participants may withdraw their Rollover Contributions at any time.
Eligible employees who are automatically enrolled in the Plan may no later than 90 days after the first Tax-Deferred Contribution is deducted from their compensation elect to make a "permissible withdrawal" from the Plan of all of his or her Tax-Deferred Contributions (and any earnings (or losses) attributable thereto). Any Company matching contributions (as adjusted for earnings (or losses) attributable thereto) that are attributable to amounts distributed to a participant by reason of a permissible withdrawal will be forfeited and be considered a forfeiture as of the date the distribution is made. Also, the participant's automatic enrollment agreement will terminate upon electing to make a permissible withdrawal, and no further Tax-Deferred Contributions will be made on the participant's behalf unless and until the participant makes an election to resume making Tax-Deferred Contributions.
Distributions
Participants may request distribution of their vested accounts upon termination of employment with the Company and its affiliates for any reason. If a participant's vested account balance is less than or equal to $1,000, it will automatically be distributed in a lump-sum payment to the participant as soon as administratively possible following termination. If a participant's vested account balance is greater than $1,000, it may be distributed in a lump-sum payment, installment payments or a combination thereof at the participant's election, and participants who are under age 70½ at termination may defer commencement of their distributions to not later than April 1 of the year after the year in which they reach age 70½.
All distributions are made in cash or in kind as the participant elects. All amounts invested in the OGE Energy Corp. Common Stock Fund, whether purchased with participant or Company contributions, may be paid in cash, in full shares of the Company's common stock with fractional shares being paid in cash or a combination thereof at the participant's election. The Plan implements a dividend pass-through program in which all dividends allocable to shares of the Company common stock in participants' accounts are automatically paid in cash to participants based on the number of shares allocated to their accounts as of the ex-dividend date for such dividend unless otherwise requested. Any dividends not distributed in cash are used to purchase additional shares of the Company's common stock, which are allocated to the respective participants' accounts in the form of additional shares which are fully vested regardless of the participants' years of service. Participants or spouse beneficiaries receiving distributions or withdrawals which are eligible rollover distributions, as defined in the Plan, may elect to make rollovers to an eligible retirement plan provided that such eligible retirement plan accepts direct rollovers. The Plan also allows a non-spouse beneficiary to directly rollover an eligible rollover distribution to an eligible individual retirement account or individual retirement annuity.
Notes Receivable from Participants (Participant Loans)
The maximum amount that a participant may borrow is the lesser of either $50,000 or 50 percent of the participant's vested account balance. No amounts may be borrowed from a participant's ESOP account. A participant may have no more than two loans outstanding at one time. The loans are secured by the participant's vested account balance. All loans granted must be repaid pursuant to a written repayment schedule not to exceed five years and evidenced by a written promissory note signed by the borrower. Borrowed amounts do not share in the earnings and losses of the investment funds. Rather, interest payments on the loan are credited to the participant's account in the Plan. If a participant should terminate employment, the participant may
repay the entire loan amount at that time or, if distribution is deferred, may elect to continue repayments by check. If a participant defaults in the payment of principal or interest under the terms of the loan at the time the participant is entitled to a distribution, the participant's account will be offset by the outstanding loan amount. If a participant ceases to make loan repayments and the Plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced, and a benefit payment is recorded. Loans made to participants will be liquidated from a participant's account in accordance with rules established by the Plan Administration Committee.
The interest rate for loans, as established by the Plan Administration Committee, is equal to the "prime rate," as published in the
Wall Street Journal
on the first business day of the month preceding the date the loan is made, plus one percent. The interest rate was
4.50 percent
and
4.25 percent
for loans initiated during
2016
and
2015
, respectively. Interest incurred on loans during
2016
was
$530,026
.
Administrative Expenses
Certain expenses of administering the Plan are expected to be paid by the participants. Participants obtaining a loan are charged $35.00 to initiate the loan and $15.00 annually for maintenance. Investment management fees for participants electing to participate in the managed account option are also paid by electing participants. All fees, commissions, charges and penalties incurred by a participant in connection with investments made through Fidelity Brokerage Link are paid from the electing participant's account. All other administrative expenses of the Plan, including legal, accounting and trustee fees, are paid by the Plan except to the extent paid by the Company.
Investment fees are generally assessed by an investment option and are deducted from the option's investment returns. Any transaction-based fees charged by an investment option will be charged directly by the investment option to applicable participant accounts.
During
2016
, the Plan received a revenue sharing credit from Fidelity. A revenue sharing credit is a refund of a portion of the revenue Fidelity and other fund managers have received based on the funds participants have chosen. The Plan recognized revenue sharing credits of
$300,000
in
2016
. This credit is reflected as an offset to administrative expenses on the Statement of Changes in Net Assets Available for Benefits. Certain record keeping fees and other Plan fees are paid through the revenue sharing credit program. After paying these qualified administrative expenses, the Plan allocated the remaining balance to eligible participants on a pro-rata basis in December
2016
.
Plan Termination
The Company intends to continue the Plan indefinitely but reserves the right to alter, amend or modify the Plan at any time upon the direction of the Company's Board of Directors or the Company's Benefits Oversight Committee, as provided in the Plan. In addition, the Company's Board of Directors may discontinue contributions to the Plan or terminate the Plan at any time. If the Plan is terminated for any reason, the interests of all affected participants will be fully vested, and the Plan Administration Committee will direct that the participants' account balances be distributed as provided in the Plan. The Company has no continuing liability under the Plan after the final disposition of the assets of the Plan.
2.
Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles ("GAAP"). Distributions to participants are recorded when paid.
New Accounting Pronouncements
In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2015-07 "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)" ("ASU 2015-07"). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. It also eliminates certain disclosures for investments measured at fair value using the net asset value per share practical expedient. The guidance requires retrospective application, and the Plan adopted this standard during 2016. The adoption of this standard did not impact the Plan's Statements of Net Assets Available for Benefits or Statement of Changes in Net Assets Available for Benefits as this adoption only impacted disclosures.
In July 2015, the FASB issued Accounting Standards Update 2015-12 "Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient" ("ASU 2015-12"). Part I designates fully benefit-responsive investment contracts to be measured, presented and disclosed only at contract value. Part II eliminates the requirements to disclose investments that represent five percent or more of net assets available for benefits and the net appreciation or depreciation for investments by general type for both participant-directed and nonparticipant-directed investments. It also simplifies the level of disaggregation of investments measured using fair value. Plans will continue to disaggregate investments that are measured using fair value by general type; however, plans are no longer required to disaggregate investments by nature, characteristics and risks. Further, the disclosure of information about fair value measurement shall be provided by general type of plan asset. Part III is not applicable to the Plan. The guidance requires retrospective application, and the Plan adopted this standard during 2016. The adoption of this standard reports the stable value common/collective trust at net asset value in "Investments at fair value" and removes the adjustment from fair value to contract value for fully benefit-responsive investment contracts held in common/collective trust. Also, the adoption of this ASU simplified the level of disaggregation presented and did not have a material impact on the Plan's Statements of Net Assets Available for Benefits, Statement of Changes in Net Assets Available for Benefits and related disclosures.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements, accompanying notes and supplemental schedule. Actual results could differ from those estimates.
Investments
Common stocks are of U.S. companies and are valued at published market prices. Mutual funds are valued at published market prices, which represent the net asset value of shares held by the Plan at year-end. The stable value common/collective trust in which the Plan invests, the Fidelity Managed Income Portfolio II ("MIP"), is valued by the trustee thereof at net asset value on the last business day of the Plan's year end as determined by the sponsor of such trust. Participant-directed redemptions in the MIP have no restrictions; however, the Plan is required to provide a 12-month redemption notice to liquidate its entire share in the MIP. The primary strategy of the MIP is to seek the preservation of capital as well as provide a competitive level of income over time consistent with the preservation of capital. Self-directed brokerage accounts primarily consist of common stock and interest-bearing cash that is comprised of U.S. dollars.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan's gains and losses on investments bought and sold as well as held during the year.
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
During
2016
, the Plan made the following changes in investments: Victory Sycamore Established Value Fund replaced Goldman Sachs Mid Cap Value Fund (Institutional Class), and TCW Total Return Fund replaced PIMCO Total Return Fund (Institutional Class). These changes did not have an effect on investment strategy or risk.
Notes Receivable from Participants (Participant Loans)
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded at
December 31, 2016
or
2015
.
Share Valuation - OGE Energy Corp. Common Stock Fund
The Plan utilizes the share method of valuation for the OGE Energy Corp. Common Stock Fund. Under the share method of valuation, the price per share of common stock is based on the quoted market value of OGE common stock. The Company's common stock price is readily available to the participants and is printed in many publications.
3.
Amounts Due To Participants
At
December 31, 2016
and
2015
, there were no participants that had terminated and requested a distribution who had not received payment of the distribution.
|
|
|
|
4.
|
Fair Value Measurements
|
The classification of the Plan's fair value measurements requires judgment regarding the degree to which market data are observable or corroborated by observable market data. GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value based on observable and unobservable data. The hierarchy categorizes the inputs into three levels, with the highest priority given to quoted prices in active markets for identical unrestricted assets or liabilities (Level 1) and the lowest priority given to unobservable inputs (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels defined in the fair value hierarchy and examples of each are as follows:
Level 1 inputs are unadjusted quoted prices in active markets for identical unrestricted assets or liabilities that are accessible by the Plan at the measurement date. Instruments classified as Level 1 include investments in common stocks, mutual funds and interest-bearing cash.
Level 2 inputs are inputs other than quoted prices in active markets included within Level 1 that are either directly or indirectly observable at the reporting date for the asset or liability for substantially the full term of the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. The Plan holds no Level 2 investments.
Level 3 inputs are prices or valuation techniques for the asset or liability that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Unobservable inputs reflect the Plan's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The Plan holds no Level 3 investments.
The following tables summarize the Plan's investments that are measured at fair value on a recurring basis at
December 31, 2016
and
2015
:
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2016
|
Level 1
|
|
Common stock
|
$
|
226,443,124
|
|
$
|
226,443,124
|
|
|
Mutual funds
|
341,409,122
|
|
341,409,122
|
|
|
Self-directed brokerage accounts
|
16,817,602
|
|
16,817,602
|
|
|
Interest-bearing cash
|
221,658
|
|
221,658
|
|
|
Total
|
$
|
584,891,506
|
|
$
|
584,891,506
|
|
|
Stable value common/collective trust measured at net asset value (A)
|
$
|
48,477,814
|
|
|
|
Total investments at fair value
|
$
|
633,369,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2015
|
Level 1
|
|
Common stock
|
$
|
189,597,455
|
|
$
|
189,597,455
|
|
|
Mutual funds
|
327,598,983
|
|
327,598,983
|
|
|
Self-directed brokerage accounts
|
16,398,486
|
|
16,398,486
|
|
|
Interest-bearing cash
|
220,917
|
|
220,917
|
|
|
Total
|
$
|
533,815,841
|
|
$
|
533,815,841
|
|
|
Stable value common/collective trust measured at net asset value (A)
|
$
|
44,252,162
|
|
|
|
Total investments at fair value
|
$
|
578,068,003
|
|
|
|
|
|
|
(A)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy tables. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Statements of Net Assets Available for Benefits.
|
The Company received a favorable determination letter dated August 12, 2014 which stated that the Plan is qualified under Section 401(a) of the Code, and therefore, the related trust is exempt from taxation. Subsequent to receiving the letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan's administrator believes the Plan, as amended, is being operated in compliance with the applicable requirements of the Code.
At
December 31, 2016
, the Plan had no unrecognized tax benefits related to uncertain tax positions. The Plan recognizes interest related to unrecognized tax benefits in interest expense and recognizes penalties in other expense, of which there were none for 2016. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
|
|
|
|
6.
|
Reconciliation of Financial Statements to the Form 5500
|
The following is a reconciliation of net assets available for benefits at
December 31, 2016
and
2015
per the financial statements to the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
2015
|
|
Net assets available for benefits per the financial statements
|
$
|
645,724,220
|
|
$
|
590,987,666
|
|
|
Adjustment from fair value to contract value for fully benefit-responsive investment contracts held in common/collective trust
|
—
|
|
317,704
|
|
|
Net assets available for benefits per the Form 5500
|
$
|
645,724,220
|
|
$
|
591,305,370
|
|
The following is a reconciliation of the net increase in net assets for the year ended
December 31, 2016
per the financial statements to the Form 5500:
|
|
|
|
|
|
|
|
Net increase in net assets per the financial statements
|
$
|
54,736,554
|
|
|
Less: Adjustment from fair value to contract value for fully benefit-responsive investment contracts held in common/collective trust at beginning of year
|
317,704
|
|
|
Net income per the Form 5500
|
$
|
54,418,850
|
|
For the year ended December 31,
2015
, the Plan's investment in a common/collective trust, which held fully benefit-responsive investment contracts, was recorded at fair value on the Form 5500 and at contract value in the Plan's financial statements. As discussed in Note 2, the Plan adopted ASU 2015-12 in the current year. As a result, the common/collective trust is no longer identified as a fully benefit-responsive investment contract, and as such, the financial statements and the Form 5500 as of
December 31, 2016
present the common/collective trust at fair value using the net asset value practical expedient.
|
|
|
|
7.
|
Related Party and
Party-in-Interest Transactions
|
Certain Plan investments are in interest-bearing cash, mutual funds and a common/collective trust managed by Fidelity. Fidelity also serves as the Trustee of the Plan, and therefore, Plan transactions involving these mutual funds, common/collective trust or interest-bearing cash qualify as party-in-interest transactions under ERISA and the Code. Additionally, a portion of the Plan's assets are invested in the Company's common stock. Because the Company is the Plan sponsor, Plan transactions involving the Company's common stock qualify as party-in-interest transactions. Finally, the engagement of Strategic Advisers, Inc. to provide investment management services under the managed account option and its investment in mutual funds and a common/collective trust managed by Fidelity are party-in-interest transactions under ERISA and the Code because Strategic Advisers, Inc. is an affiliate of the Trustee. All of the foregoing transactions are exempt from the prohibited transaction rules of ERISA and the Code under statutory or governmental agency exemptions.