In December 2019, an amendment to the Plan was adopted that no new GEICO
employees shall be participants in the Plan for Plan years beginning on or after January 1, 2019 (the freeze) and no ESOP GEICO contributions shall be made under the Plan with respect to services performed and compensation earned by
the GEICO employees, that were formerly eligible to be Participants, for Plan years beginning on or after January 1, 2019. Therefore, there will be no further allocations to GEICO employees as they are no longer participants. Effective
June 1, 2020, the Plan was amended and restated. Please refer to Note 7.
Gen Re makes annual cash contributions
necessary to repay the Loan which allows for the allocation of Berkshire Common Stock to Plan participants. No future GEICO contributions related to the Loan (or otherwise) are expected. The Loan is guaranteed by the Plan sponsor. The Plans
investment in the Berkshire B ESOP Fund consists solely of Berkshire Common Stock shares.
The lender has no rights
against shares of Berkshire Common Stock once the shares are allocated to participants. During the year ended December 31, 2019, additional funds of $10,679,337 were contributed to support the Plans debt service. Gen Re contributed
$366,717 and GEICO contributed $10,312,620. The debt service included $143,429 of interest expense; $49,333 from Gen Re and $94,096 from GEICO. The Loan balance was $441,590 and $10,977,497 at December 31, 2019 and 2018 respectively.
The Plan allocated 1,011,440 shares of Berkshire Common Stock to participants in 2019; 43,047 to Gen Re participants and
968,393 to GEICO participants. In 2019, the Plan also used 944 shares for fees, 193,268 shares were sold and retired from the Plan, 1,460 shares were used from the forfeiture account toward Gen Re employer contributions and the ESOP account had a
9,033 share decrease in the supplemental share account due to benefit and loan activity. GEICO participants diversified 208,208 shares from Berkshire Common Stock into other funds held by the Plan and applied 29,345 of forfeiture shares during 2019.
The Plan held 3,507,992 allocated shares and 102,345 unallocated shares of Berkshire Common Stock as of December 31,
2019. As of December 31, 2018, the Plan held 2,878,769 allocated shares and 1,113,785 unallocated shares.
Contributions - The Plan allows Gen Re participants to make after-tax
contributions as well as tax-deferred contributions to the Plan as permitted under IRC Section 401(k). Such participants may contribute up to 16% of their annual base salary, subject to IRC limitations
for 401(k) contributions, which, for tax-deferred contributions, was $19,000 for 2019. Gen Re participants who have attained age 50 before the end of the Plan year were eligible to make Catch-Up contributions up to $6,000 for 2019. Gen Re participant contributions may be allocated among any of the Gen Re Fidelity investment funds, at the participants discretion, with the exception of the
Berkshire B ESOP Fund. Gen Re contributes an amount equal to 100% of a participants contribution up to 6% of the participants base salary, except for United States Aviation Underwriters, Inc. (USAU) participants who are
matched at 100% of a participants contribution up 4 % of their base salary. In 2019, the Plan allocated $8,019,300 in matching contributions to Gen Re participants using shares of Berkshire Common Stock.
The Plan allowed Gen Re to make additional discretionary contributions for USAU participants in 2019 based on age and salary
through December 31, 2019. Such discretionary contributions ranged from 5% to 8% of salary. In 2019, the Plan allocated $1,147,097 in these discretionary contributions using shares of Berkshire Common Stock.
Gen Re participants are automatically enrolled at a 6% (4% for USAU participants)
pre-tax deferral rate upon becoming eligible to participate in the Plan and may elect to change or discontinue deferrals at any time. Gen Re eligible employees who are not participating in the Plan as of the
last payroll period ending before April 1st of any year will be automatically enrolled in the Plan at a 1% pre-tax deferral rate. Gen Re participants who contribute less than 6% (4% for USAU participants) of
their compensation will automatically have their contribution rate increased by 1%, unless they affirmatively elect not to have their contribution rate increased.
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