Genworth Financial, Inc. Retirement and Savings Plan
Notes to Financial Statements
December 31, 2022 and 2021
(6) |
Related-Party and
Party-in-Interest Transactions |
One
investment option available to participants is the ClearCourse SM group variable annuity provided under the Plan. Each contribution into ClearCourse
SM provides a guaranteed amount of retirement income to the participant. GLAIC offers the guaranteed amount of retirement income provided by this ClearCourse SM group variable annuity product. Fees paid by the Plan to GLAIC for the Plan years ended December 31, 2022 and 2021 were approximately $195,000 and $223,000, respectively.
Prior to January 2021, another investment in the Plan was an investment fund comprised primarily of shares of common stock issued by the
Company. The Plan owned 1,601,722 and 2,102,794 shares of common stock of the Company as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the shares had a cost basis of $7,161,019 and $9,401,224, respectively,
and a fair value of $8,473,109 and $8,516,316, respectively. During the year ended December 31, 2022, 501,072 shares were sold at a total cost of $2,240,205.
Certain Plan investments are held by The Bank of New York Mellon. The Bank of New York Mellon is the Trustee as defined by the Plan and,
therefore, is a party-in-interest. Participant loans are considered exempt
party-in-interest transactions.
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in the Companys contributions.
The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated July 13, 2018 that the Plan and related trust
are designed in accordance with applicable sections of the Code. The Plan has been amended since receiving the determination letter; however, the Plan administrator believes that the Plan is currently designed and operated in compliance with the
applicable requirements of the Internal Revenue Code.
U.S. GAAP requires Plan management to evaluate tax positions taken by the Plan and
recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded
that as of December 31, 2022 there were no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by
taxing jurisdictions; however, there are currently no audits of the Plan for any tax periods in progress. The Plan administrator believes it is no longer subject to federal or state tax examinations of the Plan for years prior to 2019.
(9) |
Transfer of Funds from First Colony Life Insurance Company Pension Plan |
The First Colony Life Insurance Company Pension Plan (FCL Plan) was a defined benefit pension plan which covered substantially all employees of
the First Colony Life Insurance Company. The FCL Plan was sponsored by Genworth North America Corporation, an indirect, wholly owned subsidiary of Genworth. The FCL Plan was terminated in 2022 and the associated projected benefit obligation was
settled by distributing Plan assets to Plan participants in the form of lump sum payments in exchange for their rights to receive specified pension benefits and/or by purchasing nonparticipating annuity contracts from a third party insurer to cover
vested benefits, as elected by eligible plan participants. Residual assets of $4,101,781 were transferred to the Genworth Retirement and Savings Plan on December 28, 2022 as a qualified replacement plan, and such assets will be used
in accordance with legal requirements to provide additional benefits to participants under the qualified replacement plan. No reversion tax is payable or anticipated as a result of the FCL Plan termination.
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