Navistar, Inc. Retirement Accumulation Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and
2019
NOTE A - DESCRIPTION OF THE PLAN - Continued
Contributions and Vesting - Continued
Company match contributions must be deposited at least annually; however, effective
January 1, 2019, Company match contributions changed from being deposited annually to being deposited monthly without regard to whether the employee was employed by the Company as of the last day of that month or of that Plan year. Retirement
contributions are deposited into participant accounts on an annual basis, as soon as administratively practical after the close of the Plan year. A participant who has terminated employment prior to the end of the calendar year for any reason except
death, involuntary termination or retirement as defined under the Plan, will not receive any Company retirement contributions for that year.
Participant and Company contributions are subject to the combined annual addition limitation of IRC Section 415. Such limit is monitored
throughout the Plan year.
Related to the COVID-19 pandemic, effective March 1, 2020, the
Company match contributions was delayed until 2021. Company match contributions for March 2020 through December 2020 were deposited into participant accounts in February 2021. Monthly deposits of Company match contributions resumed beginning with
the January 2021 contributions. In addition, effective with the first pay period beginning after September 1, 2020, the Companys match rate was reduced from 50% to 25% of the first 6% of eligible compensation deferred by the participant
for salaried employees only. The hourly employees match rate was unchanged. Effective with the first pay date after February 2, 2021, the Companys match rate was restored to 50% for the salaried employees.
Non-vested Company matching and retirement contributions are forfeited when a participant terminates
service. Such forfeitures may be used to offset future Company contributions or to pay administrative expenses of the Plan. At December 31, 2020 and 2019, forfeited non-vested accounts approximated
$927,000 and $830,000, respectively. For the employer contributions recognized for the Plan year ended December 31, 2020, approximately $540,000 of forfeitures were used to offset Company contributions.
Investment Options
Participants
direct the investment of their account balances and future contributions. Investment options during 2020 and 2019 consisted of funds classified as registered investment companies, collective trusts or Navistar common stock.
Participant Accounts
Individual
accounts are maintained for each Plan participant. Realized gains and losses, unrealized appreciation and depreciation, and dividends and interest are allocated to participants based on their proportionate share of the funds. Fund
managers fees are charged to participants accounts as a reduction of the return earned on each investment option. In addition, participant accounts are assessed a quarterly recordkeeping fee.
10