As of December 31, 2019:
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Name
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Fair
Value
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Unfunded
Commitments
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Redemption
Frequency
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Redemption
Notice Period
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Putnam Stable Value Fund
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$51,138,344
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N/A
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Daily
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7-30 days
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7.
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Related Party Transactions
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Certain Plan investments are shares of a collective investment trust and mutual funds managed by Empower, and shares of Flowers Foods, Inc.
Common Stock Fund. At December 31, 2020 and 2019, the Plan held 2,009,235 units and 2,315,650 units of Flowers Foods, Inc. Common Stock Fund with a market value of $46,031,567 and $50,944,305, respectively. The fair value of the Flowers common
stock in the Flowers Foods, Inc. Common Stock Fund was $45,675,509 and $50,810,728 as of December 31, 2020 and 2019, respectively. During the year ended December 31, 2020, there were purchases and sales of units in the Flowers Foods,
Inc. Common Stock Fund of $6,294,246 and $13,375,429, respectively. During the year ended December 31, 2019, there were purchases and sales of units in the Flowers Foods, Inc. Common Stock Fund of $5,360,742 and $8,639,457, respectively.
Income from the Flowers Foods, Inc. Common Stock Fund was $1,686,893 during 2020.
Empower is the trustee as defined by the Plan, and
Flowers Foods, Inc. is the Plan Sponsor. Therefore, certain transactions such as contributions from the Plan Sponsor and dividends, purchases, and sales involving funds managed by Empower qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules. Fees paid to the trustee were $593,887 for the year ended December 31, 2020. During the year ended
December 31, 2020, there were purchases and sales of the Putnam Stable Value Fund of $38,518,668 and $24,009,196, respectively. During the year ended December 31, 2019, there were purchases and sales of the Putnam Stable Value Fund of
$15,381,440 and $9,814,584, respectively. In addition, notes receivable from participants qualify as party-in-interest transactions, which are exempt from the prohibited
transaction rules.
Although it has expressed no intent to do so, the Company reserves the right to change or terminate the Plan at any time subject to the
provisions of ERISA. In the event of termination of the Plan, the value of each participants account as of the date of termination shall immediately become nonforfeitable and fully vested.
At December 31, 2020 and 2019, forfeited nonvested accounts totaled $1,089,921 and $347,550, respectively. The Plan included $1,025,082 of
assets transferred from the terminated Flower Foods, Inc. Retirement Plan No. 1 provided by the first amendment to the January 1,2019 Plan restatement during 2020. These contributions will be used to reduce the companys basic
contributions. In addition, forfeitures accounts will be used to reduce future Company contributions including basic and match. During 2020 Company contributions were reduced by $1,341,020 from forfeited nonvested accounts, of which $590,501 was
from the terminated retirement plan assets.
The IRS has determined and informed the Company by letter dated May 12, 2015, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plans tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable provisions of the IRC.
Accounting principles generally accepted in the United
States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the organization has taken an uncertain tax 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, 2020 and 2019, there are 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 for any tax periods in progress. The plan administrator believes it is no longer
subject to income tax examinations for years prior to 2016.
11.
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Risks and Uncertainties
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The Plan invests in various investment securities. Investment securities, in general, are exposed to various risks such as interest rate,
credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values 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.
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