Participant Accounts
Each participants account is credited with (a) participant contributions and employer contributions, and (b) the allocation of Plan
earnings and expenses, based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account. All amounts in participant accounts
are participant-directed. Participants may invest in various instruments including common stock and mutual funds.
Vesting
Participants are fully vested in Plan accounts at all times.
Distributions
Active participants may take a withdrawal
from the Plan in the event of a financial hardship. A hardship withdrawal is limited to pre-tax and catch-up contribution accounts. A hardship withdrawal will generally
result in a twelve-month suspension of pre-tax and after-tax contributions to the Plan.
After reaching age 59 1⁄2, active participants may withdraw all, or
any portion, of the balance in their accounts, including withdrawals from their rollover and after-tax account types within the Plan, without meeting one of the hardship criteria.
The Plan was amended in January 2018 to allow financial hardship in-service withdrawals up to $100,000 from the
participants vested balance by reason of Hurricane María through June 2018, as provided in the Puerto Rico Treasury Department (PRTD) Administrative Determination No. 17-29.
During 2018, in-service withdrawals related to the amendment were $2,301,914, of which $123,956 were tax withholdings directly remitted to the PRTD.
Distributions, in full or any portion, may also occur if the participant terminates employment, retires, becomes permanently disabled, or dies.
Distributions of investments are in the form of cash and are normally made in a lump-sum, unless periodic payments are elected (monthly, quarterly, semiannual, or annual installments of substantially equal
amounts over a period not to exceed 10 years). There were no participants who elected to withdraw from the Plan that had not yet been paid as of December 31, 2019 or 2018.
Administrative Expenses
Plan administrative expenses are
paid by the Sponsors to the extent not paid or offset by the Plan, as provided in the Plan document. Participants are responsible for fees associated with certain transactions such as loan originations and maintenance.
Plan Amendment and Termination
The Sponsors have the right
to amend or terminate the Plan. If the Plan is terminated, all account balances will be distributed in the form and manner determined by the Plan Administrator.
Risks and Uncertainties
The Plan utilizes various
investment instruments, including common stock and mutual funds. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with
certain investment securities, including systemic market disruptions, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the
financial statements.
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