Aqua America, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 2020 and 2019
Plan Forfeitures
Participants who take a distribution prior to being fully vested forfeit their portion of non-vested
employer contributions unless they resume employment as a Covered Employee and repay the full amount of the distribution to the Plan prior to the earlier of (a) five years after the date on which they were reemployed, or (b) the close of
the first period of five consecutive one-year breaks in service, commencing after the distribution, in which case the non-vested amount, unadjusted by any subsequent
gains or losses, shall be restored.
Forfeited non-vested accounts are used first to restore any non-vested amounts and shall then be applied as promptly as practicable to reduce employer contributions. Employer contributions were reduced by $177,833 and $170,439 during 2020 and 2019, respectively, as a result
of forfeited non-vested accounts. The balance in the forfeiture account was $0 and $10,646 as of December 31, 2020 and 2019, respectively.
Note 2 - Summary of Significant Accounting Policies
A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:
Basis of Accounting
The
accompanying financial statements have been prepared using the accrual basis of accounting.
Use of Estimates
The preparation of the financial statements, in conformity with accounting principles generally accepted in the United States of America,
requires Plan management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure at the date of the financial statements, as well as reported amounts of additions and deductions during the
reporting period. Significant estimates include the determination of the fair value of Plan assets. Actual results could differ from these estimates.
Administration
The Plan
is administered by the Retirement and Employee Benefits Committee (the Committee) consisting of three or more individuals selected by and who may be removed at any time by the Board of Directors of Essential Utilities, Inc. The Committee
members may be employees of Essential Utilities, Inc. and may be participants in the Plan. The Committee members receive no compensation from the Plan for their services in such capacity. The Committee has extensive administrative powers in
connection with the Plan, including authority to interpret the provisions of the Plan, to adopt rules for its administration and to make other decisions with respect to the Plan.
The Trustee for the Plan invests the Plans funds as instructed by participants. The Trustee invests funds received from contributions,
investment sales, interest, and dividend income and makes distribution payments to participants.
Certain
administrative expenses of the Plan are paid by the Company. The Company may, at its discretion, elect to have certain administrative expenses reimbursed by the Administrative Budget account funded by the Trustee.
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