MTW Manitowoc Company

Note 1

Plan Description (Continued)

Participants’ Accounts

Each participant’s account was credited with the participant’s contributions, the Company’s contributions, and with an allocation of plan earnings/losses and reduced for withdrawals and an allocation of investment expenses (based on account balances and participant investment elections).  Participants were entitled to the benefit in their respective accounts to an extent vested.

Vesting

All employee and rollover contributions and related earnings were 100% vested immediately.  Company contributions vested subject to a six-year graded vesting schedule.  

Participants who left the Company because of normal retirement, disability, or death were 100% vested.

Notes Receivable From Participants

In the event of financial hardship, as defined by IRS regulations, Plan participants were able to borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their employee and rollover contributions account balance.  The notes were secured by the balance in the participant’s account and carried interest at prime rate plus 1%.  At October 31, 2019 and December 31, 2018, there were no outstanding notes.  Notes were repaid through payroll deductions over a period not to exceed five years.

Payment of Benefits

Plan participants’ vested account balances were available at normal retirement (age 65), disability retirement, death, and termination of employment.  Benefits were payable in one lump sum, direct rollover, equal installments over a period of years, or an insurance company single premium nontransferable annuity contract.  The Plan also allowed for in-service distributions upon attaining age 59½.  Distributions were made as soon as administratively feasible.

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Note 1

Note 2

Plan Description (Continued)

There were no forfeited non-vested accounts at October 31, 2019. At December 31, 2018, forfeited non-vested accounts totaled $28,514.  Assets in forfeiture accounts were used to reduce future employer contributions or to pay plan eligible expenses. During 2019 and 2018, no amounts were used to reduce employer contributions.  During 2019 and 2018, forfeitures used to offset plan expenses were $28,392 and $44,858, respectively.

Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (GAAP).

Use of Estimates

The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.

Investment Valuation and Income Recognition

Investments were reported at fair value.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The Plan’s Committee determined the Plan’s valuation policies utilizing information provided by its investment advisors and trustee.  See Note 4 for discussion of fair value measurements.

Purchases and sales of securities were recorded on a trade-date basis.  Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Notes Receivable From Participants

There were no notes receivable as of October 31, 2019 and December 31, 2018.

Note 2

Summary of Significant Accounting Policies (Continued)

Administrative Expenses

Administrative expenses and audit fees incurred by the Plan were paid from the assets of the Plan.  Fees related to the administration of notes receivable from participants were charged directly to the participant’s account and were included in administrative expenses.  Investment related expenses were paid directly from the assets of the Master Trust.

Subsequent Events

Subsequent events have been evaluated through the date the financial statements were issued.  

New Accounting Pronouncement

In February 2017, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force).  ASU No. 2017-06 clarifies the presentation requirements for a plan's interest in a master trust and requires more detailed disclosure of the plan's interest in the master trust.  ASU No. 2017-06 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, and will be applied retrospectively to all periods presented.  The Company has adopted this guidance on the Plan’s financial statements effective for the period ended October 31, 2019.

Note 3

Investments in the Master Trust

The Plan’s investments were in the Master Trust until October 31, 2019, which was established for the investment of assets of the Plan and other retirement plans sponsored by The Manitowoc Company, Inc.  Each participating retirement plan had an undivided interest in the Master Trust.  The assets of the Master Trust were held by BMO Harris Bank, N.A. (“BMO”).

Effective October 31, 2019, assets of the Master Trust moved to Fidelity and  the assets of The Manitowoc Company, Inc. Retirement Savings Plan were transferred out of the Master Trust at BMO to Fidelity and merged with assets of The Manitowoc Company, Inc. 401(k) Retirement Plan trust’s assets at Fidelity.

The value of the Plan’s interest in the Master Trust at December 31, 2018 was based on the beginning of year value of the Plan’s interest in the Master Trust plus actual contributions and allocated investment income (loss), actual distributions, and allocated administrative expenses.

Trust and certain administrative expenses and transfers out of the Master Trust, were specifically identified with the particular plan. Investment income (loss) and certain administrative expense relating to the Master Trust were allocated to the individual plans based on the ratio of the investment balances of the plans.

Net assets held by the Master Trust at October 31, 2019 and December 31, 2018, were as follows:

Note 3

Investments in the Master Trust (Continued)

15

Notes to Financial Statements