If a participant does not direct the investment of contributions, they will be invested in the
age-appropriate
target date fund. Participants may change their deferral percentage and investment direction at any time.
Payment of Benefits
Participants may withdraw the
vested value of their accounts upon retirement, disability, death or termination of employment. Participants may elect to receive distributions in a lump sum or installments, or accounts may be rolled over into another
IRS-approved
tax deferral account. The Plan provides for mandatory distribution of account balances less than $5,000 following termination of employment; with i) the automatic rollover to an Individual
Retirement Account (IRA) of any mandatory distributions exceeding $1,000 but equal to or less than $5,000 for which the participant does not elect a direct rollover to an IRA or another qualified plan; and ii) a direct payment to the
participant of any mandatory distributions less than $1,000. Subject to certain limitations for assets previously transferred from the Blue Bell Pension Plan, hardship withdrawals are permitted on demonstration of financial hardship, and all fully
vested balances are available for distribution after the participant reaches the age of 59
1
/
2
.
Forfeitures
Forfeitures can be used to pay plan
expenses or to reduce safe harbor matching contributions. Unused forfeitures at December 31, 2018 and 2017 totaled approximately $3,209,000 and $3,307,000, respectively. During 2018, forfeitures of approximately $682,000 were used to pay plan
expenses.
Notes Receivable from Participants
Participants may borrow the lesser of $50,000 or 50% of their vested account balance. They may borrow only from their employee contribution and rollover
account balances. They may not borrow from matching or retirement contribution account balances. Notes receivable are collateralized by the participants account balance. Participants are charged interest at the Reuters prime rate plus 1% on
the first day of the month in which the loan is processed. Participants must repay the principal within 60 months, or 120 months if the loan is for the purchase of their primary residence. Payments are made through payroll deductions. At termination
of employment, a participant may elect to continue paying their outstanding loan directly through Fidelity. At December 31, 2018, loan interest rates ranged from 3.25% to 6.25%.
Note B - 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 of America (U.S. GAAP).
Investment Valuation and Income Recognition
The
Plans investments as of December 31, 2018 and 2017 are stated 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. See Note F for discussion of fair value measurements. Purchases and sales of securities, including gains and losses thereon, are recorded on the trade date. Dividends are recorded on the
ex-dividend
date, and interest is recorded on the accrual basis. Net appreciation/depreciation includes the Plans gains and losses on investments bought and sold as well as held during the year.
Notes Receivable from Participants
Notes
receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. The Plan considers a loan as in default if any repayment remains unpaid as of the last business day of the calendar quarter following
the calendar quarter in which a loan is initially considered past due. Defaulted notes receivable from participants are deemed distributed and recorded as benefits paid to participants in the statement of changes in net assets available for
benefits. During 2018, approximately $2,128,000 was recorded as deemed distributions. No allowance for credit losses has been recorded as of December 31, 2018 or 2017.
Payment of Benefits
Benefits paid to participants
are recorded upon distribution.
9