S u m m a r y P l a n D e s c r i p t i o n
U P S S a v i n g s P l a n
TABLE OF CONTENTS
UPS Savings Plan
This document is a Summary Plan Description for the UPS Savings Plan and part of a prospectus for the UPS Stock Fund. © April 15, 2011, United Parcel Service of America, Inc.
This document is not an offer to sell or a solicitation of an offer to buy any securities other than the securities offered under the UPS Savings Plan or an offer to sell or a solicitation of an offer to buy the securities offered under the UPS Savings Plan in any jurisdiction or to any person if that transaction would be unlawful in that jurisdiction. You should rely only on the information provided or incorporated by reference in this prospectus. We have not authorized anyone else to provide you with information. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document.
The following are changes made after the April 15, 2011 Summary Plan Description.
March 31, 2015Bright Horizon 2010 Fund
Effective March 31, 2015 the Bright Horizon 2010 Fund was closed and all assets were moved to the Bright Horizon Income Fund. The Bright Horizon Income Fund is the most conservative fund in the Bright Horizon family of funds. This fund will maintain a mix of 65 percent bonds and 35 percent equities.
Bright Horizon 2060 Fund
Effective March 31, 2015 the Bright Horizon 2060 Fund was added to the Plan’s investment line-up. This is the most aggressive fund in the Bright Horizon family of funds. The Bright Horizon 2060 Fund seeks maximum long-term growth. With the beginning asset mix entirely invested in stocks for long-term growth potential. Over time, the Fund will become more conservative by decreasing its stock holdings and adding bond exposure. As the year 2060 gets closer, the stock portion of the Fund decreases and the bond and cash portions increase. In the year 2065, the Fund will be mapped into the Bright Horizon Income Fund.
June 30, 2015
Small Balance Rollover
Effective June 30, 2015 if a participant has a severance from employment and has an account balance of more than $1000 but not more than $5000 and does not elect to have an account distribution paid directly to an eligible retirement plan, the Plan shall pay the distribution without the participant’s consent to an individual retirement plan designated by the Plan Committee.
Loan Payments
If a participant’s employment terminates for any reason on or after June 30, 2015 they may elect to continue to self-pay loan payments through ACH direct debit on outstanding loan(s) in lieu of repaying the entire outstanding loan balance. Also participants who are on an authorized Leave of Absence may also elect to make payments directly through ACH. In order for participants to receive this option, they must add their ACH information through the UPS 401(k) Savings Plan web site. Loans for participants (LOA or Terminated) that elect to use the reoccurring payment option (Reverse ACH) will be reamortized to a monthly payment frequency.
Distributions, Withdrawals and Loans
Plan participants will now be allowed the option to have distribution, withdrawal and loan disbursements sent via ACH directly to their bank. They option to receive a paper check will also still be available.
Summary of Material Modifications (SMM) for the UPS 401(k) Savings Plan
As of May 2, 2014
The following are changes made after the April 15, 2011 Summary Plan Description.
May 2, 2014US Diversified Bond Fund The Bond Market Index Fund was replaced in the fund lineup by the US Diversified Bond Fund. All assets in and investment elections for future contributions in the Bond Market Index Fund were
transferred to the US Diversified Bond Fund. Rather than investing in the same securities as the Barclays US Aggregate Bond Index Fund, the US Diversified Bond Fund uses a strategic modification of the Index. The percentages of different types of bonds and credit quality have been altered in an effort to better manage certain risks associated with bond investing, particularly in a rising interest rate environment. The US Diversified Bond Fund is managed by State Street Global Advisors.
UPS Stock Fund A trading restriction was put in place and participants will not be allowed to purchase UPS stock in the
UPS Stock Fund within five (5) business days of the dividend record date. The restriction does not apply to share transactions through regular payroll contributions, loan repayments, the ING Advisor Service, or shares acquired as a result of the UPS SavingsPLUS matching contributions.
ING Advisor Service The ING Advisor Service, powered by Financial Engines
®
was added to the 401(k) Plan to help support participants with savings and investment advice. The Personal Online Advisor, available at no additional cost, is designed for participants who want to actively manage their own retirement account. Professional Account Manager is a fee-based program designed for individuals who want to partner with aprofessional advisor and have their 401(k) account managed for them. The fees are blended and based on a percentage of your account balance. The annual fee for this service is based on your account balance. The fees are 0.50% for the first $100,000, 0.40% for the next $150,000, and 0.30% for anything over $250,000.
Delegation of Authority to an Investment Manager UPS employees in all Trading Groups (other than Trading Group 4) may have transactions in UPS securities executed on their behalf, if the transactions are executed pursuant to a written plan to delegate investment authority to ING Investment Advisors, which will make trading decisions without further input from the employee making the delegation. These transactions may then occur without satisfying the trading window and pre-clearance requirements and even at a time when the employee may possess material non-public information, any such delegation shall satisfy the following requirements:
• The delegation can only be made at a time when the employee does not possess material, non-public information and, for persons in Trading Groups 2 and 3, when the trading window is open.
• The delegation complies with the following: (a) the first transaction in UPS securities will be made in conformity with standard processing guidelines between ING Investment Advisors and Financial Engines, (b) after delegating investment authority, an employee may not separately transact in any
employee may not delegate investment discretion for the account to any investment manager for at least 180 days.
• Members of Trading Group 3 must obtain pre-clearance before delegating investment discretion. • Upon termination of the delegation to ING Investment Advisors, employees will be responsible for
complying with all applicable trading restrictions.
Self-Managed Account (SMA) Provider Change TD Ameritrade became the new brokerage provider for the 401(k) Plan replacing State Street Global
Markets.
Effective with this transition, participants will no longer be able to purchase Over the Counter Bulletin Board stocks (OTCBB). Investing in OTCBB securities can be very risky and not necessarily appropriate for long term retirement savings. These securities represent companies that do not qualify for trading on a national stock exchange or on NASDAQ® for various reasons. Since the securities are not traded through automation or electronically linked execution systems, accurate quotes and immediate executions may not be available and OTCBB securities are frequent targets of fraud or market manipulation. Participants who currently hold a position in OTCBB stocks will be allowed to maintain these holdings, but will not be able to purchase additional shares.
Additionally as of May 20, 2014, participants were no longer able to purchase positions in Master Limited Partnerships (MLP’s). MLP’s are often subject to increased price volatility and are not commensurate with the type of investments that should be held in an ERISA based retirement plan. These investments also have the potential to generate taxable income to the UPS 401(k) Savings Plan. Current participants who have MLP positions will be allowed to maintain these holdings, but will not be able to purchase additional shares. If a stock converts to an MLP, the participant will be required to liquidate that position or the 401(k) Plan will liquidate this position on the participant’s behalf and the proceeds will be placed into the participant’s Money Market account.
Summary of Material Modifications (SMM) for the UPS 401(k) Savings Plan
As of January 1, 2013
The following are changes made after the April 15, 2011 Summary Plan Description.
January 1, 2013 Effective as of January 1, 2013, the name of the UPS Savings Plan is changed to the UPS 401(k) Savings Plan.
Each Participant who is an Eligible Employee who will attain age 50 or older before the close of the Plan Year will be eligible to make Catch-Up Contributions in 1% increments from 1% to 35% of his/her Regular Eligible Compensation and in accordance with, and subject to the limitations of, Code §414(v). The prior maximum contribution amount was 10%.
Deferral of the annual Discretionary Day payout is no longer an annual election. Effective January 1, 2013, the deferral percentage will not be changed to zero. Any election that was input for 2012 will remain in effect until it is changed by the participant. Previously these deferral percentages were changed to zero each January and the participant would have put in a new election percentage during the current Plan Year.
The following are changes made after the April 15, 2011 Summary Plan Description.
January 1, 2012
Sales Incentive Program (SIP) participants may make a separate pre-tax and/or Roth
401(k) election to defer 1-100% of their quarterly SIP bonus payments, up to the annual
IRS limit. Previously, SIP bonus deferrals were withheld at the same deferral rate as
regular earnings. The new contribution feature will allow you to make a separate pre-tax
and/or Roth 401(k) election for your SIP bonus payment each quarter. Once you make an
election regarding your SIP bonus pay, the percentage you elect to defer will remain in
place until you make a change. If you do not make this separate election, none of your
SIP bonus will be deferred into the UPS Savings Plan.
June 29, 2012
Effective June 29, 2012, the US TIPS Index Fund and the US Real Estate Index Fund will
be removed from the Plan’s investment line-up and replaced by one new fund the
Strategic Real Asset Fund. The Strategic Real Asset Fund will be managed by BlackRock
and will be invested in domestic TIPS and domestic REITS, but also adds global REITS
and commodities, giving a participant even more diversification flexibility. For more
information about the Strategic Real Asset Fund, please access the Fund Fact Sheet on
the Plan Web site at
http://upssavings.ingplans.com
and click on
Fund Information
under the
Plan Investments
section.
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Table of Contents
INTRODUCTION
The UPS Savings Plan . . . 2
About This Document . . . 2
Your Responsibilities as a Participant . . . 2
PARTICIPATION Eligible Employees . . . 3
UPS and UPS Affiliated Companies Participating in the Plan . . . 3
When You Can Begin Participating . . . 3
SmartStart Enrollment . . . 4
Transfer to a Non-Eligible Job Position . . . 4
Reemployment . . . 4
CONTRIBUTIONS Eligible Compensation for Participant Contributions . . . 5
Pre-Tax Contributions . . . 5
Roth 401(k) Contributions . . . 6
After-Tax Contributions . . . 6
Catch-Up Contributions . . . 7
Changing Your Contribution Percentage . . . 7
SavingsPLUSMatch . . . 7
Eligible Compensation for the SavingsPLUSMatch . . . 7
Rollovers from Other Qualified Plans . . . 8
Participant Account . . . 8
Effect on Other Benefits . . . 8
Vesting . . . 8
INVESTMENT OPTIONS Investment Lineup . . . 9
Available Information . . . 10
The Importance of Diversification. . . 11
Plan Investment Options . . . 11
Buying, Selling and Directing Contributions to UPS Stock . . . 21
HARDSHIP LOANS. . . 23
WITHDRAWALS AND DISTRIBUTIONS Lump Sum Distribution Upon Severance from Employment . . . 25
Partial Distribution Upon Severance from Employment . . . 25
Installment Payments Upon Retirement . . . 25
Distribution of UPS Stock from the Plan . . . 26
In-Service Withdrawals . . . 26
Hardship Withdrawals . . . 26
Tax Consequences of a Distribution . . . 27
WEB SITE AND INFORMATION LINE UPS Savings Plan Web Site . . . 29
UPS Savings Plan Information Line. . . 30
LEGAL INFORMATION Legal Limitations on Benefits . . . 31
Claims Procedures . . . 31
Account Statements . . . 32
Plan Expenses . . . 32
Change of Address . . . 33
Designation of Beneficiary . . . 33
Plan Administration and Trustee . . . 34
Pension Benefit Guaranty Corporation . . . 34
Amendment and Termination . . . 34
MORE INFORMATION Where to Go if You Have Questions . . . 35
Where You Can Find More Information About UPS . . . 35
Incorporation of Documents by Reference . . . 35
Your ERISA Rights . . . 36
GENERAL INFORMATION. . . 38
APPENDICES . . . 39
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Introduction
The UPS Savings Plan
The UPS Savings Plan is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The UPS Savings Plan allows you to make contributions on a pre-tax, after-tax or Roth 401(k) basis and may provide for you to receive matching contributions on a portion of your pre-tax and Roth 401(k) contributions.
This summary plan description describes the way the Plan operates and serves as part of a prospectus for the UPS Stock Fund, an investment option in the Plan. This summary replaces and supersedes any other summary plan description or prospectus previously issued to you for this Plan. Information about your participation in the Plan can be obtained through the UPS Savings Plan Web site at http://upssavings.ingplans.com or the UPS Savings Plan Information Line at 1-800-541-6154.
About This Document
When used in this document,
the term “Plan” describes the
UPS Savings Plan. Unless noted
otherwise, this document
generally describes the Plan as
in effect on April 15, 2011. In
describing the Plan, we have
tried to avoid using the technical
language of the actual Plan
document, and we have tried to
summarize complex provisions.
If there is a difference between
this document and the formal
documents governing the Plan,
those documents will take
precedence.
Your Responsibilities as a Participant
As an active employee or while on a leave of absence, you should ensure that you keep your address current. You may do this through UPSers.com. Go to Edit My Profile, click on Personal Informationand follow the prompts to change your address. If you are a former employee, you need to keep your address current with ING, the Plan recordkeeper, either by sending written notification or through the Plan Web site or Information Line. See the
Change of Addresssection on page 33 for more details.
You need to safeguard access to your Password used to access the Plan Web site provided by ING. You should not allow anyone to use your Password on your behalf. The Plan is not responsible for any losses incurred as a result of someone using your Password.
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Participation
Eligible Employees
You are eligible to participate in the Plan if you are classified on the payroll of United Parcel Service of America, Inc. (“UPS”) or another affiliate of United Parcel Service, Inc. that participates in the Plan. You are not eligible to participate in the Plan if you are:
• covered by the terms of a collective bargaining agreement, unless the agreement expressly provides for coverage under this Plan;
• a nonresident alien with no U.S. source income from UPS or an affiliated company; or • eligible to make contributions under another 401(k) plan sponsored by UPS or an affiliated
company. Individuals who perform services for UPS or an affiliated company on a contract basis or under a leasing arrangement are not eligible to participate in this Plan.
UPS and UPS Affiliated Companies Participating in the Plan
The companies listed in the Appendices participate in the UPS Savings Plan as of April 15, 2011. The company you work for is shown on your paycheck (either by name or by that company’s unique employer identification number (EIN)). Additional companies participating in the Plan will be provided in updates to this Summary Plan Description. Updates are called Summaries of Material Modification and will be attached to the beginning of this document.
When You Can Begin Participating
Generally, as an eligible employee, you may participate in the Plan upon employment with UPS or a participating UPS affiliate company. Shortly after your employment date, you will be mailed your Password and directions on how to enroll.
However, you may enroll immediately without a Password by accessing the UPS Savings Plan Web site at http://upssavings.ingplans.com. On the login page, click on Enroll without your Passwordto open the enrollment window and follow the enrollment prompts, for your demographic information, contribution percentages and investment choices. You will have the opportunity to view the Plan’s enrollment materials before making your elections. Your contributions will generally begin within two pay periods. To enroll using the Information Line at 1-800-541-6154, you will need your Password. The Voice Response Unit (VRU) will prompt you for your Social Security Number or Employee Identification Number and your Password. You may also request enrollment materials through the Information Line. Participant Service Representatives are available for assistance Monday through Friday from 8:00 a.m. to 8:00 p.m. ET, except on days the stock market is closed.
You may also designate a beneficiary(ies) for your Plan account through the Plan Web site or by speaking to a Participant Service Representative on a recorded line. If you are married and designate someone other than your spouse as your primary beneficiary, you must do so using a beneficiary form with notarized consent from your spouse. Forms may be printed from the Formssection of the Plan Web site or requested through the Information Line. Written confirmation of your enrollment and elections will be sent to you following your enrollment online or through the Information Line to your address of record.
Please refer to the section titled Investment Options for information about the Bright Horizon Funds and all the other Plan investment options because you have the right to invest in other Plan funds. Eligible employees may opt out of SmartStart Enrollment by accessing the Plan Web site, http://upssavings.ingplans.com and clicking on Enroll without your Passwordor by calling the Information Line at 1-800-541-6154.
You should also refer to the Plan Expensessection on page 32 to understand the fees associated with each investment option.
Transfer to a Non-Eligible Job Position
If you cease to be an eligible employee because of a change in your job position, your contributions to the Plan will end. However, you will still have the opportunity to direct your investments and your account will be held as part of the Plan until you are eligible for a distribution.
Reemployment
If you stop working for UPS or any of its affiliated companies and are later reemployed by UPS or an affiliated company in an eligible capacity, you will be eligible to participate in the Plan upon your reemployment. Please refer to the SmartStart Enrollmentsection above.
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SmartStart Enrollment*
Eligible employees in all participating UPS Companies who are hired, rehired or transferred to an eligible job position on or after January 1, 2008 will automatically be enrolled as SmartStart Savers at a pre-tax contribution rate of 3 percent of eligible compensation, unless they self-enroll or opt out of automatic enrollment within 90 days of their employment/transfer date. Contributions will be invested in a qualified default investment alternative which is the age appropriate Bright Horizon Fund based on your birthdate and a retirement age of 60. The contribution percentage will be increased 1 percent annually (generally at the time of the annual merit increases in April and June) until it reaches 6 percent of eligible compensation. SmartStart Savers may change their contributions and/or investment elections, or stop making contributions, at any time. If changes are made to contribution rates and/or investment elections, or you are eligible to take a hardship withdrawal, the automatic contribution rate escalation of 1 percent annually will be stopped.
BIRTH YEAR TARGET DATE FUND
1900 – 1947 Bright Horizon Income Fund 1948 – 1952 Bright Horizon 2010 Fund 1953 – 1957 Bright Horizon 2015 Fund 1958 – 1962 Bright Horizon 2020 Fund 1963 – 1967 Bright Horizon 2025 Fund 1968 – 1972 Bright Horizon 2030 Fund 1973 – 1977 Bright Horizon 2035 Fund 1978 – 1982 Bright Horizon 2040 Fund 1983 – 1987 Bright Horizon 2045 Fund 1988 – 1992 Bright Horizon 2050 Fund 1993 and later Bright Horizon 2055 Fund
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Contributions
Eligible Compensation for
Participant Contributions
All contributions to the Plan are based on your “eligible compensation” which includes all compensation or wages payable by reason of your employment with a participating company, except the following: payments from benefit plans (other than paid time off or discretionary days), amounts paid under incentive compensation plans (other than commissions and sales incentives), Managers Incentive Program (MIP) stock awards, stock options, foreign services differentials, severance pay, expense reimbursements, grievance awards (other than back pay), fringe benefits, miscellaneous compensation and tool allowance. Additionally, contributions to the Plan cannot be made from any disability or workers’ compensation payments. If you are on disability or workers compensation leave, your contributions to the Plan will resume when you return to work and begin receiving regular payroll checks. Differential wage payments paid to a participant on military leave shall also be treated as eligible compensation. The law limits the amount of your eligible compensation that can be counted by the Plan. For 2011, this limit is $245,000. If you make pre-tax and/or Roth 401(k)
contributions to another 401(k) plan sponsored by UPS or one of its subsidiaries and the contributions are not matched, the contributions will be treated as pre-tax and/or Roth 401(k) contributions to the Plan and will be eligible for the SavingsPLUSmatch, if you transfer to an eligible employee position before the end of the same plan year. However, if you were eligible for matching contributions in another UPS-sponsored plan, your eligible compensation for the Plan will be reduced by your eligible compensation under the other plan.
Pre-Tax Contributions
As a Plan participant, you may elect to contribute from 1 to 35 percent of your eligible compensation (in increments of 1 percent) to the Plan on a pre-tax basis. Your pre-tax contributions are subject to the annual maximum dollar limit under applicable law as further described. If you elect to also make Roth 401(k) contributions, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed 35 percent of eligible compensation.
In addition, each year you may elect to defer on a pre-tax basis from 1 to 100 percent of your discretionary day payout or the cash portion of your MIP award, if applicable. If you elect to also make Roth 401(k) contributions from discretionary day payout, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed 100 percent of the payout. (The MIP Cash Award election is generally made on the Mellon Web site during the annual MIP election period, but will be on the Plan Web site for 2011 only.)
In determining how much you want to defer on a pre-tax basis, please note that you cannot defer more than the maximum dollar limit set each year by the Internal Revenue Service. For 2011, this limit is $16,500, and it applies to your deferrals for all 401(k) plans in which you participate. This dollar limit may be indexed each year for inflation. If you elect to also make Roth 401(k) contributions, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed the annual maximum set by the IRS. (See also the Legal
Limitations on Benefits section on page 31 for
other limits which may apply to you.)
Puerto Rico participants may not make Roth 401(k) contributions and, in addition to the Plan’s deferral limits, are limited by law to a maximum annual deferral of $10,000 in 2011, $13,000 in 2012 and $15,000 in 2013. All deferrals are subject to this limit.
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You may elect the amount of pre-tax contributions you want to contribute on the Plan Web site, http://upssavings.ingplans.com or the Information Line at 1-800-541-6154. The Plan Web site and Information Line also feature an automatic contribution escalator.
Automatic Deferral Escalation*
Generally, for employees hired and eligible to participate in the Plan on or before December 31, 2007 and who had an account balance, the automatic deferral escalation feature will increase your pre-tax contribution by 1 percent annually, to a maximum of 5 percent, to coincide with merit reviews, typically in April and June. You may choose not to participate in this feature by changing (1) your deferral percentage, (2) any of your investment elections, or (3) selecting the “opt out feature” on the Plan Web site.
When you make pre-tax contributions, income taxes are deferred until your account is distributed — for example, when you retire. After-tax contributions are taxed immediately and only investment
earnings are taxed at the time of distribution. With Roth 401(k) contributions, you also set money aside on an after-tax basis. However, any earnings on your Roth 401(k) contributions can be distributed tax-free in retirement, assuming you meet
certain requirements.**
Roth 401(k) Contributions
As a Plan participant, you may also elect to contribute from 1 to 35 percent of your eligible compensation (in increments of 1 percent) to the Plan on a Roth 401(k) basis. If you elect to also make pre-tax contributions, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed 35 percent of eligible compensation. Your Roth 401(k) contributions are
subject to the annual maximum dollar limit under applicable law as described below. In addition, each year you may elect to defer on a Roth 401(k) basis from 1 to 100 percent of your discretionary day payout, if applicable. If you elect to also make pre-tax contributions from discretionary day payout or such MIP award, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed 100 percent of the applicable award. In determining how much you want to defer on a Roth 401(k) basis, please note that you cannot defer more than the maximum dollar limit set each year by the Internal Revenue Service. For 2011, this limit is $16,500, and it applies to your deferrals for all 401(k) plans in which you participate. This dollar limit may be indexed each year for inflation. If you elect to also make pre-tax contributions, please note that the combination of pre-tax and Roth 401(k) contributions may not exceed the annual maximum set by the IRS. (See also the Legal Limitations on Benefitssection on page 31 for other limits which may apply to you.) Roth 401(k) contributions are not available in Puerto Rico. You may elect the amount of Roth 401(k) contributions you want to contribute on the Plan Web site,
http://upssavings.ingplans.com or the Information Line at 1-800-541-6154.
After-Tax Contributions
In addition to your pre-tax and/or Roth 401(k) contributions, the Plan accepts after-tax contributions of up to 5 percent of your eligible compensation. After-tax contributions will be held in a separate after-tax contribution account established on your behalf. You may elect the amount of after-tax contributions you want to contribute on the Plan Web site, http://upssavings.ingplans.com or the Information Line at 1-800-541-6154. Earnings on your after-tax contributions will not be taxable to you until you receive a distribution.
* Employees of Coyote Logistics, LLC are not eligible for automatic escalation.
** Generally, for the distribution of earnings on Roth 401(k) contributions to be distributed tax free, you have to wait at least five years after making your first Roth 401(k) contribution before taking a withdrawal and your withdrawals must begin after: you have reached age 59½; you have died; or you have become disabled. If your withdrawal does not meet these qualifications, your accumulated Roth 401(k) earnings — but not your Roth 401(k) contributions — will be taxed, and may be subject to a 10% early distribution penalty if you have not reached age 59½.
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Contributions
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Catch-Up Contributions
You are eligible to defer a catch-up contribution beginning in January of the year in which you will turn age 50. You may choose to defer from 1 to 10 percent of your eligible compensation on a pre-tax and/or Roth 401(k) basis, or any combination of the two, up to 10 percent. You may also defer up to 100 percent of your MIP Cash Award as a catch-up contribution on a pre-tax basis. The maximum catch-up contribution is $5,500 for 2011. The maximum catch-up contribution may be indexed each year for inflation. Catch-up contributions are not matched. Puerto Rico participants may elect pre-tax catch-up contributions of 1 to 10 percent, up to $1,000 in 2011 and up to $1,500 in 2012 and beyond. You may elect the amount of catch-up contributions you want to contribute on the Plan Web site, http://upssavings.ingplans.com or the Information Line at 1-800-541-6154.
Changing Your Contribution Percentage
After you elect your initial contribution
percentage(s) or you are automatically enrolled, you may increase or decrease your contribution percentage(s) at any time via the Plan Web site, http://upssavings.ingplans.com or the Plan Information Line at 1-800-541-6154. If you are automatically enrolled or part of the automatic deferral escalation group, your contribution percentages may be automatically increased annually.
Savings
PLUS
Match
Depending upon which UPS or UPS affiliated company you work for, or, if you were hired, rehired or transferred to an eligible position on or after January 1, 2008, you may be eligible to receive a SavingsPLUSmatching contribution on your pre-tax and Roth 401(k) contributions.
If you were an eligible employee prior to January 1, 2008, the matching contribution, if any, you may receive will be determined based on the company you were working for on the last day of the calendar quarter for which the contribution is being made (or date you ceased to be an eligible employee, if earlier).
You must be eligible to participate in the Plan for at least one day during the quarter in order to receive the SavingsPLUSmatch made on pre-tax and Roth 401(k) contributions at the end of that quarter; however, you do not have to be employed at the end of the quarter to receive the SavingsPLUS match. The Appendices to this Summary Plan Description describe the matching contribution applicable to each participating company and for employees hired, rehired or transferred to an eligible position on or after January 1, 2008. Catch-up contributions and after-tax contributions will not receive a SavingsPLUSmatching
contribution.
Eligible Compensation for
the Savings
PLUS
Match
Eligible compensation for purposes of calculating your SavingsPLUSmatch is generally the same as eligible compensation for determining your eligible pre-tax contributions (refer to page 5 for a description of eligible compensation). Although the MIP award payable in cash may be deferred, it is not considered eligible compensation when determining eligible SavingsPLUSmatching contributions.
If you make pre-tax and Roth 401(k) contributions to another 401(k) plan sponsored by UPS or one of its subsidiaries and those contributions are not matched, those contributions will be treated as pre-tax contributions to the Plan and will be eligible for the SavingsPLUSmatch if you transfer to an eligible employee position before the end of the same plan year. However, if you were eligible for matching contributions in another UPS-sponsored plan, your eligible compensation for the Plan will be reduced by your eligible compensation under the other plan.
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Rollovers from Other Qualified Plans
The Plan accepts pre-tax rollovers from other qualified plans after you become eligible to participate and enroll in the Plan. You may make a rollover contribution to the Plan at any time while you remain a UPS employee and maintain an account balance in the Plan. In addition, you may make a rollover contribution to the Plan following your termination of employment with UPS and all its affiliated companies, provided your total account balance is at least $1,000. The Roth 401(k)
contribution account will be treated like a separate plan for purposes of determining the $1,000 account balance.
If you receive a single sum or other eligible rollover distribution from another qualified retirement plan, you may instruct the trustee of that plan to transfer all or a portion of your distribution directly to the Plan. If you receive your eligible rollover distribution directly, you may roll over that distribution into the Plan provided you do so within 60 days of your receipt of the distribution.
You may also transfer any eligible rollover
distributions held in a “conduit” individual retirement account (“IRA”) into the Plan by instructing your IRA trustee to transfer all or a portion of your account balance to the Plan. (A “conduit” IRA is an IRA that holds only the assets previously distributed from a qualified plan or plans in which you were a participant, plus earnings on those assets. No other contributions may have been made to a conduit IRA.) If you receive a distribution from your conduit IRA account directly, you may roll over these funds into the Plan, provided you do so within 60 days of your receipt of the distribution. Rollover contributions made to the Plan must be made in cash. The Plan cannot accept stock in a rollover contribution. Roth contributions may not be rolled over into the Plan. Your rollover contribution will be held in a separate rollover contribution account established on your behalf and will be invested in accordance with
the investment instructions on file at the time the rollover contribution is made, or if you elect, in accordance with the specific instructions you provide as to the investment allocation of your rollover contribution. You may obtain the forms needed for a rollover through the Formssection of the Plan Web site, http://upssavings.ingplans.com or Information Line at 1-800-541-6154.
Participant Account
Your contributions are credited to an individual account established and maintained for you as a Plan participant. Your pre-tax, Roth 401(k) and after-tax contributions will be deposited in the Plan as soon as practicable following each pay period. If you are eligible for a SavingsPLUSmatching contribution, it will generally be credited to your account approximately 10 business days after the end of the Plan quarter and 15 business days after the end of the 4th Plan quarter. You can obtain information regarding your account balance at any time through the Plan Web site at
http://upssavings.ingplans.com or Information Line at 1-800-541-6154.
Effect on Other Benefits
Even though your taxable income is reduced when you contribute on a pre-tax basis to the Plan, the amount of your pre-tax contributions will be considered to determine your other pay-related benefits (e.g., life insurance benefits, retirement benefits, etc.). Your other benefits are not affected by your contributions to the Plan.
Vesting
All of your Plan account is 100 percent vested at all times. That means, no matter how long you stay with UPS or any of its affiliated companies, you will be entitled to the full value of your account when you leave.
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Investment Options
Investment Lineup
The Plan allows you to choose among a number of investment options selected by the Administrative Committee, including UPS stock. The Plan is intended to conform with the requirements of Section 404(c) of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Based on this ERISA section, the Administrative Committee, the Trustees and Plan’s investment managers may be relieved of liability for any losses that are the direct and necessary result of the investment instructions you give with respect to your Plan account. It is important that you make an informed decision regarding your investment options. This document describes in general terms each available investment option, including its principal objectives, and risk and return characteristics. This document also explains how to make your initial investment decision, how and when you can make investment changes and describes how you can obtain additional information regarding the investment opportunities described herein. Unless noted otherwise, the Plan assesses no transaction fees or charges when you select from among the available investment options, or when you make investment changes.
Please note that the Administrative Committee, the Plan Trustees and the investment managers provide information concerning the Plan’s investment options, but do not make recommendations. You must make your own investment allocation decisions. You may wish to consult a professional investment advisor regarding your individual financial situation and which investment option or options may be best for you. Please note that there may be an occasion when the Administrative Committee determines that it is necessary to add, change, or remove an investment option. When this occurs, you will be provided with a written notice mailed to your last address on file with the Plan within a reasonable period of time before the effective date of the fund transfer. You will not only be informed of the change, but given an opportunity
ASSET CLASS FUND NAME
Short-Term Government Short-Term Investment Fund Short-Term Bond Index Fund
Bond Bond Market Index Fund US TIPS Index Fund
Multi-Asset Global Diversified Asset Fund Stock S&P 500 Equity Index Fund
S&P 400 Midcap Index Fund Russell 2000 Index Fund
International Developed Country Equity Index Fund US Real Estate Index Fund
MSCI Emerging Markets Index Fund UPS Stock Fund
TARGET DATE FUNDS CORE FUNDS
BIRTH YEAR BRIGHT HORIZON FUNDS
1900-1947 Bright Horizon Income Fund 1948-1952 Bright Horizon 2010 Fund 1953-1957 Bright Horizon 2015 Fund 1958-1962 Bright Horizon 2020 Fund 1963-1967 Bright Horizon 2025 Fund 1968-1972 Bright Horizon 2030 Fund 1973-1977 Bright Horizon 2035 Fund 1978-1982 Bright Horizon 2040 Fund 1983-1987 Bright Horizon 2045 Fund 1988-1992 Bright Horizon 2050 Fund 1993 and later Bright Horizon 2055 Fund
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to take action regarding your investments. In the absence of your taking action, the Administrative Committee may change your investments on your behalf. As described below, each option has a different combination of potential risk and reward characteristics. Fund information, expense
information and current rates of return are available on the Plan Web site,
http://upssavings.ingplans.com or you may call the Information Line at 1-800-541-6154 to request this information. The choices you make should be based on your particular investment objectives including the degree of risk you are willing to tolerate.
Available Information
In order to assist you in selecting from among the Plan’s investment options, additional information is available to download from the Plan Web site, http://upssavings.ingplans.com or upon request by calling the Information Line at 1-800-541-6154. The following information is provided automatically and is also available upon request, based on the latest information available to the Plan:
• a description of the investment options
available under the Plan and a general description of the investment objectives, risk and return characteristics of such an investment; • identification of any designated investment
managers; an explanation of the circumstances under which you or your beneficiaries may give investment instructions and an explanation of any specified limitations on such instructions under the terms of the Plan;
• a description of any transaction fees and expenses which affect you, or your beneficiary(ies)’s, account balance in connection with the purchase or sale of interests in investment options;
• the name, address and phone number of the Plan fiduciary responsible for providing information; • a description of the procedures established to
provide for the confidentiality of information relating to the purchase, holding and sale of share of UPS class A common stock, and the exercise of voting, tender and similar rights, by you or your
beneficiary(ies), and the name, address and phone number of the Plan fiduciary responsible for monitoring compliance with these procedures; • in the case of an investment alternative which is
subject to the Securities Act of 1933, a copy of the most recent prospectus provided to the Plan; and • any materials provided to the Plan relating to the exercise of voting, tender or similar rights which are incidental to the investment in an investment option under the terms of the Plan.
The following information is provided upon request, based on the latest information available to the Plan: • A description of the annual operating expenses
of each investment fund, such as investment management fees, administration fees and transaction costs, that affect the fund’s rate of return expressed as a percentage of the average net assets of the particular investment fund; • Copies of prospectuses, financial statements and
reports relating to an investment alternative, to the extent such information is provided to the Plan; • A list of the assets that comprise the Government
Short-Term Investment Fund, the Global Diversified Asset Fund, the S&P 500 Equity Index Fund, the S&P 400 Equity Index Fund, the Russell 2000 Index Fund, the International Developed Country Equity Index Fund, and/or the Bright Horizon Funds and the value of each such asset (or the proportion of the fund that it comprises);
• Information concerning the value of shares or units in designated investment alternatives under the Plan, as well as past and current investment performance of such alternatives, determined, net of expenses, on a reasonable and consistent basis. You can also review current and historical rate of return information with respect to all investment options, as well as information regarding the value of the investment alternatives in your own Plan account, through the Plan Web site,
http://upssavings.ingplans.com or Information Line at 1-800-541-6154.
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Investment Options
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The Importance of Diversification
To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions can cause one category of assets, or one particular security, to perform poorly. If you invest more than 20 percent of your retirement savings in any one company or industry your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. In deciding how to invest your retirement savings, you should take into account all of your assets, including retirement savings outside of the Plan. No single approach is right for everyone because among other factors, individuals have different financial goals, different time horizons, and tolerances for risk. It is also important to periodically review your investment portfolio, your investment objectives and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. Visit the Plan Web site or www.dol.gov/ebsa/investing.htmlfor more information on individual investing and diversification.
Plan Investment Options
Your pre-tax, Roth 401(k), after-tax, rollover contributions and SavingsPLUScredited to your Plan account may be invested in one or any combination of the funds described below. Investment allocations must be made in 1 percent increments. You may change your investment options on a daily basis, if you wish, either by
transferring your current account balance or redirecting your future deferrals, or both. To make your investment changes, use the Plan Web site, http://upssavings.ingplans.com or call the Information Line at
1-800-541-6154.
Please note the following:
• Your investment change or transfer request will be implemented as soon as practicable after ING Institutional Plan Services, LLC, the Plan’s recordkeeper, receives your request. Whether you use the Plan Web site or Plan Information Line, any changes you make will be confirmed by mail, or you may choose to have your confirmations sent to an on-line mailbox on the Plan Web site. However, implementation of your request will be subject to any limitations of the investment option you select.
• Account activity is updated and recalculated every business day. Any activity in your account — a change in investment elections or fund transfers — is posted to your account at the end of each business day. This means that you always have the convenience of knowing where your account stands at any given day.
• Any assets of the Plan awaiting investment under the investment options described below will be invested in cash and cash-equivalent interest-bearing securities. These short-term investments may only be in short-term obligations and deposits rated at least A1 by Standard &Poor’s or P1 by Moody’s at the time of acquisition. Any such short-term investments shall be accounted for as part of the investment fund from which the monies making up short-term investment are derived.
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TARGET DATE FUNDS:
THE BRIGHT HORIZON FUNDS
The following Bright Horizon Funds are all tied to a different maturity date, as indicated by each fund’s name: the Bright Horizon 2010 Fund, the Bright Horizon 2015 Fund, the Bright Horizon 2020 Fund, the Bright Horizon 2025 Fund, the Bright Horizon 2030 Fund, the Bright Horizon 2035 Fund, the Bright Horizon 2040 Fund, the Bright Horizon 2045 Fund, the Bright Horizon 2050 Fund and the Bright Horizon 2055 Fund. The asset allocation for each fund begins with higher-risk investments and becomes more conservative as the maturity date of the fund approaches. The Bright Horizon Income Fund is the most conservative fund while the Bright Horizon 2055 Fund is the most aggressive fund in the Bright Horizon family of funds. The asset allocation mix of each fund becomes more conservative with time. As you get closer to your retirement date, your Bright Horizon fund automatically shifts, each year, from higher risk investments to lower risk investments according to a pre-specified schedule for each fund. Five years after each fund matures, its assets will be automatically transferred into the Bright Horizon Income Fund. The Bright Horizon Funds are designed so that your fund will have a certain amount of exposure to equities (35% of the Bright Horizon Income Fund’s assets) for the remainder of the time that the assets remain in the plan following your retirement. This is intended to help participants maintain sufficient assets for their lifetime which could last for 30-40 years following retirement and to also help offset any risk imposed by inflation. However, there is no guarantee that investing
40 35 30 25 20 15 10 5 p 5 10 Years to Retirement Date Retirement Date
2050 2045 2040 2035 2030 2025 2020 2015 2010 Income Bright Horizon Target Date Funds Glide Path
2055 100%
80% 60%
40%
20% 0%
S&P 500® Index Fund S&P Midcap 400 Index™ Fund Global Equity ex U.S. Index Fund SSgA/Tuckerman Global Real Estate Securities Index Fund
U.S. Short-Term Government/Credit Bond Index Fund
U.S. High Yield Bond Index Fund U.S. Inflation Protected Bond Index Fund U.S. Bond Index Fund
U.S. Long Government Bond Index Fund
Fixed Income
Real Estate
Equity
Russell Small Cap Index Fund
The Bright Horizon Target Date Funds are fully diversified, pre-mixed portfolios which allow you to select and invest in the fund closest to the year in which you expect to begin withdrawing your retirement savings, typically at retirement.
• In order to use the Self-Managed Account Option, you must have a minimum account balance of $3,000 in Plan funds (excluding loans). The initial transfer of $2,500 is required and subsequent transfers must be at least $1,000. Additionally, $500 must remain in your core investment fund account following your initial transfer. (Core investment funds include all of the investment options except your Self-Managed Account.) • To better ensure that the International Developed Country Index Fund continues to closely match the
performance of the Morgan Stanley Capital International (MSCI) World ex U.S. Index, the Plan will assess a 2 percent short-term trading fee for money transferred out of the International Developed Country Index Fund and/or paid out as a distribution within 30 days of investment in the International Developed Country Index Fund. The 2 percent redemption fee is assessed against the gross proceeds from the sales transaction and reinvested in the International Developed Country Index Fund as income.
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Investment Options
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in this fund will not result in losses, including near or after your retirement date and there is no guarantee that such an investment will provide adequate retirement income. If you would prefer a more conservative approach and have less of your Plan assets invested in equities, then you should consider other investment options when you approach your retirement age.
The Bright Horizon Funds are investment funds managed by State Street Global Advisors (SSgA). Because the Bright Horizon Funds consist of a broad variety of individual stocks, voting and tender rights with respect to such individual stocks held in the funds’ portfolio are not passed through to participants and beneficiaries. Instead, voting rights, if any, are exercised by SSgA, the investment manager. The Bright Horizon Funds, like the other Plan investment options utilize what is often referred to as a passive investment strategy which means that each of the underlying funds tries to achieve the return associated with its respective benchmark and is not actively managed to exceed any particular benchmark. It is expected that such an approach will result in lower investment management fees while providing adequate risk-adjusted returns. Each Bright Horizon Fund seeks to achieve its objective by investing in a set of underlying State Street Global Advisors collective trust funds representing various asset classes.
TARGET DATE FUNDS
(Based on a retirement date at age 60)
BIRTH YEAR BRIGHT HORIZON FUNDS
1900-1947 Bright Horizon Income Fund 1948-1952 Bright Horizon 2010 Fund 1953-1957 Bright Horizon 2015 Fund 1958-1962 Bright Horizon 2020 Fund 1963-1967 Bright Horizon 2025 Fund 1968-1972 Bright Horizon 2030 Fund 1973-1977 Bright Horizon 2035 Fund 1978-1982 Bright Horizon 2040 Fund 1983-1987 Bright Horizon 2045 Fund 1988-1992 Bright Horizon 2050 Fund 1993 and later Bright Horizon 2055 Fund
The Bright Horizon Income Fund
Five years following the maturity date of each of the Bright Horizons Funds, their assets will automatically transfer to the Bright Horizon Income Fund. The Bright Horizon Income Fund is the most conservative fund in the Bright Horizon family of funds. This fund will maintain a mix of 65 percent bonds and 35 percent equities.
The Bright Horizon 2010 Fund
The Bright Horizon 2010 Fund (the “2010 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2010 Fund seeks to provide moderate capital appreciation and some stability of principal for investors planning to retire in approximately the year 2010. Over time, the 2010 Fund becomes more conservative. The stock portion of the 2010 Fund decreases and the bond portion increases. Five years after its stated target year, the 2010 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
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The Bright Horizon 2015 Fund
The Bright Horizon 2015 Fund (the “2015 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2015 Fund seeks to provide moderate capital appreciation and some stability of principal for investors planning to retire in approximately the year 2015. Over time, the 2015 Fund becomes more conservative. As the year 2015 gets closer, the stock portion of the 2015 Fund decreases and the bond portion increases. Five years after its stated target year, the 2015 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2020 Fund
The Bright Horizon 2020 Fund (the “2020 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2020 Fund seeks to provide long-term capital appreciation and some stability of principal for investors planning to retire in approximately the year 2020. Over time, the 2020 Fund becomes more conservative. As the year 2020 gets closer, the stock portion of the 2020 Fund decreases and the bond portion increases. Five years after its stated target year, the 2020 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2025 Fund
The Bright Horizon 2025 Fund (the “2025 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2025 Fund seeks to provide long-term capital appreciation and some stability of principal for investors planning to retire in approximately the year 2025. Over time, the 2025 Fund becomes more conservative. As the
year 2025 gets closer, the stock portion of the 2025 Fund decreases and the bond portion increases. Five years after its stated target year, the 2025 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2030 Fund
The Bright Horizon 2030 Fund (the “2030 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2030 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2030 and is comprised mainly of stocks for maximum growth potential. Over time, the 2030 Fund becomes more conservative. As the year 2030 gets closer, the stock portion of the 2030 Fund decreases and the bond portion increases. Five years after its stated target year, the 2030 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2035 Fund
The Bright Horizon 2035 Fund (the “2035 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2035 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2035 and is comprised mainly of stocks for maximum growth potential. Over time, the 2035 Fund becomes more conservative. As the year 2035 gets closer, the stock portion of the 2035 Fund decreases and the bond portion increases. Five years after its stated target year, the 2035 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
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The Bright Horizon 2040 Fund
The Bright Horizon 2040 Fund (the “2040 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2040 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2040 and is comprised mainly of stocks for maximum growth potential. Over time, the 2040 Fund becomes more conservative. As the year 2040 gets closer, the stock portion of the 2040 Fund decreases and the bond portion increases. Five years after its stated target year, the 2040 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2045 Fund
The Bright Horizon 2045 Fund (the “2045 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2045 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2045 and is comprised mainly of stocks for maximum growth potential. Over time, the 2045 Fund becomes more conservative. As the year 2045 gets closer, the stock portion of the 2045 Fund decreases and the bond portion increases. Five years after its stated target year, the 2045 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2050 Fund
The Bright Horizon 2050 Fund (the “2050 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2050 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2050 and is comprised mainly of stocks for maximum growth potential. Over time, the 2050 Fund becomes more conservative. As the year 2050 gets closer, the stock portion of the 2050 Fund decreases and the bond portion increases. Five years after its stated target year, the 2050 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
The Bright Horizon 2055 Fund
The Bright Horizon 2055 Fund (the “2055 Fund”) seeks to provide retirement investors with an appropriate balanced fund that matches their time horizon to retirement. The 2055 Fund seeks to provide long-term capital appreciation for investors planning to retire in approximately the year 2055 and is comprised mainly of stocks for maximum growth potential. Over time, the 2055 Fund becomes more conservative. As the year 2055 gets closer, the stock portion of the 2055 Fund decreases and the bond portion increases. Five years after its stated target year, the 2055 Fund is 65 percent invested in a combination of long-term bonds and short-term bonds. The remaining investment allocation consists of 30 percent domestic and foreign stocks and 5 percent public real estate (REITs) securities.
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CORE FUNDS
Government Short-Term
Investment Fund (GSTIF)
Through active management, the Government Short-Term Investment Fund (the "GSTIF") seeks to provide safety of principal, daily liquidity, and a competitive yield by investing in U.S. Government Securities. The GSTIF consists of direct or indirect ownership interests in short-term debt securities issued by the U.S. Government (such as Treasury bills, notes, bonds, and other instruments backed by the U.S. Treasury and its agencies). This Fund's average maturity is ninety (90) days or less. The maximum expected average time to receipt of principal of any single security will not exceed three hundred ninety-seven (397) days.
Because the payment of interest and principal on the Treasury securities that make up the GSTIF is backed by the U.S Government, this Fund provides you with a means of earning interest income while securing your principal investment against risk of loss. This Fund is not guaranteed by the Administrative Committee or by the Federal Deposit Insurance Company (FDIC) or any other government agency.
Among the Plan's investment funds, the GSTIF provides the highest degree of safety for your principal investment because payment with respect to U.S. Treasury securities is backed by the full faith and credit of the U.S. Government. The GSTIF is managed by State Street Global Advisors (SSgA).
Short-Term Bond Index Fund
Through passive management, the Short-Term Bond Index Fund seeks to replicate, before expenses, the performance of the Barclay’s Capital U.S. 1-3 Year Government/Credit Bond Index by investing in a diversified sample of the bonds that make up the index. The index, managed by BlackRock, is comprised of U.S. and international government securities and investment grade corporate securities, as defined by the index, with maturities generally ranging between one and three years.
Bond investments can be an important part of a well-planned investment strategy. Called fixed income securities because they make specified payments on a regular basis, bonds may act as a moderating force in an investment portfolio by sheltering investors from fluctuations in other assets such as stocks.
This fund is intended for short-term investors seeking moderate returns by investing in a diversified portfolio of high-quality fixed income securities. As with any security, an investment in bonds is subject to risk.
Bond Market Index Fund
Through passive management, the Bond Market Index Fund, managed by BlackRock, seeks to match the performance of the Barclays Capital Aggregate Bond Index by investing in a diversified sample of the bonds that make up the index. The index is the broadest measure of the U.S. investment-grade bond market and is comprised of US Treasury and federal agency bonds, corporate bonds, residential and commercial mortgage-backed securities and asset-backed securities.
ASSET CLASS FUND NAME
Short-Term Government Short-Term Investment Fund Short-Term Bond Index Fund
Bond Bond Market Index Fund US TIPS Index Fund
Multi-Asset Global Diversified Asset Fund Stock S&P 500 Equity Index Fund
S&P 400 Midcap Index Fund Russell 2000 Index Fund International Developed Country
Equity Index Fund US Real Estate Index Fund
MSCI Emerging Markets Index Fund UPS Stock Fund
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Investment Options
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Bond investments are an important part of a well-planned investment strategy. Called fixed income securities because they make specified payments on a regular basis, bonds can act as a moderating force in an investment portfolio by sheltering investors from fluctuations in other assets such as stocks.
This fund is intended for intermediate-term investors seeking moderate returns by investing in a diversified portfolio of high-quality fixed income securities. As with any security, an investment in bonds is subject to risk.
US TIPS Index Fund
Through passive management, the US TIPS Index Fund, managed by BlackRock, seeks to match the performance of the Barclays Capital US TIPS Index by investing in some or all of the bonds that make up the index. Unlike conventional bonds, the principal and interest payments from the TIPS are regularly adjusted to reflect changes in inflation, as measured by the changes in the Consumer Price Index for Urban Consumers. Since the principal keeps pace with inflation, investors’ real purchasing power will be preserved.
Bond investments may be an important part of a well-planned investment strategy. Called fixed income securities because they make specified payments on a regular basis, bonds can act as a moderating force in any investment portfolio by sheltering investors from fluctuations in other assets such as stocks.
This fund, which is managed by BlackRock, is intended for long-term investors seeking portfolio returns that provide protection against inflation. The fund is likely to experience lower return volatility than conventional bond investments.
Global Diversified Asset Fund
(Equity and Fixed Income)
Through passive management, the Global Diversified Asset Fund seeks to replicate the returns and characteristics of a composite benchmark comprised of U.S. and non U.S. equities, fixed income and real estate securities while providing daily liquidity. The Global Diversified Asset Fund seeks to be a diversified fund offering investors a broader range of asset classes across equities, fixed income and real assets. The Global Diversified Asset Fund is intended to increase diversification and improve the expected risk adjusted returns while maintaining transparency. The risk and return profile of the Global Diversified Asset Fund is such that it offers potential for higher long-term returns (with greater risk) than the Government Short-Term Investment Fund (GSTIF), the Short-Term Bond Index Fund and the Bond Market Index Fund. The Global Diversified Asset Fund offers less risk than the Standard & Poor’s 500 Equity Index Fund, the Standard &Poor’s 400 Equity Index Fund, the Russell 2000 Index Fund, or the International Developed Country Index Fund. The principal value of the Global Diversified Asset Fund may rise or fall due to changes in the stock and bond markets and other economic conditions. The Global Diversified Asset Fund consists of pooled investment funds managed by State Street Global Advisors (“SSgA”). Because the Global Diversified Asset Fund consists of a broad variety of individual stocks, voting and tender rights with respect to such individual stocks held in the Fund’s portfolio are not passed through to participants and beneficiaries. Instead, voting rights, if any, are exercised by SSgA, the investment manager.
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Standard
&
Poor’s (S
&
P) 500 Equity
Index Fund
Through passive management, the Equity Index Fund, managed by BlackRock, is an index fund that seeks to match the performance of the S&P 500®Index by investing in stocks that make up the index. The S&P 500®Index, considered a large capitalization benchmark, is comprised of a sample of leading U.S. companies in leading industries, and accounts for more than 75% of the market value of all publicly traded stocks in the U.S.
Investing in large-capitalization stocks is the most efficient way to participate in earnings from large U.S. companies. These stocks have the potential for more stable earnings than that of small- or mid-capitalization stocks, and their prices tend to be less volatile.
This fund is intended for long-term investors seeking to capture the earnings and growth potential of large U.S. companies.
Standard
&
Poor’s (S
&
P) 400 Midcap
Index Fund
Through passive management, the Standard &Poor’s 400 Midcap Index Fund (the “S&P 400 Fund”) seeks to replicate the returns and characteristics of the Standard &Poor’s 400 Index (the “S&P 400 Index”) while providing daily liquidity. The S&P 400 Index includes a representative sample of 400 mid-sized companies that are not included in the S&P 500 Index. The S&P 400 Index is maintained by the S&P Index Committee, whose members include Standard and Poor’s economists and index analysts who meet on a regular basis. The goal of the Index Committee is to ensure that the index remains an accurate measure of mid-sized companies, reflecting the risk and return characteristics of the broader mid-cap universe on an ongoing basis.
The S&P 400 Fund is made up of 400 individual common stocks traded on the New York Stock Exchange and over-the-counter market that represent a large cross section of United States companies as determined by Standard &Poor’s. The Fund may also hold two to five percent of its value in unleveraged futures contracts (an agreement to buy or sell a specific security by a specific date at an agreed upon price). Because stock prices fluctuate, the S&P 400 Fund involves a significant element of risk. Your investment return depends on the rise or fall of the market prices of those stocks that comprise the fund, as well as dividends paid on those stocks. Stock values fluctuate in response to the activities of individual companies, and general economic conditions. Stock values may be volatile, but over the long-term, they have the potential for higher returns than the Government Short-Term Investment Fund, or the Short-Term Bond Index Fund and the Bond Market Index Fund. Mid-cap stocks are recognized as an independent asset class, with risk/reward profiles that differ considerably from both large-caps and small-caps. It is important to bear in mind that the value of your investment in this fund may decrease as well as increase. The S&P 400 Fund is a pooled investment fund managed by State Street Global Advisors (SSgA). Because the Fund consists of a broad variety of individual stocks, voting and tender rights with respect to such individual stocks held in the fund’s portfolio are not passed through to participants and beneficiaries. Instead, voting rights, if any, are exercised by SSgA, the investment manager.