AIG 401(k) match, vesting and fees

Amounts allocated to a participant’s Plan account, regardless of the source, immediately vest.

Newly hired or re-hired employees are automatically enrolled in the Plan at a 3% pre-tax contribution rate that will increase (escalate) by 1% each subsequent calendar year until a 6% pre-tax contribution rate is attained. Automatic enrollment into the Plan begins sixty (60) days from an employee’s date of hire or re-hire; however, employees have the right to “opt-out” and forgo automatic enrollment during the 60-day period. In addition, participants who are not enrolled in the 1% automatic escalation feature noted above may elect voluntary “Auto-Escalation,” which provides for automatic annual increases to their savings rates.

The Plan provides employees the opportunity to voluntarily contribute, on a pre-tax and/or Roth after-tax basis, an amount from 1% to 50% of their Plan eligible compensation, which is generally defined as base salary, commissions, overtime pay and annual short term incentive awards; provided, however, that no such contribution can exceed the maximum IRS employee deferral/contribution limit applicable for such year.

The Plan has a general loan provision which enables employees who have a Plan account balance of at least $2,000 to borrow up to 50% of the value of their vested accounts, except that no loans will be made for less than $1,000 or more than $50,000. General purpose loans are granted for a period not to exceed five (5) years. A second loan option is available for the purchase of a primary residence. Primary residence loans are granted for a period not to exceed fifteen (15) years. The maximum amount that can be borrowed remains $50,000 minus the highest outstanding loan balance, if any, the participant had at any one time during the one (1) year period ending immediately before the date of the new loan; and the usual loan origination fee will continue to apply to each loan. The Company 3% Contributions are considered in determining the maximum amount available for a loan. The rate of interest on any loan to a participant under the Plan will be determined by the Plan Administrator and will be equal to the prime rate of interest at the beginning of the quarter in which the loan originates. Loans outstanding at December 31, 2024 have been issued at interest rates between 3.25% and 8.50%, and maturities range from January 2025 to September 2039. Loan repayments by participants who are employed by the Company, including principal and interest, are generally made through after-tax payroll deductions. Participants who are no longer employed by the Company, may submit loan repayments by check, money order or direct debit or ACH payments from an employee’s personal, U.S. bank account. Each loan is secured by the vested balance in the participant’s Plan account. If a participant defaults on his or her loan by failing to make timely repayments, the outstanding principal and interest due on the loan is treated as a deemed distribution and reported as a taxable distribution to the participant in the year of default. If the participant has an outstanding loan and takes a total distribution of his or her Plan benefit, the outstanding principal and interest due on the loan is deducted from the amount distributed to the participant. If a participant takes a partial distribution, the remaining account balance must be sufficient enough to cover the outstanding loan balance. The participant can elect to continue repaying the loan.