Stihl 401(k) match, vesting and fees

Participants are vested immediately in their voluntary contributions and rollover contributions plus actual earnings thereon. Vesting in the Company’s matching and discretionary contributions plus earnings thereon is based on years of continuous service. Effective January 1, 2023, the Plan was amended to revise the vesting schedule related to the Company matching and discretionary contributions to immediately 100% vested. Prior to January 1, 2023, a participant is 100% vested in the Company matching and discretionary contributions after three years of service. Participants do not vest in Company contributions prior to meeting the three-year service requirement. Forfeited balanced of terminated participant’s nonvested accounts can be used to reduce future Company contributions or to pay Plan expenses, as defined by the Plan.

The Plan includes an auto-enrollment provision whereby all eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 4% of eligible compensation. Unless otherwise affirmed, the employee’s deferral rate will increase by 1% each year up to the maximum deferral rate of 7%.

Each year, participants may contribute up to 60% of their annual compensation, as defined in the Plan, as a pretax or Roth contribution, subject to maximum contribution limitations contained in the Internal Revenue Code (IRC).

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum amount that is equal to the lesser of $50,000 or 50% of their vested account balance. The loans have a maximum term of 60 months, except for qualified residential loans, which have a maximum term of 120 months. The loans are secured by the balance in the participant’s account. The loan interest rate, determined quarterly, is set at 2% above the prime rate, as defined.