The CNA 401k Plan
Summary Plan Description
Effective January 1, 2020
The CNA 401k Plan
Important Note: This document is the Summary Plan Description (SPD) of the CNA 401k Plan (formerly known as the CNA Savings and Capital Accumulation Plan and the CNA 401(k) Plus Plan) under the Employee Retirement Income Security Act of 1974 (ERISA). It generally describes the benefits provided under the Plan. It does not attempt to cover every detail concerning the Plan. The terms of the Plan are contained in the applicable Plan document. In the event that a provision in this SPD conflicts with the terms and provisions of the official Plan document, the terms of the Plan document will govern. You may obtain a copy of the Plan document by writing to the Plan Administrator at CNA, 151 N. Franklin Street – 18th floor, Chicago, IL 60606. The Plan Administrator may make a reasonable charge for the copies.
Nothing in this SPD is intended to be interpreted as a promise or guarantee of future or continued employment or as stating provisions and terms of employment. Continental Casualty Company (the “Company”) and its employees recognize their mutual right to end their employment relationship at any time and acknowledge that such relationship is one of employment at will. Except with respect to employment at will, the Company reserves the right to change (including, but not limited to, the right to amend, suspend, or terminate) its personnel policies, procedures, and benefits, including this Plan. It also reserves the right to make exceptions to its Human Resources policies and procedures, at its discretion, at any time without notice.
The policies and benefits described in this SPD may vary by affiliate, employee groups, or business segments, as well as from location to location. No representative of the Company has authority to make any agreement contrary to the provisions of any CNA employee benefit plan. Other important information about the Plan is included in the Benefits at CNA chapter entitled “General Information.”
If you have access to the CNA intranet, you may print this SPD directly by logging on to the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna). You may request a paper copy at no charge by contacting the Plan Administrator. See “Statement of ERISA Rights” on page 42.
Table of Contents Introduction ...... 1
Your 401k Plan, at a Glance ...... 2
CNA 401k Plan 2
Participation ...... 3
Eligibility 3
How to Enroll 3
Naming a Beneficiary 4
If You Are Rehired 5
If You Transfer to an Affiliate of the Company or Loews 6
Situations That May Affect Your Account 7
Your Employee Contributions 8
Before-Tax Contributions 9
Roth Contributions 9
Catch-Up Contributions 10
After-Tax Contributions 10
Contribution Limits 10
Making Up Contributions After Military Service 11
How to Stop, Start, or Change Contributions 12
Rollover Contributions 12
Company Contributions 14
Basic Contributions 14
Company Match Contributions 14
Company Contributions after Military Service 14
Vesting ...... 15
Vesting Service 15
Other Vesting Features 16
Reinstating Your Vesting Service 16
Forfeitures 17
Your Investment Options ...... 18
Investment Fund Pricing Information 19
Making Your Investment Choices 19
Changing Your Investment Allocation 20
What Is Investment Risk? 20
Alight Financial Advisors 21
Borrowing From Your Accounts ...... 22
How Much You Can Borrow 22
Loan Repayments 23
Loan Default/Deemed Distribution 23
Applying for a Loan 24
Withdrawals from Your Account 25
After-Tax/Rollover Contributions—“In-Service Non-Hardship Withdrawal” 28
Age 59½ Withdrawals—“In-Service Age 59½ Withdrawal” 29
Company Match Contributions 29
Before-Tax and Roth 401k Contributions—“Hardship Withdrawal” 29
Before-Tax and Roth 401k Contributions—“Active Military Duty” 30
Tax Considerations 30
Requesting a Withdrawal 31
How a Withdrawal Reduces Future Growth 31
In Plan Roth Conversion 31
Distribution of Your Account 32
How Distributions Are Taxed 34
Rollovers 34
Required Minimum Distributions 36
Special Rules for Former Participants in the CNA Surety 401k Plan ...... 37
Additional Important Information ...... 40
Plan Name, Type, and Number 40
Plan Trustee 40
Plan Administrator 40
Plan Sponsor and Employers 40
Agent for Service of Legal Process 41
How the Plan Is Funded 41
Right of Recovery 41
Plan Records 41
Plan Fees 41
Plan Amendment and Termination 42
Nondiscrimination Rules 42
Top-Heavy Rules 43
The Pension Benefit Guaranty Corporation 43
Assigning Your Benefits 43
Effect on Other Company Plans 43
Requesting a Review of a Denied Claim ...... 44
Statement of ERISA Rights ...... 46
Receive Information About Your Plan and Benefits 46
Prudent Actions by Plan Fiduciaries 46
Enforce Your Rights 46
Assistance with Your Questions 47
Appendix A: CNA 401k Plan Investment Fund Options (Effective January 1, 2020) ...... 1
Appendix B: CNA 401k Plan Investment Transfer Restrictions ...... 6
Introduction
No matter how far off retirement is for you, it’s important to start thinking about it now.
When you’re thinking about retirement, consider these facts:
• Living 25 or 30 years after retirement is no longer unusual.
• What a dollar buys today will probably be reduced in 10, 20, or 50 years due to inflation.
• Health care costs continue to rise, and the future of government programs that contribute to the support of senior citizens is uncertain.
• As a rule of thumb, financial experts say you will need an annual income equal to about 60% to 80% of your pre-retirement annual income.
• The U.S. Treasury estimates that Social Security may provide only about 20% of a retiree’s annual income.
Therefore, to have the financial independence to enjoy your retirement to the fullest, you will need to supplement your retirement income through personal savings.
For most people, tax-deferred plans like the CNA 401k Plan (“401k Plan” or the “Plan”), may be the best way to accumulate personal savings. The 401k Plan is sponsored by Continental Casualty Company for the benefit of its eligible employees. The Plan is designed to make saving for your future easy and convenient. You choose how much to contribute and how to invest your money among the Plan’s investment funds. Although the Plan is designed for long-term savings, loans and limited withdrawal options are available. Best of all, when you save through the Plan, the Company contributes extra money to your account.
The time to begin planning your financial future is now. Although it is never too late to start saving, the earlier you begin, the longer your money has to grow—and that means a greater opportunity for future income.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Your 401k Plan, at a Glance
Here is a quick look at all the ways that the Plan makes it easier to save for your future!
CNA 401k Plan
Basic Contributions Employee Contributions Company Match Contributions
Company contributes 5% of You may contribute from 1% to Company matches $1.00 on Total Pay each pay period 50% of Base Pay on a before-tax, every dollar you save each pay (whether or not you are Roth 401k, or period, up to 6% of Base Pay. contributing to after- tax basis. the Plan).
Contributions vest at the rate Contributions made on a before- Contributions vest at the rate of 20% for each year of service. tax basis reduce your current of 20% for each year of service. taxes.
Not dependent upon the Employees who attain age 50 by Company’s financial the end of the year may also performance. make “catch-up” contributions any time during the year.
For purposes of the 401k Plan:
• “Base Pay” for employee contributions and Company Match contributions includes regular base salary, overtime, any paid sales incentives, and tax-deferred contributions made to the Plan. It also includes other before-tax contributions such as health, spending account, and transit account contributions. It does not include any bonuses, commissions, other forms of incentive compensation, miscellaneous pay, overseas allowances, short term disability pay, worker’s compensation benefits, benefits received under an insurance program, purchased paid-time off (PTO Buy), any lump-sum payments of unused paid time off (PTO) days, severance or separation payments, and after April 1, 2013, all payments made pursuant to the Supplemental Unemployment Benefit Plan.
• “Total Pay” for the Company’s Basic contributions includes the same items listed above for employee and Company Match contributions plus eligible annual or other short-term incentive and performance bonuses (but not long term incentive or equity grants).
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Participation
All full-time employees are automatically enrolled in the Plan following 31 days of eligibility. (Part-time employees may be eligible to enroll after one year of service, if they have worked 1,000 hours in that year.)
Eligibility
You are eligible to participate in the 401k Plan if you are:
• A full-time employee of the Company.
• A part-time employee of the Company (including interns, temporary employees or other employees hired for a specified period of time) on the first day of the first pay cycle after completing 12 months of service if you have worked 1,000 hours within those 12 months. If you do not work 1,000 hours in your first 12 months of service, you become a participant at the end of any calendar year that you work at least 1,000 hours. If you worked for any other member of the “Controlled Group of Corporations” (described on page 6 and hereafter referred to as the “Controlled Group”) within five years before being hired by Continental Casualty Company, that service may count toward your Year of Service requirement, provided that you notify the CNA Benefits Center of your prior Controlled Group service.
You are not eligible to participate if you are:
• Employed by a separate division, unit, or operation that has not adopted the Plan;
• Classified by the Company as a leased employee or independent contractor (even if it is determined later that you were an employee for tax or other legal purposes); or
• Employed in Puerto Rico, due to the differences between US and Puerto Rico tax laws.
How to Enroll
You may enroll and begin contributing as early as the first payroll cycle after you satisfy the eligibility criteria above by logging on to the Your Benefits Resources link via single sign-on through Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or by calling the CNA Benefits Center at 877-262-5894.
As a full-time new hire or rehire, you will be automatically enrolled in the 401k Plan if you do not contact the CNA Benefits Center during the first 31 days from your date of hire. As a part-time new hire, you will be automatically enrolled at the time you become eligible. When automatically enrolled on or after January 1, 2019, the Plan will deduct 6% of your Base Pay on a before-tax basis as employee contributions and these contributions will be invested into a Qualified Default Investment Alternative (“QDIA”), which is the LifePath Index Target Date Fund
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
that corresponds to your age. A copy of the Plan’s QDIA notice is available through the Your Benefits Resources link.
These contributions will be eligible for Company match contributions. You will receive a notice in the mail informing you of your automatic enrollment.
If you do not want to automatically be enrolled in the Plan, or want to contribute more or less than 6% of Base Pay, you must notify the CNA Benefits Center within 31 days of your hire date. However, you can always change your contribution percentage, or stop contributing entirely, after you have been automatically enrolled.
If you have been automatically enrolled in the 401k Plan your before tax contribution rate will begin at 6%, and will then be automatically increased by 1% each year until you are contributing 10% of your Base Pay, unless you make a different contribution election. These automatic increases will be effective the first payroll in April that is at least 90 days after your automatic enrollment, and will continue each April until you are contributing at the current target contribution rate of 10% or you make a contribution election change.
While enrollment is automatic, you may still use the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or call the CNA Benefits Center at 877-262-5894 to:
• Elect not to contribute;
• Select a higher or lower contribution rate;
• Elect after-tax or Roth 401k contributions;
• Choose how to invest your contributions among the Plan’s investment funds; and
• Designate a beneficiary for your account in the event of your death.
A participant who affirmatively elects to contribute to the 401k Plan can also elect to have the contribution rate be automatically increased on an annual basis. The annual increase will continue until your contribution rate reaches the target contribution rate that you elect.
If you do not have an investment election on file, the contributions will be posted to the Plan’s “default fund” – the BlackRock LifePath Index Fund that most closely matches your assumed retirement age of 65 – as described above.
Naming a Beneficiary
At the time you enroll, you should name one or more beneficiaries to receive your Plan benefits in the event of your death. You may change your beneficiary at any time. If you are married,
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
your spouse will automatically be your sole primary beneficiary unless your spouse gives notarized written consent to the naming of someone else as your primary beneficiary.
If you get married after you have named a beneficiary for your Plan account and you want to keep your old beneficiary designation, you need to get a notarized consent from your spouse. Otherwise, after you have been married for one year, your old beneficiary designation is invalid and your spouse automatically becomes your sole primary beneficiary.
Your designation must be received by the CNA Benefits Center in order to be valid. If you do not designate a beneficiary and you die while you have a Plan balance, payment of your account will be made to your spouse (if applicable), or otherwise to your estate.
If You Are Rehired
If you were a participant in the Plan and are rehired by the Company before incurring a one-year break in service, you may participate in the Plan on the first payroll cycle after you are rehired (or as soon as administratively possible), whether you are rehired on a full-time or part-time basis. If you have incurred a one-year break in service, and are rehired as a full-time employee, you may also participate in the first payroll cycle.
If you are rehired as a part-time employee after a one-year break in service, you generally need to meet the eligibility requirements shown on page 3. However, if you already completed a Year of Service before you left the Company, you may begin participating on the first payroll cycle after your rehire as a part-time employee if:
• You had a vested balance in any of your Company contribution accounts; or
• You are rehired within five years of your termination date.
If you are fully vested when you leave the Company and are rehired, your service will be reinstated and you will be fully vested in Company contributions made upon rehire.
If you were partially vested when you left the Company, did not receive a distribution that included Company contributions, and are later rehired within five years of your termination date, all forfeited Company contributions will automatically be restored in your account. Your restored amount will not be adjusted for gains or losses that may have occurred during your absence.
If you were partially vested when you left the Company, took a distribution that included vested Company contributions and are later rehired within five years of your termination date, all forfeited Company contributions will be restored to your account as long as you return the value of the vested Company contributions you received. This restoration will include any forfeiture
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
from Basic contributions, Company Match contributions, and/or Performance contributions. Again, your restored amount will not be adjusted for gains or losses that may have occurred during your absence.
If you received a distribution that included vested Company contributions but do not return the value of the Company contributions, the amount forfeited from your accounts will not be restored. In order for forfeitures to be restored, all paybacks must be made within five years of your rehire date.
Even if your forfeited accounts are not restored after you are rehired, any Vesting Service you completed before your termination will count toward the vesting of your new contributions if:
• You had a vested balance in any of your accounts attributable to Company contributions when you left the Company; or
• You are rehired within five years of your termination date.
The rules regarding the restoration of forfeited accounts and Vesting Service also apply if you are hired by any member of the Controlled Group, even if your new employer doesn’t participate in the Plan. It is your responsibility to notify the CNA Benefits Center of your rehire by a Controlled Group company.
The Controlled Group: All companies in which CNA Financial Corp. or Loews Corporation owns at least an 80% interest, including other subsidiaries of Loews. However, it does not include any company of which CNA Financial Corp. or Loews owns less than 80%. If you worked for any company that is within the Controlled Group within five years before you came to work for the Company, or if you go to work for any of them within five years after you leave the Company, it is important that you notify the CNA Benefits Center. Otherwise, the Company will not be aware that you may be entitled to additional Vesting Service.
If You Transfer to an Affiliate of the Company or Loews
• If you transfer to a member of the Controlled Group that does not participate in the Plan: You will continue to be credited with Vesting Service; however, you are no longer eligible to make contributions to the Plan. Your current account will continue to be held and administered under the Plan, subject to all provisions pertaining to active participants, with the exception of contributing to the Plan and receiving Company contributions.
• If you transfer from a member of the Controlled Group: All the years you worked for the non-participating affiliate are credited for purposes of Vesting Service.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Situations That May Affect Your Account
Disability Leave of Absence
When you go on short term disability (STD), no contributions will be deducted from your STD benefits. In addition, your STD pay will not be considered part of your compensation for purposes of Company Basic contributions. Your loan payments will be automatically deducted from your STD benefits, if possible. If loan payments cannot be deducted, you will need to contact the CNA Benefits Center to make payment arrangements. (See “Borrowing From Your Accounts,” page 22.) If you have exhausted your STD benefits and your employment is terminated, see “Distribution of Your Account,” page 30, for more information.
Total and Permanent Disability
For purposes of the 401k Plan, if you are enrolled in the Company’s LTD Plan, you are considered totally and permanently disabled as of the date you are entitled to receive long term disability income under the LTD Plan. If you are not a participant in the Company’s LTD Plan, you are considered totally and permanently disabled for purposes of the 401k Plan if you would be entitled to receive a disability benefit if you were a participant in the Company’s LTD Plan.
If you are determined to be totally and permanently disabled and exhaust your STD benefits, your Plan account will become immediately 100% vested. This 100% vesting is provided by the Plan, whether or not you elected the Company’s long term disability coverage.
If you become totally and permanently disabled, and have exhausted your STD benefits, you will be administratively terminated and the full value of your Plan account will be eligible for distribution. Depending on your account balance, one of the following distribution options will apply to you:
• If your total vested account balance is $1,000 or less, you will receive an automatic cash payment mailed to your home address, unless you elect a direct rollover to an IRA or another qualified plan; or
• If your vested account balance exceeds $1,000, you have the option to take a total lump-sum payment at any time or defer your payment.
Note: Notwithstanding the foregoing provisions, certain employees may not be terminated even though they have exhausted their STD and have begun to receive long term disability under the Company’s disability policies. This may occur, for example, if the employee is also on Workers’ Compensation and state law prohibits the termination of an employee on Workers’ Compensation, or the employee is designated as out on Interim LTD or Part-time LTD because it is anticipated that the employee will be able to return to full-time employment. An employee whose STD benefits have been exhausted, but who has not been terminated, will not be eligible
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
for immediate full vesting and distribution of his or her 401k Plan account balance until his or her employment is actually terminated even if he or she is (or would be) eligible for long term disability benefits.
Your Employee Contributions
You may make contributions to the Plan, through the convenience of automatic payroll deductions, on:
• A before-tax basis;
• A Roth 401k basis;
• An after-tax basis; or
• Any combination of the above.
Contributions will be credited to your account as soon as administratively possible after they are deducted from your Base Pay.
As an eligible employee, you may contribute—in whole percentages only—from 1% to 50% of your eligible Base Pay to the Plan. The maximum you may contribute is 50%, whether you make before-tax contributions, Roth 401k contributions, after-tax contributions, or a combination of any of these.
The first 6% of Base Pay you contribute—whether before-tax, Roth 401k, after-tax, or a combination of any of these—will be matched by the Company.
You are always 100% vested in your contributions to the Plan.
To help you meet your retirement goals, you have the option to automatically increase your contribution percentage each year. The increase occurs every year in the first pay period of April. You can elect how much you want your contributions to increase each year and the ending contribution rate at which you’d like the increases to stop.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Before-Tax Contributions
You do not pay current income taxes on your before-tax contributions to the Plan. That’s because your contributions are deducted from your paycheck before federal and most state and local income taxes are withheld. (Your before-tax contributions are, however, subject to Social Security taxes and are included in your gross earnings for purposes of figuring your Social Security and Medicare benefits.)
When you make before-tax contributions to the Plan, you reduce your current taxable income by the amount of your contribution. Your contributions and the investment earnings grow tax deferred until the money is withdrawn.
Roth Contributions
The 401k Plan allows participants to make Roth 401k contributions in lieu of part or all of their before-tax contributions. Roth 401k contributions are different from before-tax contributions because:
• Roth 401k contributions are made on an after-tax basis, so they will not reduce your current taxable income or tax withholding.
• Distributions of Roth 401k contributions are entirely tax free, including the accumulated income that is distributed, provided that you meet both of the following requirements:
The distribution is made after you reach age 59½ or have become disabled, or if the distribution is made to your beneficiary after your death; and
The distribution is made at least five years after the first year in which you made a Roth 401k contribution. As an example, if you began making Roth 401k contributions of any amount in March of 2017, then all Roth 401k distributions made any time after March of 2022 (including distributions of amounts contributed after 2017) may be eligible for tax- free treatment.
The income included in amounts that are distributed for any other reason (e.g., upon termination of employment before age 59½), or before the end of the five-year holding period, is not tax free. Distributions may be rolled over to a Roth IRA (or a Roth 401k account in another employer’s plan) whether or not they qualify for tax-free treatment.
Even though Roth 401k contributions are made on an after-tax basis, they are treated as before- tax contributions for all other purposes of the 401k Plan. This means that:
• Roth 401k contributions are subject to the same limits that apply to before-tax contributions.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
• You cannot withdraw your Roth 401k contributions while you are employed before age 59½, unless you have a hardship.
• Roth 401k contributions are eligible for loans and hardship withdrawals and subject to similar rules as before-tax contributions.
• The Company will make a Company Match contribution with respect to Roth 401k contributions in the same way as before-tax contributions.
• Roth 401k contributions are fully vested.
Catch-Up Contributions
If you will be age 50 or older by the end of the year, you can also make additional before-tax or Roth 401k contributions known as “catch-up” contributions starting at any time during the year. The maximum amount of catch-up contributions is $6,500 in 2020. You can make catch-up contributions even if you have exceeded the other limits on before-tax and Roth 401k contributions under the Plan. Catch-up contributions will be withheld from your eligible Base Pay. For more information on how to make catch-up contributions, visit the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or call the CNA Benefits Center at 877-262-5894.
After-Tax Contributions
When you make after-tax contributions to the Plan, the money is deducted from your paycheck after payroll taxes are calculated. The earnings in your after-tax contributions, however, continue to grow tax free until withdrawn. While after-tax contributions are not taxable when withdrawn, the investment earnings on these contributions are subject to taxes at withdrawal.
Contribution Limits
The Internal Revenue Code (“Code”) places a limit on the amount of before-tax and Roth 401k contributions combined you may make in a year. These limits are outlined in Section 402(g) of the Code. For the 2020 Plan year, Section 402(g) limits Plan participants’ before-tax and Roth 401k contributions to $19,500. Plan participants who are age 50 or older by the end of the year may also make additional catch-up contributions of up to $6,500. Failure to limit contributions to this amount may subject you to serious tax penalties.
Note: If an employee’s before-tax and Roth 401k contribution elections cause the employee contributions during the year to reach the 402(g) limit, the employee’s contribution elections will remain in place but subsequent contributions for the remainder of the year will be deducted as
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
after-tax “spill over” contributions, unless the employee is eligible for, and has elected to contribute to, the CNA Non-Qualified Savings Plan. Catch-up contributions are not included in the 402(g) limit.
The 402(g) limit applies to all 401k plans in which you participate during a year, including those maintained by employers other than CNA. It also applies to other types of plans, such as SEP- IRA’s and 403(b) annuity plans, which allow you to make voluntary before-tax and/or Roth 401k contributions. If you begin making before-tax or Roth 401k contributions to the 401k Plan in the same year in which you participated in another employer’s plan or another type of plan, it is your responsibility to make sure that your total contributions to all the plans do not exceed this limit. If you do exceed this limit in any year, you can notify the Plan Administrator not later than March 1 of the following year and have the excess contribution distributed to you without any penalties. Failure to correct an excess contribution may subject you to serious tax consequences.
The Code also places a limit on the total annual contributions that can be made to your 401k Plan account. This limit applies to all before-tax, Roth 401k, after-tax, and Company contributions, but does not include catch-up contributions. For Plan year 2020, the maximum annual contribution limit is $57,000. If contributions to an employee’s account reach this limit, all contributions under the 401k Plan must be suspended for the remainder of the year. Any additional Basic Contributions that you are entitled to will be made to an account in your name under the CNA Non-Qualified Savings Plan, even if you are not otherwise eligible to contribute to the CNA Non-Qualified Savings Plan.
Making Up Contributions After Military Service
If you are on leave from the Company to serve in the armed forces of the United States and you return to work during the period that your re-employment is protected by federal law, you have the right to make up any before-tax, Roth 401k, or after-tax contributions that you could have contributed during your military service leave. In order to do so, you may increase the rate of your before-tax, Roth 401k, or after-tax contributions above the rate normally permitted over a period of up to three times the length of your military service (up to five years) until you have made up the contributions. Any amount that you make up will be treated, for purposes of the various limits on contributions, as if you had made the contributions during your military service. However, you cannot make up any earnings that you would have received. You may make up the missed contributions even if it requires you to increase your contribution rate to more than 50%.
In order to take advantage of these make-up contributions, you must contact the CNA Benefits Center at 877-262-5894 and let them know you would like to begin make-up contributions.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
How to Stop, Start, or Change Contributions
You may stop, start, or change your contributions on a daily basis using the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits or by calling the CNA Resources Line at 877-262-5894. CNA Benefits Center representatives are available between 8:00 a.m. and 6:00 p.m. Central Time, Monday through Friday.
If you have elected to defer any portion of your compensation under the CNA Non-Qualified Savings Plan for a year, you may not make any changes to your before-tax or Roth 401k elections during the year. However, you may elect to make Catch-Up Contributions, or change your Catch-Up Contribution election, during the year, as long as it does not affect your CNA Non-Qualified Savings Plan deferral.
All changes will be made as soon as administratively possible. After making a change, always check the amount withheld from your next full paycheck following the change to ensure that the change was made properly. If the change was not made, immediately notify the CNA Benefits Center. The Company is not responsible for any contribution errors if you fail to notify the CNA Benefits Center of the error in a timely manner.
Important: The Your Benefits Resources link on the Inside CNA> Human Resources > Benefits and Wellness > General Benefits and CNA Benefits Center are resources available to you as a convenience so you can manage and monitor your account more efficiently. If you direct a change in your contribution election, it is your responsibility to make sure that all your elections are implemented after using one of these systems. You should print a written confirmation and check your paycheck to make sure the change was properly implemented. There may be periods when one or both of these systems are not available due to technical difficulties, system overloads, or routine maintenance, updating, or any other reason. Under no circumstances will the Company have any responsibility or liability whatsoever for 1) the failure of any elections, given through either the Web site or CNA Benefits Center, to be implemented for any reason, 2) the inability of any participant to make elections through either the CNA Benefits Center or the Your Benefits Resources Web site due to technical difficulty, systems overload, maintenance, or updating.
Rollover Contributions
You may transfer—or roll over—money from another employer’s qualified plan or IRA into the 401k Plan, except to the extent that the distribution from the qualified plan or the IRA represents non-deductible or after-tax contributions. If you have a distribution that meets the rollover qualifications specified by the IRS and the Plan, the distribution may be deposited into your rollover account in the Plan. By taking advantage of this option, you can postpone paying income taxes on the rollover amount while continuing to build your savings for retirement.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Before requesting a distribution from your previous employer’s plan or an IRA, you must request a Rollover Contribution Form either from the website or by contacting the CNA Benefits Center. This form will provide you with information on what documentation is required by the Plan to initiate a rollover without incurring unwanted withholding taxes or delays in crediting to your account. If you have any questions after reviewing this material contact the CNA Benefits Center for additional clarification. Please note that no after-tax dollars may be rolled into the Plan unless they are rolled over from a Roth 401k account of another qualified plan.
You are always 100% vested in your rollover account. You can invest your rollover funds in any of the Plan’s investment options. If you do not have any investment election on file, all contributions will be invested into a Qualified Default Investment Alternative (“QDIA”), which is the BlackRock LifePath Index Fund that most closely matches your assumed retirement age of 65, unless you make a different investment election.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Company Contributions
The Company may help you increase the value of your 401k Plan account through Basic contributions and Company Match contributions.
Basic Contributions
Each pay period, the Company contributes 5% of your eligible Total Pay to the Plan. Basic contributions do not depend on Company performance or whether you are already contributing to the Plan.
Company Match Contributions
The Company will match 100% of the first 6% of eligible Base Pay you contribute to the Plan as before-tax, Roth 401k and/or after-tax contributions each pay period. The Company does not match any catch-up contributions that participants age 50 or older are eligible to make under the Plan.
Note: For Plan Years 2000 through 2019, the Company provided discretionary contributions in the form of Variable Match and Performance contributions. These contributions were eliminated from the Plan effective January 1, 2020.
Company Contributions after Military Service
If you are on leave from the Company in order to serve in the armed forces of the United States and you return to work during the period in which your right to re-employment is protected by federal law, you have the right to make up your missed before-tax, Roth 401k, or after-tax contributions. (See “Making Up Contributions After Military Service,” page 11.)
If you make up these contributions, you will receive the same Company Match contributions you would have received if you had made contributions during your period of military service. However, any earnings that you would have received will not be made up. Regardless of whether you elect to make up your employee contributions, if you return to work from military service while your re-employment rights are protected, you will receive the same Basic you would have received had you been actively employed. If you die while performing qualified military service, your beneficiary will receive Basic as if you had been employed through the date of your death, and your account will be fully vested.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Vesting
Vesting is the extent of your ownership of the contributions made to your account.
You are always 100% vested in (that is, you always have a non-forfeitable right to) the value of the following:
• Before-tax contributions;
• Roth 401k contributions;
• After-tax contributions;
• Rollover contributions from other tax-qualified retirement plans; and
• Any earnings on all of the above amounts.
Company contributions made to the Plan, including Basic, Company Match, prior Performance contributions, and the earnings on those contributions, vest according to your Years of Service.
Company Contributions Are If You Have Vested At:
Less than 1 Year of Service 0%
1 year, but less than 2 20%
2 years, but less than 3 40%
3 years, but less than 4 60%
4 years, but less than 5 80%
5 or more Years of Service 100%
Vesting Service
You earn Vesting Service from your date of hire to your termination date under the following methods:
The Plan calculates Vesting Service using the “Elapsed Time” method. Under this method, your Vesting Service is measured from your date of hire to your date of termination, regardless of
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
how many Hours of Service you work, and you may also be entitled to Vesting Service for certain periods that you are not employed by the Company, as described below.
Prior to July 1, 1999, the Plan used a different method of calculating Vesting Service. If you are not fully vested, but worked for the Company prior to July 1, 1999, check with the CNA Benefits Center to see if you are entitled to any additional Vesting Service.
Other Vesting Features
As an active participant, you also become fully vested upon:
• Being terminated by reason of becoming totally and permanently disabled; or
• Death.
Reinstating Your Vesting Service
Under the Elapsed Time method, if you are rehired within 12 months of your termination date, your Vesting Service will be reinstated and you will receive vesting credit for the period of time between your termination date and your rehire date. However, if your employment terminates while you are on a leave of absence (including short term disability), you must be rehired within 12 months of the first day of the leave for this rule to apply.
If you are rehired after 12 months from your termination date (or the first day of your leave of absence), your Vesting Service will be reinstated on your rehire date if:
• You had made before-tax or Roth 401k contributions or had a vested balance in any of your Company contributions when you left the Company; or
• You are rehired within five years of your termination date.
If your employment absence was because of the birth or adoption of your child, or to care for your child after his or her birth or adoption, your service may be restored if you are re-employed within 24 months (rather than 12 months) of the first day you went on leave. However, only the first 12 months of your leave is counted toward Vesting Service.
In addition, time spent in military service can count as part of your Vesting Service, even if it exceeds 12 months, provided that you either return to the Company during the period that federal law protects your right of re-employment, or die while performing military service.
Keep in mind, service with other affiliates of Loews Corporation can count as part of your Vesting Service, but only if you inform the CNA Benefits Center of that service.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Forfeitures If you leave the Company before you are 100% vested, you lose the portion of the Company contributions that are not vested. The portion that is not vested is subject to “forfeiture.” The non-vested portion of your account will be forfeited three months after you leave the Company unless you become an employee again prior to that date. You may be able to regain the forfeiture if you are re-employed within five years. (See “If You Are Rehired,” page 5.)
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Your Investment Options
The Plan offers a variety of investment funds to help your money grow.
You decide how to invest your contributions and the Company contributions. The investment funds you select will depend on your personal investment strategy. If you fail to elect any investment option, you will be treated as having elected to invest your entire account in the LifePath Index Target Date Fund that corresponds to your age, the Plan’s “default fund.” This fund is a Qualified Default Investment Alternative (“QDIA”). The Plan Administrator may change this fund from time to time.
You can invest in one or more investment funds in multiples of 1% as long as the total adds up to 100%. You can also transfer part of your 401k Plan balance from one fund to another at any time. However, most of the investment funds have restrictions on how often you can make transfers in and out of the fund, as described in Appendix B. In addition, some of the funds may impose further restrictions and/or fees based on how often funds can be transferred in or out in order to limit or prevent “day trading,” “market timing,” and other practices that may impose excessive costs on the fund.
The Plan is intended to constitute a plan described in Section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA), and Title 29 of the Code of Federal Regulations Section 2550.404c-1. This means that the fiduciaries of the Plan may be relieved of liability for any losses that are the direct and necessary results of your investment choices. Under these regulations, you have the right to receive additional information regarding the investment options provided under the Plan. The Plan Administrator is the Plan fiduciary responsible for providing this information, and has made the information available at the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or by contacting the CNA Benefits Center. The additional information includes:
• A description of the annual operating expenses of each investment fund and the amount of expenses expressed as a percentage of the fund’s average net assets.
• A copy of prospectuses, financial statements and reports, and other materials relating to the investment funds, to the extent such information is provided to the Plan.
• Information concerning the value of shares or units in each available investment fund, as well as the past and current investment performance of such funds, net of expenses.
• Information concerning the value of shares or units of each fund held in your account. This information is contained in your regular account statements. If you need further information, go to the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or contact the CNA Benefits Center.
Each mutual fund whose shares are registered with the U.S. Securities and Exchange Commission must periodically publish a document called a “prospectus,” which is a description of the fund, its management and investment philosophy, and certain risk factors involved in investing in the fund. The prospectus will also contain information about the prior investment performance and management expenses of the fund. The PIMCO All Asset Fund, Vanguard International Growth Fund and T. Rowe Price Institutional Emerging Markets Equity Fund are required to issue a prospectus, and you should receive and review the current prospectus before investing any part of your account in the fund. You can request a prospectus through the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or by contacting the CNA Benefits Center.
Investment Fund Pricing Information
The 401k Plan uses a Trust Portfolio accounting approach. Within this approach, the trust calculates what is often called a Plan Specific Net Asset Value or Synthetic Net Asset Value (SNAV). This will differ from the Net Asset Value (NAV) published daily within the open market.
The Trustee calculates the SNAV by taking several factors into consideration:
• the fund’s performance for the day;
• the fund manager expenses as outlined in the fund prospectus;
• any dividends paid to the fund; and
• any interest accrued by the fund (if applicable).
Making Your Investment Choices
Each investment fund has different investment objectives and levels of risk. The funds you select should fit your savings objectives and your comfort level with risk.
The investment funds currently offered by the 401k Plan are listed, and briefly described, in Appendix A to this SPD. Please keep in mind that the investment fund options listed on Appendix A may change from time to time. For the latest fund information, check the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna).
A detailed description of each of the Plan’s investment options, including information on the fees and expenses associated with each option, as well as each fund’s historical performance
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
data is available through the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) or by contacting the CNA Benefits Center.
The Annual Fee Disclosure Notice is provided to all Plan Participants annually and is also available through the Your Benefits Resources link.
Changing Your Investment Allocation
When your personal and financial circumstances change, it’s easy to change your investment choices in the Plan. You have daily access to your account. If you want to transfer money between funds, or change how your future contributions are invested, simply:
• Visit the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits or at www.mybenefitsdirectory.com/cna; or
• Call the CNA Benefits Center toll free at 877-262-5894.
Important: The Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits and CNA Benefits Center are resources available to you as a convenience so you can manage and monitor your account more efficiently. If you direct a change in your investment options, it is your responsibility to make sure that all your elections are implemented after using one of these systems. You should print a written confirmation and check your account to make sure the change was properly implemented. There may be periods when one or both of these systems are not available due to technical difficulties, system overloads, routine maintenance, updating, or any other reason. Under no circumstances will the Company have any responsibility or liability whatsoever for 1) the failure of any elections, given through either the Your Benefits Resources Web site or CNA Benefits Center, to be implemented for any reason, 2) the inability of any participant to make elections through either the CNA Benefits Center or the Your Benefits Resources Web site due to technical difficulties, system overloads, maintenance, or updating.
What Is Investment Risk?
Risk means that the value of your investment could decline. This is based on many factors, including the current economy, interest rate changes, and fluctuations in the market. Equity funds have a higher risk because they invest in stocks, which tend to have greater price fluctuations. Certain funds tend to minimize risk by investing in several different stocks and/or stocks and bonds. If one goes down, another may go up.
On the other hand, if you invest only in cash or fixed income investments, you run the risk that your savings won’t keep pace with inflation. To offset inflation, you need to achieve an investment return greater than the rate of inflation.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Of course, only you can determine how much risk you’re willing to assume, based on your short and long term investment goals and your risk tolerance.
Alight Financial Advisors
The Company has retained Alight Financial Advisors (AFA), an investment adviser that is not affiliated with the Company, to help you in making your investment decisions, if you choose to make use of its services. AFA provides an Online Advice service through its web site, which is available to all participants in the 401k Plan. In addition, AFA also offers a Professional Management service, under which, for an additional fee, participants may delegate to AFA the authority to make investment decisions for them. You may have received mailings from AFA describing this service, and may receive additional mailings in the future.
You should review the materials from AFA carefully when deciding whether you wish to make use of Professional Management. There is an additional fee for the Professional Management service, and it will require you to give AFA the authority to make investment changes in your account. If you have questions you will need to call the CNA Benefits Center at 877-262-5894 and ask to speak to an AFA Advisor. Of course, you always have the right to continue to make your own investment decisions, or to use the services of an investment adviser other than AFA.
Although the Company believes that the services provided by AFA may be helpful to those participants who choose to make use of the services, it is important that you realize that AFA is not affiliated with the Company, and the Company does not review any of the investment advice provided to participants. Under no circumstances will the Company have any liability or responsibility for the investment advice provided by AFA. Even though some materials may be provided to you with a cover letter from the Company, the materials are prepared by AFA and the Company is not responsible for them.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Borrowing From Your Accounts
If you need to access your money before retirement, you may be eligible to take a loan from your 401k Plan account and repay the interest to yourself. Participants who have terminated employment with the Company and all Controlled Group members (including for this purpose any company in which either the Company or Loews owns a 50% interest) but still have an account in the Plan may not initiate new loans.
How Much You Can Borrow
You can borrow against your own employee contributions, including all before-tax, Roth 401k, after-tax, and rollover contributions, and the vested portion of your Company Match. The loan request cannot be less than $500 and cannot exceed the lesser of:
• $50,000 minus the greater of the highest loan balance in the previous 12 months and the total unpaid balance of all loans as of the date of the loan; or
• 50% of your total vested account value excluding your Basic and Performance account), reduced by any other outstanding loans.
You cannot borrow any part of the Basic or Performance contributions. You cannot initiate a loan while out on an unpaid Leave of Absence.
Loans must be requested in whole dollar increments with a $500 minimum. Only one loan can be outstanding at any time.
Note: Prior to January 1, 2020, the Plan allowed up to two outstanding loans. If you had two outstanding loans as of December 31, 2019, you are permitted to continue loan repayments for these loans in accordance with the terms of the loans.
Effective on and after January 1, 2020, upon repayment of a loan balance, no additional loan can be initiated until 30 days following the repayment of a previous loan.
The loan term may not be for less than six months nor more than five years (unless you have a loan outstanding at the time you go out on Military Leave). The interest rate on your loan is the prime rate plus 1%, set on the first business day of the month in which you initiate the loan, based on the prime rate in effect on the 15th day of the prior month. Loan checks are generally mailed within two business days from the date your loan request processes. Prior to January 1, 2020, the interest rate previously charged was the prime rate.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Loan Repayments
Loans are repaid through payroll deductions to the extent practical. Both principal and interest are deducted after taxes each pay period and deposited to your 401k Plan account.
You can repay a portion or 100% of your loan balance, including principal and interest outstanding prior to the time a payment is due, without penalty. Early loan payoffs must be made with a certified check or money order for the amount owed. To determine the full Early Loan Payoff amount, you can contact the CNA Benefits Center to request an Early Loan Payoff (ELP) invoice.
If you are transferred to a Controlled Group company, you will need to continue your loan payments via a check or direct debit —directly to the CNA Benefits Center—as payroll deductions will not be possible.
Loan Default/Deemed Distribution
It is your responsibility to make sure your loan deductions start and that you do not miss any payments. You must contact the CNA Benefits Center within 30 days if a scheduled deduction is not made from your paycheck. If you fail to make a loan repayment your loan will be delinquent. Default will occur if you fail to correct your loan delinquency by repaying your missed loan repayments by the end of the “cure period.” The cure period is the 90 day period after you miss a loan repayment.
A defaulted loan will be considered a deemed distribution and result in your outstanding loan balance plus applicable interest in being reported on a Form 1099R as taxable income. The taxable distribution resulting from this type of default will not be eligible to roll over. You may also be subject to the additional 10% excise tax on premature distributions, depending on your age and other circumstances.
A deemed distribution does not result in your account balance being reduced by the unpaid loan. The loan continues to remain an outstanding obligation until you leave the Company or you repay the loan in full, whichever is earlier. In addition, the loan continues to accrue interest, and to count against:
• The maximum number of loans that you may have outstanding under the Plan; and
• The maximum amount available for a new loan,
If you are on a paid leave, your loan payments will continue to be deducted from your paycheck. If your paycheck is not sufficient to cover the loan repayment, you are responsible for making the loan repayments manually to the CNA Benefits Center. If you wish, you may contact the CNA Benefits Center to arrange for direct manual loan repayments while you are on an
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
unpaid leave. If scheduled payments are not made by the end of the 90 day cure period, your entire loan will be considered in default.
If you are on an unpaid leave of absence, your loan payments will be suspended for the period of the leave of absence or up to 12 calendar months, whichever is shorter. Following the suspension, your outstanding loan will be reamortized over a period not to exceed 5 years from your original loan date.
If you are on leave for military service, your payments will be suspended even if the leave is for more than 12 calendar months. The term of your loan will be extended by the length of the period of your military service.
If you terminate employment, you may continue to make loan payments via a check or direct debit. If you don’t, the loan will be considered a distribution and you will incur federal taxes on the unpaid balance of your loan, plus an additional 10% excise tax if you have not reached age 55 by the end of the year in which you terminate. If you have an outstanding loan at the time you leave the Company and you request a distribution from the Plan, your loan balance will be considered taxable unless the loan is repaid prior to the distribution.
Applying for a Loan
If you want to apply for a loan, you may apply online via the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits or call the CNA Benefits Center at 877-262-5894. There is a loan initiation fee of $50 that will be charged to your account at the time you request the loan.
You will receive a Promissory Note around the same time your loan request is processed that will show the loan amount, the duration of the loan, the interest rates, and the repayment amount. Your endorsement of the loan check will constitute your acceptance of the terms and conditions contained within your Promissory Note.
The Plan Administrator has the right to change the rules governing loans from time to time, including placing further restrictions on the number or frequency of loans or increasing the loan fee. However, in general, any changes will generally be applied only to new loans taken out after the rules are changed, unless a change to existing loans is required by law.
For more detailed information specific to loans, see the CNA 401k Plan Loan Policy by going to the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits (or www.mybenefitsdirectory.com/cna) and click on Plan Documents on the home page > Plan Information > CNA 401k Plan > Loan Policy.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Withdrawals from Your Account
While the money in your 401k Plan account is intended for retirement, in some cases you can make a withdrawal from your account when you are still employed by the Company. This is called an “in-service withdrawal.” Before you decide to make an in-service withdrawal, you should consider the tax effect of the withdrawal and the impact on your retirement savings.
In general, you may not make more than one in-service withdrawal in any six-month period (even if you are eligible under more than one category). This limit does not apply to hardship or age 59 ½ withdrawals as these are separate types of withdrawals. The minimum amount of any withdrawal is $1,000.
The Plan Administrator also has the right to change the rules governing in-service withdrawals from time to time.
The following chart sets out the order in which funds from the Plan will be taken from the contribution sources when you take an in-service withdrawal from your 401k Plan account. Withdrawals will generally be taken in the order shown in this chart, and all the assets that are available in one category must be depleted before going on to the next. Some types of withdrawals may result in a suspension period.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Type of Type of Contribution When Withdrawals Suspension of Withdrawal Sources Can Be Made 1 Contributions
In-Service Non- • Rollover • Any portion at any time None Hardship - No • After-tax unmatched 2 Suspension (pre-87)
• After-tax matched
(pre 87)
• After-tax Post 86 unmatched • Vested Company Match • [Company Match: Any portion of your balance • Prior Company when you are age 59½. Any portion of your vested balance if you have 5 years of participation. If you have less than 5 years of participation, you are restricted from withdrawing any portion that has not been in the Plan for two or more years.]
In-Service Non- • After-tax matched Any portion at any time All after-tax Hardship – with (post-86) contributions for 6 2 Suspension months After the sources indicated above are depleted
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Type of Type of Contribution When Withdrawals Suspension of Withdrawal Sources Can Be Made 1 Contributions
In-Service - Age • Rollover Any portion of your vested None 59½ balance after age 59½ • After-tax unmatched Withdrawal (pre-87) • After-tax matched (pre-87) • After-tax unmatched (post-86) • After-tax matched (post-86) • Vested Company Match • Surety Company Match • Prior Company • Before-tax • Basic • Performance
In-Service - Age • Roth Rollover Any portion of your vested None 59½ Roth balance after age 59½ • Roth 401k Withdrawal • Roth Restricted Note: Special rules apply to (effective 4/1/2020) withdrawals of Roth accounts, as described on page 8.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Type of Type of Contribution When Withdrawals Suspension of Withdrawal Sources Can Be Made 1 Contributions
• Rollover Hardship Any portion of your vested None Withdrawal – • After-tax unmatched balance, provided the (pre-87) No Suspension requirements for a hardship • After-tax matched (pre- withdrawal are satisfied 87) • After-tax unmatched (post-86) • After-tax matched (post-86) 3 • Vested Company Match • Surety Company Match • Prior Company • Roth Rollover • Roth 401k • Before-tax
• Before-tax Active Military Any portion of your before- 6-month suspension of Duty • Roth 401k tax and Roth 401k before-tax and Roth contributions if you are on 401k contributions active military duty for at least 30 days but have not terminated employment.
1 subject to $1,000 minimum 2 subject to plan limit of one non-hardship withdrawal allowed in any 6 month period 3 subject to 6 month holdback
After-Tax/Rollover Contributions—“In-Service Non-Hardship Withdrawal”
You may withdraw all or a portion of the value of your after-tax unmatched and/or rollover contributions at any time, subject to the general restrictions on withdrawals. Payment will be made to you as soon as administratively feasible.
Your after-tax contributions are not taxed when you withdraw them. However, the earnings on your after-tax contributions are taxable when withdrawn. Under IRS regulations, a portion of your after-tax withdrawal request will include earnings and these earnings will be treated as taxable income.
If you withdraw the matched portion of your after-tax contributions, your after-tax contributions to the Plan will be suspended for six months.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Age 59½ Withdrawals—“In-Service Age 59½ Withdrawal”
If you have reached age 59½, you may withdraw 100% of the value of your vested Plan accounts.
Company Match Contributions
You can withdraw any portion of your vested Company Match contributions:
• After you are a participant in the Plan for five years; or
• After you reach age 59½; or
• Two years after contributions are deposited to your account; or
• If needed for a financial hardship.
Before-Tax and Roth 401k Contributions—“Hardship Withdrawal”
If you have taken other available withdrawals (other than hardship withdrawals) for which you are eligible for under the Plan (and all other qualified and nonqualified retirement and deferred compensation plans maintained by the Company or any affiliate,but excluding Plan loans), you may be able to withdraw all or a portion of the value of your before-tax and Roth 401k contributions and the vested value of Company Match contributions if you experience financial hardship.
A financial hardship means a circumstance resulting from an immediate and heavy financial need. For purposes of the Plan, financial hardship is limited to:
• Payment of unreimbursed medical expenses for you, your spouse, your dependents (as defined in Section 152 of the Internal Revenue Code), under the 401k Plan.
• Purchase (excluding mortgage payments) of your primary residence.
• Payment to prevent your eviction from your primary residence or the foreclosure on the mortgage of your principal residence.
• Payment of tuition and related educational fees and room and board expenses, for the next 12 months of post-secondary education for you or your spouse, child, or dependent under the 401k Plan.
• Expenses for the repair of damage to your principal residence that would otherwise be deductible as a casualty loss (without regard to whether the loss exceeds 10% of your
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
adjusted gross income. This generally requires a loss caused by a fire, storm, flood, or other sudden casualty. The repair of other types of damage to your home does not qualify.
• Payment of funeral expenses for your parents, spouse, child, or dependents under the 401k Plan.
• Expenses and losses (including loss of income) incurred on account of a disaster declared by FEMA, provided that your principal residence or principal place of employment at the time of the disaster was located in an area designated by FEMA for individual assistance with respect to the disaster.
• Any additional amount to cover federal, state, and local income taxes estimated to be payable due to the financial hardship withdrawal.
You may only withdraw the amount necessary to meet the immediate financial need. As provided above, you may only request a hardship withdrawal if you have already taken other available withdrawals (other than hardship withdrawals) for which you are eligible for under the Plan (and all other qualified and nonqualified retirement and deferred compensation plans maintained by the Company or any affiliate) (but excluding Plan loans).
Before-Tax and Roth 401k Contributions—“Active Military Duty”
If you are on active military duty for at least 30 days, but your employment has not terminated, you may withdraw your before-tax and Roth 401k contributions in the same manner as if you had terminated employment. If you make a withdrawal under this provision, your ability to make before-tax or Roth 401k contributions is suspended for six months.
Tax Considerations
Your before-tax contributions, Company contributions, rollover contributions, and any earnings on contributions become taxable as income in the year the money is distributed. After-tax contributions are not taxed when withdrawn, but the portion of any earnings on your after-tax contributions will be subject to tax when they are withdrawn. In addition to regular income tax, any taxable amount included in a withdrawal may also be subject to a 10% early withdrawal penalty tax unless you are age 59½. (As described on page 8, distributions of Roth contributions may be entirely tax-free if certain requirements are met).
The IRS requires that 20% be withheld for income taxes from any taxable portion of your non- hardship withdrawal. This 20% withholding tax may be more or less than you actually owe the federal government. Any overpayment or underpayment will be offset on your federal tax return. If you determine this 20% is less than what you will need to have withheld, you may
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
elect to increase your regular paycheck withholding, or make estimated tax payments, to avoid possible penalties.
The IRS requires that the entire taxable portion of your hardship withdrawal is subject to 10% withholding, but you have the right to waive this amount. It is important to note that while the withholding is not required at the time of distribution, any taxable income included in the withdrawal is subject in the year it is distributed, including the 10% early withdrawal penalty tax, if applicable.
Hardship withdrawals are not eligible to be rolled over.
Requesting a Withdrawal
To request a withdrawal, use the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits or call the CNA Benefits Center at 877-262-5894.
How a Withdrawal Reduces Future Growth
When you make a withdrawal, your account loses more than just the money withdrawn. That’s because you also lose the value of compounded earnings (i.e., earnings on the earnings from your investments).
Take a look at this example to see how much money you could lose by taking a $5,000 withdrawal, assuming a growth rate of 5%.
Amount Amount of Time Lost Principal and Withdrawn Until Retirement Compounded Earnings
$5,000 10 years $8,235.05
$5,000 20 years $13,563.20
$5,000 30 years $22,338.72
By making a $5,000 withdrawal today, you could have $13,563.20 less in your account when you retire in 20 years … $22,338.72 less in 30 years! Your actual lost earnings will depend upon your investment return. Investment returns are not guaranteed.
In Plan Roth Conversion
Effective April 1, 2020, you may request to convert all or part of the eligible portion of your account into a Roth 401k account (such conversion is referred to as an “in-Plan Roth
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
conversion”). The eligible vested portion includes the value of the following contributions in your account:
• Before-tax • After-tax (Pre-87 matched, Pre-87 unmatched; Post-86 unmatched) • Vested Basic and Performance contributions • Vested Company match contributions that have been on the Plan for at least 24 months* • Rollover *NOTE: Surety Company Match contributions made prior to December 31, 2019 are not eligible for conversion unless you have attained age 59 ½ or you are no longer employed by CNA
You may elect an In-Plan Conversion up to 4 times per calendar year. The minimum amount you may elect to convert at any one time is $500.
The amount you elect to convert will be withdrawn from the applicable contribution account(s) and then directly rolled over into the appropriate Roth 401k account - either Roth 401k, Roth 401k Rollover or Roth Restricted. Any such converted amount will then be treated in the same manner as other Roth 401k contributions, subject to any withdrawal or distribution restrictions or rights that were applicable to the amount before the in-Plan Roth conversion. As an example, Basic contributions that are not eligible for In-Service loans or withdrawals will continue to be ineligible for In-Service loans and withdrawals. To maintain this restriction, converted Basic contributions will be posted to the Roth Restricted Rollover contribution source in your account. All converted money will have the tax advantages of Roth 401k contributions and future earnings being paid tax-free – as long as, at the time of distribution, you have had a Roth account in the Plan for at least 5 years and you have attained at least age 59 ½. You will be required to pay taxes on the converted amount in calendar year you make the In-Plan Roth Conversion. For more information on the tax implications, consult a tax of financial advisor.
Distribution of Your Account
The vested value of your account may be paid to you (or your beneficiary) under these circumstances:
You Leave the Company: If you leave the Company for any reason, you may request the vested value of your account be paid out. Depending on your account balance, one of the following distribution options will apply to you if you do not make an election:
• If the total vested portion of your account balance including any outstanding loan balance is equal to $1,000 or less, you will automatically receive the balance of your account in a single lump-sum distribution mailed to your home address.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
• If the vested portion of your account balance including any outstanding loan balance is more than $1,000, you can leave your money in the Plan and have the following choices on how your Plan account will ultimately be paid out in the form of:
• A partial distribution, • A lump sum distribution, • Monthly, quarterly or annual installments, or • A rollover to an individual retirement account or another employer plan.
Note: Upon your termination, any request to have your account distributed as a lump sum will not be processed until two payroll cycles after the payroll your termination status is received by the CNA Benefits Center.
Effective January 1, 2020, you will be required to begin taking minimum distributions on or before the later of April 1 of the calendar year following the calendar year in which you attain age 72 or terminate employment. However, if you attained age 70½ before January 1, 2020, your minimum distributions must begin on or before the later of April 1 of the calendar year following the calendar year in which you attain age 70½ or terminate employment. Your account will be distributed during your lifetime, and up to and including the calendar year of your death, unless you request an earlier distribution. The amount distributed to you in installments will be calculated based on the balance in your account and your age (as well as your spouse’s age, if you are married and your spouse is your sole designated beneficiary).
The vested value of your account will not be distributed if you transfer to a company within the Controlled Group of Corporations. However, you may request a distribution if you terminate from the Controlled Group of Corporations, or your employer is no longer a member of the Controlled Group.1 Companies that are at least 80% owned by Loews or CNA Financial are in the Controlled Group of Corporations.
You Die Prior to Terminating Your Employment: The value of your account will be 100% vested and paid to your designated beneficiary as soon as administratively feasible. See “Naming a Beneficiary,” page 4, for more information.
1 In some cases involving the sale of a business unit, the accounts of the employees involved may be transferred directly to a plan maintained by the buyer, in which case distributions may not be available until you terminate employment with the buyer.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
How Distributions Are Taxed
The IRS requires an automatic 20% income tax withholding at the time of distribution on all taxable income distributed from the Plan (except for any after-tax contributions, hardship withdrawals, and minimum required distributions after age 70½ (or age 72, for anyone who has not attained age 70½ by December 31, 2019), unless the money is rolled directly into an IRA or another employer’s qualified plan. This 20% withholding tax may be more or less than you actually owe the federal government.
Based upon your age when leaving the Company and your age at the time you receive a distribution, your distribution will be subject to the following taxes:
• You separate from the Company prior to the year you attain age 55. Distributions received are subject to ordinary income taxes and a 10% early withdrawal penalty tax for an early distribution.
• You separate from the Company and are at least age 55 by the end of the calendar year in which you terminate. Distributions received after you leave the Company are subject to ordinary income taxes, but the 10% early withdrawal penalty tax does not apply.
• You receive a hardship or an in-service withdrawal while still employed by the Company on or after age 59½. Distributions are subject to ordinary income taxes, but no early withdrawal penalty tax.
• You become disabled while employed. All distributions received after becoming disabled are subject to ordinary income tax only—there is no early withdrawal penalty tax.
• You die. All distributions received by your beneficiary are subject to ordinary income tax only—there is no early withdrawal penalty tax.
Remember, if you have an outstanding loan from your account when you request a distribution, the unpaid loan balance will be considered part of your taxable distribution.
Only the accumulated income on after-tax contributions is taxed, and distributions of Roth contributions may be entirely tax-free if certain requirements are met.
Tax laws and regulations are complex and subject to change. That’s why it’s a good idea to consult a professional tax advisor before taking a withdrawal from the Plan.
Rollovers
You may request a direct rollover of your distribution to an IRA or to another employer’s qualified plan that accepts rollovers. The amount rolled over will not be taxed until you
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
withdraw it from the IRA or another employer’s qualified plan. If you elect to have your distribution paid as a direct rollover, the check will be made payable to the financial institution you choose, but mailed to your home.
If you elect to have your distribution paid directly to you, federal law requires 20% ordinary income tax be automatically withheld on the taxable portion of your distribution. You may initiate an indirect rollover by rolling over the portion of the distribution that has been paid directly to you. Your rollover must be completed within 60 days of receiving the payment. If you roll over only the 80% you received, you will be taxed on the 20% portion that was withheld and not rolled over. However, you may still roll over 100% of the payment. To do so, add the 20% withheld to your rollover deposit (via personal funds) and report the transaction on your income tax return. Any withholding overpayments or underpayments will be offset on your income tax return.
You may not roll over hardship withdrawals or amounts paid as a minimum required distribution. You may be able to roll over your after-tax contributions, depending on where you choose to roll-over your account. Check with the other plan or IRA to see if it will accept an after-tax rollover. If you have a Roth 401k balance, it can only be rolled over to a Roth IRA or an employer-sponsored plan that accepts Roth 401k rollovers.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Required Minimum Distributions
The IRS requires you to begin taking distribution of your account no later than April 1 of the year following the later of the year in which you terminate employment or the year you attain age 70½ (if you attain age 70½ on or before December 31, 2019). Effective January 1, 2020, you will be required to begin taking minimum distributions on or before the later of April 1 of the calendar year following the calendar year in which you attain age 72 or terminate employment. If you terminate employment before age 70½ (or age 72, as applicable) and do not take a distribution of your account, the Plan will normally make your initial Required Minimum Distribution in the December prior to the April 1 following your attainment of age 70½ (or age 72, as applicable). Your account will be paid out in annual installment payments and be equal to the Required Minimum Distribution as defined by the Internal Revenue Code. All subsequent annual minimum distributions will be paid on or by December 31st. However, it is your responsibility to insure that you begin receiving your distribution before the April 1 deadline.
You can elect at any time to receive the remaining balance as a lump sum after you have commenced your Required Minimum Distributions.
If you die after you begin receiving Required Minimum Distributions, your entire remaining account balance will be paid to your beneficiary in a lump sum 90 days after the account is moved to their name unless your beneficiary elects to roll it over. Any required minimum distribution amounts will be ineligible for rollover.
If you, or your beneficiary, fail to receive the Required Minimum Distribution in any year, a penalty tax equal to 50% of the amount of the Required Minimum Distribution is imposed for each year until the Required Minimum Distribution is paid. This tax is imposed on the participant individually and is not the responsibility of the Company.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Special Rules for Former Participants in the CNA Surety 401k Plan
In June 2011, all of the stock of CNA Surety Corporation and its wholly owned subsidiary Western Surety Company (collectively “CNA Surety”) was acquired by the Company, and CNA Surety became a wholly owned subsidiary of the Company. As a result of this transaction, the employees of CNA Surety were transferred to the payroll of the Company on December 25, 2011, and immediately began participating in the Plan (except for CNA Surety employees working in Puerto Rico, and employees of CNA Surety’s SUR Insurance Agency subsidiary).
The CNA Surety Corporation 401k Plan (the “CNA Surety Plan”) was merged into the Plan in early 2012. If you had an account in the CNA Surety Plan (unless you were an employee of the SUR Insurance Agency), your account was transferred to the Plan. You will have received information regarding how your investments in your CNA Surety Plan account will have been transferred to investments in the Plan’s available funds.
Although the Plan may treat the person who was your beneficiary under the CNA Surety Plan as your beneficiary under this Plan, we recommend that you use the Your Benefits Resources link on Inside CNA > Inside HR or call the CNA Benefits Center to make sure that the right person is designated as your beneficiary.
If you were an employee of CNA Surety, whether or not you were also participating in the CNA Surety Plan, you should be aware of these special rules:
• If you had an election in place to make pre-tax contributions to the CNA Surety Plan, that election automatically transferred to the Plan. However, if you were contributing more than the maximum amount permitted under the Plan in 2012 (20% of compensation, or 9% if you were a highly compensated employee), your contribution was cut back. In addition, you must make an affirmative election to make Catch-Up Contributions, Roth 401k contributions, or After-Tax Contributions.
• Your service with CNA Surety will count under the Plan for purposes of determining when your account vests, and when you become eligible to receive the full amount of Match Contributions.
• The vesting rules that were in place under the CNA Surety Plan will continue to be used to determine when your Plan account vests, both with respect to amounts transferred from the CNA Surety Plan and amounts contributed after the transfer. Under the CNA Surety Plan rules, all of your accounts are fully vested at all times except for your Basic Contributions Account, which will vest when you have completed three years of Vesting Service.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
• You immediately became eligible to receive all Employer Contributions under the Plan when you transferred to the Company’s payroll, except that you were not eligible to receive Variable Match Contributions or Performance Contributions based on the Company’s 2011 performance. You were eligible to receive a Surety Performance Contribution for 2011 calculated under the rules contained in the CNA Surety Plan. Beginning in 2012, you will participate in all Employer Contributions on the same basis as any other participant.
• Unlike the CNA Surety Plan, the Plan does not count long-term incentive payments as part of your compensation for purposes of Basic or Performance Contributions. Because of this difference, any payouts you receive from the CNA Surety long-term incentive plan in 2012, 2013, or 2014 will be counted as part of your compensation for purposes of Basic and Performance Contributions, but after 2014 long-term incentive payments will no longer be counted.
• You are not entitled to make non-hardship in-service withdrawals from your Surety Match Contributions Account until you attain age 59½ . This includes both amounts transferred from your Match Contributions Account in the CNA Surety Plan, and Match Contributions made to your account up until December 31, 2019.
Effective January 1, 2020: Company Match contributions made to your account will be eligible for non-in-service withdrawals in accordance with Plan rules.
• If there is a balance in your Before-Tax Contributions Account that represents funds transferred from the Plan to the CNA Surety Plan when CNA Surety was originally spun off as a separate company from CNA in 1997, that amount is not eligible for hardship withdrawals.
• The Plan does not permit hardship withdrawals or loans from Performance Contributions, including amounts that were transferred from your CNA Surety Plan Performance Account. However, if you had a loan outstanding from your Performance Account when the CNA Surety Plan was merged into the Plan, that loan may remain outstanding until it is repaid in accordance with its terms.
• If you had a “CNA Deferral Account” in the CNA Surety Plan, which represented funds transferred to the CNA Surety Plan from the 401k Plan when CNA Surety was spun-off as a separate company in 1997, that balance was transferred to your Before Tax Account in the 401k Plan, but is not eligible for hardship withdrawals.
• If you transferred from CNA Surety to the Company before December 25, 2011, you may have begun participating in the 401k Plan at that time. During the remainder of 2011 you would have been treated in the same manner as any other participant in the 401k
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Plan. Once the plans were merged, your accounts (including amounts contributed during 2011) will be treated in the same manner as the accounts of other former participants in the CNA Surety Plan as described above, including the special restrictions on withdrawals and loans.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Additional Important Information
Plan Name, Type, and Number
The official name of the Plan is the CNA 401k Plan. It is a defined contribution profit-sharing plan with a 401k feature. The “plan number” used for filings with the Department of Labor and IRS is 005.
Plan Trustee
The Trustee for the CNA 401k Plan is:
The Northern Trust Company 50 S. LaSalle Street Chicago, IL 60675
Plan Administrator
For legal purposes, Continental Casualty Company is the Plan Administrator of the 401k Plan. An individual known as the Plan Administrator has been appointed to administer the Plan. The address of the Plan Administrator is as follows:
Plan Administrator – CNA 401k Plan CNA 151 N. Franklin Street Chicago, IL 60606 312-822-5000
Any correspondence to the Plan Administrator should clearly indicate the correspondence refers to the CNA 401k Plan. The Plan Administrator has the discretionary authority to determine eligibility for benefits and to interpret the terms of the Plan. The Plan Administrator is assisted by various agents, attorneys, and clerical assistants, as needed, to effectively administer the Plan.
Plan Sponsor and Employers
The 401k Plan is sponsored by Continental Casualty Company (FEIN: 36-2114545).
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Agent for Service of Legal Process
If any legal action is necessary concerning the 401k Plan, legal process may be served on:
Stathy Darcy Senior Vice President, Corporate Secretary & Deputy General Counsel CNA 151 N. Franklin Street Chicago, IL 60606
Legal process also may be served on the Plan Administrator or the Plan Trustee.
How the Plan Is Funded
The CNA 401k Plan is a defined contribution plan. The Plan is funded both by employee and Company contributions. Each participant may elect to make contributions to his or her own account, and the Company also contributes money based on the formulas described earlier.
Right of Recovery
If, for some reason, a benefit is paid that is larger than the amount allowed by the Plan, the Plan has a right to recover the excess amount from the person who received the overpayment.
Plan Records
The records for the Plan are maintained on a calendar-year basis, from January 1 through December 31. The Plan maintains financial records on the basis of a fiscal year that ends each December 31. The financial report for the fiscal year is included in the annual report for the Plan that is filed with the federal government.
Plan Fees
All active plan participants with a balance of greater than $1,000 and all terminated participants with any balance are charged a monthly administrative fee. At January 1, 2020, this fee was $3.95 per month. Please note this can range from $3.78 – $4.86 per month, based on the number of participants in the plan. You will continue to incur this fee on a monthly basis as long as you keep your balance in the Plan. For a copy of the Annual Fee Disclosure, go to the Your Benefits Resources link on Inside CNA > Human Resources > Benefits and Wellness > General Benefits or www.mybenefitsdirectory.com/cna.
Participants who elect to use AFA’s Professional Management service will be charged a fee equal to a percentage of their account balance determined by AFA from time to time.
There is a loan initiation fee of $50 charged to the participant’s account at the time a loan is requested. There is a fee of $450 charged to the participant’s account at the time a domestic
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
relations order is provided by the participant for the review, qualification and processing of a domestic relations order.
These fees are subject to change from time to time by the Plan Administrator.
Plan Amendment and Termination
While the Company intends to maintain this Plan, it reserves the right to end, modify, suspend, or amend the Plan at any time, in whole or in part. You will be notified of any changes that are made. Any amendment, modification, or termination of the Plan must be done by a resolution of the Board of Directors of the Company or by persons authorized by the Board.
If a total or partial Plan termination should occur, or if the Company completely discontinues its contributions to the Plan, the amounts allocated to all accounts of each affected employee will become fully vested and non-forfeitable.
If, upon Plan termination, the Company decides to terminate the trust, the trust fund and accounts of participants will be valued as if the termination date and the account balances will be distributed. However, if the Company decides to continue the trust, no further contributions will be made by the Company or its employees, the employees’ accounts will be fully vested, and the trust will be administered as if the Plan remained in force. If the trust is subsequently terminated, the trust fund and accounts of the employees will be valued as if the trust termination date and the account balance will be distributed.
Nondiscrimination Rules
Federal laws limit the amount some employees (defined as “highly compensated” by the Internal Revenue Code) may contribute to plans like the 401k Plan. Whether you are a highly compensated employee depends on your total compensation (including both before-tax and Roth 401k contributions to this Plan and welfare benefit plans) received in the preceding year. In 2020, you are considered highly compensated if your total compensation from the Company for 2019 was at least $125,000.
The Internal Revenue Code also limits the amount of compensation that may be utilized under the 401k Plan for any given Plan year. For the 2020 Plan year, this compensation limit is $285,000. This means that only your compensation up to $285,000 will be considered by the 401k Plan in determining contributions to the Plan.
Note: There are two definitions of compensation used under the 401k Plan: (i) base pay for purposes of determining employee contributions (and the corresponding Company match) and (ii) total pay for purposes of determining Basic contributions.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
The Plan must pass IRS nondiscrimination tests annually. These tests ensure that the Plan does not discriminate in favor of highly compensated employees. You will be advised of any additional limitations imposed upon you as a result of any nondiscrimination tests. It is possible that either a portion of the before-tax or Roth 401k contributions of highly compensated employees will have to be treated as after-tax contributions, or that a portion of the after-tax contributions will need to be distributed to highly compensated employees in order to satisfy the tests.
Top-Heavy Rules
The Plan is required by government regulations to include provisions that will apply if a majority of the benefits are being paid to employees in higher-paid positions. If this were to happen, even for only a period of time, the Plan would be required to provide certain minimum benefits and an accelerated vesting schedule thereafter for all employees.
Because of the way the Plan is structured, we do not believe that these provisions will ever apply. However, if it were to become “top-heavy,” you will be sent full information on the accelerated vesting provisions.
The Pension Benefit Guaranty Corporation
The Pension Benefit Guaranty Corporation (PBGC) does not insure benefits under the Plan because the insurance provisions under ERISA are not applicable to this type of plan. Any benefits payable by the Plan are based on amounts contributed and investment results that cannot be determined in advance. The assets under the Plan are held in trust for the exclusive benefit of the participants and their beneficiaries.
Assigning Your Benefits
Benefits under the Plan cannot be assigned, transferred, or pledged to someone else. As required by law, the Plan does make an exception for certain Qualified Domestic Relations Orders that provide for alimony payments or marital property rights to a spouse or former spouse or a lien placed on the account by the Internal Revenue Service. The Plan Administrator has adopted procedures for determining whether a court order is a Qualified Domestic Relations Order and for administering orders that are found to be qualified. A copy of these procedures is available without charge from the CNA Benefits Center.
Effect on Other Company Plans
Making before-tax contributions to the Plan will have no effect on your other Company benefits that are salary-related.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Requesting a Review of a Denied Claim
If a claim for benefits (or a claim by your beneficiary or other family member after your death) is denied, there is a process for appealing your claim.
If your claim for benefits is denied, in whole or in part, by the CNA Benefits Center, you may appeal the denial of your claim1 and have the Plan Administrator reconsider the decision within 90 days after the claim has been denied by sending the claim to:
Plan Administrator - CNA 401k Plan CNA 151 N. Franklin Street Chicago, IL 60604
When requesting a review, please state the reason(s) you believe the claim was improperly denied and submit any additional information you think is appropriate. The Plan Administrator will review your claim and its denial under the Plan provisions, and you will be informed of the Plan Administrator’s decision within 90 days (180 days if you are notified in writing of the need for additional time). The written notice will include:
• The specific reasons for the denial;
• The specific references to the Plan provisions on which the denial is based;
• A description of any additional information you must provide in order to support your claim and why such additional information is necessary; and
• An explanation of the Plan’s appeal procedures.
If the Plan Administrator upholds the denial, you may appeal the denial of the claim further and have the CNA Employee Benefits Committee review the decision. If you wish to file an appeal with the Employee Benefits Committee, you have the right to:
• Submit a written request to the Employee Benefits Committee for review of the claim no later than 60 days after receipt of the written claim denial of the Plan Administrator;
• Review pertinent Plan documents; and
1 For purposes of §503 of ERISA, this first-level appeal to the Plan Administrator is considered the “claim.”
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
• Submit a written statement of issues regarding the claim and any other documents supporting your appeal to the Employee Benefits Committee at the following address:
Employee Benefits Committee - CNA 401k Plan CNA 151 N. Franklin Street Chicago, IL 60606
The Employee Benefits Committee will advise you of its decision in writing within 60 days after receiving your request for review. If special circumstances arise that require an extension of time, a decision will be rendered as soon as possible, but not later than 120 days after receipt of your request. The notice will include the specific reasons for the decision and references for the Plan provisions on which the decision is based. Decisions of the Employee Benefits Committee are final.
No action at law or in equity may be brought to recover benefits under this Plan until your claim and appeal rights have been exercised and the Plan benefits requested in such claim and appeal have been denied in whole or in part. If your appeal is denied, you have the right to bring a civil action pursuant to Section 502(a) of ERISA within 120 days of receiving a final Adverse Benefit Determination, notwithstanding any other statute of limitations. Any such action must be filed only in the United States District Court for the Northern District of Illinois (Eastern Division) in Chicago, Illinois. Such legal action shall be governed by ERISA and the procedural and substantive laws of the State of Illinois to the extent such laws are not preempted by ERISA, notwithstanding any conflict of laws principles.
Note: If the basis for your claim is that you were improperly determined not to be totally and permanently disabled, the claims and appeals procedures of the CNA LTD Plan (the “LTD Plan”) will apply. If you are not a participant in the LTD Plan, you should still submit your claim to the 401k Plan Administrator as described above, but the LTD Plan procedures will govern. You may review the LTD Plan claims procedures by consulting the LTD Plan SPD.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Statement of ERISA Rights
As a participant in the CNA 401k Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled to:
Receive Information About Your Plan and Benefits
• Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as work sites, all documents governing the Plan, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration).
• Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description. The Plan Administrator may make a reasonable charge for the copies.
• Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
• Obtain a statement telling you whether you have a right to receive a retirement benefit at Normal Retirement Age (later of age 65 or five years of service) and if so, what your benefit would be at Normal Retirement age if you stop working under the Plan now. If you do not have a right to a retirement benefit, the statement will tell you how many more years you have to work to get a right to a benefit. This statement will be provided once per quarter. The Plan must provide the statement free of charge.
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of all Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a retirement benefit or exercising your rights under ERISA.
Enforce Your Rights
If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
to appeal any denial, all within certain time schedules, which are described in “Requesting a Review of a Denied Claim” on page 40.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court, provided that you have first complied with the Plan’s benefit claim and appeal process. In addition, if you disagree with the Plan’s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
Assistance with Your Questions
If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this document or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration), U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Appendix A: CNA 401k Plan Investment Fund Options (Effective January 1, 2020)
Fund Objective and Investments
Invesco Stable Value Fund Objective: This Fund seeks to preserve capital.
(CIT) Investments: The Fund is managed by Invesco. Invesco will invest primarily in a diversified portfolio of fixed income securities along with investment contracts by insurance companies, banks or other financial institutions. The objectives of the Invesco portfolio are preservation of principal, liquidity for plan participant withdrawals and transfers, and attractive returns.
Index: BofA Merrill Lynch 91-Day T-Bills and ICE BofA Merrill Lynch 1-3 Year Treasury
Northern Trust Aggregate Bond Index Objective: This Fund seeks total return consistent with Fund preservation of capital by striving to replicate the risk and total return characteristics of the Bloomberg Barclays US Aggregate (CIT) Bond Index.
Investments: The Fund provides broad exposure to the U.S. Treasury, government agency, investment-grade corporate, and agency-backed mortgage pass-through sectors of the fixed- income markets. The majority of the securities held in the fund have maturities between one and 30 years.
Index: Bloomberg Barclays U.S. Aggregate Index
Prudential Core Plus Bond Fund (CIT) Objective: The Fund seeks total return through a mix of current income and capital appreciation.
Investments: The Fund invests, under normal circumstances, at least 80% of the Fund's investable assets in bonds. The Fund allocates assets among different debt securities, including (but not limited to) US Government securities, mortgage-related and asset-backed securities, corporate debt securities, and foreign securities. The Fund may invest up to 30% of its investable assets in high risk, below investment-grade securities having a rating of CCC or above. The Fund may invest up to 30% of its investable assets in foreign debt securities.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Index: Bloomberg Barclays U.S. Aggregate Index
PIMCO All Asset Fund Objective: The Fund seeks to outperform inflation.
(PAAIX) Investments: The Fund invests across a broad spectrum of PIMCO-managed underlying strategies, which include global bonds, global equities, real estate and commodities. The percentage allocation to each underlying strategy is actively managed and changes over time based on changing relative value, subject to certain investment guidelines and in a manner consistent with the long-term volatility level of the strategy.
Index: Bloomberg Barclays TIPS 1-10 Yr Index and CPI + 5%
BlackRock LifePath Funds Objective: Each Fund’s investment strategy is based on a particular time horizon and level of risk that investors on average (CIT) would deem appropriate for that time frame. The most important feature of target date funds is that they are constructed so their investment mix evolves as the target retirement year is approached.
Investments: The Fund can invest in any or all of seven major asset classes to ensure that the fund is properly diversified.
Index: Custom Index based on underlying asset classes
Northern Trust S&P 500 Index Fund Objective: The Fund seeks long-term growth of capital by striving to replicate the risk and total return characteristics of the (CIT) Standard & Poor‘s 500 (S&P 500) Index.
Investments: The Fund attempts to replicate the Index by investing all, or substantially all, of its assets in the stocks that make up the S&P 500 Index, by holding each stock in approximately the same proportion as its weighting in the Index.
Index: S&P 500 Index
LSV Large Cap Value Objective: The Fund seeks long-term growth of capital.
(Separate Account) Investments: The Fund applies a quantitative model to create and maintain a broadly diversified portfolio of primarily large and mid-cap U.S. equities. The Fund aims for deep value orientation relative to the Fund’s benchmark, including low price to earnings, low price to cash flow, and high dividend yield relative to the benchmark.
Index: Russell 1000 Value Index
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Winslow Large Cap Growth Fund Objective: The Fund seeks long-term growth of capital.
(CIT) Investments: The Fund invests in a diversified group of large and mid-capitalization growth stocks. Under normal market conditions, the Fund invests at least 80% of its net assets in companies with market capitalizations in excess of $4 billion at the time of purchase. The Fund may invest up to 20% of its assets in companies outside the U.S.
Index: Russell 1000 Growth Index
Northern Trust S&P 400 Index Fund Objective: The Fund seeks long-term growth of capital by striving to replicate the risk and total return characteristics of the (CIT) Standard & Poor’s MidCap 400 (S&P MidCap 400) Index.
Investments: The Fund attempts to replicate the Index by investing all, or substantially all, of its assets in the stocks that make up the S&P MidCap 400 Index, by holding each stock in approximately the same proportion as its weighting in the Index.
Index: S&P Mid Cap 400 Index
Atlanta Capital SMID-Cap Fund Objective: The Fund seeks long-term growth of capital.
(Separate Account) Investments: The Fund invests in small and mid-capitalization domestic stocks and is benchmarked to the Russell 2500 Index. The team selects stocks for the portfolio based on a favorable combination of attractive valuation and stable earnings and dividend growth metrics. The portfolio is diversified across sectors and industries.
Index: Russell 2500 Index
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Northern Trust Russell 2000 Index Objective: The Fund seeks long-term growth of capital by striving Fund to replicate the risk and total return characteristics of the Russell 2000 Index. (CIT) Investments: The Fund attempts to replicate the Index by investing all, or substantially all, of its assets in the stocks that make up the Russell 2000 Index, by holding each stock in approximately the same proportion as its weighting in the Index.
Index: Russell 2000 Index
Northern Trust MSCI All Country Objective: The Fund seeks long-term growth of capital by striving World ex-U.S. IMI Index Fund to replicate the risk and total return characteristics of the Morgan Stanley Capital International (MSCI) All Country World (ex-US) (CIT) Investable Market Index. The Index tracks stocks issued by companies located in developed and emerging markets, excluding the United States.
Investments: The Fund attempts to replicate the Index by investing all, or substantially all, of its assets in the common stocks included in the Index. The Index includes more than 6,000 stocks of companies located in 44 countries (the United States is not one of those countries).
Index: MSCI All Country World (ex-U.S.) Investable Market Index
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Vanguard International Growth Fund Objective: The Fund seeks long-term growth of capital.
(VWILX) Investments: The Fund invests in stocks of high-quality, seasoned non-U.S. companies diversified across countries in the MSCI Europe, Australia and Far-East Index. The Fund invests 60% to 70% of its assets in companies with sustainable competitive advantages and strong prospects for long-term growth. It supplements these core holdings with large stocks in markets that are expected to have particularly strong near-term returns.
Index: MSCI All Country World (ex-U.S.) Index
Northern Trust MSCI Emerging Objective: The Fund seeks long-term growth of capital by striving Markets Index Fund to replicate the risk and total return characteristics of the MSCI Emerging Markets Equity Index. (CIT) Investments: The Fund invests substantially all of its assets in the common stocks included in the MSCI Emerging Markets Index. The Index includes approximately 750 stocks of companies located in various emerging markets around the world.
Index: MSCI Emerging Markets Index
T. Rowe Price Institutional Emerging Objective: The Fund seeks long-term growth of capital. Markets Equity Fund Investments: The Fund invests in companies located in (IEMFX) developing countries. The Fund’s investments are expected to be diversified geographically across Latin America, Asia, Europe, Africa and the Middle East.
Index: MSCI Emerging Markets Index
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Appendix B: CNA 401k Plan Investment Transfer Restrictions
The 401k Plan has transfer restrictions for the plan’s investment funds. In some circumstances, you may be subject to restrictions on moving money in and out of certain investment options. These rules apply to the frequency and timing of transferring money among funds. Please be aware of the transfer restrictions and redemption fees listed below for the current investment funds offered in the 401k Plan when making your investment decisions.
You will be notified of these transfer restrictions each time a transfer or reallocation is requested.
Redemption Fund Name Transfer Restrictions 1 Fees
Invesco Stable Value N/A N/A Fund
There is a 60 day purchase block restriction Northern Trust on this fund. After moving money out of Aggregate Bond N/A this fund you must wait 60 days before Index Fund moving money back into the fund.
Prudential Core Plus N/A N/A Bond Fund
PIMCO All Asset N/A N/A Fund
BlackRock LifePath N/A N/A Index Funds
There is a 60 day purchase block restriction Northern Trust S&P on this fund. After moving money out of N/A 500 Index Fund this fund you must wait 60 days before moving money back into the fund.
LSV Large Cap Value N/A N/A Fund
Winslow Large Cap N/A N/A Growth Fund
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
Redemption Fund Name Transfer Restrictions 1 Fees
There is a 60 day purchase block restriction Northern Trust S&P on this fund. After moving money out of N/A 400 Index Fund this fund you must wait 60 days before moving money back into the fund.
Atlanta Capital SMID N/A N/A Cap Fund
There is a 60 day purchase block restriction Northern Trust on this fund. After moving money out of Russell 2000 Index N/A this fund you must wait 60 days before Fund moving money back into the fund.
Northern Trust All Country World ex- There is a 60 day purchase block restriction on this fund. After moving money out of US Investable N/A Market Index Fund this fund you must wait 60 days before moving money back into the fund.
There is a 30 day purchase block restriction Vanguard on this fund. After moving money out of International N/A this fund you must wait 30 days before Growth Fund moving money back into the fund.
There is a 60 day purchase block restriction Northern Trust on this fund. After moving money out of Emerging Markets N/A this fund you must wait 60 days before Index Fund moving money back into the fund.
There is a 30 day purchase block restriction T. Rowe Price on this fund. After moving an amount Institutional greater than $5,000 out of this fund you N/A Emerging Markets must wait 30 days before moving money Equity Fund back into the fund.
1 Some fund managers have implemented a Market Timing Trading policy to address excessive trading. Excessive trading can be defined as making frequent fund purchases or trades in order to capture short-term gains. Excessive trading in funds occurs at the expense of long-term investors, diluting the value of their shares. It can disrupt the management of a fund’s portfolio and raise the fund’s transaction costs because the fund manager either must hold
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)
extra cash or sell investments more frequently resulting in additional costs. For more specific information on the Market Timing Trading policies for each fund, see the fund’s website.
(CNA 401k Plan Summary Plan Description – eff. 1/1/2020)