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Automatic Contribution Percentage Increases 

 

Annual Contribution Rate Increases
The plan offers an annual percentage increase option. This allows you to pre-schedule future annual increases of 1, 2 or 3 percentage points in your before-tax employee contribution rate.

You decide when during the year these automatic percentage increases will occur. You can elect the annual increase option when you join the plan or at any later time. Annual increases will continue until your before-tax rate reaches 25 percent or until you decide to stop or change your election. Regardless of your rate, contributions stop immediately if you reach the annual IRS limit during the year. (Note: Sign up for the annual increase option through vanguard.com or by calling the HR Service Center toll-free at 1‑888‑825‑5247 and selecting option 1. The annual increase option is not available through the VOICE® Network.)

The following chart shows potential benefits of annual increases to your plan contributions.

The Difference with Annual Increasesannual increase chart
*Assumes a $75,000 salary, a 10% payroll deduction, a 1% annual increase (up to 20%) and a 6% average annual rate of return.

**Assumes a $75,000 salary, a 10% payroll deduction and a 6% average annual rate of return.

This hypothetical illustration does not represent the return on any particular investment, and the rate is not guaranteed. The final account balances do not reflect any taxes or penalties that may be due upon distribution. Withdrawals from a tax-deferred investment before age 59½ are subject to a 10% federal penalty tax unless an exception applies.

 

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