3 Pre-Tax Elective Employee Contributions You may elect to make contributions on a pre-tax basis. You do not pay taxes on pre-tax contributions until you take them in a distribution from the Plan. This means that you do not pay current federal-and in most cases, state- income taxes on your pre-tax contributions, or on the earnings on your contributions. Your contributions are, however, subject to Social Security (“FICA”) taxes. Since income taxes are deferred when pre-tax contributions are made, withdrawals (and certain other payments from the Plan) are generally subject to regular income taxation when funds are withdrawn. The amount you elect to contribute as pre-tax contributions must be a whole percentage of your pre-tax wages, from 1 percent to 50 percent. Your employer will withhold this amount from your paycheck and send it to the Plan. You may also elect to defer up to 100% of any bonus or similar large payment, subject to special Plan conditions. If you are a “Highly Compensated Employee,” you may only contribute up to10 percent of your pre-tax wages. For 2021, the dollar limit is $130,000 as determined by the Internal Revenue Service (IRS). This amount can increase periodically in future years for cost-of-living adjustments. You may be further limited in how much you can defer based on the results of the Plan’s annual non-discrimination testing. IRS Limits and Catch-Up Contributions Finally, the IRS limits the dollar amount of your annual pre-tax contribution. In 2021, that limit is $19,500. For 2021, employees age 50 or older may defer an additional $6,500, known as a “catch-up” contribution. After-Tax Elective Contributions You may also elect to defer after-tax contributions which are available for withdrawal at any time. Because after- tax contributions are taxed before they are deposited in your account, you do not pay taxes on those contributions when you withdraw them. The earnings on those contributions, however, are taxed when you withdraw them. After-tax contributions are limited to 15 percent of your wages. You may elect to defer both pre-tax and after-tax contributions. If you are not a Highly Compensated Employee, you may defer up to 50percent of your pay as pre-tax contributions. The maximum rate of deferral for after- tax contributions is 15 percent. If you elect to defer both pre-tax and after-tax contributions, there is a combined limit of 50 percent of pay subject to IRS limits. For Highly Compensated Employees the combined limit is 25 percent. Non-Discrimination Testing A non-discrimination test may limit the pre-tax elective contributions made by the Highly Compensated Employees of an employer during the Plan Year. If this test is not met, excess contributions (adjusted for investment gains or losses) must be refunded to the Highly Compensated Employees. There is a separate, similar non-discrimination test for after-tax elective contributions and employer matching contributions. In addition, plans that have collectively bargained and non-collectively bargained participants must be mandatorily disaggregated for purposes of non- discrimination testing. This means that there are separate non-discrimination tests for the non-collectively bargained group and the collectively bargained group. Contributions While on Active Duty in the Armed Forces If you are absent from employment because of service in the uniformed services of the United States and are reemployed by your employer after completing your military service, you have the option of making up missed contributions. If this may apply to you, please contact the Fund Office about these rights.