About the Plan
The Komatsu Mining Corp. Deferred Compensation Plan, or DCP, is defined as a nonqualified, deferred compensation plan. As opposed to a qualified plan (e.g., the Retirement Savings Plan), it is exempt from most ERISA regulations and is not subject to a dollar cap or many of the restrictions placed on qualified plans. There are generally two purposes for the plan.
First, the DCP is designed to allow eligible employees to defer a portion of their current income on a pre-tax basis and to provide the potential for tax-deferred returns on that money. This is an opportunity to defer additional pre-tax income above and beyond the income deferred to the Retirement Savings Plan.
Second, the DCP is designed to ensure you receive all company contributions you are eligible for regardless of IRS limits. If you are expected to reach the 401(a)(17) compensation limit ($330,000 in 2023, 2024 limit pending), then company contributions may automatically be made in the DCP to be sure you realize the full retirement benefit available.
Komatsu will automatically contribute a percentage of your salary in excess of IRS compensation limits to the DCP, including a 5% fixed contribution and a 3% “match” (regardless of personal deferral rate)*. Please note: investments in the DCP are deemed to be company assets until distributed.
There are several key differences between a deferred compensation plan and a qualified 401(k) Plan. It is important for you to understand the advantages and risks of participation.
* Also, for certain eligible participants, any portion of the Individual Replacement Contributions from the Retirement Savings Plan — that when combined with your other contributions is greater than the annual contribution amount allowed in a qualified plan — will be funded in the DCP.
