8:19 AM 401k Education Guide
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PayPal 401(k)
Savings Plan
PayPal encourages you to invest in yourself and your future by participating in the PayPal
401(k) Savings Plan (the “Plan”).
In order to help build toward financial stability in your retirement years, it is important to take
action now.
Our retirement plan service provider, Schwab Retirement Plan Services, Inc., provides tools
and resources to help you make informed choices about your retirement needs, investment
alternatives, and the benefits of long-term saving. The Plan is designed to help you make
pre-tax and/or Roth 401(k) contributions and invest them according to your personal level of
risk tolerance and timeline to retirement. In addition, PayPal provides a matching contribution*
to help with your savings goals.
This guide will assist you as you explore:
• What to consider as you build your retirement savings
• How to review your current financial objectives to help attain your retirement goals
• How to choose investments from those available in the Plan
• How to take action
Additionally, whether you are joining the Plan for the first time, currently participating in the
Plan or approaching retirement and looking for guidance on retirement options, a Participant
Services Representative is available to assist you every step of the way. PayPal considers this
Plan a very important benefit. We sincerely hope you will take this opportunity to save and
invest in your financial future.
*The employer contribution is paid on a pre-tax basis and may be taxable at withdrawal.
Welcome PayPal U.S. Employees
2 PayPal 401(k) Savings Plan Highlights
5 Investment Options
6 Investment Strategies
7 Act Now! Enroll.
Table of Contents
THE TIME TO BEGIN IS NOW.
The earlier you start, the longer your money has the
opportunity to work for you.
**Your company may have a maximum match as well as other
restrictions. The employer contribution is paid on a pre-tax basis
and may be taxable at withdrawal.
†Contributions to workplace retirement plans are typically on a
pre-tax basis; if you make Roth 401(k) contributions, the benefits
of pre-tax contributions are not applicable.
Hypothetical examples are for illustrative purposes only and are
not intended to represent the past or future performance of any
specific investment. The balances shown represent the amount
contributed and the interest compounded daily. Assumes a
hypothetical average rate of return of 6.5%, reinvestment of any
dividends and any capital gains, and no current taxes paid on
any earnings in a retirement plan account. Schwab Retirement
Plan Services, Inc. does not provide tax or legal advice.
(1114-7239)
Hypothetical earnings
Employer Match*
Employee Contributions†
$294,290
$81,136
$81,136
Contributions Start at
Age 35; Stop at Age 65.
Withdrawals Start at
Age 65.
Jennifer
$874,513
Brian
$456,562
$712,241
$81,136
$81,136
Contributions Start at
Age 25; Stop at Age 55.
Withdrawals Start at
Age 65.
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
1
The Power of Compounding
Although it is never too late to start saving for retirement, starting early is one of the best ways to help build retirement
savings. The sooner you start saving, the more you may benefit from tax-deferred compounding.
Start Early. It’s Important!
Jennifer and Brian both saved the same amount over 30 years. However, she started at age 25; he started at age 35.
Jennifer’s savings earned 10 additional years, worth of compound interest by the time they both started withdrawals at age
65. Jennifer benefited from starting early. When will YOU start saving?
Start Early. It’s Important.
Time in the market is more important than timing the market.
Assumptions for Both Individuals
$50,000 Annual Salary
$0 Starting Balance
4% Matching Contributions**
4% Employee Contributions†
2% Annual Salary Increase
6.5% Annual Return
Totals represent hypothetical balances at age 65
2
Plan Highlights
Eligibility and Enrollment
PayPal employees are immediately eligible to participate
in the Plan. Employees must be at least 18 years old
to participate.
Your Contributions
You can make pre-tax and/or Roth 401(k) contributions, up
to 50% of your earned compensation per pay period.
• Federal law limits the amount you can contribute every
year; the 2016 limit is $18,000.
• If you will be age 50 years or older by December 31,
2016, you may make an additional catch-up contribution
to the Plan. In 2016, the catch-up limit is $6,000.
• The Plan includes a Roth 401(k) option. If you decide to
make Roth 401(k) contributions, they will be deducted
from your paycheck after taxes. Your contributions and
any earnings may grow tax-free, and you will not pay
taxes on the money when it’s withdrawn—provided that
any distribution from the Plan account occurs at least
five years following the year you make your first Roth
401(k) contribution, and you have reached age 59½ or
have become disabled.
• You may elect two separate 401(k) deferrals—one
for your regular earnings and one for your bonus
earnings. These deferrals can be made on a pre-tax
basis, Roth 401(k) basis, or a combination of both.
Currently, the deferral rate you have designated to
your regular earnings also applies to your bonus
unless you change it.
You can change your contribution rate at any time by
calling Participant Services at 800-724-7526 or by visiting
workplace.schwab.com. Changes will be made as soon
as administratively feasible.
Company Contributions
To help you save more for the future, PayPal will make a
Safe Harbor Match of 100% of your earned compensation
you contribute, up to 4% of your earned compensation.
The employer contribution is paid on a pre-tax basis and
may be taxable at withdrawal.
Vesting
Vesting is your ownership of your account. You are
always 100% vested in your own contributions, any
earnings on your own contributions, the Safe Harbor
Match contribution and any earnings, and any rollovers
you make to your account.
Rollovers
You can roll over account balances from other employer-
sponsored qualified 401(k) plans into your Plan account.
You can obtain a copy of the Rollover Form online at
workplace.schwab.com or by calling Participant
Services at 800-724-7526.
Withdrawals
The Plan is designed primarily to help you save for
retirement; there are IRS restrictions on when money may
be withdrawn from your account. The IRS does, however,
recognize certain events may present a need for you to
access your savings. Under the following circumstances,
you may withdraw money from your account.
Retirement
You can withdraw money from your Plan account when
you reach the normal retirement age of 65.
Loans
You may borrow from your vested account balance.
Loan repayments are made through salary deductions
each pay period.
• The minimum loan amount is $1,000.
• The maximum loan amount is $50,000 or 50% of your
vested balance, whichever is less.
• The interest rate for the loan is the Prime Rate at the
time the loan is taken.
• One outstanding loan is allowed at any time.
• The maximum term for a general loan is 5 years, and
10 years for a residential loan.
Most of your retirement income will come from
savings accumulated during your working years.
The PayPal 401(k) Savings Plan can help you
build your retirement savings and help you stay on
track toward your retirement goals.
3
In Service
You can withdraw money from your Plan account while you
are still employed by PayPal if you are at least age 59½.
These withdrawals are allowed under certain circumstances.
Hardship Withdrawals
A “financial hardship” is defined as a heavy and immediate
financial need that cannot be satisfied by other resources
available to you, including taking a loan from the vested
portion of your Plan account. You may be eligible to
withdraw a portion of your account balance if you
experience a financial hardship. Qualified reasons for a
hardship withdrawal include:
• to prevent eviction from, or foreclosure of, your
primary residence;
• to purchase a primary residence;
• to pay for post-secondary education for you or an
immediate family member;
• to pay for uninsured medical expenses;
• to repair damage to your primary residence; and
• to cover funeral expenses.
Hardship withdrawals are subject to ordinary income tax
and may be subject to a 10% federal penalty. Residents of
certain states may also be subject to state penalties. You
will be prohibited from making elective contributions to the
Plan for at least six months after receipt of the hardship
distribution. Safe Harbor Match dollars are not eligible for
hardship withdrawals.
Termination
You may receive all of your vested balance of your account
upon termination of employment. Please note: If your vested
account balance upon termination, or at any point thereafter,
is $1,000 or less, including rollovers, your account will be
distributed to you as a single-sum cash distribution unless
you select another distribution option within 90 days of
termination. Taxes and penalties may apply.
If your vested account balance, including rollovers, is more
than $1,000 but less than $5,000, and you fail to elect either
a lump sum or rollover, the balance will be rolled over to a
Rollover IRA administered by Charles Schwab Bank.‡
If your vested account balance, including rollovers, is
greater than $5,000, your balance will remain in the Plan
until you request a distribution.
Disability
If you terminate your employment with PayPal because
you become permanently disabled, you are allowed to
withdraw your money.
Death
In the event of your death, your account balance will be
paid to your beneficiary as you have designated on your
account with Schwab Retirement Plan Services, Inc. If
there is no beneficiary on file with Schwab Retirement Plan
Services, Inc., your account balance will be paid per the
terms specified in the Plan Document.
For more information about your withdrawal options, call
Participant Services at 800-724-7526 to speak with a
Participant Services Representative.
‡Rollover funds in the Schwab Bank IRA are invested in an FDIC-
insured money market deposit account at Charles Schwab Bank.
Any account balances in Roth 401(k) sources will be rolled over into a
Roth IRA, and the five year qualification period will start over.
This information is not intended to be a substitute for specific
individualized tax, legal or investment planning advice. Where specific
advice is necessary or appropriate, you should consult with a qualified
tax advisor, CPA, Financial Planner or Investment Manager.
The above highlights section is only a brief overview of the Plan’s features
and does not constitute a legally binding document. A more detailed
Summary Plan Description is available at workplace.schwab.com. Please
review it carefully for additional information about the specific provisions
of the Plan. If you have further questions, call 800-724-7526 to speak
with a Participant Services Representative.
Go to workplace.schwab.com to access the Paycheck
Calculator located under the Calculators & Resources section.
This will help you run scenarios to see how different deferral
percentages will impact your take-home pay. You’ll see that with
pre-tax contributions, the net impact on your take-home pay is
much less than the amount you contribute. There are also several
worksheets available that you can use to help determine how
much savings you may need when you retire. This will help you
move from “How much can you save?” to “How much do you
need to save?”
4
Savings Advantages
Since Social Security may not provide enough income during your retirement years and inflation could reduce the
spending power of your savings, it is important to develop a sound retirement plan. Saving through an employer-
sponsored retirement plan is an important step in saving for retirement.
First—Consider the Tax Advantages
Pre-tax contributions: The amount you put into the Plan is deducted from your paycheck before it is taxed. The net
impact on your take-home pay will be less than the amount you are contributing to the Plan.
Tax-deferred earnings: In addition to the advantage of having your pre-tax contributions go into the Plan before taxes on
your pay are calculated, your money may grow tax-deferred. This means any current tax due on any earnings stays in the
Plan and contributes to the compounding in your account. Of course, at retirement the withdrawals you make from your
Plan account will be considered income and can be subject to regular income taxes, depending on your tax bracket at
that time. You may be in a lower tax bracket during retirement and your tax burden may be less than it is today.
Tax-free earnings: You also have an opportunity to have your money grow tax-free with the Roth 401(k). This means
you pay taxes at the time of the contribution. Assuming you meet the withdrawal qualifications, both your Roth 401(k)
contributions and any associated investment earnings are distributed from the Plan tax-free. Some of the factors to
consider include your current tax rate, anticipated tax rate at retirement, and how long you anticipate the money will
stay in your retirement account.
Plus, There Is the Company Contribution
When you ask the question, “How much should I save for retirement?,” invariably you will hear the answer, “As much
as you can!” That may be true, but if you’re looking for a number, consider this: You can contribute from 1% to 50% of
your eligible compensation to the Plan, up to $18,000. If you are 50 years of age or older in 2016 and make the additional
catch-up contribution of $6,000, you can contribute a total of $24,000 in 2016. So, save as much as you can, and
remember, PayPal makes a 4% matching contribution as well.
Three steps to enrollment
Step 1 - Decide how much to save.
Quick Tip!
A note about risk: PayPal has made
available different investments in the
hope of meeting the various savings
and investment goals for all participants.
As you make your investment choices,
keep in mind that there is risk involved.
The funds differ in growth potential and
risk. Pursuant to Department of Labor
Regulation 2550.404c-(b)(2)(i)(B)(1)(i), this
Plan is intended to qualify as an ERISA
404(c) Plan that relieves plan fiduciaries
of liability for any investment losses that
result from investment directions made by
Plan participants.
The values of the target funds will
fluctuate up to and after the target
date. There is no guarantee the funds
will provide adequate income at or
through retirement. Diversification
and asset allocation strategies do not
ensure a profit and cannot protect
against losses in a declining market.
The Funds are subject to market
volatility and risks associated with
the underlying investments. Risks
include exposure to international and
emerging markets, small company
and sector equity securities, and fixed
income securities subject to changes
in inflation, market valuations, liquidity,
prepayments, and early redemption.
The funds are built for investors who
expect to start gradual withdrawals
of fund assets on the target date to
begin covering expenses in retirement.
The principal value of the funds is not
guaranteed at any time.
5
Three steps to enrollment
Step 2 - Decide which investments are right for you.
Fund Name Ticker Asset Category
Vanguard Prime Money Market Instl VMRXX Money Market
Galliard Stable Value Fund - PayPal 1 N/A Stable Value
Metropolitan West Total Return Bond I MWTIX Intermediate-Term Bond
Vanguard Total Bond Market Index I VBTIX Intermediate-Term Bond
Dodge & Cox Balanced DODBX Moderate Allocation
Dodge & Cox Stock DODGX Large Value
Harbor Capital Appreciation Fund HACAX Large Growth
Artisan Mid Cap Value Investor ARTQX Mid-Cap Value
Fidelity Spartan Extended Mkt Index Inv FSEMX Mid-Cap Blend
AMG TimesSquare Mid Cap Growth Instl TMDIX Mid-Cap Growth
Boston Partners Small Cap Value II Instl BPSIX Small Value
Morgan Stanley Instl Small Co. Growth IS MFLLX Small Growth
American Funds EuroPacific Growth R6 RERGX Foreign Large Blend
BlackRock EAFE Equity Index Collective T 1 N/A Foreign Large Blend
American Funds Capital World G/I R6 RWIGX World Stock
Schwab Managed Retirement Trust Cl IV 2010 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2015 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2020 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2025 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2030 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2035 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2040 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2045 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2050 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV 2055 2 N/A Target Retirement
Schwab Managed Retirement Trust Cl IV Income 2 N/A Target Retirement
Investment Options
The following funds are the investment options available in the Plan. If you do not
make investment choices, your account balance will be invested in an age-appropriate
Schwab Managed Retirement Trust Fund™2 based on your expected retirement year,
as determined by the Plan. For more information on choosing the investments that are
right for you, review the Investment Strategies section of this guide.
6
Changing Your Investments
Your contributions will be deducted automatically from
your paycheck and deposited into your account according
to your investment instructions. You may change your
investment elections for future contributions or rebalance
your investments at any time, subject to prospectus
requirements.
Need More Information?
Visit workplace.schwab.com or call and speak with a
Participant Services Representative at 800-724-7526.
Investment Options – Continued
Investment Strategies
We offer different options based on the kind of investor you may be to help you choose your investments. Based on your
answer to the question below, choose one of the following strategies.
Do you have the time or expertise to make investment decisions for your retirement account on your own?
“No, I prefer to do my retirement
investing with some help.”
Target Date Retirement Funds
If you are looking for a single strategy within
the Plan’s retirement savings options, target
date retirement funds may be right for you.
These funds provide an asset allocation
glidepath, are managed by investment
professionals, and are adjusted to become
more conservative over time.
By choosing the fund that most closely
matches your expected retirement date,
as well as other factors important to your
planning objectives and retirement goals, you
set your retirement plan in motion.
To Select the Target Date Retirement Funds:
Go to workplace.schwab.com or call
Participant Services at 800-724-7526 to
access your account or enroll.
We suggest you review your investments at
least annually or whenever there is a change
in life events.
“Yes, I prefer to do my retirement
investing on my own.”
Plan-Selected Funds
If you like making your own investment
decisions, the Plan has a pre-screened group
of funds known as Plan-Selected Funds from
which to choose.
After you review these funds, you can select
the funds in which you’d like to invest and
determine the percentage you want to
allocate to each fund.
You manage your own portfolio.
For help, complete the Investor Profile
Questionnaire at workplace.schwab.com.
To Select Your Own Investments:
Go to workplace.schwab.com or call
800-724-7526 to access your account.
Review/change your contribution rate.
Select your investments from the
Plan-Selected Funds list.
Re-evaluate your financial plan and investment
risk regularly to meet your retirement goals.
7
Three steps to enrollment
Step 3 - Act now! Enroll.
Enroll Online at
workplace.schwab.com.
• Go to the Plan Participant Login box and click on
New User.
• Enter your Social Security number as your Login ID
(no dashes).
• Enter your default password, which is your four-
digit month and day of birth (e.g., if your birthday is
November 30, your default password is 1130).
• Click Login.
Once you are logged in, you’ll be asked to create a new
Login ID and password.
Enroll by Phone at 800-724-7526.
• Enter your Social Security number, then hit the “#” key.
• You’ll be asked to enter your password. Press “*1”
and you will bypass this step and be transferred to a
Participant Services Representative.
• The Representative will ask you some questions to
verify your identity.
• Once your identity has been verified, tell them you
would like to enroll in the PayPal 401(k) Savings Plan.
Enroll on Your Mobile Device
The Schwab Workplace Retirement app is available for
iPad®
, iPhone®
, Android™, or Kindle Fire.
Get on-the-go access to your retirement savings account:
• Enroll in your plan.
• Check your progress—see how much you’re saving
and how your balance may be changing.
• Monitor your personal performance.
• Make contribution elections.
• Set up investment instructions for future contributions.
• Securely access the full website without logging
in again.
• Read the latest market news.
Visit workplace.schwab.com/mobile today to download
the Schwab Workplace Retirement app.
Don’t Forget to Complete Your
Beneciary Designation Online.
• It is important and only takes a minute to go online and
designate the beneficiary for your Plan account.
• You may also designate your beneficiary via phone by
speaking to a Participant Services Representative at
800-724-7526.
This lets Schwab Retirement Plan Services, Inc. and
PayPal know who should receive your account balance in
the event of your death.
Feature availability depends on both plan and participant settings.
Requires a wireless signal or mobile connection.
System availability and response times are subject to market
conditions and mobile connection limitations.
Apple, the Apple logo, iPad, and iPhone are trademarks of Apple Inc.
registered in the U.S. and other countries.
Android is a trademark of Google Inc. Use of this trademark is subject
to Google Permissions.
Kindle, Kindle Fire, and Amazon are trademarks of Amazon.com, Inc.
or its affiliates.
Access to electronic services may be limited or unavailable during
periods of peak demand, market volatility, systems upgrades,
maintenance, or for other reasons.
8
Notes
9
Notes
1 This investment option is a collective trust and is not a registered investment company product.
2 The Schwab Managed Retirement Trust Funds™ and Schwab Institutional Trust Funds® are collective trust funds maintained by Charles Schwab
Bank (“Schwab Bank”), as trustee of the Funds. They are available for investment only by eligible retirement plans and entities. Schwab Bank
Collective Trust Funds (“Funds”) are not insured by FDIC or any other type of deposit insurance; are not deposits or other obligations of, and are
not guaranteed by Schwab Bank or any of its affiliates; and involve investment risks, including possible loss of principal invested. The Funds are
not mutual funds and are exempt from registration and regulation under the Investment Company Act of 1940 (“1940 Act”), and their units are not
registered under the Securities Act of 1933, or applicable securities laws of any state or other jurisdiction. Unit holders of the Funds are not entitled to
the protections of the 1940 Act. The decision to invest in the Funds should be carefully considered. The Funds’ unit values will fluctuate and may be
worth more or less when redeemed, so unit holders may lose money. The Funds are not sold by prospectus and are not available for investment by
the public; Fund prices are not quoted in newspapers.
Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans and has provided this
communication to you as part of the recordkeeping services it provides to the Plan.
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