|AECOM filed this Form 11-K on 06/14/2018|
The SICs generally impose conditions on both the Stable Value Master Trust and the issuer. If an event of default occurs and is not cured, the non-defaulting party may terminate the contract. The following may cause the Stable Value Master Trust to be in default: a breach of material obligation under the contract, a material misrepresentation, or a material amendment to the Stable Value Master Trust agreement. The issuer may be in default if it breaches a material obligation under the investment contract; makes a material misrepresentation; has a decline in its long-term credit rating below a threshold set forth in the contract; is acquired or reorganized and the successor issuer does not satisfy the investment or credit guidelines applicable to issuers. If the Stable Value Master Trust is unable to obtain a replacement investment contract, in the event of a default of an issuer, withdrawing plans may experience losses if the value of the Stable Value Master Trusts assets is below contract value.
The terms of an investment contract generally provide for settlement of payments only upon termination of the contract or total liquidation of the covered investments. Generally, payments will be made pro-rata, based on the percentage of investments covered by each issuer. Contract termination occurs whenever the contract value or market value of the covered investments reaches zero or upon certain events of default. If the contract terminates due to issuer default (other than a default occurring because of a decline in its rating), the issuer will generally be required to pay to the Stable Value Master Trust the excess, if any, of contract value over market value on the date of termination.
If a SIC terminates due to a decline in the ratings of the issuer, the issuer may be required to pay to the Stable Value Master Trust the cost of acquiring a replacement contract (i.e. replacement cost) within the meaning of the contract.
If the contract terminates when the market value equals zero, the issuer will pay the excess of contract value over market value to the Stable Value Master Trust to the extent necessary for the Stable Value Master Trust to satisfy outstanding contract value withdrawal requests. Contract termination also may occur by either party upon election and notice.
H. BENEFITS PAYABLE
Net assets available for benefits at December 31, 2017 and 2016 include $2.8 million and $2.2 million, respectively, for participants who have withdrawn from the Plan and have requested distribution of benefits, but have not yet been paid.
I. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of common stock of AECOM. At December 31, 2017 and 2016, the Plan held approximately 5.7 million and 5.4 million shares of AECOM common stock with a fair value of approximately $212 million and $196 million, respectively. During 2017, the Plan purchased approximately $54 million and sold approximately $38 million of AECOM common stock, and recorded a net appreciation of approximately $3 million, which included gains and losses on shares bought and sold, as well as held during the year.
AECOM charges the Plan for certain administrative labor costs. The total cost of administrative labor charged to the Plan by AECOM during the year ended December 31, 2017 was $398,751. AECOM is the Plan sponsor as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions.
The Plan holds self-directed brokerage accounts and investments managed by Bank of America, N.A. and their affiliates, and these transactions qualify as party-in-interest transactions. The Plan also holds common stock in Northern Trust Corporation and investments managed by Northern Trust Corporation, and these transactions also qualify as party-in-interest transactions. The Plan holds investments managed by Fidelity and Vanguard, and these transactions qualify as party-in-interest transactions.
These party-in-interest transactions qualify for prohibited transaction exemptions.
J. PLAN TERMINATION
Although it has not expressed any intent to do so, AECOM has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of the Plans termination, participants will become 100% vested in their accounts.