picture your future · 2017. 10. 3. · online: ip.com, click on 401(k) savings plan link under...

Picture Your Future

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Join the SABIC U.S. Employee Retirement Savings Plan today!

You've received this booklet because you're eligible to join the SABIC U.S.Employee Retirement Savings Plan (the "Plan"). The Plan can be animportant part of your financial security. It gives you an easy andconvenient way to save, as well as the choice and flexibility that you need toachieve your savings goals.

Joining the Plan is easy. Inside, you'll find an overview of the Plan and itsmany benefits, as well as information about how to enroll. You'll also findexamples of how the Plan can help you to build a more secure future. So,take a few minutes to review the pages that follow to see how to get started.

Note that, due to the Plan’s automatic enrollment feature, you will beautomatically enrolled to contribute 8% of your pay to the Plan unlessyou either opt out or enroll on your own within a specified time. Fordetails on the automatic enrollment feature, please consult the notice thathas been mailed to you under separate cover from the Benefits ServiceCenter. Employees who are automatically enrolled in the Plan may changetheir contribution and investment elections prospectively at any time.

Inside, you'll find an overview of the Plan and its many benefits. You'll alsofind examples of how the Plan can help you to build a more secure future.So, take a few minutes to review the pages that follow to make sure you'remaking the most of the Plan.

For more detailed information, just visit the Your SABIC Total Rewardswebsite at www.benefits.sabicip.com website from any computer withinternet access.

The website is available 24 hours a day, seven days a week. You can use itanytime to access and manage your account. You can also call the SABICBenefits Service Center at 1877SABICUS (18777224287) to completemany of the same transactions that you can complete online.

What's Inside

Accessing the Plan

How the Plan Works

Your Investment Choices

The Basics of Investing

Accessing the Plan

Online: www.benefits.sabicip.com, click on 401(k) Savings Plan Link underOther Resources.

The Your SABIC Total Rewards website is your best source for detailed,personalized information about the Plan and your account, and it's the easiest andfastest way to make Plan transactions. Beneficiary designations should also be madeon the website. You can access the website 24 hours a day, seven days a week, fromany computer with internet access — log on at work, home, or anywhere.

By Telephone: 1877SABICUS (18777224287), then follow the prompts tospeak to a 401(k) Benefits Service Representative.

You can call the SABIC Benefits Service Center tollfree for answers to yourquestions or if you are experiencing difficulty online. Simply follow the prompts,and the system will guide you to a 401(k) Benefits Service Representative.Representatives are available between 8 a.m. and 8 p.m. Eastern Time, Mondaythrough Friday, except Federal holidays.

Need Saving and Investing Help?

Turn to experts in the Hewitt Personal Finance Center for help with investmentplanning, college savings, and other decisions that affect your financial future.

To access the Personal Finance Center:Log on to the Your SABIC Total Rewards website at www.benefits.sabicip.comFrom the Home Page, Click on 401(k) Savings Plan (Your Savings Resources)under Other Resources (located on the bottom right)Click on Savings and RetirementClick on Financial Solutions and Education link under the same subheadRead the disclaimer, then once you agree to the terms, you can access all of thecontent on the website

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www.benefits.sabicip.com

How the Plan Works

WHY SAVE?

You may spend up to a third of your life in retirement.Experts say that you'll need at least 80% of your preretirementincome to maintain your lifestyle in retirement. SocialSecurity generally replaces less than half of what most retireesthink they need. So your personal savings, including yourSABIC U.S. Employee Retirement Savings Plan account, mayhave to make up a significant portion of that 80%.

If you don't select a savings rate, you will be automaticallyenrolled in the Plan at a pretax contribution rate of 8%.This amount will be deducted from your pay. Youraccount is automatically invested in the Alliance BernsteinTarget Retirement Fund (based on age) unless you make adifferent election. You may change how your money isinvested at any time.

MORE GOOD REASONS TO SAVE

Company matching contributionsFor every $1.00 of your pretax, Roth 401(k), and aftertaxsavings, the Company adds 50 cents up to 8% of your pay ona per pay basis; the Company's contribution can be as muchas 4% of pay on a per pay basis.

Employer Retirement Contribution AccountThe Company will contribute 5% of your eligible pay onyour behalf. This will occur automatically on a per pay periodbasis. You are not required to be contributing to the Plan inorder to receive this benefit. If you are not participating and

have not chosen how your contributions will be invested inthe Plan's investment fund options, this contribution willautomatically be invested in the Alliance Bernstein TargetRetirement Fund (based on age).

ControlYou decide how much to save.

For 2017, you may save up to the lesser of $53,000 or 80%of your eligible pay each year. An annually adjusted InternalRevenue Service (IRS) dollar limit also applies. The dollarlimit on your total combined regular pretax 401(k)contributions and Roth 401(k) contributions is $18,000 for2017.

Please note, once you reach this limit and unless you elect tostop your contributions, deductions will continue to betaken, but will be made on an aftertax basis.

Participation in the Plan is "shutoff" once your annualcompensation reaches $270,000.

To make saving even easier, you can choose to have yourcontribution automatically increased by 1% each year, up tothe target level you specify.

And if you're age 50 or older within the calendar year, youmay be eligible to make additional catchup contributions upto the 2017 limit of $6,000. Please note when making yourelection for catchup contributions, that the election is a perpay period amount.

You can change your contribution rate at any time.

If you had a taxqualified retirement savings account with aformer employer, you may roll it over into this Plan.

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ChoiceYou choose how to invest your savings in the Plan'sinvestment funds. You can change your choices and moveyour savings to different investment funds at any time.

Automatic savingYour contributions are automatically deducted from yourpay, deposited into your account, and invested according toyour instructions.

Taxdeferred savingsBy saving on a pretax basis, your savings come out of yourpaycheck before taxes are calculated. So, you end up payingless income tax now. What's more, you won't owe taxes onyour savings, the company match, or your investmentearnings until you take money out of your account.

The benefit of saving via Roth 401(k) contributions is thefact that your Roth 401(k) contributions, and earnings onthose contributions, are distributed from the Plan taxfree when you receive the money through a qualifieddistribution!* Roth 401(k) contributions are made on anaftertax basis only.

It's easier than you think! Pretax contributions maylower your current taxable income. The chart belowis an example of how the net reduction to yourpaycheck is less than what goes into your account.

Your PercentageofPay

Contribution

AnnualAmount YouContribute

Annual ActualReduction to

Your Paycheck

3% $900.00 $720.00

7% $2,100.00 $1,680.00

9% $2,700.00 $2,160.00

Note: The numbers above are based on an annual base pay of $30,000 andassume a combined federal and state income tax rate of 20%. Your taxsituation may be different.

*Roth contributions must generally remain in a Roth account (including a Roth IRArollover account) for a minimum of five years and at least until the date you reach age59½ to receive this taxfree advantage.

GrowthYou don't pay taxes on company contributions or investmentearnings while they are in your account. This means that allyour investment earnings are reinvested in the Plan so thatthey'll continue to grow tax deferred (or taxfree if you madeRoth 401(k) contributions). These earnings on your earningsare called "compounding," and it's what makes the Plan sucha powerful savings tool.

Time really is money! Here's an example showing howa participant's investment could grow at differentcontribution levels and how waiting can dramaticallyimpact possibilities. This assumes a $30,000 salary andan average return of 6%. These numbers also assumethat you are 30 years old, your pay remains the same asit is now, and that you contribute the indicatedpercentages of pay and receive matching contributionseach year. Your actual results may vary depending onyour pay, contribution level, and investment strategy

$463,031

$373,986

$160,280

$326,467

$263,685

$113,008

$225,223

$181,911

$77,962

9% Contribution7% Contribution3% Contribution

Bal

ance

at A

ge 6

5

Starting Waiting WaitingNow Five Years Ten Years

2

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OwnershipMatch on Pretax, Roth 401(k), andAftertax Contributions

You vest—or earn ownership of—company matchingcontributions immediately. You're always 100% vested inyour own contributions and their earnings.

Employer Retirement Contribution Account

You vest in—or earn ownership of—100% of the EmployerRetirement Contribution Account following 3 years ofservice.

AccessYou can borrow money from your account and pay yourselfback with interest (subject to certain dollar limits andexcluding your Employer Contribution Account). You may

also be able to withdraw money if you're facing a financialhardship. Plus, if you leave the company, you can take yourvested balance with you and keep it growing by rolling it overinto an individual retirement account (IRA).

Education and guidanceVisit the Your SABIC Total Rewards website to getinformation about how the Plan works, learn about the basicsof saving and investing, and research the Plan's investmentfunds. Use the website at any time, at your own pace. Plus,use the site to:

— Access tools that can help you plan your savings andinvestment strategy.

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Your Investment Choices

Here's an overview of the Plan's investment funds. If you need help to decide how toinvest your savings, see "The Basics of Investing" section to learn more about fund types,asset classes, risk and return, diversification, and time horizon.

The Plan offers Target Retirement Date Funds for those who wish to leave the assetallocation decision to investment professionals and Core Funds for those who wish tocreate and monitor their own investment portfolio.

Target Retirement Date FundsThese portfolios are designed to make investing easier. They're made for you to put100% of your contributions and savings in the professionally designed portfolio thatmost closely matches your target retirement date. This portfolio automatically adapts asyou move toward – and through – your retirement. The objective of each targetretirement date fund is to achieve the highest total return over time consistent with itsinvestment mix. The target retirement date portfolios balance risk and return against thelength of time your money will be invested. Over time, your money shifts from moreaggressive investments focused on growth (primarily stocks and other equity securities) tomore conservative investments focused on income (primarily bonds and other fixedincome securities) to ensure that your money is put into investments that have less risk asyou get older. However, there is no guarantee that any of these funds will provideadequate retirement income, and investments in these funds may still experience lossesnear or following retirement. The investment mix will continue to change with anincreasing exposure to investments in bonds and fixed income securities – and acorresponding decrease in equity exposure – until 15 years after the target retirementdate. Thereafter, the investment allocation will generally be fixed. Based on the currentdesign of these funds, the equity allocation ranges from 95% (at 25+ years before thetarget retirement date) to 35% (at 15+ years after the target retirement date).

The underlying investment portfolios within the target retirement date funds mayinclude both actively managed and passively managed portfolios. These underlying indexfunds may participate in securities lending. More information about the composition ofthe investments in the AB Target Retirement Date Funds is available online at theSABIC Benefits Portal website address listed below.

Target RetirementDate Fund

Strategies and Asset Allocation

AB Target Retirement2010

The AllianceBernstein Target Retirement 2010 Fund is a diversified premixed portfolio designedfor individuals who previously retired in or around the year 2010.


The AllianceBernstein Target Retirement 2015 Fund is a diversified premixed portfolio designedfor individuals intending to retire in or around the year 2015.







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Target RetirementDate Fund

Strategies and Asset Allocation







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Core FundsThe Core Funds let you create your own investment mix. It's important to balance thefunds' riskandreturn profiles with the amount of time that your money will be investedbetween now and retirement. You should review your investment choices and assetallocation at least once a year and rebalance as appropriate to maintain your assetallocation strategy.

Here are sample allocations for someone between the ages of 40 and 49, with eithera Conservative, Moderate, or Aggressive portfolio:

Conservative Moderate Aggressive

Note: Depending on your personal situation, other asset allocations may be better suited for you. You should consider yourother assets, income and investments (e.g. equity in a home, IRA investments, and savings accounts) in addition to yourinterests in the Plan.

This chart lists the available funds, from most conservative to most aggressive. Moreconservative funds generally have lower risk of investment loss, and returns are likely tobe lower in the long term. More aggressive funds generally have higher risk of investmentloss in the short term, but returns are more likely to outpace inflation in the long run.

Fund Name Strategy Asset Class

Federated U.S.Treasury CashReserves

This fund seeks to provide conservative investors with stability of principal andliquidity. The fund pursues its objective by investing in a portfolio of shorttermU.S. Treasury securities. Portfolio of shortterm U.S. Treasury securitiesprovides a high degree of quality and safety because direct obligations of the U.S.Treasury are guaranteed as to the payment of principal and interest.

Cash/Stable

NT Aggregate BondIndex

This fund seeks to hold a portfolio representative of the overall United Statesbond and debt market, as characterized by the Barclays Capital Aggregate BondIndex. This fund may participate in securities lending.

Bond

BlackRock InflationProtected Bond Fund

The investment seeks to maximize real return, consistent with preservation ofreal capital and prudent investment management. The fund invests at least 80%of assets in inflationindexed bonds of varying maturities issues by the U.S. andnonU.S. governments, their agencies or instrumentalities, and U.S. andnonU.S. corporations. It invests up to 20% of assets in noninvestment gradebonds or securities of emerging market issuers. The fund maintains an averageportfolio duration that is within plus/minus 20% of the duration of the BarclaysCapital Global Real: U.S. TIPS Index. It is nondiversified. (This information isfrom the fund prospectus.)

Bond

T. Rowe Price U.S.Value Equity Trust

This fund seeks to provide longterm capital appreciation by investing incommon stocks believed to be undervalued. Income is a secondary objective.

Large Cap Value

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Fund Name Strategy Asset Class

NT S&P 500 IndexFund

This fund approximates the riskandreturn characteristics of the S&P 500Index. This Index is commonly used to represent the large cap segment of theU.S. equity market. This fund may participate in securities lending.

Large Cap

Nuveen WinslowLarge Cap Growth

This fund seeks longterm growth of capital. The fund normally invests at least80% of its assets in companies with market capitalizations in excess of $4 billionat the time of purchase.

Large CapGrowth

NT Extended EquityMarket Index Fund

The primary objective of the NT Extended Equity Market Index Fund is toapproximate the risk and return characteristics of the Dow Jones U.S.Completion Total Stock Market Index. The fund provides primary exposure tothe small to midcap sector of the U.S. equity market.

Mid Cap

FIAM SmallMid CapCore Fund

Under normal market conditions, the portfolio will be fully invested in smalland midcapitalization companies that are domiciled or have their principalplace of business in the U.S. The portfolio will invest in companies with marketcapitalizations similar to that of the Russell 2500 Index. This investment optionis a collective investment trust.

Mid/Small Cap

Dodge & CoxInternational StockFund

This fund seeks longterm growth of principal and income by investingprimarily in a diversified portfolio of equity securities issued by nonU.S.companies from at least three different foreign countries, including emergingmarkets.

International

SelfDirected Brokerage WindowThe Plan also offers a selfdirected brokerage window (SDBW) account for those whodesire more investment diversity when tailoring a portfolio to their individual goals. Thisoption allows you to invest a portion of your account in a variety of options outside ofthe Plan's target date retirement fund and core fund investment lineup. You can invest inthe SDBW after you enroll in the Plan. You will be responsible for monitoringinvestments and expenses in the SDBW. An SDBW application can be found within thePlan section on the Your SABIC Total Rewards website. Before completing an SDBWapplication, please carefully review the SDBW informational brochure available on theBrokerage Account website for important information about how these accounts workand the associated fees. You can also access this site from the Your SABIC Total Rewardswebsite.

NEED MORE INFORMATION?The Your SABIC Total Rewards website is your best source for detailed Plan informationand tools that will help you make the saving and investing decisions that are right foryou. Make sure you're taking advantage of everything that the site and the Plan have tooffer. To access this website, please use the Your SABIC Total Rewards website,www.benefits.sabicip.com. If you have difficulties logging onto the website, please call1877SABICUS (18777224287), then follow the prompts to speak to a 401(k)Customer Service Representative.

This booklet provides a brief overview of the Plan's features. Please refer to your SABICBenefits Handbook for more details.

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The Basics of Investing

How do you decide which

funds are right for you?

By doing a little homework!

After you review this section,

you’ll be better equipped to

make investment decisions

that support your long-term

savings goals.

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9

Asset Class Strategy

Stable Value/ Seeks to maintain value and provide consistent returns by investing in Cash high-quality, short-term securities. Examples include money market funds, U.S. Treasury bills, and insurance contracts.

Short-Term Seeks income by investing in shorter-maturity (typically up to three Bond years) bonds.

Long-Term Seeks long-term growth by investing in longer-maturity (seven or moreBond years) bonds.

Balanced Invests in a mix of stocks and bonds to achieve higher returns than those of all-bond funds, but with less risk of loss than all-stock funds.

Large Cap Seeks long-term capital growth by investing primarily in the commonStock stocks of companies that have large total market values and that are

typically more well-established in their businesses.

Mid Cap Seeks long-term capital growth by investing in stocks of companiesStock that have mid-sized total market values.

Small Cap Seeks long-term growth by investing in stocks of smaller and/or Stock up-and-coming companies.

International Seeks capital appreciation by investing primarily in the common Stock stock of non-U.S. companies. Currency fluctuations and political

developments could add risk.

Emerging Seeks long-term growth by investing in companies of developing Markets countries. Currency fluctuations and political developments could add risk.

More conservative

funds.

Generally have lower risk of investment

loss, but returns are likely to be lower

over the long term.

More aggressive

funds.

Generally have higher risk for investment loss

in the short term, but returns are more likely to

outpace inflation over the long term.

FUND TYPES

There are many different types of investment funds, and each one has a different investment objective and risk-and-return profile. Compare the following overview with your savings plan’s fund options to help you understand which funds might be right for you. “Asset Class” indicates a fund’s investment type, and “Strategy” indicates the fund’s desired performance.


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What’s in Your FundsSavings plan funds are made up of different mixes of stocks, bonds, and stable value investments. Here’s a look at what these types of investments are.

Stocks. Companies sell stock to raise money. The stock buyer actually buys a part of the company that issued the stock.

Stocks, which are also called “equities,” provide value in two ways. First, some companies pay out a portion of their annual earnings to shareholders as dividends. Second, when shareholders sell stock, they can get a “capital gain” if the price at which they sold the stock is higher than the price they paid for it. If a stock is sold for less than its purchase price, that’s a “capital loss.” Stocks have a higher risk of investment loss than bonds and stable value investments, but are more likely to significantly outpace inflation over time.

Bonds. Buying a bond is like giving a loan to a company, bank, or government. The bond issuer promises to pay the buyer back at a specific time with interest. Bonds have a higher risk of investment loss than stable value investments, but are more likely to outpace inflation over time.

Stable Value Investments. Stable value investments are designed to maintain their value and provide a consistent rate of return. Money market funds and U.S. Treasury bills are examples of stable values. So are agreements between insurance companies or banks and other organizations that guarantee a specific rate of return over a specific period of time.

Stable value investments typically have less risk of investment loss, and returns are likely to be in line with inflation.

Understanding StyleWhen you research investment funds, you’ll see the term “style.”

This refers to how funds are managed and invested. Here’s some

background on what this means:

MANAGEMENT STYLE

Passive. Passively managed funds—which are also called “index funds”—attempt to mirror the performance of a particular investment index, such as the S&P 500. They typically have lower fees than actively managed funds.

Active. Actively managed funds seek to perform better than competing funds and benchmarks.

INVESTMENT STYLE

Value. Value funds invest in underpriced companies that show signs of improvement. The stocks of these companies usually have low price/earn-ings ratios.

Growth. Growth funds invest in companies that have strong earnings growth prospects. The stocks of these companies usually have high price/earn-ings ratios.

GEOGRAPHIC STYLE

Domestic. Domestic funds hold U.S. investments.

International. International funds hold non-U.S. investments.

Global. Global funds hold both U.S. and non-U.S. investments.

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How Investments Grow Over Time

This chart shows how a $1 investment in stocks, bonds, and stable value

investments would have grown over a specific period of time. As you can

see, despite the stock market’s ups and downs, stocks would have returned

the most money in the long run, followed by bonds, and then stable value

investments. When you’re deciding how to invest your money in the plan’s

funds, make sure that you understand the funds’ underlying investment

types and what this might mean over the long term.

$18.84

$2.75

$7.10

$2.16

20151985

Note: Past performance is no guarantee of future results.


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RISK, RETURN, AND TIME HORIZON Part of figuring out which investments are right for you depends on your risk tolerance.

If you can sleep easily at night knowing that most of your money is invested in the stock

market—which has a higher risk of investment loss corresponding to its greater potential

for long-term investment growth—you have a high risk tolerance. If you can’t tolerate the

potential for any short-term investment loss, you have a low risk tolerance.

To determine whether lower-risk or higher-risk investments best meet your needs, you have to consider your investment goals, how long you plan to invest, and your willingness to watch your account balance go up or down over time.

If you have a high risk tolerance, you might be comfortable with investments that have a higher risk of investment loss in the short term corresponding to their greater potential for long-term investment growth. These investments are more likely to significantly outpace inflation—the rate at which the cost of goods and services increases—over time. They may include large cap stock, small cap stock, and international stock funds.

If your tolerance level is somewhere in the middle, you may want investments that have a more moderate risk of investment loss in the short term, and a corresponding moderate potential for long-term investment growth. Investments in this category may include balanced funds.

If you have a low risk tolerance and don’t want to risk investment loss, you might be more comfortable with stable value and money market funds, knowing that you’re likely to see investment returns that are in line with inflation.

That said, it’s very important to balance your risk tolerance with your time horizon, or the number of years that your money will be invested. If you don’t, chances are that you won’t have enough money to retire. Consider this:

If you have a low risk tolerance and a long time horizon, you may need to stretch a little and consider higher-risk investments. If you invest too conservatively, your money will be less likely to grow enough to provide you with an adequate retirement income—especially if your returns don’t outpace inflation. For example, if inflation holds steady at 4% a year, the prices of everything you need to live will double in about 18 years. At 5% inflation, prices will double in about 14 years.

If you have a high risk tolerance but only a short time until you retire, you may need to invest more conservatively to guard against investment losses that could hurt your financial security in retirement.

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DIVERSIFICATION AND ASSET ALLOCATION

Diversifying means putting your money in several different investments to spread out your risk.

Asset allocation is how you divide your money between types of investments or asset classes.

If your investments are diversified, your account is less likely to be hurt by the poor performance of a single investment.

Studies have shown that asset allocation is a key factor in determining risk and return. It not only helps you to spread risk, but also may help you to meet your long-term savings goals.

Ready to Get Started?

When you join a savings plan, you’re not just a saver—you’re an investor. A savings plan is a natural place for you to begin investing. And by joining the plan, you can avoid the biggest investment mistake of all—doing nothing.

After you get started, keep going. No one has a magic formula that can guarantee success. But one thing is certain: Nothing happens if nothing begins!


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Picture Your Future

This booklet is educational, and its content should not be interpreted as investment advice. The booklet uses examples toillustrate concepts; these examples are based on historical information and are not intended to predict future results. Theassumed rates of return do not represent the performance of any particular investment.

Your Benefits ResourcesTM is a trademark of Hewitt Management Company LLC.

Copyright© 2017 Hewitt Management Company LLC.

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picture your future · 2017. 10. 3. · online: ip.com, click on 401(k) savings plan link under...

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