SIP Summary Plan Description - Vought Aircraft Division

different loan amounts and repayment schedules (the maximum repayment schedule is five
years).
Primary Residence Loans
To apply for a loan to purchase your primary residence, you must complete a written application.
You may request an application by accessing SIP Online or calling the SIP Line. Primary
residence loans require a valid agreement of the sale signed by both the buyer and the seller, and
a good faith estimate of closing costs. The repayment schedule may be up to 10 years.
In-Service Withdrawals
Following is a summary of the SIP provisions that permit you to withdraw money from your
account while you are still employed under limited circumstances. Of course, once you retire or
otherwise terminate your employment with the Company you are free to withdraw your entire
account at any time, for any reason.
Please note that, with only very limited exceptions, a 10% early withdrawal penalty tax applies
to the taxable portion of any SIP withdrawal taken before you reach age 59½. This penalty
generally applies even to withdrawals taken after you retire or otherwise terminate employment,
unless you terminate after you reach age 55. The 10% federal penalty tax is in addition to
federal income taxes (and state taxes, if applicable) that will apply to the taxable portion of any
withdrawal you take. Please note also that, depending on your tax bracket, the taxes that you may
owe on these types of withdrawals will often be more than the 20% withheld from your check.
As a result, you should consider very carefully whether or not to take an in-service withdrawal,
because the tax consequences can be severe.
When you request a withdrawal by accessing SIP Online or calling the SIP Line, in general,
money from your vested SIP account is withdrawn in the following order:
Your after-tax contributions and their earnings; then
Any contributions and earnings you rolled over from a former employer’s plan (this does not
count balances transferred from the Northrop Grumman SIP); then
Your Company Matching Contributions and their earnings, but only if you are entitled to a
distribution of these amounts (as described on the following page); then
Your pretax contributions or Company Retirement Contributions and their earnings, but only
if you are entitled to a distribution of these amounts (as described on the following page).
In all cases, 20% of the taxable amount of the withdrawal will be withheld for federal income
taxes; state tax withholdings will also apply, where required.
Age 59½ In-Service Withdrawals
There may be times when you want to withdraw all or a portion of your vested SIP account
before your employment terminates. You are allowed to withdraw your entire vested account,
including your pretax, after-tax, employer, and rollover contributions and earnings once you
reach age 59½.
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