Citi Benefits Handbook
Citigroup Common Stock Fund
The Citigroup Common Stock Fund is intended to be an employee stock ownership plan within the meaning of section 4975(e)(7) of the Code. The Citigroup Common Stock Fund is a collective investment fund that invests primarily in shares of Citigroup common stock, which are retained in this fund regardless of market fluctuations unless Fiduciary Counselors Inc., the independent fiduciary, determines that retaining Citigroup common stock is no longer consistent with ERISA.
In the normal course, cash equivalents also will be held for liquidity purposes to meet administrative and distribution requirements. Participants in this fund do not directly own shares of Citigroup common stock.
The Plan's record keeper has adopted unitized accounting to value each participant's interest in the Citigroup Common Stock Fund. "Share equivalents" are the accounting measure for determining a participant's ownership interest in the fund. The number of share equivalents credited to a participant's account represents the number of hypothetical shares that would be held in such account if the fund were 100% invested in shares of Citigroup common stock. Since a small portion of the fund is actually invested in cash equivalents for liquidity reasons, the actual number of shares that are ultimately allocated to a participant's account will be slightly less than the number of share equivalents credited to the participant's account.
Participants will have the opportunity to direct the voting of shares of Citigroup common stock allocated to a participant's account based on the participant's proportionate ownership interest in the Citigroup Common Stock Fund. If a participant does not provide voting directions in a timely manner, the participant's allocated shares in the fund will be voted in the same proportion as the shares for which voting instructions were provided, subject to the requirements of the Plan and applicable law. In either case, participant directions may be disregarded by the fiduciary if following those directions would constitute a violation of fiduciary duties under ERISA.
Citigroup Common Stock Fund Dividends
Citigroup Common Stock Fund dividends are vested as soon as they are allocated to your account.
You may elect to receive any dividends from your investment in the Citigroup Common Stock Fund in cash. Declared dividends are paid quarterly. If the amount of your dividend distribution is less than $10, your dividends will be automatically reinvested, irrespective of your election. No dividend distribution of less than $10 will be made.
If your employment is terminated, you elected to receive your dividends from the Citigroup Common Stock Fund in cash, and you have requested a lump-sum distribution prior to the dividend payment, then your dividends will be paid as soon as administratively possible after the dividend has been declared.
You may change your dividend election at any time. If you elect to take dividends in cash, they will be taxable to you at ordinary income tax rates in the year of the distribution. If you received a dividend payment in 2019, you will receive a Form 1099 in early 2020.
The Plan allows you to move any portion of your account invested in the Citigroup Common Stock Fund to other investment alternatives under the Plan. You may go online or call the Plan, as instructed under "How to Contact the Plan", for specific information on how to exercise this right. All of the investment options under the Plan are available (except for closed funds) if you decide to diversify out of the Citigroup Common Stock Fund.
To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return while minimizing your overall risk of losing money.
Diversification is advisable as market or other economic conditions that cause one category of assets, or one particular security, to perform very well may cause another asset category, or another particular security, to perform poorly. If you invest more than 20% of your retirement savings in any one company, industry or asset category, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it may be an effective strategy to help you manage investment risk.
In deciding how to invest your retirement savings, you may want to take into account all of your assets, including any savings outside the Plan. No single approach may be right for everyone because, among other factors, individuals may have different financial goals, different time horizons for meeting their goals and different tolerances for risk. You also may want to periodically review your investment portfolio, investment objectives and the investment options under the Plan to help ensure that your retirement savings will meet your retirement goals. Visit the Plan's website accessible through My Total Compensation and Benefits at www.totalcomponline.com or https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/pension-protection-act/investing-and-diversification for more information on individual investing and diversification.
As a reminder, the Plan is intended to operate as a long-term savings vehicle, and the selection of investment options is entirely up to you. To prevent short-term speculative trading, which may cause potential harm to the Plan and to its participants, the Plan has imposed a seven-day transfer restriction. This restriction applies to all of the investment options in the Plan, except the BlackRock Cash Fund: Treasury, into which you can transfer money at any time. In addition, the Stable Value Fund has its own set of restrictions. Certain Plan participants also may be subject to corporate policies that restrict personal trading in Company stock. See "Restrictions on Fund Transfers, Reallocations and Rebalancing." Within these constraints, you are free to transfer assets among the investment options at any time to meet your goals.
Dividend payments are not subject to early withdrawal penalties. You cannot roll over your cash dividends into another eligible retirement plan or IRA, or as an in-Plan Roth Conversion. Each dividend will be credited to your account or made in cash based on your election on file at the time the dividend is paid.
If you elect to receive dividend payments in cash, you are reducing the investment in your Plan account. If you do not make an election, dividends will be reinvested in your Citigroup Common Stock Fund account automatically.
How to Make a Dividend Election
You can call the Plan or visit the Plan's website, as instructed under "How to Contact the Plan" to elect to receive any dividends allocated.
Your election on file on the day the dividend is allocated will determine if your dividend will be paid to you in cash or reinvested in the Citigroup Common Stock Fund. You may change your election at any time.
Risks of Investing in Company Stock
Investing in the Company's common stock is subject to certain risks. The material risks are described in detail in the Company's annual report on Form 10-K. For information on how to obtain a copy of the most recent annual report, see Information about Citi.