Popular, Inc. U.S.A. 401(k) Savings and Investment Plan
Notes to Financial Statements
December 31, 2022 and 2021
1. Description of Plan
The following description of the Popular, Inc. U.S.A. 401(k) Savings and Investment Plan (the Plan) provides only general information.
Participants should refer to the Plan Document for a more complete description of its provisions.
Plan Description
The Plan is sponsored by Popular, Inc. (the Corporation). The Plan is a defined contribution plan covering any United States (excluding Puerto
Rico), United States Virgin Islands and British Virgin Islands employees of the Plan Sponsor who have completed 30 days of service. The Plan provides the participants the ability to invest in mutual funds, single group annuity contract, pooled
separate accounts and common stock in Popular, Inc. The Plan is subject to the provisions of Employee Retirement Income Security Act of 1974 (ERISA).
In July 2022, the Plan amended and restated its preapproved plan document to incorporate certain legal and administrative changes, including the adoption to
comply with the requirements of certain provisions of the Bipartisan Budget Act of 2018 that amended the rules relating to hardship distributions.
On
October 15, 2021, Popular Equipment Finance LLC (PEF), a newly formed wholly owned subsidiary of Popular Bank, completed the acquisition of certain assets and the assumptions of certain liabilities of K2 Capital Group LLCs
(K2). As part of the acquisition PEF retained 25 former employees of K2. As further detail below, a number of these former K2 employees became participants of the Plan.
Contributions
Participants may make pre-tax contributions up to the maximum permitted amount based on IRS limitations (maximum $20,500 in 2022), as defined in the Plan documents. Participants direct the investment of Plan contributions into various
investment options offered by the Plan. Also, the Plan permits catch-up contributions that are before tax contributions made in excess of the deferral limit by a participant who has reached age 50, limited for
the calendar years ended on December 31, 2022 and 2021 to $6,500.
On October 1, 2021, the Plan was amended to provide former employees of K2
who became participants of the Plan immediate eligibility and previous service for vesting purposes in the value of their account, and the option to rollover Roth balances into the plan.
On July 1, 2021, the Plan was amended to provide that newly hired employees are automatically enrolled in the Plan at a
pre-tax rate of 5% and a match formula of 50% for each dollar pre-tax contribution up to a maximum of 8%, increased from 6% before the amendment, of the
participants contribution. As a result, the Corporations maximum effective formula is 4% of the total cash compensation.
The plan provides
for an automatic annual increase of 1% to the employees pre-tax contribution until such contribution reaches a certain percent which at December 31, 2022 was 8%. Participants shall be given written
notice of the automatic increase no less than 30 days or more than 90 days before the increase is to be effective. Participants, upon receipt of the notice of automatic increase, may elect to change their percentage of
before-tax contributions to a different amount, including zero (0%), by the deadline established by the Plan Administrator to avoid the automatic increase. Matching contributions are invested pursuant to each
participants investment directions.
The Corporation may make discretionary contributions to its own employees out of its net profits in such
amounts as the Corporations Board of Directors may determine. At December 31, 2022 and 2021, the plan had $1,921,457 and $1,669,955 respectively included as employer contributions receivable in the accompanying Statement of Net Assets
Available for Benefits, related to discretionary contributions declared by the Corporations Board of Directors subsequent to the end of that fiscal year.
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