*Other schedules required by
29 CFR 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 (“ERISA”) have been omitted, because they are not applicable.
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
|
|
1.
|
Description of the Plan
|
The following description of
the GSK 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan Document
or the Summary Plan Description
for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution
plan sponsored by GlaxoSmithKline LLC (“GSK” or the “Company”). The Plan was established to encourage and
assist Company employees to save regularly for retirement. It is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
On March 21, 2019, the GSK 401(k)
Plan was amended to include the Stiefel Laboratories, Inc. Retirement Savings Plan (the “Stiefel RSP”). On that date,
participant accounts and assets of the Stiefel RSP were merged into the GSK 401(k) Plan through a trust-to-trust transfer.
During the year 2019, employees
of Pfizer’s Consumer business became employees of the GSK Consumer JV and became eligible to participate in the GSK
401(k) Plan. There were no benefits or assets transferred to GSK from the Pfizer retirement plans.
Transfers in
On February 24, 2020, the GSK
401(k) Plan was amended to include the assets of the Tesaro, Inc. 401(k) Plan (the “Tesaro Plan”). On that date, participants’
accounts and assets of the Tesaro Plan were merged into the GSK 401(k) Plan through a trust-to-trust transfer. Subsequently, $58,902,982
in assets and which includes $379,074 in loans, were transferred into the Plan.
Contributions
Under the terms of the Plan,
eligible employees with one hour of credited service may voluntarily elect to contribute pre-tax and/or Roth 401(k) contributions,
which combined can range from 1% to 50% of their eligible compensation. Participants who have attained age 50 before the end of
the Plan’s year are also eligible to make catch-up contributions. Participants may also contribute amounts, representing
distributions from other qualified retirement plans or individual retirement accounts, subject to the terms of the Plan. Participants
may direct the investment of their contributions into various investment options offered by the Plan and may change those options
at any time during the year.
The Company makes contributions
to the accounts of employees with one year of credited service in two ways. GSK will match up to 100% of the first 4% of the employee’s
combined pre-tax and/or Roth 401(k) contributions not in excess of 4% of the employee’s eligible compensation as defined
by the Plan. Additionally, the Company provides for GSK core contributions of 2% of eligible employee compensation, regardless
of whether the employee voluntarily contributes to the Plan. Participants decide how to invest the Company contributions into the
various investment options offered by the Plan and may change those options at any time during the year.
During the year 2020 the total
amount of the employee and employer contributions was $352,689,034, which includes rollover contributions of $21,512,350.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
Participant Accounts
Each participant’s account
is credited with the participant’s contributions, Company matching contributions, GSK core
contributions and investment earnings or losses as applicable and charged with fees as applicable. The earnings on investments
are allocated daily to the individual accounts of participants. These allocations are based on each participant’s relative
interest in the fair value of the assets held in each fund, except for dividends and unrealized appreciation and depreciation on
the GSK American Depository Receipts (ADRs), as held in the GlaxoSmithKline Stock Fund (the “GSK Stock Fund"), which
are allocated based upon the number of units held in the individual accounts of participants. The benefit, to which a participant
is entitled, is the benefit that can be provided from the participant’s vested account. The Plan’s investments include
the GSK Stock Fund. The GSK Stock Fund is comprised of GSK American Depository Shares (ADRs). Each ADR represent two ordinary shares
of GlaxoSmithKline plc. In addition, the GSK Stock Fund holds a small percentage invested in the State Street Institutional Treasury
Money Market Fund, managed by State Street Global Advisors (SSGA) for liquidity.
Nonparticipant -Directed Investments
If a participant does not designate
an investment direction, their future contributions and earnings will be invested in the age-appropriate
Vanguard Target Retirement Trust Plus fund closest to the year that the participant turns age 65. The participant can change
this future investment direction as well as transfer any accumulated holdings to any other fund in the Plan at any time.
Vesting
Participants are immediately
and fully vested in their participant contributions, GSK matching contributions and GSK core contributions plus actual earnings
thereon.
Payment of Benefits
Participants become entitled
to payment of the total value of their accounts at the time of termination, retirement, disability, or death. If the participant
account balance is less than $5,000, payment is in the form of an immediate lump sum distribution of cash or if invested in the
GSK Stock Fund those distributions may be made in GSK ADRs. The GSK Stock Fund invests in GSK ADRs listed on the New York Stock
Exchange representing two ordinary shares of GlaxoSmithKline plc. Participants with balances greater than $1,000 but less than
$5,000 may have the value of their account rolled over to an Individual Retirement Account (IRA) or Roth IRA in their name with
Merrill Lynch Wealth Management, and invested in an interest-bearing cash account.
If the account balance is greater
than $5,000, participants have the option of electing (1) up to four partial distributions each year from their account balance;
(2) a total distribution of their account balance as annual installments over a period not exceeding 20 years, or as a lump sum
distribution of cash or if invested in the GSK Stock Fund those distributions may be made in GSK
ADRs. Required minimum distributions begin at age 72.
During employment, participants
may withdraw participant rollover contributions, Roth rollover contributions, after-tax contributions, after-tax earnings and prior
employer contributions at any age. After the age of 59-1/2, participants may also withdraw their pre-tax and Roth 401(k) contributions
at any time.
Prior to age 59-1/2, participant
pre-tax and Roth 401(k) contributions may only be withdrawn in the event of financial hardship and then only after the withdrawal
of the value of all participant after-tax contributions, prior employer contributions and rollover contributions. Prior to June
21, 2019 withdrawals of participant pre-tax or Roth 401(k) contributions during employment may cause the participant to become
ineligible to participate in the Plan for a period of 6 months following the withdrawal.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
Participant Loans Receivable
Participants may borrow from
their vested fund accounts a minimum loan amount of $1,000 up to a maximum loan amount equal to the lesser of $50,000 or 50% of
their vested account balance. Loan transactions are treated as transfers from the applicable investment option to the participant
loans receivable. Loan terms range from 1-5 years, or up to 15 years for the purchase of a primary residence.
The loans are collateralized
by the balance in the participant’s account and bear interest at a rate equal to the prime rate plus 1% as of the initial
date of the loan, as determined by the Plan’s administrator. Principal and interest are paid ratably through semi-monthly
payroll deductions. Participants must pay a one-time loan processing fee of $50.
Loans outstanding at December 31,
2020 have interest rates ranging from 4.25% to 9.25% with maturity dates from 2021 to 2048. Loans outstanding at December 31,
2019 had interest rates ranging from 4.25% to 9.25% with maturity dates from 2020 to 2045. Loan maturities beyond 15 years are
due to loans transferred in as a result of the Human Genome Sciences Plan merger in 2013, Novartis Corporation Investment Savings
Plan in 2016 and the Tesaro Plan in 2020.
Participant loans receivable
are valued at unpaid principal plus accrued interest, but not paid interest, which approximates fair market value. Participant
loans are also considered party-in-interest transactions.
Administrative Expenses
Investment management fees are
borne by Plan participants. Investment management fees for certain funds are recorded as Administrative Expenses and Management
Fees in the Statement of Changes in Net Assets Available for Benefits. Other investment management fees are deducted from the respective
fund investment returns. Those participants who elect to use Alight Financial Advisors (AFA) Professional Management to manage
their 401(k) investments pay a monthly fee in arrears to AFA for this service. These fees are deducted from participant accounts
monthly and are also included in administrative expenses and management fees. Certain administrative functions are performed by
officers or employees of the Company and its affiliates. No such officer or employee receives compensation from the Plan. Other
administrative expenses of the Plan are paid by the Company.
In addition to the Administrative
Expenses and Management Fees borne by Plan participants, during the year ended December 31, 2020 the Company paid administrative
expenses of $2,289,380 on behalf of the Plan. This includes the amount of $352,655 for custody
fees and benefits processing paid to State Street Bank and Trust Company, the Trustee and custodian for GSK 401(k) Plan.
|
|
2.
|
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
|
Basis of Presentation
The accompanying financial statements
have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United
States of America.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ from those estimates and differences could be material.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
Investment Valuation and Income Recognition
The Plan’s investments
are stated at fair value as defined by FASB Accounting Standards Codification (ASC) 820, except for synthetic guaranteed investment
contracts that are stated at contract value. The Plan's Management determines the Plan's valuation policies utilizing information
provided by the investment advisers, custodians and contract issuers.
The following is a description
of the valuation methodologies used for the investments measured at fair value. There have been no changes in methodologies used
at December 31, 2020 and 2019.
|
|
●
|
Common stock: valued at the closing price reported on the active market on which the individual
security is traded.
|
|
|
●
|
Common collective trust funds: valued at the net asset value of units of a bank collective trust.
The net asset value as provided by the trustee is used as a practical expedient to estimate fair value. The net asset value is
based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used
when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset
value.
|
|
|
●
|
Mutual funds: valued at the quoted NAV of shares held by the Plan at year end.
|
|
|
●
|
Money market funds: valued at cost plus accrued interest; preserves principal and liquidity and the maintenance of a stable
$1.00 per share NAV.
|
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
The measurement methods as described
above may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its
valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions
to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting
date.
The Plan provides participants
various investment options, some of which are separately managed accounts. Separately managed accounts represent a portfolio of
individual securities that are managed by professional investment managers appointed by Plan management. Unlike a mutual fund or
common collective trust fund, the Plan directly owns the individual underlying securities instead of pooling the assets with other
investors. The individual assets of separately managed accounts are held in the name of the Plan and are generally considered separately
as individual investments for accounting, auditing and financial statement reporting purposes.
Included in the investment options
are the following separately managed accounts for which the underlying investments are listed individually on Form 5500, Schedule
H, line 4i:
|
|
•
|
CRM Small/Mid Cap US Equity
|
|
|
•
|
Dodge & Cox Large Cap US Equity
|
The underlying represents common
stock, common collective trust funds, mutual funds, money market funds as described above and disclosed in Note 4.
The Plan also offers a separately
managed stable value account investment option which includes fully benefit responsive synthetic guaranteed investment contracts.
The underlying synthetic guaranteed investment contracts are presented at contract value. Contract value is the amount participants
would receive if they were to initiate permitted transactions under the terms of the Plan. Contract value represents contributions
made under each contract, plus earnings, less participant withdrawals and administrative expenses.
The Plan owns the underlying
investments of the synthetic GICs. The underlying assets of the synthetic contracts consist of a money market fund, a common collective
trust fund holding high-quality bond portfolios, and limited partnership funds owned by the Plan and an investment contract issued
by an insurance company, designed to provide a contract value “wrapper” around the fixed income portfolio to guarantee
a specific interest rate which is reset quarterly and that cannot be less than zero. The wrapper contract provides that realized
and unrealized gains and losses on the underlying fixed income portfolio are not reflected immediately in the net assets of the
fund, but rather are amortized over the duration of the underlying assets through adjustments to the future interest crediting
rate. Primary variables impacting future crediting rates of the investment contract include the current yield, duration, and existing
difference between market and contract value of the underlying assets within the wrap contract.
The underlying investments of
the synthetic contracts are listed individually on Form 5500, Schedule H, line 4i. See Note 3 for further information on the synthetic
GICs.
Purchases and sales of investments
are recorded on the trade-date basis. Interest income is recognized as earned. Dividend income is recorded on the ex-dividend date.
The Plan presents in the Statement
of Changes in Net Assets Available for Benefits, the net appreciation in the fair value of its investments, which includes realized
gains and losses and unrealized appreciation and depreciation.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
Benefits Paid to Participants
Benefits paid to participants
from participants’ accounts are recorded when paid.
Fair Value Measurement
In
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to
the Disclosure Requirements for Fair Value Measurement, which amends certain disclosure requirements of ASC 820. The ASU removed
the requirement to disclose the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy as
well as the policy for timing of transfers between levels. The ASU also modified the disclosure for investments in certain entities
that calculate NAV to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption
might lapse only if the investee has communicated the timing to the Plan or announced the timing publicly. It also clarified
the measurement uncertainty disclosure to communicate information about the uncertainty in measurement as of the reporting date.
The Plan adopted ASU 2018-13 on January 1, 2020 retrospectively. The adoption of this ASU did not have a material impact on the
Plan’s financial statements.
|
|
3.
|
Synthetic Guaranteed Investment Contracts
|
The
Plan provides participants a self-managed stable value account investment option. The Plan owns 100% of the underlying assets of
the stable value account, which includes fully benefit-responsive synthetic guaranteed investment contracts (synthetic GICs), a
bank common collective trust and a money market fund. The synthetic GICs are at contract value and the common collective trust
fund and money market fund are at fair value as disclosed in the Investment Valuation section of Note 2.
Synthetic GICs are agreements
with high quality banks and insurance companies which are designed to help preserve principal and provide a stable crediting rate.
The synthetic GICs are fully benefit responsive and provide that all participant initiated withdrawals permitted under the Plan
will be paid at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise.
A synthetic investment contract
includes a wrapper contract, which is an agreement from the wrap issuer, such as a bank or insurance company, to make payments
to the Plan in certain circumstances.
Certain events may limit the
ability of the Plan to transact at contract value with the contract issuer. These events may be different for each contract. Examples
of such events include (1) communication to Plan participants which may induce participants to make a withdrawal from the stable
value fund, (2) equity wash provisions are not followed, (3) other Plan sponsor events (for example, a group layoff, an early retirement
incentive or spin-offs of the Plan) that cause a significant withdrawal from the Plan, (4) the Plan’s failure to qualify
under Section 401(a) of the Internal Revenue Code (IRC) or the failure of the Plan to be tax-exempt under Section 501(a) of the
IRC or (5) amendments to the Plan documents (including complete or partial Plan termination or merger with another Plan).
No events are probable of occurring
that might limit the ability of the Plan to transact at contract value with the contract issuers and that also would limit the
ability of the Plan to transact at contract value with the participants.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
In addition, certain events allow
the issuer to terminate the contracts with the Plan and settle at an amount different from contract value. Those events may be
different under each contract. Examples of such events include (1) termination or replacement (or “change in control”
as defined in the contract) of the investment adviser without the issuer’s consent, (2) if a security is sold or subject
to a lien other than as permitted under the contract, (3) the contract holder engages in fraud or other bad faith that in some
cases must also have materially and adversely affected the risk profile of the contract (4) a material amendment to the agreements
without consent of the issuer,(5) failure to be exempt from federal income taxation, or (6) the Plan merges with another plan.
Automatic termination of the
wrap contract will occur if the contract value equals zero; the contracts may also be terminated in the event of a default by the
issuer. The Plan’s ability to receive amounts due in accordance with fully benefit responsive investment contracts is dependent
on the third-party issuer’s ability to meet its financial obligations. The issuer’s ability to meet its contractual
obligations may be affected by future economic and regulatory developments. Participant initiated withdrawals permitted under the
Plan are paid at contract value. Any event that is employer initiated could result in withdrawal at market value (which may be
significantly less than contract value). If the assets were transferred to another synthetic contract within the Plan’s synthetic
guaranteed investment contract portfolio, the market value to contract value loss in existence on the termination date, if any,
would be transferred to the new contract and the loss would be amortized through future crediting resets.
There are three synthetic GICs
included in the Plan. These are provided by The Prudential Insurance Company of America, State Street Bank and Trust Company and
Transamerica Premier Life Insurance Company.
|
|
4.
|
Fair Value Measurements
|
The framework for measuring fair
value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. To increase
consistency and comparability in fair value measurements and related disclosures, the Plan utilizes the fair valuation hierarchy
required by FASB ASC 820-10 which prioritizes the inputs to valuation techniques and to measure fair value into the following three
broad levels:
|
|
Level 1
|
Inputs to the valuation methodology are unadjusted quoted
prices for identical assets or liabilities in active markets that the Plan has the ability to access at the measurement date (i.e.
common stocks and mutual funds).
|
|
|
Level 2
|
Inputs other than quoted prices that are observable for
the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active (i.e. common
collective trust funds).
|
|
|
Level 3
|
Inputs to the valuation methodology are unobservable
and significant to the fair value measurement.
|
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
|
|
|
Assets at Fair Value as of December 31, 2020
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
$
|
1,191,975,819
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,191,975,819
|
|
|
Money market fund
|
|
|
23,442,397
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,442,397
|
|
|
Mutual funds
|
|
|
95,353,559
|
|
|
|
—
|
|
|
|
—
|
|
|
|
95,353,559
|
|
|
|
|
|
1,310,771,775
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,310,771,775
|
|
|
Investments measured at net asset value as a practical expedient (a)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,323,781,759
|
|
|
|
|
$
|
1,310,771,775
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,634,553,534
|
|
|
|
|
Assets at Fair Value as of December 31, 2019
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
$
|
1,334,709,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,334,709,125
|
|
|
Money market fund
|
|
|
25,791,800
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,791,800
|
|
|
Mutual funds
|
|
|
59,843,849
|
|
|
|
—
|
|
|
|
—
|
|
|
|
59,843,849
|
|
|
|
|
|
1,420,344,774
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,420,344,774
|
|
|
Investments measured at net asset value as a practical expedient (a)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,534,282,140
|
|
|
|
|
$
|
1,420,344,774
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,954,626,914
|
|
(a) Certain investments that
were measured at net asset value per share (or its equivalent) as practical expedient have not been classified in the fair value
hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to
the line items presented in the Statements of Net Assets Available for Benefits.
The following summarizes investments
measured at fair value based on NAV per share as a practical expedient as of December 31, 2020 and 2019, respectively.
|
|
|
December 31, 2020
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
|
|
Redemption Notice Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
State Street Global Advisors Funds
|
|
$
|
4,387,357,154
|
|
|
n/a
|
|
Daily
|
|
8:30am EST on T+1for participant-directed redemptions. In accordance with the relevant Declaration of Trust for the Commingled Funds, SSGA requests emailed notice 15 days in advance of Trade Date for all plan-directed contributions or redemptions that are of significant size, as determined by SSGA in its sole discretion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
|
|
Vanguard Target Retirement Trust Plus
|
|
|
1,689,618,825
|
|
|
n/a
|
|
Daily subject to frequent trading provisions
|
|
No defined period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pzena International Value All Country (ex-U.S.) CIT (Class 1)
|
|
|
38,003,268
|
|
|
n/a
|
|
Daily subject to frequent trading provisions
|
|
Orders for withdrawals must be received by 3pm CET on the trade date.The Representative covenants that will provide the trustee with at least (5) business days advance written notice of Large Transactions proposed to be executes on behalf of the Participating Trust. Large Transactions are defined as a purchase or redemption of Units of the Group Trust, or multiple purchases or redemptions of Units of the Group Trust on a single day, in amounts exceeding $10 million , or amounts equivalent to 10% of the Participating Trust's assets invested in the Group Trust.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Government Short Term Investment Fund
|
|
|
208,802,512
|
|
|
n/a
|
|
Avg 10 per month
|
|
In the event of Plan (non-participant) directed activity into or out of the Collective Funds, the Trustees will provide the Manager with thirty (30) days advance notification in order to allow for coordination of order placement, trading and specification of settlement date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total December 31, 2020
|
|
$
|
6,323,781,759
|
|
|
|
|
|
|
|
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
|
|
|
December 31, 2019
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
|
|
Redemption Notice Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
State Street Global Advisors Funds
|
|
$
|
3,974,880,903
|
|
|
n/a
|
|
Daily
|
|
8:30am EST on T+1for participant-directed redemptions. In accordance with the relevant Declaration of Trust for the Commingled Funds, SSGA requests emailed notice 15 days in advance of Trade Date for all plan-directed contributions or redemptions that are of significant size, as determined by SSGA in its sole discretion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
|
|
Vanguard Target Retirement Trust Plus
|
|
|
1,340,033,110
|
|
|
n/a
|
|
Daily subject to frequent trading provisions
|
|
No defined period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pzena International Value All Country (ex-U.S.) CIT (Class 1)
|
|
|
40,240,254
|
|
|
n/a
|
|
Daily subject to frequent trading provisions
|
|
Orders for withdrawals must be received by 3pm CET on the trade date.The Representative covenants that will provide the trustee with at least (5) business days advance written notice of Large Transactions proposed to be executes on behalf of the Participating Trust. Large Transactions are defined as a purchase or redemption of Units of the Group Trust, or multiple purchases or redemptions of Units of the Group Trust on a single day, in amounts exceeding $10 million , or amounts equivalent to 10% of the Participating Trust's assets invested in the Group Trust.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Government Short Term Investment Fund
|
|
|
173,055,215
|
|
|
n/a
|
|
Avg 10 per month
|
|
In the event of Plan (non-participant) directed activity into or out of the Collective Funds, the Trustees will provide the Manager with thirty (30) days advance notification in order to allow for coordination of order placement, trading and specification of settlement date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GS SV Collective Trust
|
|
|
6,072,658
|
|
|
n/a
|
|
Daily
|
|
In general, five business days’ advance notice of withdrawal is required, subject to the Trustee’s agreement to a shorter notice period. Under normal market conditions, the Trustee intends to permit daily withdrawal from the Fund, upon a minimum of one day’s notice.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total December 31, 2019
|
|
$
|
5,534,282,140
|
|
|
|
|
|
|
|
*State Street Global Advisor
Funds includes 5 funds (for 2020, see individual funds as listed in attached Schedule H, line 4i – Schedule of Assets Held
– Common Collective Trust Section).
**Vanguard Target Retirement
Trust Plus Funds includes 11 funds (for 2020, see individual funds as listed in attached Schedule H, line 4i – Schedule of
Assets Held – Common Collective Trust Section)
|
|
5.
|
Related Party and Party in Interest Transactions
|
Certain Plan investments are
common collective trust funds and mutual funds managed by SSGA, an investment management division of State Street Bank and Trust
Company, which is the Trustee and custodian of the Plan, and therefore, these transactions and expenses qualify as party-in-interest
transactions.
During the year ended December
31, 2020, the Plan purchased $94,471,654 and sold $88,541,595 of the GSK Stock Fund, which included purchases of $29,536,787 and
sales of $23,059,148 of GSK ADRs and received GSK ADRs dividends of $18,052,136.
During the year ended December
31, 2020, Dodge & Cox Large Cap US Equity purchased $165,087,602 and sold $230,996,915 of various equities on behalf of the
Plan, which included purchases of $3,064,106 and sales of $1,109,405 of GSK ADRs and received GSK ADRs dividends of $408,924. Fees
paid by the Plan to Dodge & Cox Large Cap US Equity for investment management services were $1,742,268 for 2020.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
During the year ended December
31, 2020, CRM Small/Mid Cap US Equity purchased $311,031,344 and sold $360,176,932 of various equities. This did not include any
sales, purchases and dividend receipts of GSK ADRs. Fees paid by the Plan to CRM Small/Mid Cap US Equity for investment management
services were $1,728,060 for 2020.
The stable value account is a
customized separately managed account held by Goldman Sachs, therefore, transactions with Goldman Sachs qualify as party-in-interest
transactions. Fees paid by the Plan to Goldman Sachs for investment management services were $416,806 for 2020.
The Plan issues loans to participants,
which are secured by the vested balances in the participants’ accounts.
Although it has not expressed
any intent to do so, the Company has the right under the Plan Document to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA.
The Internal Revenue Service
has determined and informed the Company by a letter dated February 16, 2017, that the Plan and related trust are designed
in accordance with applicable sections of the IRC. In December 2016, the IRS began publishing a Required Amendments List for individually
designed plans which specifies changes in qualification requirements. The list is published annually and requires plans to be amended
for each item on the list, as applicable, to retain its tax-exempt status. Although the Plan has been amended since receiving the
determination letter, the Plan administrator and the Plan's tax counsel believe that the Plan is designed, and is currently being
operated, in compliance with the applicable requirements of the IRC and, therefore, believe that the Plan is qualified, and the
related trust is tax-exempt.
|
|
8.
|
Reconciliation to Form 5500
|
The following is a reconciliation
of net assets available for benefits per the financial statements at December 31, 2020 and 2019 to Form 5500:
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the financial statements
|
|
$
|
8,103,610,469
|
|
|
$
|
7,339,253,990
|
|
|
Amounts allocated to withdrawing participants
|
|
|
(1,850,038
|
)
|
|
|
(1,677,295
|
)
|
|
Adjustment from contract value to fair value for fully benefit-responsive investment contracts
|
|
|
16,823,936
|
|
|
|
5,302,890
|
|
|
Net assets available for benefits per Form 5500, Schedule H
|
|
$
|
8,118,584,367
|
|
|
$
|
7,342,879,584
|
|
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
The following is a reconciliation
of total additions per changes in net assets available for benefits per the financial statements at December 31, 2020 to Form
5500:
|
|
|
2020
|
|
|
|
|
|
|
|
Net additions per the Statement of Changes in Net Assets Available for Benefits per financial statements
|
|
$
|
1,222,796,696
|
|
|
2020 Adjustment from contract value to fair value for fully benefit-responsive investment contracts
|
|
|
16,823,936
|
|
|
2019 Adjustment from contract value to fair value for fully benefit-responsive investment contracts
|
|
|
(5,302,890
|
)
|
|
Total income per Form 5500, Schedule H
|
|
$
|
1,234,317,742
|
|
The following is a reconciliation of benefits paid
to participants per the financial statements for the year ended December 31, 2020 to Form 5500:
|
|
|
2020
|
|
|
|
|
|
|
|
Benefits paid to participants per the financial statements
|
|
$
|
511,260,477
|
|
|
Amounts allocated to withdrawing participants at December 31, 2020
|
|
|
1,850,038
|
|
|
Amounts allocated to withdrawing participants at December 31, 2019
|
|
|
(1,677,295
|
)
|
|
Benefits paid to participants per Form 5500, Schedule H (2e, 2g)
|
|
$
|
511,433,220
|
|
|
|
9.
|
Risks and Uncertainties
|
The Plan invests in various investment
options. These investment options are exposed to various risks, such as interest rate, market and credit risks. Due to the level
of risk associated with certain investment securities, it is reasonably possible that changes in the values of investments will
occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported
in the Statements of Net Assets Available for Benefits.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
Included in investments at December 31,
2020 and 2019, are shares of GSK’s common stock of $343,213,654 and $427,276,123 respectively. This investment represents
4.2 percent and 5.8 percent of net assets available for benefits at December 31, 2020 and 2019, respectively. A significant
decline in the market value of GSK’s stock would affect the net assets available for benefits.
As of December 31, 2020 and 2019,
the following investments represent more than 5.0 percent of the net assets available for benefits:
|
2020
|
|
|
|
|
|
|
|
|
|
Investment
|
|
Fair Value of Investment
|
|
|
State Street S&P 500 Index Non-Lending Series Fund (Class A)
|
|
$
|
1,836,262,495
|
|
|
State Street US Extended Market Index Non-Lending Series Fund (Class C)
|
|
|
839,084,610
|
|
|
State Street International Index Non-Lending Series Fund (Class A)
|
|
|
807,683,048
|
|
|
State Street US Bond Index Non-Lending Series Fund (Class A)
|
|
|
556,331,973
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Investment
|
|
Fair Value of Investment
|
|
|
State Street S&P 500 Index Non-Lending Series Fund (Class A)
|
|
$
|
1,684,134,833
|
|
|
State Street International Index Non-Lending Series Fund (Class A)
|
|
|
807,216,728
|
|
|
State Street US Extended Market Index Non-Lending Series Fund (Class C)
|
|
|
712,250,057
|
|
|
State Street US Bond Index Non-Lending Series Fund (Class A)
|
|
|
462,025,235
|
|
|
GlaxoSmithKline plc ADR
|
|
|
427,276,123
|
|
There are no other individual
investments that represent more than 5.0 percent of the net assets available for benefits at December 31,2020 and 2019.
Current events
The ongoing novel coronavirus
(COVID-19) was declared a pandemic by the World Health Organization on March 11, 2020. The outbreak has negatively impacted the
world economy and common stock share prices for many companies, including GSK PLC’s common stock share price. The Plan’s
investment in the common stock of GSK PLC is stated at fair value based on the closing price of $36.80 per share at December 31,
2020. The impact of COVID-19 on companies continues to evolve rapidly and its future effects on the Plan’s net assets available
for benefits, and changes in net assets available for benefits are, uncertain.
On March 27, 2020, Congress
passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided the option for retirement plan sponsors
to provide temporary relief for their participants with respect to distributions and participant loans. The provisions of the CARES
Act may be effective and operationalized immediately, prior to amending the Plan Document.
Plan management has adopted
certain relief provisions included in the CARES Act which became effective on June 12, 2020.
Subsequent events were evaluated
through June 8, 2021, the date the financial statements were issued.
GSK 401(k) Plan
Notes to Financial Statements
As of December 31,
2020 and 2019 and for the Year Ended December 31, 2020
The Company makes contributions
to the accounts of employees with one year of credited service, which has changed to one hour of credited service effective January
1, 2021.
GSK core contributions have changed
to 7% effective January 1, 2021, for eligible employee compensation, regardless of whether the employee voluntarily contributes
to the Plan.
On February 25, 2021 six new
investment options were added to the GSK 401(k) Plan menu, and five investment options were removed.
Supplemental Schedule