Flowserve’s 2006 401(k) Discretionary Match
As part of the 401(k) Retirement Savings plan and because Flowserve’s overall performance in 2006 was strong,
eligible U.S. associates1 who participated in the 401(k) Retirement Savings plan last year received a discretionary
company match effective April 10, 2007.
Flowserve provides this discretionary match in addition 1. One associate earned $30,000 and participated in
to the standard fixed match that the company deposits Flowserve’s 401(k) the entire year, contributing 6 percent
to participants' accounts each pay period based on (or $1,800) to the plan. Because Flowserve automatically
participants' contributions (see 401(k) Retirement Savings matches 50 percent2 of the first 6 percent of eligible pay
Plan Match Details in the table below). that associates contribute to the basic 401(k) plan, this
associate received a fixed match of $900 in 2006. In
Each year, the company determines the discretionary match addition, this associate received Flowserve’s one-time
based on our overall annual company performance—the discretionary match of $360 (20 percent of the $1,800
stronger the company performance, the greater the contribution) for 2006, making the company’s total match
discretionary match may be. The 2006 discretionary match for the year $1,260 (70 percent of the $1,800 contribution).
contribution will be 20 percent of the participant’s pre-tax and
post-tax 2006 contribution up to the first 6 percent of the 2. The other associate also earned $30,000 and participated
employee’s contribution. Participants receive the 20 percent in the company’s 401(k) plan for the entire year. However,
discretionary match in addition to the standard 50 percent this associate contributed 3 percent (or $900) to the
fixed match2—a total of 70 percent. plan. This associate’s fixed match came to $450, and the
discretionary match equaled $180 (20 percent of the $900
Sample Scenarios contribution). That made Flowserve’s total 2006 match to
The examples at the right show how the discretionary this associate’s 401(k) plan $630 (70 percent of the $900
match would be calculated for two associates with different contribution).
individual contribution percentages.
401(k) Retirement Savings Plan Match Details
Match Eligibility for Match Contributions Investments Vesting
Fixed 401(k) Match A guaranteed match Based on participation for Associates can stop or Associates choose from Aligns with Flowserve’s
of 50 percent (25 the plan year. change deductions or 16 investment options current vesting schedule.
percent for certain union investment options at any made available through
associates) of the first 6 time by calling Vanguard. The Vanguard Group.
percent of contributions
made by associates.
Discretionary Percentage is based on Based on participation for The amount varies Invested automatically Aligns with Flowserve’s
401(k) Match Flowserve’s performance the plan year. from year to year and is in the Flowserve current vesting schedule.
for the plan year. given at the company's Corporation Stock Fund.
Flowserve matches discretion.
the first 6 percent of
contributions made by
associates.
1 Subject to eligibility requirements.
2 Certain associates represented by a collective bargaining agreement receive a fixed match of 25 percent of the first 6 percent of pay.
Continued on back
Investing and Vesting Want to save more for the future?—One Step
All discretionary match contributions are automatically Those who want to save more but are unsure how to reach
invested in the Flowserve Corporation Stock Fund, allowing their desired savings rate can gradually increase their rate
associates to participate directly in the success of the through a convenient tool called One Step. One Step will
company. Flowserve’s current vesting schedule applies automatically increase a participant’s savings rate each
to the discretionary match. Associates always are vested year beginning the month the participant chooses. So for
100 percent in their own contributions to the 401(k) participants who are contributing less than they would ideally
along with the investment earnings generated by those like to, they can use this tool to automatically increase their
contributions. Flowserve’s matching contributions—fixed contribution by 1 percent each year. Most participants set up
and discretionary—vest according to the associate’s years of this contribution increase to occur after salary actions so that
service, beginning with 20 percent vesting after one year and their contribution increase takes place at the same time as
increasing by 20 percent each year until the participant is fully their potential pay increase.
vested after five or more years of service.
Because associates may save with pre-tax dollars—from
Questioning how much you should invest and what else you 1 to 50 percent of annual eligible pay (base, overtime and
can do to save for the future? incentive) subject to IRS limits—participation may cost less
Access to financial counseling is provided by Flowserve than they think. If a participant elects 6 percent pre-tax
as an associate benefit through The Ayco Company, L.P., contributions, that participant's take-home pay will not go
a Goldman Sachs Company. Representatives at Ayco are down by 6 percent because the pre-tax contribution reduces
familiar with the benefits Flowserve offers and can provide the amount of pay subject to payroll tax withholding.
information on any financial topic. Call the toll-free Ayco
AnswerLine® service at 866-487-9452 Monday through To get started using One Step, go to www.flowserveflex.
Friday, 8 a.m. to 7 p.m. Central Time, the TTY/TDD at com to access www.vanguard.com. After you log on,
800-437-6380 or go to the www.flowserveflex.com and look for the “I Want To” box on the right side of your account
log on to www.Aycofn.com. page, and then click “Paycheck deduction/One Step
election.” If you have not yet registered for online account
access, you will need the Vanguard plan number (090551),
along with your Social Security number, birth date, and home
zip code. Or call Vanguard at 800-523-1188. Vanguard
associates are ready to help you Monday through Friday from
8:30 a.m. to 9 p.m., Eastern Time.
April 2006