New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

10 Essential Investment Terms Every Penske Automotive Group Employee Should Familiarize Themselves With

Healthcare Provider Update: Healthcare Provider for Penske Automotive Group Penske Automotive Group employees typically receive healthcare coverage through a variety of providers depending on their specific plan selections, with major national insurers like Kaiser Permanente, UnitedHealthcare, and Anthem BlueCross BlueShield being among the options available. The exact provider often varies by location and the specific plan chosen during open enrollment. Healthcare Cost Projections for 2026 The healthcare landscape is set for significant upheaval in 2026, with potential premium hikes expected to exceed 75% for many Affordable Care Act (ACA) marketplace enrollees, largely due to the expiration of enhanced federal subsidies. Penske Automotive Group employees, particularly those nearing retirement, may face steep increases in their healthcare costs as insurers respond to rising medical expenses and price inflation. With the ACA marketplace seeing some state requests for premium increases reaching as high as 66%, careful financial planning will be essential for employees heading into another challenging year in healthcare affordability. Click here to learn more

Whether you live in Texas or Puerto Rico, you’ll receive quite a bit of useful information from this article. If you're new to investing following a departure from a Penske Automotive Group company, you may encounter some unfamiliar jargon. Understanding the following terms may help you become a more confident investor.

Portfolio

An investment portfolio is a collection of investments owned by an individual or an institution. Typically, a portfolio comprises a mix of asset classes such as stocks, bonds, and cash. This will typically include any additional assets from retirement not limited to your Penske Automotive Group pension, 401 (k), lump sum, and annuity payments. An investor's risk tolerance, time horizon, and investment goals generally determine a portfolio's asset allocation.

Stock

A stock is a security that represents ownership (or equity) in a corporation. Typically after a specific year of service, most Penske Automotive Group employees will receive some form of stock as part of their benefits package. An investor who purchases shares of stock owns a piece of the company and has a claim on a portion of the assets and earnings. Shareholders are subject to the potential benefits and risks of that position, which means they can make money if the company does well or lose money if the company does poorly.

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Note: The return and principal value of stocks fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost.

Bond

A bond is a fixed-income security issued by a government entity or corporation to raise money needed for ongoing operations or to finance new projects. Investors who buy bonds are essentially lending money to the issuing organization and become a creditor. Bondholders typically receive interest payments at regular, predetermined intervals. These payments are based on a fixed annual interest rate, also known as the bond's coupon rate. These interest rates also can effect your Penske Automotive Group lump sum and annuity. Bondholders can expect to be paid the bond's full face amount at its stated maturity date, barring default by the issuer.

Note: The principal value of bonds may fluctuate with market conditions. Bonds redeemed prior to maturity may be worth more or less than their original cost.

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Cash

Cash is another investment type, or asset class. It includes currency and cash alternatives that offer low risk and high liquidity.

Some examples of common cash alternatives are savings accounts, certificates of deposit (CDs), and U.S. Treasury bills.

Note: The FDIC insures CDs and bank savings accounts, which generally provide a fixed rate of return, up to $250,000 per depositor, per insured institution.

Note: U.S. Treasury securities are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest.

Mutual Fund

A mutual fund is a collection of stocks, bonds, and/or other securities purchased and managed by an investment company with funds from a group of investors. Shares are typically bought from and sold back to the investment company at the end of the trading day, with the price determined by the net asset value (NAV) of the underlying securities. Mutual funds offer investors the advantages of diversification and professional management. Diversification is a method used to help manage investment risk; it does not guarantee a profit or protect against investment loss. Understanding the level of diversification is important to making sure your retirement from Penske Automotive Group is as care free as possible.

Exchange-Traded Fund

An exchange-traded fund (ETF) is also a portfolio of securities assembled by an investment company. But unlike mutual funds, ETF shares can be traded throughout the day on stock exchanges, like individual stocks, and the price may be higher or lower than the NAV because of supply and demand. ETFs typically have lower expense ratios than mutual funds, but you must pay a brokerage commission whenever you buy or sell ETFs, so your overall costs could be higher, especially if you trade frequently.

Note: The return and principal value of mutual funds and ETFs fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Before investing, carefully consider the fund's investment objectives, risks, fees, and expenses, which can be found in the prospectus. Read it carefully before investing.

Dividends

Dividends are the distributions of a company's earnings to shareholders, generally paid in cash or additional shares of the company's stock on a quarterly basis. The dividend amount per share is decided by the company's board of directors. Dividends must be reported as income by shareholders in the year received. Understanding the ins and outs of taxes is an often overlooked part of clients dealing with dividends purchased with lump sum payouts from Penske Automotive Group. Investors often view dividend payments as an indicator of the company's financial strength and future prospects.

Note: Investing in dividends is a long-term commitment. In exchange for less volatility and more stable returns, investors should be prepared for periods when dividend payers drag down, not boost, an equity portfolio. The amount of a company's dividend can fluctuate with earnings, which are influenced by economic, market, and political events. Dividends are typically not guaranteed and could be changed or eliminated.

Yield

Generally, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation. Investments seeking to achieve higher yields also involve a higher degree of risk.

Index

An index is a statistical composite used to track changes in economic conditions (such as inflation) or financial markets over time.

Investors use some indexes as benchmarks against which the performance of certain investments can be measured. For example, the S&P 500 Index is considered to be representative of the U.S. stock market in general, but there are hundreds of other indexes based on a wide variety of asset classes (stocks/bonds), market segments (large/small cap), and styles (growth/value).

Note: The performance of an unmanaged index is not indicative of the performance of any specific investment. Individuals cannot invest directly in an index. Past performance is not a guarantee of future results. Actual results will vary.

Bear/Bull Market

A bear market is generally defined as a period in which the prices of securities are falling, resulting in a downturn of 20% or more in several broad market indexes over a period of several months or longer. A bull market is a sustained period in which the market is rising and investor optimism is high, usually occurring over several months or years. Either of these market trends can influence the attitudes and behaviors of investors.

What are the specific eligibility criteria for participation in the Penske Cash Balance Plan, and how can employees of Penske ensure they meet these requirements as they work towards retirement? Furthermore, how does the plan address the transition from being a participant to receiving benefits once the eligibility criteria are met?

Eligibility Criteria: Employees of Penske automatically become participants in the Penske Cash Balance Plan after completing a year in which they work 1,000 or more hours, as long as they are in an eligible group. To ensure they meet the eligibility requirements, employees should confirm they meet these conditions annually and consult the Summary Plan Description for details(Penske Cash Balance Pla…).

In what ways does the Penske Cash Balance Plan differentiate itself from traditional defined contribution plans, and how can employees of Penske navigate the choices available to them, including lump sum distributions and annuities? Additionally, what implications do these options have for long-term financial planning for retirement?

Plan Differences: The Penske Cash Balance Plan is a defined benefit plan, offering benefits similar to a defined contribution plan but providing additional options like lump-sum distributions and annuities. Employees should carefully evaluate these options, as lump sums provide immediate access to funds, while annuities ensure steady long-term payments. Both choices impact long-term financial stability(Penske Cash Balance Pla…).

How does the concept of vesting apply to the Penske Cash Balance Plan, and what are the steps that employees of Penske should take to ensure they understand their rights to these benefits prior to retirement? Furthermore, what resources are available to help employees fully grasp the nuances of vesting in relation to their individual situations?

Vesting: Vesting refers to an employee's right to receive benefits even if they leave Penske before retirement. Employees must meet specific requirements to become vested, and they can consult the Brief Plan Summary to fully understand their rights(Penske Cash Balance Pla…).

What mechanisms does the Penske Cash Balance Plan have in place to ensure that employees can trust they will receive their benefits? How does this assurance interact with projected benefits and calculations provided through DB Online, and what should employees of Penske do if they have concerns about the accuracy of their benefit estimates?

Benefit Assurance: Benefits from the Penske Cash Balance Plan are paid from a trust fund established by the company and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can rely on the trust fund and the PBGC for benefit security, and should contact the Customer Contact Center if they have concerns about benefit estimates(Penske Cash Balance Pla…).

How are pension benefits from the Penske Cash Balance Plan typically taxed, and what strategies can employees of Penske implement to manage tax implications effectively during their retirement planning? Moreover, what are the possible ways to minimize taxes on lump sum distributions compared to annuity payments?

Taxation: Benefits from the Penske Cash Balance Plan are generally taxed as ordinary income. Employees can manage taxes effectively by rolling over lump-sum distributions to an IRA to defer tax payments. Careful consideration of lump sums versus annuities can minimize taxes over time(Penske Cash Balance Pla…).

What are the various forms of payment options available under the Penske Cash Balance Plan, and how should employees of Penske evaluate their choices regarding life annuities versus lump sum payments? Additionally, how do these payment options affect short-term and long-term financial stability in retirement?

Payment Options: Employees can choose between lump-sum payments and various types of annuities. Evaluating these options is essential for balancing short-term and long-term financial goals, as lump sums offer immediate liquidity, while annuities provide lifetime payments(Penske Cash Balance Pla…).

In the event of a divorce or separation, what specific procedures must employees of Penske follow to protect their pension benefits, and how does a Qualified Domestic Relations Order (QDRO) impact these benefits? What guidance does the Penske Cash Balance Plan provide to ensure that the division of assets is conducted appropriately?

Divorce and QDRO: In the event of a divorce, employees must obtain a Qualified Domestic Relations Order (QDRO) to divide their pension benefits. This court order ensures that the division is legally recognized, and employees should refer to plan procedures for guidance(Penske Cash Balance Pla…).

How can employees of Penske prepare for the multitude of decisions they need to make as they approach retirement, and what resources does the company offer to assist in this decision-making process? Additionally, how do the various teams and services provided by Penske streamline the retirement transition for its employees?

Retirement Preparation: Penske offers specialized retirement counseling and customer support services to help employees navigate retirement decisions. These resources can assist employees in making informed choices and smooth their transition into retirement(Penske Cash Balance Pla…).

What are the major types of annuities offered by the Penske Cash Balance Plan, and how should employees of Penske assess the suitability of these annuity options for their personal retirement needs? What does the company recommend in terms of beneficiaries and their implications for future payments from the plan?

Annuity Options: Penske offers various annuities, including life annuities and joint survivor annuities. Employees should assess these based on their personal needs and consult the company for recommendations regarding beneficiaries to ensure future payments are secure(Penske Cash Balance Pla…).

How can employees of Penske contact the company to inquire further about the Penske Cash Balance Plan and its intricacies? What methods of communication are available, and what information should employees gather beforehand to make their inquiries as productive as possible?

Contact Information: Employees can contact the Penske Cash Balance Plan administrators by calling 1-800-755-5801 for further inquiries. It's advisable to have all relevant documents and questions prepared in advance to make the discussion more productive(Penske Cash Balance Pla…).