Moody’s Corporation Profit Participation Plan of Moody’s Corporation Annual Report Summary
1. Plan Overview
The Profit Participation Plan of Moody’s Corporation is a defined contribution plan established for eligible U.S. employees, providing a mechanism for regular and long-term retirement savings. The Plan is subject to the Employee Retirement Income Security Act (ERISA) and offers various features including automatic enrollment, company matching contributions, and multiple investment options.
2. Eligibility and Contributions
- Eligibility: Full-time U.S. employees hired or rehired on or after January 1, 2008, are automatically enrolled with a 3% contribution rate unless they opt out. Part-time U.S. employees are eligible after working at least 1,000 hours within a consecutive 12-month period or in any calendar year following employment.
- Contributions: Participants can contribute up to 50% of their compensation, with limits for before-tax and Roth contributions ($23,500 in 2025). The company matches 50% of the first 6% of annual compensation. Participants can invest in various funds, including the Moody’s Corporation Stock Fund, with a 10% limit on such investments.
3. Participant Accounts and Distributions
- Participant Accounts: Each participant has a separate account with contributions invested in chosen funds. The plan allows for loans collateralized by account balances, with a maximum of two general-purpose loans and a principal residence loan.
- Distributions: Participants are eligible for lump sum distributions upon retirement or termination, with options for deferred distributions for balances exceeding $1,000. Withdrawals are permitted after age 59½ or due to financial hardships.
4. Vested Benefits and Forfeitures
- Vesting: Participants vest in their own contributions immediately and in company contributions after three years of service, with full vesting at age 65, upon death, or in cases of total and permanent disability.
- Forfeitures: Unvested participant amounts forfeited during the year were $5 million, used to offset company contributions and cover administrative fees. The plan held approximately $700 thousand and $400 thousand in forfeited amounts as of December 31, 2025, and 2024, respectively.
5. Administration and Voting Rights
- Administration: The Master Benefit Committee (MBCC) serves as the Plan Administrator, with Fidelity Management Trust Company as Trustee and Mercer Investments LLC as the Investment Manager.
- Voting Rights: The Trustee votes company stock in the Stock Fund based on participant instructions, with default voting if instructions are not received.
6. Plan Termination
The company has no expressed intent to terminate the Plan but reserves the right to do so, with participants becoming fully vested in employer contributions in such an event.
7. Accounting Policies
- Basis of Accounting: The plan uses the accrual method, with participant withdrawals and distributions recorded when paid.
- Use of Estimates: The plan involves estimates and assumptions affecting reported financials, with potential variations due to actual results.
- Risks and Uncertainties: Investments are subject to market risks, including interest rate fluctuations and credit risk, which could impact account balances.
8. Investment Valuation
- Fair Value Measurements: Investments are valued based on quoted market prices or net asset values, with no use of Level 3 inputs.
- Investment Transactions and Income: Securities are purchased and sold on a trade-date basis, with dividend income recorded on ex-dividend dates.
9. Related Party Transactions
Plan investments managed by Trustees and Investment Managers are considered party-in-interest transactions, with certain fees charged to the Plan.
10. Tax Status
The Plan is tax-exempt and operates in compliance with Internal Revenue Code (IRC) requirements, with no uncertain tax positions recognized as of December 31, 2025.
11. Form 5500 Compliance
The Plan failed the Section 415(c) and Section 402(g) tests in subsequent years, resulting in corrective distributions recorded as contribution refunds.
12. Schedule H
- Schedule H, Line 4a: Delinquent participant contributions for 2025 and 2024 were remitted during and after the respective years.
- Schedule H, Line 4i: The plan held approximately $700 thousand and $400 thousand in assets as of December 31, 2025, and 2024, respectively.
