UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________
Commission File Number: 1-4018
A: Full title of the plan and the address of the plan, if different from that of the issuer named below:
DOVER CORPORATION RETIREMENT SAVINGS PLAN
B: Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
DOVER CORPORATION
3005 Highland Parkway
Downers Grove, IL 60515
(630) 541-1540
Dover Corporation Retirement Savings Plan
Index to Financial Statements
December 31, 2019 and 2018
Page | |
Financial Statements: | |
Supplemental Schedules: | |
Schedule H, line 4a - Schedule of Delinquent Participant Contributions for Year Ended December 31, 2019 | |
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 have been omitted because they are not applicable.
Report of Independent Registered Public Accounting Firm
To the Plan Administrator, Plan Participants and Benefits Committee of the
Dover Corporation Retirement Savings Plan
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of Dover Corporation Retirement Savings Plan (the Plan) as of December 31, 2019 and 2018, the related statement of changes in net assets available for benefits for the year ended December 31, 2019, and the related notes to the financial statements. In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Report on Supplemental Information
The supplemental information in the accompanying schedule of delinquent participant contributions for the year ended December 31, 2019 and schedule of assets (held at end of year) as of December 31, 2019 have been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedules, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedules is fairly stated in all material respects in relation to the financial statements as a whole.
Respectfully Submitted,
/s/Insero & Co. CPAs, LLP
Insero & Co. CPAs, LLP
Certified Public Accountants
We have served as the Plan’s auditor since the year ended December 31, 2018.
Rochester, New York
June 22, 2020
1
Dover Corporation Retirement Savings Plan
Statements of Net Assets Available for Benefits
(in thousands)
At December 31, | ||||||||
2019 | 2018 | |||||||
Assets: | ||||||||
Investments: | ||||||||
Dover Stock Fund | $ | 291,168 | $ | 189,126 | ||||
Apergy Stock Fund | — | 28,761 | ||||||
Mutual funds | 301,108 | 239,923 | ||||||
Collective funds | 849,976 | 681,965 | ||||||
Total investments | 1,442,252 | 1,139,775 | ||||||
Receivables: | ||||||||
Participant contributions receivable | 16 | 3 | ||||||
Employer contributions receivable | 12,604 | 12,365 | ||||||
Notes receivable from participants | 34,895 | 32,822 | ||||||
Total receivables | 47,515 | 45,190 | ||||||
Net Assets Available for Benefits | $ | 1,489,767 | $ | 1,184,965 | ||||
See Notes to Financial Statements
2
Dover Corporation Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
(in thousands)
For the Year Ended December 31, 2019 | |||
Additions: | |||
Investment income: | |||
Dividends | $ | 10,875 | |
Net appreciation in investments | 322,774 | ||
Total investment income | 333,649 | ||
Interest income on notes receivable from participants | 1,527 | ||
Contributions: | |||
Participant | 58,729 | ||
Employer | 37,304 | ||
Rollovers | 7,159 | ||
Total contributions | 103,192 | ||
Total additions | 438,368 | ||
Deductions: | |||
Distributions | (132,588 | ) | |
Administrative expenses | (1,130 | ) | |
Total deductions | (133,718 | ) | |
Increase in net assets available for benefits prior to transfers | 304,650 | ||
Net plan transfers (Note 7) | 152 | ||
Increase in net assets available for benefits after transfers | 304,802 | ||
Net assets available for benefits: | |||
Beginning of year | $ | 1,184,965 | |
End of year | $ | 1,489,767 | |
See Notes to Financial Statements
3
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
1. Description of the Plan
The following description of the Dover Corporation Retirement Savings Plan (the "Plan") provides only general plan-related information. This description reflects the governing terms and conditions which are contained in the written Plan document. Participants should refer to the Plan document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established to encourage and facilitate retirement savings and investment by eligible employees of Dover Corporation and its subsidiaries ("Dover"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The assets of the Plan that are invested in Dover common stock are held in a separate fund ("Dover Stock Fund") which constitutes an "Employee Stock Ownership Plan" (an "ESOP") as described under certain sections of the Internal Revenue Code ("IRC"), as amended. The Plan gives participants the option to receive cash dividends attributable to the portion of respective account balances held in the Dover Stock Fund. This allows Dover to deduct, for Federal income tax purposes, the dividends paid with respect to the Dover common stock in the Dover Stock Fund, regardless of whether participants actually receive the dividends in cash.
Wells Fargo Bank, N.A. is the trustee to the Plan. The Trustee has been granted authority by Dover's Benefits Committee (the "Plan Administrator") to purchase and sell securities.
On January 1, 2018, assets amounting to $97,836 were transferred out of the Plan (as a trust-to-trust transfer of assets) into a qualified plan set up for those participants who, as of January 1, 2018, were part of the Apergy Corporation ("Apergy") business that was spun-off on May 9, 2018. The transaction was completed through a pro rata distribution of 100% of the common stock of Apergy to Dover's shareholders of record as of the close of business on April 30, 2018. Dover participants who held Apergy common stock either voluntarily liquidated or had it liquidated for them by an independent fiduciary and the proceeds were reinvested into the appropriate Vanguard Target Retirement Fund based on the participants' date of birth unless the participants elected to have contributions invested within any of the other investments permitted under the Plan by May 9, 2019.
On January 1, 2019, assets amounting to $152 were transferred into the Plan as a result of the legal plan merger of the Ettlinger North America LP 401(k) Profit Sharing Plan and Trust. Employees in this plan began participating in the Plan effective January 1, 2019.
Eligibility
Eligible employees of Dover who have elected to participate in the Plan may make pre-tax contributions to the Plan. Subsidiaries of Dover that participate in the Plan (each, a "Participating Employer") make matching contributions and may make profit-sharing contributions or automatic base contributions to the Plan. Generally, all employees of such participating companies who have reached age 18 are immediately eligible to participate in the Plan.
Automatic Enrollment and Escalation
The Plan has an automatic enrollment feature for all employees (except for employee groups covered by collective bargaining agreements that have not authorized such feature). Eligible employees are enrolled automatically in the Plan at a 3% pre-tax contribution rate unless they formally elect to opt-out of the Plan or affirmatively elect to contribute at an alternative rate within thirty days starting at the date of hire. Participants who are automatically enrolled in the Plan will have their deferral amounts automatically increased by 1% annually (up to a maximum of 6%), unless they otherwise elect to opt-out of the automatic increase feature. Pre-tax contributions of participants who are automatically enrolled in the Plan will be invested in the appropriate Vanguard Target Retirement Funds based on the participant's date of birth unless the participant elects to have contributions invested within any of the other investments permitted under the Plan.
4
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
Contributions
Participant
Participant pre-tax deferrals from eligible compensation to the Plan are voluntary. Eligible compensation generally includes salary and wages, commissions and certain bonuses. Generally, a participant may elect to defer between 1% to 50% (in whole percentages) of his or her eligible compensation ("Participant Contribution") to his or her account in the Plan. Participants who have attained the age of 50 by the end of the Plan Year are eligible to make catch-up contributions. These pre-tax deferrals promote retirement savings while lowering current taxable income to participants. The total amounts of participant pre-tax deferrals and catch-up contributions participants are allowed to make to the Plan are subject to applicable IRC limits. Each participant also has the right to roll over into the Plan certain distributions from other tax-qualified plans or appropriate individual retirement accounts.
Employer
The Plan allows for a fixed per-payroll matching contribution ("Basic Employer Matching Contribution"). The Basic Employer Matching Contribution is typically 100% on the first 1% of pre-tax contributions to the Plan and 50% on the next 5% of pre-tax contributions. This Basic Employer Matching Contribution formula for employees covered under a collective bargaining agreement may, however, vary between Participating Employers. Basic Employer Matching Contributions may be made in the form of cash or Dover stock.
Generally, in any Plan Year in which a participant does not receive the maximum Basic Employer Matching Contribution to which he or she is entitled (due to periodic payroll-based limitations or changes to individual deferral rates during the Plan Year), the Participating Employers will make an annual "true-up" contribution which allows eligible participants to receive the maximum allowable Basic Employer Matching Contribution to which they are entitled.
In addition to the Basic Employer Matching Contribution, Participating Employers make an annual automatic base contribution equal to the greater of 1% of pay or 750 dollars to employees who are actively employed on the last day of the Plan Year. A Participating Employer may also elect to make a profit sharing contribution based on a stated formula or a combination of both profit sharing and automatic base contributions.
Vesting
All participants are fully vested immediately with respect to their own pre-tax contributions and Basic Employer Matching Contributions. Generally, the automatic base contributions vest immediately with the exception of certain union groups which vest over a defined period of time.
Except for those Participating Employers whose employees' profit-sharing contribution accounts are immediately vested, a participant's profit-sharing account generally becomes fully vested after five years of service (i.e. at a rate of 20% per year). A participant's profit-sharing account may also become fully vested upon the participant's attainment of age 65 while he or she is a Dover employee, in the event of his or her death or permanent disability while a Dover employee, or if the Plan is terminated.
Distributions and Forfeitures
A participant's vested account balance in the Plan is distributable following the participant's retirement, death, or other termination of employment. Unvested amounts are forfeited and used to offset future employer contributions. At December 31, 2019 and 2018, accumulated forfeited unvested amounts totaled $375 and $325, respectively. During the 2019 Plan Year, forfeitures totaling $278 were used to offset current year employer contributions.
Hardship withdrawals are permitted for any participants who are actively employed and demonstrate a financial hardship which meets IRC regulations to be considered an "immediate and heavy financial need." The hardship withdrawal amount is limited to the amount "necessary" to satisfy the financial need, but may be increased to cover income taxes that the participant is expected to incur on the amount of the withdrawal. Such withdrawals are generally subject to a 10% excise tax.
Distributions from the Plan are generally made in the form of single lump sum payments, although the Plan allows installment distribution payments in the case of fully vested terminated participants who have reached age 55. Distributions may be made payable directly to participants with income taxes withheld, or may be rolled over to another qualified retirement plan or Individual
5
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
Retirement Account. For distributions that include Dover stock, the participant may elect to receive whole shares of Dover stock "in-kind" and the remaining fractional share in cash.
A Participant is fully vested in his or her entire account balance upon retirement, at or after age 65, death, or disability if he or she becomes permanently disabled.
Notes Receivable from Participants
A participant may borrow from his or her vested interest in the Plan, subject to applicable IRC regulations and certain restrictions imposed by the Plan. The minimum amount that can be borrowed is $1 thousand for each loan. The maximum amount that can be borrowed is the lesser of (i) 50% of the eligible vested account balance, (ii) $50 thousand, reduced by the highest outstanding balance of Plan loans during the previous 12 months or (iii) the combined value of the participant's salary reduction account and rollover account. The notes receivable are secured by the balances in the participant's accounts and participants repay the notes receivable via payroll deduction. Each note receivable carries a reasonable rate of interest determined by the Plan Administrator to be commensurate with the prevailing interest rate charged on similar commercial loans made within the same locale and time period. Notes receivable outstanding as of December 31, 2019 bear interest at rates between 3.25% and 10.00%. A participant may have up to two outstanding notes receivable at one time and only one of which can be a primary residence loan. The loan repayment period is limited to 59 months for a general purpose loan and 359 months for a loan used to purchase or build a principal residence.
Allocation Provisions
Subject to the Plan's excessive trading restrictions, each participant has the right to direct the entire amount of his or her Plan account to be invested in one or more of the available investment funds in multiples of one percent. Each participant has the right during any business day to transfer all or any portion of the amount in his or her account among the investment funds. Participants who are considered Dover "insiders" may only complete transfers involving Dover stock during designated window periods.
Participants are entitled to vote with respect to any Dover shares in their Plan account in the same manner as other Dover stockholders. The Trustee represents those participants who did not exercise voting rights by casting votes on their behalf in the same proportion as the shares of Dover stock in the Plan for which it received voting instructions.
Administrative Expenses
Certain administrative expenses of the Plan related to the trustee, recordkeeping, legal, and audit fees are paid by the trust. Fees or commissions associated with each of the investment options and certain other administrative expenses of the Plan are paid primarily by participants on a quarterly basis as a deduction from the amount invested or as an offset to investment earnings.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements were prepared on the accrual basis of accounting in conformity with generally accepted accounting principles ("U.S. GAAP") in the United States of America.
Investment Valuation
The Plan's investments are reported at fair value or net asset value (see Note 4). Investments in common shares of Dover and Apergy stock are valued at the closing market price on the last business day of the Plan Year based on quotations from a national securities exchange. The fair value of investments in registered mutual funds are obtained from quoted prices on national securities exchanges. The value of investments in collective funds are based on the net asset values as of the last business day of the Plan Year as determined by their respective investment managers and recent transaction prices.
Investment Transactions and Income Recognition
Purchases and sales of investment securities are reflected on a trade-date basis. Gains and losses on sales of investment securities are determined on the average cost method. Funds temporarily awaiting investment are placed in a short-term investment fund of the Trustee where they earn the prevailing market rate of interest. Dividend income is recorded on the ex-dividend date.
6
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
The Plan presents in the Statement of Changes in Net Assets Available for Benefits the net appreciation or depreciation in its investments which consists of the realized gains or losses and the unrealized appreciation or depreciation on those investments bought and sold as well as held during the year.
Fair Value of Other Financial Instruments
The carrying amount of the contribution receivables approximate fair value due to their short term maturities.
Notes Receivable from Participants
Notes receivable from participants are reported at their unpaid principal balance plus any accrued but unpaid interest with no allowance for credit losses, as repayments of principal and interest are received through payroll deduction and the notes are collateralized by the participants' account balances. Interest income is recorded as earned.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures of assets, liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results may differ from those estimates.
Risks and Uncertainties
The Plan provides participants with various investment options in any combination of stocks, collective trust funds, and mutual funds. Investment securities are exposed to various risks, including, but not limited to, interest rate, market volatility, liquidity, and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect participants' account balances and the amounts reported in the Statement of Net Assets Available for Benefits and Statement of Changes in Net Assets Available for Benefits. See also Note 9 - Subsequent Events.
At December 31, 2019 and 2018, 19.54% and 15.96%, respectively, of the Plan's assets were invested in Dover common stock.
Distributions to Participants
Distributions to participants are recorded in the Plan's financial statements when paid.
Excess Contributions
Refunds of excess participant deferral contributions may be required to satisfy the relevant nondiscrimination and compliance provisions of the Plan and the IRC. Such refunds are accrued as a liability and reduction to contributions in the Plan Year in which the excess deferrals were made to the Plan.
Plan Termination
Although it has not expressed any intent to do so, Dover retains the right under the Plan to discontinue all contributions at any time and to terminate the Plan, subject to the provisions of the Plan, ERISA and the IRC. In the event of termination, participants will become 100% vested in their Plan accounts.
3. Investments
The Plan Administrator periodically reviews the investment options available in the Plan to ensure that they continue to help participants reach retirement savings goals.
The Plan offered the following investment fund types during 2019 and 2018:
Dover Stock Fund:
• | The Dover Stock Fund invests in Dover common stock and contains a nominal balance in money market instruments for liquidity purposes. This account holds shares of Dover common stock purchased through employee and employer contributions. |
7
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
Apergy Stock Fund:
• | The Apergy Stock Fund was a temporary investment fund established to hold the shares of common stock of Apergy Corporation received by participants in the Plan as part of the spin-off of Apergy completed on May 9, 2018. Participants who held Apergy common stock either liquidated or had it liquidated for them by an independent fiduciary and the proceeds were reinvested into the appropriate Vanguard Target Retirement Fund based on the participants' date of birth unless the participants elected to have contributions invested within any of the other investments permitted under the Plan by May 9, 2019. |
Mutual funds:
• | The mutual funds are traded in an active market valued by obtaining quoted prices from nationally recognized securities exchanges. The Plan offers various types of mutual funds with varying levels of risk. Such funds invest in domestic common stock, international stock, and bonds. |
Collective funds:
• | Valued at their respective Net Asset Value ("NAV") as reported by such trust. The NAV is used as a practical expedient to estimate fair value based on the underlying assets of the trust. The fair value of the underlying assets is obtained by the Plan's trustee from information provided by each fund manager using their respective audited financial statements of the collective trusts at year end. Generally there are no restrictions on redemption of these investments, however, some investments may require an advance written notice to the trustee prior to redemption of trust units. |
4. Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Plan considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
ASC 820 also establishes a fair value hierarchy that requires the Plan to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:
Level 1: quoted prices in active markets for identical assets or liabilities.
Mutual funds, Dover Stock Fund and Apergy Stock Fund: These investments are public investment securities valued by obtaining quoted prices from nationally recognized securities exchanges.
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
There were no Level 2 investments held as of December 31, 2019 or 2018 or during the year ended December 31, 2019.
Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities or significant unobservable inputs that reflect the Plan’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
There were no Level 3 investments held as of December 31, 2019 or 2018 or during the year ended December 31, 2019.
8
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
Below are the Plan’s financial instruments carried at fair value on a recurring basis by their ASC 820 fair value hierarchy level as of December 31, 2019 and 2018:
As of December 31, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | |||||||||||||||
Dover Stock Fund | $ | 291,168 | $ | — | $ | — | $ | 291,168 | |||||||
Mutual funds | 301,108 | — | — | 301,108 | |||||||||||
Total Investments in the Fair Value Hierarchy | 592,276 | — | — | 592,276 | |||||||||||
Investments measured at net asset value* | |||||||||||||||
Collective funds | — | — | — | 849,976 | |||||||||||
Total Investments | $ | 592,276 | $ | — | $ | — | $ | 1,442,252 | |||||||
* In accordance with Subtopic 820-10, certain investments that are measured using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of net assets available for benefits.
As of December 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments: | |||||||||||||||
Dover Stock Fund | $ | 189,126 | $ | — | $ | — | $ | 189,126 | |||||||
Apergy Stock Fund | 28,761 | — | — | 28,761 | |||||||||||
Mutual funds | 239,923 | — | — | 239,923 | |||||||||||
Total Investments in the Fair Value Hierarchy | 457,810 | — | — | 457,810 | |||||||||||
Investments measured at net asset value* | |||||||||||||||
Collective funds | — | — | — | 681,965 | |||||||||||
Total Investments | $ | 457,810 | $ | — | $ | — | $ | 1,139,775 | |||||||
* In accordance with Subtopic 820-10, certain investments that are measured using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of net assets available for benefits.
There were no transfers between Level 1 and Level 2 investments during 2019 and 2018.
5. Related-Party and Party-in-Interest Transactions
Certain Plan assets are invested in common stock of Dover. As the Plan sponsor, Dover is also a related party in accordance with Section 3.14 of ERISA. Certain Plan investments are shares of mutual or collective funds managed by the Trustee or companies owned by the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Notes receivable from participants held by the Plan are also considered party-in-interest transactions.
Certain administrative functions are performed by employees of Dover and no such employee receives compensation from the Plan. Other expenses relating to the Plan, including certain legal and consulting services, are paid directly by Dover. Fees or commissions associated with each of the investment options and certain administrative expenses of the Plan are paid primarily by participants as a deduction from the amount invested, or as an offset to investment earnings.
At December 31, 2019 and 2018, the Plan held 2,503 and 2,631 shares of Dover stock, respectively. Dividends received by the Plan on these shares totaled $4,995 for the year ended December 31, 2019. These transactions also qualify as party-in-interest transactions.
9
Dover Corporation Retirement Savings Plan
Notes to Financial Statements
(Amounts in thousands except where otherwise indicated)
6. Income Tax Status
The Plan obtained its latest determination letter on April 28, 2015, in which the Internal Revenue Service stated that the Plan and related trust, as adopted, was designed in accordance with the applicable requirements of the IRC. The Plan has been amended since receiving the determination letter. Dover believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC in all material respects with the exception of the transactions noted in Note 8. Therefore, Dover believes that the Plan was qualified and the related Trust was tax-exempt as of the financial statement dates.
U.S. GAAP requires plan management to evaluate tax positions taken by the Plan. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2019 and 2018, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing authorities. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2015.
There is currently a Department Of Labor ("DOL") audit in progress. Dover does not believe it will have a material effect on the financial statements.
7. Transfers In
On January 1, 2019, assets amounting to $152 were transferred into the Plan as a result of the legal plan merger of the Ettlinger North America LP 401(k) Profit Sharing Plan and Trust. Employees in this plan began participating in the Plan effective January 1, 2019.
8. Nonexempt Transactions
As reported on the supplemental schedule of delinquent participant contributions, certain Plan contributions were not remitted to the Plan within the time frame specified by 29 CFR 2510-3-102 of the Department of Labor’s Rules and Regulations for reporting under ERISA, thus constituting nonexempt transactions between the Plan and Dover for the year ended December 31, 2019. The transactions that were corrected within the year included deposits of applicable interests.
9. Subsequent Event
On January 1, 2020, assets amounting to $5,055 were transferred into the Plan as a result of the legal plan merger of the Belanger, Inc. 401(k) Profit Trust. Employees of this plan began participating in the Dover plan effective January 1, 2020.
In March 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic, triggering volatility in financial markets and a significant negative impact on the global economy. As a result, the Plan’s investment portfolio has incurred a significant decline in value since December 31, 2019. However, because the values of the Plan’s individual investments have and will fluctuate in response to changing market conditions, the amount of gains or losses that will be recognized in subsequent periods, if any, cannot be determined. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act allows retirement plan participants to have greater access to their savings if they are impacted by the coronavirus, as defined in the CARES Act. On April 3, 2020, the Benefits Committee approved and adopted both the optional and the mandatory provisions below:
• | Qualified individuals are permitted through December 31, 2020 to take a distribution in an amount up to $100 thousand without imposition of the 10% early distribution penalty, and this distribution is not subject to the 20% tax withholding rate. Additionally, individuals taking this withdrawal have the option to have the withdrawal income taxed over three years with the ability to recontribute within three years (optional provision). |
• | Participant loan limits temporarily increased to the lesser of i) $100 thousand or ii) greater of 100% of the vested account balance. This increase is permitted for loans granted through September 23, 2020 (optional provision). |
• | Upon participant request, repayments of loans due between March 27, 2020 and December 31, 2020 may begin after the lapse of up to a one-year grace period (mandatory provision). |
10
EIN# 53-0257888
Plan# 030
Dover Corporation Retirement Savings Plan
Schedule H, line 4a - Schedule of Delinquent Participant Contributions
Year Ended December 31, 2019
(in thousands)
Participant Contributions Transferred Late to Plan | Total that Constitutes Nonexempt Prohibited Transactions | |||||||||
Check here if Late Participant Loan Repayments are included: x | Contributions Not Corrected | Contributions Corrected Outside Voluntary Fiduciary Correction Program (VFCP) | Contributions Pending Correction in VFCP | Total Fully Corrected Under VFCP and PTE 2002-51 | ||||||
2019 | $ | 101 | ||||||||
11
EIN# 53-0257888
Plan# 030
Dover Corporation Retirement Savings Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
At December 31, 2019
(in thousands)
(b) | (c) | (e) | |||
(a) | Identity of Issuer, Borrower, Lender, etc. | Description of Investment | Fair Value | ||
Stock Fund: | |||||
* | Dover Corporation | Dover Stock Fund | $ | 291,168 | |
Mutual funds: | |||||
Vanguard | Extended Market Index | 26,640 | |||
Vanguard | Institutional Index I | 132,230 | |||
Vanguard | Small Cap Index Fund Institutional | 58,211 | |||
Vanguard | Total Bond Market Index Institutional | 44,837 | |||
Vanguard | Total International Stock Index Institutional | 39,190 | |||
Total mutual funds | 301,108 | ||||
Collective funds: | |||||
Aristotle | Small-Mid Cap Equity Collective Trust B | 23,701 | |||
Columbia Trust | Income Fund | 116,984 | |||
T. Rowe Price | Structured Research Common Trust Fund Class C | 143,371 | |||
Vanguard | Target Retirement Income Trust II | 25,810 | |||
Vanguard | Target Retirement 2015 Trust II | 9,636 | |||
Vanguard | Target Retirement 2020 Trust II | 57,279 | |||
Vanguard | Target Retirement 2025 Trust II | 65,096 | |||
Vanguard | Target Retirement 2030 Trust II | 120,089 | |||
Vanguard | Target Retirement 2035 Trust II | 40,206 | |||
Vanguard | Target Retirement 2040 Trust II | 75,892 | |||
Vanguard | Target Retirement 2045 Trust II | 24,191 | |||
Vanguard | Target Retirement 2050 Trust II | 18,653 | |||
Vanguard | Target Retirement 2055 Trust II | 12,649 | |||
Vanguard | Target Retirement 2060 Trust II | 6,297 | |||
Vanguard | Target Retirement 2065 Trust II | 619 | |||
* | Wells Fargo | Wells Fargo Core Bond CIT N | 40,832 | ||
* | Wells Fargo | Wells Fargo/Causeway International Value CIT | 34,122 | ||
William Blair | Small-Mid Cap Growth CIT | 34,549 | |||
Total collective funds | 849,976 | ||||
Notes receivable from participants: | |||||
* | Plan participants | Interest rates from 3.25% - 10.00% | |||
Maturities through 2049 | 34,895 | ||||
Total investments at fair value | $ | 1,477,147 | |||
Column (d) omitted as cost information is not required for participant-directed assets.
* Denotes party-in-interest to the Plan
12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
DOVER CORPORATION | ||
RETIREMENT SAVINGS PLAN | ||
Dated: | June 22, 2020 | /s/ Kimberly K. Bors |
Kimberly K. Bors | ||
Senior Vice President, Human Resources and Chairman of the Benefits Committee | ||
(Plan Administrator) | ||
13
EXHIBIT INDEX
14
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statement (Nos. 333-192604 and 333-01419) on Form S-8 of Dover Corporation of our report dated June 22, 2020, relating to our audit of the financial statements and supplemental schedules of the Dover Corporation Retirement Savings Plan, which appears in this Annual Report on Form 11-K of the Dover Corporation Retirement Savings Plan for the year ended December 31, 2019.
/s/Insero & Co. CPAs, LLP
Insero & Co. CPAs, LLP
Certified Public Accountants
Rochester, New York
June 22, 2020