The Company has 401(k) plans that provide for annual contributions not to exceed the maximum amount allowed by the Internal Revenue Code. The plans are qualified and cover employees meeting certain eligibility requirements who are not covered by collective bargaining agreements. The amounts contributed each year are discretionary and are determined annually by management. The Company recognized $11, $2, $10, and $13 in 401(k) expense during the years ended December 31, 2020 and 2019 (Successor), the period from January 1, 2019 through September 30, 2019 (Predecessor), and the year ended December 31, 2018 (Predecessor), respectively. APi Group had an employee stock ownership plan (ESOP) that was terminated and settled as a result of the APi Acquisition. (See Note 4 – “Business Combinations”) The Company had no remaining commitments or obligations related to the ESOP as of December 31, 2019.

During 2019, the Company adopted a trustee-administered, profit sharing retirement plan covering substantially all employees not covered by collective bargaining agreements. The Company also adopted a profit sharing plan for employees in Canada (collectively, “Profit Sharing Plans”). The Profit Sharing Plan provides for annual discretionary contributions in amounts based on a performance grid as determined by the Company’s directors. The Company recognized $14, $5, $9, and $0 in expense during the years ended December 31, 2020 and 2019 (Successor), the period from January 1, 2019 through September 30, 2019 (Predecessor), and the year ended December 31, 2018 (Predecessor), respectively.

The Company also managed a retirement compensation arrangement for employees of the Company’s Canadian subsidiary, Vipond, Inc. (“The Arrangement”). The Arrangement covered employees meeting certain eligibility requirements but who were not covered by collective bargaining agreements. The Arrangement was superseded by the Profit Sharing Plan. As a result there were no contributions to the Arrangement during 2020. The Arrangement was funded entirely by the Company’s contributions. The amounts contributed under the Arrangement were based on net income before tax, as set forth in the arrangement documents. The Company recognized $1, $3, and $1 of expense for contributions under this for the years ended December 31, 2019 (Successor), the period from January 1, 2019 through September 30, 2019 (Predecessor), and the year ended December 31, 2018 (Predecessor), respectively.

The Company participates in several multiemployer pension plans (MEPPs) that provide retirement benefits to certain union employees in accordance with various collective bargaining agreements (CBAs). As one of many participating employers in these MEPPs, the Company may be responsible with the other participating employers for any plan underfunding. The Company’s contributions to a particular MEPP are established by the applicable CBAs; however, its required contributions may increase based on the funded status of the MEPP and the legal requirements of the Pension Protection Act of 2006 (the PPA), which requires substantially underfunded MEPPs to implement a funding improvement plan (FIP) or a rehabilitation plan (RP) to improve their funded status. Factors that could impact the funded status of the MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions, and the utilization of extended amortization provisions.

The Company believes that certain of the MEPPs in which the Company participates may have underfunded vested benefits. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPPs current financial situation, the Company is unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether the Company’s participation in these MEPPs could have a material adverse impact on the Company’s consolidated financial position, results of operations, or liquidity. The Company did not record any withdrawal liability for the years ended December 31, 2020 and 2019 (Successor), the period from January 1, 2019 through September 30, 2019 (Predecessor), and the year ended December 31, 2018 (Predecessor).

The Company’s participation in MEPPs for the year ended December 31, 2020, is outlined in the table below. The EIN/PN column provides the Employer Identification Number (EIN) and the three-digit plan number (PN). The most recent PPA zone status available for 2020, 2019 and 2018 is for the plan year ends, as indicated below. The zone status is based on information that the Company received from the plans and is certified by the plans’ actuaries. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are between 65% and 80% funded, and plans in the green zone are at least 80% funded. The FIP/RP status pending/implemented column indicates plans for which an FIP or an RP either is pending or has been implemented. In addition, the Company may be subject to a surcharge if the Plan is in the red zone. The Surcharge imposed column indicates whether a surcharge has been imposed on contributions to the Plan. The last column lists the expiration date(s) of the collective bargaining agreement(s) to which the plans are subject.

Contributions

PPA Zone Status⁽¹⁾

FIP/RP

(In millions)

December 31

Status

Expiration

Plan

(Successor)

(Predecessor)

Pending/

(Successor)

(Predecessor)

Than

Surcharge

Date of

Pension Fund

EIN/PN

Year-End

2020

2019

2018

Implement

2020*

2019*

2018*

5%⁽²⁾

Imposed

CBA

National Automatic Sprinkler Industry Pension Fund

52-6054620-001

12/31/2019

Red

Yes

3/31/2021⁽³⁾

National Electrical Benefit Fund

53-0181657-001

12/31/2019

Green

3/31/2022

Twin City Pipe Trades Pension Plan

41-6131800-001

4/30/2020

Green

Yes

4/30/2022

Heavy And General Laborers Local Unions 472 And 172 Of New Jersey Pension Fund

22-6032103-001

3/31/2020

Green

Yes

2/28/2021

Boilermaker-Blacksmith National Pension Trust

48-6168020-001

12/31/2019

Yellow

Yes

6/30/2023

Sheet Metal Workers' Local 10 Pension Fund

41-1562581-001

12/31/2019

Green

Yes

5/31/2022

Sheet Metal Workers' National Pension Fund

52-6112463-001

12/31/2019

Yellow

Yes

5/31/2023

Plumbers And Pipefitters National Pension Fd

52-6152779-001

6/30/2019

Yellow

Yes

4/30/2023

Building Trades United Pension Trust Fund Milwaukee And Vicinity

51-6049409-001

5/31/2020

Green

5/31/2023

Central Pension Fund Of The IUOE & Participating Employers

36-6052390-001

1/31/2020

Green

5/31/2023

Total other

Total

(1)	The zone status represents the most recent available information for the respective MEPP, which may be 2019 or earlier for the 2020 year and 2018 or earlier for the 2019 year.

(2)

This information was obtained from the respective plan’s Form 5500 (Forms) for the most current available filing. These dates may not correspond with the Company’s fiscal year contributions. The above-noted percentages of contributions are based upon disclosures contained in the plans’ Forms. Those Forms, among other things, disclose the names of individual participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year. Accordingly, if the annual contribution of two or more of the Company’s subsidiaries each accounted for less than 5% of such contributions, but in the aggregate accounted for in excess of 5% of such contributions, that greater percentage is not available and accordingly is not disclosed.

(3)	Subsequent to year-end, negotiations were concluded and a new plan was ratified that extends through March 31, 2025.

*	2020 and 2019 Successor periods represent the years ended December 31, 2020 and 2019. Predecessor periods represent the period from January 1, 2019 through September 30, 2019 and the year ended December 31, 2018.

The nature and diversity of the Company’s business may result in volatility in the amount of its contributions to a particular MEPP for any given period. That is because, in any given market, the Company could be working on a significant project and/or projects, which could result in an increase in its direct labor force and a corresponding increase in its contributions to the MEPP(s) dictated by the applicable CBA. When that particular project(s) finishes and is not replaced, the number of participants in the MEPP(s) who are employed by the Company would also decrease, as would its level of contributions to the particular MEPP(s). Additionally, the amount of contributions to a particular MEPP could also be affected by the terms of the CBA, which could require, at a particular time, an increase in the contribution rate and/or surcharges. The Company’s (Predecessor) contributions to various MEPP(s) did not significantly increase as a result of acquisitions made since 2018.