Payment of Benefits — On termination of service due to death, disability or retirement, a participant may elect to receive distributions equal to of the value of the participant’s vested interest in his or her account as a lump-sum amount or installment payments. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution.
Hardship distributions, subject to a $500 minimum, may also be allowed from the participant deferral contribution balance for purchasing a primary residence, financing higher education, paying for necessary medical care, or alleviating certain other financial hardships.
Forfeited Accounts — Forfeitures of participants’ non-vested accounts are used to pay Plan expenses or to reduce future Company contributions. As of December 31, 2021 and 2020, forfeited non-vested accounts totaled $573,770 and $260,058, respectively.
Administrative Expenses — The Plan is sponsored by the Company and administrative expenses of the Plan are paid by the Company as provided in the Plan document.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting — The accompanying financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Use of Estimates — The preparation of financial statements in conformity with GAAP requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates.
Risk and Uncertainties — The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Included in investments at December 31, 2021 and 2020 are shares of the Company’s common stock with a fair value of $38,292,087 and $36,731,271, respectively, held by the Plan within participant accounts. This investment represents 22.9% and 23.9% of total investments at December 31, 2021 and 2020, respectively. A significant decline in the market value of the Company’s stock would significantly affect the net assets available for benefits.
Payment of Benefits — Benefit payments to participants are recorded upon distribution. There were no amounts allocated to accounts of former participants who elected to withdraw from the Plan but had not been paid at December 31, 2021 and 2020.
Excess Contributions Payable — The Plan is required to return contributions received during the Plan year in excess of IRC limits. As of December 31, 2021 and 2020, total excess contributions payable was approximately $170,737 and $161,561.
Investment Valuation and Income Recognition — The Plan’s investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Administrative Expenses — Management fees and operating expenses charged to the Plan for investments in mutual funds, common-collective trust funds and the stable value fund are deducted from income earned on a daily
