401(k) Plan 11K 12-31-2012
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
PURCHASE, SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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(X) | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended December 31, 2012 |
OR |
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( ) | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ______________ to ________________ |
Commission file number 0-14112
A. Full title of the plan and address of the plan, if different from that of the issuer named below:
Jack Henry & Associates, Inc. 401(k) Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Jack Henry & Associates, Inc.
663 Highway 60, P.O. Box 807, Monett, MO 65708
REQUIRED INFORMATION
The following financial statements and schedules have been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended:
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1. | Statement of Net Assets Available for Plan Benefits at December 31, 2012 and 2011. |
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2. | Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 2012. |
EXHIBITS
23. Consent of Independent Registered Public Accounting Firm
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
JACK HENRY & ASSOCIATES, INC.
401(K) RETIREMENT SAVINGS PLAN
By: /s/ Kevin D. Williams
Kevin D. Williams, Chief Financial Officer
Date: June 7, 2013
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| Jack Henry & Associates, Inc. 401(k) Retirement Savings Plan Financial Statements as of December 31, 2012 and 2011 and for the Year Ended December 31, 2012, Supplemental Schedules as of and for the Year Ended December 31, 2012, and Report of Independent Registered Public Accounting Firm |
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 |
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FINANCIAL STATEMENTS: | |
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Statements of Net Assets Available for Benefits as of December 31, 2012 and 2011 | 2 |
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Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2012 | 3 |
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Notes to Financial Statements | 4-12 |
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SUPPLEMENTAL SCHEDULES | |
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Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year) | 14 |
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Form 5500, Schedule H, Part IV, Question 4a - Schedule of Delinquent Participant Contributions for the Year Ended December 31, 2012 | 15 |
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NOTE: | All other schedules required by Section 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 Board of Trustees
Jack Henry & Associates, Inc.
401(k) Retirement Savings Plan
Monett, Missouri
We have audited the accompanying statements of net assets available for benefits of the Jack Henry & Associates, Inc. 401(k) Retirement Savings Plan (the “Plan”) as of December 31, 2012 and 2011, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the table of contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 2012 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
June 6, 2013
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2012 AND 2011
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| 2012 | | 2011 |
ASSETS: | | | |
Participant-directed investments | $ | 303,825,676 |
| | $ | 246,286,642 |
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| | | |
Receivables: | | | |
Notes receivable from participants | 9,954,024 |
| | 9,306,535 |
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Employer contributions | 376,066 |
| | 369,206 |
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Employee contributions | 807,569 |
| | 711,220 |
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Total receivables | 11,137,659 |
| | 10,386,961 |
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NET ASSETS AVAILABLE FOR BENEFITS | $ | 314,963,335 |
| | $ | 256,673,603 |
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See notes to financial statements.
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2012
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ADDITIONS: | |
Employer contributions | $ | 11,365,710 |
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Participant contributions | 20,406,646 |
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Rollover accounts for new Plan participants | 3,265,211 |
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Net appreciation in fair value of investments | 29,561,481 |
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Dividends | 2,724,217 |
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Interest and other income | 1,537,226 |
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Interest income on notes receivable from participants | 320,016 |
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Total additions | 69,180,507 |
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DEDUCTIONS: | |
Administrative expenses | 28,350 |
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Distributions to participants | 10,862,425 |
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Total deductions | 10,890,775 |
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INCREASE IN NET ASSETS | 58,289,732 |
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NET ASSETS AVAILABLE FOR BENEFITS - Beginning of year | 256,673,603 |
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NET ASSETS AVAILABLE FOR BENEFITS - End of year | $ | 314,963,335 |
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See notes to financial statements.
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2012 AND 2011 AND FOR THE YEAR ENDED DECEMBER 31, 2012
The following description of the Jack Henry & Associates, Inc. 401(k) Retirement Savings Plan (the “Plan”) provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan's provisions.
General - The Plan is a defined contribution 401(k) plan benefiting Jack Henry & Associates, Inc. (the “Company”) employees. An eligible employee must have attained the age of 18 and completed 30 days of service to be a participant. Participants are eligible to receive safe harbor employer matching contributions (“Safe Harbor Contributions”) after six months of service. Additionally, the Company may make a Company discretionary contribution to all eligible employees who meet the same minimum service requirement, and the Company may also make an applicable qualified non-elective contribution (QNEC) to each non-highly compensated employee, actively employed on the last day of the Plan year, who has completed a year of service (1000 hours of service), if otherwise required under the Plan. The Company is the Plan administrator and Prudential Bank and Trust, FSB (“Prudential” or “Plan Trustee”) was appointed Plan Trustee to, among other things, hold and invest the Plan's investments in accordance with the direction of the Plan Administrator and terms of the Plan. The Plan is subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA).
The Plan also contains an Employee Stock Ownership Plan (ESOP) component that provides for a portion of the Plan's assets to be invested in Jack Henry & Associates, Inc. common stock. Participants are provided the option of receiving a direct cash distribution of any dividends paid on such stock held in participant elective contribution accounts and, if they are 100% vested as of the dividend record date, the Company match accounts. Dividends paid on Company stock are automatically reinvested, unless cash distribution was elected.
Contributions - Effective January 1, 2011, the Plan was amended to provide for an automatic deferral of 2% of compensation for new participants, unless the participant makes an election not to defer. In 2011, the Plan was also amended to allow post-tax “Roth” deferrals by participants effective July 1, 2011. Participants may elect to defer compensation into the Plan, up to the maximum amounts allowed under the Internal Revenue Code (IRC). For 2012, the maximum elective deferral that a participant could contribute to the Plan was $17,000. If a participant reached age 50 by December 31, 2012, they were able to contribute an additional $5,500 “catch up” contribution to the Plan on a pre-tax basis.
The Company matches 100% of participant contributions up to a maximum of the lesser of 5% of the participant's eligible compensation or $5,000. In addition to the Company matching contributions, the Company may make other discretionary contributions, as well as Company QNEC contributions equal to a uniform percentage of each participant's eligible compensation, which is determined each year by the Company. No Company discretionary or other QNEC contributions were made in 2012.
Participant Accounts - Individual accounts are maintained for each Plan participant. Each participant's account is credited with the participant's contribution, Safe Harbor Contributions, Company contribution account, and/or allocations of Company QNEC contributions and Plan investment earnings, and charged with withdrawals and an allocation of Plan investment losses.
Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.
Investments - Participants direct the investment of their contributions and Company contributions into various investment options offered by the Plan. The Plan currently offers Jack Henry & Associates, Inc. common stock, twenty-three mutual funds, seven pooled separate accounts and a guaranteed investment contract (GIC) as investment options for participants.
Vesting - Participants are vested immediately in their voluntary contributions, Safe Harbor Contributions, and the earnings on these contributions. Vesting in the Company contribution and other QNEC portion of their accounts, if applicable, is based on years of service with an employee vesting 20% after two years of service and subsequently vesting 20% each year until becoming fully vested with six years of continuous service.
Participant Loans - Participants may borrow, as defined in the Plan, from their fund accounts a minimum amount of $1,000 up to the lesser of (1) $50,000 less the amount of highest outstanding loan balance in the previous 12 months or (2) 50% of their vested account balances. Loan terms range from one to five years, unless the loan is to be used to purchase the participant's principal residence, in which case the term may extend beyond five years. The loans are secured by the balance in the participant's account and bear interest at a rate as defined by the Plan (ranging from 3.25% to 11.00% as of December 31, 2012). Principal and interest are paid through payroll deductions.
Payment of Benefits - Upon termination of service due to death, disability, or retirement, a participant/beneficiary may elect to receive a lump-sum amount equal to the value of his or her account as soon as administratively feasible following the date on which a distribution is requested or is otherwise payable. A participant/beneficiary may also elect to receive the value of his or her account in installment payments or have the balance rolled over into an individual retirement account.
Forfeited Accounts - At December 31, 2012 and 2011, forfeited nonvested accounts totaled $11,926 and $30,819, respectively. These accounts are used first as restoration of participant's forfeitures, then as offset to Plan expenses, then as a reduction to future Company discretionary contributions. Forfeitures are restored when a participant is rehired and had previously forfeited any fund balance in the Company contribution account, including any applicable QNEC source.
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2. | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting - The accompanying financial statements have been prepared 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 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, including common stock, mutual funds, pooled separate accounts and a GIC. Investment securities, in general, are exposed to various risks, such as interest rate, credit, 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.
Investment Valuation and Income Recognition - The Plan's investments are stated at fair value. Fair value of a financial instrument 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. The Company's common stock is valued at the closing price reported on the NASDAQ Stock Market on the last business day of the Plan year. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end.
The units of pooled separate accounts are stated at fair value as determined by the issuer of the account based on the fair value of the underlying investments. Individual participant accounts invested in the pooled separate accounts are maintained on a unit value basis. The Plan's GIC with Prudential is valued at contract value, which is equal to fair value (see Note 5).
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.
Management fees and operating expenses charged to the Plan for investments in the mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.
Notes Receivable from Participants - Notes receivable from participants are measured at their unpaid principal balance plus any accrued, but unpaid interest. Delinquent participant loans are recorded as distributions, based on the terms of the Plan document.
Administrative Expenses - Administrative expenses of the Plan are paid by either the Plan or the Company, as provided in the Plan document.
Benefits Payable - Benefits are recorded when paid. As of December 31, 2012 and 2011, there were no distributions payable to Plan participants.
New Accounting Standards - The financial statements reflect the prospective adoption of the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which amends ASC 820, as of the beginning of the year ended December 31, 2012 (See Note 3). ASU 2011-04 is effective for financial statements issued for fiscal years beginning after December 15, 2011 and expands certain disclosures about fair value measurement. The ASU requires the categorization by level for items that are only required to be disclosed at fair value and information about transfers between Level 1 and Level 2. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The ASU requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The effect of the adoption of ASU 2011-04 had no impact on the Plan's statement of net assets available for benefits and statement of changes in net assets available for benefits.
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3. | FAIR VALUE MEASUREMENTS |
ASC 820, Fair Value Measurements and Disclosures, provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows: Level 1, which refers to securities valued using unadjusted quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Asset Valuation Techniques - Valuation technologies maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the valuation methodologies used at December 31, 2012 and 2011.
Fixed income separate accounts are categorized as Level 2. They are valued using third party pricing services. These services use, for example, model-based pricing methods that use observable market data as inputs. Broker dealer bids or quotes of securities with similar characteristics may also be used.
U.S. and global equity separate accounts are categorized as Level 1 if the securities actively trade on national or international exchanges and are valued at their last reported closing price.
The Company's common stock is valued at the closing price reported on the active market on which the securities are traded (NASDAQ Global Select) on the last business day of the Plan year. The Company's common stock is categorized as Level 1.
Shares of registered investment companies held are primarily categorized as Level 1; they are valued at quoted market prices as reported by the fund. Mutual funds held by the Plan are open-ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.
The following tables, set forth by level within the fair value hierarchy, are a summary of the Plan's investments measured at fair value on a recurring basis at December 31, 2012 and 2011:
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| December 31, 2012 | | |
| Active Markets for identical assets (Level 1) | | Other Observable inputs (Level 2) | | Significant unobservable inputs (Level 3) | | Total |
Mutual funds: | | | | | | | |
Balanced funds | $ | 31,009,737 |
| | $ | — |
| | $ | — |
| | $ | 31,009,737 |
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Fixed income fund | 2,443,611 |
| | — |
| | — |
| | 2,443,611 |
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International fund | 29,291,902 |
| | — |
| | — |
| | 29,291,902 |
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Domestic stock funds | 108,456,939 |
| | — |
| | — |
| | 108,456,939 |
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Total mutual funds | 171,202,189 |
| | — |
| | — |
| | 171,202,189 |
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| | | | | | | |
Pooled separate accounts: | | | | | | | |
Balanced funds | — |
| | 2,553,825 |
| | — |
| | 2,553,825 |
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Domestic stock funds | — |
| | 16,894,906 |
| | — |
| | 16,894,906 |
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Fixed income fund | — |
| | 21,362,986 |
| | — |
| | 21,362,986 |
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Total pooled separate accounts | — |
| | 40,811,717 |
| | — |
| | 40,811,717 |
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| | | | | | | |
Guaranteed Investment Contract | — |
| | 42,473,674 |
| | — |
| | 42,473,674 |
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Common stock - software | 49,338,096 |
| | — |
| | — |
| | 49,338,096 |
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| | | | | | | |
Total investments at fair value | $ | 220,540,285 |
| | $ | 83,285,391 |
| | $ | — |
| | $ | 303,825,676 |
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| | | | | | | | | | | | | | | |
| December 31, 2011 | | |
| Active Markets for identical assets (Level 1) | | Other Observable inputs (Level 2) | | Significant unobservable inputs (Level 3) | | Total |
Mutual funds: | | | | | | | |
Balanced funds | $ | 24,187,932 |
| | $ | — |
| | $ | — |
| | $ | 24,187,932 |
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Fixed income fund | 2,730,269 |
| | — |
| | — |
| | 2,730,269 |
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International fund | 22,009,602 |
| | — |
| | — |
| | 22,009,602 |
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Domestic stock funds | 79,431,757 |
| | — |
| | — |
| | 79,431,757 |
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Total mutual funds | 128,359,560 |
| | — |
| | — |
| | 128,359,560 |
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| | | | | | | |
Pooled separate accounts: | | | | | | | |
Balanced funds | — |
| | 1,901,945 |
| | — |
| | 1,901,945 |
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Domestic stock funds | — |
| | 20,286,605 |
| | — |
| | 20,286,605 |
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Fixed income fund | — |
| | 16,367,146 |
| | — |
| | 16,367,146 |
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Total pooled separate accounts | — |
| | 38,555,696 |
| | — |
| | 38,555,696 |
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| | | | | | | |
Guaranteed Investment Contract | — |
| | 36,544,265 |
| | — |
| | 36,544,265 |
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Common stock - software | 42,827,121 |
| | — |
| | — |
| | 42,827,121 |
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| | | | | | | |
Total investments at fair value | $ | 171,186,681 |
| | $ | 75,099,961 |
| | $ | — |
| | $ | 246,286,642 |
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Transfers between Levels - The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the end of the reporting period. For the years ended December 31, 2012 and 2011, there were no transfers between levels.
The components of the Plan's individual investments, which represent 5% or more of the Plan's net assets available for benefits at December 31, 2012 and 2011, were as follows:
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| | 2012 | | 2011 | |
* | Common stock - Jack Henry & Associates, Inc. | $ | 49,338,096 |
| | $ | 42,827,121 |
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* | Prudential - Guaranteed Income Fund | 42,473,674 |
| | 36,544,265 |
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| JP Morgan Funds - Large Cap Growth Select Fund | 30,656,169 |
| | 24,899,654 |
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| American Funds - Europac Fund | 29,291,902 |
| | 22,009,602 |
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| Blackrock Funds - Blackrock Eq Dividend 1 | 25,249,373 |
| | 19,404,529 |
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* | Prudential - Core Plus Bond/PIMCO Fund | 21,362,986 |
| | 16,367,146 |
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| Invesco Funds - Charter Institutional Fund | 14,349,608 |
| ** | 12,896,738 |
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* Represents a party-in-interest to the Plan
** Amount was zero (less than 5%) as of December 31 but is presented for comparative purposes
During 2012, the Plan's investments (including gains and losses on investments bought, sold, as well as held during the year) appreciated, as follows:
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American Funds — Europac Fund | $ | 4,113,883 |
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Diamond Hill — Small Cap Fund | 501,544 |
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Loomis Sayles Funds — Loomis Small Cap Growth Fund | 864,492 |
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Blackrock Funds — Blackrock Eq Dividend I | 1,956,036 |
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Blackrock Funds - Inflation Protect Fund | 58,508 |
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Invesco Funds - Charter Institutional Fund | 1,553,195 |
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JP Morgan Funds — JP Morgan Gov’t Bond A | 16,760 |
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JP Morgan Funds - Large Cap Growth Select Fund | 2,900,030 |
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T Rowe Price Funds — T Rowe Blue Chip Fund | 525,711 |
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T Rowe Price Funds — T Rowe RA 2005 | 14,478 |
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T Rowe Price Funds — T Rowe RA 2010 | 134,998 |
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T Rowe Price Funds — T Rowe RA 2015 | 78,624 |
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T Rowe Price Funds — T Rowe RA 2020 | 500,597 |
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T Rowe Price Funds — T Rowe RA 2025 | 74,986 |
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T Rowe Price Funds — T Rowe RA 2030 | 1,021,664 |
|
T Rowe Price Funds — T Rowe RA 2035 | 101,004 |
|
T Rowe Price Funds — T Rowe RA 2040 | 1,303,801 |
|
T Rowe Price Funds — T Rowe RA 2045 | 28,272 |
|
T Rowe Price Funds — T Rowe RA 2050 | 19,756 |
|
T Rowe Price Funds — T Rowe RA 2055 | 13,906 |
|
T Rowe Price Funds — T Rowe RA Income Fund | 108,886 |
|
Vanguard Funds - Vanguard Ext Mkt Index Fund | 545,006 |
|
*Common stock — Jack Henry & Associates, Inc. | 7,354,953 |
|
*Prudential Retirement Insurance and Annuity Company — Core Plus Bond / PIMCO Fund | 1,743,223 |
|
*Prudential Retirement Insurance and Annuity Company — Mid Cap Value/CRM Fund | 1,492,713 |
|
*Prudential Retirement Insurance and Annuity Company - MC GR/Goldman Sachs Fund | 1,094,023 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Growth Fund (I) | 119,114 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Income & Equity Fund (I) | 6,952 |
|
*Prudential Retirement Insurance and Annuity Company — Dryden S & P 500 Index Fund | 1,196,754 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Balanced Fund (I) | 73,827 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Conservative Fund (I) | 43,785 |
|
| $ | 29,561,481 |
|
* Represents a party-in-interest to the Plan
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5. | Investment Contract with insurance company |
The Plan has a fully benefit-responsive GIC with Prudential. Prudential maintains the contributions in a general account, which is credited with earnings and charged for participant withdrawals and administrative expenses. The GIC is included in the financial statements at fair value, which is equal to contract value. The concept of a value other than contract value does not apply to this GIC even upon a discontinuance of the contract in which case contract value would be paid no later than 90 days from the date the sponsor provides notice to discontinue. There are no specific securities in the general account that back the liabilities of this annuity contract and it would be inappropriate to look to the market value of the securities within the insurer's general account to determine a fair value. The insurer owns a promise to pay interest at crediting rates, which are announced in advance and guaranteed for a six-month period. This contract is not a traditional GIC and therefore there are no cash flows that could be discounted. Contract value represents contributions made under the contract, plus transfers to the fund and credited interest, less
participant withdrawals, transfers out of the fund and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
Limitations on the Ability of the GIC to Transact at Contract Value - The GIC does not have any restrictions that impact the ability of the Plan to collect the full contract value. However, the GIC does allow disbursements to be deferred over a period of time if the value of the disbursements exceeds 10% of the total beginning net assets of the guaranteed income fund pool in which the GIC belongs. Plan management believes that the occurrence of events that would cause the Plan to transact at less than contract value is not probable. Prudential may not terminate the contract at any amount less than the contract value.
Average Yields - Prudential is contractually obligated to pay the principal and specified interest rate that is guaranteed to the Plan. The crediting interest rate is based on a formula agreed upon with Prudential, but may not be less than 1.50%. Such interest rates are reviewed on a semi-annual basis for resetting. The crediting rate of the product will be established based on current economic and market conditions, the general interest rate environment, and both the expected and actual experience of a reference portfolio within the issuer's general account. These rates are established without the use of a specific formula.
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| | | | | |
| December 31, 2012 | | December 31, 2011 |
Average yields: | | | |
Based on annualized earnings (1) | 2.70 | % | | 3.15 | % |
Based on interest rate credited to participants (2) | 2.70 | % | | 3.15 | % |
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(1) | Computed by dividing the annualized one-day actual earnings of the contract on the last day of the Plan year by the fair value of the investments on the same date. |
| |
(2) | Computed by dividing the annualized one-day earnings credited to participants on the last day of the Plan year by the fair value of the investments on the same date. |
| |
6. | EXEMPT PARTIES-IN-INTEREST TRANSACTIONS |
Certain Plan investments are shares of mutual funds and a guaranteed investment contract, managed by Prudential. Prudential is the Plan Trustee, as defined by the Plan, and these transactions qualify as exempt party-in-interest transactions. In addition, the Company pays certain fees on behalf of the Plan for accounting services.
At December 31, 2012 and 2011, the Plan held 1,258,568 and 1,274,237 shares, respectively, of common stock of the Company, the sponsoring employer, with a cost basis of $26,085,127 and $24,872,615, respectively. During the year ended December 31, 2012, the Plan received $593,809 in dividend income related to shares of the common stock of the Company held by the Plan.
Although it has not expressed an intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. In the event of plan termination, employees become 100% vested in any non-vested portion of their accounts.
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8. | FEDERAL INCOME TAX STATUS |
The Plan was restated to comply with applicable law changes and updates effective December 1, 2008, and an application for an Internal Revenue Service (IRS) determination letter was filed on April 15, 2010. Although the Plan has been amended since filing for a new determination letter, the Plan Administrator reasonably believes that the Plan, as restated and amended, is designed and is being operated in compliance with applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan's financial statements.
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the relevant taxing authority. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2009.
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9. | NONEXEMPT PARTY-IN-INTEREST TRANSACTION |
The Company remitted certain 2012 and 2011 participant contributions totaling $79,798 and $29,696 to the trustee later than required by Department of Labor (DOL) Regulation 2510.3-102. The Company credited participant accounts with the amounts of investment income that would have been earned had the participant contributions been remitted on a timely basis, during 2013 (for 2012 untimely contributions) and 2012 (for 2011 untimely contributions). The Company will file an application for a compliance statement from the DOL under the Voluntary Fiduciary Correction Program (VFCP) to correct these untimely contributions.
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10. | NET ASSET VALUE (NAV) PER SHARE |
The following tables for December 31, 2012 and 2011, set forth a summary of the Plan's investments with a reported NAV.
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| | | | | | | | | | | |
| Fair Value Estimated Using Net Asset Value per Share |
| December 31, 2012 |
Investment | Fair Value * | | Unfunded Commitment | | Redemption Frequency | | Other Redemption Restrictions | | Redemption Notice Period |
Equity Index Funds (a) | $ | 16,894,906 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Balanced Funds (b) | 2,553,825 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Bond Funds (c) | 21,362,986 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Total | $ | 40,811,717 |
| | | | | | | | |
|
| | | | | | | | | | | |
| Fair Value Estimated Using Net Asset Value per Share |
| December 31, 2011 |
Investment | Fair Value * | | Unfunded Commitment | | Redemption Frequency | | Other Redemption Restrictions | | Redemption Notice Period |
Equity Index Funds (a) | $ | 20,286,605 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Balanced Funds (b) | 1,901,945 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Bond Funds (c) | 16,367,146 |
| | None | | Immediate | | Up to 30 days if negative cash flow | | None |
Total | $ | 38,555,696 |
| | | | | | | | |
*The fair values of the investments have been estimated using the net asset value of the investment.
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(a) | Equity index fund strategies seek to replicate the movements of an index of a specific financial market, such as the Standards & Poors' (S&P) 500 Index or Russell Midcap Value Index, regardless of market conditions. |
(b) The balanced fund strategies seek to consistently outperform its benchmarks over full market cycles. These funds invest in a family of funds comprised of five distinct, multi-asset class, multi-manager
investment portfolios, which offer a range of risk/return characteristics. The investment objectives of each of the five funds vary in keeping with the desired risk tolerance and associated asset allocation of the underlying portfolio.
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(c) | The bond fund strategies seek to exceed the return of the Barclays Capital U.S. Aggregate Bond Index, consistent with preservation of capital by investing in a diversified portfolio of fixed income securities. |
* * * * * *
SUPPLEMENTAL SCHEDULES
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
EIN: 43-1128385
Plan Number: 003
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2012
|
| | | |
Description of Investment | Fair Value |
American Funds — Europac Fund | $ | 29,291,902 |
|
Blackrock Funds - Blackrock Eq Dividends I | 25,249,373 |
|
Blackrock Funds - Blackrock Inflation Protect Fund | 3,694,001 |
|
Diamond Hill — Small Cap Fund | 6,977,070 |
|
John Hancock - Disciplined Value Mid Cap I | 10,101,089 |
|
Invesco Funds - Invesco Charter Institutional Fund | 14,349,608 |
|
JP Morgan Funds — JP Morgan Gov’t Bond A | 2,443,611 |
|
JP Morgan Funds - Large Cap Growth Select Fund | 30,656,169 |
|
Loomis Sayles - Loomis Small Cap Growth Fund | 9,576,000 |
|
T Rowe Price Funds — T Rowe Blue Chip Fund | 3,574,025 |
|
T Rowe Price Funds — T Rowe RA 2005 Fund | 289,598 |
|
T Rowe Price Funds — T Rowe RA 2010 Fund | 1,598,342 |
|
T Rowe Price Funds — T Rowe RA 2015 Fund | 1,297,056 |
|
T Rowe Price Funds — T Rowe RA 2020 Fund | 4,898,857 |
|
T Rowe Price Funds — T Rowe RA 2025 Fund | 729,050 |
|
T Rowe Price Funds — T Rowe RA 2030 Fund | 8,528,031 |
|
T Rowe Price Funds — T Rowe RA 2035 Fund | 920,646 |
|
T Rowe Price Funds — T Rowe RA 2040 Fund | 10,648,265 |
|
T Rowe Price Funds — T Rowe RA 2045 Fund | 262,342 |
|
T Rowe Price Funds — T Rowe RA 2050 Fund | 187,905 |
|
T Rowe Price Funds — T Rowe RA 2055 Fund | 118,542 |
|
T Rowe Price Funds — T Rowe RA Income Fund | 1,531,104 |
|
Vanguard Fund — Vanguard Ext Mkt Index Fund | 4,279,603 |
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*Prudential Retirement Insurance and Annuity Company — Core Plus Bond / PIMCO Fund | 21,362,986 |
|
*Prudential Retirement Insurance and Annuity Company - MC GR/Goldman Sachs Fund | 7,432,680 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Growth Fund (I) | 1,067,919 |
|
*Prudential Retirement Insurance and Annuity Company — IFX Long-term Balanced Fund (I) | 750,767 |
|
*Prudential Retirement Insurance and Annuity Company — FX Long-term Conservative Fund (I) | 523,019 |
|
*Prudential Retirement Insurance and Annuity Company — FX LT Income & Equity Fund (I) | 212,120 |
|
*Prudential Retirement Insurance and Annuity Company — Dryden S & P 500 Index Fund | 9,462,226 |
|
Mutual fund and pooled separate account total | 212,013,906 |
|
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*Prudential Retirement Insurance and Annuity Company — Guaranteed Income Fund | 42,473,674 |
|
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*Common Stock — Jack Henry & Associates, Inc. | 49,338,096 |
|
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*Notes receivable from participants (interest rate ranging from 3.25% to 11.00%; maturity dates ranging from 2013 to 2023) | 9,954,024 |
|
| |
TOTAL | $ | 313,779,700 |
|
* Represents a party-in-interest to the Plan
JACK HENRY & ASSOCIATES, INC.
401(k) RETIREMENT SAVINGS PLAN
EIN: 43-1128385
Plan Number: 003
FORM 5500, SCHEDULE H, PART IV, QUESTION 4a
SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
|
| | | | | | | | | | | | | | | |
| Total That Constitute Nonexempt Prohibited | | |
| Transactions | | |
| Contributions Not Corrected | | Contributions Corrected Outside VFCP | | Contributions Pending Correction in VFCP | | Total Fully Corrected under VFCP and PTE 2002-51 |
Participant Contributions Transferred Late to the Plan - 2012 | $ | 78,397 |
| | $ | — |
| | $ | 1,401 |
| | $ | — |
|
| | | | | | | |
Participant Contributions Transferred Late to the Plan - 2011 | $ | — |
| | $ | — |
| | $ | 29,696 |
| | $ | — |
|