401(k) Participant Forms
Please complete the form in a legible manner or use your computer to complete the form, then print the form and sign it. If you choose to sign electronically, a photo ID must also be included with the completed forms. The completed forms may be mailed, faxed, e-mailed, or uploaded to our website. See instructions on each form for more information.
Frequently Asked Questions for 401(k) Participants
What is a 401(k)?
A section 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pretax basis. These deferred wages (commonly referred to as elective deferrals) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 since they were not included in the taxable wages on your Form W-2. However, they are included as wages subject to social security, Medicare, and federal unemployment taxes.
How does a 401k work? When am I eligible to put money into the plan? How much may I contribute?
The summary plan description (SPD) is made available to participants. This basic descriptive document is a plain-language explanation of the plan and must be comprehensive enough to apprise participants of their rights and responsibilities under the plan. It also informs participants about the plan features and what to expect of the plan. Among other things, the SPD must include information about:
- When and how employees become eligible to participate in the 401(k) plan;
- The contributions to the plan;
- How long it takes to become vested;
- When employees are eligible to receive their benefits;
- How to file a claim for those benefits; and
- Basic rights and responsibilities participants have under the Federal retirement law, the Employee Retirement Income Security Act (ERISA).
What funds are available to invest my 401k?
The Company will generally choose investment options to make available to participants or hire someone to determine the investment options to make available to participants. Either way, the investment options currently available to participants are on our website after you log into your account and select investment profiles. Fund performances are easily viewed by selecting any of the funds listed.
Can I change my investments? How often? Can I change my investments online? If I trade today, how long does it take to show up in my account?
Participant directed accounts allow for participants to change their investments at any time and as often as they wish. Participants may make investment changes online by selecting Transactions.
To change current investment elections (what funds your current deferrals will be invested), put the percentage you want your deferrals invested into next the fund choice under the New % column. The New % totals must equal 100%.
To rebalance your portfolio to your new investment elections, click on Transfer Funds. Under Transfer Type: select Rebalance Investment Based on New Allocation Percentages.
You may also transfer between investments through the Transfer Funds tab.
Trades typically take between 3 to 5 business days to complete and be updated on your online account.
What is the maximum amount of money I can contribute to my 401k annually?
The maximum amount workers can contribute to a 401(k) for 2023 is $22,500 for those younger than age 50. If you’re age 50 and older, you can add an extra $7,500 per year in “catch-up” contributions, bringing your total 401(k) contributions for 2023 to $30,000.
To see my account online, what is my user ID and password? Can I change my password? How often is the website updated?
To login to your account, from our home page select Participant Login. Please contact our office directly if your Human Resource department has not provided your login information. Once you login, you can perform many functions such as changing your password, updating your personal information, checking your investment elections and tracking transaction history. For most plans, our website is updated daily.
How can I get a form? What form do I need?
Our forms are available on our website under Forms Library. There you will find access to the Distribution Election Form, Hardship Withdrawal Request Form, Loan Application Form, Beneficiary Designation Form and the ACH Direct Deposit Authorization Agreement Form. If you are separated from employment, the Distribution Election Form most likely applies to you as you cannot receive a hardship or a loan after separation from employment. If you are over the plan’s retirement age, are still employed and want a distribution out of the plan, the Distribution Election Form also applies to you.
Each of the forms is designed to be filled out using your computer. Simply open the form you need, complete the form using your computer, print out the completed form, sign it and return it to us by fax at 919-942-2804 or mail to our address on the form.
How often will I receive a statement?
Statements are sent out quarterly by mail.
What is a beneficiary? What is a primary or contingent beneficiary? How do I change my beneficiary?
A beneficiary is the person or entity named as the inheritor of property when the property owner dies. Primary beneficiary or beneficiaries inherit the property when the property owner dies. Contingent beneficiary or beneficiaries inherit the property if the primary beneficiary has died at the time the benefit is to be paid. To change your beneficiary online, select Personal Profile, then Beneficiaries. You can view your current beneficiaries, change the percentages for multiple beneficiaries or add or delete new beneficiaries. You may also complete a Beneficiary Designation Form.
Can I take out a loan against my 401k? How long does it take to get the loan?
The rules governing 401k plans allow plans to provide loans, but do not mandate that an employer make it a plan feature. Check with your Human Resources department if you’re not sure if your plan allows loans.
Usually you are allowed to borrow up to 50% of your vested account balance to a maximum of $50,000 (set by law). Because of the cost, many plans will also set a minimum amount and restrict the number of loans you can have outstanding at any one time.
If loans are available in your plan, they are pretty easy to get. No credit check is required. Loans are processed as quickly as administratively possible, depending on where your funds are held. Loan payments will generally be deducted from your payroll checks.
Loans from a 401k are not subject to income tax or the 10% early withdrawal penalty. The maximum term is five years unless the loan is used to purchase your primary residence, then up to 10 years. The minimum term is one year. To start the loan process, complete the Loan Application Form.
What options do I have if I terminate my employment? Can I leave the 401k money in the plan or must I take it out? Can I rollover my money to my new employer?
Upon termination, the participant may choose to have the balance of the account either directly paid to them or rolled over into an Individual Retirement Account (IRA) or another qualified plan. Some successor employer 401k plans allow for money to be rolled over from a previous employer’s 401k. To choose one of these options, complete the Distribution Election Form.
The options available to the employer after a participant termination depends on the participant’s account balance. If the balance in a participant’s account is less than $1,000, the employer may involuntary cash-out the participant’s balance and issue a check to the participant as a lump sum payment. If the balance is between $1,000 and $5,000, the employer may involuntary cash-out the participant’s balance and roll over the balance to an Individual Retirement Account (IRA). For account balances over $5,000, the participant must consent to any distribution.
When can I receive a distribution out of the plan?
Generally, distributions of elective deferrals cannot be made until one of the following occurs:
- You die, become disabled, or otherwise have a severance from employment.
- The plan terminates and no successor defined contribution plan is established or maintained by the employer.
- You reach age 59½ or incur a financial hardship.
To receive a distribution out of your account, complete the Distribution Election Form.
How long do distributions take to process?
Distributions typically take between two to four weeks, depending on the fund company where the assets are located. If you are recently terminated from service, there may be a delay in order to receive all of the money taken out of your paycheck at the investment company before liquidation of assets can occur.
Is my distribution taxable?
Distributions from your 401(k) plan are taxable unless the amounts are rolled over. A rollover occurs when you receive a distribution of cash or other assets from one qualified retirement plan and contribute all or part of the distribution within 60 days to another qualified retirement plan or traditional IRA. Rollovers are not taxable but are reportable on Form 1099-R.
Any taxable amount that is not rolled over must be included in income in the year you receive it. If the distribution is paid to you, you have 60 days from the date you receive it to roll it over. Any taxable distribution paid to you is subject to mandatory Federal withholding of 20%, even if you intend to roll the distribution over later. State withholding may also apply if required by your state. If the distribution is rolled over, and you want to defer tax on the entire taxable portion, you will have to add funds from other sources equal to the amount withheld. You can choose to have your 401(k) plan transfer a distribution directly to another eligible plan or to an IRA. Under this option, no taxes are withheld.
If you are under age 59 ½ at the time of the distribution, any taxable portion not rolled over may be subject to a 10% additional tax on early distributions. Consult your tax professional if you are not sure if the 10% penalty applies to you or if you think you qualify for an exception.
Can I have my distribution direct deposited into my bank?
Yes. The ACH Direct Deposit Authorization Agreement Form is included with the Distribution Election Form, the Loan Application Form and the Hardship Withdrawal Request Form.
For your security, and to assure an accurate transfer of funds, complete the entire form in a legible manner and attach a voided check where indicated. The routing and account numbers on this form must be identical to the routing and account numbers on your voided check. The payer name on the voided check must match the plan participant’s name. If a voided check is not available, or if the account number or routing number provided on this form is different than on the voided check, include a letter from the bank or financial institution on their letterhead. Have the letter signed by an authorized representative of the bank and indicate the name of the account holder and provide the routing and account numbers to be used by Pelion Benefits, Inc. for ACH purposes.
How do I roll over my 401k?
Upon separation from employment or attainment of the plan’s retirement age, a participant may roll over their 401k balance by completing the Distribution Election Form. Option 2 tells us who you want the check payable to, mailed to and your new account number. In order to be a non-taxable exchange, the balance must be transferred from trustee to trustee. Therefore, we cannot mail a roll over check to the participant’s address. The check must be payable to the successor custodian and mailed directly to them. We do not wire roll over money to successor custodians.
Rollovers may be made to a Traditional IRA account or Another Qualified Plan.
Traditional IRA accounts can easily be set up at any bank or rolled over into an existing IRA you may already own.
Some employer’s qualified plans (such as another 401k plan) allow rollovers into their qualified plans. Check with your new employer for such an option. If you already own a qualified plan and it allows you to transfer money into it from another qualified plan, that may be a good option for you.
What are the rules regarding hardship withdrawals from my 401k?
Like loans, hardship withdrawals are allowed by law, but your employer is not required to provide for them in your plan. Again, most companies do, but some don’t. The cost of administering such a program can be prohibitive for many small companies. Check with your Human Resources department if you’re not sure if your plan allows hardship withdrawal. Like loans, your employer must adhere to some very strict and detailed guidelines.
The IRS code that governs 401k plans provides for hardship withdrawals only if: (1) the withdrawal is due to an immediate and heavy financial need; (2) the withdrawal must be necessary to satisfy that need (i.e. you have no other funds or way to meet the need); (3) the withdrawal must not exceed the amount needed by you; (4) you must have first obtained all distribution or nontaxable loans available under the 401k plan; and (5) you can’t contribute to the 401k plan for six months following the withdrawal.
The following five items are considered by the IRS as acceptable reasons for a hardship withdrawal:
1. To purchase applicant’s principal residence
2. To prevent eviction from or foreclosure on applicant’s principal residence
3. To pay for college tuition expenses for applicant or family member
4. To pay medical expenses for applicant or family member
5. To pay funeral expenses for family member
Hardship withdrawals are subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. You do not have to pay the withdrawal amount back. For more information and examples of documentation necessary to receive a hardship, see the Hardship Withdrawal Request Form.
What is vesting? How does it apply to my account?
An employee’s rights to retirement benefits are determined through the application of a vesting schedule. A vesting schedule defines vesting in terms of percentages which are in turn determined based on the employee’s number of years of service. Employee salary deferrals are immediately 100 percent vested – that is, the money that an employee has put aside through salary deferrals cannot be forfeited. When an employee leaves employment, he/she is entitled to those deferrals, plus any investment gains (or minus losses) on their deferrals.
In SIMPLE 401(k) plans and safe harbor 401(k) plans, all required employer contributions are always 100 percent vested.
In traditional 401(k) plans, you can design your plan so that employer contributions become vested over time, according to a vesting schedule.
Refer to your summary plan description or check with your Human Resources department if you’re not sure which vesting schedule your company utilizes.
How can I update my personal information such as my address, e-mail or phone number?
Login to your account on our website and select the Personal Profile tab. Make the changes and submit.