Knowledgebase

Retirement Alliance’s experienced professionals are often asked questions about 401(k) plans. If you are unable to find the answer to your question below, please contact your Retirement Alliance This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

How do I access my account as a Partner?

Contact your Retirement Alliance This e-mail address is being protected from spambots. You need JavaScript enabled to view it for login information.

Is there a maximum amount that employees may invest?

Yes. Visit our Hot Topics page for current year limits. Highly compensated employees may be limited by the ADP tests that apply to the specific Plan. Please refer to most recent annual valuation for these limitations.

How do employees' contributions affect their income taxes?

Taxable income is reduced by the amount that is contributed to the Plan. For example, an employee with a salary of $25,000 who contributes $2,000 would have a W-2 income of $23,000.

Do employees pay taxes on the earnings in their accounts?

Yes, but only when they actually receive distributions from their account, most likely at retirement.

When may employees begin to receive benefit payments?

At retirement, termination of employment, disability or death, or in the event of an extreme financial hardship if allowed by the provisions of the Plan.

May employees stop and re-start contributions?

Yes. Employees have the option of ceasing contributions at any time. Refer to the Plan document for entry dates to re-enter the Plan.

May employees change the amount of their contributions?

Yes, at the times specified by the Plan document.

Do employees' deferrals affect their pension or Social Security contributions or benefits?

No. Social Security income is calculated prior to 401(k) deferral.

When do contributions become vested?

Employee contributions vest immediately. Any employer contributions are subject to the vesting schedule defined by the Plan document.

What happens if an employee terminates employment?

Employees may elect to receive the value of their accounts under any of the available benefit options. Employee accounts with more than $5,000 are eligible, at the discretion of the employee, to remain in the Plan until retirement. Contact your Plan Administrator for further details.

How does the employer contribution work?

Employers may contribute in various ways, depending on the type of plan. Please refer to your Plan document for details.

What if I need more information?

Contact a Retirement Alliance This e-mail address is being protected from spambots. You need JavaScript enabled to view it regarding tailoring the parameters of your own 401(k) Plan in the manner that best conforms to the needs of your firm.