 |
The Plan is intended to help
you
put aside money for your retirement |
Features and Highlights
WHAT IS ABC COMPANY'S PLAN YEAR?
The Plan Year is the
consecutive twelve-month period beginning on 01/01 and ending on 12/31.
WHO CAN PARTICIPATE?
Participation is open to
employees who have met the following requirements:
- Attained age 21.
- Completed 1 Year
of Service, as defined by the Plan.
The Plan does not allow participation by employees who
are:
- Covered by a
collective bargaining agreement.
- Leased employees.
- Non-resident
aliens with no U.S.
earned income.
Other requirements may also
have to be met, as described in the Summary Plan Description.
WHEN MAY I JOIN?
Eligible employees may join
the Plan on the earlier of the first day of the Plan year, or the first day of
the fourth, seventh or tenth month of the Plan year coinciding with or next
following the date on which the eligibility requirements are met (quarterly).
HOW DO I CONTRIBUTE TO THE PLAN?
- Though payroll
deduction, you can make elective deferrals up to the maximum allowed by
law. The dollar limit is $15,500 for
2007.
- You can also
designate your elective deferrals to a Plan account that qualifies as a Roth
401(k) account. In 2007 you may
contribute as much as $15,500, in total, to your 401(k) accounts (Roth 401(k)
and pre-tax contributions), or the maximum allowed by your plan, whichever is
less. Roth 401(k) contributions will be
included in your taxable income.
Earnings on the Roth 401(k) contributions will accumulate tax free, and
retirement withdrawals may be exempt from federal income tax.
- You may make a
special elective salary deferral on any bonuses you receive up to 100% of any
bonus.
- If you have an
existing qualified retirement plan (pre-tax), Roth 401(k), qualified retirement
plan (after-tax), 403(b) tax deferred arrangement or governmental 457 plan with
a prior employer, or hold a taxable IRA account, you may transfer or roll over
that account into the Plan on becoming a participant in the Plan.
CAN I MAKE CATCH-UP CONTRIBUTIONS TO THE PLAN?
If you are age 50 or older
and make the maximum allowable deferral to your Plan, you are entitled to
contribute an additional "catch-up contribution". The catch-up contribution is intended to help
eligible employees make up for smaller contributions made earlier in their
careers. The maximum catch-up contribution
is $5,000 for 2007. See your Benefits
Administrator for more details.
CAN I STOP OR CHANGE MY CONTRIBUTIONS?
- You may stop your
contributions anytime upon written notice to ABC Company. Once you discontinue contributions, you may
only start again as provided under the terms of the Plan.
- You may increase
or decrease the amount of your contributions upon written notice to ABC
Company. The frequency of these changes
is determined by ABC Company. See your
Plan Administrator for more information.
HOW DOES ABC COMPANY CONTRIBUTE TO THE PLAN?
The Plan also provides for
ABC Company to make contributions.
- ABC Company will
make matching contributions equal to 5% of your eligible elective deferrals, up
to 10% of compensation.
- The matching
contribution will be made on both pre-tax contributions and Roth 401(k)
contributions. Any match made on Roth
401(k) contributions and the earnings on that match will be subject to income
tax upon withdrawal.
- The Plan also
provides for discretionary matching contributions on eligible elective
deferrals in an amount to be determined by ABC Company on an annual basis. The discretionary matching contribution will
be made only on pre-tax contributions.
- ABC Company will
make safe harbor matching contributions of 100% of the first 3% of compensation
you contribute to the Plan and 50% of the next 2% of compensation you
contribute to the Plan. Other
limitations may apply.
The employer match on
eligible elective deferrals benefits eligible employees who are actively employed
on the last day of the Plan year and who have completed a year of service.
The employer discretionary
match on eligible elective deferrals benefits all eligible employees and
eligible employees who have worked 1,000 hour(s) during the Plan Year.
HOW DO I BECOME "VESTED" IN MY PLAN ACCOUNT?
Vesting refers to your
"ownership" of a benefit from the Plan. You are always 100% vested in your Plan
contributions and your rollover contributions, plus any earnings they generate. You are 100% vested in the "safe
harbor" contributions ABC Company makes on your behalf, plus any earnings
they generate. Other employer
contributions to the Plan, plus any earnings they generate, are vested as
follows:
Years of
|
Vesting
|
Service
|
Percentage
|
Less than 2
|
0%
|
2
|
20%
|
3
|
40%
|
4
|
60%
|
5
|
80%
|
6 or more
|
100%
|
All accounts are fully vested
at the Normal Retirement Age of 65.
WHEN CAN MONEY BE WITHDRAWN FROM MY PLAN ACCOUNT?
Money may be withdrawn from
your Plan account in these events:
- Retirement at the
Plan's Normal Retirement Age of 65.
- Your attaining
age 59½.
- Death.
- Disability.
- Termination of
Employment.
To receive favorable tax
treatment, distributions of Roth 401(k) contributions must be made after you
reach age 59½ , or on account of your death or disability, and must be made at
least 5 years after the date your first Roth 401(k) contribution was made. See your Summary Plan Description for more
details about taking withdrawals from the Plan.
Be sure to talk with your tax advisor before withdrawing any money from
your Plan account.
MAY I WITHDRAW MONEY IN CASE OF FINANCIAL HARDSHIP?
If you have an immediate
financial need created by severe hardship and you lack other reasonably
available resources to meet that need, you may be eligible to receive a
hardship withdrawal from your account.
If you feel you are facing a financial hardship, you should see your
Benefits Administrator for more details.
MAY I BORROW MONEY FROM MY ACCOUNT?
The Plan is intended to help
you put aside money for your retirement.
However, ABC Company has included a Plan feature that lets you borrow
money from the Plan.
- The amount the
Plan may loan to you is limited by rules under the tax law. In general, all loans will be limited to the
lesser of one-half of your vested account balance or $50,000.
- The minimum loan
amount is $1,000.
- All loans must
generally be repaid within five years.
- You may have 2
loans outstanding at a time.
- Loans are
permitted from all accounts.
Other requirements and limits
must be met, and certain fees may apply.
Refer to the Summary Plan Description for more details about this
participant loan feature.
HOW ARE PLAN CONTRIBUTIONS INVESTED?
You give investment
directions for your Plan account, selecting from investment choices provided
under the Plan, as determined by ABC Company.
- You may change
your investment choices anytime.
- More information
about your Plan's investment choices can be found elsewhere in these materials.
The Plan is intended to be an
ERISA Section 404(c) plan. This simply
means that you "exercise control" over some or all of the investments
in your Plan account. The fiduciaries of
the Plan may be relieved of liability, or responsibility, for any losses that
you may experience as a direct result of your investment decisions.
As a plan participant, you
may request certain information from Susan R. Sample, Trustee, 123 Main Street,
Anywhere, USA
12345, phone: 123-456-7890. This information includes: annual operating
expenses of the Plan investments; copies of prospectuses, financial statements,
reports, or other materials relating to Plan investments provided to the Plan;
a list of assets contained in each Plan investment portfolio; the value of
those assets and fund units or shares; and the past and current performance of
each Plan investment.
SUMMARY PLAN DESCRIPTION
The above highlights are only
a brief overview of the Plan's features and are not a legally binding
document. A more detailed Summary Plan
Description is available. Contact your
Benefits Administrator if you have any further questions.
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Hollis Lamon
Lamon & Stern
Atlanta, Georgia |
Contact Hollis Lamon of Lamon & Stern today for all your retirement planning needs! 770-951-8411
