PESC 401K Plan – July 1st Open Enrollment
This is a reminder that during the month of January and July new employees with at least one year of service, and at least 1,000 hours of service within that year become eligible to enroll into the PESC 401K Plan. For those of you who are already in the plan, this is a great time to review and change your contributions to the plan to make sure you’re meeting your retirement goals. As a reminder, PESC only matches your contribution up to 4% of your salary. If anyone has questions about any of this or needs help with your investments, please call PESC’s 401K financial advisor at the information below. Also, here’s some additional information for you to review. I’m also happy to help if you have any questions.
John Nilmeier*, CFP®, CLU
Nilmeier Financial and Insurance Services
7491 N. Remington Ave, Ste 102
Fresno, CA 93711
(559) 227-6100 phone
ELECTIVE DEFERRALS
Your elective deferrals are amounts that you chose to (or are assumed to have chosen to) have withheld from your paycheck and contributed to the Plan in your name. Please see the section of your SPD titled "Eligibility for Participation" to determine if you are eligible to make elective deferrals and "Contributions to the Plan" for the type of compensation you may defer into the Plan.
How do I make or change my deferral election?
You may make or change your deferral election by: Contacting the Plan Administrator
Once I make a deferral election, how often can I change, stop, or re-start the election?
You may change or re-start your deferral election once each pay period. You may stop your deferrals at any time.
If I make a deferral election is the amount withheld from my paychecks taxed?
No, the amount you elect to defer into the Plan is not taxed until you take the money out of the Plan.
Are there any limits to how much I can defer into the Plan?
Your elective deferrals are subject to the following limits:
- Your total amount of deferrals cannot be more than $20,500 (for 2022).
- If you are age 50 or over, you may defer an additional amount, called a "catch-up contribution," of up to $6,500 (for 2022).
The Plan Administrator may establish additional rules you will need to follow when making your deferral election. Your deferral election is only effective for compensation you have not received yet. The Plan Administrator may also reduce or totally suspend your election if they determine that your election may cause the Plan to fail to satisfy any of the requirements of the Internal Revenue Code.
SAFE HARBOR CONTRIBUTIONS
The Plan Administrator intends the Plan to be a safe harbor plan. In a safe harbor plan, if certain requirements are met, the Plan will be deemed to automatically pass certain IRS required non-discrimination testing (ADP, ACP, and top-heavy). One of these requirements is a minimum level of employer contributions to the Plan. The Plan may be amended during the plan year to reduce or suspend the safe harbor contributions. The reduction or suspension will not apply until at least 30 days after you are provided notice of the reduction or suspension.
Am I eligible to receive safe harbor contributions?
Once you meet the eligibility requirements below, you will be eligible to receive safe harbor contributions unless you fall into one of the
following categories.
- You are an employee covered by a collective bargaining agreement where retirement benefits were the subject of good faith bargaining.
- You are a non-resident alien with no U.S. sourced income.
What eligibility requirements do I have to meet to receive safe harbor contributions?
You will be eligible to receive safe harbor contributions on the first day of the first month and seventh month of the plan year coincident with or next following the day you meet the following requirements.
- You attain age 21.0.
- You complete 1000 hours of service in a 12-month period.
Will safe harbor contributions be made to my account under the Plan?
Yes, as long as you are eligible to receive safe harbor contributions, a safe harbor matching contribution equal to 100% of your deferrals up to 4% of your compensation will be made to your account.
Will any additional contributions be made to my account under the Plan?
Additional contributions may be made to your account under the Plan. Please see the section of your SPD titled "Contributions to the Plan" for
information on any further contributions.
VESTING
Vesting refers to the amount of money you have in the Plan that you have a non-forfeitable right to receive. You may be required to work a certain amount of time to earn certain contributions to the Plan. Please see your SPD section titled "Vesting" for more information about vesting and how it is calculated.
Do I need to work a certain amount of time to keep my elective deferrals and safe harbor matching contributions?
No, you will always be immediately 100% vested in your elective deferrals and safe harbor matching contributions.
Do I need to work a certain amount of time to keep my matching contributions and profit sharing contributions?
Yes, your matching contributions and profit sharing contributions will vest as specified below:
- Less than two years of vesting service - 0%
- Two years but less than three years of vesting service - 20%
- Three years but less than four years of vesting service - 40%
- Four years but less than five years of vesting service - 60%
- Five years but less than six years of vesting service - 80%
- Six or more years of vesting service - 100%
DISTRIBUTIONS
Can I take a distribution of my account balance after my employment terminates?
Yes, you can take a distribution of your account balance immediately after your employment terminates.
Can I take a loan from the plan?
No, loans are not available under the plan.
Please see the SPD section titled "Distributions" for further information on your distribution options.
PLAN INVESTMENTS
Can I direct how my account balances will be invested?
Yes, you can direct how your entire account balance will be invested from among the different investments offered under the Plan.
You may make or change your investment elections by: Contacting the Plan Administrator
How often can I change my investment election?
Subject to any additional restrictions placed on investment timing by the actual investment, you may change your investment elections daily.
How will my account balances be invested if I do not make an investment election?
If you do not make an investment election your account balances will be placed in investments selected by the Plan Administrator.
