Beneficiary Form —
This form is used to list who you would like to receive your retirement funds in the event you pass away.
Catch-Up Contributions —
A contribution that allows people aged 50 or older to make additional contributions to their 401(k) or IRA.
Contribution Limits —
The maximum amount an employee can contribute into a 401(k) plan as determined each year by the Internal Revenue Service.
Contributions —
The money from an employee's paycheck that is placed in their retirement account. Also called a deferral.
Deferral —
Same as a contribution.
Enrollment Form —
Enrolls you into the plan and sets up how much of your paycheck you would like to defer or contribute to your account.
Hardship Distribution —
An emergency removal of funds from a retirement plan that meets IRS defined criteria for an immediate and heavy financial need. The distribution avoids the 10% early withdrawal penalty but will be taxable as additional income. Call our participant hotline to see if your situation meets the criteria — 1-866-811-6604.
In-Service Distribution —
A removal of funds from a retirement account while an employee is still employed with the employer sponsoring the retirement plan. There may be a 10% penalty for early withdrawal and the funds may be subject to state and federal taxes.
Investment Advisor —
An individual that helps retirement plans and their participants with investment decisions.
IRA —
Stands for Individual Retirement Account. Very similar to a 401(k) retirement plan, except it is opened by a single person with an IRS approved institution.
Loans —
If your employer's retirement plan allows, you can borrow money from your retirement account. The borrowed money must be paid back with monthly payments.
Matching Contributions —
In some cases, an employer will contribute money to an employee's retirement account and will "match" a certain percentage that an employee contributes.
Plan Document —
A document that governs a retirement plan's features and day-to-day operations. How the plan works and any special features are captured here. The document is created when the plan is setup and can be amended.
Plan Sponsor —
An employer or company that sets up a retirement plan.
Rate of Return —
The net gains or losses of your investments over a period of time.
Rebalancing —
This is when funds are sold and bought in the retirement plan to keep the asset allocation percentages constant.
Roth —
Money that you put into your retirement account that has already been taxed. These funds will not be taxed when they are distributed later.
Separation of Service Distribution —
A distribution of your money in a retirement plan that is distributed when you stop service with an employer. Depending on your age, you may have to pay a penalty and owe extra taxes if the funds are not rolled over into another employer's retirement plan or an IRA.
Summary Plan Description —
A detailed guide to the benefits of your employer's retirement plan and how the plan works. Retirement law dictates employers give this to employees free of cost.
Target Date Funds —
A class of mutual funds that rebalances the mix of stocks and bonds as you age. The mix, if stock-heavy early, then switches to bond-heavy as the target date draws near.
Termination Distribution —
Distribution of your retirement funds when an employer's plan is terminating.
TPA —
Third Party Administrator. A company that helps run a retirement plan for a plan sponsor.
Vesting —
The percentage of your employer's contributions to your retirement account that you own. You usually need to work for your employer for a certain amount of time before receiving partial and full ownership of the funds.