Enrolling in Your 401 Retirement Savings Plan

Congratulations! You are about to begin building for a secure retirement future. And it’s so easy!

With an ICMA-RC 401 Plan, your retirement benefit is based on the total contributions made by you and your Employer.

Here’s how it works. Your Employer makes an annual fixed (401a) or discretionary (401k) contribution towards your retirement account. You may be required to make a contribution and may also be allowed to make voluntary contributions. As long as your contributions remain below the specified limit, they are not subject to current Federal and, in some cases, state income taxes. Earnings on your savings are also tax-free until they are withdrawn. (See Amount of Contribution, below) With a 401 plan you are in control — it is your account and you manage the account and decide how to invest the money.

It's easy. Your contributions are handled through automatic payroll deduction, so once you sign up, your employer and ICMA-RC take care of the rest.

Enrolling

If your employer has a 457 Deferred Compensation Plan information office they will be your best resource for enrolling in your plan. Start there. Otherwise, to enroll, you’ll need the 401 Plan Employee Enrollment Form. This form is also in the “401 Enrollment Kit” available through your employer. When completing the enrollment form, you’ll have to make some important decisions, among them:

• Beneficiary Designation: Unlike many insurance annuity programs, in the event of your passing, your account balance is not forfeited. Instead it becomes available to your beneficiaries — you can name one or several.
  
  Be sure to include your designated beneficiaries’ date of birth and Social Security number plus, if applicable, the percentage of the benefit you want them to receive. (Please note that there are IRS rules regarding your beneficiary. These are outlined in your employer’s plan, or you may contact ICMA-RC Investor Services.
• Amount of Contribution: Depending on the specifics of your Employer’s plan, there are several different types of contributions that can be made to your 401 Plan. Some are mandatory and made as either a pre-tax or after tax contribution. In addition, you may be allowed to make an “elective” pre-tax contribution or a voluntary after-tax contribution. Please check with your employer to see which employee contributions are permitted. (Please note that there are annual dollar limits as determined by IRS regulation. Contact us or see your employer for further information.)
• Allocation of Contributions: Investing is one of best ways you can build your retirement security. It is an important decision and you'll probably need further information before designating your choices. ICMA-RC has many helpful investment information publications and educational tools available to you. Plus you can also speak to an Investments Specialist.

On the Enrollment Form, you may invest in one fund or any combination. Be sure to include the code and percentage of your contribution you wish to allocate. And make sure that the percentage equals 100%.

The Investment Options sheet included with the enrollment packet provides you with the investments available. Remember, you can reallocate your investments at any time.

Once you’ve completed the 401 Enrollment Form, remember to sign it and return it to your Employer as soon as possible.

Once you’ve enrolled in the ICMA-RC 401 Plan, you can easily manage your account on-line and through 24-hour telephone access with VantageLine.

Need more information on the 401 Retirement Savings Plan? Need more information about the specifics of your 401 Plan and the investments available to you? Contact an ICMA-RC representative.