Friday, June 09, 2006

LANS 401K update

Submitted by Anonymous:

Not sure if others were aware of this twist on the 401K plan yet. I
sure wasn't when I choose TCP2 as being an unvested UC employee. LANS
sold the TCP2 as having the 401K plan with a matching contribution of
6 up to 6% of one's salary if you contributed that much as well as a
service-based non-matched contribution. The service-based
contribution is set so that 3.5% of your salary goes in for 0-9 years
service, and increases the longer you've been in. NNSA even changed
it so that past service to UC counted in your years of service. So in
my naive thinking I thought that after this first paycheck (issued
June 8th for 2 days of LANS employment) I would receive in my 401K the
6% I contributed, the 6% matched by LANS and 3.5% for my service
contribution. No, Fidelity only has the 6% from me and the 6%
matching (12% total). On calling benefits to ask where the 3.5% was I
got the answer -- it will only be put in once a year (maybe January of
next but they aren't sure exactly when). So much for everyone making
money off that service-based contribution in your 401K every year!
Maybe I missed it in all the talks but I don't remember anyone saying
this would be an annual service-based contribution. What next? Maybe
if you aren't employed the full year they won't give it to you?

What next? Maybe
if you aren't employed the full year they won't give it to you?

Maybe if you don't complete five years with LANS you don't get their 6% at all. That is how normal private companies work. For non completion of the term, you only get what you put in. Verizon is 3 years of service minimum or you lose all company contributions. I am sure that it is going to get more interesting as time goes on.
I also noticed this when I looked at my pay stub yesterday. I just got off of the 'phone with benefits, and was told that the deposit will (they think) occur during the "first quarter" of the following calendar year. If we terminate or retire, the deposit will still happen (they think), and be based on salary earned that year, up to the termination date.

I didn't have the brains to ask how we would get the deposit if we were working somewhere else, and had rolled the 401k over to another plan.

It certainly would have been nice to have fully understood how this was to work before the decision deadline. I can't find references to a yearly deposit. Anyone else pick up on this little detail before last May 15?

No great loss, but I wish we had all of the facts BEFORE we had to make our decisions. That’s what is pissing me off…just another example of how half-assed this transition has been.
Did anyone also notice that Social Security/Medicare deductions started over at zero?

If you are interested in contributing the maximum annual amount to the LANS 401k while simultaneously receiving the LANS 6% contribution, you will find that you must balance contributions such that both targets will max out exactly right on the last pay period of the year. Good Luck! Apparently payroll will no longer cut your contributions once the limits are reached.
"Apparently payroll will no longer cut your contributions once the limits are reached."

Your 401k deductions can only be managed by contacting Fidelity directly, and may "take up to two pay periods to take effect". Be warned that you need to watch this carefully. Payroll will be no help at all.
I didn't pay much much attention to the 401k details, but nevertheless I knew that the extra employer contribution only comes once a year; I don't remember where I read or heard this. Furthermore, I think the extra is a matching contribution, so if you are only contributing 6% you won't get the extra matching employer contribution.
The extra contribution is not a matching one, and is based on service credit. TCP-2 participants are supposed to get it regardless of how much one contributes.

I wish Mike could remember where he found this info, looking back, I can't find any referencees to the yearly deposit.

As I said, this isn't a huge problem, just another example of not having ALL of the facts before the deadline.
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