After-Tax Spillover for 401(k) Available Jan. 28

Jan. 25, 2010

 

Do you ever reach the IRS limit on combined pre-tax and/or Roth after-tax contributions to the Farm Credit Foundations 401(k) plan? If so, then the new after-tax spillover feature is for you.

No More Monitoring Your Paychecks to See if You Reached the Limit

With the new auto spillover feature, just make one election that will automatically switch your contributions every year to traditional after-tax when you reach the IRS limit each year ($16,500 in 2010, or $22,00 if you reach age 50 or over during 2010). Your election will continue year after year, subject to other IRS limitations*, unless you make a contribution rate change.

 

Receive Your Employer Match, Even After You Reach the Limit

If you do not enroll in the spillover feature, the employer match stops when you contributions are suspended when you reach the IRS limit. To keep receiving your employer match for the rest of the year, you can make after-tax contributions.  Therefore, you will receive the maximum employer match if you continue to contribute at least 6%.

 

How to Enroll After-Tax Spillover

You can enroll in the after-tax spillover beginning Jan. 28.  Just log in to your account on mylife.newyorklife.com, and go to the Contribution Rate Change menu under the Manage My Account tab. You can also call BenefitsComplete at 1-800-294-3575. Contribution rate changes completed by 4 p.m. Central Time on Thursday, January 28, will take effect with the February 12 semi-monthly pay check.

 

Access Your Earnings Statement

You may access your Earnings Statement on Ceridian Self-Service each pay period to keep track of all your year-to-date contributions including any after-tax spillover contributions you elect.  You may also view contribution postings to your 401(k) account at mylife.newyorklife.com by accessing the Detailed Statement Online menu item under the View My Account tab.

 

* Although there is no dollar limit on traditional after-tax contributions, the IRS does have a limit on total employee and employer contributions to the 401(k) Plan.  The limit for 2010 is $49,000 (plus an additional $5,500 pre-tax and/or Roth after-tax contributions if age 50 or over).  And, the IRS limits compensation that can be used for employer matching contributions to $245,000 in 2010 ($360,000 if you first participated in the 401(k) plan, or any predecessor plan, prior to 1996).