401(k) Toolkit - Frequently Asked Questions
Who are my 401(k) plan contacts? General Questions
Contact Transamerica by phone toll-free at (800) 401-8726. Transamerica representatives are available Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern Time. You may also email questions by going to www.-ta-retirement.com, and selecting Contact Us in the top right hand corner of the screen. Investment Advice
Contact Renee Scherzer at 480.282.4424 or via email at renee.scherzer@lpl.com
Where can I obtain my account balance?
When you log into the Web site, you are automatically taken to the Account Information page, which contains your account balance. You can also check your balance over the phone via our Interactive Voice Response (IVR) system. Visit Contact Us or log in and visit the Phone Access section under the Transactions menu to obtain the phone number to the IVR system How do I make an address change?
You can make address changes online by logging into the Web site and visiting the Account Information section and selecting Personal Profile.
Can I take out a loan from my account balance?
Your employer allows 401(k) loans of up to 50% of your account balance or $50,000. The minimum loan amount is $1,000, so you must have a balance of at least $2,000 in your account. Employees have the option of choosing a repayment period of up to 5 years, but must remember that any amounts remaining unpaid upon termination of service are considered a distribution and will be taxable. Loan repayments are made on an after-tax basis. To request a loan:
- Log on to your Transamerica account at www.ta-retirement.com and select Transactions in the left-hand column.
- Click on “Access Loan Information” in the middle of your screen.
- Click on “Model a Loan” to get an estimate of what the payments will look like.
- Click on “Request a Loan” to go through the loan process.
- Transamerica will send documents and a check directly to you.
Can i take a distribution?
Your employer allows distributions for hardship or in-service withdrawals at age 59 ½ and upon termination or death.
- To request a distribution:
- Log on to your Transamerica account at www.ta-retirement.com and select Transactions in the left-hand column.
- Click on “Request a Distribution” in the middle of your screen.
- Click on “Request Distribution” and follow the instructions.
Transamerica will send documents and a check directly to you. What are some of the advantages and disadvantages of borrowing from a retirement plan account?
If you borrow from your own account and become your own creditor. One potential cost is the loss of tax-deferred interest. You lose the benefit of future compounding when the money is not in your account. Your loan repayment (principal and interest) goes directly back into your plan account. Although you earn the loan interest, paying it directly to your account, you could earn a potentially higher return on the money through your plan’s investment choices.
Competitive interest rates are typically 1% over the prime rate. You make your loan payments (principal and interest) with after-tax dollars. When you retire and take distributions out of your plan, the interest you’ve paid on the loan will be taxed again.
How do I repay my loan and can I repay it early?
Loan payments are due each pay period via payroll deduction. The payroll frequency may be weekly, bi-weekly, or monthly. An amortization schedule will be sent to you when you take out the loan so that you will be aware of your payment amount and frequency.
You may repay your loan in full at any time. However, you may not make partial re-payments. To repay your loan in full you must send a cashier’s check or money order to the plan administrator at your company, who will send the check and advise Transamerica that your loan is paid in full.
Can I take more than one loan at a time?
No
What is vesting? Am I vested?
Vesting refers to the ownership of your account balance. You are always 100% vested in your contributions to the plan, any earnings on your contributions, and any money you have rolled over into your account from another plan. On the other hand, contributions made by your employer to your account may be subject to a vesting schedule. Vesting in company contributions is based on years of service with the company, which in most cases starts to accumulate on your hire date (not to be confused with your start date in the retirement plan). To see your company’s vesting schedule, as well as your specific vesting rules, please see your Summary Plan Description, or speak with the plan administrator at your company.
Because it’s a loan and not a distribution, you don’t incur federal or state taxes upon receiving the loan funds. However, if you default on repayment you will be taxed on any unpaid loan balance as a distribution. If you stop making loan repayments, the outstanding loan balance is considered a distribution and will be subject to federal and possibly state income tax. In addition, you may also be subject to an IRS 10% early withdrawal penalty if you’re under 59½ years old.
Repayments are easy and convenient though payroll deductions. Depending on the amount of your loan repayments, they may affect your ability to continue participating in the plan at the same contribution percentage.
You select the term of your loan, usually between one and five years. Loans taken for the purchase of a principal residence may allow longer repayment terms.
Can I roll over the balance in my qualified plan into a Transamerica IRA?
Yes, or any other IRA. When a qualifying event (separation from service, attainment of age 59 ½, retirement, death, or disability) occurs, you may obtain a distribution request form from your plan administrator. Complete the form noting the IRA account you would like your balance to be rolled into, and return it to the plan administrator at your company.
Before you become eligible for a rollover distribution, your plan administrator is required to give you a written notice outlining important tax rules that affect your distribution. This notice will explain that there are two ways to accomplish a tax-free rollover to an IRA:
- You may complete a direct rollover by having your full distribution paid directly to an IRA custodian, avoiding federal income tax withholding on your distribution; or
- You may complete an indirect rollover by having the distribution paid directly to you. With this option, 20% of the funds are automatically withheld for federal income taxes (state income taxes may also be withheld). You will then have 60 days from receipt of the payment to roll over the funds to an IRA. Be aware, however, that since 20% was withheld, you must make that portion up when you roll over your funds to the IRA. If you do so, you may apply for a full refund of the 20% at tax time. If you do not, taxes and penalty will apply to that 20% and your refund, if any, will be less.
Are there tax implications involved in rolling over my account?
Before you become eligible for a rollover distribution, your plan administrator is required to give you a written notice outlining important tax rules that affect your distribution. This notice will explain that there are two ways to accomplish a tax-free rollover to an IRA:
- You may complete a direct rollover by having your full distribution paid directly to an IRA custodian, avoiding federal income tax withholding on your distribution; or
- You may complete an indirect rollover by having the distribution paid directly to you. With this option, 20% of the funds are automatically withheld for federal income taxes (state income taxes may also be withheld). You will then have 60 days from receipt of the payment to roll over the funds to an IRA. Be aware, however, that since 20% was withheld, you must make that portion up when you roll over your funds to the IRA. If you do so, you may apply for a full refund of the 20% at tax time. If you do not, taxes and penalty will apply to that 20% and your refund, if any, will be less.
What is the maximum amount that I can contribute to the plan?
The IRS defined maximum dollar amount a participant may contribute to a retirement plan for the year 2009 is $16,500*. You may also be eligible to contribute an additional “catch-up contribution” of $5,500* if you are over age 50 (if allowed by your plan). Your employer may also contribute to your retirement plan account. The total annual contribution, including employer contributions, but excluding “catch-up contributions”, cannot exceed $49,000 or 100% of total compensation, whichever is less.
*COLA increase, if any, in $500 annual increments.
Can I download my investment choice information or look up ticker symbols so that I can track my investments in Quicken?
Currently our system does not allow you to download investment choice performance or account values into Quicken. You can check the performance of your investment choices daily by visiting the Investment Choice Performance page of our Web site. You may also use our Personal Portfolio Tracker, which allows you to track your current investment choices online, as well as other alternative portfolio scenarios made up of investment choices available in your plan.
What happens to my retirement account if I die?
A distribution is paid to your designated beneficiary(ies). If there are no beneficiaries listed, the distribution will be paid to your spouse, children, or estate, depending on the plan provisions and state law.
If I am a beneficiary and the participant has passed away, what do I need to do?
You will need to contact the plan administrator at the participant’s company and request a death distribution from the account. You may have this account balance paid directly to you, subject to federal and state, taxes. Or, if you are a spousal beneficiary, you may roll it over to an IRA.
How often should I change my investment choices?
There is no uniform answer to this question. It is really a matter of preference. Some people will review their investment choices when they get their statements, while other may only look at them once a year. However you choose to monitor your investment choices, make sure you have a strategy in mind. If a life event causes your strategy or goals to change, then that is probably a good time to make sure your investment choices are in line with your new goals.
How often will I receive my account statements?
You will receive an account statement after the end of each plan quarter. For any questions regarding your statements contact the plan administrator at your company.
I am no longer employed with the company and need to access my money. How can I take my money out?
If you have more than $5,000 in your account you may leave your money in the plan. If your balance is $5,000 or less you may be required to take a distribution. Either way when you leave the company you may roll over the money into an IRA offered through SecurePath, a service by Transamerica Retirement Management, Inc., click here or call (866) 691-0300 or another IRA or qualified plan. You may also receive a lump sum distribution, subject to federal and any state income tax. In addition, if you are under age 59 ½ a 10% federal income tax early withdrawal penalty and state income tax penalty may apply.
Contact the plan administrator at your previous employer for more information about your distribution options and to obtain the necessary forms to withdraw your money from the plan.
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