Wednesday, September 18, 2019

Frequently Asked 401(k) Questions


Q.

How can I put money into my 401k Plan?

A.

You may only contribute to the 401k Plan on a pre-tax basis through salary deductions up to the annual statutory limit. If you are interested in participating, please contact the Plan Administrator at (503) 224-0048 or (800) 547-4457, extension 1683, for an Enrollment Packet.

Q.

How can I change my existing investment fund allocations?

A.

You may change your existing account balance's investment allocation via the web at ibu.trsretire.com or by contacting Transamerica at (800) 755-5801. You will need your Personal Identification Number to access your account.

Q.

 How can I change the allocation of my future contributions?

A.

You may change your future contributions' investment direction via the web at ibu.trsretire.com or by contacting Transamerica at (800) 755-5801. You will need your Personal Identification Number to access your account.

Q.

How can I get information on the mutual fund options?

A.

Fund information is available from the Trust Office, via the web at ibu.trsretire.com, or by contacting Transamerica at (800) 755-5801. When contacting Transamerica, you will need your Personal Identification Number to access your account.

Q.

How do I get a Personal Identification Number (PIN)?

A.

You may set up or request a new PIN via the web at ibu.trsretire.com, or by contacting Transamerica at (800) 755-5801. Without a PIN, to reach a customer service representative press 0 (zero).

Q.

How often should I expect to receive an account statement?

A.

Quarterly. Participant statements are mailed by the Plan's record keeper, Transamerica, to your address of record on or about the 15th day following the end of each calendar quarter. To request a duplicate or replacement statement, contact Transamerica via the web at ibu.trsretire.com, or by contacting Transamerica at (800) 755-5801. You may also request that electronic statements be emailed to you via the website ibu.trsretire.com.  

Q.

How do I request a distribution from the Plan?

A.

To request a distribution, print the Distribution Application Instructions and Distribution Request Form or contact the Trust Office to request that a Distribution request from be mailed to you. Completed Distribution Request Forms must be forwarded to the Trust Office for review and approval.
Your Distribution Request Form will be reviewed, and if complete, the approved request will be forwarded to Principal for processing. Your check should be mailed within three weeks from the date your Distribution Request Form was received by the Trust Office, although the Trust Office does have up to 90 days to complete the request. Direct deposit for direct payments is available and recommended. If your request is not approved, you will be notified by letter.

Q.

What taxes or penalties apply to my retirement plan distribution?

A.

 If you request a distribution payable to you, mandatory 20% federal income tax withholding will apply and minimum mandatory state income taxes will also apply. Furthermore, if you are under the age of 59½, you may also incur an additional 10% early withdrawal penalty. Unless you request otherwise, the 10% early withdrawal penalty is not withheld from the distribution.

If you elect to rollover your account balance to an IRA or another qualified retirement plan, no taxes or penalties would apply at the time. Please note that some distributions are not eligible for rollover. Specific questions relating to your individual situation should be directed to your tax advisor and we suggest that you read through the Special Tax Notice included with the Distribution Request Form.

Q.

How can I change my name or address?

A.

To change your name or address, please contact the Trust Office. You may also mail your change the Trust Office, Attn: IBU 401k.

Q.

What will happen to my account if I should die?

A.

If you should die before having received your entire account balance, the remaining balance is payable to your beneficiary(ies). Your spouse is automatically your beneficiary, unless you designate, and your spouse consents, in writing on the Beneficiary Designation Form to another beneficiary. You may print the Beneficiary Designation Form or contact the Trust Office to request a Beneficiary Designation Form be mailed to you.

Q.

What should I do if I'm going through a divorce?

A.

If you are going through a divorce and expect that a portion of your 401k account will be awarded to your spouse, please contact the Plan Administrator at (503) 224-0048 or (800) 547-4457, extension 1683 and request a sample Domestic Relations Order.

There are specific requirements that a Domestic Relations Order must meet to be deemed Qualified under the Plan, the sample Order may be provided to your attorney as a guide in preparing your Order.

Furthermore, we recommend that you provide the Plan Administrator with a draft or preliminary copy of your Order. The Plan Administrator and the Plan's Legal Counsel can review the preliminary Order to ensure that the it meets the requirements necessary to be deemed a Qualified Domestic Relations Order under the IBU 401k Plan.

Q.

How do I request a participant loan?

A.

To apply for a participant loan, contact Transamerica via the web at ibu.trsretire.com or by contacting Transamerica at (800) 755-5801.

Q.

How do I find out my available loan balance?

A.

Contact Principal via the web at ibu.trsretire.com or by contacting Transamerica at (800) 755-5801.

Q.

How much can I borrow and what are the loan term limitations?

A.

The amount of your loan may not be less than $1,000 or more than the lessor of (1) 50% of your vested account balance nor less than $1000 or (b) $50,000 reduced by the highest outstanding loan balance from the Plan during the preceding 12 months. The maximum loan term is 5 years.

Q.

What interest rate will I be charged?

A.

The interest rate assigned to your loan is the rate charged by a commercial bank and interest is not tax deductible. Your applicable rate is assigned when you apply for a loan.

Q.

What if I miss a payment?

A.

A participant loan becomes delinquent when any one payment is not received when due, and loans will be deemed in default if the payment is not made up within 90 days of the original due date

If you default on your loan the IRS will be notified and you will be issued an IRS Form 1099-R. The IRS imposes severe tax consequences for default loans. You will be required to pay ordinary federal, and if applicable, state and local income taxes on the total outstanding loan balance and an additional IRS penalty tax of 10% may apply. You should consult a tax advisor for additional information concerning loans from a qualified retirement plan.

If you default on your loan, you will be unable to initiate any future loans unless the defaulted loans was been repaid.