Deferrals from Your Pay
The Annuity Plan gives you the chance to make additional contributions through pre-tax payroll deductions, which are known as deferral contributions or 401(k) contributions. In order to make deferral contributions, you must first obtain the correct form by calling 866-288-9261 (toll free) or 203-288-9261, ext. 274, or writing to the Fund Office. You need to fill out the form completely and accurately, and then:
- Provide the original form to your employer (since your employer will be making deductions from your pay and forwarding them to the Fund Office)
- Provide a copy to the Fund Office (to ensure your employer is following your instructions).
Deferral contributions are beneficial to you in at least two ways. First, since you are making additional contributions to the Plan, you will likely end up with a larger overall Plan benefit when you are eligible for a distribution. Second, because these deferral contributions are deducted from your pay before you receive the money in hand, these contributions are not taxable to you as income at the time you receive your paycheck. Instead, taxes will be due when you take the money out of your deferral contributions account.
You may choose from the following deferral amounts: $0.50, $1, $2, $3, $4, $5 or $6 of the compensation otherwise payable to you on an hourly basis. In addition, there is a special rule for those eligible for catch-up deferral contributions.
You may start such deferral contributions, change the amount you are having deferred, or stop deferral contributions in accordance with the Plan's procedures. If you want to change or stop your deferral contributions, you will need to fill out a new form and provide it to your employer, with a copy to the Fund. Again, contact the Fund Office to get the proper form.
IRS Limits on Your Deferral Contributions
Your deferral contributions to this Plan (and all other 401(k) plans and 403(b) plans combined) are subject to an annual dollar limit. For the 2020 calendar year, the dollar limit is $19,500.
We want you to know that this dollar limit is adjusted periodically Internal Revenue Service (IRS) in accordance with the tax laws. You should contact the Fund Office for more details about the dollar limit, and let us know if you make other 401(k) or 403(b) deferrals under another retirement plan in a calendar year that you make deferral contributions to this Plan.
Depending on the overall level of participation and the mix of participants with regard to non-highly compensated and highly compensated employees, the IRS limit noted above for those who fall into the highly compensated category may be set at a lower amount due to complicated IRS tests. Any excess contributions which are amounts over the annual IRS limit must be withdrawn the year you make them or no later than April 15th of the following year.
SPECIAL RULE: If you will be age 50 or older by the end of any calendar year beginning on or after January 1, 2020, you can make catch-up deferral contributions to the Plan during that particular calendar year. Catch-up deferral contributions are additional deferral contributions that would otherwise exceed applicable Plan or IRS limits. The catch-up deferral contributions are subject to all other Plan rules, and the catch-up limit for 2020 is $26,000. This limit on catch-up contributions is also subject to adjustment by the IRS in future calendar years.