401k Prudential

Plan Information & Rules

  • Plan Number: 002003
  • Plan Type: 401(k) Retirement Plan
  • Plan Address: DST Supplemental Retire Plans
    3200 Atlantic Avenue 2nd. Floor
    Raleigh, NC 27604

The 401(k) Retirement Plan

The North Carolina 401(k) Plan is one of the best ways to save money for your retirement years. The 401(k) feature allows you to decide what percentage of your gross annual earnings you would like to contribute for retirement.

Allocation

You may change your investment allocation for future contributions at any time.

Contribution

You may be eligible for an employer contribution. Please see your employer for additional information. Your account is always 100% vested.

The Federal maximum limit for elective deferrals in 2020 is $19,500. If you will be age 50 or older in 2020, you may also contribute an additional catch-up amount of $6,500 extra in 2020, for a total of $26,000. The contribution limits can include pre-tax contributions, Roth after-tax contributions, or a combination of the two.

You may increase or decrease your contribution rate at any time. Changes to your contribution rate may be effective with your next or following pay cycle. You may stop contributions at any time. You may contribute up to 80% before tax as allowed by your employer.

Exchange

You may make transfers between investment options at any time

Fee

A flat fee ($7.75/quarter; $31.00/year) for record-keeping and communications services became effective January 1, 2016. This was formerly calculated as a fixed percentage of your account balance. The fee will appear as a “Fee” within Transaction History.

Loan

  • Only one outstanding loan is allowed at one time
  • Maximum Loan Amount is limited to 50% of your vested account balance or, if lower, $50,000 minus the difference between the highest outstanding loan balance in the previous 12 months and the current outstanding loan balance
  • Repaying an outstanding loan will not necessarily increase the amount permitted as a new loan
  • Loan activity related to any of your employer’s plans is your responsibility to ensure the amount borrowed does not exceed the loan limits as defined in your plan’s loan policy, taking into account any loans under other plans
  • Failure to monitor loan limits may result in treatment of your loan as a taxable distribution
  • Minimum loan amount $1,000
  • Loans are available while you are actively employed, loan repayments are made via payroll deductions
  • Term of the loan may not exceed 5 years
  • There is a 15 day waiting period between satisfying a loan and taking a new loan
  • Interest Rate - Prime plus 1%
  • Application Fee - $60 for each loan application
  • Upon termination, an existing loan may be converted to monthly coupon payments. A $100 conversion fee will apply.

Tax

A 10% Internal Revenue Service penalty tax may be due on disbursements of funds prior to age 59 1/2. Certain conditions are exempt from this including the following: Disability, Death, and Retirement. You usually pay taxes at your current income tax rate for the year in which you receive the money. In the event of your death, your account balance is paid (and is income tax payable) to your beneficiaries and they are responsible for all taxes.

Withdrawal

  • Effective 1/1/2019, Hardship Changes related to Bipartisan Budget Act: 
    • No suspensions for new hardships taken
    • No loan required prior to taking hardship 
  • Elect Systematic disbursements including Substantially EqualPeriodic Payments. 
  • Uponseparation from service, retirement or disability, you may choose to: 
    • Receive afull or partial lump sum payment 
    • Deferreceipt until age 70 1/2 
    • Roll overfunds to another qualified Retirement Plan, Traditional IRA, or Roth IRA
  •  You may begin taking withdrawals from your plan uponreaching age 59 ½. You must meet one or more of the following to qualify for ahardship withdrawal: 
    • Major medical expenses
    • Purchase of a primary residence
    • Payment to prevent eviction from your home 
    • Payment for higher education. 
  • In-Service Withdrawals are subject to a minimum amount ofthe lesser of $ 500 or your total account balance. 
  • In the event of death, your account balance is paid (and isincome tax payable) to your beneficiaries and they are responsible for alltaxes. 
  • Distributions requested from this plan will not be processeduntil 60 days after the date you separate from service, unless you are over theage 59 1/2 or your separation is due to retirement. 
  • If your plan has distribution fees, distributions thatinclude both Roth and Non-Roth money will be processed as 2 separatetransactions and will be subject to separate transaction fees. You will see 2transaction fees after the transaction has processed. 
  • You may choose to have any disbursement check express mailedfor a fee of $25.