| 401a Investment Plan |
What is a 401(a) Investment Plan? |
| A 401(a) Investment Plan is a retirement plan governed by Section 401(a) of the United States Internal Revenue Code. |
Who is eligible to participate in the Plan? |
• An employee who has completed thirty (30) years of service as a member of the City of Lakeland Employee Pension Plan or has attained normal retirement age with a minimum of ten (10) years of service as a member of the City of Lakeland Employee Pension Plan and elects to participate in the Plan. Please note, Police Officers and Firefighters may not participate in the Investment Plan, by State law they must participate in a defined benefit pension plan.
• Employees who at the time of hiring are age 52 or older shall have the option of electing to participate in the 401a Investment Plan in lieu of participation in the City of Lakeland pension plan. As indicated above, this option is not offered to Police Officers and Firefighters per State regulations.
• Any employee the Commission of the City of Lakeland designates.
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What contributions are involved in participating in the 401(a) Investment Plan? |
• Each Plan year the Employer shall make contributions to the Plan in an amount determined by the Employer, at its discretion. Each Participant shall receive a contribution equal to a specified percentage of such participant’s compensation.
Current Plan Year Employer contribution is 14.45% of Participant compensation.
• Each participant shall contribute to the Plan, a percentage of his compensation, which is equal to the employee funded contributions percentage for Participants in the City of Lakeland Employee Pension Plan.
• Voluntary after-tax employee contributions are not permitted under this Plan.
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How long will it take to become vested in the 401(a) Investment Plan? |
| A participant will be 100% vested in the Employer Contribution Account upon completion of five years of participation in the plan. The vesting schedule is 20% per year. Employee contributions are 100% vested at all times. |
How is my money invested? |
| When you become a participant, you have a choice of many professionally managed investment options, including several mutual funds. More complete information can be found at www.alleninvestments.com. You should carefully read any prospectus and other relevant investment information before you select your Plan investment options. |
May I split contributions among the different investment options? |
| Yes. You may allocate contributions in whole percentages among the various Plan investment options. |
Once I am enrolled in the Plan, how may I transfer or reallocate amounts from one investment option to another? |
A transfer or allocation change can be requested through the Hartford website at www.retire.hartfordlife.com, or by speaking to a Participant Service Representative at 800-528-9009.
• The Allen & Company website is found at www.alleninvestments.com
The dedicated City of Lakeland phone line is 863-616-6056. The Allen & Company performs the due diligence of each fund offered by the Hartford Company. Additionally, they are committed to offering the very best service to each City of Lakeland employee and their beneficiaries. |
What if I take a job with another employer? |
| If you take a job with another employer that maintains a Section 401(a) plan, you may elect to have all or a portion of your eligible rollover distribution paid directly to that employer’s plan, as long as the other plan will accept a rollover. In the case of such a rollover, the amount rolled over will not be treated as currently taxable income by the IRS. |
When do I receive my Plan money? |
Because your Plan is designed to provide retirement income, you can’t take a distribution from your Plan until after you permanently sever from employment (including death or termination due to total and permanent disability).
The age at which retirement income can be realized from this plan without the 10% early age penalty is 59 1/2. |
What is severance from employment? |
| Severance from employment occurs due to your voluntary termination, involuntary termination or death. A leave of absence or suspension from employment is not a severance of employment. |
Is there a time when I must receive payments from the Plan? |
| Yes, just like IRA’s or other retirement plans, you must begin receiving payments starting with the year after you reach age 70 ½. But if you’re still working when you reach age 70 ½, you will not have to begin receiving payments until the year after you actually leave full-time employment. These payments must satisfy certain minimums based on your life expectancy. A Hartford representative can help with an estimated required minimum distribution amount and can be reached at 800-528-9009. |
How am I taxed on my Plan money? |
| Each Plan payment is taxed as ordinary income when you receive it. A distribution before age 59 ½ may result in a 10 percent federal penalty tax. |
What are my benefit payment options? |
You may elect o have your benefits paid in a:
• Lump sum
• Monthly, quarterly or annual basis in substantially equal installments over a number of years that does not exceed your life expectancy
• Partial lump sum followed by periodic payments |
Can I roll over my Plan Account value into an IRA? |
| Yes. If you receive an eligible rollover distribution, you may make a rollover into an IRA. |
Investment Options |
| Please visit www.alleninvestments.com for the most recent investment options. |
