What Is Changing
1. What is a Roth 401(k) account and is Unisys planning on implementing one?
1. When will Unisys offer retirement planning workshops?
Typically, participants in defined contribution plan have made salary deferrals on a before-tax basis and paid income taxes upon distribution of the account assets. Part of this strategy was based on the concept that participants in retirement would be eligible for a lower personal income tax rate, helping to lessen the income tax consequence for the withdrawal.
Beginning January 1, 2006, Federal laws governing 401(k) defined contribution plans were changed to allow plan sponsors to amend their savings plans to permit participants to designate all or a portion of their elective salary deferrals as what’s known as Roth 401(k) contributions. Roth 401(k) deferrals differ from more traditional qualified defined contribution retirement plan salary deferrals in these ways:
Designated Roth 401(k) contributions are made on an “after-tax basis,” that is, the eligible pay is taxed as regular income before being contributed to the participant’s account. Upon qualified distribution, however, Roth 401(k) contributions and all investment results are free from Federal income taxation.
The availability of Roth 401(k) contributions provides plan participants with a different option for the Federal income tax treatment of their eligible pay deferrals and their distributions.
At this time, Unisys has no plans to add a Roth 401(k) account to the Savings Plan.
In the fall, Unisys will offer on-site workshops at several Unisys locations to help you with your retirement planning and your Savings Plan questions. Once the dates of the workshops are finalized, we’ll communicate the details to all employees.
But don’t wait to learn more. Retirement planning Web workshops are immediately available through the Fidelity Retirement Resource Center at: http://personal.fidelity.com/retirement/?bar=c. You can register for and attend these Web workshops at any time to obtain specific information about making your investment choices. The workshops offered include: Retirement Savings Basics, Rebalancing Your Portfolio, Evaluating Stock Mutual Funds, Basics of Estate Planning, and College Planning Web Workshop.
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