Frequently Asked Questions
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Benefits To Participation
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Glossary
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401(k) MOST FREQUENTLY ASKED QUESTIONS & ANSWERS
1. What is a 401(k) plan?
A 401(k) plan is a savings plan that provides a unique opportunity
to contribute pre-tax dollars to an
investment plan. The plan enables you to save money for your long-term
financial future and receive tax savings not only on your contribution
but on the interest and investment return as well as your company's matched
contributions.
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2. I am too young for this type of a program...why
would I want to enroll?
401(k) is an excellent savings
plan offering an immediate tax savings, quality investments, and
a matching contribution from Fitch & Mather up to the first 5%
you contribute. By not participating in the plan, you are not
taking full advantage of your complete Fitch & Mather compensation package. Even a small contribution rate can provide immediate
tax savings and a faster growth rate on your investments due to
the tax-deferred status of the plan and the matching funds from Fitch & Mather.
No one is "too young" to
start saving money, and few savings plans will give you a 50%
match for doing so...ENROLL NOW!
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3. How do I enroll?
You are eligible to enroll in the 401(k) plan during the Open Enrollment period
following your date of hire. To enroll, just select the "Sign Up"
option on this web site!
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4. What are deductions based on?
Payroll deductions are based your salary from Fitch & Mather.
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5. How is the money taxed that is deposited
into a 401(k) plan?
Your payroll contributions are not subject to federal withholding when made,
only social security (FICA), up to certain limits. Interest earnings and
Fitch & Mather matching contributions are taxed only when withdrawn.
All funds that are distributed out of your account are subject
to taxation. Favorable tax treatment for distributions upon termination
of employment begins after attaining age 55.
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6. How much can I defer into 401(k)?
You can defer up to 15% of your eligible
compensation, up to a maximum deferral of $9,500 in 1997. This amount
does NOT include Fitch & Mather's matching contributions.
Your contributions automatically stop once you reach the maximum
deferral amount, and automatically resume the first pay
period of the following year. Matching contributions continue
until the formula of 50% of deferrals, up to a 5% deferral rate,
has been reached.
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