Retirement Savings Plan Summary Plan Description
4.2 401(k) Contributions
In addition to Employer contributions, Participants are allowed to make 401(k) contributions (sometimes referred to as elective deferral or Employee contributions) to their account. Participants may select a deferral classification effective as of January 1 and July 1 of each year which determines the amount of the Participant's hourly wage that is paid into the Participant's account instead of paid in cash. A Participant may elect to defer any percentage of pay in 3% increments up to 24%. Although election changes may be made only semi-annually, a Participant may revoke an existing salary deferral election at any time, subject to reasonable administrative processing.
The maximum amount of Employee contributions that may be made to your account for 2023 is $22,500, though that limit is increased by a "catch-up" amount of $7,500 (to $30,000 total) if you will have attained at least age 50 by the end of the deferral year. These limits adjust annually for inflation. Although Employee contributions reduce a Participant's wages for income tax purposes, they are still subject to Social Security and Medicare taxes.
In late May effective for the next July 1, and in late November effective for the next January 1, a Participant may complete a form changing his or her desired hourly elected deferral amount. That form must be returned to the Plan Office by the date specified in the accompanying notice if any change from the prior 6-month period is to be made for the next 6-month period. The Plan Office will notify your Employer of any wage deferral election changes you submit. If you are later dispatched to another signatory employer, your dispatch form will reflect your current elective deferral percentage amount. Although you may make or change an election to defer your wages only twice per year as described above, you may revoke an existing election (that is, stop all 401(k) contributions) at any time during the year by notifying the Plan Office. Your revocation election may require one or two pay periods to implement.
Excess Deferrals. The annual limit on Employee contributions ($22,500 for 2023) applies to all 401(k) and other elective deferral plans of other employers in which you may participate. Potentially, elective deferrals to your account, when combined with deferrals made to other plans in which you participate, will exceed the limit. If that occurs, notify the Plan Office by March 1 after the end of the year and ask the Plan to issue you a refund of the excess (plus earnings) by April 15 in order to avoid adverse tax consequences. Excess deferrals refunded to you must then be included in your taxable income for the year to which the refund relates. If you contribute to multiple elective deferral plans, you may want to monitor your deferrals as the year progresses and revoke your elections when you reach your annual limit.
If you are an Employee who is working on portability as described in the 1997 portability agreement between the IBEW and NECA, any 401(k) election you have made under the RSP is suspended until you no longer are working on portability. Employees working on portability are not allowed to make 401(k) contributions.