Secure Your Future With a 401(K)
Arrow Alliance Industries is pleased to offer eligible staff a 401(K) Retirement Plan
The Management Team of Arrow Alliance Industries hopes you'll take this opportunity to make the most of your 401(K) plan. We believe that every employee should take advantage of the 401(K) tax-deferred investment plan, even those with working spouses who have their own investment plan. A 401(K) is a type of retirement plan that allows employees to save and invest for their own retirement. The federal government established the 401(K) in 1981, with special tax advantages, to encourage people to prepare for retirement. They get their catchy name from the section of the Internal Revenue Code which established them (you guessed it, section 401(K)).
Pre-Tax Savings
Through a 401(K), you can authorize your employer to deduct a certain amount of money from your paycheck before taxes are calculated and to invest it in the 401(K) plan. You decide how much money you want deducted from your paycheck and invested during each pay period, up to the legal maximum (the IRS sets an annual dollar limit each year). Your money is invested in investment options that you choose from the ones offered through our company's plan.
The money you contribute to your 401(K) account is deducted from your pay before income taxes are taken out. This means that by contributing to a 401(K), you can actually lower the amount you pay in taxes each pay period. For example, if you earn $1,000 each paycheck, and you contribute 5% ($50), you are only taxed on $950. You don't owe income taxes on the money invested in the 401(K) until you withdraw it from the plan. At the time you choose to withdraw funds from your 401(K) investment, you could be in a lower tax bracket which would enhance the value of your retirement savings.
"Tax-deferred investing" is one of the best benefits of contributing to your 401(K). It means that you can defer -- or postpone -- paying taxes on the money you invest in the plan. Why is this a benefit? The money you contribute on a pre-tax basis comes out of your pay before it's taxed, so more of your money is going to work for you. You don't pay taxes on the money you contribute or any account earnings until you start taking it out, which is usually at retirement when you could be in a lower income tax bracket.
Initial Investments
The Arrow Alliance Industries 401(K) plan provides for enrollment or waiver by all employees. If you do not want to participate, simply specify on the enrollment form. You may also change your contribution level to zero percent (0%). Don't worry, you can re-up anytime you want! This is acknowledged as part of the Employee Onboarding process through Outstaffing, Inc. The 401(K) contributions are sent to the TPA for deposit each payroll. They will be allocated to the investment accounts selected by the employee (default is a Fidelity VIP Freedom Fund). Employees can manage investments and contributions 24/7 on the American National participant portal.
Eligibility
All employees must meet the eligibility requirements listed below for: All contributions.
- You must be 21 years old.
- You must have completed 1 month of service.
The Plan does not allow participation by employees who are:
- Non-Resident Aliens
- Union Employees
Enrollment Periods
On meeting the eligibility requirements you may join the Plan: Immediately eligible.
Contributions
Employee Contributions
Through payroll deduction, you can make pre-tax contributions from 0.00% up to 100.00% of your eligible compensation. An Internal Revenue Service (IRS) dollar limit applies. The dollar limit is $23,000 for 2024. The IRS limit for pre-tax contributions in 2024 is $23,000 ($7,500 catch up for those over age 50). The IRS limit for Roth contributions in 2024 is $23,000 ($7,500 catch up for those over age 50).
Roth Contributions
The Plan allows you to make after-tax Roth contributions to your Retirement Plan. The Internal Revenue Code dollar limit also applies cumulatively to your employee pre-tax contributions and your Roth contributions. The dollar limit is $23,000 for 2024. To qualify for tax-free withdrawals, your money must remain in the account for five years and you must have reached 59 1/2. Unlike Roth IRA's, there is no income limit on who can make Roth contributions to a Retirement Plan. However, Roth contributions may be limited by applicable nondiscrimination rules for Retirement Plans. See your Plan Administrator for more details.
Catch-Up Contributions
If you are age 50 or older and make maximum allowable deferrals to your Plan, you are entitled and may elect to contribute an additional "catch-up contribution". The catch-up contribution is intended to help eligible employees make up for smaller contributions made earlier in their career. The maximum catch-up contribution is $7,500 for 2024. See your Plan Administrator for more details.
Employer Contributions
Match
The plan provides for discretionary matching contributions determined at the end of the Plan Year. To receive the contribution, you must be employed on the last day of the Plan Year and have completed 500 hours of service during the plan year. Discretionary matching contributions will be limited to 3.00% of your eligible compensation.
Profit Sharing
Your employer may make Profit Sharing contributions at its discretion, which will be allocated among all eligible employees, whether or not they make contributions.
Vesting
Vesting refers to your 'ownership' of a benefit from the Plan. The money that you contribute and the money it earns are always 100% vested. Any rollover or transfer contributions you make are also 100% vested.
Employer Match
| Years of Service | Vesting % |
|---|---|
| 2 | 20% |
| 3 | 40% |
| 4 | 60% |
| 5 | 80% |
| 6 | 100% |
Profit Sharing
| Years of Service | Vesting % |
|---|---|
| 2 | 20% |
| 3 | 40% |
| 4 | 60% |
| 5 | 80% |
| 6 | 100% |
Withdrawals*
Funds may be withdrawn from your Plan account in these events:
- Qualified Retirement
- Age 59 1/2 or older
- In-Service Withdrawals
- Financial Hardship
- Termination of Service
- Death
- Disability
In-service withdrawals permitted from fully vested accounts for participants age 59.5 or older
Hardship Withdrawals*
If you have an immediate financial need created by severe hardship and you lack other reasonably available resources to meet that need, you may be eligible to receive a hardship withdrawal from your Plan. Hardship withdrawals may be taken from accounts which are fully vested.
A hardship, as defined by the government, can include:
- Purchase of your primary residence
- Payment of tuition and related costs for the employee, spouse, dependents, or children who are no longer dependents for post-secondary education
- Payment of certain medical expenses
- Prevention of eviction from, or foreclosure on, your primary residence
- Funeral/burial expenses for a parent, spouse, child or dependent
- Repair of damages to employee's primary residence that qualifies for casualty deduction
Termination*
Generally, an employee can cash out a 401(K) whenever leaving a job. If an employee wants to avoid paying taxes on the 401(K) money received after termination, they can roll the amount into an individual retirement account or another retirement plan.
Rollovers
You are allowed to roll over money into your account. See your Summary Plan Description or Plan Administrator for roll over details.
* Please consult appropriate tax counsel.