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401(k) Benefits Explained

What is a 401(k) plan?

401(k) Plans were created to help you save for your retirement in two important ways:

1) Enabling you to save more by using pre-tax (tax deferred) dollars,

2) Permitting you to invest those monies in investment types of your choosing and then accumulatingany earnings on a tax deferred basis

Because your income taxes are based on your income after your 401(k) contributions have been deducted, the taxes you pay are lower than they would have been without the 401(k) contribution. And the investments you make in that plan grow on a tax free basis until they are withdrawn, so they can grow more quickly.

A 401(k) gives even the most undisciplined saver a way to save on a steady basis, by letting you set and forget the weekly amount to be saved (which you can always change for future periods). And because you can put in as little as a few dollars a week, it’s a relatively painless way to save.

In addition, you can generally do better than the meager interest rates most banks offer today in one of the Plan’s fixed income accounts. Or you can invest your money in professionally managed funds for potential growth. With so many investment options to choose from, you can be as conservative or aggressive as you like with your investments.

Moreover, you’re never locked into your investment decisions. You can stop, change or suspend your contributions, as well as change your investment choices, at any time. And if you don’t want to bother with making investment choices, your money will automatically be placed in one of the Fund’s “Target Date” investments. These are portfolios of investments that are professionally managed based on your expected retirement date. For instance, growth is more the focus when your retirement date is far in the future, while capital preservation and current income are the focus when you are nearing or beyond retirement age.

All in all, if you contribute regularly to your 401(k) account, by the time you’re ready to retire, you could be sitting on a pretty nice nest egg!

Finally, the contracts negotiated by the Actors’ Equity with many employers (e.g., Production and LORT contracts) require employer contributions and permit you to defer an additional amount of your income at your discretion. Other contracts offer no employer contribution but flexible salary deferrals on your part. And there are some contracts that do not enable any 401(k) contributions, but the number of these contracts has diminished over the years since the 401(k) Fund was established. You can find out which contracts require or enable 401(k) contributions by clicking here.

We Urge You Begin Making Contributions Today

If you’re eligible to make 401(k) deferrals and ready to get started, just complete and sign a Deferral Salary Agreement Form, and give it to your employer at the theater. We urge you to start today, even if you can only afford to defer 1% of your income each week (the minimum deferral permitted by the Fund). Your future self will thank you!

Employer contributions to your 401(k)

Some employers signed to Actors’ Equity contracts contribute to the Equity-League Benefit Funds 401(k) Plan, while others do not. The terms of the applicable collective bargaining agreement determines who (the employer, the employee or both) is required or allowed to make 401(k) contributions. If the CBA requires employer contributions, it will also set the employer contribution rate.

To learn if the Actors’ Equity contract you are working under requires employer contributions to your 401(k), search the Agreements library at Actors’ Equity site. For additional information, view our 401(k) FAQs.

What are the minimum and maximum 401(k)contributions I can make?

The minimum amount required to make a salary-deferred 401(k) contribution is 1% of your wages for any single pay period.

Salary-deferred employee contributions are subject to both weekly and annual maximum deferrals limits , as described below.

• Weekly maximum deferral – Generally, no weekly amounts above $7,500 will be considered for deferral purposes. For example, if you earn $9,500 in a week, and you have chosen to contribute 1% of your salary, your contribution that week will be $75 – not $95. However, if you are age 50 or older, you may contribute more through a catch-up contribution, as described below.

• Annual maximum deferral – You may not make salary-deferred contributions for any tax year above the maximum annual deferral established by law, excluding any catch-up contributions you are eligible to make. This number changes annually. For the most current information, visit You may not voluntarily make after-tax contributions to the 401(k) Plan.

Understanding “catch-up” contributions

If you are age 50 or older by the end a calendar year, you may contribute an additional amount above the weekly and annual deferral maximums for that year. For 2017, the maximum allowed catch-up contribution is $6,000, if you are eligible. This means that if you are at least age 50, you could defer up to $24,000 of your salary to contribute to your 401(k) in 2017. Like the maximum annual deferral described above, the catch-up contribution amount also changes annually. Visit for the most current information.

Can I rollover funds into my ELF 401(k)?

You may rollover funds from any qualified retirement account:

  • Plans qualified under Section 401(a) or 403(a) of the Employee Retirement Income Security Act (ERISA), excluding after-tax employee contributions
  • Annuity contracts described in ERISA section 403(b)
  • Eligible plans under ERISA section 457(b) maintained by a state, a political subdivision of a state1
  • Individual Retirement Accounts under ERISA 408(a) or (b)2.

Distributions you received as a surviving spouse of a participant in another qualified retirement plan may be eligible for a rollover. Distributions you received as an alternate payee under a qualified domestic relations order “QDRO” under another qualified retirement plan may also be eligible.

The Plan does not accept rollovers of any after-tax contributions made to another retirement plan. Additionally, the Trustees of the 401(k) Plan reserve the right to approve or deny rollovers in their sole and absolute discretion.

1  Or by any agency, or instrumentality of a state or political subdivision of a state

2 Roth IRAs are not eligible for rollover into your Equity-League Benefit Funds 401(k) Plan.

You may want to compare the how much your investments could earn under each plan before deciding to proceed with a rollover. Please understand that Equity-League Benefit Funds staff are neither qualified nor legally permitted to provide investment advice, so consider reviewing your options with a financial planner.

To initiate a rollover from another eligible retirement plan, visit our 401(k) Forms page to download a 401(k) Rollover Statement. Complete and submit this form as directed by the form’s instructions.

Rollovers to your 401(k) account

Once you become a Plan participant, you are eligible to “roll over” funds from another eligible retirement plan(s) into your Equity-League Benefit Funds 401(k). If you choose to do so, all rollovers are kept separate from contributions made by you and/or your employers.

Rolling over funds to another retirement account may delay your taxes

You may delay your tax obligation by rolling over your 401(k) distribution into an individual retirement account or another qualified retirement plan. However, if you don’t plan to roll over any distribution that is eligible for a rollover, 20% of the distribution be withheld for federal income tax. If applicable, your surviving spouse is also subject to this withholding requirement when taking a survivor benefit.

How your 401(k) benefits are taxed

Your 401(K) benefits will be taxed as income when you receive distributions.  However, distributions made to you prior to age 59½ may be subject to a 10% federal excise tax – a tax penalty – in addition to ordinary income taxes.

401(k) survivor benefits

If you die before receiving your Equity-League Benefit Funds 401(k) account balance, your spouse or other designated beneficiary is entitled to your remaining benefit. To name a beneficiary who is not your spouse, you must have written consent from your spouse.

Your surviving spouse or other beneficiary may receive your remaining 401(k) balance through a direct rollover, as a lump sum payment, in multiple payments, in installments or through the single life annuity option.

Remembering the deadline for taking survivor benefits

Distributions generally must be completed by the Dec. 31 that follows the fifth anniversary of the participant’s death. If an annuity is chosen, the annuity must commence by Dec. 31 of the calendar year that follows the year of the participant’s death. Annuity benefits may be received throughout the life of the beneficiary, or over a defined period that does not exceed the beneficiary’s life expectancy.

Paying benefits when there is no spouse or beneficiary

If you have no surviving spouse and/or designated beneficiary, the account balance will be distributed to your family members or estate. The distribution will occur by Dec. 31 of the calendar year that includes the fifth anniversary of your death. When there is no spouse or beneficiary, distributions are paid in a lump sum or sums in the following order of priority:

  1. Your natural and adopted children and children of deceased children1.
  2. Your parents in equal shares.
  3. Your brothers and sisters, and nephews and nieces who are children of deceased brothers and sisters1.
  4. Your estate.

1 The balance will be distributed per “stirpes,” meaning each branch of the family will receive an equal share of an estate.

For complete details about the Equity-League Pension and 401(k) plan, refer to the Equity-League Benefit Funds Pension Plan and 401(k) Summary Plan Description. If you have additional questions or need assistance, contact the Equity-League Benefit Services Department at (212) 869-9380 (New York City) or (800) 344-5220.