What is a 401(k) plan?
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 And the investments you make in that plan grow on a tax free basis until they are withdrawn, so they can grow more quickly.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)
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?
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 www.irs.gov. You may not voluntarily make after-tax contributions to the 401(k) Plan.
Understanding “catch-up” contributions
Can I rollover funds into my ELF 401(k)?
- 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
Rolling over funds to another retirement account may delay your taxes
How your 401(k) benefits are taxed
401(k) survivor benefits
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
Paying benefits when there is no spouse or beneficiary
- Your natural and adopted children and children of deceased children1.
- Your parents in equal shares.
- Your brothers and sisters, and nephews and nieces who are children of deceased brothers and sisters1.
- 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 Equity-League Benefit Funds 401(k) benefits, 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 Funds Retirement Services Department at (212) 869-9380 (New York City) or (800) 344-5220.