IAM National 401(k) Plan

Many IAM members have asked for a way to put aside their own money for retirement, which they can do on a tax-advantaged basis through the IAM National 401(k) Plan. The plan is a valuable complement to the National Pension Plan, Social Security, and the other investments and savings participants may have for retirement.

View a summary of the IAM National 401(k) Plan (PDF)

Here are highlights of the plan:

  • Contributing to your account. If you choose to participate, you set aside your own money for retirement. You can contribute 1% to 50% of your eligible pre-tax pay, up to IRS-defined limits. After-tax contributions (up to 15%) are permitted. Participants age 50 or older can make additional "catch-up contributions," up to IRS-defined limits.
  • Investing your contributions. You can invest your contributions in several investment options, and you can change your investment elections at any time. The plan also provides you with access to personalized retirement planning advice from qualified advisors. View the IAM National 401(k) Plan's investment options (PDF)
  • Tax-favored treatment. Your balance (your contributions plus investment earnings) grows on a tax-deferred basis. Your contributions and investment earnings are taxed only on withdrawal, as governed by federal regulations.
  • Accessing your account. Prior to retirement, you can access your account through loans or through hardship withdrawals (if your hardship meets the plan's requirements). In addition, at age 59 ½ and after, you can make withdrawals with no penalty while you are still working in covered employment. You can withdraw your after-tax contributions (if any) at any time.

Prudential administers the IAM National 401(k) Plan. Your account information is available online at www.prudential.com/online/retirement. You can also contact Prudential customer service representatives at 1-877-PRU-2100 (1-877-778-2100) to get information about your account.  If you are interested in e-delivery of your 401(k) statements, please view "Don't Wait for the Mail" (PDF).

Prudential also offers a Retirement Planning website - click here to read about it (PDF) - or go to http://www.preparewithpru.com/.

Note: You may have been auto-enrolled in the plan if your employer became a contributing employer to the IAM National 401(k) Plan after January 1, 2007, or when your collective bargaining agreement renews after January 1, 2007. If so, a 3% before-tax contribution will automatically be deferred from each paycheck and invested in the age-appropriate Manning & Napier Retirement Target Fund closest to your expected retirement age of 65, unless you opt out within 60 days of the date you receive notice your enrollment. You can opt out either online or by phone. You may also change your contribution percentage and investment options at any time, either online or by phone.

If your employer is not participating in the IAM National 401(k) Plan, talk to your IAM representative to learn more about how to negotiate the plan into your contract. After the plan is negotiated into your collective bargaining agreement, you will be eligible to participate immediately after acceptance is completed.

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Gwen Lewis—Garnett Auto Supply
LL 708—Wichita, Kansas
Plan Participant

Frequently Asked Question (FAQ)

If the National Pension Plan is better, why are 401(k) plans so popular?

401(k) plans are popular with employers because they shift the expense and investment risk to employees. They are popular with employees because 1) payroll deductions are made on a before-tax basis (which allows employees to defer paying taxes on the portion they contribute to the plan); 2) they often offer a choice of investment options and 3) account balances are generally accessible either through loans, hardship withdrawals or in-service withdrawals, or at the time an employee leaves the employer.

Can I be in both the National Pension Plan and a 401(k) plan?

Yes. The IAM National Pension Fund also offers the IAM National 401(k) Plan to participants who have negotiated the National Pension Plan into their collective bargaining agreement. Also, if your employer offers a defined benefit plan to collectively bargained employees, you can participate in the IAM National 401(k) Plan.

Who manages the Fund's assets?

The Fund's assets are managed by professional investment managers who follow the investment objectives set by the Fund's investment committee.

What does the Fund do with earnings on investments?

The Fund is a not-for-profit organization. All investment earnings are used to provide benefits to pensioners and beneficiaries, and to cover the cost of running the Fund.

Is the Fund financially sound?

Yes. Unlike many single-employer or company pension plans, the National Pension Plan is well funded and financially sound. View copies of the plan's Annual Funding Notice here.

How is the plan funded?

The plan is funded through employer contributions and earnings on investments.

Who manages the Fund's assets?

The Fund's assets are managed by professional investment managers who follow the investment objectives set by the Fund's investment committee.

What does the Fund do with earnings on investments?

The Fund is a not-for-profit organization. All investment earnings are used to provide benefits to pensioners and beneficiaries, and to cover the cost of running the Fund.

Is the Fund financially sound?

Yes. Unlike many single-employer or company pension plans, the National Pension Plan is well funded and financially sound. View copies of the plan's Annual Funding Notice here.

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