CUNA Mutual introduces online tools to support Roth 401(k)
Calculators, brochures and stuffers available for CUs considering, implementing new retirement savings program
MADISON, WI – CUNA Mutual Group has developed a suite of online information and implementation tools for credit unions interested in offering a Roth 401(k) program to their employees.
Beginning Jan. 1, 2006, employers can allow workers to make after-tax Roth contributions to their 401(k) plan without paying personal income taxes upon withdrawals at retirement. Credit unions can add this new 401(k) feature, made possible by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), to existing 401(k) programs through a simple plan amendment.
Prior to 2006, 401(k) plans allowed employees to set aside pre-tax dollars that would be taxable (along with all earnings) upon distribution. Some 401(k) plans also allow employees to make after-tax contributions, with earnings taxable at distribution. All investment earnings on Roth 401(k) contributions, however, are tax-free at distribution, which could make it a valuable benefit for younger workers and higher-paid employees.
Final IRS regulations on Roth 401(k) contributions and model language for amending plans have not been issued. In the meantime, CUNA Mutual is providing the following tools on its Web site to assist credit unions in determining whether a Roth 401(k) is a good fit for credit unions and their employees:
· Employer Educational Brochure - “Roth 401(k): Understanding the New Tax Option.” Designed to help retirement plan administrators understand Roth and the administration required.
· Employee Educational Brochure and Payroll Stuffers. Designed to educate employees about the Roth 401(k) and help them make an informed decision on whether to participate.
· Roth 401(k) Analyzer/Calculator. This easy-to-use online calculator enables employee participants to make informed decisions on whether to designate all or a portion of their elective deferrals as pre-tax or after-tax (Roth) contributions. In addition, the Gap Analyzer component of the calculator allows participants to perform a gap analysis to determine account balances to meet retirement income needs.
“CUNA Mutual has made information available to assist employers in the decision-making process on whether to amend their plans to include Roth,” said Tom Eckert, senior vice president pension operations. In addition, we’re prepared to support employers electing Roth with a comprehensive package of online and print tools and other resources to educate their employees.”
For more information, go to http://www.cunamutual.com, or call CUNA Mutual’s Retirement Service Center toll-free at 800-999-8786.
CUNA Mutual Group is the leading provider of financial services to credit unions and their members worldwide. More information on the company is available on the company’s Web site at http://www.cunamutual.com.