NC 401(k) Plan
The NC 401(k) Plan is administered by the NC Department of State Treasurer and provided by Prudential Retirement. Originally designed for private sector employers, the 401(k) is a defined contribution plan, which means an employee may designate how much is contributed to his/her account, and has control over how contributions are invested. The NC 401(k) Plan is a supplemental retirement program that allows employees to set aside payroll-deducted contributions on a tax-deferred or after-tax (Roth) basis. Selecting a pre-tax deduction means taxes are not paid on contributions or earnings until the time of distribution. In an after-tax (Roth) deduction, taxes are paid at the time of the deduction and these funds can be withdrawn in retirement tax-free.
Who's Eligible to Participate?
The NC 401(k) Plan is available to university employees who actively contribute to the North Carolina Teachers and State Employees' Retirement System (TSERS), the North Carolina Law Enforcement Officers' Retirement System (LOERS) or the UNC Optional Retirement Program (ORP). Employees must be permanently employed at least three-quarters time (30 hours per week) for 9 or more months per year on a recurring basis.
How Do I Enroll?
Eligible employees may enroll in the NC 401(k) plan at any time. Employees may obtain enrollment information at www.ncplans.prudential.com or by calling the NC 401(k) Plan service center at 1-866-NC-PLANS.
How Much Can I Contribute?
You may contribute up to 80% of your compensation on a pre-tax or after-tax basis. The federal maximum contribution limit for the year 2009 is $16,500. If you are age 50 or older, you may contribute an additional $5,500 in 2009. Contributions can be changed at any time by logging into your Prudential account, by submitting a contribution change form to the Benefits Office, or by contacting the NC 401(k) Plan service center at 1-866-NC-PLANS.
Note: Combined, 401(k), 403(b) and 403(b)(7) contributions cannot exceed the federal annual maximum contribution limit; however, additional contributions may be made to the NC Deferred Compensation Plan (457). There is a Supplemental Retirement Plan Comparison available.
When Do I Become Vested?
Employees are immediately 100% vested in their contributions made to the NC 401(k) Plan. Law Enforcement Officers become vested in the University's 401(k) contribution simultaneously with LEORS vesting.
What Investment Choices Do I Have?
Investment choices can be made more easily through GoalMaker, a free program that helps participants select investment options based on personal needs and risk tolerance. Investment-savvy employees or those willing to take a bigger risk are able to customize investments to meet personal financial strategies. Whether new to making investment choices, or well-seasoned, the NC 401(k) Plan offers many institutional investment options.
When Can I Access My Funds?
The NC 401(k) plan is a long-term retirement savings vehicle; however the Plan has several built-in features that allow a participant to access funds under certain circumstances.
Loans
Participants may borrow from his/her own account, with loan amounts varying based on the account balance. Principal and interest are paid by through post-tax payroll deductions. Click here for Plan Highlights and more information about Loan Rules. (hyperlinks)
Hardship Withdrawals
The NC 401(k) Plan provides hardship withdrawal options which may be subject to Plan Administrator approval. Qualifying reasons may be for payment of major medical expenses, purchase of a primary residence, payment to prevent eviction from the home or payment for higher education.
Age 59 1/2 Withdrawals
At age 59 1/2 withdrawals for unspecified reasons are permitted while still employed. Withdrawals may be subject to taxes and penalties.
What Are My Distribution Options?
The NC 401(k) Plan provides several distribution options to meet individual needs. Options include partial or systematic withdrawals, full or partial lump sum withdrawals, roll-over to a qualified plan or Individual Retirement Account (IRA). Systematic withdrawals and lump sum distributions may be available to those employees who become disabled. Taxation and penalties may be applicable.
