New Communications on 401(k) Plan Distributions

NRECA is introducing a new process for handling 401(k) Pension Plan distributions that is designed to help departing cooperative employees make more informed decisions about what to do with the money they’ve accumulated in their 401(k) accounts.

The changes are in response to recent findings that many participants in the 401(k) Plan were unaware they could keep their money in the plan after leaving co-op employment—or of the advantages of keeping those assets invested in the 401(k) Plan.

Make the Right Move
As part of the new procedure, due to launch in April, departing employees will be mailed “Make the Right Move,” a brochure that clarifies the participant’s options while outlining the pros and cons of remaining invested in the 401(k) Plan. The new brochure reminds employees that by staying in the plan, they will retain access to the Personal Investment & Retirement Consulting (PIRC) team and continue to enjoy the plan’s competitively low fees. It also offers contacts and instructions for those employees who want to roll their money out of the plan or make an intermittent withdrawal.  If employees have already decided to roll assets out of the plan, they or their benefits administrator (BA) can request option forms by contacting the Member Contact Center at 866.673.2299, option 8, or contactcenter@nreca.coop.

The change to the new procedure is designed to be relatively seamless for BAs, who will continue process terminations by logging onto the NRECA Employee Benefits website. NRECA will take it from there. Participant option forms for distributions from the Retirement Security (RS) Pension Plan will continue to be mailed as they have in the past.

Benefits administrators in co-ops that offer the 401(k) Plan will be receiving samples of the new brochure and an explanatory fact sheet in a mailing that is scheduled to go out next week.