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I presently contribute the maximum allowed amount of money to my 401K as well as a "catch up" contribution because I am over 50.
My company is phasing out pensions and it appears they will be adding approx an extra $4k a year annually to my 401k to offset the anticipated decrease in pension I will recieve (I am in a transition group so there will be a pension, albiet reduced in monthly benefit).
Does anyone know if that additional money put in by the company will "count against" the total amount of pre-tax annual contributions that I can make to my own funds? Or total contribution in general?
I have asked HR but HR is also downsized and not expecting an answer real soon.
I think the additional $4k would be considered "employer match" or something similar to that, so I don't think it would affect what you are actually contributing. I would call whoever operates your 401K (Merrill Lynch, etc.), they should be able to tell you.
That sounds like good advice.......and I do already have a match on some of my contributions and you are correct that the match is not held against me.
As long as it is considered an employer contribution it does not count against your max contribution. Your 401k holder will more then likely not allow you to fund your account when you hit your limit. We use Fidelity and when folks I work with hit 15k or whatever it is, their funding automatically stops.
My company went through the same pension- to - additional 401k funding transition about 5 years ago. I get a lump sum % of annual salary deposited into my 401k each January. It shows up in the same line as employer match so I would definitely think none of it counts towards the individual max.
That is exactly what they are doing. I will get a % of my salary which is based on age and years of service placed into my fund. I can see how it is a win for the company not as much for me..
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