Enrolling in Your 401(k) Plan

This article explains how 401(k) enrollment generally works and what decisions you will be asked to make. Every plan is different. Your plan's Summary Plan Description (SPD) and any notices your employer provides control what actually applies to you.

A 401(k) is a retirement plan sponsored by your employer. You choose an amount to contribute from your pay, and your employer withholds it through payroll and sends it to your account.

Contributions can generally be made two ways, depending on what your plan allows:

• Pre-tax (traditional): Contributions reduce your taxable income now. Withdrawals in retirement are taxed as ordinary income.

• Roth: Contributions are made from pay that has already been taxed. Earnings can be withdrawn tax-free if IRS conditions for a qualified distribution are met.

Some plans also provide employer contributions, such as a match or a profit sharing contribution. Not all plans do. Employer contributions may be subject to a vesting schedule, which determines how much of that money is yours if you leave.

The IRS limits how much you can contribute from your pay each year. The limit is adjusted annually. Your plan may also set its own limits.

Enrollment methods vary by plan. Most plans offer one or more of the following:

• The online participant portal, where you set your contribution rate and investment elections

• A paper or electronic enrollment form provided by your employer

• Calling NestEggs, where we can walk you through the portal and answer questions about your plan

NestEggs can explain how your plan works and how to complete each step. We cannot make elections on your behalf, and we do not provide individual investment advice.

How much to contribute. Usually a percentage of pay, though some plans allow a flat dollar amount per pay period.

Pre-tax, Roth, or both, if your plan offers Roth contributions. This is a tax decision. If you are unsure which is better for your situation, consider speaking with a tax advisor.

How to invest your contributions. You select from the investment options your plan makes available. All investing involves risk, including possible loss of principal.

If you do not make investment elections, your contributions are typically invested in your plan's default investment option, often a target date fund selected based on your age. You can change that election at any time.

Many plans use automatic enrollment. If yours does, you will be enrolled at a default contribution rate unless you make your own election or opt out by the deadline stated in your notice.

How it generally works:

• You are enrolled after the eligibility and entry timing your plan specifies.

• A default percentage of your pay is withheld each pay period. Your notice states the rate.

• Many plans also apply automatic escalation, which increases your default rate by a set amount each year up to a cap stated in your notice.

• Contributions are invested in the plan's default investment option until you choose otherwise.

You will receive a notice before contributions begin. The notice explains the default rate, how to opt out, and the deadline for doing so.

At any time, you can:

• Change your contribution rate, including to 0%

• Change your investment elections

• Stop automatic escalation, if your plan allows

You can opt out before contributions begin by following the instructions in your notice. If contributions have already started, you can stop future contributions by changing your election to 0% through the portal or by contacting us.

Two additional points:

Refund of automatic contributions. Some plans permit a withdrawal of automatic contributions if you request it within a limited window after your first automatic contribution, generally no more than 90 days. The amount refunded is taxable in the year you receive it, and any associated employer match is forfeited. Not all plans offer this. Check your notice or contact us.

Employer contributions. If your plan provides a match, you generally have to contribute in order to receive it. If you stop contributing, you may stop receiving the match.

Stopping contributions does not close your account. You can restart contributions later by submitting a new election.

Eligibility is set by your plan document. Common requirements include a minimum age, a service requirement such as 30 days, 60 days, or one year, and a defined entry date on which participation begins.

Part-time employees may also become eligible to make contributions under federal long-term part-time rules if they work at least 500 hours in each of two consecutive years, even if they never meet the plan's standard service requirement. Employer contributions are not automatically required for employees who become eligible this way.

To confirm your eligibility date, check your SPD or contact us.

Your SPD describes your plan's specific rules, including eligibility, contribution types, employer contributions, vesting, and distribution options. Depending on your plan, it may be available in the participant portal or distributed by your employer. If you cannot locate it, contact us and we will direct you to it.

If you need help accessing your account or completing your elections, contact NestEggs at 866-202-4646 or at info@nesteggs401k.com.

This material is provided for general informational purposes and describes how 401(k) plans commonly operate. It is not tax, legal, or investment advice, and it does not override the terms of your plan document. Where this article and your plan document differ, the plan document controls.