Agenda - 05-11-1999 - 4 - Laserfiche WebLink

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401(k) Plan Information 1. Background 5 Attachment 2 The North Carolina legislature created the Supplemental Income Plan of North Carolina [NC 401(k) Plan] in 1984 to offer employees a tax- deferred investment program for their retirement. The plan is established under Section 401(k) of the Federal Internal Revenue Code. 2. Plan Governance The Plan is sponsored by the State of North Carolina and is governed by the Department of the State Treasurer and the Plan's Board of Trustees. The Board is composed of members of the Boards of Trustees for the State Retirement System and the Local Government Employees Retirement System. The State Treasurer and the Board have contracted with Branch Banking and Trust Company (BB &T) to administer the plan. 3. Plan Eligibility The Plan is available to employees who are members of the State Retirement System or the Local Government Employees Retirement System. 4. How the Plan Works ❑ An employee and/or employer makes a contribution to the plan through payroll deduction. The contribution goes into the employee's individual 401(k) account that is owned by the employee. ✓ An employee's contributions are pre -tax; that is, they are sheltered from Federal and State income taxes and not subject to taxes until withdrawal. ✓ An emplo econtributions are pre -tax and also are exempt from mandatory deductions for Social Security and Local Government Employees Retirement System. ❑ The employee selects the investment options for the funds in his or her account from a range of options that include bank investments or mutual funds. ❑ Funds may be withdrawn: ✓ At retirement in a variety of payout options to provide retirement income. ✓ For certain financial hardships. ✓ Through a loan provision in which employees borrow from the account and pay back to themselves for any reason such as for medical or college expenses.