What is a 401k?

A 401(k) plan is a retirement saving plan offered by employers for their employees. Many 401(k) plans have a matching incentive where an employer will match funds that their employees contribute to the 401(k) plan. The matching incentive is designed to motivate employees to contribute funds to the retirement savings plan.

Reliant provides an employer sponsored contribution plan called a 401(k) plan. This plan is similar to an individual retirement account (IRA) except that only employers may establish a 401(k) plan for employees through their payroll.

Reliant's 401(k) Plan offers two types of savings opportunities for our employees - a traditional 401(k) and a Roth 401(k). The Traditional 401(k) Plan allows employees to save money for retirement while deferring federal, state, and in some cases local taxes on the amount invested. The Roth 401(k) Plan does not offer tax savings at the point contributions are made to the retirement plan, but, the employee's Roth contributions as well as the interest and dividends earned while invested in the plan are not subject to federal and/or state income taxation at the point of withdrawal (at retirement - age 59½ or above).

If withdrawals are made to either of these 401(k) Plan Retirement accounts prior to age 59½ the employee may incur tax penalties. Employees who have worked for Reliant at least 1 year may be eligible to begin participating in the 401(k) plan (previous internships and employment with Reliant may apply toward eligibility). Upon becoming eligible to participate, employees will receive an enrollment packet from the Reliant Finance Department. For questions or additional information about Reliant's 401(k) Plan please contact the Finance Department.

Contributions

Reliant offers matching your contributions up to 5% of your salary. “Ineligible” earnings such as your ministry expense bonus, taxable reimbursements, and wages earned prior to your 401(k) plan entry date are not eligible for the 5% employer match.

How will this effect my MTD Goal?

You will have to raise the extra money for the employer match, and it will increase your support goal. 

Why would you want to participate and raise the extra funds?

The advantage of a 401(k) plan versus personal investing or saving, is the employer match does not get taxed (until you retire and withdraw it). So, the match enables you to save extra money (on top of any money you save through other methods) towards your retirement.

It’s like opting to receive a special bonus every month that goes directly into your retirement savings account and that the government doesn’t tax you on (until retirement). That’s smart!

Investment Options

The 401(k) Plan has over 20 different investment options for you to choose how your money is invested. You can also select a Principal Trust Target Date Fund that will select the investments for you, and will invest your money in investment options that have appropriate risk and diversity based on your expected retirement date.

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