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Plan Information Center

The investment portion of your retirement plan is extremely important. To get the maximum benefit for your participation, you should also know how to participate, and what your rights are in your plan.

This section is devoted to some of that information. The important parts of your participation are

I. Knowing Your Plan Description
II. Knowing Your Plan Document and amendments
III. Knowing Your Summary Annual Report
IV. Knowing Your Account Statement
V. Knowing Your Investment Options
VI. Knowing How to Change Investments
VII. Knowing What to do When You Terminate Employment

If you know how to participate in your plan, you will be more successful in accumulating funds for retirement. Learn and remember the basics!

Knowing Your Summary Plan Description
Your Summary Plan Description gives you a birds eye view of your plan.

Every plan participant is required to receive one. Find yours. If you don't have one, ask you Plan Administrator for a copy. Read it. Review it. Know what your plan provides, and what the benefit structure is.

What your Plan Description contains:

All plan descriptions are fairly similar in layout, and must provide you with the following information, in a manner that is supposed to be easily understood by the average participant. The primary information it contains is:

  • Who the Plan Sponsor Is
  • Who the Plan Administrator Is
  • Where the Plan Administrator Is
  • The Type of Plan You Are Participating In
  • The Types of Contributions Being Made to the Plan
  • The Vesting Schedule of the Plan
  • When You Can Receive Distributions From the Plan
  • How to Apply for a Distribution
  • Loan Provisions (if any)
  • Hardship Provisions (if any)
  • Your Rights Under Federal Law

    • Familiarize yourself with the Plan, and know what you can and cannot do.

    Knowing Your Plan Document and Amendments
    You have the right to read the Plan document and any of the amendments to it. You also have the right to copy the document for a reasonable charge. If you want to do it, you can have your own copy to read.

    The Plan document controls all of the actions that take place in the operation of the Plan. This document is from 60 to 100 pages long, and has a lot of housekeeping and required government language. If you don't get answers to your questions, read a copy of the Plan.

    Amendments are changes to the Plan that can cover a host of things, from required changes to the plan by Federal Law, or changes to the contribution rates or vesting rates.

    If you read the Plan, also ask to see copies of any amendments that have been made.

    Knowing Your Summary Annual Report
    Each year, you are required to receive a Summary Annual Report of the Plan's activity for the Plan Year. This report has a standard format, and describes the total contributions and income into the plan for the year.

    It also informs you of any annual report items that are available for your inspection.

    One of the most important items is the 5500 form you plan must file each year. This form is the Plan's disclosure of information to the Internal Revenue Service and the Department of Labor. There are numerous attachments to this form, and you have the right to inspect a copy of this return.

    Knowing Your Account Statement
    Know your account statement. This is the summary of your contribution activity and your investment gains and losses.

    Learn to read the statement and track your contributions. Understand how to determine your gains and losses, and what your true performance is.

    Keep copies of your statements, for at least two years, in the same location so that you can refer back to them when you have questions.

    Knowing Your Investment Options

    Know precisely what investment accounts you can select.
    Gather as much information about each of the choices as you can so that you can determine each of the fund's objectives, top holdings, and performance record.

    When you select your funds, or change your funds, the more you know about your choices, the better your selections should be.

    Determine where each of the funds matches up with the primary profitsharing.org fund categories. This will help you allocate assets properly during your investment lifetime.

    Knowing How to Change Investments
    To successfully manage your funds, you must know how to change your investments.

    Most plans have more than one option in funds switching. Generally, you can do it in one of three ways:

  • Phone switch

  • Internet switch

  • Paper switch (faxing to the administrator)

    • In any event, you will have to know two or three pieces of information:

  • Plan Number or Contract Number

  • Your Social Security Number

  • A PIN Number

    • Know these and keep them handy.

    Remember, that with all mutual funds and annuity contracts, if you want to switch accounts, you must have your instructions to the fund company or insurance company by 4:00 p.m. (Eastern time) for your changes to take affect the following day.

    All changes are done at the close of business. There is no inter-day changing of accounts.

    If you are following technical analysis such as done by profitsharing.org, you must be aware of how to move funds from account to account.

    Knowing What to do When You Terminate Employment

    If you terminate your employment at your current job, you have several choices of what to do with your retirement money. Generally, you can:

  • Roll it over to an IRA rollover account

  • Leave it in your current employer's account if there are no restrictions

  • Roll it over to a Plan at a new employer's

  • Cash it in

    • Learn what your options are and consult with a tax advisor to determine which make the most sense in your particular circumstance.

    You will in most cases, have a narrow time frame in which to make these decisions, so be prepared to move your funds if it is required.