2025 Benefits Guide- updated 10-20 - Flipbook - Page 27
Employee Savings and Investment Plan 401(k)
What is a 401(k)?
401(k)s are employer-sponsored defined-contribution benefit plans that give employees a taxadvantaged way to save for retirement.
Who is eligible?
All active employees are eligible to participate in the 401(k) Employee Savings and Investment
Plan.
Employee Contributions
You can contribute up to 60% of your annual base pay, up to IRS limits, into VELCO’s 401(k). The
plan offers two options for employee contributions - pre-tax (traditional) and post-tax (ROTH):
Pre-tax contributions reduce your taxable income now, but you'll pay income tax when you
withdraw the money in retirement.
Post-tax (ROTH) contributions are made with after-tax dollars so you receive no immediate
tax benefit from your contribution, however, when the money is withdrawn in retirement you
pay no income taxes.
You can opt to make both pre-tax and post-tax contributions in the same plan year, however,
the maximum yearly limits apply to aggregate contributions.
Employer Contributions
VELCO will match your contributions dollar-for-dollar up to 4.25% of applicable earnings.
For employees who are not in the Pension Plan VELCO will also make an employer
contribution of 3.5% of base earnings (regardless of whether or not you make employee
contributions.)
Please see Summary Plan Description for further details, including a vesting schedule for
employer contributions.
How to participate?
Fidelity is the record keeper for VELCO’s 401(k). You can easily view investment options,
monitor your 401(k) balance and transactions, enroll or change your contributions, update your
beneficiaries, etc. using the Fidelity App (NetBenefits), in the Fidelity Portal, or by telephone at
800-835-5097.
