Financial: Employee 401(k) Savings Plan
Your Total Rewards benefits package offers a defined contribution employee 401(k) plan to assist you in planning and saving for retirement.
Eligible employees age 18 or older may participate in the 401(k). Eligible employees are 100% vested in their account, which means the account cannot be forfeited or reduced (other than with respect to market fluctuations).
Below are some of the plan's available options –
- Annually State Farm contributes $300 into the account of each eligible employee, and for qualifying participants, the Company will match employee contributions dollar for dollar up to $900.
- Contributions may be elected based on a dollar amount or a whole percentage, and contributions will apply evenly over all pay periods. If a percentage is elected, the rate is calculated on your available bi-weekly income amount. The maximum amount you will be allowed to contribute to the plan each year is set by the Internal Revenue Service (IRS).
- There are two types of contributions that can be made to the plan – before-tax contributions and Roth 401(k) contributions, or a combination of both before-tax and Roth 401(k).
- Automatic contribution increase feature.
- Employees may be able to roll over contributions into the plan.
- Several investment options are available - Fixed Income, Equities, and Balance Accounts, and 12 Target Date Portfolios.
Newly eligible employees are automatically enrolled in the 401(k) plan. The default is a before-tax contribution rate of 3 percent of gross biweekly income and includes an automatic increase of 1 percent (up to a maximum of 10 percent) each February.
The default investment fund is the Target Date investment option based on the year the employee will attain age 65.
New employees may opt out of automatic enrollment within 30 days of their hire date. They may also change their contribution levels, automatic increase rate, and investment options at any time.
Employees may also enroll on their own. Participants can take a more active role in their 401(k) savings plan and can choose their own contribution rate based on either a dollar amount or a whole percentage of pay. These contributions can be made with before-tax dollars, Roth 401(k), or a combination of before-tax and Roth 401(k) contributions. Participants also choose their investment option(s).
This brief overview of the State Farm 401(k) Savings Plan is not intended to be a complete explanation of plan features. For more detailed information, please refer to the Summary Plan Description found within the online Human Resources Policy Manual for U.S. employees.
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