Skip to main content

IRS 2014 Contribution Limits, New Actuarial Factors, 401K Match on Winning Performance Lump Sums

IRS contribution limits

The overall 401(k) contribution limit for calendar year 2014 will increase from $51,000 to $52,000.

This overall limit includes employees’ pre-tax, after-tax or Roth contributions to the 401(k) Plan; TVA’s matching contributions to the 401(k) Plan; and employees’ after-tax contributions to the Fixed or Variable funds.

The pre-tax contribution limit to the 401(k) plan will remain at $17,500, while the pre-tax catch-up limit for employees who are age 50 or older in 2014 will remain at $5,500. Note: Catch-up contributions do not count toward the overall contribution limit of $52,000.

In addition, the interest rates for the Cash Balance Benefit Structure and the Fixed Fund remain at 6 percent for 2014.

Retirement Estimates with New Actuarial Factors Now Available

As announced earlier in TVA Today, the TVARS board in November adopted new actuarial assumptions. The new assumptions more accurately reflect the life expectancy of TVA employees and retirees. New factor tables will be implemented for retirements beginning on or after Feb. 1, 2014.

Though the new assumptions will not go into effect until Feb 1, Retirement Management is able to provide estimates reflecting the new factors now, for comparison purposes.

For employees considering retirement before Feb. 1, these estimates will show the impact of the factors and help the employee decide whether to retire before or after Feb. 1.

To request an estimate, employees are encouraged to email the request directly to retsvcs@tva.gov or use the “Request an estimate” option on the Contact Us page of the TVA Retirement System Web site at www.tvars.com. (The “Contact Us” link is in the menu bar near the top of the TVA Retirement System site.)

Possible need for 401(k) contribution changes concerning use of Winning Performance lump-sum payments in retirement benefits

The TVA Retirement System’s rules and the provisions of the 401(k) Plan provide for the inclusion of any lump sum up to 6.25 percent of regular salary or wages paid under the TVA Winning Performance Team Incentive Plan. Your incentive opportunity may be a higher percentage, but 6.25 percent is the limit on what will be included for retirement purposes.

Matching contributions will be adjusted automatically for employees already contributing more than 6 percent to the 401(k) Plan. Retirement Management says employees contributing 6 percent or less to the 401(k) Plan may need to increase their contribution rate to ensure they receive TVA’s matching contributions on any eligible lump-sum payment(s) made during this fiscal year.

Since 401(k) Plan deductions are not withheld from lump-sum payments, employees who normally contribute 6 percent of their base pay (to receive the maximum amount of TVA matching contributions) will need to temporarily increase their contribution by a dollar amount equal to 6 percent of any eligible lump-sum payment.

Note: This temporary increase can occur anytime during FY 2014 (before Oct. 1, 2014). It is not required to be done by the end of this calendar year.

An example

For employees who receive an eligible lump-sum payment of $1,000, the 6-percent contribution would be $60 ($1,000 X .06 = $60).

Therefore, these employees would need to increase their 401(k) contribution by an additional $60 to receive the corresponding matching contribution.

How to change contribution amounts

As noted above, employees can change their contribution online by accessing Fidelity NetBenefits or by calling Fidelity at 1-800-354-7121.

For answers to questions or for more information

Employees who have general questions can call or e-mail the TVA Retirement System (email: retsvcs@tva.gov; phone: 632-2672, 1-800-824-3870).

http://www.tvars.com/things_to_know.htm

Comments

Post a Comment

Popular posts from this blog

A Task Assigned to the TVARS Board

The TVARS board is required to recommend a contribution from TVA to be made in fiscal year 2014 prior to the end of the current fiscal year.  (See Section 9B on pages 51-53 of the rules here .)  Since TVA sets its budget months before the end of the fiscal year, it is imperative that this recommended amount be: decided upon by the TVARS board as quickly as possible; sufficient to adequately fund TVARS; and consistent with the amounts charged to ratepayers for pension expense. All seven TVARS board members have an obligation to come together to accomplish this.  (See TVARS board members here .)  I sincerely hope we will be able to accomplish this without further rule changes suspending TVA contributions, or further claims that legitimate accrued benefits are not really vested and must be reduced.  I hope we will be able to put an end to our failure to insure that amounts paid by TVA ratepayers for pension expense are used for their intended purpose.  As a TVARS board member, I
Post a Comment
Read more

Why do TVARS board meetings remain closed?

Within the next couple of months, the TVARS board must vote on a contribution amount to recommend that TVA make in fiscal year 2014. In conjunction with the contribution amount, it is possible the vote will include amendments to the rules. In conjunction with the contribution amount in 2009, the rules were amended to: suspend contribution requirements and related actuarial valuations for four years (Section 9B9); suspend the requirement that part of the contribution go to the “excess COLA account,” which was designed to accumulate and grow funds to be used for payment of future COLAs (Sections 9B9, 10D1 and 10D2); and reduce legitimate accrued pension benefits (Sections 6I, 7L and 18C3). The vote in 2009 was not open to observation, and unless the TVARS board takes action, neither will the vote this year. Not one of the six other TVARS board members would second the motion I made in December to open TVARS meetings to observation. All that is required to open future boa
18 comments
Read more

Introduction

This is my personal blog to facilitate communication among TVA employees, retirees and beneficiaries who are members of TVARS and who wish to preserve their retirement benefits. Please join my site and post your comments.  I have been an elected member of the TVA Retirement System (TVARS, or the system) board of directors since 2003. I am not speaking officially for the TVARS board of directors or TVA management. TVARS is an entity legally independent of TVA. Three of the board members are TVA employees (including myself), three are appointed by TVA management (currently all TVA executive managers), and the seventh is generally a retired TVA employee (appointed by the other six). As TVA employees, we all have a duty of loyalty to carry out directives issued by TVA management in our regular TVA jobs. However, each board member has a fiduciary duty to all the members of the system when performing TVARS duties. This fiduciary duty legally supercedes our duty of loyalty to carry out direct
21 comments
Read more