IRS contribution limitsThe 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 AvailableAs 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 email@example.com 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 benefitsThe 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 exampleFor 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 amountsAs 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 informationEmployees who have general questions can call or e-mail the TVA Retirement System (email: firstname.lastname@example.org; phone: 632-2672, 1-800-824-3870).