After-Tax Savings Option (ATSO)
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General
Information |
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Q. |
Who is eligible to make after-tax contributions to the Aerospace Savings Account Plan (ASAP)? | |
A. |
Many Aerospace employees and retirees can contribute to this option. Contact Employee Benefits for details. | |
| Q. | How is this different from the Voluntary Annuity/Account Program (VA/AP)? | |
| A. | Contributions to VA/AP, which is a 403(b) program, are made on a pre-tax basis reducing federal and state taxes. Contributions to the ASAP After-Tax Savings Option (ATSO) which is a 401(a) plan, are made on an after-tax basis. Earnings on contributions to the After-Tax Savings Option are tax deferred until withdrawn. | |
Q. |
Will contributing to ATSO have any effect on the amount I can contribute to VA/AP? | |
A. |
No. | |
Contributions
and Limits |
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| Q. | How
can I contribute to the ATSO? |
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| A. | You can contribute to
this option only through weekly payroll deductions. You may enroll by
calling Fidelity at (800) 343-0860 or by logging on to the Fidelity website
at fidelity.com/atwork.
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| Q. | Is
there a minimum percentage that I can contribute? |
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| A. | Yes, the minimum that
you can contribute is 1% of your weekly pay.
All percentages must be in whole numbers.
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| Q. | Is
there an annual limit to the amount of ATSO contributions that I can
make? |
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| A. | Yes.
Your contributions to the ATSO are limited by the terms of the ASAP,
as well as by applicable law.. The maximum amount you can contribute in any
year will depend on whether you are considered a highly compensated employee
(“HCE”) under the Internal Revenue Code (IRC).
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Bargaining
unit members and Non Highly Compensated Employees (“NHCEs”) will
generally be able to contribute 25%
of their weekly salary. Applicable
law, however, limits the total amount of an individual’s contributions
under ATSO and Company contributions to certain retirement plans on the
individual’s behalf for any year to $42,000.
If you are affected by this annual limit, Aerospace will notify you
and your contributions under ATSO will be adjusted accordingly.
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In
contrast, HCEs are affected by
the requirement that ATSO satisfy a test which limits contributions by HCEs
on the basis of the amount contributed by NHCEs.
For the purpose of this limitation, an employee is considered to be
an HCE if he or she is not a bargaining unit member and was in the top 20%
of Aerospace pay during
the previous year. Aerospace
has determined tha HCEs may not contribute to ATSO.
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| Q. | Are rollovers
accepted? |
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| A. | Rollovers
from other qualified after-tax savings plans are accepted.
Contact Fidelity directly to initiate a transfer of funds. You may
rollover any AERP Optional Contributions to this account as well.
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Investment Information |
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| Q. | What are my investment options? | |
| A. | Your investment options are the same as those currently offered under the ASAP for Company Contributions. The investment options include eight mutual funds and five asset allocation funds linked to a specific time horizon. Contact Fidelity Investments at (800) 343-0860 for specific information. | |
| Q. | Can I change the allocation of future contributions or transfer accumulations between Fidelity funds? | |
| A. | Yes. You can change the allocation of your future weekly contributions or transfer your existing accumulations between the available funds at any time by contacting Fidelity Investments. | |
| Q. | How can I find out more information on specific Fidelity funds? | |
| A. | You may contact Fidelity Investments at (800) 343-0860 or www.fidelity.com to request a prospectus and summary annual report for each of the individual funds available under this Plan. | |
| Q. | Will I receive a statement showing deposits and earnings to my account? | |
| A. | Yes, Fidelity Investments will send a quarterly statement to your home showing activity for your After-Tax Savings Option account. If you have other Aerospace accounts with Fidelity, these will be reflected on your quarterly statement as well. | |
| Q. | Does Fidelity charge me any fees for the ATSO? | |
| A. | Fidelity Investments has waived their annual administration and maintenance fees. However, some funds may be subject to short-term redemption fees if you sell them within a certain time frame (e.g. this applies to the Low Priced Stock Fund if you sell it within 30 days and also to the Diversified International Fund). Please check with Fidelity on the specifics. | |
Withdrawals |
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| Q. | Once I put money into this account, can I make a withdrawal? | |
| A. | Yes,
you can take an annual in-service withdrawal.
However, the distribution is subject to applicable taxes and possibly
excise taxes. Contact Fidelity Investments for distribution forms.
Fidelity will mail checks to your home address approximately two
weeks after receipt of the distribution form.
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| Q. | What portion of my withdrawal is taxable? | |
| A. | Income tax is payable on any distribution of earnings from your account. Your contributions have been made on an after-tax basis and are not subject to additional taxes when distributed. Contributions and earnings are distributed according to their proportion in the account. Taxes on earnings are automatically withheld at the rate of 20% Federal and the appropriate rate for your state (e.g. 2% California) upon the distribution. | |
| Q. | Are there penalties for withdrawal? | |
| A. | Unless you are age 59-1/2, retired after age 55 , disabled, or die, there is a 10% Federal excise tax and possibly a State excise tax, depending on where you live (e.g. 2-1/2% in California) on any withdrawal of earnings. This is in addition to ordinary Federal and State income taxes as stated in the previous answer. | |
Termination/Retirement |
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| Q. | What happens to my ATSO account when I terminate or retire? | |
| A. | Once you have terminated or retired, you may leave your account on deposit with Fidelity Investments. All retired participants must begin taking minimum required distributions from their ATSO accounts no later than April 1 following the calendar year in which they attain age 70-1/2 or, if later, the year in which they retire. | |
| Q. | May I roll over my ATSO account to an IRA or other qualified plan when I terminate or retire? | |
| A. | You may roll over all after-tax account balances to an IRA following termination of employment. You may also roll over all after-tax account balances to another qualified plan that allows for such rollovers. | |
| Q. | When I retire, may I receive monthly payments instead of a lump sum? | |
| A. | Yes. You may elect systematic withdrawals (monthly, quarterly, and annually) through Fidelity Investments. You may also elect to have your annual minimum required distributions automatically paid to you by Fidelity Investments. | |
Survivor
Benefits |
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| Q. | What happens to my ATSO account if I die? | |
| A. | All participants must complete a Fidelity Beneficiary Designation form for a Qualified Plan. Participants may leave their account to the beneficiary of their choice. However, a married participant must designate his or her spouse as beneficiary unless the spouse consents in writing to the designation of a different beneficiary. Beneficiary designations may be changed at any time by completing a new Fidelity form. Contact Fidelity at (800) 343-0860 to request beneficiary designation forms or download it here. Completed forms should be returned to Fidelity. If you were hired after December 31, 1992 and already have a beneficiary designation on file with Fidelity for your Aerospace Savings Account Plan (ASAP), your current existing beneficiary designation will apply to any ATSO contributions as well. | |
| Q. | If I am an ASAP participant, can I designate a separate beneficiary for my ATSO account? | |
| A. | Because the ATSO is part of the ASAP, the same beneficiaries must be designated for both components-- Company Contributions AND the ATSO. | |
| Q. | If I am an AERP participant or if I have VA/AP with Fidelity do I need to complete a new beneficiary designation form just for ATSO? | |
| A. | Yes. | |
Additional
Questions |
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| Q. | Whom can I call if I have more questions? | |
| A. | If you have additional questions about making a contribution, or general administration of your ATSO account, contact the Aerospace Employee Benefits Office at (310) 336-5107. For questions about specific funds, switching between funds, reallocating contributions between funds, beneficiary designation, withdrawals or fund performance you may contact Fidelity Investments at (800) 343-0860. | |
| Q. | What happens if I have money also invested in Optional? | |
| A. | Your money will remain in Optional until you withdraw it or roll it over. You will continue to receive statements from Fidelity Investments. | |
| Q. | Can I transfer funds that I have in Optional to ATSO? | |
| A. | Yes, you may do so by contacting Fidelity Investments. | |
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