Slavic401k.com Frequently Asked Questions

Managing Your Account

How do I access my 401(k) account information?

In order to view your balance or make changes to your account, from the menu above select "Plan Participants" and then click on "Manage Your Account." Enter your Social Security Number (SSN) (without hyphens) and your Personal Identification Number (PIN). The default PIN Number is the last four digits of your SSN. You should change your User ID and PIN once you have already logged into your account.

How do I access my 401(k) account if I am a DWS Scudder, Lincoln, or John Hancock participant?

You will need to check your Plan ID. You can find your Plan ID on your quarterly statements. If you are a:
DWS Scudder Participant (Plan ID starts with "008"), click here.
John Hancock Participant (Plan ID starts with "M"), click here.
Lincoln Participant (Plan ID starts with "7"), click here.
Multiple Fund Participant (Plan ID starts with "S" or "D"), click here.

What do I do if I forgot my PIN, my Pin is locked in a security log, or my SSN/PIN is the wrong combination?

You have two options:
Go to the "Manage Your Account" section of our site and fill out the form under "Forgot your PIN?" or
Contact Customer Service for assistance with resetting your PIN.

How do I know my account information is secure?

The account information and transaction areas use Secure Socket Layer (SSL) encryption to ensure that your account information is not accessible to others. You are also required to enter a personal identification number (PIN) to access your specific account information. Upon accessing your account, you should change your User ID and PIN to something different. You should keep these credentials confidential.

What is the 401(k) Express E-Mail?

Slavic401k.com is offering a free service to send your 401(k) balance to you by e-mail once per week. We also provide links to online information about your 401(k) plan to help your better manage your investments. To subscribe, click here.

How can I download my transactions into my financial planning software?

While we do not specifically support Intuit's Quicken, Microsoft Money, or any other financial software, there is a way to download your transactions from our website for import into your software:

Log in to our site to Manage Your Account, and from the menu on the top select Transactions. Then from the menu on the left side, select Transaction History.

From the Transaction History screen:

Select "Show Account History" From and To dates for the date range you wish to download, then select Submit

Click the Download Detail button, this will prompt you to save the file.

Go to Big Red Consulting This is the website that has been recommended to us as having various tools for converting text files for import into Quicken. Specifically look for the Excel to .QIF converter. This will allow you to convert text files & spreadsheets into QIF files for import into Quicken or MS Money. Please note: Big Red Consulting is not affiliated with Slavic Investments and we are unable to provide any support in the use of this program.

Plan Administration

How much money can I put into my 401(k) account?

The maximum pre-tax contribution dollar amount is set by law and adjusted for inflation annually. The 2007 pre-tax contribution limit is $15,500. If you are age 50 or older you may also make an additional catch-up contribution of $5,000 per year.

In addition, there are special non-discrimination rules that apply to the plan. If you earn more than $100,000 a year, or own more than 5 percent of the company, contribution caps may apply for you.

What is the difference between investing pre-tax in a 401(k) plan and after-tax outside of the plan?

The difference between the two types of investments is when you are taxed. Pre-tax contributions and earnings are taxed only when you withdraw it. Since the money that would normally be paid in taxes goes directly into the 401(k) plan, pre-tax contributions can accumulate quickly. However, if you need to withdraw money prior to age 59½ you may incur a 10% withdrawal penalty, in addition to owing current income taxes. After-tax contributions are taxed before they are invested. You are taxed on the growth and earnings in your account as you save.

What pre-tax percentage should I invest when I am starting out?

Any savings is better than nothing and the sooner you get started, the better!! You should maximize your company's match if one is available. Simply defer as much as you can afford to budget and take full advantage of the tax deferral.

I still have a 401(k) account with my former employer. I would like to transfer this account into my new 401(k) Plan. Can this be done?

Yes, this can be done and is referred to as a trustee-to-trustee transfer. You need to request a rollover form from Slavic401k.com and a distribution form from your former employer. There are no penalties with a trustee-to-trustee transfer. Call Slavic401k.com for assistance with rollovers.

Why are there so many Vanguard Mutual Funds available as investments in the new plan?

Vanguard is well known for their low cost funds. Morningstar did a study called "Fees Matter." They found that expenses are a much better predictor of future returns than past performance. As an investor, there are three elements that you can control in the 401(k) plan: the amount of risk you can afford to take, the amount you save, and the fees of the funds you select. The passively managed S&P 500 Index has outperformed 80% of actively managed funds over a 20-year period primarily because of the low fees charged. For example, the SSgA S&P 500 Index fund in the typical Slavic401k.com plan costs only 0.09% to own. The Trustee of the plan elected to include many low cost funds as options for you to invest in.

Why does Slavic401k.com reimburse all revenue paid by the funds (12b-1, Finder's Fees or Sub TA record keeping fees)?

By reimbursing this revenue, Slavic401k.com creates a "Net" Expense Ratio that achieves three important objectives:

All revenue and cost in the plan is disclosed. Therefore, the plan is completely transparent and is compliant with all current as well as anticipated regulation.

Fund selection is objective. The Advisor or Broker is not selecting funds on the basis of getting paid a commission by the funds, but rather on the basis of a fully disclosed service fee to the plan.

Reimbursed fees lower internal costs dramatically. The Net Expense Ratio falls between .40% and .50% on most plans, approximately one-third of the average mutual fund or annuity separate investment expense.

How long will it take for my 401(k) plan to be transferred to Slavic401k.com?

It typically takes 30 to 60 days for the transfer to take place. Your account will remain fully invested until the funds are actually transferred. When the transfer takes place, you will be un-invested for a few days while the accounting and assets are reconciled and invested in the new plan.

Why do we have two plans?

Your PEO may have an old frozen, single employer plan that is not compatible with the new multiple employer plan. Because they are different types of plans, the regulations prevent them from being merged and the assets must remain separate. If you have a balance in both plans, you will receive two statements in separate mailings.

Can I transfer my 401(k) balance in the frozen plan into an IRA if I'm fully vested?

You cannot take a distribution or roll to an IRA while you are still employed under IRS regulations.

Why can't I take my money out of the plan if I am no longer participating?

IRS regulations prevent taking a distribution if you are still employed at the PEO or the work-site employer. Once you terminate employment, you may withdraw your vested balance.

Contributions

I received my statement and the amount of contributions does not match the amount deducted on my pay stub - why?

Your payroll service by law has until the 15th business day of the month following the month in which the deferral was deducted to transmit it to your 401(k) plan. Therefore, there is always a lag between the time it is deducted and when it appears on your cash basis statement. Your payroll service may transmit your money more frequently than monthly if administratively possible. However, the compilation of the data file that must accompany the money is complex and includes required data to make the contribution. The file usually includes thousands of employees, meaning the processing time is lengthy and the reason your deferral can't be transmitted any faster. Once the funds and the data file are received, it takes Slavic 2 to 4 days to process the information and send the trade to the fund companies. The fund companies have, by law, three days to settle the trade, after which you will see your contribution on your statement via the Web.

Where is the money held if there a delay in investing it?

As explained in the previous question, the compilation of the required data accompanying the contribution is a lengthy and complex systems process. Until this is accomplished, your money remains at the PEO. It cannot be invested until an electronic data file can be compiled. When the file is ready, the money is sent to a trust account while Slavic does the accounting, plan testing, and the trade. This usually takes 3 days. During this period, interest does not accrue to you because trust accounts, by law, do not pay interest, nor does Slavic earn any interest on your money. Your 401(k) plan has daily valuations and segregated accounts requiring advanced systems to provide you this information. Your deferral is tested before it goes to the fund companies to insure that eligibility is met, vesting is computed, and that you haven't exceeded certain deferral limits. This process takes 2 to 4 days and requires all of your payroll information for every contribution in order to operate your plan compliantly. If the PEO could increase the frequency of transmissions, the cost of the plan would go up because more processing would occur. For this reason, your deferrals are being invested as cost-effectively and as fast as administratively feasible.

Withdrawals & Loans

Can I withdraw money from my account while I am still working?

Most plans offer loans allowing you to borrow money from your 401(k) account, but you have to pay yourself back with interest. If you fail to pay back the loan, it is treated as a withdrawal and the outstanding loan balance will be subject to current income taxes as well as a 10% early withdrawal penalty. If your plan doesn't offer loans, you may be able to qualify for a severe financial hardship withdrawal if no other resources are available to you. According to the IRS a hardship withdrawal includes the following:

Down payment of primary residence

College tuition for you or your dependents

Unreimbursed medical expenses

Prevent eviction or foreclosure from your home

What happens to my 401(k) account balances if I choose to leave or am terminated from the company?

Your distribution options are the same whether you voluntarily leave or are terminated. If your account balance is more than $5,000, you can leave your money in the plan. If you want to take your money with you, your vested account balance can be rolled into another 401(k) plan with your employer or put into an IRA to avoid early withdrawal penalties.

What are the rules regarding hardship withdrawals from my 401(k)?

The IRS code that governs 401(k) plans provides for hardship withdrawals only if:

the withdrawal is due to an immediate and heavy financial need

the withdrawal must be necessary to satisfy that need (i.e. you have no other funds or way to meet the need)

the withdrawal must not exceed the amount needed by you

you must have first obtained all distribution or nontaxable loans available under the 401(k) plan

you can't contribute to the 401(k) plan for 6 months following the withdrawal

The following four items are considered by the IRS as acceptable reasons for a hardship withdrawal:

Un-reimbursed medical expenses for you, your spouse, or dependents

Purchase of an employee's principal residence

Payment of college tuition and related educational costs such as room and board for the next 12 months for you, your spouse, dependents, or children who are no longer dependents

Payments necessary to prevent eviction of you from your home, or foreclosure on the mortgage of your principal residence

Hardship withdrawals are subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. You do not have to pay the withdrawal amount back.

What are the general rules regarding loans from a 401(k)?

The rules governing 401(k) plans allow plans to provide loans. You must pay the loan back within five years, although this can be extended for the first-time home purchase.

Usually you are allowed to borrow up to 50% of your vested account balance to a maximum of $50,000 (set by law). Loan payments will generally be deducted from your payroll checks and, if married, you may need your spouse to consent to the loan. Funds obtained from a loan are not subject to income tax or the 10% early withdrawal penalty. If you should terminate your employment, often any unpaid loan will be considered a distribution, subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty.

Fees

Our old 401(k) plan did not have any fees. Why do we have fees in the new plan?

All 401(k) plans have fees including your old plan. Usually these fees consist of 3 parts: 1) Expense ratios of the investment options. 2) An asset and administration fee. 3) Third Party Administration (TPA) expenses paid directly by the employer. The first 2 categories of fees are almost always part of the ongoing expenses paid out of the account balances of the plan. Historically, most providers have not completely disclosed these costs to the participants. So, while it may appear that your old plan had no fees, the fact is they were simply not disclosed to you. It is common practice for 401(k) plan providers to net fees against investment earnings making them difficult to monitor. Slavic401k.com is proud of the fact that it has always disclosed fees as a line item dollar amount on participants statement and on the website. Your new plan is fully transparent, and in most cases, significantly less in cost compared to your old plan. Your employer selected Slavic401k.com, because in light of the services provided, Slavic401k.com is one of the most cost-efficient service providers available.