The ICMA-RC 401(a) Defined Contribution Plan

By offering a 401(a) Defined Contribution Plan, you have plan design flexibility without any additional administrative burden. Plus, there are no additional out-of-pocket expenses. Also since most public employees need more than a defined benefit pension payment and Social Security (if eligible) to finance their retirement future, participating in a 401(a) plan has become increasingly important— it will be the main source of retirement income.

With a 401(a) Defined Contribution Plan, employers make most of the decisions about contributions, including the types of contributions that will be made and the amount that will be contributed for each employee.

With a 401(a) Plan

• The plan sponsor specifies the type of employee contribution:
  • Mandatory pre-tax (pick-up)
  • Mandatory after-tax
  • Voluntary after-tax
• Annually, employers may make a fixed, preset contribution to the plan. These contributions are not subject to FICA.
• Flexible vesting schedule on employer contributions with unused contributions earmarked for future funding or to pay plan expenses.

The ICMA-RC Advantage for Plan Sponsors

• Excellent recruitment and retention tool
• Easy enrollment process

The ICMA-RC Advantage for Employees

• There are no restrictions or charges for reallocating investment mix and all funds offered through ICMA-RC are no-load.
• There are no minimum investment requirements
• The most flexible payment options available. Employees determine the payment schedule that’s right for their lifestyle.
• Even while receiving benefits, employees direct the investments of the remaining account balance. Even during retirement, their account has earnings potential.