The Deferred Compensation Plan is another way to boost your savings—it lets you save tax-free money beyond the annual 401(k) contribution limits. It’s available to a select group based on pay level and retirement committee approval.
While this is a separate plan, both deferred compensation and 401(k) are managed by Fidelity. As a reminder, the deferred compensation plan is not your 401(k). You need to enroll in the 401(k) plan separately. Be sure to familiarize yourself with the plan differences before you enroll.
The Hitachi Vantara LLC Deferred Compensation Plan II is available to a select group of employees based on pay level and retirement committee approval.
How to Enroll
Open enrollment for the Hitachi Vantara LLC Deferred Compensation plan takes place each September:
- Decide how much money to set aside during the calendar year. You may set aside up to 50% of your base salary and up to 100% of your total incentives earned during the year.
- Choose your investment mix. The plan has a similar set of financial investment options as are available under the 401(k).
- Make your distribution election. This election must be made at the time that you enroll; unlike a 401(k), you have the option of electing an in-service distribution. In any case, you are required to make an election for how you want your funds distributed upon termination.
Once you join the plan, you must re-enroll each year, as long as you continue to meet the plan’s eligibility criteria. Your election does not roll over from year to year, and you cannot change your enrollment during the year.
It’s important to tell you that while the plan has great savings benefits, there are some risks along with it—most importantly, that your account isn’t protected by most federal retirement laws, and may be garnished by any creditors Hitachi Vantara owes in the case of company bankruptcy. You should seek advice from your tax adviser and/or financial consultant before you enroll.
This is also taken out of your paycheck before your Retirement Savings 401(k) contributions are taken out, which helps to reduce your taxable earnings.