CVS Health 401k plan change- FYI

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Hukedonfonix4me
Posts: 64
Joined: Thu Oct 13, 2016 3:00 pm

CVS Health 401k plan change- FYI

Post by Hukedonfonix4me » Mon Nov 13, 2017 5:48 pm

Fancy, bright colored mailer is coming out advertised as "exciting" changes to the future fund 401k plan.

They are doing away with the True-up match and are switching to "per-pay-period match" ONLY.

Starting the first payroll deduction in January 2018, if any other contributor does not amend their contribution rate to at least 5% of eligible pay for each and every paycheck, you will miss the boat on matching contributions.

Just a friendly actionable note for those who work for/know someone employed with CVS.
"While some mutual fund founders chose to make billions, he chose to make a difference." | -The Bogleheads' Guide to Investing

shipwreck
Posts: 51
Joined: Mon May 02, 2011 12:55 am
Location: North of the Equator

Re: CVS Health 401k plan change- FYI

Post by shipwreck » Tue Nov 14, 2017 4:26 pm

Wow. Is that right? Minimum 5% or no match at all?

Hukedonfonix4me
Posts: 64
Joined: Thu Oct 13, 2016 3:00 pm

Re: CVS Health 401k plan change- FYI

Post by Hukedonfonix4me » Tue Nov 14, 2017 4:33 pm

No, match is 100% up to 5% per pay period.
"While some mutual fund founders chose to make billions, he chose to make a difference." | -The Bogleheads' Guide to Investing

sco
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Joined: Thu Sep 24, 2015 2:28 pm

Re: CVS Health 401k plan change- FYI

Post by sco » Wed Nov 15, 2017 1:16 am

So I guess those making over $370k per year won't be able to get the full match. 5% would hit the 18,500 yearly cap.

mggray17
Posts: 55
Joined: Thu Feb 11, 2010 8:09 am

Re: CVS Health 401k plan change- FYI

Post by mggray17 » Wed Nov 15, 2017 5:28 am

sco wrote:
Wed Nov 15, 2017 1:16 am
So I guess those making over $370k per year won't be able to get the full match. 5% would hit the 18,500 yearly cap.
5% Contribution + 5% Match = ??????

ERISA Stone
Posts: 1343
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Re: CVS Health 401k plan change- FYI

Post by ERISA Stone » Wed Nov 15, 2017 7:39 am

sco wrote:
Wed Nov 15, 2017 1:16 am
So I guess those making over $370k per year won't be able to get the full match. 5% would hit the 18,500 yearly cap.
Participants in a 401k plan cannot receive benefits on compensation over $275k for 2018. If the matching formula is 100% of deferrals up to 5% of compensation, the maximum matching contribution is $13,750.00.

sco
Posts: 622
Joined: Thu Sep 24, 2015 2:28 pm

Re: CVS Health 401k plan change- FYI

Post by sco » Wed Nov 15, 2017 9:45 am

ERISA Stone wrote:
Wed Nov 15, 2017 7:39 am
sco wrote:
Wed Nov 15, 2017 1:16 am
So I guess those making over $370k per year won't be able to get the full match. 5% would hit the 18,500 yearly cap.
Participants in a 401k plan cannot receive benefits on compensation over $275k for 2018. If the matching formula is 100% of deferrals up to 5% of compensation, the maximum matching contribution is $13,750.00.
Interesting, thanks.

sco
Posts: 622
Joined: Thu Sep 24, 2015 2:28 pm

Re: CVS Health 401k plan change- FYI

Post by sco » Wed Nov 15, 2017 9:46 am

mggray17 wrote:
Wed Nov 15, 2017 5:28 am
sco wrote:
Wed Nov 15, 2017 1:16 am
So I guess those making over $370k per year won't be able to get the full match. 5% would hit the 18,500 yearly cap.
5% Contribution + 5% Match = ??????
The yearly IRS cap is on Contributions, not matches.

The Matches would be limited by not being able to do 5% each paycheck, at least not all year.

As noted above, apparently there is another salary cap limit as well.

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