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Workplace Plans

401(a) Defined Contribution Plan

With a 401(a) plan, you can save and invest for retirement with tax benefits. Even better, your employer can offer both a 401(a) and 457(b) plan together to help you build a secure retirement.
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What is a 401(a) plan?

A 401(a) plan is a type of workplace retirement plan that can include an employer contribution and require you to contribute either a certain dollar amount or a percentage of your pay with pre-tax dollars. Depending on the terms of the 401(a) plan, you may be permitted to contribute additional after-tax dollars as well.

How does a 401(a) plan work?

Contributions to your 401(a) plan are invested and can grow with interest over time. Investment options vary and are chosen by your employer. Once you’ve reached normal retirement age or for certain qualifying events, you can withdraw the funds without penalty to replace your income in retirement.
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401(a) Contributions

Contribution rules are generally determined by your employer. A common method combines employer and mandatory employee contributions.
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Employee Contributions

Employee contributions can be either mandatory or voluntary. Voluntary contributions are made on an after-tax basis.
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Employer Contributions

Employer contributions are typically made as either a fixed-dollar amount or percentage amount of an employee's compensation. Employers that allow voluntary contributions may elect to match the employee's contribution.
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401(a) Contribution Limits

IRS rules limit the total contributions made to an account, including both employer and employee contributions. See contribution limits for the current calendar year.
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Frequently Asked Questions

Are 401(a) contributions pre-tax?

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Mandatory contributions are generally made with pre-tax dollars, which reduces your current taxable income. Voluntary contributions are made with after-tax dollars and can be up to 25% of your compensation.

What are the 401(a) plan investment options?

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You control how your account is invested, choosing from options selected by your employer. A typical plan includes a wide range of options, from more conservative stable-value funds to more aggressive bond and stock funds. You may choose to build a diversified portfolio of various funds, select a simple yet diversified target-date or target-risk fund, or rely on specific investment advice through Guided Pathways® Advisory Services, if offered by your plan. To review investment options for your plan, log in to your account. Learn more about investing for retirement in the Financial Education Center.

Can I borrow from a 401(a) plan?

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If the terms of your 401(a) plan allow it, you may borrow money from your account under certain circumstances. Learn more about 401(a) loans and early withdrawals, including repayment rules, hardship withdrawals, and borrowing from a 401(a) plan for a down payment on a home.

What are the 401(a) plan withdrawal rules?

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Withdrawing After Leaving Employment

Upon leaving employment, you may withdraw money from your 401(a) account as you see fit. You have the flexibility to take money as needed and have it directly deposited into your bank account. An IRS-imposed 10% early-withdrawal penalty may apply to withdrawals taken before age 59 1/2. If you’re no longer employed, you must begin making Required Minimum Distributions at age 73.*

Withdrawing When Employed

While you’re employed, the available withdrawal options are limited and vary by plan. Some options may include the ability to withdraw voluntary, after-tax contributions at any time or to withdraw money after you reach a certain age (e.g. the plan's normal retirement age). As with withdrawals made upon separation from service, any in-service distributions made after age 59 1/2 would not be subject to penalty.

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401(a) Rollovers

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You can roll over funds from your 401(a) plan into a variety of other plans, including 457(b) plans, IRAs, and other 401(a) plans. Learn more about 401(a) rollovers.
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401(a) RMD Rules

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Required Minimum Distribution rules apply to 401(a) plans when you reach age 73* and are no longer working for the employer. Some employers may require you to start RMDs at age 73, even if you’re still employed. Contact us with questions about RMDs.
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401(a) Survivor Benefits

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Individuals designate one or more beneficiaries to receive any remaining assets in their 401(a) account upon their death.
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*Age 70 1/2 (if you were born before July 1, 1949), age 72 (if you were born after June 30, 1949, and before Jan. 1, 1951), or age 73 (if you were born after Dec. 31, 1950).

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Get Professional Investment Advice

Access fund recommendations and investment management options for your 401(a) plan through our Guided Pathways® Advisory Services.
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