7.5.3.2
401(k) Retirement Plan
Shasta Head Start sponsors a 401(k) retirement savings plan. Below is a breakdown of the basic aspects of the SHS 401(k) retirement plan. Any questions or concerns regarding Shasta Head Start’s 401(k) plan should be directed to the Human Resources Department. A full explanation of the plan can be found in the Summary Plan Description.
Contributions
Eligible employees can contribute to their 401(k) plan through payroll deductions. Open enrollment occurs quarterly (January, April, July, & October). Employees can begin contributing or make any changes to their contributions during open enrollment periods only. Contributions may be stopped at any time but cannot start again until a new quarterly open enrollment.
Plans
There are two different types of plans: Roth and Pre-Tax (or traditional). Below is a very simple explanation of the basic differences between each plan.
Roth 401(k)
- Money is taxed at time of contribution
- Any growth in addition to your contributions will not be taxed when you withdraw at retirement
- Money will not be taxed on your distributions when you retire/reach retirement age and begin withdrawing funds from the account
Pre-Tax/Traditional 401(k)
- Money is not taxed at time of contribution
- Contributions and any growth will be taxed at time of distribution when you retire/reach retirement age and begin withdrawing funds from the account
You can contribute to both Roth and Pre-Tax plans at the same time, but the limit ($23,000/year) and catch up for those of age 50 or older ($7,500/year) will apply to both plans combined.
Portfolio
Determine how you would like your money invested by selecting the appropriate portfolio. American Trust provides multiple risk-based model portfolios that can be selected based upon your comfort level (ultra-aggressive vs. ultra-conservative). Additionally, there is an option to create your own portfolio. Either way, financial advice regarding your SHS 401(k) plan is available at no cost (see below).
Advice
Shasta Head Start will not provide any advice on investments, plans, portfolios, etc. We have a financial advisor who has your best interest in mind. You can discuss your 401(k) plan and seek financial advice regarding your SHS 401(k) retirement plans with him at no cost.
Employer Match
Shasta Head Start will make a matching contribution equal to 50% of employee’s salary contributions, not to exceed 5% of total compensation. The maximum match is $1,000 per year. The employer match is calculated at the end of a calendar year and is contributed as a lump sum (this typically occurs around March of each year).
More information on the employer match, including other conditions, can be found in the Summary Plan Description.
Vesting
This plan has a vesting schedule based on years of service that applies to certain employer contributions. This means employees may not be entitled (“vested”) in all the contributions until they have been employed with SHS for five years. However, employees will always be 100% vested in any contributions they have made (including rollovers). For each year of service with SHS, the vesting percentage increases by 20%. Below is a table describing the vesting percentages based upon years of service.
| Years of Service | Percentage Vested |
| 1 | 20% |
| 2 | 40% |
| 3 | 60% |
| 4 | 80% |
| 5 | 100% |
More information on vesting can be found in the Summary Plan Description.
Account Information
American Trust Company administers our agency’s 401(k) retirement plan. Employees can access their account information through American Trust’s website. American Trust will send out quarterly statements for accounts. Statements will be sent via mail or accessible via e-statements online if requested.