Benefits News

GE 401(k): Suggested Portfolios

noreply@blogger.com (Unknown) — Mon, 18 Jun 2012 02:24:00 +0000

Now that GE offers more investment options in the 401(k), it is possible to construct many standard portfolios suggested by financial advisors using these options. I've listed some below:

Paul Merriman suggests the following three different asset allocations for stocks and bonds, for Aggressive, Moderate and Conservative portfolios:

Aggressive: 100% stocks
Moderate: 60% stocks, 40% bonds
Conservative: 40% stocks, 60% bonds

I have used the following further breakdowns within each category, but you may want to tweak this according to your preferences:
Stocks: 25% US Large Cap, 10% US Mid-Cap, 15% Small-Cap, 50% International
Bonds: 50% intermediate-term, 30% short-term, 20% TIPS

These portfolios primarily use the new index fund options available in the GE 401(k). If you prefer the more established GE fund options (actively managed), you can use them instead, as I've indicated at the bottom of this post.

Aggressive portfolio:
25% U.S Large Cap Equity Index Fund
10% U.S. Mid-Cap Equity Index Fund
15% U.S. Small-Cap Equity Index Fund
50% Non-U.S. Equity Index Fund

Moderate portfolio:
15% U.S Large Cap Equity Index Fund
6% U.S. Mid-Cap Equity Index Fund
9% U.S. Small-Cap Equity Index Fund
30% Non-U.S. Equity Index Fund
20% U.S. Aggregate Bond Index Fund
8% U.S. TIPS Index Fund
12% GE S&S Short Term Interest

Conservative portfolio:
10% U.S Large Cap Equity Index Fund
4% U.S. Mid-Cap Equity Index Fund
6% U.S. Small-Cap Equity Index Fund
20% Non-U.S. Equity Index Fund
30% U.S. Aggregate Bond Index Fund
12% U.S. TIPS Index Fund
18% GE S&S Short Term Interest

For those who prefer the actively managed options in GE S&SP, the following funds may be substituted:
-GE S&S Program Mutual Fund instead of U.S Large Cap Equity Index Fund
-GE Institutional International Equity Fund instead of Non-U.S. Equity Index Fund
-GE Institutional Small-Cap Equity Fund instead of U.S. Small-Cap Equity Index Fund
-GE S&S Income Fund instead of U.S. Aggregate Bond Index Fund

What about GE stock in your S&SP? A general guideline is not to hold more than 10% of employer stock in your overall investment portfolio. Any GE stock you hold may be considered to be part of the U.S. Large Cap, and the other allocations adjusted accordingly.

2012 Retirement account contribution limits

noreply@blogger.com (Unknown) — Sun, 08 Apr 2012 16:41:00 +0000

IRS restricts the maximum amount that you can contribute to tax-advantaged retirement account (401k, 403b, IRA etc.). The limits for 2012 are published at the IRS web site.

The maximum pre-tax contribution allowed to 401(k) and 403(b) accounts for 2012 is $17,000. Those who are over 50 are allowed to contribute an additional $5,500 in "catch-up" contributions.

Note that this is the maximum allowed by IRS. Your individual plan may have additional restrictions that prevent you from contributing the full amount. It is important to check with your plan administrator.

For IRAs (both Traditional and Roth), the contribution limit is the same as for 2011 ($5,000). The contribution limit for those over 50 is also the same as before ($6,000).

For traditional IRAs, you qualify for a tax deduction if your Modified Adjusted Gross Income (MAGI) is below certain limits. For 2012, the deduction phase-out ranges are:

For Single and Head of Household filers, $58,000 to $68,000.

For married couples filing jointly and where the spouse contributing to the traditional IRA is covered by an employer-based retirement plan: $92,000 to $112,000. For a spouse not covered by a group plan, the deduction is phased out on income between $173,000 to $183,000.

To be eligible to fully contribute to a Roth IRA, your adjusted gross income (AGI) must be under $173,000 for taxpayers filing a joint return. For single taxpayers, the AGI limit is $110,000. Even if you are not eligible for a Roth IRA contribution, you may be able to contribute to a Traditional IRA and then convert it to Roth.

2012 HSA contribution limits

noreply@blogger.com (Unknown) — Sun, 08 Apr 2012 16:33:00 +0000

For Health Savings Accounts in 2012, you can save up to the maximum contribution limit of $3,100 for an individual HSA health plan and $6,250 for a family HSA health plan.

Individuals age 55 to age 65 can contribute an additional $1,000 in 2012. If both husband and wife are over 55, each can contribute the additional amount to an HSA.

An HSA account is an individual account. With a family HSA health plan, both a husband and wife can set up separate HSA accounts, or one spouse can set up a single HSA account usually coupled with a beneficiary designation to the other spouse. Dependent children do not qualify to set up their own HSA.

HSAs are only available to individuals who are covered by a high-deductible health insurance plan, which means a plan that (in 2012)

has an annual deductible of not less than $1,200 for individuals (or $2,400 for families); and
has required out-of-pocket maximums of not more than $6,050 for individuals (or $12,100 for families).

GE 401(k) Overview

noreply@blogger.com (Unknown) — Wed, 21 Jul 2010 03:13:00 +0000

Savings and Security Program (S&SP) is the 401(k) plan for employees of General Electric company.

GE introduced major changes to S&SP in 2010. The major changes are:

Record keeping and other administrative functions transitioned to Fidelity Investments
5 new Index fund options from Barclays Global Investors (BGI, which is now owned by BlackRock)
Vanguard S&P 500 Index fund (VIIIX) to be replaced with the BGI S&P 500 Index fund
GE Stock to be replaced with a "unitized" GE Common Stock fund.
Roth 401(k) option

The investment options available in the 401(k) for 2010 are listed below, with ticker symbols and expense ratios where available. Expense ratios are from the December 2009 fund prospectus documents. All index funds are managed by BlackRock (formerly Barclays Global Investors).

Stock funds:

GE S&SP Program Mutual Fund (GESSX 0.19%)
GE Institutional International Equity Fund (GIEIX 0.57%)
GE Institutional Small-Cap Equity Fund (GSVIX 0.93%)
GE Common Stock fund (0.00%)
U.S Large-Cap Equity Index Fund (tracks S&P 500 Index, 0.016%)
U.S. Mid-Cap Equity Index Fund (tracks S&P MidCap 400 Index, 0.056%)
U.S. Small-Cap Equity Index Fund (tracks Russell 2000 Index, 0.047%)
Non-U.S. Equity Index Fund (tracks MSCI All Country World ex-US Index, 0.106%)

Bond funds:

GE S&SP Income Fund (GESLX 0.19%)
GE S&SP Short Term Interest Fund (0.00%)
U.S. Aggregate Bond Index Fund (tracks Barclays Capital Aggregate Bond Index, 0.047%)
U.S. TIPS Index Fund (tracks Barclays Capital U.S. TIPS Index, 0.055%)

Other:

GE Institutional Strategic Investment Fund (balanced fund) (GSIVX 0.36%)
GE S&SP Money Market Fund (0.00%)
U.S. Series "EE" Savings Bonds (For after-tax contributions only, 0.00%)

Healthcare legislation: Changes in 2011

noreply@blogger.com (Unknown) — Tue, 20 Jul 2010 01:12:00 +0000

Under the new Healthcare legislation (Patient Protection and Affordable Care Act) signed into law in 2010, a number of changes are set to be phased in over the next few years.

The changes made this year will come into effect in 2011, with more phased in over the next few years until the law becomes fully implemented by 2018 or later.

According to a CNN Money article, So here's what you can to expect in 2011 to employee healthcare plans:

Dependent coverage to age 26: 2011, employers will have to provide coverage for dependents of employees who don't have access to other employer-based health care coverage 'till age 26 with the exception of a few states which mandate this coverage until age 28 or 29
No lifetime dollar limits: The new law eliminates all lifetime caps on individual benefits. In the event of a catastrophic accident or illness, employees no longer have to worry that their benefit will run out.
No reimbursement for over-the-counter drugs using money in FSA and HSA accounts.
Higher penalty for misusing Health Savings Accounts: Under the new law, the penalty for non-qualified use jumps from 10% to 20 % of the value of the offending claim.
Report health coverage on W-2 forms: Employers will have to report the value of an employee's health care plan on W-2 forms.
Cap on Flexible Spending Account contributions: Although this change does not kick in until 2013, the new law will limit employee contributions to FSAs to $2,500 a year.

Employee health insurance: 2010 trends

noreply@blogger.com (Unknown) — Fri, 16 Jul 2010 02:31:00 +0000

According to CNN Money, in 2010, your employer is making sure that when it comes to paying for your health care, you're sharing much more of the burden.

"The headline is greater cost sharing," said Tom Billet, senior consultant with human resources consultancy Watson Wyatt. "That means higher [employee] contributions, higher deductibles, or both," he said.

According to the article, here's what we're seeing in 2010:

Higher out-of-pocket costs.
Moving away from co-pays (where you pay a fixed fee) to co-insurance (where you pay a percentage).
Fewer options.
Consumer-directed health plans.
Closer scrutiny of dependent coverage.
Incentives to stay healthy.

Best companies to retire from

noreply@blogger.com (Unknown) — Wed, 14 Jul 2010 01:51:00 +0000

CNN Money/Fortune has published this list of 8 great companies to retire from.

The companies listed are:

1. IBM
Highlight: "Gold standardin 401(k) plans: Automatic company contributions run up to 4% of pay, while the firm matches employee savings up to 6% of pay."

2. Procter & Gamble
Highlight: "P&G contributes cash and preferred stock to each employee's account, scaling its payments for each year of service, up to 18% of pay, after 20 years at the company. "

3. Sherwin-Williams
Highlight: "After 35 years of service, retirees can walk away with the company covering 80% of their medical costs."

4. Alcon Labs
Highlight: "Employees get cash contributions from the company, worth 7% of their pay, and dollar-for-dollar matching of their 401(k) savings, up to 5% of pay."

5. Principal Financial Group
Highlight: "The company offers 75% matching on employee 401(k) donations, up to 8% of pay, while two defined-benefit plans scale up over an individual's career and, in some cases, top out at 14% of pay. "

6. Devon Energy
Highlight: "A 401(k) plan that lets millennial-generation workers control their own finances and keeps them there by scaling up over their years of service to top out at 22% of pay, along with medical coverage."

7. NuStar Energy
Highlight: "A pension plan that gives retirees their full salary for one-and-a-half times their years of service: work 20 years and get 30 years' worth of your full pay, assuming you haven't retired early, and dollar-for-dollar 401(k) matching, up to 6% of pay."

8. Weyerhaeuser
Highlight: "Offers both a pension and a 401(k) plan, and for employees to manage their retirement dollars."

Health Savings Accounts (HSAs)

noreply@blogger.com (Unknown) — Sun, 11 Jul 2010 17:42:00 +0000

Health Savings Accounts (HSA) are attractive to people who expect to have low medical expenses or can afford to plan in advance for future medical expenses. Unlike the more widely used flexible spending accounts, which must be emptied each year, HSAs can be used to save for future health costs on a tax-free basis.

While the HSAs are still supported under the new Healthcare law, it is clear that they are not strongly favored by many lawmakers. Since HSAs primarily benefit middle income earners, they don't have a lot of strong proponents in Congress. Health insurers aren't particularly fond of these plans either in that their profit potential is low with high-deductible plans. They also don't like the idea of healthier members switching to the high-deductible plans, thereby increasing the risk of their regular insurance plan members.

While money in HSAs is safe, and it is safe to continue to contribute to these plans, some things about these plans may change in the future:

There may be tighter limits on contributions to HSAs. Annual contribution limits this year are $3,050 for individuals and $6,150 for families.
There may stronger requirements on verifying that account holders are spending funds on qualified medical expenses. Currently, account holders and custodians are required to report annual contributions and distributions from HSAs to IRS. In case of an audit, it’s the responsibility of the account holder to prove, by showing receipts, that the money was used for medical expenses.
Starting in early 2011, you will no longer be able to pay for Over-the-counter medications with HSA dollars.

Additional sources for information about HSAs:

FAQ from U.S. Treasury

IBM 401(k) - The gold standard?

noreply@blogger.com (Unknown) — Sat, 10 Jul 2010 00:08:00 +0000

The 401(k) plan for IBM employees is considered to be one of the best in the industry. IBM phased out its defined-benefit pension plans and transitioned all employees to the 401(k) in the last few years.

What's so good about IBM's 401(k) plan? It is a combination of generous company contributions, ample fund choices, low fees and good financial advise.

Employer match of 100% for up to 6% of pay.
A large number of available funds, or nearly every asset category. There are 23 primary investment products, and another 200 mutual funds from multiple investment companies such as Fidelity, Vanguard, Pimco and Dodge & Cox.
Low fund fees, of around 0.10% are a result of the size of the plan and IBM's negotiating power.
Unlimited access to confidential, one-on-one personal financial planning from Fidelity and Ayco, a Goldman Sachs company, for employees and their families.
Target-date funds designed in-house based on core investment choices. There are four premixed investment funds that range from conservative to aggressive in risk.
Auto-enrollment, contribution escalation and re-balancing
Roth 401(k) option is available.
Option to roll over your 401(k) into an annuity when you retire. You can choose from multiple annuity providers at IBM’s institutional rates, which are lower than you will find on the open market.

IBM was widely criticized for dropping their pension plans, but its 401(k) plan is now generally considered to be a success. Of the more than 100,000 active employees, about 94% participate in the program. This could be a model for other large companies.

2010 Retirement account contribution limits

noreply@blogger.com (Unknown) — Fri, 09 Jul 2010 02:53:00 +0000

IRS restricts the maximum amount that you can contribute to tax-advantaged retirement account (401k, 403b, IRA etc.). The limits for 2010 are published at the IRS web site.

The maximum pre-tax contribution allowed to 401(k) and 403(b) accounts for 2010 is $16,500, which is the same as it was for 2009. Those who are over 50 are allowed to contribute an additional $5,500 in "catch-up" contributions. This is again the same as it was for 2009.

Note that this is the maximum allowed by IRS. Your individual plan may have additional restrictions that prevent you from contributing the full amount. It is important to check with your plan administrator.

For IRAs (both Traditional and Roth), the contribution limit is the same as for 2009 ($5,000). The contribution limit for those over 50 is also the same as before ($6,000).

To be eligible to fully contribute to a Roth IRA, your adjusted gross income (AGI) must be under $167,000 (increased from $166,000 for 2009) for taxpayers filing a joint return. For single taxpayers, the AGI limit is $105,000, which is the same as it was last year.

Basics of TSP (Thift Savings Plan)

noreply@blogger.com (Unknown) — Thu, 08 Jul 2010 01:33:00 +0000

Thrift Savings Plan (TSP) is the defined-contribution retirement plan for U.S. Federal employees. It is equivalent to 401(k) plan for private corporations and enjoys the same kind of tax advantages.

The following are the investment options available for TSP participants:
Government Securities Investment Fund ("The G Fund")
This contains government securities specially issued for TSP. This is a "stable value fund", i.e., it is guaranteed not to lose principal, but is subject to inflation risk.

Fixed Income Index Investment Fund ("The F Fund")
This is a bond fund that contains government, corporate and mortgage-backed bonds. It tracks the Barclays Capital U.S. Aggregate Bond Index.

Common Stock Index Investment Fund ("The C Fund")
This is a U.S. Large-cap stock fund that tracks the S&P 500 index.

Small Capitalization Stock Index Investment Fund ("The S Fund")
This fund contains stocks of medium and small U.S. companies that are not included in the C fund. It tracks the Dow Jones U.S. Completion TSM Index.

International Stock Index Investment Fund ("The I Fund")
This is a fund that contains stocks of non-U.S. companies, specifically those of developed countries. It tracks the the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) Index.

Lifecycle (L) Funds
These were added in 2005. These are asset-allocation funds, equivalent to target retirement funds available from investment firms. These are invested in the G, F, C, S, and I Funds according to a pre-set formula. There are 5 different L funds available, depending on your target retirement date: L Income fund, L 2010 fund , L 2020 fund, L 2030 fund and L 2040 fund. The L Income fund is intended for participants who are already withdrawing their money or who are just about to begin withdrawal.

More information about TSP funds is available at the official TSP site here.

http://www.tsp.gov/

Welcome

noreply@blogger.com (Unknown) — Wed, 07 Jul 2010 01:40:00 +0000

Welcome to Benefits News!

This is an independent blog intended for covering news and information about employee benefits at different companies and organizations. My hope is that this will help readers compare their benefits with others, and discuss their benefit plans and options with others in a similar situation.

This site is not affiliated with any employer, plan administrator, or financial advisor in any way. Any comments left on the posts are the opinions of the respective posters. Please do not post any information that is private or confidential to your employer.

If you have any questions, comments or suggestions about the forums, please post here, or send me an email at benefitsblog@gmail.com.

Thank you.
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