Liberty Mutual wants to help employees reach their retirement goals. That’s why we offer the Liberty Mutual 401(k) Plan. Employees can set aside money for their future through convenient payroll contributions and invest their savings in a variety of investment options. Plus, Liberty matches 50% of the first 8% of pay that’s contributed — that could mean an extra 4% going toward retirement!
Employees can contribute to the 401(k) Plan on a before-tax, traditional after-tax and/or Roth basis through convenient payroll deductions. For before-tax and/or Roth contributions, an annual IRS limit of $19,000 applies in 2019. Employees age 50 or older can contribute an additional $6,000 in catch-up contributions annually.
View the table below to learn more about the tax treatment of each contribution type:
|Before-tax contributions||Traditional after-tax contributions||Roth contributions|
|Reduces taxable income?||Yes||No||No|
|Taxed on contributions?||Yes, when a distribution is taken from the plan||Yes, at the time of payroll contribution||Yes, at the time of payroll contribution|
|Taxed on earnings?||Yes, when a distribution is taken from the plan||Yes, when a distribution is taken from the plan||No, as long as the distribution is qualified*|
Liberty matches 50% of the first 8% of eligible pay contributed to the 401(k) Plan. To receive the full company match, the employee must contribute at least 8% of pay.
Please keep in mind that company matching contributions — and any earnings on those amounts — are taxable upon distribution.
Eligibility and enrollment
The 401(k) Plan is available to most full-time and part-time employees classified as regular, permanent or non-temporary employees.
Newly hired employees will be enrolled automatically in the 401(k) Plan at an 8% contribution rate on a before-tax basis on their hire date. Their accounts will be invested in the age-based Target-Date Portfolio. Employees can opt out of automatic enrollment within 30 days of their date of hire.
Vesting is the non-forfeitable right to receive a benefit. For example, when an employee is 100% vested in the 401(k) Plan, they have earned the right to receive the whole value of the benefit in question. It also means that employees can withdraw or rollover to another qualfied plan the entire amount – even what’s been contributed by Liberty – if they choose to leave the organization.
Employees are always fully vested in the value of their own contributions and any investment earnings on those contributions. For company contributions and earnings on those contributions, employees will become 50% vested after completing one year of service and 100% vested after completing two years of service.
The plan investment lineup offers a wide range of options to make it easy for employees to choose the investments best suited to their personal investment style and financial goals. Employees can choose to invest their contributions and any company contributions in either an age-based Target-Date Portfolio or an investment mix of their choice. Employees can also change their investment elections at any time.
Liberty has teamed with Fidelity Investments to offer Fidelity® Personalized Planning & Advice at Work, a managed account service designed to help employees get – and stay – on course toward their retirement goals. Employees get retirement account management, which means that Fidelity’s team of investment professionals invest, monitor and rebalance the account as needed to adjust to changes in the market or with an employee’s specific situation. Please note there’s an additional charge for this service.
Loans and withdrawals
Employees may borrow up to 50% of their vested 401(k) Plan account, but keep in mind that the portion of the account that’s being borrowed won’t be making any investment gains while it’s out of the plan.
Employees can take a regular loan for any reason and repay it through payroll deductions over a period of one to five years. Employees can take a home loan to acquire their principal residence and repay it over a period of 6 – 15 years. Plan contributions will continue after the loan is taken, unless elected otherwise.
If employees experience financial hardships, they may request a withdrawal of a portion of their account while still working at Liberty. Depending on the type of withdrawal requested, the plan contributions may be suspended for six months. Be sure to understand both the tax consequences and implications for long-term savings of taking a withdrawal.