New 401(k) "Catch-Up" for age 50 & Above
4/10/2002
The Economic Growth and Tax Relief Reconciliation Act of 2001 made some changes to 401(k) plans that allow employees over age 50 to contribute additional money (up to $1,000 extra in 2002). The changes were made by Congress to allow employees age 50 and older the opportunity to "catch up" on their retirement savings. Many employees have asked if Airborne will be adopting these new provision in our CAP/401(k) plan.
The IRS has issued regulations which provide guidance on how the new "catch-up" feature will work. Unfortunately, the IRS did not address all of the questions raised by the 401(k) community. There are still a number of important issues that have not been addressed on how the program will function. The IRS has promised to address the open questions with additional guidance by late spring 2002. Because there are still open questions on how catch up feature will function, Airborne has decided to wait until the additional guidance has been issued before proceeding with implementation. Assuming the IRS guidance addresses the outstanding questions, it is likely that Airborne would be able to add this feature to our plan later this year. If you have any questions about this issue please e-mail abx.benefits@airbrone.com.
For more information about new 401(k) catch up provisions visit the Fidelity's web site www.401k.com and read the article The New and Improved 401(k).
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