This Week's Hotel Voice


Enrollment Dates for 401 (k) Plan Are May 28 through June 14

Hotel Voice - May 17, 2019 Share/Save/Bookmark

More than 13,000 HTC members can't be wrong. They are participating in the union's 401 (k) benefit and helping to ensure a comfortable retirement. It's important to mention this now because the popular 401 (k) benefit has only two enrolment periods each year, and one of them is rapidly approaching. For this reason it would be a good idea to review why this benefit has so many members participating.



Hotel Trades Council members already enjoy two forms of retirement income — a pension plan and Social Security benefits — and the 401 (k) benefit is an excellent way to supplement that income.

In fact, the 401 (k) program is one of the few tax shelters available to working families. And while it is not a defined benefit like the HTC pension plan, it is certainly one of the smartest investments members can make. This is especially true because in no way were the tax-saving benefits of having a 401 (k) account affected by the so-called tax reform package passed by Congress at the end of 2017. These important facts are important to know now, because the next enrollment date for the union’s 401 (k) plan benefit takes place between Tuesday, May 28 and Friday, June 14. After that, the next enrollment period will occur close to the end of the year.

As always, there is lots of information available to help members decide if they would like to participate in the 401 (k) program. To assist those who are considering enrolling in the program, the Benefit Funds Office will be conducting meetings in the union’s auditorium and in many of the hotels. At these meetings members can learn more about this excellent benefit, receive enrollment forms, and submit enrollment forms.

The meetings at the union's Gertrude Lane Auditorium (305 West 44th Street) will take place on Friday, May 31, from 7:30 a.m. until 5:00 p.m., Thursday, June 6, from 7:30 a.m. until 5:00 p.m., Friday, June 7, from 7:30 a.m. until 7:00 p.m., Thursday, June 13, from 7:30 a.m. until 5:00 p.m., and Friday, June 14, from 7:30 a.m. until 7:00 p.m. There will be bilingual persons conducting the meetings, which will be held continuously throughout the day, meaning that members may arrive at any time between the hours listed. Members from any eligible shop can also come to the Funds Office at 305 West 44th Street any weekday between May 28 and June 14 to enroll for the July 1, 2019 start date.

Here's why so many members are already enthusiastically participating in the 401 (k) program. For starters, 401 (k) accounts are one of the few investments that can provide a return of up to 33% the first year. That's because contributions to 401 (k) accounts are not subject to federal or state income taxes. Contributions from participating members are deducted from paychecks (without taxes taken out) and directly deposited. For many workers, that income would be subjected to up to 33% combined federal and state income tax. But it is tax free when deposited into a 401 (k) account, making it a superb tax shelter.

But that’s not all. The money in 401 (k) accounts is allowed to grow without being taxed! Money in 401 (k) accounts is only taxed when it is withdrawn.

All of these facts help explain why the 401 (k) plan is an excellent way for workers to supplement their retirement income. Especially with Republican resistance to improving the Social Security program, there is little doubt that the 401 (k) benefit is a wise choice for workers who want a comfortable and secure retirement.

It should also be noted that there is a wide variety of investment choices members can choose from in determining how their 401 (k) account money is invested, some with less risk than others, and there are even investments that are not related at all to the stock market.

You can learn information like this by attending one of the enrollment meetings in your hotel or those scheduled for the union’s auditorium. If you attend one of these meetings, you will be given descriptions on the various funds available to invest in through the program, including a thorough explanation of risks and returns. In addition, all questions members may have about the 401 (k) benefit can be answered at these meetings.

We would also like to remind members that to enroll in the 401 (k) benefit you must have all your beneficiary information readily available to complete the forms of enrollment. No enrollments can be accepted without information like your beneficiaries’ names, addresses, Social Security numbers and dates of birth. Married members must have their spouses sign and notarize the beneficiary designation form if the money in their 401(k) plan is to be left to someone other than their spouses or even if any portion of the money is to be left to someone else. Obviously, the purpose of this is to ensure that any money in your 401(k) account is left to the person(s) you designate in the event of your death.

There are some other important things you should know about the 401 (k) program. For example, if you change employment you are usually permitted to roll over your 401(k) account to an IRA (individual retirement account) or to your new employer’s 401 (k) plan. In either case, you will not suffer a tax penalty. And, yes, just like our Union’s pension benefit, the 401 (k) plan is portable. That means that if you change employment from one Hotel Trades Council shop to another you will be able to continue your 401 (k) plan without penalty.

You should also know that since 401 (k) plans are tax shelters designed to help fund your retirement, there are usually tax consequences if you withdraw your money earlier than age 59½. Moreover, money withdrawn before age 55 will usually result in a 10% tax penalty. There are some exceptions to these rules.

There is one final note that we think is important: there is no investment that guarantees the income tax savings that a 401 (k) plan can, and that’s why we urge members to consider participating.

If you would like to enroll in the 401(k) benefit in time for the next enrollment date please remember that you must do so between May 28 and June 14. If you would like to learn more about this benefit or enroll in the program, you can do so by visiting the Union’s auditorium at the dates and times listed earlier in this article. Again, presentations explaining the 401(k) plan will take place continuously during those hours. Also, members from any eligible shop can come to the Funds Office at 305 West 44th Street, fourth floor, any weekday between May 28 and June 14 to enroll for the next 401 (k) benefit start date.

Yes, more than 13,000 HTC members have taken advantage of the 401 (k) benefit. Your opportunity to join these members in saving for a secure retirement takes place during the 401 (k) enrollment period from May 28 until June 14.