Last week following our E-lines publication addressing the 401(k) Automatic Increase & Escalation and the Fidelity Annual Increase Program information, there were a number of people who were apparently unaware of either the Automatic Enrollment & Escalation Contract provision or the Annual Increase Program offering by Fidelity or both. Let’s clear up any confusion.
Section 29.I.d.(3). of our JCBA provides for the Automatic Enrollment and Escalation feature of the Retirement Plans Section of our Contract as Additional 401(k) Provisions of the JCBA. At company discretion, the 401(k) plan may include an automatic enrollment and/or an automatic escalation feature. In December 2016, the company advised employees of their intent to implement the Automatic Increase program as a way to encourage employees to plan for their future, they outlined how the plan would work. Anyone contributing less than 10% to their 401(k) plan would have their contributions increased by 1% annually (on their pay anniversary) unless electing to opt out of the feature.
The Fidelity Annual Increase Program, while similar, is not part of this provision of the Contract and is entirely at the direction of the employee. Employees using this feature available from the Fidelity Investments website elect not only the percentage of wages to be deferred into the 401(k) plan, they also elect the date on which the increase is to become effective. Using this feature, deferral percentages can range from 1% to 100%, at the employee’s option.
In both cases, to make changes or opt out, you must use the features of the Fidelity website to remove or reduce the percentage deferral specified. Keep in mind, the 401(k) matching feature of the Retirement Plan provisions of our JCBA are specific to your pre-merger affiliation. In any case, should you elect to reduce the deferral contributions to your 401(k) plan account, we strongly encourage you to consider the potential impact any decrease may have on the matching contributions from United required under the plan.