401(k) & PSP Highlights
K-C offers the 401(k) & Profit Sharing Plan (401(k) & PSP) in partnership with Fidelity Investments to help you build savings for retirement during your career with K-C. You have direct control over how much you contribute and how you invest your funds.
Let’s take a look at some of the highlights of the 401(k) & PSP and the resources available to help you reach your retirement goals.
Need Help?
Call the K-C Benefits Information Line at 800-551-2333 and select the 401(k) & Pension option.
401(k) Contributions
The 401(k) allows you and K-C to work together to help you save for retirement because when you start, how much you save, and where you invest matters.
K-C Contributes:- K-C matches your 401(k) contribution, dollar-for-dollar, on the first 5% of the eligible earnings you contribute.*
- You elect to contribute a percentage of your pay each pay period through automatic pre-tax, Roth 401(k), and/or after-tax deductions. Up to 50% of your eligible earnings can be contributed, subject to contribution limits and you can change your contribution at any time.
- By electing the annual increase program in the 401(k), you can set up your contributions to automatically increase each year.
- You're immediately 100% vested in both your contributions and K-C's contributions to the 401(k) & PSP, including any earnings on them.
How to Roll Over
If you previously participated in another employer’s qualified retirement plan, you may be able to roll over some or all of your distribution from a prior employer’s plan. To request a Rollover Contribution Form, log in to NetBenefits.
Pre-tax Contributions
Every pre-tax dollar you contribute to the 401(k) out of your paycheck reduces your taxable income by a dollar. That means you’ll pay less in income taxes today and you don’t pay taxes on your contributions and earnings until you make a withdrawal.
With less of your income being taxed each pay period, contributing to the plan costs less than you might think. Believe it or not, saving extra pre-tax money may not make much of a difference in your take-home pay.
Roth 401(k) Contribution
Roth 401(k) contributions are after-tax savings for your retirement where the earnings grow tax free. The advantages of Roth 401(k) contributions are realized when you take your money out. If you're in a lower tax bracket when you save, it may be beneficial to put aside Roth 401(k) contributions particularly earlier in your career.
If you contribute after-tax dollars on a Roth 401(k) basis, the earnings are also tax free, as long as you follow the rules.
Need help deciding how much you should save for retirement?
You have access to a Fidelity Planning Consultant at no additional cost to you. Call 866-811-6041 from 8:30 a.m. to 8:30 p.m. ET.
After-tax Contributions
When you contribute after-tax dollars, you'll pay taxes on that money today, but you won’t owe taxes on your contributions when you take the money out. However, you'll owe taxes on the earnings.
If you plan to contribute more than the pre-tax and Roth 401(k) limit, after-tax contributions are available up to the contribution limits.
Profit Sharing Contributions
The profit sharing component of our retirement plan allows K-C to make an annual profit sharing contribution, at the Company’s discretion, to eligible employees. The profit sharing scale ranges between 0% and 8% of your eligible earnings. The target contribution is 4% and is adjusted to reflect K-C’s overall performance against a key financial metric called Earnings Per Share (EPS) that is established by the Board at the beginning of each year.
Eligibility & Timing
You’ll receive an annual discretionary profit sharing contribution if:
- you’re employed on December 31,
- you leave K-C during the year at or after age 55, or
- your employment ends due to death
If eligible, the profit sharing contribution is contributed into your 401(k) account during the first quarter of each year. The contribution amount is a percentage of your eligible earnings for the prior year.
Example & Investments
Let’s say you’re an eligible employee who received $60,000 in eligible earnings for the year. K-C reaches the EPS target and approves the 4% annual discretionary profit sharing contribution. You would receive a $2,400 profit sharing contribution into your 401(k) account during the first quarter of the year.
Your profit sharing contribution would be invested based on your investment elections in effect at the time the contribution is made. Be sure to review your contribution and investment elections regularly to see how they impact your retirement goals. To review your election, log in to NetBenefits and select View Summary.
If you’re currently not making employee contributions to the Plan, you’re still eligible to receive the profit sharing contribution. Your contribution would automatically be invested in a Target Date Fund based on your date of birth.
Investment Options
K-C gives you a lot of control over how your retirement money is invested in the 401(k) & PSP. Once you’re enrolled, you can pick from a wide selection of investments.
Do it Yourself - Comfortable with Managing Your Own Portfolio?
Core Funds
These funds cover a wide range of asset classes (stocks, bonds, and others) that have different risk/reward potential. From the Core Funds, you can create an investment portfolio that you’ll manage yourself based on when you want to retire, your risk tolerance, and your savings goals.
Don’t forget:
- Core Funds provide some guidance to help you determine risk-level.
- You’re still allocating money to the funds and need to think through how to diversify your investment so you have an appropriate mix of aggressive and lower-risk funds.
Self-Directed Brokerage Window
The Self-Directed Brokerage Window offers the broadest marketplace of funds. You can access more "non-K-C" investment choices as well as exchange-traded funds. So, this is the most hands-on option to invest your contributions.
Don’t forget:
- With greater control, comes greater responsibility. You’ll need to carefully monitor your investments so they continue to support your retirement goals.
Do it For Me – Need Help Managing Your Own Portfolio?
Premixed Portfolios - Target Date Funds
Target Date funds provide a single, diversified investment option that automatically gets more conservative as you approach retirement age. All you need to do is select the target date fund that’s closest to the year you plan on retiring.
Don’t forget:
- They automatically rebalance as contributions are added or grow, so you always have a diversified portfolio.
Personalized Planning & Advice
For a fee, Fidelity’s professional investment team will continuously monitor and rebalance your assets to a model portfolio based on your specific financial situation. These professionals will track the changes in the market, as well as the funds in your plan.
Don’t forget:
- You can opt in or out at any time by contacting a Fidelity Planning Consultant at 866-811-6041.
- To learn more about Personalized Planning & Advice, including how to change your participation in this service, see the Investment Performance and Research section of NetBenefits.
Loans & Withdrawals
Whether you’re looking to take a loan or make a withdrawal from your 401(k) account, there’s a lot to consider.
Loans
It may be tempting to borrow from your 401(k) account, but a 401(k) loan may not be worth its true cost:
- Loan fee. You’ll be charged a $50 fee when you take a loan from your 401(k) balance.
- No tax deduction. You’ll repay the loan with after-tax dollars deducted from your paycheck.
- Potentially lower investment returns. The money you borrow doesn’t grow through investment gains while you’re paying back the loan.
Withdrawals
While the plan is designed primarily to serve your retirement goals, it also gives you limited access to the money in your accounts while you’re still employed.
- Regular: Available only on specific accounts within the plan. There are some limitations based on your age and how long your contributions have been in the Plan.
- Hardship: Allowed only when you have an immediate and heavy financial need as defined by IRS Guidelines and the Plan.
Distributions
Payment Options
When you leave K-C, the options available to you depend on the amount you have in your 401(k) account.
Note: that any distribution taken out of your account may be subject to a 10% early distribution tax penalty. However, this penalty does not apply if you leave K-C in the year you turn age 55 or after. Contact Fidelity for more information.
- Balances of $1,000 or less: The entire amount will be automatically paid to you in cash unless you elect to roll it over into another plan or IRA.
- Balances greater than $1,000 up to $7,000: It will automatically roll over into an IRA with Fidelity unless you roll it over into another plan or financial institution, or take a lump sum distribution.
- Balances greater than $7,000: You can leave your money in the Plan, take partial or scheduled payments, roll it over into another plan or financial institution, or take a lump sum distribution. If you leave your money in the Plan, the required minimum payments will begin at age 73.
When you’re ready to set up scheduled payments, take a distribution, or roll over your balance, complete the request through NetBenefits or by contacting Fidelity. You may want to consult with your tax and/or financial advisor before taking any payment from the Plan.
Want to learn more about what happens to your 401(k) account after you leave K-C? Read the Leaving K-C Guide.
Fidelity Retirement Savings Webinar
This Fidelity webinar will help you understand:
- the importance of saving as much as possible for retirement,
- how much to save,
- different account types to save for retirement, and
- ways to preserve and grow your savings to last throughout your lifetime.