Redstone Federal Credit Union 401(k) match, vesting and fees

Vesting – Participants are immediately vested in their own contributions and the Credit Union’s contributions plus actual earnings thereon.

The Plan has an automatic enrollment provision wherein participants are automatically enrolled at a deferral percentage of 3% of compensation. Participants must choose to opt out of Plan participation within 30 days following date of eligibility if they wish to not participate. Unless elected otherwise by the participant, deferrals are automatically increased annually by 1%, up to a maximum auto-deferral of 15% of compensation.

Contributions – Participants can elect to make tax deferred and Roth contributions as defined in the Plan document, subject to limits imposed by Internal Revenue Code (IRC) regulations.

Notes receivable from participants – Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. The loans are issued by the Plan and secured by the balance in the participant’s account. All loans must be repaid within a period of five years, unless the loan is used to purchase a principal residence, in which case, the loan must be repaid within a reasonable period of time. Under the terms of the Plan agreement, plan loans will bear a reasonable rate of interest determined by the Plan administrator. Principal and interest is paid ratably through monthly payroll deductions. As of December 31, 2024, the rates of interest on outstanding loans ranged from 5.25% to 10.50%, with various maturities through November 2029.