Helping Idaho Public Employees Build A Secure Retirement

Choice 401(k) Plan Frequently Asked Questions

 Accessing Your Choice 401(k) Plan Account
 Contributions
 Investments
 Loans & Hardships
 Withdrawing Funds & Payments
 Buying Base Plan Service
 Rolling in Funds from Other Plans

Accessing Your Choice 401(k) Plan Account

Method 1 (preferred):

Log into your myPERSI account and browse down to find the "Exit to the PERSI Choice 401(k) Plan Site" link. That will direct you to your Choice 401(k) Plan account without requiring you to go through a separate login.

Method 2 (optional):

Log into your Choice 401(k) Plan account directly at mypersi401k.com using your Social Security Number and PIN (Personal Identification Number). Your PIN is not your myPERSI account password, it will be provided by the record keeper. If you do not have a PIN, you will need to request one from the record keeper at 1-866-437-3774.

If you need assistance:

Call the record keeper at 1-866-437-3774. Customer Service Representatives are available from 7:00 AM - 6:00 PM MST (Mountain Standard Time) on business days and an automated phone system is also available 24 hours per day.

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Contributions

What are my Choice 401(k) Plan contribution limits?

For Choice 401(k) Plan contributions and limits, please visit our online Defined Contribution Plan Limits Calculator.

What are my Choice 401(k) Plan contribution limits if I also contribute to a 457 or 403(b) plan?

For Choice 401(k) Plan contributions and limits, please visit our online Defined Contribution Plan Limits Calculator.

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Investments

How do I transfer my CURRENT funds between investment options?

You may transfer your currently invested funds by calling toll-free at 1-866-437-3774 or logging into your Choice 401(k) Plan account. You will need your Social Security Number and PIN (Personal Identification Number) for this transaction. Note: When you move money in your 401(k) account, changing current funds and future funds requires two separate actions. Transferring your current funds between investments is one transaction. Allocating where you want future contributions to go is another transaction. See the detailed instructions for transferring your CURRENT funds.

How do I change allocation of my FUTURE contributions?

You may change the direction of your future allocations by calling toll-free 1-866-437-3774 or logging into your Choice 401(k) Plan account. You will need your Social Security Number and PIN for this transaction. Note: When you make fund allocations in your 401(k) account, changing current funds and future funds requires two separate actions. Transferring your current funds between investments is one transaction. Allocating where you want future contributions to go is another transaction. See the detailed instructions for redirecting your FUTURE allocations.

Does the Choice 401(k) Plan have "safe" investment options?

PERSI does not offer financial advice, but you may want to read the Choice 401(k) Plan Highlights or review the investment fund options. You may also wish to contact a personal financial advisor.

Does the Choice 401(k) Plan offer a "guaranteed return" option?

No. PERSI offers several conservative funds that have shown a positive return over the last several years. You may want to consult a financial advisor for further help in deciding how to allocate your 401(k) funds.

Why is the PERSI Total Return Fund (TRF) the Default Fund?

The TRF (with billions in assets) is extremely well diversified among US and international stocks, large cap to small cap funds, and more to ensure as little risk as possible. These reasons make it a good introductory investment option. See PERSI Total Return Fund. If you would prefer a different investment plan, other investment options are available, and you may transfer your money at any time. Call toll-free 1-866-437-3774 or see Choice 401(k) Plan Investment Options.

How long does it take for my contributions to reach my account?

PERSI gives your employer five days from your pay date to send us a payroll report and your funds. If these reports contain errors they must be sent back to the employer. This process can take several days to complete. Our goal is to have your money deposited in your Choice 401(k) Plan within three business days of receipt of a clean report and verifiable funds. We are working diligently to accomplish this goal and appreciate your patience.

What are no-load, front-end load, back-end load, and 12b-1 fees?

No-Load - Funds that do not charge any front-end or back-end loads. Such funds eliminate sales commissions charged by load funds by selling their shares through direct distribution.
Front-End Load - You pay a sales commission up front when you purchase fund shares. If a front-end load is charged in a participant directed plan, you will see an immediate reduction in the amounts your deferrals.
Back-End Load - You pay a sales commission when fund shares are redeemed.
12b-1- You pay a charge to cover marketing and distribution expenses.
The PERSI Choice 401(k) Plan does not charge any of these types of fees.

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Loans & Hardships

Can I take a loan from the Choice 401(k) Plan?

Yes. You may borrow up to 50% of your account balance. The minimum loan amount is $1,000, so you must have at least $2,000 in available funds in your account for a loan. Available funds include your voluntary contributions, rollover amounts from previous eligible plans, earnings, and any employer contributions. Gain Sharing money is not eligible for loans. You may apply for a loan via your Choice 401(k) Plan account by calling toll-free 1-866-437-3774.

How do I pay back the loan?

You repay your loan to your own account through payroll deductions. Your employer will set up the required payroll deductions.

Can I pay off my Choice 401(k) Plan loan early?

Yes, you may pay it off early if you pay the entire balance in a lump sum. Partial loan payments cannot be accepted. To pay off your loan early, call the record keeper toll-free at 1-866-437-3774 to get the loan payoff amount and they will provide payoff instructions.

Is there a downside to taking a loan from the Choice 401(k) Plan?

There may be. Even though you are paying the principal and interest back to yourself, you are paying it with after-tax money. The money you use to repay the loan will be taxed again when you take a distribution from the plan. Also, you may miss out on potential earnings on the money while it is out on loan.

How do I apply for a hardship withdrawal from the Choice 401(k) Plan?

If you are eligible for a Choice 401(k) Plan loan, you must first apply for the loan before requesting a a hardship withdrawal. If you already have an outstanding loan, or if you do not qualify one, you may then apply for a hardship withdrawal. To apply, call toll-free 1-866-437-3774 or go to your  Choice 401(k) Plan account. You may request a hardship withdrawal only from your voluntary pre-tax contributions. Earnings, rollover funds, gain sharing contributions, and employer contributions are not eligible for hardship distributions. A hardship withdrawal is only available for the following reasons:

· Payment of medical bills above and beyond what insurance covers.
· College tuition and costs for you or your immediate family.
· To prevent foreclosure or eviction from your primary residence.
· Purchase of a new primary residence.
· Burial or Funeral Expenses: You may request a hardship withdrawal for expenses for deceased parent, spouse, children, or dependents.
· Expense for the repair of damage to principal residence: You may request a hardship withdrawal for expenses that would qualify for the casualty loss deduction under Internal Revenue Code Section 165, such as those resulting from a hurricane or flood damage.

Are there any consequences to me if I take a hardship?

You will not be allowed to participate in the 401(k) plan for six months following your hardship withdrawal. Your payroll clerk will be advised to stop your contributions. The record keeper holds 10% of the distribution for federal taxes unless you request a different amount on the application. You will receive a 1099-R form from the record keeper, and depending upon your tax bracket, you may owe more at the time you file your tax return. You may be responsible for a 10% penalty when you file your federal income taxes if you are under 59½ years of age.

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Withdrawing Funds & Payments

Can I withdraw my 401(k) money while I'm working?

You may be eligible for an in-service withdrawal. If you have rollover funds in your Choice 401(k) Plan, you may request a distribution from those funds at any time, regardless of your age. If you have contribution funds that were transferred from the Idaho Super Saver 401(k) Plan (called "prior" funds) you may request an in-service withdrawal from those funds if you are at least age 59½. Any other money contributed to the Choice 401(k) Plan after October 1, 2001, regardless of the source, is not eligible for an in-service distribution. These distributions are subject to early withdrawal penalties: 20% of the payment will be withheld for federal taxes and a 10% penalty may be applied when you file your federal income taxes if you are under age 59½. Other distributions are available from the Choice 401(k) Plan only upon termination, retirement, death, or disability. You may also qualify for a loan or hardship withdrawal.

How do I get a payment after I retire or quit work?

Online distributions are available, just log into your Choice 401(k) Plan account using your Social Security Number and PIN (Personal Identification Number) or call 1-866-437-3774.

Can I leave my money in the 401(k) after I quit or retire?

Yes. If your account balance is over $1000.00, you may leave the money in your account until a later date.

If your account balance is below $1000.00 after you terminate or retire, the record keeper will process a final distribution. When your account balance goes to $0, it is closed. When you turn age 70-1/2, the IRS mandates that you begin receiving Required Minimum Distributions (RMD).

Why did the record keeper send me a check I didn't request?

If you quit work or retired and your 401(k) account balance is less than $1000.00, the record keeper will automatically send you the funds. To avoid any potential tax consequences, you may roll the check into an IRA or other eligible fund within 60 days from the date of the check.

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Buying Base Plan Service

Can I use my 401(k) money to buy back Base Plan service while working?

Yes. This is an excellent way to buy back your service using tax-deferred money. You may transfer money with no tax consequences from the Choice 401(k) Plan to the Base Plan to buy back service, pay for a waiting period, or pay delinquent contributions. You will need to contact PERSI and request a Payment Agreement (Form 116) and accompanying paperwork. To process this type of transfer, you must complete the Payment Agreement (Form 116) and the PERSI Choice 401(k) Plan Request for In-Service Transfer of Funds (Form V). If you have already started making payments through payroll deduction on a buyback, you are not eligible for this transfer.

Can I use my 401(k) money or other funds to buy back service in the Base Plan after I quit?

Yes, but only if the buyback is for a waiting period or to pay back delinquent contributions. You would not be able to pay back a separation benefit unless you had initiated that buyback before you left employment and had made at least one payment. To accomplish this transfer of funds after termination of employment, you would use rollover funds from an eligible plan. You will need to contact the plan administrator to initiate the rollover. If you use funds from the Choice 401(k) Plan, you would need to complete the Payment Agreement (Form 116) and the Choice 401(k) Plan Request for Distribution/Rollover (Form V).

Can I use 401(k) money to do a Purchase of Service in the Base Plan?

Yes. You must complete the Purchase of Service paperwork within 90 days prior to your retirement. Contact your PERSI Retirement Specialist for information on how to use your Choice 401(k) Plan to purchase service and obtain the appropriate paperwork (See the Purchase of Service web page).

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Rolling in Funds from Other Plans

How do I roll funds from a previous 401(k) plan into my Choice 401(k) Plan?

To begin the roll-over process, call the record keeper at 1-866-437-3774.

Can I roll money from my current 457 or 403(b) into the 401(k)?

If you are still working for the employer who offers the plan, you generally may not roll the money out of that plan. Check with the plan's administrator to see if that is available. Upon a distributable event (termination or retirement), you may then roll the money into the Choice 401(k) Plan if you have an open Choice 401(k) Plan account balance. You may not roll money out of a 457 plan from a tax-exempt or non-profit organization. Only money from a governmental 457 plan may be rolled into the Choice 401(k) Plan.

Can I roll money from my 457 or 403(b) into the 401(k) after I quit or retire?

Yes, the Choice 401(k) Plan will accept rollovers even though you are no longer an active employee. However, you must have a Choice 401(k) Plan account before your termination and maintain it (not close it out) after termination.

Can I roll money from an IRA into the 401(k)?

Yes, if the IRA is from pre-tax money. You will need to certify that the funds are pre-tax. The plan cannot accept after-tax dollars.

Can I defer ERIP money into the 401(k)?

Some employers offer early retirement incentive plans (ERIPs) to their employees in the form of a cash bonus. You may defer this money to the Choice 401(k) Plan if the following conditions are met:

1) The ERIP must be paid through your payroll while you are still actively working. The salary must also be reported to the IRS as W-2 wages.
2) You may not exceed your annual contribution limit. If you are contributing to a 403(b) plan as well as the Choice 401(k) Plan, the total of the two plans may not exceed that allowable limit.

To defer an ERIP, you must complete a Choice 401(k) Plan Enrollment Form 801. On the form, indicate the percentage or dollar amount that will allow you to contribute as much as desired to the plan without exceeding the annual contribution limit. It should be noted that while the IRS considers the ERIP to be compensation, ERIP payments are not treated as salary for PERSI Base Plan purposes.

How do I benefit from rolling my other funds into the 401(k)?

The PERSI Choice 401(k) Plan funds are no-load funds and the management fees are considered nominal and are much less than those charged by most funds in traditional IRAs. Many IRAs and other eligible plans not only charge higher management fees, but also include front-end load, back-end load, and 12b-1 fees, all of which will lower your potential earnings.

Can I put money in the 401(k) from my spouse's plan or IRA?

No. The IRS considers your account separate from your spouse! The money may not be mixed.

Can I put money in the 401(k) as my spouse's beneficiary?

Yes. If you are a spouse beneficiary, the IRS allows you to roll this money into the Choice 401(k) Plan.

Can I roll a death benefit from a non-spouse into the 401(k)?

No. A non-spouse beneficiary can choose a direct rollover to an IRA established on behalf of the designated beneficiary that will be treated as an inherited IRA. The IRA must be established in a manner that identifies it as an IRA with respect to a deceased individual and also identifies the deceased individual and the beneficiary, for example, "Tom Smith as beneficiary of John Smith." A direct rollover is not subject to tax withholding and the beneficiary is not taxed on the money until it is later withdrawn from the IRA. If a non-spouse beneficiary chooses a lump sum distribution, the distribution is subject to federal tax withholding at the rate of 10%; however, the beneficiary can choose to have no tax withheld by submitting Form W-4P to PERSI. Non-spouse beneficiaries may not leave funds in the Choice 401(k) Plan. Pending changes in the plan will require funds to be paid out within 15 months after the member's death.

What is a Letter of Acceptance?

A Letter of Acceptance is sometimes required by an annuity plan, such as a 403(b) plan or an IRA. It ensures that our plan is eligible to accept custody of the funds in the annuity plan. The letter states that PERSI agrees to accept as trustee a rollover contribution or the portion of a distribution from an IRA or annuity described in Section 408(a) or 408(b) of the IRS Code that it is eligible to be rolled over and would otherwise be includible as gross income.

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