What is changing?
We are pleased to announce that effective April 1, 2023, the All Current Electrical Sales 401(K) Plan is merging into the EBSCO Savings and Profit Sharing Plan (“the Trust” or “PST”).
There will be a blackout period beginning April 1, 2023, continuing through May to transition your retirement plan account to the EBSCO PST. During the blackout period, your account will remain invested.
In May, you will receive notification once the plan transition is completed, and you will access your retirement plan account through Principal at principal.com/welcome.
Your retirement plan account balance will already have been “mapped” to investments that are similar to the investments you have in the All Current plan and using your existing allocation. Post-blackout, you will be able to view your investments on principal.com and consider other available investment choices and allocations from the EBSCO PST’s investment menu.
EBSCO’s fiscal year, and the PST’s plan year, begins each July 1 and continues through June 30.
Why are we making these changes?
EBSCO is committed to continually improving. One of EBSCO’s most generous employee benefits is its US retirement plan, the PST. The PST unites us as we all benefit when we grow company profits because EBSCO contributes 15% of its annual before-tax profits to participants of the PST. Meaning $15 out of every $100 earned in profit goes into the PST. These plan mergers further the goals of continuous improvement and fairness of benefits by enabling our All Current US participants to share in EBSCO’s profits along with other EBSCO US employees.
How much does the company contribute to the PST?
EBSCO contributes up to 15% of its eligible before-tax profits each year. EBSCO’s profits can be increased by the ideas we develop, the customer appreciation we earn, and our productivity in manufacturing, in the office and in sales. Company contributions are NOT tied to the participant’s personal savings amount as the PST is a profit sharing plan rather than a matching plan based on personal savings. This means eligible participants receive an annual company profit sharing contribution whether or not they save personally.
How is the annual company profit sharing contribution I receive determined?
Participants become eligible for annual profit sharing after one year of service when they remain actively employed each June 30th. (One year of service will be determined using your hire date with All Current). A participant must have worked 1,000 plan hours, excluding the first year eligible, during the plan year. A participant’s first company contribution is based on a partial-fiscal year wage base – based on the months that the employee is an eligible participant. For example, if Tom was hired on February 15, 2021, Tom becomes an eligible participant on March 1, 2022 and receives a company profit sharing contribution based on four months of wages earned between March 1, 2022 through June 30, 2022. Each year after the first (partial) year, and when remaining an active employee on June 30, a participant’s profit sharing will be based on the full fiscal year wage base (wage base for profit sharing is capped at $90,000). For example, if Susan earned $40,000 during the fiscal year (July 1 – June 30), her company contribution would be based on a $40,000 wage base. And, if Mary earned $110,000 during the fiscal year (July 1 – June 30), her company contribution would be based on a $90,000 capped wage base.
EBSCO’s annual profits for each July 1 to June 30 fiscal year are audited and the percentage of eligible pay the company will contribute for profit sharing is determined. Profit sharing contributions are paid to plan accounts of eligible participants mid-September following the fiscal year-end during which the profits were earned. Over the past ten years, EBSCO’s profit sharing contribution has averaged almost 9% of eligible compensation (which is capped at $90,000).
Who is Principal?
Principal is the recordkeeper for the EBSCO PST and a leading retirement plan service provider with more than 75 years of retirement plan service experience and over 140 years of financial experience.[1] Principal was named one of the “World’s Most Ethical Companies”.[2] With Principal, participants will have access to a suite of financial tools and resources.
[1] 1941-2020 and 1879-2021
[2] Ethisphere Institute, February 2019
When can I create my account with Principal?
Post-blackout (May 2023), participants will have access to create an online account and set up their beneficiaries at principal.com/Welcome. If you have a previous account at principal.com, you will log in to that same account and view your EBSCO PST account.
What happens if I do not set up an account?
Setting up an account with Principal allows you to view details in your retirement plan account, make changes, and determine beneficiaries. If you do not set up an account with Principal, you will not be able to view your account details, make changes, or confirm your beneficiaries.
How do I access my account?
Post-blackout (May 2023), you will have full account access by logging in to principal.com, the Principal app, or calling Principal at 800-547-7754.
Will my current vesting schedule change?
No. All active EBSCO plan participants became 100% vested in company contributions effective January 1, 2023. You are always 100% vested in your personal contributions.
Will I need to re-elect my personal savings or catch-up elections?
No. Your elections as of April 1, 2023 from your existing plan will be transferred to Principal. May 2023, you can elect or change your elections by logging into principal.com or calling Principal at 800-547-7754. If you were not saving in your existing plan, you will be auto-enrolled to save at a 3% pre-tax deferral rate in the EBSCO PST once you have completed 3 months of service using your hire date with All Current. Once the blackout period ends, you can log into your account at principal.com to change your savings rate or to opt out.
How are my personal savings and catch-up changes handled?
All personal saving changes need to be made in your All Current plan account by March 31, 2023, before the blackout period.
No personal savings changes can be made during the blackout period from April 1, 2023 through early May 2023.
Once the blackout period ends, early May 2023, changes to your personal savings election will be submitted through Principal (via the app or online at principal.com) or by calling 800-547-7754.
Will my beneficiary designation transfer? How do I elect or update beneficiary information?
Your existing beneficiaries will NOT transfer to Principal. However, once you log into principal.com in May, you can add your beneficiary information. Having accurate beneficiary information designated in your account is very important since it determines how your account will be handled if you were to pass away. If married, your primary beneficiary must be your spouse unless the spouse provides consent for another beneficiary to be primary.
How will I receive my statements based on investment returns?
Once the transition to Principal and the EBSCO PST is complete, a transition statement will be mailed to your home address showing funds transferred from prior plan account. Ongoing, Principal will provide electronic statements on a quarterly basis. You can also create an on-demand statement at any time by logging in to your account at principal.com.
Once the transition is complete, how do I submit an in-service request, hardship request, or other distribution requests?
Post-blackout (May 2023), an in-service request, hardship request, or a benefit event distribution will be submitted through Principal online at principal.com or by calling 800-547-7754.
Will I be taxed on my hardship withdrawal?
Yes. The plan is required to withhold 20% for federal taxes on all taxable funds withdrawn. If you are under the age of 59½ years, you are subject to an additional 10% federal penalty. It will be your responsibility to pay the 10% federal penalty and any applicable state tax that may be due when you file your annual personal income tax return.
How are investments valued and updated?
Investment values will be updated daily at principal.com.
What is a “QDIA” OR “Target Date Fund”?
QDIA stands for qualified default investment alternative. In the EBSCO PST, the “QDIA” investment option used is a series of Target Date Funds, the Fidelity Freedom Index fund series, which automatically shift your money to diversified investments based on the target date of the portfolio, which typically aligns with your expected retirement year. When you are further from retirement, investments are typically placed primarily in equities, which can be higher-risk investments, that seek to maximize your rate of return. As you get closer to retirement, or the target date of the investment, investments automatically shift to a generally more conservative allocation which may include a higher portion of bonds. Additional information on the investments within specific Target Date Funds available will be on principal.com. If a participant does not make an investment selection on principal.com, the QDIA option appropriate for the participant’s age will be used.
How will the funds of existing retirement plan accounts be transferred?
Your current retirement account will transfer to Principal and the EBSCO PST in early April. Your current investments will be mapped to similar investments on the EBSCO PST investment menu. Once the transition is complete, you can review your account at Principal and make any investment changes based on options provided or leave it as invested.
Once the transition is complete, how do I make investment changes?
Post-blackout (May 2023), investment transfers or investment direction changes will be submitted through Principal online at principal.com or by calling 800-547-7754. These changes are typically processed each business day
What investments will be available?
A wide range of investment options in a variety of asset classes, including equity and fixed income, is available. Some investment options are actively managed funds while others are passive index funds. If you would like to discuss your investments with a professional advisor, the EBSCO PST permits participants to schedule appointments with CAPTRUST advisors at no additional cost.
What resources are available to help me make investment decisions?
Once you create your online account, you will have access to valuable investment education, tools, and resources, including:
Investor Profile Quiz– Take the quiz to help you determine your risk tolerance and the best types of investments for you.
5 basic investing tips– A reference for new investors and a quick review of the basics.
Webinar Series– Award-winning webinar series gives you monthly live webinars on simple, straightforward topics that can help you stay on track with your financial goals. Learn more about investing, debt reduction, estate planning and more, and find a library of replays to check out any time.
If you would like to discuss your investments with a professional advisor, the EBSCO PST permits participants to schedule appointments with CAPTRUST advisors at no additional cost.
What types of retirement resources are available from Principal?
The Principal Milestones financial wellness program to help you manage your financial priorities
Prepare a standard Will and other legal documents at no additional cost
Award-winning educational webinars
The Retirement Wellness Planner and Retirement Wellness Score
Account access on-the-go with the Principal app
A dedicated call center with access to translation services at 800-547-7754
What is the Plan Number or Plan ID for the EBSCO PST?
The Plan Number or Plan ID is a security question and form of verification you might be asked when accessing your account. You will also need the Plan Number/ID if you are setting up a PIN number on the automated phone system. The EBSCO Plan Number/ID is 536575.
Are there any changes to the maximum that I can contribute?
The EBSCO PST savings (employee contribution) limits are up to 50% of eligible compensation, in increments from 1% to 50%, and up to a maximum of $18,000 per plan year. This $18,000 savings limit applies to the total of before-tax and Roth employee contributions, combined, made during a plan year.
The EBSCO PST is subject to annual ERISA testing which requires the plan’s saving limit to be different from the IRS limit.
Is there an option for Roth 401(k)?
Yes, the EBSCO PST permits Roth contributions, Roth catch-up contributions and Roth in-plan conversions. Any Roth savings percentages you have currently will transfer with your account information to the EBSCO PST. If you have any questions post-transition, contact Principal at principal.com or 800-547-7754.
Will EBSCO recommend or educate me on safe investments?
While EBSCO cannot recommend investments for you, Principal’s website and app have an abundance of investing information and tools. Also, the EBSCO PST permits participants to schedule appointments with CAPTRUST advisors at no additional cost.
What are the expense ratios for the investment fund options?
Before the transition, you will receive participant notices containing information for each fund option and the related fees associated.
Will I be charged any fees from Principal?
Yes, all retirement plans charge fees. Before the transition, you will receive participant notices containing information for each fund option as well as all related fees.
Will new hires be defaulted to 3%?
Yes, a default before-tax savings rate (“auto-save”) of 3% for new hires will continue. A participant always has the option to change their personal savings rates.
How will hardship withdrawals be handled through Principal?
Hardship requests will be made on the Principal website or app. Principal will request the appropriate documents to validate and process the request. A service fee of $80 is charged to process a hardship request.
Does The EBSCO PST offer socially responsible investment options?
There is one Environmental, Social and Governance (ESG) option offered by EBSCO’s PST. It is the Vanguard FTSE Social Index Admiral fund.
Will I be able to borrow money from my account?
No. The EBSCO PST does not offer loans.
When can I have personal savings withheld?
After three (3) months of service. (Three months of service will be determined using your hire date with All Current). Personal savings can begin the full pay period after the employee becomes a participant. Log into Principal.com to make this election.
When can I change my personal savings percentage?
The plan allows changes at any time. You can log into Principal.com to make changes. The payroll deduction is based on the savings percentage in place on the first day of the payroll period.
What is Auto-Save?
If you do not select a personal before-tax savings percentage of 0% to 50% on Principal.com within your first three months of employment, you will be automatically set up to contribute 3% of your total payroll wages on a before-tax basis. (Three months of service will be determined using your hire date with All Current).
Can I choose to save another amount that better meets my needs?
Yes. If you indicate the personal before-tax savings percentage you wish to elect (0%–50%) before the completion of three months of employment, you will override the auto-save amount.
Can I opt out of Auto-Save?
Yes. You must opt out before the completion of three months of employment if you do not want personal before-tax savings contributions to begin on the next payroll period. Go to Principal.com to opt out.
How do the annual Auto-Save sweep and Auto-Escalate work?
EBSCO PST conducts an annual auto-save sweep and auto-escalate to help you save more. Auto-save sweep will set before-tax savings rates of less than 3% to 3% each July 1. Auto-escalate will increase before-tax savings rates between 3% and 9% by 1% each July 1. For example, if you are saving 5% before-tax, auto-escalate would increase this before-tax savings rate to 6% on July 1 if you do not opt out. If you prefer not to be impacted, you will need to log into principal.com during the month of June to manually reset your before-tax savings rate. At any time, you can adjust your personal savings rates, for before-tax or Roth savings, at principal.com or on the Principal app. Auto-save and auto-escalate do not adjust any Roth savings percentages you elect.
With the plan change, do I have the option to roll my current savings into a personal account?
If you are an active employee of EBSCO and you are 59 1/2 years old or older, you can submit an in-service request at principal.com to rollover your retirement savings to an IRA or other eligible retirement account (transaction fees will apply). Also, you could request a taxable lump sum withdrawal; if you are less than age 59 ½ a 10% early withdrawal penalty will apply in addition to taxes. Otherwise, your EBSCO PST account will remain with Principal and separate from other savings or investments you have.
What is a Catch-Up contribution?
A participant is allowed to make additional contributions, known as catch-up contributions, if he or she is at least 50 years of age. These contributions are in addition to the regular payroll contributions, and limits may change with each calendar year. Catch-up contributions can be either before-tax or Roth.
When can I receive annual company profit sharing contributions?
Participants become eligible to receive annual company contributions at the beginning of the month following 12 months of service when they remain actively employed each June 30th. A participant must have worked 1,000 plan hours, excluding the first year eligible, during the plan year. Annual company profit sharing contributions are paid annually, mid-September, following the June 30 plan year-end during which the profits were earned. If you become eligible for profit sharing during the plan year (July 1 to June 30), your profit sharing contribution the following September will be based on your compensation earned during the partial year period you were eligible.
When will I be required to pay federal and state taxes on my personal savings and company contributions made to my account?
Taxes will be due anytime before-tax funds are withdrawn from the plan, and profit sharing contributions are before-tax. Rollovers made directly to an Individual Retirement Account (IRA) or another employer’s qualified Trust will generally allow you to postpone paying taxes until a later date. After-tax funds in the plan are generally not taxable upon withdrawal. Consider contacting a tax professional for advice before you withdraw funds from your EBSCO PST account.
What is an in-service withdrawal?
An in-service withdrawal allows a full participant who is 100% vested in the plan and is at least 59½ years of age the option to withdraw an amount from their account balance from the plan for any reason. This option allows the participant to rollover an amount to a financial institution of their choosing or to receive a lump sum payment (generally taxable). You will remain a participant for personal savings, applicable earnings (gain/loss), and, if eligible, receipt of any company contributions at the end of the plan year. This election can be requested anytime through Principal.com and applicable fees will apply.
What is a minimum distribution?
A minimum distribution allows a full participant who is at least 72 years old the option to withdraw required minimum annual payments from his or her account balance. You will remain a participant for personal savings, applicable earnings (gain/loss), and, if eligible, receipt of any company contributions at the end of the plan year. This election can be requested anytime through Principal.com and applicable fees will apply.
If I contribute to the EBSCO PST, can I still contribute to an IRA?
Yes. You may still contribute up to the maximum to a traditional IRA, but the IRA contributions may not be fully tax deductible depending on your income level.
Does the EBSCO PST accept incoming rollovers?
Yes. After completing 3 months of service, you may make a rollover contribution from another qualified employer plan (i.e., 401(k)), a 403(b), or a conduit IRA to the plan. Any such contribution must be in cash and must be eligible for rollover to a qualified plan. You will also be responsible for providing a determination letter, if requested, from your previous employer stating that the plan is qualified and that the funds are eligible for rollover. You must specify any before-tax rollover amounts and separately any Roth rollover amounts.