Tuesday, December 29, 2015

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401(k) Catch-Up Contributions - LAA

The way 401(k) Catch-Up contributions are taken out of your paycheck is changing for LAA Flight Attendants.  

For 2015, if you elected both Regular Contributions and Catch-Up Contributions, (for over age 50 participants) the company would deduct Regular Contributions, and zero Catch-Up Contributions until you hit the annual maximum for Regular Contributions ($18,000 for 2015,) THEN they would start the Catch-Up Contributions. (In other words, they followed one another, they never took both out at the same time.)  

That meant that if you had selected 20% for Regular Contributions, and 20% for Catch-up Contributions, the company only took 20% out of your check at any one time.

This is changing in 2016.  In 2016, the company will take out both Regular and Catch-Up Contributions at the same time.  In the above 20% and 20% example, the company would take 40% out of your check.  Yikes!  This may not be what you want to have happen.  

To avoid this possible “paycheck surprise”, the Company will reset your Catch-Up contribution to zero at the end of this year. If you really do want both contributions taken out for both Regular and Catch-Up Contributions, you can log back into after January 5, 2016 and increase your Catch-Up Contributions. The 2016 maximum contributions are $18,000 for Regular, and $6,000 for Catch-Up Contributions.

Please call Fidelity at 1-800-354-3412 or log onto if you have any questions.

Patrick Hancock
APFA Retirement Specialist

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About APFA: APFA is a strong and independent Union comprised of 25,000 hard-working Flight Attendants of American Airlines. Like any organization, opinions and interests are varied. What makes APFA unique, though, is its highly democratic process which allows members to make their voices heard through the direct election of their Union representatives and voting power on all Constitutional changes. APFA is proud of its membership’s diversity, passion, and advocacy.
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