A 401a plan can be either a supplemental or core retirement plan for employees who meet eligibility rules. A 401a plan may provide for either mandatory employee contributions or voluntary employee after-tax contributions. However, a 401a plan does not permit employees to make 401k contributions.  

An employer offers a 401a plan to enable employees to save for their retirement. The plan document will determine the employer contribution formula and will describe which employees are eligible to participate in the plan. Employers may offer the 401a plan to attract and retain employees. 

Key Features

  • The employer decides employee eligibility to participate in the plan. The employer also decides on the formula for employer contributions that will be made into participant accounts.
  • Depending on the 401a plan design, employees may either be required to make mandatory contributions or have the option to make after-tax contributions to the plan.  
  • Typically, employees will be permitted to select investment funds offered under the plan.
  • Employees can access funds in their accounts when they have a distributable event. Amounts are typically subject to income tax when withdrawn.  

Suitable For

Employers looking to attract and retain employees.  

Additional Details

This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. We recommend that you consult an independent legal or financial advisor for specific advice about your individual situation.

The tax information herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. 

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Securities offered through Voya Financial Advisors, Inc. member SIPC.

Neither Voya nor its agents or representatives provide legal or tax advice. Please consult with your tax and legal advisors regarding your individual situation.