21-104 21-104 . . . Supplemental Executive Retirement Plan which permits eligible management and highly-compensated employees to receive benefits that will compensate them for limitations imposed by Sections 401(a)(17), 401(k), 401(m) and 402(g) of Internal Revenue Code on salary deferrals and matching contributions under 401(k) plan
The Alabama Supplemental Retirement Plan (ARP) is a retirement savings program available to employees of Alabama state agencies, public educational institutions, and participating local governmental entities. It serves as an additional retirement savings option beyond the benefits provided by the regular Alabama Retirement Systems. The ARP is designed to help employees accumulate more funds for their retirement and offers various advantages such as tax-deferred contributions, investment flexibility, and potential employer-matching contributions. It allows participants to contribute a portion of their pre-tax salary, thereby reducing their taxable income. The contributions and any accumulated earnings are only taxed when withdrawn, typically during retirement when individuals may be in a lower income tax bracket. Participants have the flexibility to choose from a range of investment options offered by the plan, such as mutual funds, annuities, and other investment vehicles. These options are carefully selected to cater to different risk tolerances, investment preferences, and timelines for retirement. Alabama Supplemental Retirement Plan providers offer guidance and education to help participants make informed investment decisions aligned with their retirement goals. It is worth noting that there are two major types of Alabama Supplemental Retirement Plans: the 401(k) and the 457 plans. The Alabama 401(k) Plan is available to state and local governmental employees, allowing them to make pre-tax contributions taken directly from their salary. This plan is ideal for those looking to take advantage of potential employer-matching contributions and tax-deferred growth of their investments. On the other hand, the Alabama 457 Plan is designed specifically for state and local governmental employees. This plan enables participants to contribute a portion of their salary on a pre-tax basis, much like the 401(k) plan. However, one notable difference is that the 457 plan allows employees to make additional contributions known as "catch-up" contributions, which can be beneficial for those nearing retirement age. Both the 401(k) and 457 plans within the Alabama Supplemental Retirement Program offer employees invaluable options to save for their post-work years effectively. By diversifying an individual's retirement savings through these plans, participants can potentially secure a more financially stable and comfortable retirement. In summary, the Alabama Supplemental Retirement Plan (ARP) provides public sector employees a valuable opportunity to enhance their retirement savings beyond the regular Alabama Retirement Systems. With options such as the 401(k) and 457 plans, participants can contribute pre-tax earnings, potentially receive employer-matching contributions, and benefit from tax-deferred investment growth. By providing flexibility and investment opportunities catering to individual preferences, the ARP empowers employees to build a strong financial foundation for their retirement years.
The Alabama Supplemental Retirement Plan (ARP) is a retirement savings program available to employees of Alabama state agencies, public educational institutions, and participating local governmental entities. It serves as an additional retirement savings option beyond the benefits provided by the regular Alabama Retirement Systems. The ARP is designed to help employees accumulate more funds for their retirement and offers various advantages such as tax-deferred contributions, investment flexibility, and potential employer-matching contributions. It allows participants to contribute a portion of their pre-tax salary, thereby reducing their taxable income. The contributions and any accumulated earnings are only taxed when withdrawn, typically during retirement when individuals may be in a lower income tax bracket. Participants have the flexibility to choose from a range of investment options offered by the plan, such as mutual funds, annuities, and other investment vehicles. These options are carefully selected to cater to different risk tolerances, investment preferences, and timelines for retirement. Alabama Supplemental Retirement Plan providers offer guidance and education to help participants make informed investment decisions aligned with their retirement goals. It is worth noting that there are two major types of Alabama Supplemental Retirement Plans: the 401(k) and the 457 plans. The Alabama 401(k) Plan is available to state and local governmental employees, allowing them to make pre-tax contributions taken directly from their salary. This plan is ideal for those looking to take advantage of potential employer-matching contributions and tax-deferred growth of their investments. On the other hand, the Alabama 457 Plan is designed specifically for state and local governmental employees. This plan enables participants to contribute a portion of their salary on a pre-tax basis, much like the 401(k) plan. However, one notable difference is that the 457 plan allows employees to make additional contributions known as "catch-up" contributions, which can be beneficial for those nearing retirement age. Both the 401(k) and 457 plans within the Alabama Supplemental Retirement Program offer employees invaluable options to save for their post-work years effectively. By diversifying an individual's retirement savings through these plans, participants can potentially secure a more financially stable and comfortable retirement. In summary, the Alabama Supplemental Retirement Plan (ARP) provides public sector employees a valuable opportunity to enhance their retirement savings beyond the regular Alabama Retirement Systems. With options such as the 401(k) and 457 plans, participants can contribute pre-tax earnings, potentially receive employer-matching contributions, and benefit from tax-deferred investment growth. By providing flexibility and investment opportunities catering to individual preferences, the ARP empowers employees to build a strong financial foundation for their retirement years.