Archived 401k

[FredPanda3]

I know we aren't fully vested in the 401k until year 3, but is it year 3 of working there or year 3 of having the 401k?

 

[Hardlinesmaster]

From targetpayandbenefits.com:
Who is eligible?
You are eligible to participate in the TGT 401(k) after you
meet the following requirements:
• You are classified by Target as an employee; and
• You are age 21 or older; and
• You complete and have been paid for 1,000 or more
hours of employment; however, if you have one full
calendar year in which you have no hours of employment
and if you previously did not complete at least 1,000
hours of employment, then you must complete 1,000
hours of employment during any subsequent period of
employment without having another full calendar year in
which you have no hours of employment.

Once you are eligible you are automatically enrolled at a 5% (the maximum match) contribution, though you will definitely want to go in and change the distribution. There is no real incentive to get Target stock, and you would generally be advised against getting it at all. The managed funds should be fine for most people. Make sure you change the company match to your preferred fund otherwise I believe it defaults entirely to company stock.

 

[Infinim]

You are vested right away. No three year wait. That's all I can find. Nothing about 3yesrs.

 

[Kartman]

I love my 401k.

Free money from Spot.

What's to not love?

 

[Infinim]

That free 5% additional pay is something people don't even consider. It adds up over time. I don't get it

 

[Kartman]

I get it...

lol!

 

[aj76257]

Does anyone know why you have to be 21? I understand the 1000 hours as that shows commitment, but why can't you sign up if you're over 18? Is there some legal reason? HR couldn't give me an answer.

 

[kingpin003]

In general, an employee must be allowed to participate in a qualified retirement plan if he or she meets both of the following requirements:

• Has reached age 21
• Has at least 1 year of service

Source

Spot. As usual, doing the bare minimum.

 

[aj76257]

Oh. That seems like such an arbitrary decision. I don't understand the reason as to why I have to wait a couple more years. Most people my age aren't forward-thinking enough to even consider a 401(k).

 

[kingpin003]

No good answer for you. A google search turned up a statistic(I'm not sure how valid this is) that 64% of companies require the age of 21. So it's pretty common for companies to limit them in this way. If I had to guess it would be related to administrative costs, low participation, and choosing to do the minimum required.

 

[aspiringETL]

I've read vested immediately it starts at 3%, 4% at year 2, 5% and year 3 and beyond. tbh target has a pretty generous plan!