North Carolina 401(k) Plan
The North Carolina 401(k) plan is sponsored by the State of North Carolina and governed by the Department of the State Treasurer. The plan administrator for this program is Empower. The North Carolina 401(k) Plan is a supplemental retirement plan that allows employees to set aside payroll-deducted contributions on either a tax deferred basis or Roth after-tax basis.
All permanent and temporary employees who are subject to FICA withholdings are eligible to participate (students are not eligible).
Due to plan rules with Empower, you cannot enroll or change contributions to the NC 401k through ConnectCarolina. You must use the Empower Portal at myncplans.empower-retirement.com/participant/#/login. Empower then sends a file to UNC for the deductions.
See the UNC System Supplemental Retirement Plan Decision Guide for more information.
The annual contribution limit to the 401(k) plan is $23,500. You may be eligible for a catch-up contribution of an additional $7,500 if you are 50 or older, or will turn 50 during the current calendar year.
For employees age 50 or older, the maximum contribution amount is $30,500. Your contributions can be deducted on either a tax deferred basis (reduces your federal and state taxes) or an after-tax basis using a Roth 401(k) account.
An aggregation of 403(b) and 401(k) plan contributions must be made if you participate in more than one supplemental plan during a calendar year. For example, if you contribute to the 401(k) plan in addition to the 403(b) plan, the combined amount of the contribution to both plans cannot exceed the elective deferral plan limit of $23,000. The age 50 catch-up is also a combined amount with the 403(b) program.
Contributions to a 457(b) deferred compensation plan are not aggregated with 403(b) or 401(k) plan limits.
Generally, distributions from a 401(k) Plan can be made when an employee reaches age 59 1/2, severs employment, becomes disabled or dies. In most cases, payments received from a 401(k) account are taxed as ordinary income and may be subject to an additional penalty.