Visa Supplemental Post-Tax “Spillover” Explained

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Visa Supplemental Post-Tax “Spillover” Explained
Visa Supplemental Post-Tax
“Spillover” Explained
Why do I need a Supplemental Post-Tax “Spillover” Election?
It’s important to have a supplemental post-tax spillover election on file in case you reach the 18,000
pre-tax limit before the last pay period of the year. Let’s say that you reach the pre-tax contribution limit in the
first pay period in November. Your pre-tax contributions will stop, and if you do not continue to make
contributions through the rest of the year, you’ll miss out on Visa matching contributions.
Because contribution matches are made on a pay period basis, if you elect 3% post-tax supplemental, your
contributions to the Plan will automatically switch to post-tax when you reach the pre-tax limit and you will
receive the maximum employer-matching contributions for the remainder of the year. At the beginning of the
next year, your contributions will automatically revert back to your pre-tax election.
For example, let’s assume that a participant has made pre-tax contributions from the first pay period of the
year. As of September 30, his pre-tax contributions total $17,475.00. The chart below tracks his contributions
for the rest of the year with and without Supplemental Post-Tax contributions. Notice the difference in total
match contributions at the end of the year:
Remaining
Pay
Periods
3% Pre-Tax
Contribution
Visa Matching
Contribution
w/o Suppl.
3% Supplemental
Post-Tax
Contribution
Visa Matching
Contribution
w/Suppl.
15-Oct
31-Oct
15-Nov
30-Nov
$175
$175
$175
0 (Pre-tax limit
reached)
0
0
$350
$350
$350
0
0
0
0
$175
$350
$350
$350
$350
0
0
Total match for
year: $7,350
$175
$175
$350
$350
Total match for
year: $8,400
15-Dec
31-Dec
But I do not contribute anywhere near enough to reach the pre-tax limit
You should still have an election on file. Even though you may not reach the limit this year, by having the
election on file, you are protecting your Visa match for future years when you may consider contributing up to
the pre-tax limit.
If you do not reach the pre-tax limit during the calendar year, no supplemental post-tax spillover contributions
will be withheld.
To elect post-tax supplemental contributions, go to www.401k.com or call Fidelity Investments at 1-800-8355098.
Fidelity Investments Institutional Operations Company, Inc., 245 Summer Street Boston MA 02210
655932.3.0

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