In order to help our clients from Phillips 66 understand just how NUA can be used, we'd first like to make sure our Phillips 66 clients understand qualified accounts that this tax trick can be used in and how they differ in tax treatment compared to non-qualified accounts. Qualified accounts (i.e. Traditional 401(k)) are designed to offer individuals added tax benefits. In a qualified account, you can make contributions with pre-tax dollars from your income, which lowers your tax bill for that year.
| 'Qualified accounts (i.e. Traditional 401(k)) are designed to offer individuals added tax benefits.' |
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In addition, no tax is paid on appreciation until withdrawals are made. At the point withdrawals are made (tax penalty for withdrawals before 59½ and required minimum distributions [RMDs] after 70) both appreciation and invested amounts are taxed as ordinary income.
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On the other hand, we'd like to point out to our Phillips 66 clients that non-qualified plans are those (i.e. a standard brokerage
account) that are not eligible for tax-deferral benefits. Investments are paid
for with after-tax dollars. When appreciated shares are liquidated (a gain is
“realized”), the difference between cost basis (original cost at purchase) and sales price is taxed at either short-term or long-term capital gains rate depending on how long they were held, in addition to taxes paid on dividends the year they are received. Funds from non-qualified accounts are neither subject to early withdrawal penalties nor RMDs.
What is the 401(k) plan offered by Phillips 66?
The 401(k) plan offered by Phillips 66 is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are deducted.
How does Phillips 66 match employee contributions to the 401(k) plan?
Phillips 66 offers a matching contribution to the 401(k) plan, which typically matches a percentage of the employee's contributions up to a certain limit.
When can employees at Phillips 66 enroll in the 401(k) plan?
Employees at Phillips 66 can enroll in the 401(k) plan during their initial eligibility period, which is typically within 30 days of their hire date.
What types of investment options are available in the Phillips 66 401(k) plan?
The Phillips 66 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.
Can Phillips 66 employees take loans against their 401(k) savings?
Yes, Phillips 66 employees may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.
What is the vesting schedule for Phillips 66's 401(k) matching contributions?
The vesting schedule for Phillips 66's 401(k) matching contributions typically follows a graded schedule, meaning employees earn rights to the match over a period of time.
How can Phillips 66 employees access their 401(k) account information?
Phillips 66 employees can access their 401(k) account information through the company's benefits portal or by contacting the plan administrator.
What happens to a Phillips 66 employee's 401(k) if they leave the company?
If a Phillips 66 employee leaves the company, they can choose to roll over their 401(k) balance to another retirement account, cash out, or leave the funds in the Phillips 66 plan if eligible.
Are there any fees associated with the Phillips 66 401(k) plan?
Yes, there may be fees associated with the Phillips 66 401(k) plan, including administrative fees and investment management fees, which are disclosed in the plan documents.
Can Phillips 66 employees change their contribution percentage to the 401(k) plan?
Yes, Phillips 66 employees can change their contribution percentage to the 401(k) plan at certain times throughout the year, typically during open enrollment or at designated times.