Frequently Asked Questions

  • What are the benefits of investing in a retirement plan? 
  • When you participate in your company’s retirement plan offered to employees you save taxes in two ways.  Each dollar you contribute into the pre-tax portion of your company’s plan goes into the plan free of any federal income tax.  Depending on your tax rate you potentially save between 10% and 35% of every dollar you contribute to your retirement plan. Additionally, the earnings you make on amounts you contribute grow tax-deferred.  As long as you leave your balances in your plan, you will not pay taxes on the amount in your account until you withdraw the funds when you decide to retire.


  • What or who is the retirement plan sponsor?
  • The entity (generally the employer) responsible for establishing and maintaining the plan. In other words, it's just another name for your employer who sets up and oversees the retirement plan.

  • When can I enroll in my company’s retirement plan? 
  • If you employer sponsors a retirement plan for employees, you can enroll in the plan by completing an Enrollment Form and submitting to your human resources or benefits department.  Before you can participate, you must meet your plan’s eligibility requirements which is stated in the plans Summary Plan Description.  Contact your human resource department to obtain a copy of this document which describes the plan in more detail.


  • What information can I access on 
  • If your retirement plan is on the PensionSource platform, you can access detailed information regarding your account.  You can get information about your balance, investment options, see past transactions and see copies of your participant statements. You may also make changes to your account, including transferring money between investments and choosing how future contributions are invested.

  • How do I determine how much to save for retirement? 
  • Will you have enough money to enjoy a secure and happy retirement?   If your account is on the PensionSource Platform you will access to GuidancePlus, an online investment tool that will help you make your investment decisions and plan for your retirement.  It’s easy to access; simply log into your account at and select the GuidancePlus link located under the Tools menu.


Click on the PDF file below to learn more about how GuidancePlus can help you with your investment decision-making.   

  • How are my assets protected? 
  • The Employee Retirement Income Security Act of 1974 (ERISA) protects the retirement assets of Americans by implementing laws that qualified plans must follow to ensure that plan fiduciaries do not misuse plan assets.  The law also contains detailed provisions for government reporting and disclosure to participants.  Additionally, there are provisions aimed at assuring that plan funds are protected and that participants who qualify receive their benefits.


  • What is the most I can contribute to my account each year? 
  • There are annual limits set by the Internal Revenue Service on the amount you can contribute to your retirement plans.  These limits are adjusted annually for inflation. 


To view the current annual limits click on this file:       

  • Who can withdraw money from my retirement plan? 
  • You, the participant, are the only authorized person who can withdraw funds from your account.  The form you complete to request any withdrawal must be signed by you and approved by your employer before any funds are disbursed.


  • What are the general rules regarding requesting a loan from my retirement plan? 
  • The rules governing retirement plans allow plans to provide loans, but do not mandate that an employer make it a plan feature. Even so, loans are a feature of most plans. Check with your Human Resources department if you're not sure if your plan allows loans. If offered, your employer must adhere to some very strict and detailed guidelines on making and administering them.

A few of the most common reasons for a loan include, but are not limited to:

  • To pay medical expenses of the participant, spouse or dependents
  • To purchase a principal residence for the participant
  • To pay tuition, room and board, and other educational-related expenses for post-secondary education for the participant, spouse or dependents
  • To prevent eviction or foreclosure from the participant’s principal residence
  • Payments of burial or funeral expenses for a deceased parent, spouse, child or other dependent
  • Expenses for repair of damage to a principal residence that would qualify as a casualty under the Internal Revenue Code

Usually you are allowed to borrow up to 50% of your vested account balance to a maximum of $50,000 (set by law). Because of the cost, many plans will also set a minimum amount and restrict the number of loans you can have outstanding at any one time.
Contact your Human Resources department on how to apply. Loan payments will generally be deducted from your payroll checks and, if married, you may need your spouse to consent to the loan.
Funds obtains from a loan are not subject to income tax or the 10% early withdrawal penalty. If you should terminate your employment, often any unpaid loan will be distributed to you. This distribution will be subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. A loan can't be roll into an IRA.

  • I am no longer employed with the company, how do I request a distribution from my account? 
  •  Most plans allow employees to withdraw their entire vested balance in a lump sum or rollover their balance to an IRA or another qualified plan.  If your plan permits this option and if you have terminated employment with your company, you can obtain a Termination Distribution Packet by contacting your human resources department.


  • What are the tax penalties if I withdraw my plan balance before age 59½?

Participants that have not reached age 59 ½ that withdraw funds from their qualified retirement account are subject to federal withholding of 20% “mandatory” and a 10% early withdrawal penalty if the funds are taken as a lump sum and are not rolled over to an IRA or another employer plan.  Exception for age 55: If the participant separates from service after reaching age 55, payments received from the plan are not subject to the 10% early withdrawal penalty.

  • What is a financial advisor?
  • A financial advisor provides financial advice or guidance to customers for compensation.  Any compensation earned is generally paid from the assets of the plan.   Advisors must obtain various licenses in order to conduct business with the public. 


  • Who is PensionSource?

PensionSource provides recordkeeping and administrative services for your employer’s retirement plan.  These services may include, but not limited to:

  • Processing new enrollments
  • Fund changes and distributions when requested by the participant
  • Quarterly statements
  • Web-based and/or telephonic support for participants and employers

PensionSource does not provide any financial advice. These services are offered by an independent financial advisor selected by your employer.

© 1998- PensionSource Corporation. All rights reserved.