General Mills, one of the largest food firms in the world, is set to retire. After 150 years in business, General Mills has announced that it will be closing its doors for good. This decision surprised many people, as General Mills has been a staple in the food industry for decades. So what led to this retirement? And what does General Mill Retirement mean for its employees and consumers alike?
General Mills 401(k) Plan
General Mills has a lengthy background in providing its employees with a retirement savings plan. The General Mills 401(k) Plan was created in 1986 and is one of the oldest 401(k) plans. Today, it is amongst the most extensive corporate retirement plans in the United States, with more than $24 billion in assets and over 700,000 participants. General Mills has always been a company that takes care of its employees, and this retirement plan is just another example of that commitment.
Eligibility and Enrollment
My Benefits and the Benefits Service Center
General Mills is committed to giving you the resources to make informed decisions about your retirement. The My Benefits website is an excellent resource for employees, as it provides information on the General Mills 401(k) Plan and other benefits. The Benefits Service Center is another excellent resource for employees, as it allows for assistance with enrollment, changes to your account, and questions about your benefits.
Eligibility and Enrollment
You are eligible to participate in the General Mills 401(k) Plan if you are a regular full-time or part-time employee of General Mills. You can enroll in the plan at any time, but you must be enrolled to receive matching contributions from them.
General Mills allows you to transfer or rollover your account balance from another retirement plan, such as a 401(k) from a previous employer. You also can roll over your IRA into the General Mills 401(k) Plan. The General Mills 401(k) Plan does not have an age limit, so you can continue contributing to your account even after you retire.
General Mills offers a generous 401(k) match, matching 100% of your contributions to the first six percent of your eligible pay. General Mills also offers a catch-up contribution for employees over 50, allowing you to contribute an additional $500 per year. General Mills employees are automatically enrolled in the 401(k) Plan at a three percent contribution rate, but you can change your contribution rate.
- Earnable Compensation
General Mills defines earnable compensation as your base pay, bonuses, and commissions. Earnable compensation does not include overtime pay, tips, or expense reimbursements.
- Maximum Contribution Rates
General Mills employees can contribute up to $19,500 per year to the 401(k) Plan. Employees above 50 years old can contribute an additional $6000 per year. The total contribution limit for 2019 is $25,500.
- Annual Dollar Limits
There are also annual dollar limits on how much you can contribute to the General Mills 401(k) Plan. These limits are made by the IRS and are adjusted for inflation each year. For 2019, the contribution limit is $19,000.
- Federal Contribution Limits
General Mills employees are also subject to federal contribution limits, and the contribution limit for 2019 is $18,500.
- Pre-Tax Contributions
General Mills employees can choose to make pre-tax contributions to the 401(k) Plan. Pre-tax contributions lower your taxable income, resulting in a lower tax bill.
- Roth 401(k) Contributions
General Mills employees can also choose to make Roth 401(k) contributions. Roth 401(k) contributions are made with after-tax dollars, but they grow tax-free and can be withdrawn tax-free in retirement.
- Roth 401(k) In-Plan Conversion
General Mills employees can convert their pre-tax 401(k) contributions to Roth 401(k) contributions. This conversion is taxed as ordinary income, but it can be an excellent way to diversify your tax exposure in retirement.
- Pre-Tax or Roth?
General Mills employees can choose to make either pre-tax or Roth 401(k) contributions. There is no right or wrong answer, depending on your circumstances. If you hesitate about which option is right for you, General Mills offers a tool on the My Benefits website that can help you decide.
- Catch-Up Contributions
General Mills employees over 50 can make catch-up contributions to the 401(k) Plan. Catch-up contributions are an additional $500 per year, on top of the regular contribution limit.
- Military Make-Up Contributions
General Mills employees called to active duty can make catch-up contributions to the 401(k) Plan. These contributions must be made within two years of returning from active duty.
- Changing Your Contribution Percentage
General Mills employees can change their contribution percentage at any time. You can do this online through the My Benefits website or by completing a paper form and sending it to General Mills.
- Annual Increase Option
General Mills employees can choose to increase their contribution percentage each year automatically. The annual increase option is an excellent way to increase your savings rate gradually.
- Highly Compensated Employees
General Mills employees considered highly compensated may have their contribution percentage limited. Highly compensated employees are those who earn higher than $120,000 per year.
General Mills employees can roll over their 401(k) balance to an IRA when they retire. This could be an excellent way to consolidate your retirement accounts and save on fees. There are two main types of IRAs: traditional and Roth.
Traditional IRAs: Offer tax-deferred growth, which means you won’t pay taxes on the money you contribute until you withdraw it in retirement.
Roth IRAs: Offer tax-free growth, which means you won’t pay taxes on the money you contribute or withdraw it in retirement.
General Mills 401(k) Plan is a tax-advantaged retirement savings plan. This indicates that the money you contribute to the plan grows tax-deferred. You won’t pay taxes on the money you contribute or on the earnings from your investment until you withdraw it in retirement. Withdrawals from the General Mills 401(k) Plan are subject to ordinary income taxes.
Tax Treatment of Distributions
The tax treatment of distributions from the General Mills 401(k) Plan depends on whether they are taken as a lump sum or an annuity. Lump-sum distributions are taxed as ordinary income in the year they are taken, and annuity payments are taxed as ordinary income over the annuity’s life.
A direct rollover is when you roll over your 401(k) balance to an IRA without taking a distribution. This is the most tax-efficient way to rollover your account, as you won’t have to pay taxes until you withdraw it from the IRA.
Early Distributions and Tax Penalties
If you take a distribution from the General Mills 401(k) Plan before you reach age 59½, you may be subject to an early withdrawal tax penalty. The penalty is ten percent of the withdrawn amount and ordinary income taxes. There are some exceptions to the early-withdrawal tax penalty, such as if you become disabled or need the money for medical expenses.
Fidelity Investments administers the General Mills 401(k) Plan. Fidelity is amongst the largest providers of retirement services in the United States. They offer a wide range of investment options and online tools and resources to help you plan for retirement.
Amendments and Termination
The General Mills 401(k) Plan may be amended or terminated. However, amendments must be approved by the General Mills Board of Directors. If the General Mills 401(k) Plan is terminated, participants will receive a distribution of their account balance.
If you are a General Mills employee eligible for retirement benefits, you can begin claiming your benefits by contacting Fidelity Investments. Fidelity will help you determine what benefits you qualify for and how to claim them. They will also provide you with information on how to roll over your 401(k) balance to an IRA if you choose to do so.
Final Thoughts – General Mills Retirement
General Mills Retirement offers many great options for those looking to retire. General Mills makes retiring easy with tax-deferred growth, a variety of distribution options, and an easy claim process. Employees can rest assured that their retirement is in good hands with General Mills.