401(k) Changes Beginning in January 2020

What are the changes happening in January 2020?

There are two changes to your 401(k) Plan as of January 2020. First, Empower will be the new 401(k) Plan recordkeeper. Second, we’re introducing new Target Date Funds, which will replace the three Style Funds (Conservative, Moderate, and Aggressive), and the Balanced Inflation Plus Fund.

To learn more about the changes, read this brochure and review the Investment Fund Overview chart.

Why is the recordkeeper changing?

The Administrative Committee, made up of senior Baker Hughes executives, decided to move to Empower Retirement, the second largest retirement services provider in the United States, serving more than 38,000 plans and 9.2 million participants. The main responsibility of the recordkeeper is to track how much you have, where it is, and what type of money it is. Because Baker Hughes utilizes custom funds for investments only designed for the Baker Hughes 401(k) Plan, the choice of recordkeeper does not impact the investments of the Plan.

What are Target Date Funds?

Target date funds are designed to simplify your investment decisions by providing an investment option with an asset allocation that is appropriate for your age. The year in the Baker Hughes Target Date Funds refers to the approximate year (the target year) when you would retire and leave the workforce. You choose the Target Date Fund with the date closest to the year of your target retirement date (for many people, this may be age 65).

Each Target Date Fund begins with a larger allocation to aggressive (growth) investments, such as stock, when the target date is further off. This is because you have a longer period of time to ride out any short-term ups and downs in the market to gain more earnings on your investments over the long-term. The asset allocation for the Target Date Funds gradually changes over time to more conservative (income) investments, such as bonds and cash, which provide more stability as you get closer to your retirement date and your investment horizon shortens. See the Investment Option Overview chart.

What is happening with the Style Funds?

The Style Funds will be replaced with the Target Date Funds. Any balances you currently have invested in the three Style Funds (Conservative, Moderate, and Aggressive) and/or the Balanced Inflation Plus Fund will automatically be “mapped” and invested in a Target Date Fund based on your estimated retirement age. Any investment elections for future contributions in these funds will also be mapped to the Target Date Funds. You will be able to make changes to these investments once the recordkeeper transition is complete.

When will the recordkeeper transition to happen?

The recordkeeper transition begins on December 21, 2019 and end the week of January 6, 2020 but no later than January 10, 2020. During that time period – called a blackout period – you won’t be able to perform certain activities in your account as of specific dates. Please note that you will be able to make investment changes through December 31st. Learn more here.

What happens during the blackout period?

To ensure all account information is transferred accurately to the new recordkeeper, during the blackout period you will be unable to manage or change the investments in your account, request loans or distributions, and make withdrawals. Even though the blackout period begins on December 21, 2019 for certain activities, you will be able to make investment changes through December 31st.  You can learn more about the blackout period here.

Do I need to take any action?

If you are satisfied with your current investment elections, you do not have to take any action during the transition period. You will be notified of important dates, but there is NO action you have to take. Any investment elections for balances you have in the three Style Funds (Conservative, Moderate, and Aggressive) and the Balanced Inflation Plus Fund will map to the new Target Date Funds based on your year of birth.

What if I have questions?

If you have questions, contact the Baker Hughes Benefits Center at 1-866-244-3539. After the transition period, you will continue to call this same number to speak to a 401(k) representative during these extended hours: Monday - Friday, 7 a.m. to 9 p.m. and Saturdays from 8 a.m. to 4:30 p.m. CT.