Empower Retirement is the Baker Hughes 401(k) Plan record keeper. They are the record keeper for all contributions (pre-tax, after-tax, Roth) made by you and Baker Hughes.
You can contribute to your 401(k) on a pre-tax, after-tax or Roth basis. You can contribute to one or all of these contribution types. All contributions are made through bi-weekly payroll deductions.
You should consult with your tax or financial advisor as you make this decision. There are pros and cons to each of these three options and your tax or financial advisor can help you decide the right path for you.
You can contribute up to $20,500 in 2022 to your 401(k), from 1% to 50% of your eligible pay. You can contribute up to $22,500 in 2023 to your 401(k), from 1% to 50% of your eligible pay. If you are age 50 or older, you can make an additional catch up contribution of $6,500 in 2022 and $7,500 in 2023. These limits apply to the combination of your pre-tax and Roth contributions. Regular after-tax contributions and Baker Hughes contributions are not subject to these limits. Please refer to the Summary Plan Description to learn about all the IRS limits pertaining to your 401(k).
You may change contribution amounts or change investment elections at any time.
Baker Hughes automatically contributes 4% of your eligible pay to your account every pay period, even if you do not elect to contribute. In addition, Baker Hughes will make company matching contributions dollar for dollar up to 5%. So, if you contribute 5% through pre-tax, Roth and/or regular after-tax contributions, you’ll get a 14% contribution each pay period. If you hit the combined pre-tax/Roth contribution limit of $19,500 for 2021 before the final pay period of the year you will need to switch to regular after-tax contributions for the rest of the year to continue receiving company match contributions.
The 2022 IRS contribution limits will be provided once they are published by the IRS.
You need to contribute 5% of your eligible pay to get the full match.
Baker Hughes contributions are made every pay period.
Your eligible pay includes, but is not limited to:
You are always 100% vested in your own contributions, the company’s matching contributions and any related earnings. Being “100% vested” means the money is yours to keep, even if you leave the company. You become 100% vested in the company base contributions and any related earnings when you:
The funds offered in the Plan are overseen by an Investment Committee established by Baker Hughes. The duties of the Committee include the establishment, monitoring and evaluation of investment funds, fund managers and investment expenses. The Committee periodically reviews the 401(k) investment lineup and may consider changes to the lineup in the future.
You will have the choice of investing in a Target Date Fund or the Core Funds. The type of approach you choose will depend on your comfort level with making investment decisions and how much time you want to devote to managing your investments. Additional details about your investment options will be made available when you enroll.
Target Date Funds are pre-mixed, diversified funds that provide a quick and easy method for diversifying your investments with a single selection. 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).
You also have the choice of six Core Funds if you prefer to choose your investment mix.
At this time the 401(k) Plan does not allow for pre-tax and regular after-tax contributions to be converted into a Roth account inside the plan. These are called in-plan Roth conversions and is a feature under review for future implementation.
Baker Hughes uses custom funds designed specifically for the 401(k) Plan. Investment managers used in the funds are selected by the Baker Hughes Investment Committee with the guidance of an investment consultant.
Yes. You can take one loan up to $50,000.
If you terminate employment with an outstanding loan balance, you must repay the loan within 90 days or the loan will be in default and the unpaid outstanding balance will be deemed a taxable distribution to you in the default year.
Yes. Income limitations that apply to Roth IRA contributions do not apply to Baker Hughes 401(k) Plan Roth contributions. The only income limitation in the Baker Hughes 401(k) Plan applies to all contribution types (before-tax, Roth and regular after-tax). This limitation requires that neither you nor the company can contribute to the Baker Hughes 401(k) Plan after your plan eligible income reaches $290,000 in 2021.
The 2022 IRS limits will be provided once they are published by the IRS.
Yes. Under certain circumstances, you may be able to make an early withdrawal from your account.
You may withdraw all or part of your after-tax contributions, plus the applicable earnings. Amounts from earnings are subject to income taxes in the year they are withdrawn. If you withdraw any after-tax contributions, you will be suspended from making contributions to the Baker Hughes 401(k) plan for six months.
You may withdraw your before-tax contributions and proportionate earnings if you qualify for a financial hardship withdrawal. For these purposes, financial hardship generally means you cannot obtain the funds from any other source (including the Baker Hughes 401(k) plan loan provision) and you need the funds for certain reasons such as purchasing your primary residence, paying incurred uninsured and unreimbursed medical expenses for yourself, your spouse or your dependent children and repairing damage to primary residence due to certain natural disasters, along with other circumstances.
Click here for the current 401(k) fund fact sheets which are updated monthly.
Anyone eligible for the Baker Hughes 401(k) Plan can make pre-tax, regular after-tax, or Roth contributions, up to the allowable IRS limits.
All 401(k) Plan participants are eligible to make Roth contributions, but must elect to make Roth contributions – they are not automatic.
All 401(k) contributions will be taxed at some point. Pre-tax contributions are taxed at the time you withdraw your savings, and after-tax and Roth contributions are taxed at the time you make the contributions. If you believe that at the time you plan to withdraw your contributions you will be at a higher tax bracket than you are currently, now may be a better time to pay taxes on your contributions. Or if you are unsure about future tax rates, contributing both pre-tax and after-tax (Roth or regular) can diversify your tax situation at retirement.
You may elect any combination of pre-tax, regular after-tax, or Roth contributions up to 50% of pay, as long as your total contributions don’t go over the annual limits set by the IRS. And remember, the company match is made every pay period, so be sure to calculate your total contributions to ensure you are making 401(k) contributions each pay period.
Both elections allow you to save on an after-tax basis, and when you withdraw your savings they will not be taxed. Earnings from investments are handled differently, however. Earnings from Roth contributions remain tax-free, and earnings from regular after-tax contributions are taxed upon withdrawal.
Under current tax laws, neither your Roth contributions nor the income on those contributions will be subject to federal income tax when you receive them if the distribution of your Roth contributions (including earnings thereon) is made:
1. On or after the later of the date you attain age 59½, die or become disabled; and
2. After the completion of the five-taxable-year period beginning on the earlier of (a) the first day of the first taxable year in which you first made a Roth contribution to the Plan or (b) if you made a rollover contribution to the Plan from a designated Roth account previously established for you under another retirement plan, the first taxable year for which you made a Roth contribution to such plan (a “Qualified Roth Distribution”).
The company will make matching contributions on pre-tax, regular after-tax, and Roth contributions.
No. Company contributions have not yet been taxed, so they are pre-tax contributions that will be taxed at the time of distribution.
You can accomplish all savings elections, including Roth elections, changes to investments, or beneficiary changes online or by talking to a Baker Hughes benefits representative Monday through Friday from 7:00 a.m. to 7:00 p.m. CT at 1-866-244-3539.