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Understanding Risk Tolerance: A Guide for Alliant Energy Employees Navigating Retirement Changes

Healthcare Provider Update: Offers health, dental, and vision insurance, along with prescription drug coverage and pre-tax savings programs. Benefits include employer-paid disability and life insurance, wellness programs, and a 401(k) match1. As ACA premiums rise and subsidies expire, Alliants comprehensive employer-sponsored plans may offer more predictable costs and better coverage than marketplace alternatives. Click here to learn more

The world of investing is very subjective--the investment plan that’s right for you depends largely upon the level of comfort that you have when it comes to risk. We'd like our clients from Alliant Energy to remember that you can’t completely avoid risk when it comes to investing, but it's possible for you to manage it.

There are two aspects of risk tolerance for Alliant Energy employees to consider: (1) the capacity of your investment plan itself to absorb losses, and (2) how comfortable you are personally with risk. The first aspect can be quantified--the more flexibility your investment plan has when it comes to potential loss, the more risk your plan can tolerate. For example, as we’ve discussed, a long investment time horizon may allow you to take on more risk than a short time horizon.

'You can’t completely avoid risk when it comes to investing, but it is possible for you to manage it..'

The second aspect, how comfortable you are personally with risk, is more of an emotional measure, and depends on many factors, including your objectives, life stage, personality, and investment experience. Some investors are comfortable with a high degree of risk, while others can tolerate only minimal risk. Individual risk tolerance is an important factor for Alliant Energy employees in deciding which individual investments are appropriate for them, as well as how their investment dollars should be allocated among different investment classes.

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Investors are typically grouped into three categories for purposes of discussing risk tolerance: aggressive (those who have a high degree of risk tolerance); moderate (those willing to accept some degree of risk), and conservative (those who are risk averse).

What is the purpose of Alliant Energy's 401(k) Savings Plan?

The purpose of Alliant Energy's 401(k) Savings Plan is to help employees save for retirement by allowing them to contribute a portion of their salary to a tax-advantaged account.

How can I enroll in Alliant Energy's 401(k) Savings Plan?

Employees can enroll in Alliant Energy's 401(k) Savings Plan by completing the online enrollment process through the employee portal or by contacting the HR department for assistance.

What types of contributions can I make to Alliant Energy's 401(k) Savings Plan?

Employees can make pre-tax contributions, Roth (after-tax) contributions, and may also have the option for catch-up contributions if they are age 50 or older in Alliant Energy's 401(k) Savings Plan.

Does Alliant Energy offer a company match on 401(k) contributions?

Yes, Alliant Energy offers a company match on employee contributions to the 401(k) Savings Plan, which helps to enhance the overall retirement savings.

What is the maximum contribution limit for Alliant Energy's 401(k) Savings Plan?

The maximum contribution limit for Alliant Energy's 401(k) Savings Plan is set by the IRS and can change annually. Employees should check the current limits for the specific year.

When can I start withdrawing from my Alliant Energy 401(k) Savings Plan?

Employees can typically start withdrawing from their Alliant Energy 401(k) Savings Plan without penalty at age 59½, or earlier in cases of hardship or other qualifying events.

Are loans available from Alliant Energy's 401(k) Savings Plan?

Yes, Alliant Energy may allow employees to take loans from their 401(k) Savings Plan, subject to specific terms and conditions set by the plan.

How does Alliant Energy's 401(k) Savings Plan handle investment options?

Alliant Energy's 401(k) Savings Plan provides a variety of investment options, including mutual funds and other investment vehicles, allowing employees to choose based on their risk tolerance and retirement goals.

Can I change my contribution percentage to Alliant Energy's 401(k) Savings Plan?

Yes, employees can change their contribution percentage to Alliant Energy's 401(k) Savings Plan at any time through the employee portal or by contacting HR.

What happens to my Alliant Energy 401(k) Savings Plan if I leave the company?

If an employee leaves Alliant Energy, they have several options for their 401(k) Savings Plan, including rolling it over to a new employer's plan, an IRA, or cashing it out (though this may incur taxes and penalties).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Alliant Energy offers its employees both a defined benefit pension plan and a 401(k) plan as part of their retirement benefits package. The company's pension plan follows a Final Average Pay (FAP) formula, where benefits are calculated based on the average salary over the final years of an employee's career, multiplied by years of service. Employees become vested in the pension plan after a specified number of years of service, generally after 10 years. Alliant Energy's defined benefit plan ensures that employees who retire at the standard retirement age of 65 or older receive a monthly pension payment, with earlier retirements receiving adjusted, reduced benefits (Pension Rights Center) (Wikipedia) (Wikipedia). Alliant Energy's 401(k) plan allows employees to contribute a percentage of their income to a tax-deferred savings account. The company matches a portion of employee contributions, a common feature to incentivize savings. Employees have the option to choose between traditional 401(k) contributions, which are made pre-tax, and Roth 401(k) contributions, made after-tax. These plans also provide a wide range of investment options, such as mutual funds, bonds, and stocks, which employees can select based on their retirement goals (Wikipedia) (Annuity.org). In terms of eligibility, employees generally qualify for both the pension plan and the 401(k) plan after meeting a specific threshold of years of service, which is typically 10 years for the pension plan and immediate eligibility for the 401(k) plan upon employment. The pension benefits calculation typically involves age and years of service. As for the 401(k), employees can enroll upon hire and take advantage of Alliant Energy's employer matching contribution immediately.

In 2024, Alliant Energy continued its energy transition efforts by filing a request to convert its coal-fueled Edgewater Generating Station to natural gas. This shift is part of Alliant's broader sustainability initiatives aimed at reducing greenhouse gas emissions and bolstering reliability (Homepage). The company reaffirmed its commitment to clean energy and community economic benefits. This restructuring is crucial to track because the energy industry is directly influenced by shifts in the economic and political landscape, which has implications for investment strategies and tax benefits (Alliant Energy Retirees - Home) (Alliant Energy Retirees - Home). Alliant Energy updated its 401(k) plan record keeper in 2023, switching to Fidelity Investments. This transition, disclosed in an 8-K filing with the SEC, signifies an effort to enhance the management and performance of employee retirement plans (Alliant Energy Retirees - Home). Changes in company benefits and pensions are essential to follow because they reflect how companies are adapting to both market conditions and new tax laws, affecting employees' retirement security (Alliant Energy Retirees - Home).

Alliant Energy offers its employees stock options (SO) and Restricted Stock Units (RSU) as part of its compensation and benefits program. Stock options provide employees the right to purchase company stock at a predetermined price, while RSUs are company shares granted to employees, typically with vesting conditions. Alliant Energy's stock options and RSUs are generally made available to senior-level management and eligible employees based on performance and tenure. In 2022, Alliant Energy continued to grant stock options under its Long-Term Incentive Plan (LTIP). These stock options (LNT-SO) allowed eligible employees to purchase shares at a set price, aligning their interests with shareholder value growth. Additionally, RSUs (LNT-RSU) were awarded, vesting over time as an incentive to retain talent and reward long-term contributions (Homepage) (Alliant Energy) (Homepage). For 2023 and 2024, the company sustained its stock option grants, especially focusing on performance-based RSUs, which required meeting specific performance metrics for full vesting. These RSUs are typically granted annually and can vest over several years, incentivizing executives and employees to meet long-term company goals. Information on the distribution and conditions for these awards can be found in Alliant Energy’s annual reports and proxy filings.

Alliant Energy offers comprehensive health benefits to its employees and retirees, reflecting a commitment to supporting the well-being of their workforce. For current employees, the company provides several key healthcare options, including medical, dental, and vision insurance plans. Their health plans emphasize flexibility and affordability, with options such as the Consumer-Driven Health Plan (CDHP), which allows employees to manage their healthcare expenses using Health Reimbursement Arrangements (HRA) and Flexible Spending Accounts (FSA). Additionally, Alliant Energy provides access to mental health services through their Employee Assistance Program (EAP), which offers confidential support for personal, emotional, and financial issues (Alliant) (Homepage). The importance of discussing healthcare benefits at Alliant Energy in today's economic, investment, and political environment cannot be overstated. Rising healthcare costs and changing tax laws have made it critical for employees to maximize their benefits, especially as companies like Alliant Energy continue to adapt their offerings to provide sustainable and inclusive coverage. For retirees, Alliant Energy ensures continuity in care through early retiree medical benefits, with premium categories based on contract status. With programs such as Delta Dental and VSP for vision care, the company maintains comprehensive coverage even after retirement. As healthcare remains a significant concern in policy debates, understanding these benefits helps employees and retirees alike plan for future costs and healthcare needs.

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For more information you can reach the plan administrator for Alliant Energy at 4902 North Biltmore Lane, Suite 1000 Madison, WI 53718; or by calling them at (608) 458-3311.

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