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Understanding Creditor Protections forKohl's Employees

Healthcare Provider Update: Healthcare Provider for Kohl's Kohl's offers a variety of employee health benefits through Aetna. This partnership provides extensive medical coverage options to its employees, including plans that encompass medical, dental, and vision care, ensuring that staff have access to comprehensive health services. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are projected to surge dramatically due to a combination of factors, including the expiration of enhanced ACA premium subsidies and ongoing medical inflation. Many employees, particularly those at companies like Kohl's, could see out-of-pocket health insurance premiums rise by over 75%. With insurers requesting steep rate hikes-some exceeding 60% in states like New York-employees should brace for significant financial impacts. As they consider their healthcare options, it's critical to stay informed and proactive in managing potential expenses in the coming year. Click here to learn more

'Kohl's employees must be aware that while ERISA-qualified plans provide significant protection from creditors, non-ERISA accounts like IRAs are more vulnerable, and it's crucial to understand state-specific laws to ensure full asset security as you approach retirement,' says Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'As retirement approaches, Kohl's employees should consider not only the strength of their ERISA-qualified plans but also the potential vulnerabilities of non-ERISA accounts, and seek guidance from legal and financial experts to ensure their assets are fully protected,' advises Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The protection of retirement savings under ERISA-qualified plans.
The limitations of ERISA protection, including potential risks from creditors.
The role of state laws in protecting non-ERISA retirement accounts like IRAs.

For employees at Kohl's, an important issue is the security of retirement savings, especially when employees approach the retirement age or are retired. It is generally assumed that all retirement assets are protected from creditors. Nevertheless, the extent to which these assets are protected differs greatly depending on the type of retirement plan and the laws of the state. In this article, we explore the specifics of asset protection.

Plans Covered by ERISA: A Stronghold Against Creditors
Most of the retirement plans that meet the eligibility requirements of the Employee Retirement Income Security Act (ERISA) are generally safe. Such ERISA-qualified plans are also usually safe from the reach of creditors in the event of bankruptcy or civil suits. Importantly, this protection is maintained even if the company sponsoring the plan goes bankrupt. These assets are usually out of the reach of personal creditors.

To meet the ERISA requirements, a retirement plan must be offered by an employer or an employee organization and must meet certain federal requirements regarding membership reporting, funding, and vesting. Typical ERISA-qualified plans include profit-sharing plans, pensions, deferred compensation plans, and 401(k)s.

Furthermore, ERISA applies to some employee health and welfare benefits, such as:

Hospital, surgical, and medical coverage through Health Maintenance Organization (HMO) plans.
Health care Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
Dental and vision plans.
Prescription drug programs.
Disability insurance.
Specific welfare benefit plans under sections 419(a)(f)(6) and 419(e).

The anti-alienation clause in these plans prohibits the assignment of benefits and thus keeps the assets beyond the reach of most creditors.

Weaknesses of ERISA-Qualified Plans
Although they are very strong, ERISA plans are not foolproof. They can be subject to claims by:

A former spouse for child support or divorce settlements, with a Qualified Domestic Relations Order (QDRO).
The Internal Revenue Service (IRS) for any unpaid federal income taxes.
The federal government in cases involving fines and penalties for crimes.
Creditors in the event that a plan participant breaches the terms of the plan.

The State of Non-ERISA Plans
The protection of retirement accounts that are not covered by ERISA, such as traditional and Roth IRAs, is not uniform. Some 403(b) plans offered by government or religious organizations may also not be ERISA plans.

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BAPCPA provides some protection for IRA funds in bankruptcy, but such funds are not protected by ERISA.

State Laws and IRA Security
The protection of IRAs and other non-ERISA plans against creditors can vary greatly by state. Some offer little protection, while others offer almost none. It is imperative to know these nuances in order to manage the risk of potential creditor claims. Kohl's employees are encouraged to seek the advice of experienced local attorneys in order to navigate these complex legal situations.

Conclusion
The legality of protecting retirement funds from creditors depends on the type of retirement account, state laws, and certain exemptions. Although most employer-sponsored retirement plans are relatively safe, the legal framework is complex, and it is advisable to seek legal advice early to maximize the protection of retirement assets.

Sources:

Mavar, Tyson. The Retirement Group, a Division of Wealth Enhancement Group . Interview. January 2025.

'ERISA: A Guide to Employee Retirement Income Security Act.' U.S. Department of Labor , 2024, www.dol.gov/general/topic/retirement/erisa . Accessed 31 Jan. 2025.

'How Bankruptcy Affects Retirement Accounts.' National Bankruptcy Forum , 2023, www.nationalbankruptcyforum.com/affects-of-bankruptcy-on-retirement-accounts . Accessed 31 Jan. 2025.

'State Laws and IRA Protection.' Retirement Law Journal , vol. 12, no. 4, 2024, pp. 47-52.

'Understanding Qualified Domestic Relations Orders (QDROs).' Internal Revenue Service , 2023, www.irs.gov/retirement-plans/plan-participant-employee/understanding-qualified-domestic-relations-orders . Accessed 31 Jan. 2025.

What type of retirement savings plan does Kohl's offer to its employees?

Kohl's offers a 401(k) retirement savings plan to help employees save for their future.

Does Kohl's provide a company match for contributions made to the 401(k) plan?

Yes, Kohl's provides a company match on employee contributions to the 401(k) plan, encouraging employees to save for retirement.

What is the eligibility requirement to participate in Kohl's 401(k) plan?

Employees become eligible to participate in Kohl's 401(k) plan after completing a certain period of service, typically outlined in the plan documents.

Can employees at Kohl's choose how to invest their 401(k) contributions?

Yes, employees at Kohl's can choose from a variety of investment options for their 401(k) contributions, allowing them to tailor their investment strategy.

What is the maximum contribution limit for Kohl's 401(k) plan?

The maximum contribution limit for Kohl's 401(k) plan is subject to IRS guidelines, which can change annually. Employees should refer to the latest IRS limits for specifics.

Does Kohl's allow employees to take loans against their 401(k) savings?

Yes, Kohl's 401(k) plan may allow employees to take loans against their savings, subject to certain terms and conditions outlined in the plan.

How can employees at Kohl's access their 401(k) account information?

Employees at Kohl's can access their 401(k) account information online through the plan's designated website or by contacting the plan administrator.

Is there a vesting schedule for Kohl's 401(k) company match?

Yes, Kohl's has a vesting schedule for the company match in the 401(k) plan, which determines when employees fully own the matched funds.

Can part-time employees at Kohl's participate in the 401(k) plan?

Yes, part-time employees at Kohl's may be eligible to participate in the 401(k) plan, depending on their hours worked and the specific eligibility criteria.

What happens to my Kohl's 401(k) if I leave the company?

If you leave Kohl's, you have several options for your 401(k), including leaving the money in the plan, rolling it over to another retirement account, or cashing it out.

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

Kohl's offers a comprehensive retirement savings program for its employees, which includes both a 401(k) plan and a company match program. The specific plan is named the Kohl's Department Stores Inc. Savings Plan, managed through Alight, and covers over 84,000 employees (Kohl's). For the 401(k) plan, full-time employees are eligible to participate immediately upon hire, while part-time employees become eligible after working 1,000 hours within their first 12 months of employment (Capitalize). The company offers a 100% match on employee contributions, up to 5% of their salary (Capitalize). Although Kohl's currently offers no pension plan, the 401(k) remains a critical component of retirement savings for its employees. It allows workers to save with the security of a company match, encouraging long-term financial health.

Kohl's is undergoing significant restructuring efforts as part of its broader business transformation. The company announced the layoff of approximately 250 employees in 2023 as part of this effort to streamline operations and improve profitability. In addition, Kohl’s is focusing on modernizing its brand to align with the Active and Casual lifestyle categories. Key initiatives include expanding its digital business, driving growth in core categories, and enhancing customer loyalty programs, including updates to its Kohl's Card Rewards program. The company is also committed to ESG goals, aiming for Net Zero emissions by 2050 and increasing diversity among suppliers (Kohl's Corporate).

Kohl's offers both Non-Qualified Stock Options (NQSOs) and Restricted Stock Units (RSUs) as part of their equity compensation plans for employees and certain contractors. For stock options, employees can purchase Kohl's shares at a predetermined strike price, with potential tax impacts occurring at the time of exercise. RSUs, on the other hand, are granted as stock units that vest over a set period. Once vested, these RSUs are treated as ordinary income and the shares are automatically transferred to the employee. Both stock options and RSUs are available to Kohl's employees, but only employees are eligible for Incentive Stock Options (ISOs), which have specific tax treatments and holding requirements (Kohl's Corporate) (Kohl's Corporate) (Zajac Group). In 2022, 2023, and 2024, Kohl's continued to offer RSUs to its employees as part of its incentive program. RSUs typically vest over several years, incentivizing employees to remain with the company. NQSOs can be exercised at any time after vesting, with employees being taxed on the spread between the exercise price and the fair market value at the time of exercise

Kohl's offers a comprehensive health benefits package for both full-time and part-time employees working at least 30 hours per week. Key highlights include medical, dental, and vision coverage, which are accessible to all permanent employees. In addition, Kohl's provides a Health Savings Account (HSA) option, contributing up to $700 per year depending on the employee's insurance plan (Kohl's) (Home Page). Recent developments include a renewed focus on mental health and well-being, highlighted by Kohl's continued support for the National Alliance on Mental Illness (NAMI) in 2024 (Home Page). This initiative aligns with their broader goal of enhancing employee well-being through partnerships with organizations that offer mental health resources. The company also offers significant wellness perks, including access to telehealth services, which became particularly relevant during and after the pandemic. Acronyms frequently mentioned within Kohl's benefits package include HSA (Health Savings Account) and PPO (Preferred Provider Organization), commonly available as options for healthcare coverage (Kohl's Investors). This focus on mental and physical health aligns with Kohl's overall strategy of promoting a healthy work-life balance through wellness programs, flexible work schedules, and wellness discounts. These efforts reflect the company’s commitment to improving employee well-being, which has been underscored by corporate announcements and external partnerships in recent years

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For more information you can reach the plan administrator for Kohl's at , ; or by calling them at .

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