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Fiserv Employees: Don't Fall for These Common IRA Rollover Traps!

Healthcare Provider Update: Healthcare Provider for Fiserv: Fiserv is engaging in the healthcare sector through its Clover platform, which is set to launch PracticePay in early 2026. This service aims to cater specifically to small and medium-sized healthcare providers, partnering with Rectangle Health to offer tailored payment solutions that comply with healthcare regulations. Potential Healthcare Cost Increases in 2026: As 2026 approaches, healthcare costs are expected to surge sharply, driven by multiple economic pressures. Insurers anticipate an average increase of 7.5% to 8.5% in individual and group medical costs, attributed to rising medical service expenses, labor shortages, and the potential termination of enhanced federal premium subsidies. Without intervention, many individuals enrolled in ACA plans may face premium hikes exceeding 75%, significantly affecting their out-of-pocket healthcare expenses and access to affordable coverage as we enter this challenging financial landscape. Click here to learn more

In the complex financial landscape faced by individuals transitioning from full-time employment to part-time roles at Fiserv, it is critical to grasp the nuances of managing retirement savings. This includes addressing the potential consequences associated with transferring retirement accounts such as 401(k)s to Individual Retirement Accounts (IRAs).

Christine Benz of Morningstar notes that a common scenario encountered by professionals is a change in position and the need to effectively manage rollovers. Benz introduces Ed Slott, a renowned tax and IRA expert, who recently published a guide titled 'The Retirement Savings Time Bomb Goes Off Louder.' This work explores common mistakes and strategies for managing retirement savings, crucial for those navigating their transition to retirement.

A key element that Slott emphasizes is the preference for direct transfers over rollovers when it comes to moving retirement funds. Direct transfers, where funds are moved directly from one retirement account to another without the owner taking possession, minimize risks and complications. This method avoids common risks such as custody obligations and the strict 60-day closure rule required for rollovers. According to Slott, 'three things happen when you roll over, and all are bad,' highlighting the importance of opting for direct transfers wherever possible.

Slott explains the mechanics of the 60-day rollover rule, where individuals have a two-month period to complete a rollover. While this may seem sufficient, many fail to meet this deadline, resulting in unexpected tax liabilities and penalties. He points out a major error: if a person makes more than one money transfer from an IRA within a 365-day period—not a calendar, but a fiscal year—it constitutes an excessive contribution. This error can lead to the taxation of the entire amount, with penalties, turning what should be a straightforward procedure into a costly mistake.

One specific example Slott mentions involves a prominent individual and their advisors who, despite their expertise, failed to adhere to these rules, resulting in taxes and penalties exceeding one million dollars. This cautionary tale serves as a powerful reminder of the risks associated with improper management of retirement funds.

Additionally, Slott discusses another crucial rule, the 'same property rule,' which stipulates that the same assets withdrawn must be re-deposited into the new IRA. This rule, as evidenced in the case mentioned above, can lead to severe financial consequences.

Slott's advice is clear: avoid the pitfalls related to 60-day rollovers and ensure that all transfers are direct, trustee-to-trustee. This method not only simplifies the process but also preserves the funds against common mistakes that could jeopardize one's financial life.

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For those at Fiserv transitioning from a 401(k) to an IRA, understanding these rules is crucial for financial stability in retirement. It is crucial to stay informed and cautious, utilizing resources such as Slott's experience to manage this complex but essential part of retirement planning. Employing competent financial advisors and information sources like Morningstar can ensure that individuals make the best decisions for their long-term financial well-being.

The discussion between Benz and Slott is not just a debate on best practices but is an essential guide for anyone looking to preserve their fortune during their transition from active employment to retirement. Their exchange is a vital tool for understanding the new rules and avoiding mistakes that can lead to significant financial losses.

It's important for Fiserv employees to consider the impact of Minimum Required Distributions (RMDs) for individuals managing IRA rollovers, which begin at age 72. The deferral of IRA rollovers until age 72 can complicate RMD calculations, potentially leading to higher tax liabilities due to the aggregation of account values. To optimize tax efficiency, financial planners often recommend completing rollovers before the start of RMDs, which facilitates management and may reduce tax rates during retirement years ('Smart Strategies for IRA Rollovers and RMDs,' Forbes, April 2021). This strategic timing is essential for preserving financial stability and reducing taxes as retirees manage their retirement planning.

What is the primary purpose of Fiserv's 401(k) plan?

The primary purpose of Fiserv's 401(k) plan is to help employees save for retirement by providing a tax-advantaged savings vehicle.

How can Fiserv employees enroll in the 401(k) plan?

Fiserv employees can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

Does Fiserv offer matching contributions to its 401(k) plan?

Yes, Fiserv offers matching contributions to its 401(k) plan, which helps employees increase their retirement savings.

What types of investment options are available in Fiserv's 401(k) plan?

Fiserv's 401(k) plan typically offers a range of investment options, including mutual funds, target-date funds, and company stock.

What is the vesting schedule for Fiserv's 401(k) matching contributions?

The vesting schedule for Fiserv's 401(k) matching contributions may vary, so employees should refer to the plan documents for specific details.

Can Fiserv employees take loans against their 401(k) savings?

Yes, Fiserv employees may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.

What is the minimum contribution percentage for Fiserv employees participating in the 401(k) plan?

The minimum contribution percentage for Fiserv employees is typically set at 1%, but employees are encouraged to contribute more to maximize their savings.

Are there any fees associated with Fiserv's 401(k) plan?

Yes, there may be fees associated with Fiserv's 401(k) plan, including administrative fees and investment management fees, which are disclosed in the plan documents.

How often can Fiserv employees change their contribution amounts?

Fiserv employees can change their contribution amounts at any time, subject to the plan's guidelines.

What happens to Fiserv employees' 401(k) savings if they leave the company?

If Fiserv employees leave the company, they can roll over their 401(k) savings to another retirement account, withdraw the funds, or leave the savings in the Fiserv plan if allowed.

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

Fiserv offers a comprehensive retirement program for its employees, which includes both a 401(k) plan and a pension plan. The 401(k) plan allows employees to contribute on a pre-tax basis, or on a post-tax basis through the Roth 401(k) feature. Fiserv matches 100% of the first 1% of an employee's contribution, and 50% of the next 4% of eligible compensation, providing a potential match up to 3% (Working at Fiserv, Inc.). This 401(k) plan, named the Fiserv Employee Savings Plan, is administered through Vanguard (Working at Fiserv, Inc.). In addition to the 401(k), Fiserv also offers a defined benefit pension plan for long-serving employees, depending on their hire date (Working at Fiserv, Inc.). This plan typically includes employees who were part of First Data Corporation before its acquisition by Fiserv. The pension plan's eligibility criteria involve a combination of years of service and age qualification; typically, employees need at least five years of service and must be of retirement age, which is usually defined as 65 (Working at Fiserv, Inc.). However, specific details regarding the pension formula and years of service requirements were not explicitly stated on the documents accessed.

Restructuring and Layoffs: In early 2024, Fiserv announced a significant restructuring plan, which included a workforce reduction affecting approximately 5% of its global employees. This move was part of a broader effort to streamline operations and focus on core business areas amid challenging economic conditions. The decision to reduce the workforce reflects the company's strategy to adapt to shifting market demands and improve operational efficiency.

Fiserv provides stock options and RSUs as part of its compensation package. Fiserv issues stock options under the acronym SO and RSUs under the acronym RSU. In 2022, 2023, and 2024, Fiserv employees, especially executives and key personnel, are eligible for these benefits. The specifics are detailed in the company's compensation sections of annual reports.

Fiserv Health Benefits Overview 1. Official Fiserv Website: Health Insurance: Fiserv provides a range of health insurance options, including medical, dental, and vision plans. These options include PPO (Preferred Provider Organization) and HDHP (High Deductible Health Plan) plans. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs): Available for employees to save on out-of-pocket expenses. Wellness Programs: Includes resources for mental health support, fitness programs, and preventive health services. 2. Glassdoor: Employee Reviews: Employees appreciate the comprehensive benefits package which includes a range of health insurance plans and wellness incentives. Some have noted that while the benefits are robust, they may come with high deductibles depending on the plan chosen. 3. Indeed: Health Benefits: Reviews indicate that Fiserv’s health benefits are competitive, offering multiple plan choices with various coverage levels. Employees also mention access to telemedicine services as a plus. 4. LinkedIn: Benefits Overview: Includes detailed information on Fiserv’s health benefits such as medical, dental, and vision plans. Also highlights their emphasis on work-life balance and employee wellness programs.