ADS 637 - U.S. Personal Services Contractors 401(k) Defined Contribution Pension Plan

Personal Services Contractors 401(k) Defined Contribution Pension Plan is a retirement savings plan for USAID employees. The plan is a 401(k) defined contribution pension plan, which means that participants make all contributions and the employer does not contribute any monies to participant accounts. Participant-contributed monies and earnings are vested immediately. Eligibility for the plan is open to all U.S. Personal Services Contractors (USPSCs), and there is no open season for enrollment. USPSCs can enroll or terminate their participation in the plan at any time. The plan is administered by a contractor, who provides information on enrollment, investment products, and participant account records. The plan has several advantages, including the deferral of federal income taxes on contributions and earnings until benefits are received or funds are withdrawn, a wide variety of ways to receive retirement benefits, and the ability of participants to borrow funds contributed to their plan accounts. Participants can also access their account information daily from any location in the world by telephone or the Internet. The Office of the Chief Financial Officer (CFO) is responsible for directing, managing, and providing policy guidance and oversight of the plan. The Mission Controller of an Overseas Accounting Office acts as the plan administrator for all overseas-based USPSCs, while the contractor provides information on enrollment, investment products, and participant account records. Participants are responsible for seeking professional assistance from their tax advisor or financial consultant regarding the tax implications and financial impact of their decision to participate in the plan. Financial documentation is any documentation that impacts on or results in financial activity, and it is not limited to documentation within the Controllers' or Office of Financial Management (FM) operations. Cognizant Technical Officers (CTOs), Loans/Grants Officers, Strategic Objective (SO) teams, etc., are responsible for retaining financial documentation and ensuring its availability for audit by either the Office of Inspector General or another responsible audit organization. The plan requires participants to complete an Enrollment Form, a Salary Reduction Agreement, and a Certification of Participant Contribution. The participant completes each form and makes two copies, submitting the original and one copy to the plan administrator and retaining one copy for the participant. The plan administrator is responsible for processing all contribution withholding actions, remitting contributions to the contractor, and processing any participant-initiated changes in enrollment or contribution. The plan has undergone several revisions, with the most recent revision occurring on December 14, 2011. The plan is subject to the USAID Records Management Program, which requires the retention of financial documents for a minimum of seven years. The specific financial records disposition schedules are located in the Mandatory Reference Section of ADS 502, The USAID Records Management Program.