Employee 401(k) Plan Contributions
You can contribute 1% – 50% of your eligible compensation, up to the annual Internal Revenue Service (IRS) contribution limit, whichever is lower. Pre-tax contributions are automatically deducted from your paycheck before you pay income taxes. If you do not enroll within 30 days of becoming eligible, you will be automatically enrolled at a pre-tax rate contribution rate of 6% of your eligible compensation.
You are 100% vested in your contributions. The value of your contributions and earnings are yours when you leave the company, regardless of your years of service.
Earnings on your entire account balance grow on a tax-deferred basis. Taxes are assessed only when you take a distribution from the plan.
The 401(k) plan is administered by Empower Retirement. You reach Empower by clicking here to access the website or by calling 1-844-465-4455.
Employer Matching Contributions
Pearson matches dollar for dollar on the first 3% of your pre-tax contribution election plus $0.50 for every dollar on the next 5% of you pre-tax contribution election.
You are 100% vested in Pearson’s contributions after three years of service. (Between 1–2 years of service you are 33-1/3% vested, and between 2–3 years of service you are 66-2/3% vested).
401(k) Contribution and Compensation Limits
The limits for 2020 are as follows:
- Contribution Limit – $19,500
- Catch-Up Contribution Limit (age 50 and over) – $6,500
- Compensation Limit – $285,000