Pera 401k offers a range of investment options to help you build a sustainable future.
The Pera 401k platform allows you to invest in a variety of assets, including stocks, bonds, and ETFs.
Investing in a diversified portfolio can help reduce risk and increase potential returns over time.
Pera 401k's investment options are designed to be low-cost and easy to manage, making it simple to get started with retirement savings.
By spreading your investments across different asset classes, you can potentially reduce your exposure to market volatility.
This approach can help you build a more stable financial foundation for the long-term.
Curious to learn more? Check out: Fidelity 401k Options
Sustainable Investment Options
The PERAdvantage SRI Fund is a great option for those looking to invest in a way that's both financially sustainable and socially responsible. It's the only PERAdvantage fund with a focus on environmental, social, and governance factors.
The fund has two underlying portfolios: the BlackRock ACWI ESG Fund and the TIAA-CREF Core Impact Bond Fund. The BlackRock fund excludes companies involved in tobacco, controversial weapons, fossil fuel extraction, and thermal coal power.
For your interest: 401k S and P Index Only Startegy
The BlackRock ACWI ESG Fund mirrors an index with over 500 stock holdings, with top holdings including Apple, Microsoft, and Tesla. This fund makes up about 60% of the SRI Fund.
The TIAA-CREF Core Impact Bond Fund includes investments aimed at driving positive environmental and social impact, and makes up about 40% of the SRI Fund. This fund also includes investments that are tilted toward positive ESG exposure.
In 2021, the SRI Fund provided a return of 10.2% for the year. As of the end of 2021, PERA members had more than $40 million invested in the fund.
The primary objective of the SRI Fund is to deliver financially sustainable risk-adjusted returns to participating members.
For your interest: John Hancock 401k Investments
Plan Types
So you're considering a Pera 401(k) plan, and you're wondering about the different types of plans available. There are three main types: Safe Harbor, Non-Elective, and Cross Tested.
A Safe Harbor plan is a great option for small businesses, as it allows you to make a qualified matching contribution to your employees' accounts, which can be a big incentive for them to participate. This type of plan also requires a more straightforward annual notice to employees.
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A Non-Elective plan, on the other hand, requires you to contribute a fixed amount to each employee's account, regardless of whether they contribute or not. This type of plan is often more expensive than a Safe Harbor plan, but it can be beneficial for businesses with a high percentage of highly compensated employees.
A Cross Tested plan is a hybrid of the two, allowing you to make matching contributions to certain employees while still requiring a fixed contribution to all employees' accounts. This type of plan can be beneficial for businesses with a mix of highly compensated and non-highly compensated employees.
The key to choosing the right plan is to consider your business's specific needs and goals. For example, if you're a small business with a high percentage of highly compensated employees, a Cross Tested plan might be the best option.
Check this out: Roth 401k vs 401k for High Income Earners
Frequently Asked Questions
Does a PERA have a 401k?
Yes, a PERA employer offers a 401(k) plan called PERAPlus 401(k) Plan, which is available to all employees. Learn more about enrollment and benefits.
Is PERA better than a 401k?
PERA offers a guaranteed lifetime benefit based on your salary and years of service, whereas 401k plans rely on investment returns. This predictable income stream makes PERA a more stable retirement option for public employees.
How much do I need in my 401k to get $1000 a month?
To estimate how much you need in your 401k for a $1,000 monthly retirement income, assume you'll need about $240,000 saved, assuming a 5% annual withdrawal rate. This rule of thumb can help you plan for a comfortable retirement income.
Can you roll a 401k into a PERA?
Yes, you can roll over a 401(k) into a PERA plan, but you must be eligible to take a distribution from your current plan. Check with PERA for specific requirements and to confirm your eligibility for a rollover.
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