401(k) Overview

2020 Plan Year Information

401(k) Plan Eligibility

Saving for retirement should be one of your most important goals, regardless of your age. Participating in the Morgan Stanley 401(k) Plan can help you achieve that goal.

Generally, you are eligible to participate in the 401(k) Plan if you are US benefits-eligible and a full-time or part-time employee.

Note

If you are a part-time employee regularly scheduled to work less than 20 hours per week, you can participate in the Firm’s 401(k) after one year of employment or upon turning 21, whichever is later.

Enroll in the 401(k) Plan

As an eligible employee, you can generally start participating in the 401(k) Plan any time on or after your hire date or, if later, the date you meet the eligibility requirements outlined in the 401(k) Summary Plan Description.

To enroll in the 401(k) Plan, visit the Morgan Stanley Benefit Center website and go to Savings and Retirement > 401(k) Savings Plan > Change Contributions and designate the rate of pay by pay type you want to contribute.

Employee Contributions

You can contribute up to the maximum amount of 30% of your eligible pay or the pre-set IRS limit ($19,500 for 2020), whichever is less.

If you will be age 50 by December 31, consider contributing extra catch-up contributions up to the IRS limit ($6,500 for 2020) to help boost your retirement savings.

However, the annual IRS limits apply to contributions you make to any 401(k) Plan during the year. Therefore, if you contributed to another employer’s 401(k) Plan during the year, you must take into consideration any contributions made to that plan to ensure that you don’t exceed the IRS annual maximum.

Automatic Savings

Through the Plan, you may choose your own contribution rates, which will be conveniently deducted from your paychecks automatically.

You can also take advantage of the automatic annual increase feature available on the Benefit Center website to increase your contributions to help you meet your annual retirement savings goal.

Company Contributions

Company Match: Morgan Stanley, in its discretion, matches 100% of your eligible contribution to the 401(k) Plan, up to 4% of your eligible pay (eligible pay is limited by the IRS). Don’t miss out — contribute at least 4% to get the full match.

If your pay does not exceed $100,000 and you are not a Financial Advisor, you may be eligible for an additional non-matching Company Contribution that can help you grow your retirement savings even faster.

Rollover Contributions

You may roll over certain distributions from other plans to the 401(k) Plan, such as distributions from your prior employer’s 401(k) Plan.

However, the annual IRS limits apply to contributions you make to any 401(k) Plan during the year. Therefore, if you contributed to another employer’s 401(k) Plan during the year, you must take into consideration any contributions made to that plan to ensure that you don’t exceed the IRS annual maximum.

See the 401(k) Plan Summary Plan Description for rollover rules and directions.

Before-Tax Contributions

When you make before-tax contributions to the 401(k) Plan, you won’t pay federal income taxes and, in most cases, state income tax, on the money in your account until you take it out — usually, when you’re retired. You may be in a different tax bracket then and pay less taxes than you would now. (Social Security and/or Medicare taxes still apply.)

After-Tax Contributions

The 401(k) Plan also has the option to make Roth after-tax contributions. Generally, if you meet certain requirements, investment earnings on Roth after-tax contributions are not taxed when you take your money out — usually, when you’re retired.

Roth Conversion Feature

The Firm’s 401(k) retirement savings plan allows you to convert all or a portion of your non-Roth 401(k) account balances to a Roth 401(k) account within the plan. This is similar to a conversion from a traditional IRA to a Roth IRA. If you choose to make an in-Plan conversion, you will owe taxes currently on the pre-tax amount you convert. Thereafter, your Roth 401(k) account, including any investment earnings, is tax-free, as long as you meet the Roth distribution requirements.

Make Changes to Your 401(k)

To set or change your contribution rates in the 401(k) Plan, visit the Morgan Stanley Benefit Center website and go to Savings and Retirement > 401(k) Savings Plan > Change Contributions and designate the rate of pay by pay type you want to contribute.

To set your contribution rates to increase automatically, visit the Morgan Stanley Benefit Center website and set your initial contribution rates. Then, follow the instructions and enter annual increase and target rate percentages.

To choose or change your investment mix or investment elections for future contributions, visit the Morgan Stanley Benefit Center website and go to Savings and Retirement > 401(k) Savings Plan > Change Investments and follow the instructions.

Avoid Penalties

Since 401(k) plans are designed to help you save for retirement, there are penalties for taking your money out early. You’ll owe income taxes on the total amount you withdraw to the extent such amounts are taxable, and you may also owe a 10% early withdrawal penalty. The Plan has both loan and hardship withdrawal options in case of financial emergency.

Adhere to the Firm’s Trading Rules

In general, you may change your investment choices as often as you like. However, you are required to hold most funds a minimum of 30 days. In addition, any trading restriction or window period that applies to you as a Morgan Stanley employee also applies to your Plan investments in the same way that it applies to your trading accounts outside the Plan. See the 401(k) Summary Plan Description for more information.

Investment Options

You decide how your money is invested in the 401(k) Plan. The Plan offers two investment paths to address the various needs of its diverse participants.

  • Path 1: Delegate (choose your target date fund) is geared to the participant seeking a diversified portfolio that shifts the investment mix based on the time remaining until the target retirement date.
  • Path 2: Customize (choose your own investments) is geared to the participant who prefers to customize his or her investment portfolio.

With both paths, you may diversify and access investment options with varying risk and return profiles.

There is no assurance that a fund in the 401(k) Plan will achieve its investment objective. Funds are subject to market risk. The market value of a fund may decline and the value of fund shares may be more or less than what you paid for them. Accordingly, you can lose money investing in any fund.