Page 35 - 2022 AEO Benefit Guide

Roth 401(k) REMINDER

AEO is excited to offer our Associates the ability to invest in a Roth 401(k). This is an Beneficiary designations for
employer-sponsored investment savings account funded with after-tax dollars that your 401(k) account and your
you elect to contribute. Employee Stock Purchase
Pl a n a r e to be made at
The eligibility rules for this benefit are the same as those for AEO’s pre-tax 401(k) www.netbenefits.com.
plan. You will not be automatically enrolled in this plan; it must be elected by you in
the Fidelity system if you wish to participate.

What Is a Roth 401(k)?

As a Roth contribution, the amount of your compensation that you elect to contribute
is subject to federal, state, and local income taxes in addition to Social Security and
unemployment taxes at the time you make the contribution. However, because you
already will have paid tax on any Roth contributions, these amounts (along with
investment earnings and losses) will not be subject to Federal tax when distributed to
you, allowing for the opportunity to accumulate earnings on your Roth contribution
account on a tax-free basis.

Impact on Auto-Enrollment
Impact on pre-tax 401(k) auto-enrollment: If you elect to make Roth 401(k) contributions
and have been automatically enrolled in the pre-tax 401(k), your pre-tax 401(k)
contributions will be automatically increased each year until they reach 6%.
However, if you elect to make Roth 401(k) contributions and you elect to change
your pre-tax 401(k) contribution in any way (increase, decrease, or elect not to make
pre-tax contributions at all), your pre-tax contributions will no longer be automatically BUDGET
increased each year.

Maximum Contribution Limits
The AEO Plan limits the combined total of pre-tax and Roth contributions to 50% of
your compensation. In addition, the IRS places limits on the combined total dollar
amount of contributions you can make each year. If you are age 50 or over, you may
also make “Catch-up” contributions into a pre-tax 401(k) or a Roth 401(k).
Matching Contributions
If you are eligible to receive matching contributions, you will receive the matching
contributions on your combined pre-tax and Roth contributions. If you only make
Roth contributions, the matching contributions you receive will still be made on a
pre-tax basis.

Roth Rollovers
AEO’s plan will accept rollovers of Roth contributions from other qualified plans.
There are specific rules regarding whether a Roth is eligible for a rollover, which are
detailed in AEO’s Plan Document.

Additional Information
AEO’s Plan Document for the 401(k) is located in Benefitfocus > Money Matters >
401(k) Plan. This document provides much more information and details on AEO’s
pre-tax 401(k) and Roth 401(k) offerings. Please also visit www.netbenefits.com,
Fidelity’s website, for information on AEO’s benefit offerings.

FULL TIME BENEFITS — BUDGET 33