2024 Update on the Norfolk Southern 401k Plan

(Status as of December 31st, 2023)

In this comprehensive guide, we delve into the vital topic of the Norfolk Southern 401k. For railroad employees and retirees, understanding the intricacies of this plan is paramount.

Let’s dissect the details, illuminate the plan’s current status, and equip you with actionable insights. Your retirement security remains our utmost priority!

key takeaways NS 401K Plan 2024

key takeaways from the Thrift and Investment Plan of Norfolk Southern Corporation and Participating Subsidiary Companies for the year ended December 31, 2023:

1. Financial Position:
   • Net assets available for benefits increased from $1,333,669,000 in 2022 to $1,474,028,000 in 2023, representing a net increase of $140,359,000.
2. Investments:
   • Total investments at fair value were $1,459,560,000, consisting of $1,150,818,000 in various investment options and $308,742,000 in Norfolk Southern Corporation common stock through a Master Trust
3. Contributions:
   • Employee contributions totaled $43,897,000
   • Employer contributions were $14,706,000
   • Assets transferred in from another plan amounted to $319,000
4. Investment Performance:
   • Net appreciation in fair value of investments was $155,220,000
   • However, there was a net decrease of $6,057,000 in the plan’s interest in the Master Trust for Norfolk Southern Corporation common stock
5. Plan Features:
   • The plan offers pre-tax, Roth, matching, discretionary, and rollover contribution options
   • Automatic enrollment is set at 6% of compensation with automatic annual increases of 1% up to 10%
   • Employer matching is 100% on the first 1% of contributions and 50% on the next 5%
   • Automatic Enrollment: New members are automatically enrolled with a 6% Pre-Tax Contribution rate, increasing by 1% annually until it reaches 10%. Contributions are invested in the Vanguard Target Retirement Trust by default, which targets retirement age 65.
6. Vesting:
   • Members are immediately fully vested in all accounts, with a minor exception for certain withdrawn matching contributions
7. Distributions and Loans:
   • Various distribution options are available upon termination of employment
   • Hardship withdrawals and loans are permitted under certain conditions
8. Investment Options:
   • The plan offers a variety of investment options including registered investment companies and common collective trusts
   • A Vanguard Managed Account Program is available for members who want professional management of their accounts
9. Tax Status:
   • The plan is believed to be qualified and tax-exempt, though it is subject to potential IRS examination
10. Plan Amendments:
    • In 2023, the plan increased the mandatory cash-out limit from $5,000 to $7,000 and adjusted the age for required minimum distributions

Unveiling the Norfolk Southern 401k Plan

Norfolk Southern extends an additional avenue for their agreement employees to save for retirement, beyond the Railroad retirement income (tier 1 and tier 2 benefits). But what exactly is a 401(k)? This plan empowers employees to save for retirement through pre-tax contributions from their paychecks.

Eligibility for NS employees begins after one year of service, starting from the first day of the month following the completion of this requirement.

The Blueprint of the 401k Plan

The Norfolk Southern Agreement Employee 401k Retirement Thrift Plan plays a pivotal role in retirement planning. Here’s a quick overview of how it operates:

Key Facts about NS Agreement 401k:

• Your contributions to the 401(k) are fully vested, meaning every dollar you contribute belongs to you. If you decide to leave NS, you can take your 401(k) account balance with you to your new job, cash it out, or rollover to an individual IRA/Roth.
• Norfolk Southern offers a matching contribution for employees. However, if you are covered by a retirement plan by the BLET (Brotherhood of Locomotive Engineers and Trainman) then you are not eligible to participate in the NS 401K. NS will match 100% of your pre-tax contributions up to 1% of your compensation. Then, the amount over 1% but not more than 6% receives 50% matching contribution.
  • For example, if you contribute 7% of your salary, your employer matches some of that amount. In your case, NS matches 100% of your contributions up to 1% of your compensation, and 50% for contributions that exceed 1% up to 6%.
• The responsibility for investment choices rests with you as the employee. You have the autonomy to select investments, with NS and the investment company (Vanguard) offering suitable options tailored to the broader employee base. These options may range from conservative to aggressive, giving you flexibility.
• Loans are available through your 401K, with a maximum loan term of five years.
• In-service withdrawals are permitted according to plan provisions, including withdrawals of rollover contributions, hardship withdrawals, and withdrawals after reaching the age of 59½.

As a side note, in addition to the NS 401(k), agreement employees also have access to the Employee Stock Purchase Plan. This plan allows you to purchase Norfolk Southern stock (NSC), and you can elect to have the NSC dividends reinvested into the NSC common stock fund.

Let’s Dive into the Status of the Norfolk Southern Agreement Employee 401k Plan and What It Means for You

A Closer Look at the Plan’s Status

To provide you with accurate insights, we’ve delved into the official source: the Securities and Exchange Commission (SEC) filing for Norfolk Southern as of December 31st, 2023. As of the filing date, the plan remains active and operational, serving as a valuable vehicle to help you prepare for retirement.

Key Status Updates:

• Total 401(k) Plan Assets: $1.4 Billion as of December 31st, 2023. This represents a increase from $1.3 Billion as of December 31st, 2022, mainly attributed to fluctuations in the stock market in 2023 compared to the market lows of 2022.
• Total Contributions:
  • Employee Contributions: $43 million for 2023.
  • Norfolk Southern Contributions: $14 million for 2023.
• Total Distributions: $90 million for 2023.
• Net increase in Assets from 2022 to 2023: $140 million
• Total assets available for benefits (payable to employees’ 401(k) participants): $1.4 Billion as of December 31st, 2023.
• Administrative Expenses: Administrative fees, covering investment management and transaction fees related to the assets in the 401(k) Plan, amounted to ≈776k in 2023.

Embracing Your Norfolk Southern 401k Plan

Now that you understand the significance of the Norfolk Southern 401k Retirement Plan, let’s explore how you can make the most of it.

1. Understand Your Benefits Access information about company benefits on the NS website. When planning for retirement, consider the rule of thumb: a 4% withdrawal from your 401k over your retirement years should suffice to cover your desired retirement lifestyle, including Railroad Retirement Benefits. Additionally, consider increasing your savings rate in line with any pay raises.

2. Leverage Employer Match Maximize Norfolk Southern’s contribution match by contributing enough to take full advantage of this benefit. It’s essentially free money towards your retirement.

3. Diversify Your Portfolio Diversification is key to managing risk and optimizing returns. Norfolk Southern offers various investment options to align with your risk tolerance.

4. Monitor and Adjust Regularly review and adjust your investment choices to match your evolving financial goals and risk tolerance. Consider Vanguard’s target date mutual funds for a hassle-free approach.

5. Plan Ahead The earlier you start contributing to your 401k, the more time your investments have to grow through compound interest. Don’t delay; start today to secure your financial future.

Conclusion

The Norfolk Southern Agreement Employee 401k Retirement Plan is your ticket to a secure retirement. By comprehending its mechanics and staying informed about its status, you’re equipping yourself for financial success.

Remember to check your 401(k) investments and track your progress toward your retirement goals. Reach out to us today for personalized guidance. Let’s ensure your Norfolk Southern 401k Plan is a powerful tool for securing your future.

Your retirement dreams await, let’s start planning now!