2025 Status of Union Pacific Corporation 401k Plan

(Status as of December 31^st, 2024), For Non Agreement Employees. Information from 6/26/2025

In the continuation of the comprehensive guides to Railroad company’s 401K plan. We will discuss the topic of the Union Pacific Corporation (non agreement) Employee 401(k) Retirement Thrift Plan. As a railroad employee or retiree, understanding the ins and outs of this plan is crucial.

This guide is similar to the agreement employee 401K plan with a few key differences described as follows.

Let’s break down the details, shed light on the plan’s current status, and empower you with actionable insights. Your retirement, your benefit, your knowledge!

Key Takeaways – 2025 Status of Union Pacific Corporation 401k Plan

Plan Overview

• Plan Type: Defined contribution 401(k) plan for non-agreement employees
• Sponsor: Union Pacific Corporation
• Trustee: Vanguard Fiduciary Trust Company (VFTC)
• Plan Administrator: Senior VP and Chief Human Resources Officer (changed from President role in August 2024)

Financial Performance

• Total Net Assets: $2.305 billion (December 31, 2024) vs. $2.266 billion (2023)
• Net Increase: $39.3 million for 2024
• Investment Income: $219.7 million (including $194 million in net appreciation (growth on the assets))
• Total Contributions: $79.6 million ($52.4M participant + $27.2M employer)
• Distributions: $259.9 million paid to participants

Investment Structure

• Master Trust Participation: Plan assets commingled with other UP retirement plans
• Total Master Trust Assets: $4.72 billion
• Investment Categories for the Corp UP Plan Interest:
  • Common/collective trusts: $1.6 billion (largest allocation)
  • Union Pacific common stock: $326 million
  • Mutual funds: $174 million
  • Stable value contracts: $147 million

Contribution Features

Standard Employees (Pre-2018)

• Participant contributions: 1-75% of eligible compensation
• Employer match: 50% of contributions up to 6% of compensation
• Automatic enrollment: 6% for new hires after October 1, 2008

Post-2017 Covered Employees

• Enhanced employer match: 100% of contributions up to 6% of compensation
• Non-elective contribution (NEC): 3% of annual base salary regardless of participation
• Must be employed on last day of plan year to receive NEC

Key Plan Provisions

• Vesting: 100% immediate vesting for all contributions
• Loan Features:
  • Minimum $1,000, maximum lesser of 50% of balance or $50,000
  • Interest rates: 3.25% to 8.50%
  • Terms up to 5 years (15 years for primary residence)
• Investment Limit: Maximum 20% allocation to Union Pacific stock fund
• ESOP Feature: Union Pacific stock fund converted to ESOP structure (December 2023)

Compliance and Governance

• Audit Firm: Deloitte & Touche LLP (auditor since 1974)
• Tax Status: IRS determination letter from 2016, plan believes current compliance maintained
• ERISA Compliance: Subject to Employee Retirement Income Security Act provisions

Notable Issues

• Prohibited Transactions: Administrative errors resulted in late deposits totaling $1,519
  • $522 in participant contributions
  • $253 in employer matching contributions
  • $744 in loan payments
  • Corrected in 2025 with lost earnings

Investment Options and Management

• Various mutual funds, common/collective trusts, and stable value options
• Managed Account Program available through Vanguard Advisers
• Default investment options for participants who don’t make elections
• Dividend election rights for ESOP participants (reinvest or distribute)

Distribution Features

• Lump sum distributions upon separation
• In-service withdrawals available (hardship, age 59½, after-tax contributions)
• Required minimum distributions begin at age 73 (or separation if later)
• ESOP distributions available in stock or cash

Unveiling the Union Pacific 401K Retirement Thrift Plan

Union Pacific provides their non agreement (not union) employees with an additional way to save for retirement, outside of Railroad retirement income (tier 1 and Teir 2 benefits).  

What is 401(K)? 401(K) allows employees the ability to save for retirement through pre-tax contributions from their pay to the 401(K). The pretax saving accumulated tax deferred and allows continue savings throughout the employees’ working years.

The Blueprint of the 401k Plan

The Union Pacific Corp 401K Plan is a cornerstone of retirement planning. Here’s a snapshot of how it operates:

Facts about UP 401K:

• Your contributions to the 401K are 100% vested. Meaning every dollar, you contribute are yours and if you decide to leave UP you can take your 401K account balance with you to your new job (or leave at Union Pacific Railroad), cash out, or rollover to an individual IRA/Roth. 
• Union Pacific contribution, you can receive a matching contribution of 50% not in excess of 6% of your contributions. For example, with your 7% contribution, UP will add a matching contribution of 3%; for a total of 10% of eligible compensation per payroll period.  Also, covered employees can receive a non-elective contribution in an amount equal to 3% of annual base salary.
• Investment risk is on you as the employee; meaning, you pick the investments and if those investments underperform the 401K/Union Pacific is not responsible. However, UP and the investment company (Vanguard) that manages the investments does have the responsibility to offers suitable investments for the greater employee base. This may be more conservative and at times more aggressive than your individual goals and needs, but you have options.
• In service withdrawals, are permitted according to the plan provisions for
  • Withdrawals of rollover contributions or
• • after-tax contributions withdrawals for qualified birth or adoption distributions
• • Hardship withdrawals
  • And withdrawals on or after age 59 ½

Quick side note you have access to Employee Stock Ownership Plan. The ESOP for short allows you to purchase up to 20% of your account in Union Pacific stock.

Let’s dive into the status of the 2025 Status of Union Pacific Corporation 401k Plan and what it means for you.

A Closer Look at the Plan’s Status

To provide you with the most accurate insights, we’ve explored the official source: the Securities and Exchange Commission (SEC) filing for Union Pacific. As of the filing date, the plan remains active and operational, serving as a vehicle to help you prepare for retirement.

• Total 401K Plan Assets: $2.3 Billion as of Dec. 31^st, 2024. Balance was $2.2 Billion as of Dec. 31^st 2023. The increased plan balance was ultimately due to overall stock market performance, and contributions to the plan.
• Total Contributions:
  • Contributions by employees, $52 Million for 2024
  • Contributions by Union Pacific, $25 Million for 2024
• Total Distributions:
  • Distributions, $259 Million for 2024
• Net increase in Assets from 2023 to 2024 is $40 Million
• Total assets available for benefits (payable to employees 401K participants): $2.3 Billion as of Dec. 31^st, 2024
• Administrative Expenses:  Admin fees are for investment management and transaction fees related to the assets in the 401K Plan. $994,447 in 2023 compared to $978,482 Million for 2023. This increase in admin expense is expected with the higher overall asset amount for 2023 compared to 2024.

Embracing Your Union Pacific Retirement 401K Plan

Now that you’re aware of the Union Pacific 401(k) Retirement Plan’s significance, let’s explore how you can make the most of it.

1. Understand Your Benefits

Information about the company benefits can be accessed on the UP website. Also, when determining your retirement need the rule of thumb is 4% withdrawal from a 401K over a retiree retirement year will suffice to provide for the desired retirement in addition to your Railroad Retirement Benefits.

And I actually learned the following technic while working at the Railroad. Each year increase your saving rate for the amount of increase you received over last year. For example, if your base is $70K and this year base rate was increased to $72,500. Save the additional $2,500 either in your 401K or outside savings.

Also, you maybe eligible for bonuses that would include cash and/or UNP stock. These bonuses not only help accelerate savings, but also helps to diversify in alternative investments similar to real estate.

2. Leverage Employer Match

Union Pacific’s contribution match is an excellent opportunity. Contribute enough to maximize this match—it’s like free money towards your retirement. For example, using the $70K base pay and you contribute 6% to the 401K; UP will match 50%. Meaning $70K * 6% (for those in the 401k plan prior to 2018) = $4,200 for your contribution and $2,100 for the company match on your behalf from UP, HIGHBALL!

3. Diversify Your Portfolio

While investing can seem daunting, diversification is key. Spread your investments across various assets to mitigate risk and optimize returns.

For example, UP offers the ability to invest in the UP common stock fund (where you purchase UNP equivalent share), a Cash alternative, and various mutual funds. Depending on your risk tolerance you may prefer a more aggressive option of investing more in the stock fund and the aggressive mutual fund options.

Or if you prefer a more conservative option, you can purchase cash solution and the conservative mutual fund option.  

4. Monitor and Adjust

Your financial goals and risk tolerance may change over time. Regularly review and adjust your investment choices to align with your evolving needs.

Furthermore, Vanguard offers target date mutual funds that targets a year in the future typically related to your potential retirement year. And the investments in the mutual fund adjust to more conservative as the investment portfolio gets closer to the target year.

Quick tip, if you are a more aggressive investor and your retirement year is 2030 then you could select a target date fund of 2035 or any time after 2030 to have a slightly more aggressive allocation and we still suggest reducing the allocation as you get closer to retirement.

5. Plan Ahead

Don’t delay! The earlier you start contributing to your 401(k), the more time your money has to grow through compound interest.

We’ve used the pomegranate tree illustration before; however, simply put saving for retirement allocations money for the future, over use for immediate needs or making purchases on debt, which is similar to allocating money to the past.

Also, historically stock investments in general have out paced inflation in any 10-year time horizon. Therefore, investing today is a great hedge against future inflation concerns.   

Conclusion

The Union Pacific Corp 401k Plan is your “train order” to a secure retirement. By understanding its mechanics and staying informed about its status, you’re equipping yourself for financial success.

Have you reviewed your 401K investments and how you are tracking to your retirement goal? Reach out to us today for personalized guidance.

Let’s ensure your Union Pacific 401(k) Retirement Thrift Plan is a powerful tool in securing your future. Your retirement dreams await, let’s start planning now!