Werner Enterprises retirement accounts explained

Werner Enterprises, a major trucking and logistics company, offers its employees a 401(k) plan and a defined benefit pension plan. The 401(k) is a tax-deferred savings account where you contribute a portion of your paycheck, and Werner may match a percentage of what you put in. The pension is a separate benefit that pays you a fixed monthly amount after you retire, based on your years of service and salary history. Most Werner employees have access to both, though the terms depend on when you were hired and which division you work in.

Understanding how these two accounts work together matters because they operate under different rules. Your 401(k) is yours to manage — you choose how much to contribute and where the money is invested. The pension is managed by Werner; you do not control the investments, but the company guarantees the payout. Knowing the contribution limits, vesting schedules, and withdrawal rules for each helps you plan how much you will have at retirement.

Key Takeaways

  • Werner offers both a 401(k) plan where you control contributions and investments, and a defined benefit pension that pays a may provide monthly amount after retirement.
  • The 401(k) contribution limit for 2024 is $23,500 per year if you are under 50, or $31,000 if you are 50 or older, though Werner's match may have a lower cap.
  • The pension vests over time — you must work a certain number of years before the benefit becomes yours to keep, even if you leave the company.
  • Withdrawals from the 401(k) before age 59½ typically trigger a 10% penalty plus income tax, with limited exceptions for hardship or loans.
  • Your pension payout depends on your final average salary and years of service, and the amount is locked in at retirement unless you choose a lump sum option.

Werner 401(k) contribution limits and company match

As a Werner employee, you can contribute up to the IRS annual limit to your 401(k). For 2024, that limit is $23,500 if you are under age 50, and $31,000 if you are 50 or older (the extra $7,500 is called a catch-up contribution). You contribute this money before taxes are taken out, which lowers your taxable income for the year.

Werner's company match varies by division and employment status. The company typically matches a percentage of what you contribute, up to a certain amount of your salary — for example, 50% of the first 6% you contribute. This means if you earn $50,000 and contribute 6% ($3,000), Werner adds $1,500. The match is not may provide to reach the full IRS limit; it caps at whatever Werner's plan document specifies. Check your plan summary or HR materials for your specific match formula, as it may differ for over-the-road drivers, local drivers, or office staff.

Money you contribute is always yours. Money Werner contributes through the match vests according to a schedule — typically over three to five years. Vesting means the employer contribution becomes permanently yours; if you leave before it fully vests, you forfeit the unvested portion.

Defined benefit pension: how Werner's pension works

Werner's defined benefit pension is a separate account from the 401(k). The company funds it entirely; you do not make contributions. At retirement, the pension pays you a monthly benefit for life, calculated using a formula that considers your years of service and your final average salary (usually the highest three or five consecutive years of earnings).

The pension formula typically looks like this: years of service × a percentage (often 1.5% to 2%) × final average salary. For example, if you worked 30 years, your final average salary was $60,000, and the formula is 1.5%, your annual pension would be 30 × 1.5% × $60,000 = $27,000 per year, or $2,250 per month. The exact formula depends on the plan document for your division or hire date.

Vesting for the pension also follows a schedule. You must work a minimum number of years — often five to ten — before the pension becomes yours. Until then, if you leave Werner, you receive no pension benefit. Once vested, the benefit is locked in, even if you leave the company. You do not receive it until you reach the plan's retirement age, typically 62 to 65, depending on your hire date.

Vesting schedules: when your benefits become yours

Vesting is the process by which employer contributions or benefits become permanently yours. Werner uses different vesting schedules for the 401(k) match and the pension, and the schedule may vary by plan year or division.

For the 401(k) match, Werner typically uses a three-year or five-year graded vesting schedule. Graded means a percentage vests each year. For example, under a three-year schedule, you might vest 33% after year one, 67% after year two, and 100% after year three. If you leave after two years, you keep your own contributions plus the 67% of the company match that vested, but forfeit the remaining 33%.

The pension vesting schedule is usually longer — five to ten years of service before you are fully vested. Some plans use cliff vesting, where nothing vests until you hit the service requirement, then 100% vests at once. Others use graded vesting over several years. Once you are vested in the pension, you have a right to that benefit even if you leave Werner, though you will not receive payments until you reach retirement age.

Check your Summary Plan Description (SPD) or ask Werner HR for the exact vesting schedule that applies to you, as it depends on when you were hired and which plan you are in.

Withdrawals and loans from the 401(k)

Money in your 401(k) is meant to stay invested until retirement. If you withdraw before age 59½, you typically owe income tax on the amount withdrawn plus a 10% early withdrawal penalty. For example, a $10,000 withdrawal might cost you $2,500 in penalties and taxes (depending on your tax bracket), leaving you with $7,500.

The IRS allows some exceptions to the early withdrawal penalty. These include withdrawals for an unreimbursed medical expense that exceeds 7.5% of your adjusted gross income, a disability, a series of substantially equal periodic payments (SEPP), or a may have access to domestic relations order (QDRO) related to divorce. Hardship withdrawals — for when ready and heavy financial need — may be allowed under the plan, but you still owe income tax on the amount, and some plans charge a penalty anyway.

A 401(k) loan is an alternative to withdrawal. You borrow from your own account and repay yourself with interest. Werner's plan may allow loans up to 50% of your vested balance or $50,000, whichever is less. The loan term is typically five years (longer if the loan is for a home purchase). If you leave Werner before repaying the loan, the outstanding balance is usually treated as a withdrawal, triggering taxes and penalties on the unpaid amount.

Pension payout options at retirement

When you reach retirement age and are vested in Werner's pension, you have choices about how to receive your benefit. The most common option is a life annuity, which pays you a fixed monthly amount for as long as you live. This is the default option in most plans.

Some plans offer a lump sum option, where Werner calculates the present value of your lifetime pension benefit and offers to pay it all at once. A lump sum gives you control over the money and the ability to leave it to your heirs if you die early, but it also puts the investment risk on you. If you take a lump sum, you must decide whether to roll it into an IRA or another retirement account to avoid when ready taxes and penalties.

Other payout forms may include a joint-and-survivor annuity (your spouse receives a reduced benefit after you die) or a period-certain annuity (payments continue to your beneficiary for a set number of years). The amount of each option is different; a joint-and-survivor benefit is lower than a single life annuity because the company expects to pay longer.

Werner will provide a benefit statement showing your estimated pension amount under each payout option before you retire. This statement is crucial for retirement planning because it shows you exactly what to expect.

Rolling over or transferring retirement accounts when you leave Werner

If you leave Werner before retirement, what happens to your accounts depends on whether they are vested and what type of account they are.

Your 401(k) contributions are always yours, but the company match is only yours if it has vested. If you leave with an unvested balance, you forfeit the unvested portion. You can roll over your vested 401(k) balance to an IRA or to another employer's 401(k) plan. A rollover moves the money directly from Werner's plan to the new account without you touching it, which avoids taxes and penalties. If you take the money as a check, you have 60 days to deposit it into another retirement account, or it becomes taxable income plus a 10% penalty.

Your pension benefit, if vested, stays with Werner. You do not roll it over. Instead, Werner holds it and pays it to you starting at your retirement age. If you are not yet vested when you leave, you forfeit the pension benefit entirely. Some plans offer a refund of your own contributions (if you made any), but the employer-funded portion is lost.

If you are rehired by Werner within a certain period (often five years), your prior service may be credited back, allowing you to resume vesting. Check with Werner HR about rehire policies if you leave and later return.

Frequently Asked Questions

Can I take money out of my Werner 401(k) while I am still working there?

Some plans allow in-service withdrawals or loans while you are employed. A loan lets you borrow from your balance and repay it. A hardship withdrawal is possible if you have an when ready financial need, but you owe taxes and may owe a penalty. Contact Werner's benefits department or your plan administrator to see what your specific plan allows.

What happens to my pension if I die before retirement?

If you die before reaching retirement age and before your pension is vested, your beneficiary typically receives nothing from the pension (though your 401(k) balance passes to them). If you are vested but die before retirement, some plans pay a survivor benefit to your spouse or beneficiary, but the amount is usually much smaller than your full pension would have been. Your plan summary will explain the death benefit rules.

Can I collect my pension and still work?

Some pension plans have a "retirement age" at which you can begin collecting, but allow you to keep working. Others have an "early retirement" age with a reduced benefit if you leave before a later "normal retirement" age. Werner's plan rules determine whether you can work and collect simultaneously. Check your Summary Plan Description or ask HR about your specific plan's rules on working after you start receiving pension payments.

How do I know what my pension will be worth?

Werner sends annual benefit statements to participants showing an estimate of your pension based on your current salary and years of service. You can also request a benefit estimate from the plan administrator or HR. The estimate assumes you work until a certain age and uses your current salary; the actual benefit will change as your salary and service years increase.

What is the difference between rolling over my 401(k) and cashing it out?

A rollover moves your 401(k) balance directly to an IRA or new employer plan without taxes or penalties. Cashing out means taking the money as a check; you owe income tax on the full amount plus a 10% penalty if you are under 59½. A rollover preserves the tax-deferred status and keeps the money growing. Cashing out should only happen if you have an when ready need and understand the tax cost.