The Complete Guide to Your Banner Health 401(k) Plan
Banner Health is one of the largest nonprofit health care systems in the country, serving communities across six states. As part of their comprehensive benefits package, Banner Health offers a robust 401(k) retirement plan designed to help employees build long-term financial security.
Banner Health 401(k) Plan Overview
The Banner Health 401(k) offers several attractive features:
Immediate eligibility for all qualifying employees
100% immediate vesting for both employee contributions and employer matching contributions
Generous 4% dollar-for-dollar employer match
Both pre-tax and Roth contribution options
Wide range of investment choices through Fidelity
Who Is Eligible?
You are eligible to participate in the Banner Health 401(k) plan if you are a regular full-time, part-time, per-diem, or flat-rate team member. The plan provides immediate eligibility, meaning you can start contributing as soon as you're hired.
Note: Registry employees working through Banner Staffing Services are eligible for a separate 403(b) plan rather than the 401(k).
Contribution Limits and Requirements
For 2025, you can contribute up to the IRS annual limits:
Under 50: Up to $23,500 annually
50 and older: Up to $31,000 annually (includes $7,500 catch-up contribution)
You can contribute up to 100% of your eligible compensation as long as it falls within the limits above. Banner does not impose any limits of their own.
Contribution Types
Banner Health has a unique requirement that the first 4% of your contributions must be made on a pre-tax basis. After contributing the first 4% pre-tax, any additional contributions may be pre-tax, Roth (after-tax), or a combination of both.
Pre-Tax Contributions
Pre-tax contributions reduce your current taxable income dollar-for-dollar. For example, if you earn $60,000 and contribute $6,000 pre-tax, you'll only pay taxes on $54,000 of income for that year. However, you'll pay ordinary income taxes on withdrawals in retirement.
Roth Contributions
Roth contributions are made with after-tax dollars, so they don't reduce your current taxes. However, all investment growth and qualified withdrawals in retirement are completely tax-free. This can be valuable for younger employees or those who expect to be in higher tax brackets in retirement.
Employer Match
After you’ve worked at Banner for one year, the company will match your 401(k) pre-tax contributions dollar for dollar, up to 4% of your eligible compensation. This is one of the most generous matching programs in the healthcare industry, providing a 100% match rather than the more common 50% match.
True-Up Matching
Banner will evaluate your earnings and contributions from the prior calendar year to determine what the employer match would've been had the calculation been done on a full-year basis. Banner will make a true-up matching contribution during the first quarter to reconcile the difference if you meet certain eligibility and timing requirements.
This true-up feature ensures you don't miss out on matching contributions if your contributions weren't evenly distributed throughout the year.
Vesting Schedule
You are always 100% vested in all contributions you make to your plan, as well as matching contributions made by Banner Health and any earnings from both. That means:
Your contributions belong to you immediately.
Employer matching contributions are yours to keep immediately.
All investment gains and losses are immediately vested.
There is no waiting period to take control of your full account balance. It’s all yours!
Investment Options and Management
The Banner Health 401(k) offers several categories of investment options:
Target date funds: These funds automatically adjust risk over time based on your planned retirement date, becoming more conservative over time.
Target allocation funds: These offer different levels of stock and bond allocation based on risk tolerance.
Individual mutual funds: These include a wide range of options, including large-cap, mid-cap, and small-cap stock funds, as well as bond funds, specialty funds, and more.
If you do not specify how you want your funds invested when you enroll, your contributions will be defaulted into a target date fund appropriate for your retirement age.
Withdrawal Options
You are generally allowed to withdraw money from your plan when you leave your employer, retire, or become permanently disabled. The plan may also allow hardship withdrawals under specific circumstances, though these should be used sparingly due to tax implications and early withdrawal penalties.
Leaving Banner Health
When leaving Banner Health, you have several options for your 401(k) balance. You can:
Leave it with Fidelity (if the balance meets minimum requirements)
Roll it into your new employer's plan
Roll it into an IRA for more investment options and control
Take a distribution (subject to taxes and potential penalties)
A fiduciary financial advisor can advise you on which strategy is best in your case.
Making Changes to Your Plan
One of the advantages of the Banner Health 401(k) is flexibility. You can:
Change your contribution percentage at any time
Adjust your investment allocations
Switch between pre-tax and Roth contributions
Update your beneficiary designations
Take loans or make withdrawals (subject to plan rules)
To manage your Banner Health 401(k) account, visit Fidelity NetBenefits. You can also contact Fidelity at 800-343-0860 for English or 877-297-3017 for Spanish.
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Tips for Maximizing Your Banner Health 401(k)
Always Contribute at Least 4% for the Full Match
The most important step is contributing at least 4% to receive Banner Health's full dollar-for-dollar match. This is essentially free money that provides an immediate 100% return on your investment. Even if you can't afford to save much initially, prioritize getting the full employer match.
Gradually Increase Contributions
Start with whatever you can afford and gradually increase your contributions as your income grows. Consider increasing your contribution rate whenever you receive a raise, bonus, or promotion.
Make Strategic Investment Choices
Don't simply accept the default target date fund without consideration. Take time to understand your investment options and choose allocations that match your goals and risk tolerance. Review your investment allocations at least annually to ensure they align with your changing circumstances.
Use the True-Up Feature
If you don't contribute consistently throughout the year, remember that Banner Health's true-up feature will help ensure you receive the full matching contribution you're entitled to based on your annual earnings and contributions. This provides flexibility for employees with variable incomes.
Keep Your Beneficiaries Current
Update your beneficiary designations after major life changes like marriage, divorce, or having children. Outdated beneficiary information can create complications for your loved ones later on. Use Fidelity's easy online system to make updates.
Be Cautious with 401(k) Loans
While 401(k) loans can provide access to funds, use them sparingly. They reduce your retirement savings growth and create risks if you can't repay them or leave Banner Health before repayment. Consider other financing options first.
Get Help from a Pro
If you have complex financial situations, need help with tax optimization, or want comprehensive retirement planning, consider working with a fiduciary financial advisor who understands healthcare benefits.
Other Retirement Benefits at Banner Health
While the 401(k) plan is the cornerstone of Banner Health's retirement benefits, the organization offers several other programs that can help you save more for retirement.
Health Savings Account (HSA)
Banner Health offers HSAs to employees enrolled in high-deductible health plans. HSAs provide triple tax advantages:
Contributions are pre-tax.
Investment growth is tax-free.
Withdrawals for qualified medical expenses are tax-free.
Banner Health contributes $450 per year for individual coverage or $900 for family coverage on the Premier Plan. After age 65, HSA funds can be withdrawn for any purpose without penalty.
Flexible Spending Accounts (FSAs)
Banner Health offers two types of FSAs for employees:
The Health Care FSA allows you to save up to $3,200 annually for medical expenses with pre-tax dollars.
The Dependent Care FSA lets you save up to $5,000 annually for childcare and eldercare expenses.
Both reduce your taxable income by allowing you to pay for eligible expenses with pre-tax dollars.
Life and Disability Insurance
Banner Health provides company-paid basic life insurance and accidental death and dismemberment (AD&D) coverage, plus short-term and long-term disability insurance. These benefits protect your income and provide financial security for your family. Additional voluntary coverage options are available for purchase.
Wellness Programs
The MyWell-Being Program allows you to earn points toward wellness incentives, including lower medical premiums, by making healthy decisions. Employee Assistance Programs provide counseling and crisis intervention services for all team members and their household members at no cost.
Legacy Pension Plans
Banner Health's pension plans are frozen, but some long-tenured employees may still have benefits. Employees who started with Samaritan, Lutheran, or Banner prior to 1992 or Sun Health prior to 2008 may be eligible. Contact Principal Life Insurance Company at 800-247-7011 to determine if you have pension benefits.
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Banner Health 401(k): An Industry Leader in Retirement Benefits
The Banner Health 401(k) plan offers exceptional value with its 4% dollar-for-dollar match, immediate vesting, low costs, and flexible contribution options. And with Fidelity's robust platform, Banner Health employees have access to institutional-quality retirement benefits typically reserved for much larger organizations.
Still have questions? We have the answers!
At TrueWealth Financial Partners, we specialize in helping hardworking professionals like you optimize their retirement planning strategies. Our fee-only fiduciary advisors understand the unique challenges and opportunities in healthcare benefits and can help you develop a comprehensive financial plan that integrates your Banner Health benefits with your broader financial goals.
Schedule a free consultation today, and we’ll be happy to help you in any way we can. Together, we can work to ensure your golden years are truly golden.
FAQs
When can I start contributing to the Banner Health 401(k)?
You can start contributing immediately as soon as you’re hired. However, employer matching doesn't begin until after your one-year anniversary.
What happens if I leave Banner Health before my one-year anniversary?
You'll keep all of your own contributions and any investment gains or losses since there's immediate vesting. However, you won't receive any employer matching contributions since the match doesn't begin until after one year of service.
Can I change my contribution percentage during the year?
Yes, you can change your contribution percentage at any time by contacting Fidelity at 800-343-0860 or through your NetBenefits account online.
What if I can't afford to contribute 4% right away?
Start with whatever you can afford and gradually increase your contributions. Even contributing 1%–2% initially builds good savings habits. Try to reach 4% as soon as possible to get the full employer match.
Do I have to contribute exactly 4% pre-tax to get the match?
No, you can contribute more than 4% pre-tax if you want. The requirement is that your first 4% must be pre-tax, but you can contribute additional amounts pre-tax as well, up to the IRS limits.
Can I contribute to both pre-tax and Roth in the same year?
Yes, after contributing your first 4% pre-tax, any additional contributions can be pre-tax, Roth, or a combination of both, up to the annual IRS limits.
Can I roll over my previous employer's 401(k) into Banner Health's plan?
Yes, you can roll over retirement accounts from previous employers. Contact Fidelity to initiate the rollover process and consolidate your retirement savings.
What happens to my account if I die?
Your beneficiaries will inherit your account. It's important to keep your beneficiary designations current through your NetBenefits account, especially after major life events.
What's the difference between the Banner Health 401(k) and 403(b)?
The 401(k) is for regular Banner Health employees (full-time, part-time, per-diem, flat-rate), while the 403(b) is for registry employees working through Banner Staffing Services. Both offer similar contribution options and tax advantages.
When should I get help with my retirement planning?
Consider getting help from a fiduciary financial advisor if the following are true:
You are nearing retirement and need distribution planning
You have complex financial situations or goals
You need help optimizing your overall tax strategy
You want comprehensive retirement income planning
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