Understanding the Prisma Health 401(a) Plan

IntelliVest Wealth Management is not affiliated with, endorsed by, or sponsored by Prisma Health, Prisma Health - Upstate, Empower, Empower Annuity Insurance Company of America, or The Variable Annuity Life Insurance Company. All trademarks are the property of their respective owners. This article is provided for educational purposes only and is not a solicitation, an offer, or individualized investment advice. Plan provisions change; always confirm details against your official plan documents. Plan details described here are drawn from the plan's audited financial statements for the plan year ended December 31, 2024. Information is gathered from the Form 5500.

What is the Prisma Health 401(a) Plan?

If you work for Prisma Health - Upstate, you probably have two retirement accounts, and most employees only think about one of them.

The money you contribute from your paycheck goes into a 403(b) plan. Separately, Prisma puts its own money into a 401(a) plan in your name. This article is about the second one — the account Prisma funds.

It's worth understanding for one reason above all others: unlike the money you contribute yourself, this money isn't fully yours right away. There's a three-year requirement, and a large number of Prisma employees leave before they meet it.

A note on who this covers, because the two plans don't cover the same people. The 403(b) covers substantially all employees of Prisma Health who aren't independent contractors. This 401(a) plan is narrower — it covers employees of Prisma Health - Upstate, excluding anyone employed by Greenville Health Authority or Richland Memorial Hospital.

So it's possible to have the 403(b) without having this plan. If you're at a Prisma facility outside the Upstate, check your statement.

Prisma Contributes 3% of Your Pay

Each year, Prisma makes a nonelective contribution to your 401(a) account. Nonelective means it doesn't depend on whether you contribute anything yourself.

The contribution is 3% of eligible compensation — and notably, it's a flat 3% for everyone, regardless of age or years of service. There's no tier that improves as you get older or stay longer.

On a $65,000 salary, that's roughly $1,950 a year going into your account.

Across the plan, Prisma contributed $62,109,637 during 2024.

One condition worth knowing: the contribution is based on hours worked during the plan year. If you work part-time or PRN, confirm whether you meet the requirement — this is the difference between receiving the contribution and receiving nothing.

The Three-Year Rule: Check This Before You Give Notice

Here's the part that costs Prisma employees real money.

Your own contributions to the 403(b) are always 100% yours. Prisma's contributions to the 401(a) are not. You become 100% vested after three years of credited service. Before that, the money isn't yours to take.

At 3% of a $65,000 salary, someone approaching their third anniversary has roughly $5,500 plus earnings in the account. Reaching three years of credited service is what makes it yours.

We know this happens often, because the plan reports it. Money forfeited by employees who left before vesting had accumulated to $8.8 million by the end of 2023. That's thousands of employees' worth of employer contributions that went back to the plan instead of leaving with the people it was credited to.

If you're thinking about a move, check your years of credited service first. A few weeks of timing can be worth thousands of dollars, and it's the single easiest retirement decision most people never think to check.

Is Prisma Matching Your 403(b) Contributions?

Here's how the two plans connect. Prisma may match the contributions you make to your 403(b) — but the match doesn't land in the 403(b). It goes into this 401(a) account. And it's discretionary: Prisma decides each year whether to fund it at all.

For the plan year ended December 31, 2024, Prisma did not elect to make any matching contributions.

That's worth knowing if you've been assuming your 403(b) contributions are being matched. For 2024, they weren't. Whether that changes in a future year is Prisma's decision, and you'd receive notice if it does.

One useful detail: if a match is made and you participate in the 403(b), the matching portion is 100% vested immediately — unlike the 3% nonelective contribution, which is subject to the three-year rule.

You Can't Borrow From This Account

Many 401(k) and 403(b) plans let you take a loan against your balance. This one doesn't.

The plan was amended effective October 1, 2010 to stop allowing new loans. Loans outstanding at that date stayed in place under their original terms, and later amendments preserved loans that carried over from the Baptist Easley Hospital Matching Savings 401(k) Plan and the Greenville Health System 401(k) Savings Plan when those plans were merged in during 2019.

So if you need to borrow against retirement savings, this account isn't the place to look.

Your 403(b) does permit loans. You may borrow a minimum of $1,000 up to the lesser of $50,000 or 50% of your vested account balance, secured by your account balance and repaid through biweekly payroll deduction. The interest rate is set when the loan originates.

A loan is generally better than an early withdrawal, since you aren't triggering taxes or the 10% penalty. But you're pulling money out of the market while you repay it, and an unpaid balance can become a taxable distribution if you leave. Worth thinking through before you borrow.

When and How You Can Access It

Two separate triggers, and they're often confused:

On termination of service. You may elect to receive the value of your vested interest as a lump sum or in installments as the plan provides.

At age 59½. All fully vested balances become available for distribution.

The word doing the work in both is vested. If you leave before three years of credited service, the unvested portion isn't available at any age — it's forfeited.

One more difference between the two accounts: your 403(b) permits hardship distributions on demonstration of financial hardship. This 401(a) plan's provisions don't include them. So in a genuine emergency, the 403(b) is the account with more flexibility — through a loan or a hardship distribution — and this one has neither.

Leaving Prisma: What Happens to This Account

First, check your vesting. Everything else is secondary to whether you're past three years of credited service.

If you are vested, your options look like any other employer plan:

Leave it where it is. Large plans often have access to institutional pricing you can't get retail. Worth comparing before you move anything.

Roll it into your new employer's plan. Keeps the money in a workplace plan.

Roll it into an IRA. Opens a wider investment universe and lets this account be managed alongside your 403(b) balance and everything else you own. Use a direct trustee-to-trustee transfer — an indirect rollover triggers 20% mandatory withholding and a 60-day deadline.

Cash it out. Ordinary income tax, plus a 10% penalty if you're under 59½. Rarely the right answer.

Because your Prisma savings are split across two plans, the decision is more complicated than it looks — the right move for the 401(a) may not be the right move for the 403(b). If you'd like a second opinion, our consultations are complimentary.

FAQ

• Does Prisma Health contribute to my retirement account?Yes. Prisma makes a nonelective contribution of 3% of eligible compensation to the Prisma Health 401(a) Plan, paid regardless of whether you contribute anything yourself, subject to an hours-worked requirement.

• When am I vested in the Prisma 401(a) Plan?You are 100% vested in Prisma's nonelective contributions after three years of credited service. Matching contributions, when made, are 100% vested immediately for 403(b) participants.

• Does the 3% contribution increase with age or years of service?No. It is set at 3% of eligible compensation for all participants regardless of age and years of service.

• Did Prisma match 403(b) contributions in 2024?No. The plan permits discretionary matching contributions based on 403(b) contributions, but Prisma did not elect to make any for the plan year ended December 31, 2024.

• Can I take a loan from my Prisma 401(a) account?No. The plan was amended effective October 1, 2010 to no longer allow new loans.

• When can I withdraw from my Prisma 401(a) account?On termination of service you may elect a lump sum or installments equal to your vested balance. All fully vested balances are available for distribution after age 59½.

• Why do I have both a 403(b) and a 401(a) at Prisma?The 403(b) holds the contributions you make from your paycheck, and those are 100% vested immediately. The 401(a) holds Prisma's employer contributions, which vest after three years of credited service. They are separate plans with different rules, and the 403(b) covers more employees than the 401(a) does.

• Can I take a hardship withdrawal from my Prisma retirement account?The 403(b) permits hardship distributions on demonstration of financial hardship. The 401(a) plan's provisions do not include hardship distributions.

• Who holds the Prisma Health 401(a) Plan?Empower Retirement, LLC serves as trustee, with Empower Annuity Insurance Company of America and The Variable Annuity Life Insurance Company as custodians.

Disclosure

IntelliVest Wealth Management is a Registered Investment Advisor headquartered in Spartanburg, South Carolina. This is not a solicitation or financial advice, and this article should only be used for educational purposes. Plan details are drawn from the Prisma Health 401(a) Plan's audited financial statements for the plan year ended December 31, 2024 and were accurate as of that filing. Plan provisions may change, and discretionary contributions are determined annually by the employer. Confirm your own plan provisions against your Summary Plan Description and current plan materials, and consult IntelliVest Wealth Management about your personal financial situation.