Established in 1941, the Army and Air Force Exchange Service Trust manages retirement benefits for employees of AAFES (Army and Air Force Exchange Service), the retail store on U.S. Army and Air Force installations worldwide. AAFES employees who work 500 or more hours each year qualify for its retirement plan funded by employee payroll contributions that provide both 401(k) contributions as well as employer matching contributions; additionally it offers Roth contributions. Furthermore catch-up contributions may also be available.
Additionally, this legislation includes a re-characterization option where employees can change from pre-tax contributions to Roth contributions under certain conditions. Furthermore, a rollover contribution feature was created so employees who move from one plan to another could transfer their money directly into an IRA with similar tax treatment as contributions made under their old plan.
AAFES also offers its employees access to an e-service platform so they can manage their account whenever and however they choose, with 24-hour access. Employees can make changes to salary deferral, asset allocation and update personal details; review their retirement forecast; as well as make other necessary updates via this online portal.
Federal employees often switch retirement plans, with complex rules surrounding this practice. Public Law 101-508, effective Jan. 1, 1987, allows CSRS and FERS employees who switch within 3 days to an appointment within DOD that falls under its “appropriated fund” to keep the retirement system from which they previously belonged.
Public Law 104-106, effective August 10, 1996, expanded these provisions to all federal agencies and departments, offering employees who transition into non-appropriated fund positions a three-day window to switch retirement systems without incurring penalties for vesting credits earned prior to transfer date. Furthermore, this law permits those transitioning within one year after beginning new employment to retain coverage in their previous retirement system without forfeiting vesting credits already earned by moving between retirement plans without penalty.
LeafHouse Financial provides AAFES’s 401(k) offerings as a fiduciary, acting on behalf of employees in their retirement plans. With $12.9 billion under management and being DALBAR 3(38) Certified for added third-party oversight. In addition, LeafHouse’s proprietary technology enables it to select, evaluate, and monitor investments based on client best interests.