Impact of Employment Changes

If you’re considering transferring between countries or leaving Microsoft, it’s important to understand how your 401(k) account is impacted.

Transfer to a Microsoft International Location

If you are an active employee who transfers from Microsoft U.S. to an international Microsoft subsidiary, you aren’t considered terminated per 401(k) rules. This means that you can’t take a full distribution from the Microsoft 401(k) Plan unless you are at least 59 ½ years old. In addition, you can’t continue making contributions to the Plan. However, you will have full access to your 401(k) account at Fidelity NetBenefits or by calling Fidelity's international toll-free number at IAC + (877) 833-9900. You can make 401(k) fund exchanges, view account holdings, and request hardship withdrawals and loans. 

Transfer back from a Microsoft International Location

If you are an active employee who transfers back to Microsoft U.S. from an international Microsoft location, you can restart your 401(k) contributions. You’ll need to re-enroll in the 401(k) plan with Fidelity NetBenefits because your previous elections will not automatically restart after you return.

Event	Impact to your Plan Contribution Elections
Transfer from Microsoft U.S. to an international subsidiary	Your contribution elections on file will continue to apply to any eligible compensation paid from the U.S. payroll. In contrast, your contribution elections will not apply to any compensation paid from the payroll of an international subsidiary, and contributions may not be made from such compensation.
Transfer from an international subsidiary to Microsoft U.S.	You must enroll/re-enroll in the 401(k) Plan either online at Fidelity NetBenefits or by calling Fidelity at (888) 810-6738. After you make your elections, your contributions will generally begin in one to two pay periods.
Transfer from Microsoft to a U.S. subsidiary that is not a Participating Employer	Your contribution elections on file will continue to apply to any eligible compensation earned and paid as a Microsoft employee. You will need to enroll in the subsidiary's 401(k) Plan if you want to participate in that Plan; your Microsoft 401(k) Plan enrollment will not be carried into your new Plan.
Transfer from a U.S. subsidiary that is not a Participating Employer to Microsoft	You must enroll/re-enroll in the Microsoft 401(k) Plan either online at Fidelity NetBenefits or by calling Fidelity at (888) 810-6738; your former 401(k) Plan enrollment will not carry into your new Plan. After you make your elections, your contributions will generally begin in one to two pay periods.
Rehire	You must enroll/re-enroll in the Microsoft 401(k) Plan either online at Fidelity NetBenefits or by calling Fidelity at (888) 810-6738. After you make your elections, your contributions will generally begin in one to two pay periods.

Note: There are some circumstances where Fidelity's enrollment tool may not be consistent with our stated practices. If the rules under Event vs Impact on Plan Contribution Elections require you to re-enroll, you must do so regardless of the contribution elections reflected on Fidelity's system. If the rules under Event vs Impact on Plan Contribution Elections state that you must re-enroll and you do not do so, contributions will not be deducted from your paychecks after your transfer/employment change.

If you transfer from Microsoft U.S. to an international subsidiary, you must still repay your outstanding 401(k) loan. Because you will no longer be on U.S. corporate payroll, you must make arrangements to either make monthly payments or repay your loan in full. Upon your transfer, Fidelity will send you a letter outlining the steps necessary to set up an electronic deduction from a bank account located in the U.S. for recurring monthly payments or full payoff. If this service is not set up within 60 days, the loan will be considered in default. For more information, see Request & Repay a Loan.

U.S. citizen

If you are a U.S. citizen who terminates your employment at Microsoft, learn about distribution options by viewing Request a Distribution When Leaving Microsoft.

Non-Resident Alien (NRA)

If you are a Non-Resident Alien (NRA) who terminates your employment at a Microsoft U.S. location and moves back to your home country or you are an NRA who transfers from Microsoft U.S. to an international Microsoft location and then terminates employment, you will still have access to your accounts at Fidelity using the channels mentioned above. In addition, you can take a full distribution of your 401(k) account by calling the international number at IAC+ (877) 833-9900. Generally, the tax implications are as follows, but it is always advisable to consult with your individual tax advisor.

A default 30% income tax withholding will be taken by Fidelity and submitted to the IRS. An IRS Form 1099-R will be sent to you.
If you are under age 55, you may be required to calculate and pay an additional 10% early withdrawal penalty at the time you file your annual U.S. tax return.
If you reside in a country that has a favorable tax treaty with the U.S., you can request an IRS W-8 BEN Form from Fidelity that states a different income tax withholding will be taken by Fidelity. When you return this form to Fidelity, they will distribute the account at the applicable tax treaty withholding rate and then report and remit taxes to the IRS. You will receive an IRS Form 1099-R.
Fidelity will not remit taxes or report income to foreign countries. You may have to file taxes in your foreign country and claim the income. It is up to you to file the necessary documentation. Your tax advisor may help you identify the necessary forms that need to be completed.