NUA Strategy for Government & Defense IT Contractor Employees (Leidos, SAIC, Booz Allen Hamilton, CACI International)

Government and defense IT contractors are an overlooked NUA niche — and for a specific reason: most of the major firms in this sector either IPO'd or were spun off between 2008 and 2014, and the post-crisis appreciation from those starting prices has been substantial. Booz Allen Hamilton (BAH) went public in November 2010 at $17/share and trades near $73 today — a 4.3:1 ratio for IPO-era contributors. SAIC began trading as a standalone company in September 2013 at $23.66/share and now trades above $120 — a 5.1:1 ratio. CACI International, which has been public far longer, fell to around $55–$75/share during the 2008–2009 financial crisis before recovering to over $620 today — a ratio of 8:1 to 11:1 for employees who contributed through that period. The sector also has one timing feature that no other industry shares: most federal government contracts run on the October 1 through September 30 federal fiscal year. When a major contract is not recompeted or is awarded to a competitor, mass layoffs often begin on September 30. An employee laid off on that date faces the NUA lump-sum distribution deadline in just 91 days — among the tightest windows of any sector. Here is the full guide.

Why defense IT employees are NUA candidates

Three structural features of long-tenure defense IT careers create favorable NUA conditions:

• Long single-employer tenures. Systems engineers, program managers, cleared intelligence analysts, and senior technical leads at major defense IT firms routinely spend 20–35-year careers at a single contractor — often following a government career into the contractor workforce in their 40s and then staying through retirement. Long, unbroken tenure at a single employer is the precondition for the low blended cost basis that makes NUA most powerful.
• Post-2008 crisis and post-IPO appreciation. The defense IT sector expanded significantly in the decade following 9/11 and the 2008 crisis: government information technology and cybersecurity budgets grew substantially, and several major firms capitalized with IPOs or spin-offs at relatively low prices. Employees who contributed to company stock in those early years now hold positions where the current market price is 4:1 to 10:1 above their cost basis — the ideal NUA profile.
• The spinoff basis reset (LDOS and SAIC). In September 2013, the original SAIC Corporation split into two separate publicly traded companies: Leidos Holdings (LDOS), which inherited the old SAIC corporate entity and took over the science and intelligence business, and new SAIC, which took the SAIC brand and the government IT services business. Employees who received both stocks at the September 2013 separation — or who contributed to either company's stock shortly after — hold shares that started trading at $37–$40 (LDOS) and $23.66 (SAIC). Those starting prices, relative to current values of $143+ (LDOS) and $120+ (SAIC), represent 3.8:1 and 5.1:1 ratios, respectively. Any employee who contributed to employer stock in either company since 2013 has a real NUA opportunity to evaluate.

Contractor summary table

Booz Allen Hamilton (BAH)

Booz Allen Hamilton went public on the New York Stock Exchange on November 16, 2010, priced at $17/share.¹ The company's 401(k) plan — formally the Employees' Capital Accumulation Plan — is administered by Voya Institutional Plan Services (State Street Bank and Trust Company serves as trustee), covers approximately 56,540 participants, and held roughly $9.32 billion in plan assets at year-end 2024. The plan offers a 100% employer match on the first 6% of eligible pay, contributed annually (not per payroll period), and includes a Charles Schwab self-directed brokerage account (SDBA) window.

The NUA opportunity at BAH depends heavily on contribution era. Employees who received BAH shares near the IPO or contributed in the first few years of the company's public life hold the most favorable ratios:

• 2010 (IPO): $17/share → $72.95 (September 28, 2026) = 4.3:1
• 2012–2013: ~$20–$26/share → $72.95 = 2.8–3.6:1
• 2016–2018: ~$32–$45/share → $72.95 = 1.6–2.3:1
• 2021–2023: ~$85–$125/share → $72.95 = below 1:1 — NUA not available

The pattern is typical of a company that experienced strong early appreciation followed by a period of overvaluation and correction. BAH's 52-week high through September 2026 was approximately $109/share — employees who contributed in 2022–2023 at or above current prices face an IRA rollover as the only logical exit (NUA doesn't help when there is no NUA). But employees who contributed from 2010 through 2016 at $17–$40/share and still hold those shares hold a meaningful NUA opportunity.

One important consideration for BAH employees: the Voya SDBA brokerage window allows participants to hold individual BAH stock inside the plan. Shares held in the SDBA within the Employees' Capital Accumulation Plan still qualify as employer securities for NUA purposes — they are inside the qualified plan — but the in-kind distribution mechanics may require coordination between the SDBA custodian (Schwab) and the plan administrator (Voya). Confirm the in-kind distribution process with Voya before initiating. The plan portal is accessible at voya.com/portal.

Virginia state tax note: Booz Allen Hamilton is headquartered in McLean, Virginia. Virginia taxes long-term capital gains at the same flat 5.75% rate as ordinary income. BAH employees in Northern Virginia receive federal-only NUA benefit — but for an employee in the 32–35% federal bracket with a 4:1 ratio position, that federal savings alone is substantial.

Leidos Holdings (LDOS)

Leidos Holdings was created on September 27, 2013, when the original SAIC Corporation separated into two companies. The old corporate entity — SAIC, Inc. — renamed itself Leidos Holdings, Inc. (trading as LDOS), retaining the science, intelligence, and health IT businesses. LDOS shares began trading on September 30, 2013, in the $37–$40 range.² As of late September 2026, LDOS trades around $143–$146/share, representing a 3.6–3.9:1 ratio from the spinoff starting price for early contributors.

The Leidos retirement plan (Leidos, Inc. Retirement Plan) transitioned from Vanguard to Empower in July 2025. The transition completed during the week of July 20, 2025, and participants now access their accounts at leidos.empower-retirement.com.³ Employees should use the Empower portal to verify their current cost basis for LDOS shares — and if the Empower system shows a cost basis that seems lower than expected, confirm it: legacy Vanguard basis records should have migrated in full, but any gaps from pre-spinoff SAIC contributions should be resolved by calling Empower's plan administrator line.

An important nuance: employees who worked for the original SAIC before the September 2013 spinoff received LDOS shares (in the continuing entity) as their existing SAIC stock. Their cost basis in those shares reflects their original SAIC contribution prices — which for pre-2008 employees can be dramatically lower than the $37 spinoff starting price. If your plan records show LDOS shares with a basis far below $37, that reflects pre-spinoff contributions to the original SAIC before the 2013 corporate separation. The ratio for those employees could be 5:1 to 8:1+ on the early lots.

Virginia state tax note: Leidos is headquartered in Reston, Virginia. Federal-only NUA benefit applies to Virginia-based employees (LTCG taxed as OI at 5.75%).

SAIC (Science Applications International Corporation)

The "new SAIC" — Science Applications International Corporation, trading under the SAIC ticker — was spun off from the original SAIC Corporation (which became Leidos) in September 2013. SAIC shares began trading at $23.66/share on September 19, 2013.⁴ By September 2026, SAIC trades above $120/share — a 5.1:1 ratio from the spinoff starting price. The company serves as a major IT, engineering, and systems integration contractor across DoD, federal civilian agencies, and the intelligence community.

The SAIC retirement plan recordkeeper was historically Vanguard at Work; however, retirement plan recordkeeper arrangements can change, and the current provider should be verified with HR or through your most recent plan statement. Employees can also check the SEC EDGAR database for SAIC's most recent Form 11-K (Annual Report of Employee Benefit Plan), which discloses the current trustee and record-keeper arrangement.

For employees who contributed to SAIC stock after the 2013 spinoff, the appreciation ratios break down as follows:

• 2013 (spinoff): ~$24/share → ~$120 = 5:1
• 2015–2017: ~$40–$60/share → ~$120 = 2–3:1
• 2019–2021: ~$80–$95/share → ~$120 = 1.3–1.5:1

The 2013–2017 vintage lots are the most compelling for NUA. Post-2019 contributions typically generate ratios below the breakeven for 37%-bracket employees and would likely be better suited for an IRA rollover. This makes SAIC another partial NUA lot-selection case: NUA the spinoff-era and early post-spinoff lots; roll the rest.

Virginia state tax note: SAIC is headquartered in Reston, Virginia. Federal-only NUA benefit for Virginia-based employees.

CACI International (CACI)

CACI International has been publicly traded since 1983, making it the longest-tenured publicly traded company of the four covered here. The company's federal IT, intelligence, and cybersecurity focus led to substantial stock appreciation following the post-2008 defense spending expansion. CACI's stock price fell to the $55–$75/share range during the 2008–2009 financial crisis and recovered steadily. By September 2026, CACI trades around $620–$650/share, with an all-time high of $667.57 reached in August 2026.⁵

The appreciation history for CACI employees breaks down by contribution era:

• 2005–2012 (crisis and early recovery): ~$55–$90/share → ~$620 = 7–11:1 — the strongest NUA case
• 2013–2018: ~$90–$175/share → ~$620 = 3.5–7:1 — solid NUA opportunity
• 2019–2022: ~$200–$350/share → ~$620 = 1.8–3.1:1 — borderline to moderate
• 2023–2026: ~$350–$600/share → ~$620 = 1–1.8:1 — typically below NUA breakeven

CACI has approximately 23,000 employees. Employees should confirm their plan's current recordkeeper through HR or the most recent Form 11-K on SEC EDGAR, as the CACI retirement plan recordkeeper is not confirmed in recent publicly available sources. The plan portal and cost basis reporting format should be verified before modeling the NUA election.

The most compelling NUA scenarios at CACI involve senior engineers, program managers, or executives who have been with the company since the 2000s and accumulated substantial employer match contributions in company stock through the crisis-era trough. A 25-year CACI employee with even 500–1,000 crisis-era shares — at a basis of $65–$85/share and a current price above $620 — faces a position where the NUA election can save $30,000–$80,000+ in lifetime federal taxes on that lot alone.

Virginia state tax note: CACI International is headquartered in Reston, Virginia. Federal-only NUA benefit for Northern Virginia employees, which nonetheless represents very large dollar savings for senior employees with decades of low-basis stock.

The September 30 fiscal year separation problem

The federal government's fiscal year ends on September 30. Most defense IT and government consulting contracts are awarded or renewed on an annual or multi-year basis aligned to this fiscal year. When a contract is not recompeted, is awarded to a competitor, or is terminated for convenience, contractor layoffs often begin on October 1 — the first day of the new fiscal year.

For NUA purposes, this creates a timing crunch that is unique to the defense IT sector:

• The qualifying event: Separation from service due to layoff (contract non-renewal) is one of the four IRC §402(e)(4) qualifying events for a lump-sum NUA distribution. An October 1 layoff qualifies.
• The lump-sum distribution deadline: To elect NUA, all assets must leave the 401(k) plan in the same tax year as the qualifying event. A layoff on October 1, 2026 means the lump-sum distribution must be completed by December 31, 2026 — 91 days.
• Plan administrator processing time: In-kind employer stock distributions are not self-service on any recordkeeper platform. Processing typically takes 4–8 weeks after the request is submitted and the plan administrator confirms separation from service. That leaves virtually no margin for error if the distribution request is not initiated within the first 1–2 weeks of October.

The practical implication: employees who are aware they may face contract non-renewal should plan the NUA distribution in advance. If you know a major contract is up for recompete, model the NUA decision before October 1, not after. Have the distribution request letter drafted, know your cost basis, and confirm the in-kind transfer process with your plan administrator so that you can initiate within days of the separation date — not weeks.

Employees who miss the December 31 deadline cannot retroactively elect NUA for that tax year. A missed lump-sum distribution deadline typically forces the IRA rollover — permanently eliminating the NUA election, since any subsequent distribution from an IRA is ordinary income with no capital gains treatment available.

Security clearance: not a barrier to NUA

Many defense IT employees hold active security clearances — Top Secret (TS), Top Secret/Sensitive Compartmented Information (TS/SCI), or TS/SCI with a polygraph. A common concern is that separating from a cleared employer will result in losing the clearance, which may influence timing decisions around separation and NUA.

The key facts for clearance-concerned employees:

• Clearances belong to the government, not the employer. A security clearance is granted and owned by the U.S. Government (through the appropriate adjudicative authority). The employer sponsors access to cleared facilities and systems, but the clearance itself does not disappear upon separation.
• Clearances can remain active for approximately 2 years after separation if no derogatory information arises and if another cleared employer sponsors the employee within that period. Many cleared professionals consult, join smaller cleared boutique firms, or are hired by another prime contractor shortly after separation — preserving continuous clearance access.
• NUA and re-employment are compatible. The NUA qualifying event is separation from service from the plan sponsor — not retirement from the workforce. An employee who separates from CACI (triggering NUA eligibility), executes the lump-sum distribution, and then begins cleared consulting work with a different firm does not retroactively disqualify the NUA election. The election is based on the prior qualifying event; subsequent employment elsewhere is irrelevant to the NUA tax treatment.

This means cleared professionals should not delay or forgo the NUA election out of clearance concerns. The clearance and the NUA election operate in entirely separate legal frameworks.

State tax table for defense IT hub locations

The critical fact for most defense IT employees: Northern Virginia and Maryland — where Leidos, SAIC, CACI, and Booz Allen Hamilton are all headquartered, and where the majority of their employees work — provide zero additional state NUA savings. Both Virginia and Maryland tax long-term capital gains at the same rate as ordinary income. The NUA benefit for NOVA and Maryland employees is entirely federal — which is still very large for senior employees in the 32–37% federal bracket with decades of low-basis stock.

Defense IT employees based in Texas (San Antonio's Lackland area houses significant Air Force and CYBERCOM support) and Florida (Jacksonville Naval Station, Tampa's SOCOM and CENTCOM support contractors) capture the full federal + zero-state-tax advantage. Tennessee-based employees working on Department of Energy contracts at Oak Ridge also get the full benefit, as Tennessee eliminated its income tax on wages in 2021.

Worked example: CACI International principal, Fairfax County VA

Robert Chen, 62, is a CACI International Principal (senior technical staff) in Fairfax County, Northern Virginia. He has been with CACI for 26 years and is separating from service to retire. His 401(k) holds a total of 1,400 CACI shares, accumulated through employer match contributions and his own deferrals over his career. He has identified the early vintage lots as the NUA opportunity and plans a partial NUA election.

His lot history:

• 2002–2014 (early career, crisis-era, and recovery): contributions at average $85/share → 900 shares, total cost $76,500
• 2015–2020: contributions at average $230/share → 360 shares, cost $82,800
• 2021–2026: contributions at average $500/share → 140 shares, cost $70,000
• Total: 1,400 shares, total cost $229,300

Robert plans to NUA only the 900 early-lot shares. The 360 + 140 post-2015 shares ($152,800 combined cost basis) will roll to a traditional IRA.

NUA election (early lots only):

• 900 shares × $620 (current CACI price) = $558,000 FMV
• Cost basis: $76,500
• NUA amount: $481,500
• Appreciation ratio: $620 ÷ $85 = 7.3:1

Robert files MFJ. His other income in the separation year is $280,000 (W-2 income through separation, spouse's income, and investment income). He is in the 32% federal bracket.

Federal tax on the NUA path:

• Ordinary income tax on $76,500 cost basis at 32%: $24,480
• Long-term capital gains on $481,500 NUA (sold over multiple years), stacked on $356,500 OI:
  • $227,250 at 15% LTCG rate (up to MFJ $583,750 threshold): $34,088⁶
  • $254,250 at 20% LTCG rate (above $583,750 threshold): $50,850
  • 3.8% NIIT on all $481,500 (MAGI exceeds $250,000 MFJ): $18,297
• Total LTCG + NIIT: $103,235
• Total federal — NUA path: $127,715

Federal tax — IRA rollover path (same 900 shares, $558,000 eventually as ordinary income at 32%): $178,560

Federal lifetime savings from NUA: $178,560 − $127,715 = $50,845

Virginia state tax: Virginia taxes long-term capital gains at the same 5.75% flat rate as ordinary income. Robert pays the same Virginia tax whether the $558,000 comes out as NUA (LTCG) or IRA distributions (OI). Virginia state savings: $0. The $50,845 savings is entirely federal.

What changes if Robert were in Texas: Both his NUA path and his IRA rollover path produce $0 Texas state tax (no state income tax). The federal savings of $50,845 is identical. Texas does not amplify the NUA advantage over Virginia — it simply means both retirement paths are cheaper overall. The NUA decision is made on federal math regardless of his state.

Pitfalls specific to defense IT employees

1. Missing the December 31 lump-sum deadline after a September 30 layoff. This is the highest-probability failure mode in this sector. Employees who are told on September 30 that their contract position is ending have 91 days to complete an in-kind stock distribution. Plan administrators need 4–8 weeks. Do not wait until November or December to initiate the paperwork.
2. Confusing LDOS and SAIC after the 2013 split. Employees who worked for original SAIC before September 2013 received shares in both Leidos (LDOS) and new SAIC. The cost basis, plan, and recordkeeper are different for each company's shares. Model them separately — the ratios and plan mechanics differ.
3. Assuming the SDBA brokerage window (BAH/Schwab) handles in-kind distributions automatically. The Schwab SDBA window inside the BAH Capital Accumulation Plan holds individual BAH stock — but an in-kind NUA distribution still requires a plan administrator (Voya) authorization step, not just a Schwab brokerage transfer. Call Voya directly; do not initiate through the Schwab brokerage portal.
4. Rolling 401(k) assets to an IRA before completing the lump-sum. Once any employer securities from the same plan are rolled to an IRA — even a partial rollover — the NUA election may be permanently disqualified for assets remaining in the plan. The lump-sum distribution requirement demands that the entire plan balance leave the qualified plan in the same tax year, with in-kind employer stock going to a taxable brokerage and remaining assets rolled to an IRA (not reversed). See the 7 NUA Election Mistakes guide for the mechanics.
5. Blending all lots and concluding NUA doesn't pencil. Most defense IT employees have post-2020 contributions at prices near or above today's levels. The blended basis for the full position can make NUA look marginal. But the early-vintage lots alone often have 5:1 to 10:1 ratios. A partial NUA strategy — NUA the high-appreciation early lots, roll the rest — frequently shows $30,000–$80,000+ in federal savings even when the blended position looks unimpressive.
6. Waiting to get re-employed before deciding on NUA. Once you accept a new position with a new employer and begin rolling your prior 401(k) assets, you may inadvertently trigger a rollover. The NUA election must be made before any rollover. If you are between jobs and considering NUA, complete the NUA distribution before starting the new job's HR/benefits onboarding.

Questions to ask your plan administrator

• What is my total employer securities balance (shares and current cost basis)?
• Can you provide a lot-level cost basis report — each block of shares with its purchase date and price per share?
• Does my plan allow in-kind distribution of employer securities to a taxable brokerage account?
• What is the required processing time for an in-kind distribution request from separation date to transfer complete?
• For the remaining (non-employer-stock) balance, can I execute a direct rollover to a traditional IRA in the same tax year?
• What form or request letter do I submit to initiate the in-kind employer stock distribution?
• Will you issue a 1099-R with Box 6 populated for the NUA amount? Can you confirm this in writing before distribution?

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Sources

1. Booz Allen Hamilton Holding Corporation — historical stock price data and IPO information. StockAnalysis.com / BAH price history. IPO date and price confirmed: November 16, 2010 at $17/share. Current price as of September 28, 2026: $72.95. Plan details (Voya recordkeeper, 56,540 participants, $9.32B assets, 100% match on 6%) from plan documentation at waterfallplanning.com/plans/booz-allen-hamilton and SEC Form 11-K filings.
2. Leidos Holdings — spinoff from original SAIC Corporation September 27, 2013. LDOS shares began trading September 30, 2013 in the $37–$40 range. Current price as of September 2026: approximately $143–$146. StockAnalysis.com / LDOS price history.
3. Leidos, Inc. Retirement Plan — transition to Empower completed July 2025. Source: Leidos Benefits site — Empower transition notice (PDF). Current participant portal: leidos.empower-retirement.com.
4. SAIC (Science Applications International Corporation) — spinoff price and price history. SAIC began trading September 19, 2013 at $23.66/share. Current price as of September 2026: approximately $120–$127. StockAnalysis.com / SAIC price history.
5. CACI International — historical price data and all-time high. All-time high closing price $667.57 on August 11, 2026. StockAnalysis.com / CACI price history.
6. 2026 long-term capital gains thresholds (0%/15%/20%) — IRS Revenue Procedure 2025-32. MFJ: 0% up to $98,900; 15% up to $583,750; 20% above $583,750. NIIT: IRC §1411, 3.8% on net investment income above $250,000 MFJ / $200,000 single (not inflation-adjusted). Values verified as of September 2026.

Related guides: NUA for Aerospace & Defense Employees (Lockheed Martin, RTX, Northrop Grumman) · NUA After Layoff or Early Retirement Package · Partial NUA Lot-Selection Framework · NUA Distribution Timing Strategy · NUA Distribution at Voya · NUA Distribution at Empower