Corporate and Institutional FAQs

A hardship distribution is a withdrawal that meets one of the four IRS definitions of financial hardship:

• To purchase a primary residence
• To prevent foreclosure or eviction from a primary residence
• To pay unreimbursable medical expenses
• To pay post-secondary tuition for a member of your immediate family

You must be a current employee to take a hardship distribution, and you will be suspended from contributing to the plan for six months following this type of distribution. You will receive no employer matching contributions during your suspension.

To inquire about an in-service distribution, please call a Participant Account Services Representative.  Call (800) 377-9188 between 7:00 a.m. and 10:00 p.m. ET Monday through Friday and Press 0.

The Distribution Support Team (DST) will be happy to help you understand all of your distribution options and to help you initiate a distribution.  Please contact a DST Representative at (800) 690-0531, 8:00 a.m. to 6:00 p.m. ET, Monday through Friday.

If you terminate your employment, you will receive more information about your distribution options. Generally, you can:

• Keep your money in your plan, if your former employer allows
• Roll over your money into another plan or a rollover IRA
• Take your money in cash, as a lump sum distribution.  You will owe income tax on your distribution, and if you are younger than 59 ½ (some exceptions apply) your distribution may be subject to an early withdrawal penalty.

The Distribution Services Team (DST) is available to help you understand your options and to help you initiate distributions.  Call (800) 690-0531 between 8:00 a.m. to 6:00 p.m. ET Monday through Friday to speak to a DST Representative.

Please consider your options carefully and consider seeking the help of a financial advisor to understand the tax implications of each distribution option.

When you retire you decide how and when you want to receive your money. Your two basic options are taking the money out of the plan all at once (known as a lump sum distribution), or, if the plan permits, leaving the money in the plan. If you elect to leave the money in the plan, you still have to begin taking distributions when you reach the required distribution date. For most employees, this is the later of April 1^st following the calendar year you reach age 70 ½ or the date you retire. If you are a 5% owner of the company, the required distribution date is April 1^st following the calendar year in which you reach age 70 ½ (whether you are retired or not).

If you choose to take a lump sum distribution, you have several options as to what to do with your money:

• Roll the money over into an Individual Retirement Account (IRA). Putting your distribution into an IRA allows your money to continue growing on a tax-deferred basis, as you pay no taxes on your distribution or your investment earnings until you withdraw from the IRA. To ensure that no taxes are withheld from your rollover, your distribution check must be made payable to the IRA's financial institution. The Distribution Services Team (DST) is available to provide more information on IRAs and to help you with your rollover.  Call (800) 690-0531 between 8:00 a.m. to 6:00 p.m. ET Monday through Friday to speak to a DST Representative.
• Purchase an annuity.The advantages of an annuity include the security of a fixed amount of income, no responsibility for managing funds or investments, and you pay taxes on your money as you receive it rather than at the time of your plan distribution. However, to make sure that no taxes are withheld from your distribution, the distribution check must be made out to the annuity's insurance company. What are the disadvantages of an annuity? Inflation can decrease the buying power of a fixed income investment such as an annuity. This can be a real problem in times of high inflation unless you have other sources of income besides the annuity. In addition, annuities often leave nothing to survivors after a spouse dies or to children if you die. Annuities can have high expenses as well.

Note: Some plans also offer partial or periodic payments from the plan. Call (800) 690-0531 between 8:00 a.m. to 6:00 p.m. ET Monday through Friday to speak to a DST Representative.

Special tax treatment of lump sum distributions.  If you cash out your entire distribution, you may be eligible for ten-year averaging and/or capital gains tax treatment. Ten-year averaging and capital gains taxation are special methods of taxing a lump sum distribution from a retirement plan that may reduce the tax you may owe on the lump sum distribution. To determine if you are eligible for ten-year averaging or capital gains treatment, consult your tax advisor.