How to Withdraw Monies - 401(k) Plan

The Plan is designed to promote long-term savings.  However, by allowing withdrawals, the Plan allows you to meet certain financial needs.

You may make a withdrawal for financial hardship or upon reaching age 59½. Simply complete a Notice of Hardship Form or Notice of Distribution Form and return it to your Plan Administrator.
 

IRS limits hardship withdrawals to amounts that cannot be obtained elsewhere for certain "immediate and heavy" expenses.  The following expenses qualify for a hardship withdrawal:

• purchase of your primary place of residence home

• uninsured medical expenses incurred or money needed for medical care for you or your dependents

• payment of tuition, related educational fees and room and board expenses for the next 12 months of post-secondary education for you or your dependents,

• prevent eviction from your primary place of residence or the foreclosure on the mortgage of your home

• funeral expenses of parents, spouse, children or dependents

• certain expenses relating to the repair of damage to the employee's principal residence

Any payment you receive from the Plan is subject to income tax.  However, you can avoid having tax withheld by having the payment directly rolled over to another plan or IRA.  Depending on your state of residence, state tax may also be withheld from your payment.

In addition to income taxes, there is a 10% excise tax on certain early payments.  Please review the "Special Tax Notice"

If your employment is terminated, you may complete a Notice of Distribution Form.  If you are married, your spouse may have to consent on the form.  Submit the completed form to your Plan Administrator.  On this form, you may select one of the options listed below.

• Continued Account.  You may elect to continue your account until age 70½.  At that time, you must request a distribution from the Plan by completing the Notice of Distribution.  The money will remain as invested and you may continue to change investments.

• Direct Rollovers.  You may elect to move your vested account balance to a new employer's plan or IRA.  Eligible distributions may be rolled over into an IRA, another qualified retirement plan, Code section 403(b) custodial accounts or tax-sheltered annuities or Code section 457(b) governmental plans.

• Cash Payment. 

• Annuity.  You may elect an Annuity to commence on the date you could have retired under the Plan or sooner depending on your age.  An Annuity is a contract with MassMutual that provides regular income over a stated period of time, or over your lifetime.  The amount of the Annuity will be based on your vested account balance less any expenses and state premium taxes.  If you die before retirement, your Beneficiary will receive a cash payment equal to the death benefit stated on your Annuity Certificate.

Retirement Options

• Cash Payment - a one sum payment equal to the total value of all funds in your account.

• Installment Payments - periodic (monthly, quarterly, semi-annual or annual) payments starting at retirement.  You may elect to have payments for a fixed time (e.g., 10 years), fixed amount (e.g., $200 monthly) or over your lifetime.  To elect this option, you must also complete an Election of Installments Form.  Attach it to your Notice of Retirement Form.

• Continuation of Account - You may elect to leave your account balance in the Plan until you reach age 70½.  At that time, you must elect another option by completing a Former Employee's Benefit Election Form.  Prior to that time, you may withdraw part of your account balance by completing a Former Employee's Benefit Election Form.  The money will remain as invested and you may continue to change your investments.

• Direct Rollovers - You may elect to move your vested account balance to a new employer's plan or an IRA.  Eligible distributions may be rolled over into an IRA, another qualified retirement plan, Code section 403(b) custodial accounts or tax-sheltered annuities or Code section 457(b) governmental plans.

• Joint and Survivor Annuity - monthly payments starting at retirement and continuing for your lifetime, followed by lifetime payments to your spouse or another person chosen by you at retirement.  You may elect these on-going payments to be 50%, 66 2/3% or 100% of the amount of each payment to you.  Your spouse must consent if any election is made other than 50%.

• Full Cash Refund Annuity - monthly payments continuing for your life.  If the total payments received during your lifetime are less than the amount paid to provide the Annuity (the Annuity's net purchase price), the difference will be paid to your beneficiary.  If the total payments you receive are equal to or more than the Annuity's net purchase price, no benefits will be available to your beneficiary.

• Life Annuity with 120 Stipulated Payments - monthly payments beginning when you retire and continuing for your Life.  If you die before 120 monthly payments have been made to you, the remaining payments will be made to your Beneficiary in a one-sum cash payment.

• Life Annuity - monthly payments beginning on your retirement date and continuing for your life.  Benefit payments cease upon your death.  Upon death, no payments will be made to your beneficiary.

If you die before retirement, the full value of your account will be paid to your spouse or another beneficiary (if your spouse has consented).  If no beneficiary is elected, the Plan will pay the Executor or Administrator of your estate.

Your account can be paid in the form of an Annuity, installments or a one-sum cash payment.  Surviving spouses of deceased participants may roll over distributions to their own company plan (e.g. qualified plan, 403(b) annuity or governmental 457 plan) or to an IRA.

A non-spouse beneficiary may continue your account for up to five years after your death.  A spouse beneficiary may continue your account up until the year you would have reached age 70½.  At that time another option must be elected.

If you die after retirement, your death benefit, if any, is based on the retirement option you elected.  If any installment payments remain at death, the remaining amount will be paid in one-sum to your beneficiary.
 

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