Disbursement options
Forms of Payment upon Retirement/Break-in-Service
We want you to know up front that the vast majority of Annuity Plan Participants (with the consent of their spouses, as applicable) receive a full lump sum distribution of their Plan account(s). Despite that, we want you to know that the Plan offers a wide variety of payment options. Also, your payment form under the Annuity Plan does not need to match any payment form you may be receiving under the I.U.O.E. Local No. 478 Pension Plan.
Fast Facts:
- If you are married when you retire (whether on a normal, early or disability basis) or have a break-in-service, you will automatically receive a 50 percent joint-and-survivor annuity, unless you and your spouse reject that form and choose a different payment form.
- If you are unmarried when you retire, or have a break-in-service, you will automatically receive a life annuity, unless you reject that option and choose a different payment form.
- The Plan also offers payment in a single lump sum, installment payments, and annuities that provide a larger monthly payment to a surviving spouse. Again, the single lump sum payment is the most common option chosen.
Important notes:The rules in this section apply to those who are retiring or incur a break- in-service. The following rules apply to In-Service and Hardship Withdrawals:
- If you are applying for an In-Service distribution, the only payment form available to you is a single lump sum distribution of 50% or 100% of your Plan account(s), which can be paid directly to you (less 20 percent for Federal Income Tax, and/or appropriate State Income Tax), rolled over into another Qualified Retirement Plan/IRA or a portion paid directly to you (less taxes) and a portion rolled over into your QRP or IRA. If you are married, you will be required to obtain your spouse's consent to this single lump sum distribution.
The Available Forms of Payment at Retirement or Break-in-Service
When you become eligible for and elect payment of your Annuity Plan benefit upon retirement or incurring a break-in-service, you will need to decide how you want to have your benefit paid. The various forms of payments possible are summarized in the accompanying chart. All forms except the lump-sum payment and the installment payments provide a monthly lifetime payment for you. The forms available to married participants also provide a lifetime monthly payment for your surviving spouse if you should die first. Please note that in all cases, for your surviving spouse to be eligible for the post-retirement survivor annuity payments described in the chart, you and that spouse must have been married on your annuity starting date.
Forms of Payment for Annuity Plan Benefits - At Retirement or Break-in-service |
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Joint-and-survivor Annuities (Available only to married participants) |
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| 50% Joint-and-survivor annuity | This is the Annuity Plan's automatic form of payment if you are married, unless you and your spouse reject this form of payment. This form provides a monthly payment to you for your lifetime. If you have a surviving spouse, he or she will receive a monthly payment for his or her life of 50 percent of the amount you were receiving, starting after your death. |
| 75% Joint-and-survivor annuity | This form is the same as the 50 percent joint-and-survivor annuity above, with one difference: if you have a surviving spouse, he or she will receive a monthly payment for his or her life of 75 percent of the amount you were receiving. |
| 100% Joint-and-survivor annuity | This form is the same as the 50 percent and 75 percent joint-and-survivor annuities above, except that if you have a surviving spouse, he or she will receive a monthly payment for his or her life of 100 percent of the amount you were receiving. |
| Single-Life Annuity (Available to all participants, but married participants need spousal consent) | |
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Life annuity |
This is the Annuity Plan's automatic form of payment if you are unmarried, unless you reject this form of payment. This form provides a monthly payment to you for your lifetime, and any and all payments end at your death. |
| Installment Payments (Available to all participants, but married participants need spousal consent) | |
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Installment payments |
This form provides payments in substantially equal monthly or yearly installments as elected by you for a period of up to 15 years, with any remaining balance paid in a lump sum at the end of the applicable period.
Once payments start, you are not permitted to change the payment schedule. However, the Annuity Plan will permit you to stop the installments and take a lump-sum payment of the remainder of your benefit at any time. |
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Lump-Sum Payment (Available to all participants, but married participants need spousal consent) |
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Lump-sum payment |
This payment form provides a single lump sum payment of your entire benefit, and it is the most common payment form.
A lump sum distribution is the automatic form of payment if the combined balance of your regular account and deferral contribution account (if any) is $7,000 or less and never exceeded $7,000 on a prior distribution date, including any amounts distributed as a hardship withdrawal.
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Flexible Lump Sum |
Went into effect 10/1/13 and allows participants (retiree, disabled, terminated, Alternate Payee) to receive quarterly disbursements of at least $2,500 |