Distribution/Taxation

When Am I Eligible To Receive a Distribution?

Your Retirement Plan is designed to help your money grow faster by utilizing the tax-favored status of the Retirement Plan to your benefit. Therefore, the IRS imposes certain limitations on distributions from the Plan. You are eligible to receive a distribution from the Plan upon any of the following events:

  • Termination of employment, at any age for any reason
  • Retirement
  • Death (payable to your beneficiary)
  • Disability

Although you are eligible for distribution upon termination of your employment, you may defer your distribution and leave your Retirement Plan funds tax-sheltered with CCOERA for future distribution.

How Do I Withdraw My Money From The Plan?

When you become eligible to receive a distribution you have several options to choose from. You may choose from any of the following distribution options:

  • Lump-sum distribution
  • Periodic payments over a specified number of years
  • Periodic payments of a specified amount
  • Tax-free Rollovers to other types of plans may be available

Is There A 10% Penalty On Distributions Prior To Age 59 1/2?

The portion of a distribution that is subject to income tax is also subject to a special 10% penalty tax if made prior to age 59 1/2.  However, this tax does not apply if the distribution is made to you after you separate from service and the separation occurred during or after the year in which you reach age 55. Also, the 10% penalty tax does not apply to distributions that are part of a series of substantially equal periodic payments expected to last over your lifetime, or due to total and permanent disability.

At What Age MUST I Begin Distribution?

You must begin distribution from your account no later than April 1st following the year you attain age 70 1/2.

Can The Money In My Account Be Transferred To Another Retirement Plan or IRA?

Yes. After you terminate employment you may transfer your account balance to another qualified retirement plan or you may transfer funds to an Individual Retirement Account (IRA).

Can I Borrow Money From My Account?

Yes, CCOERA employers may set up a loan program through their CCOERA retirement plans. However, it is up to each employer to decide whether to offer loans under their particular CCOERA plans. Please contact your employer to determine whether they are (or will be) offering loans through their CCOERA retirement plans.

What Happens To My Account When I Leave Employment?

Upon termination of employment or retirement you are immediately eligible to begin receiving a distribution in any of the methods described in the previous section. Alternatively, you may elect to postpone distribution to a future date. After you elect to defer the distribution of your account, you will continue to receive quarterly account statements and maintain the ability to manage your money among the available investment options.