When Am I Eligible To Receive a Distribution?
Your Deferred Compensation Plan is designed to help you save additional money for retirement by utilizing the tax-favored status of the 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
- Death (payable to your beneficiary)
Is There a 10% Penalty On Distributions Prior To Age 59 1/2?
No. Eligible distributions from your 457 Deferred Compensation plan are not subject to the 10% penalty typically found in tax-favored retirement plans.
Is There a Loan Provision?
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.
How Do I Withdraw My Money From The Plan?
When you become eligible to receive a distribution you have several distributions options to choose from. You may choose from any of the following options:
- Lump-sum distribution
- Periodic payments over a specified number of years
- Periodic payments of a specified amount
- Periodic payments from various forms of life-time annuity options
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 forms described above. Alternatively, you may elect to postpone distribution to a future date you elect, not beyond your age 70 1/2. 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.
Can the Money in My Account be Transferred to Another Retirement Plan?
Beginning January 2002, you may transfer money in a 457 Deferred Compensation Plan to a qualified retirement plan, IRA, or another 457 Deferred Compensation Plan. However, if rolled to an IRA or qualified retirement plan (ie, 401(k), 401(a), etc.), balances become subject to the tax regulations governing those plans, including a 10% penalty on withdrawals prior to age 59 1/2.
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, unless you continue to work beyond that age.
What Happens to My Account If I Die?
In the event of your death before you begin distribution, a spousal beneficiary is eligible for all of the same options that would be available to the participant. A spousal beneficiary may elect to defer distribution to a future date or select one of the distribution options to begin immediately.
A non-spousal beneficiary may choose one of the following two options:
- Lump-sum distribution
- Periodic payments not to exceed 15 years
In the event of your death during distribution, payments must continue to your beneficiary at least as rapidly as you were receiving them. Your beneficiary may accelerate the distribution but may not extend it.