- Your Retirement
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|Withdrawals and Transfers of Interest|
If you have terminated employment and have a vested balance of $5,000 or less in your employer account, your account will be cashed out to you according to Plan requirements. If the vested balance in your entire account is less than $1,000, your account will be cashed out to you according to Plan requirements. Any non-vested portion of your employer account balance will be forfeited back to your employer.
Note: You cannot cash out your account if you are in the service of a participating employer or if you are on the pastoral placement list.
Your account is actually two accounts:
1.Your employer account – the amount contributed by your employer and the investment return on this amount, and
2.Your personal account – the amount you personally contributed and the investment return on this amount.
It is important to note that any tax-deferred contributions and investment return in your cashout, and any Roth Contributions held for less than 5 years, are taxable.
• May be subject to a 10 percent IRS penalty for early withdrawal
• Will have 20 percent withheld for federal income tax unless you choose a direct transfer.
Please contact a tax expert for further information.
If you cease working for your employer or are 59 1/2 or older and working, you may have the option of withdrawing all or a portion of your employee subaccount. Withdrawal forms are available in your online account at www.brethrenpension.org or by calling us at 866-723-0001. You may withdraw an amount one time each quarter as long as you are not employed by a participating employer.
Your withdrawal will be processed and the money sent to you on the basis of the new unit values established upon completion of your withdrawal transaction.
The Plan is required to withhold 20 percent of the taxable portion of any lump-sum distribution amount and submit to the IRS for federal income taxes unless you directly roll this amount over to an eligible plan. See the section entitled Direct Rollovers and Mandatory Withholding for more information on this withholding requirement.
Taxes will be due on —
• All contributions except Tax-Paid and Roth Contributions, unless any Roth Contributions have been held for less than
• The investment return on all contributions, including Tax-Paid Contributions.
A 10 percent penalty is assessed by the IRS on taxable withdrawals after separation from service unless you are age 59 1/2 or older. This will be reported to you and the IRS on Form 1099-R. You may avoid the 10 percent penalty by directly transferring or rolling over your employee accumulations to an eligible retirement plan. You should talk to your financial or tax adviser before making a withdrawal prior to age 59 1/2.
Note: Pastors whose names are on the Church of the Brethren pastoral placement list may not make withdrawals while on this list, unless eligible due to age.
You may apply for a hardship distribution of all or a portion of your employee contributions, not including any earnings.
A hardship distribution will be made only if you have an immediate and heavy financial need. You must have exhausted all other means of obtaining the needed funds before a hardship withdrawal will be available for consideration, including any distributions and nontaxable loans currently available under this Plan, if any, or any other plans maintained by your employer, unless taking a loan would be counterproductive and would increase the amount of the need. Verification of need must also be submitted from an outside source (bank, mortgage company, educational institution). If proof of need is satisfied, the distribution will be processed as soon as administratively possible.
In addition, a hardship distribution must be for the exact amount needed to satisfy the obligation, plus any applicable taxes and penalties. Hardship withdrawals are considered to be distributions and therefore taxed as income; they are subject to early withdrawal penalties if the participant is under 59 1/2 years old.
A hardship distribution is available for the following immediate and heavy financial needs:
• Unreimbursed medical expenses incurred by you, your spouse, or your dependents. Required documentation: Name of who incurred the medical expense. Relationship to the participant (self, spouse, dependent, or primary beneficiary under the plan). Purpose of the medical care (not the actual condition, but the general category of expense (diagnosis, treatment, prevention, associated transportation, long-term care). Name and address of service provider (hospital, doctor, dentist, pharmacy). Amount of medical expenses not covered by insurance. Copies of bills or predetermination cost showing the amount payable to doctors, hospitals, etc., after taking into account any reimbursement from your insurance company.
• The purchase (excluding mortgage payments) of a principal residence. Note: Applicable to Participant’s principal residence only. Required documentation: Address of the residence. Purchase price of the principal residence. Type of costs and expenses covered (down payment, closing costs, title fees). Name and address of the lender. Date of purchase or sale agreement. Expected date of closing. Copy of the signed purchase contract or agreement of sale and an estimate of closing costs.
Note: The amount of the hardship withdrawal, plus any applicable income tax withholding, cannot exceed the total of the down payment and the closing costs.
• Tuition payments for the next 12 months of postsecondary education for you, your spouse, or your children or dependents. Required documentation: Who are the education payments for (name). What is the relationship to the participant (self, spouse, child, dependent, or primary beneficiary under the plan). Name and address of educational institution. Categories of educational payments involved(posthigh school tuition, related fees, room and board). Period covered by the educational payments (beginning and ending dates up to 12 months). The estimate needs to be on the school’s letterhead and be signed by an official representative of the school. Scholarships, school loans and grants must be applied to reduce the amount of all bills being submitted for this withdrawal.
• To prevent your eviction from your principal residence or foreclosure on your principal residence’s mortgage. Note: Applicable to Participant’s principal residence only. Required documentation: Address of residence. Type of event (foreclosure or eviction). Name and address of the party that is issued the foreclosure or eviction notice. Date of the notice of foreclosure or eviction. Payment due date to avoid foreclosure or eviction.
• Payment of funeral or burial expenses for your spouse, your children, or other dependents. Required documentation: Name of deceased. Relationship to the participant (parent, spouse, child, dependent, or primary beneficiary under the plan). Date of death. Name and address of the service provider (cemetery, funeral home). Copies of invoices and/or receipts showing the cost of such burial or funeral expenses after taking into account any reimbursement from your insurance company.
• Payment for expenses for the repair of damage to your home caused by catastrophic events — such as floods, hurricanes, tornados, or fires — as allowed by the IRS. Note: Applicable to Participant’s principal residence only. Required documentation: Address of residence that sustained damage. Description of the cause of the casualty loss (fire, flooding, type of weather-related damage). Date of casualty loss. Description of repairs including date of repair (in process or completed copies of invoices and/or receipts showing the cost of repair after taking into account any reimbursement from your insurance company.
A distribution necessary to satisfy an immediate and heavy financial need must meet the following requirements:
• It cannot be in excess of the amount of the immediate and heavy financial need.
• You must have obtained all distributions, other than hardship distributions and all nontaxable loans available under this Plan and all other plans maintained by your employer, if any.
Joining the Plan
Receiving your Retirement Benefit
Other Plan Provisions