Receiving Benefits

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Receiving Benefits

457 Plan

You may receive a distribution from your 457 account if you:

  • Leave county employment;
  • Reach age 70 1/2;
  • Have an “unforeseeable emergency;” or
  • Die.

If you have an "unforeseeable emergency,” you may apply for a hardship distribution by submitting an application to Empower Retirement. You can only request an amount that is sufficient to meet this emergency. Your application will be reviewed and approved by Empower Retirement to ensure it meets appropriate guidelines before a distribution can be made.

If you choose to defer distributions, the balance of your account will continue to accumulate tax deferred, and you will continue to be able to transfer balances among the various investment options available in the Plan. When you are ready to receive a distribution, you will be able to select from the distribution options available at that time.

You must begin receiving a required minimum distribution (RMD) by April 1 of the year following the year in which you reach age 70-1/2 or sever employment, whichever occurs later. If you choose to defer your distribution, you will still be subject to the RMD rule.

If you select a full lump sum distribution, the full vested value of your account will be distributed. Unless you select a direct rollover of all or a portion of the distribution, the distribution will be paid directly to you. Any pre-tax balances not directly rolled over will be fully taxable to you in the year the funds are distributed.

You may elect to take a portion of your balance as a distribution and defer distribution on the remaining balance of your account. Any pre-tax balances not directly rolled over will be fully taxable to you in the year the funds are distributed.

Periodic Payment of an Amount Certain

You designate the dollar amount for your distribution that you wish to receive on a regular installment basis (monthly, quarterly, semi-annually or annually). Payments to you will continue until your account balance is zero. The total number of payments you receive will vary depending on the rate of return of your investments. After you reach your RMD beginning date, you must ensure that your periodic payment meets or exceeds your RMD amount.

Periodic Payment of a Period Certain

You will receive payments on a regular basis depending upon the frequency you choose (monthly, quarterly, semi-annually or annually). Payment amounts depend on the length of time you choose to receive payments, the frequency you choose and the rate of return of your investment options.

Your payment amount is calculated by dividing your current vested account balance by the number of remaining payments.

Your payment is recalculated each time a payment is distributed; therefore, your payment will not be the same amount each time. The payment amount will depend on the account value, which may fluctuate depending upon the performance of the investments that you have chosen. With this payment method, your balance will be zero by the end of the term you select. The payment term you select should not exceed your life expectancy. After you reach your RMD beginning date, you must ensure that your periodic payment meets or exceeds your RMD amount.

Once you elect one of the following methods and your distribution begins, your election becomes irrevocable.

Fixed Life Annuity

You will receive monthly annuity payments that will not change for the rest of your life. This fixed annuity payment option provides the highest fixed annuity payments available. However, there is no guaranteed minimum number of payments, nor is there a provision for a death benefit to your beneficiary.

Fixed Life Annuity with Period Certain

You will receive monthly annuity payments that will not change for the guaranteed annuity payment period you select (5, 10, 15 or 20 years) or for your lifetime, whichever is longer. Upon your death, payments remaining under the guaranteed period (if any) will be paid to your beneficiary.

Joint and Survivor Life Annuity

You will receive a guaranteed life income. Upon your death, your designated survivor, if living, will continue to receive payments for his/her life equal to 100%, 66-2/3% or 50% of your payment, depending on the percentage you select. Upon your death and the surviving second annuitant’s death, all payments cease. If your designated second annuitant does not survive you, all payments cease upon your death.

Joint and Survivor with Guaranteed Period Certain

You will receive monthly annuity payments for life. Upon your death, your surviving designated second annuitant will continue to receive payments at 100%, 66-2/3% or 50% of your payment, depending on the percentage you select. Upon your death and your second annuitant’s death, any payments remaining under the guaranteed payment period you selected (5, 10, 15 or 20 years) will be paid to a named beneficiary.

Designated Period Certain Annuity

You will receive an income for the designated period of your choice. It does not provide you with income for your lifetime. If you should die before the end of the designated period, the remaining payments will be made to your beneficiary. Your payments will stop at the end of the designated period.

At the time you elect your distribution method, you can specify a combination of payment options for portions of your account balance.

Partial Lump Sum and Periodic Payment or Annuity

You can withdraw less than 100% of your balance as a partial lump sum payment after severance of employment and then also elect a periodic payment or annuity payment option for the remaining balance. Unlike an annuity, the periodic payment option allows you to keep your remaining balance in the investment options available under the Plan.

Periodic Payment and Annuity

You can elect to have part of your balance applied to any type of periodic payment and the remaining balance applied to any type of annuity. This combination option allows you to have different types of payouts as your needs dictate.

Periodic Payment and Future Partial Lump Sum Distributions

If you elect to receive periodic payments and, in the future, wish to receive a partial lump sum payment from your balance, complete the Distribution Request Form to receive the partial lump sum payment. The partial payment will not affect your periodic payment schedule, but it will affect the time remaining for your periodic payments if you choose an amount certain. It will also affect the payment amount if you elected a period certain or life expectancy payout option.

Series of Partial Lump Sum Payments

You may elect partial lump sum payments at different times as your needs dictate. Complete the Distribution Request Form each time you wish to receive a partial lump sum payment.

Money in your CERF 401(a) account can be rolled into another eligible 401(a) plan or to a separate account deemed to be an IRA after you leave county employment.

If you die and there is money in your account at the time of your death, the remaining account balance will be paid to your beneficiary upon receipt of a Death Benefit Claim Form by Empower Retirement. If you have not designated a beneficiary, payment will be made to your spouse. If you do not have a spouse, payment will be made to your estate.

Generally, ordinary income taxes will apply to your withdrawals. When a withdrawal is made, 20% will be withheld automatically for federal income taxes.

Please allow 6-8 weeks from last date of service for delivery of funds