This section contains information on how to process participant distributions. As Plan Administrator, you will handle participant distributions for a number of different reasons:

  • Employment ending or retirement,
  • Becoming disabled in connection with employment ending,
  • After-tax or rollover account withdrawals when terminated or retired,
  • Required minimum distribution,
  • Alternate payee under a Qualified Domestic Relations Order (QDRO), or
  • Death.

You will first need to determine if the participant meets the requirements for a distribution under the plan. You can do this by checking Articles 6 and 7 of the plan document, as well as your plan’s adoption agreement. Distribution options, taxes and penalties vary based on the participant’s age and reason for distribution.

For information on processing hardship withdrawals, see “Hardship Withdrawals.” For information on loans, see “Loans.” For information on in-service withdrawals, see “In-Service Withdrawals.” For information on death claims, see “Death Claims.”

Highlights

In the chart below, you will find the steps to process a distribution.

Steps for Receiving a DistributionPlan Participant’s 
Role
Plan Administrator’s RoleThe Program’s Role
1. Determine if participant is eligible to request a distribution; if so, send the Distribution Request Formalong with a “Special Tax Notice Regarding Plan Payments,” “Notice of Benefit Payments,” and “Notice of Waiver of Annuity and Election of Alternate Benefit Payment Form” to participant  
2. Decide what type of distribution to request and payment option  
3. Complete and sign applicable form(s) and send them to the Plan Administrator  
4. Review, sign and send form(s) to the Program  
5. Process form(s)  
6. Send check to participant  
7. Send IRS Form 1099-R to participant and IRS