Understanding the payout options for the DC 401(a) Retirement

SECOND QUARTER
2014
PLANNING FOR YOUR
RETIREMENT SERIES
This is the last in the four-part
series of educational articles
that explain the benefits of the
DC 401(a) Retirement Plan.
For the other three articles,
go to dc401a.ingplans.com >
Plan Information > Publications >
Quarterly Update. Select First
Quarter 2013, Second Quarter
2013 and Third Quarter 2013.
Understanding the payout options
for the DC 401(a) Retirement Plan
When you leave employment with the District of Columbia, you have a variety
of payout choices for the money in your DC 401(a) Retirement Plan account.
Before you make a payout decision, you’ll want to think about your financial situation based on
your age and all potential sources of income, including any benefits that you may be eligible to
receive from a pension, retirement plan accounts, Social Security and/or the District of Columbia
457(b) Deferred Compensation Plan (DCPLUS).
Since all distributions from the DC 401(a) Retirement Plan and DCPLUS are taxable, you will also
want to consider the tax consequences of different payout options, perhaps with help from a
qualified tax or financial adviser.
If you are not ready to make a decision, take your time: there’s no immediate deadline. In fact, all
of your money can stay in the DC 401(a) Retirement Plan until April 1 following the year in which
you reach age 70½ or quit working, whichever happens later. At that point, you will begin annual
Required Minimum Distributions (RMDs).
(continued on other side)
Lower fees for some SSgA funds
Fees for investing in the State Street Global Advisors (SSgA) target
retirement funds and the SSgA S&P 500 Index Fund offered by the
DC 401(a) Retirement Plan were reduced on May 30, 2014.
The total fund expense of 0.535% was lowered to 0.525% for the SSgA Target
Retirement Income Fund, SSgA Target Retirement 2010 Fund, SSgA Target
Retirement 2020 Fund, SSgA Target Retirement 2030 Fund, SSgA Target Retirement
2040 Fund and SSgA Target Retirement 2050 Fund.
Two changes affected the SSgA S&P 500 Index Fund on May 30. The total fund
expense of 0.06% was lowered to 0.05%. Investors saw a change in the number
of fund shares they owned as the result of a stock split that applied at the close
of the markets on May 30. While the number of shares held by investors changed
due to the stock split, the total dollar value of the shares remained the same as
the pre-split amounts.
New name for ING:
Voya Financial™
ING, the DC 401(a) Retirement Plan’s
record keeper, is changing its name to
Voya Financial. Nothing changes to your
account or the quality retirement services
you receive as a result of this name change.
Over the next few months you will begin
to see the Voya name more and more.
In September, you will see Voya on your
account statement, printed materials
and Plan website, and by the end of 2014,
on all other materials.
Information about these changes is available at dc401a.ingplans.com under
Plan Information or by calling the Plan Information Line at (866) 772-4012.
Remember, a target retirement fund is generally managed to a specific retirement
year (target date) included in its name. Its asset allocation will become more
conservative as it approaches its target retirement date. An investment in a target
retirement fund is generally not guaranteed at any time.
Plan Information Line: (866) 772-4012
Plan website: dc401a.ingplans.com
(continued from other side)
Understanding the payout options for the DC 401(a) Retirement Plan
Stay in the Plan
By postponing payouts, you can continue to take advantage of
these benefits: a wide choice of investment options, educational
opportunities, planning and investing tools, professional advice
services, assistance from local representatives and the convenience
of managing your DC 401(a) Retirement Plan account online
and by phone.
Start the payout
The DC 401(a) Retirement Plan offers these flexible payout options:
Rollover. You can move eligible amounts (that meet IRS rules)
into another 401, 403(b) or governmental 457(b) plan that accepts
rollovers, to a traditional IRA or (if rolled over directly) to a Roth IRA.
Lump sum. You may take all or a portion of your account balance
as a lump sum.
Combination of payout options. You may leave the money in
your account, subject to RMD rules, or select a combination of
payout options. For example, depending on your account balance,
you could take a partial lump sum, roll over some money into an
IRA and leave the rest in the DC 401(a) Retirement Plan.
•
Installments
•
Dollar amounts
•
Required Minimum Distributions (RMDs)
•
Rollover
Next steps
•
Lump sum
•
Combination of payout options
If you are close to retirement age or retiring, it is important to
evaluate your payout options carefully. Developing a withdrawal
strategy is a critical part of the retirement planning process.
For assistance with comparing the options, call (866) 772-4012.
You should consult with a tax or legal adviser before making
a decision.
Amounts that are distributed to you will be subject to applicable
federal, state and DC income tax withholding.
Installments. You may receive payments over a specified
number of months or years. The amount of each installment
will be calculated by dividing your account balance at the end
of each period by the remaining number of payments.
Dollar amounts. You can receive a specific dollar amount each
month or year until your account balance is exhausted.
RMDs. You can put off taking the money until the law requires
you to begin annual minimum withdrawals by April 1 following
the year in which you reach age 70½ or the year in which you
retire, whichever is later.
You can get information and forms online or by phone to help
you with your payout options.
•
Go to dc401a.ingplans.com > Plan Information > Plan Highlights.
Select either Distributions from Your Account or Distribution
Options When Separating From Service.
•
Call the Plan Information Line at (866) 772-4012.
Take control of your financial future
The District of Columbia’s dynamic education program is available to you at no charge.
COLUM BIA
O THE DISTRIC T OF
EN T OF
MENT
MEN
G
THE GOVERN
TE FOR
AT
ESEN TS THIS CER TIFICA
BY PRESEN
HEREBY
TING
CO
SUCCES SFULLLY COMPLE
1: Getting Started
ack 1
Track
If you haven’t joined in yet, don’t miss your chance! Four tracks of live interactive seminars and
online on-demand courses cover basic concepts to advanced financial strategies. Take at least
three of four seminars in a track by September 2014 to earn a certificate of completion!
For live seminars, go to dc401a.ingplans.com or call (866) 772-4012.
Officer
Office of the Chief Financial
Human Resources
D.C. Department of
District of Columbia
Government of the
3028984.G.P
For on-demand courses, go to
ing.us/individuals/retirement/seminar-library.
Select a topic, then sign the guest book using
your work e-mail address.
Contact Information:
dc401a.ingplans.com
(866) 772-4012
DC Local Office:
441 4th Street NW
Room 340 North
Plan administration services provided by ING Institutional Plan Services, LLC. Information from registered Plan
Service Representatives is for educational purposes only and is not legal, tax or investment advice. Local Plan
Service Representatives are registered representatives of ING Investment Advisors, LLC (member SIPC).
This newsletter is not intended to provide legal, tax or investment advice. For such advice, participants should
contact their legal, tax or investment advisers.
*
quarterly calendar
Transactions made on this date when the
New York Stock Exchange (NYSE) is closed
will be processed the following business
day that the NYSE is open.
• Monday, September 1, 2014
CN0502-17660-0616
SKU#DC 2Q14