How Taxes Affect Your Benefit

Eligible Rollover Distributions

The Plan is a tax-qualified plan that meets the requirements of the Internal Revenue Code Section 401(a) and ERISA. You (or in some cases your beneficiary) can defer paying taxes if your lump sum payment from your Plan Account is rolled over or transferred directly to a tax-qualified plan of another employer, a 403(b) plan, 457 plan or a traditional individual retirement account (IRA) or Roth IRA. A qualified plan is a plan sponsored by your employer that meets certain IRS requirements and is therefore subject to special tax rules. You (or in some cases your beneficiary) may also defer paying taxes if you roll over your lump-sum distribution to a 403(b) plan (which is generally sponsored by a tax-exempt entity) or a 457 plan (which is generally sponsored by a state or local government), as long as that plan chooses to accept your rollover. You may elect either a direct rollover (in which the distribution is transferred directly to the recipient plan or IRA) or you may roll over the distribution within 60 days of receiving it from the Plan. Please also note that if you receive a hardship withdrawal, you will not be allowed to roll over your withdrawal.

Note that you may roll over all, or a portion of, your Plan Account to a Roth IRA. A rollover to a Roth IRA will not defer taxes on the amount of the rollover. However, when you take a distribution from the Roth IRA, the earnings on the amount rolled over from the Plan will not be taxed, as long as you are at least 59½ and the Roth IRA account is at least five years old. It is not the responsibility of the Plan Administrator to determine if you are eligible to make a rollover to a Roth IRA.

Lump sum distributions to your Spouse or to a spousal alternate payee are also eligible for a direct rollover or a 60-day rollover. Distributions to a non-Spouse beneficiary may be rolled over using the direct rollover method only and are subject to special rules.