Distributions - Former Employees

Once you leave employment, you have a variety of options and are eligible to take a distribution at any time.

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If you have determined that you are eligible for a distribution, follow planwithease instructions to make your request.

Education-Related Employers
Distribution Summary

Wait to take a distribution

When you separate from employment, your money may stay fully invested in RIC. If you choose to leave your money invested in RIC, no forms are necessary. Your pretax money continues to defer taxes (post-tax Roth assets, if offered in your plan, continue to grow tax-free) until you decide to take income or reach the IRS required beginning date for required minimum distributions (RMD).

You continue to have access to your account to make investment selection changes, provider changes, or distributions at anytime (some providers may have restrictions and/or fees).

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Income options (taxable)

To request a distribution, follow planwithease instructions and contact your provider directly to request the required paperwork. Some of the RIC providers allow you to take income in one or a combination of the following ways (some providers may have product restrictions and fees):

  • Total lump sum distribution (ask if there surrender charges)
  • Partial lump sum distributions
  • Systematic/periodic payments (flexible)
  • Lifetime payments (irrevocable)

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Tax treatment of distributions

  • 403b Pretax Assets
    Taxable distributions of pretax 403b assets are taxed as ordinary income and reported on an IRS 1099 Form. 403b assets have no penalties for qualified withdrawals.

  • 403b Roth Post-tax (Roth) Assets (if allowed in your plan)
    Roth contributions are tax-free at distribution but the earnings (if any) are tax-free only if qualified.

"Qualified" Roth distributions require all the following:

  • You have a distributable event
    • Separation of employment
    • Age 59 ½
    • Disability
    • Death
  • You have held your account for 5 years or longer and
  • You are either 59 ½ or older, disabled, or deceased

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Required minimum distributions (RMD)

The IRS requires that you begin taking annual minimum distributions by the IRS required beginning date. 

If you fail to begin taking your requirement minimum payments on time, you will be subject to an IRS penalty on the amount you should have taken.

Your provider will calculate your required minimum distribution amount upon request. You may elect to receive the entire value of your account or you may receive periodic payments over your life expectancy. If you do not elect a lifetime payment option, you have the option to take more than your required minimum amount at anytime.

To request a distribution, please contact your provider.

  

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If you have determined that you are eligible for a distribution, follow planwithease instructions to make your request.

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Purchase IPERS credits

When you file for IPERS benefits in retirement, you may request a transfer of retirement account assets from a pretax 403b, 457, 401a, 401k, and tax-deductible or rollover IRA to IPERS to purchase eligible service credits.

To explore the possible benefits of purchasing IPERS and determine your eligibility, review Service Purchase on the IPERS website. If you have questions, contact IPERS toll free at 800-622-3849 (281-0020 in Des Moines) or email them at Info@ipers.org. If IPERS approves your request to purchase, they will send you a cost quote.

To rollover your pretax RIC 403b plan assets to make the purchase:

  • Contact your RIC investment provider and ask if they require you complete their form. Be sure to ask your provider if surrender charges or fees will apply.
  • Forward to us your IPERS Rollover/Transfer form and a copy of your IPERS cost quote electronically or by fax (515-281-5102).
  • RIC will request the rollover from your provider and send you a copy of your rollover paperwork (signed by RIC).
  • Your provider will send you a check for the amount you requested.
  • Forward the check and the IPERS forms to IPERS to complete the purchase.
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If you have determined that you are eligible for a distribution, follow planwithease instructions to make your request.

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Rollovers

If you leave employment, you have the option to roll over all or a portion of your 403b assets to another eligible plan. This is a non-taxable event.

If the money you wish to roll is with an active provider, contact them directly to request the required paperwork. Before rolling your money, ask you provider if there are restrictions or penalties.

To request a withdrawal, complete your provider's distribution form and print an approval letter from planwithease.

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