Distributions & withdrawals

FAQs

"Distributions" refers to money coming out of your retirement plan – like a withdrawal or a rollover to another institution. The amount you can take out of your account depends on the type of retirement distribution and your plan's rules, which can be found on the participant site on the Plan Highlights page.

Retirement plan participants can typically take a distribution from the employee website.

Note: Former Newport, CoPilot, and PAi users should use this link.

If not, your employer can provide you with a form.

Please allow 5-10 business days for processing of withdrawals. Once the request is processed, you will see the fund withdrawal from your account via the employee website. An email confirmation will be sent once the withdrawal is complete.

As a plan participant, you are generally required to take an RMD if you meet both of the following conditions: 

  • You will reach your applicable RMD age by the end of the calendar year, and  

  • You are either no longer employed by the plan sponsor, or own more than 5% of the company sponsoring the plan, regardless of employment status 

Many plans defer these types of distributions for participants who are still employed after reaching their applicable RMD age and own less than 5% of the company. Availability of this deferral depends on the terms of the specific plan.

Eligible designated beneficiaries of inherited retirement accounts must also take RMDs, although there are specific rules regarding timing (whether the original owner had already started taking RMDs) and the type of beneficiary (spouse or non-spouse). 

The SECURE 2.0 Act changed the age at which RMDs must begin. Your applicable RMD age depends on your birth year:

Birth Year RMD Age
Before July 1, 1949  70½ 
July 1, 1949 – 1950  72
1951 – 1959  73
1960 or later  75

 

Usually, your first RMD must be taken by April 1st the year after you reach your applicable RMD age. Some plans permit you to delay your first RMD until the year you retire from the employer sponsoring the plan, regardless of age.  

After your first RMD, you must take an RMD by December 31st each year. 

If you own, or are considered to own, more than 5% of the company sponsoring the plan, you are not permitted to delay your RMD until retirement. 

 

The amount of your RMD is calculated annually based on IRS life expectancy factors and the balance of your 401(k) account at the end of the prior year. If you fail to take your RMD as required, you’ll be penalized for up to 25% of the amount that wasn’t taken but should have been. The penalty may be reduced if the missed RMD is corrected in accordance with IRS rules. 

An RMD is the minimum amount that retirement plan participants are required to annually withdraw from their retirement account(s) starting at a certain age.

You will receive Form 1099-R if you took a distribution of $10 or more from your retirement plan during the previous tax year or you had an outstanding loan balance from your plan that became a taxable distribution. Ascensus will send a hardcopy of Form 1099-R by January 31 to participants who did not choose eDelivery; please allow up to two weeks for it to arrive. If you have not received your 1099-R by mid-February, the quickest way to obtain a copy is by logging into your account online.

Participant Support

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