Distribution Options
A Participant is entitled to a distribution of the amounts credited to his or her Accounts when the Participant retires, dies, becomes disabled or otherwise terminates employment with the College.
Retirement income options are those offered by TIAA-CREF and are described in TIAA-CREF booklets available in the Human Resources Office or online at www.tiaa.org/public/tcm/williams. If a Participant, however, is married at the time distributions begin, the presumptive form of distribution provides for an annuity for his or her life followed by a survivor benefit to the surviving spouse. In order to receive benefits in some other form that does not provide for this kind of spousal protection, a Participant needs to provide the signed and notarized consent of his or her spouse.
If the total amount credited to a Participant’s Plan Accounts does not exceed $1,000, the total amount will be distributed to the Participant as soon as practicable after the Participant’s termination of employment or retirement unless the Participant elects to make a rollover. A Participant’s written consent will be required for any distribution if the Participant’s Accounts value is $1,000 or more.
Once a Participant terminates employment, benefits must begin to be paid by April 1 of the calendar year following the calendar year in which he or she reaches age 70½, except for pre-1987 contributions and related earnings, distribution of which can begin as late as age 75.
Optional Form of Benefit – Lump Sum
Assuming a Participant receives spousal consent (to the extent applicable), distribution in a lump sum is generally permitted. The availability of lump sum payments is subject to TIAA-CREF’s restriction that lump sum distributions of TIAA Traditional Annuity accumulations (not CREF accumulations) can only be made in substantially equal annual payments over a period of ten years. Any such amounts withdrawn before age 59½ may be subject to a 10% tax penalty.
Death Benefits Prior to Distribution
If a Participant dies prior to commencing distribution under the Plan, federal law requires that the beneficiary for at least 50 percent of the Participant’s account be his or her surviving spouse, unless the Participant elects otherwise with the spouse’s written consent. If a Participant elects to designate a non-spouse beneficiary prior to age 35, he or she needs to reaffirm that designation upon reaching age 35. The portion of a Participant’s account that is not paid to his or her spouse will be paid to any other beneficiary designated by the Participant or to the Participant’s estate if no other beneficiary is designated.
Rollover Distributions
A Participant who is entitled to receive a distribution which is an “eligible rollover distribution” may roll over all or a portion of such distribution, either directly or within 60 days after receipt, into an eligible retirement plan (generally, a Code Section 403(b) plan, 401(a) plan or a 457(b) plan sponsored by a State or political subdivision of a State or IRA). An eligible rollover distribution, in general, is any distribution other than an annuity payment, a required minimum distribution, a payment which is part of a fixed period payment over ten or more years or a hardship distribution. Under current law, an eligible rollover distribution that is not directly rolled over will be subject to automatic 20% federal income tax withholding.
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