Benefits Bulletin 05 10 17

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TIAA 401(a) Cash Match Plan Termination FAQs

#1
Why is APS terminating the TIAA Cash Match plan?

The plan is being terminated because it is no longer being used for the School Board cash match contributions; these contributions are now being directed to your vendor of choice, either Lincoln Financial or AXA/PlanMember. Once that change was made, we wanted employees to have options with regard to the money in their TIAA accounts.

#2
Is there still a cash match on my 403(b)/457(b) contributions?

Yes. As February 28, 2017, the School Board match is being directed to your own 403(b) account with either Lincoln Financial or AXA/PlanMember, whichever you have chosen as your vendor. This change was announced via letter of January 30, 2017.

#3
Will cash match contributions impact the IRS limit on my contributions?

No. Employer 403(b) contributions are not included the IRS total 403(b) limit on employee contributions.

#4
What is the effective date of the TIAA plan termination?

May 10, 2017

#5
What are my options with regard to the funds in my 401(A) cash match account?

A.
Leave the funds with TIAA:

You have an individual contract with TIAA that will continue to be serviced by TIAA. Your account will maintain its tax-deferred status and you may still transfer between investment accounts within your annuity. No additional contributions may be made to this contract. You can find out your rate on your TIAA account at TIAA.org or by calling 1-800-842-2252.

B.
Roll over your plan assets into another eligible plan or an Individual Retirement Account (IRA):

Funds invested with TIAA may be rolled into another eligible plan (with Lincoln Financial or AXA) or another IRA to the extent permitted by the terms of the contracts. This transaction is not a taxable event and there are no distribution fees.

C.
Full or partial withdrawal:

Take a distribution of your TIAA account held under the 401(a) Plan in any of the options available under the 401(a) Plan. You may elect a full lump sum, partial withdrawal, installment payments or an annuity option. If you elect a partial withdrawal or installment payments, the remainder of your account will be treated as described in Option A listed above.

Any amount that is paid directly to you from your retirement account will be taxed as ordinary income. In addition, if you are not age 59½ at the time of any distribution to you, you may be subject to an additional 10% early distribution tax penalty as defined by the IRS.

#6
If I want to roll the funds over or take a distribution, when can I submit the request?

These options are available after the plan termination date, which is May 10, 2017.

#7
Should I take a cash distribution of funds?

APS cannot advise you on this decision; you are strongly encouraged to contact TIAA to discuss the financial impact of your options, and also to consult with a tax advisor.

#8
How do I request a rollover or distribution of funds?

Requests must be initiated directly with TIAA. Contact TIAA at 1-800-842-2252.

If you are rolling the funds over to your APS-approved 403(b)/457(b) account, it must also go through approval with TSA Consulting Group, the APS third-party administrator for the supplemental retirement program.

Contact TSA Consulting Group by phone at 1-888-796-3786, or send an email to recordkeeping@tsacg.com.

#9
If I roll over to AXA/PlanMember or Lincoln Financial, will that company charge me a fee to do so?

You will not be charged a fee by AXA/PlanMember or Lincoln Financial for rolling funds to your accounts with those vendors.

#10
I also have a 403(b) account with TIAA, from when TIAA was an approved APS 403(b) vendor. Is the 403(b) plan also being terminated?

No. Only the Cash Match plan is being terminated, which means you can now roll over or take a distribution of funds from the 401(a) account. Any funds you have in a TIAA 403(b) will remain in place under the same rules.