Police and Firefighters Member Handbook: Distribution of Member Contributions
This section only applies to members of the 1977 Fund. If you “converted” from another locally administered fund and chose to be covered by the 1977 Fund terms, you do not qualify for a distribution of contributions.
If you end your employment (other than by death or disability) before you complete 20 years of service, you may apply for a distribution of your member contributions plus earned interest. To request a distribution, you can log in to your online member account. You may also contact our Customer Service Center at (888) 286-3544. Your account will earn interest for five years after you end employment. If you continue employment in a non-1977 Fund-covered position with the same employer, your account will earn interest until you end employment.
If you have at least 20 years of service and decide to end employment before you are age eligible for a retirement benefit, your member contributions will be held until you qualify for a benefit. You qualify for a reduced benefit at age 50. You qualify for an unreduced benefit at age 52. Your member contributions are used to fund your retirement benefit.
If you end employment before you complete 20 years of service, you can withdraw your 6 percent member contributions and earned interest from the Fund. You may receive your distribution by:
- direct payment to you, or
- direct rollover.
Payment Directly to You
You will have 60 days to directly roll over your contribution to a traditional Individual Retirement Account (IRA) or an eligible employer plan that will accept rollovers. If you do not roll over your contribution in 60 days, the taxable portion will be subject to a 20 percent federal income tax withholding. The federal tax is mandatory and a state tax may also apply. The distribution is taxed in the year you receive it.
If you receive a distribution of your 6 percent contribution before age 55 and you do not roll it over, you may have to pay an early distribution tax penalty. The penalty equals 10 percent of the taxable portion. It is in addition to the regular income tax. For more information, contact our Customer Service Center at (888) 286-3544, Monday through Friday from 8 a.m. to 8 p.m. EST. You may also e-mail your questions to firstname.lastname@example.org.
A direct rollover is a direct payment of some or all of your 6 percent contributions to:
- a Traditional IRA, or
- an eligible employer plan (such as a 403(b) tax sheltered annuity, a 457 deferred compensation plan), or
- a 401(a) qualified plan that will accept the rollover.
You can choose a direct rollover for all or a portion of your eligible distribution. You will not be taxed on your direct rollover until you withdraw the funds from the rollover account. There is no income tax withholding on the amount you roll over.
To request a distribution, you can log in to your online member account. You may also call (888) 286-3544 to speak with a customer service representative. The Customer Service Center is open Monday through Friday from 8 a.m. to 8 p.m. EST. You may also e-mail your questions to email@example.com.
Section Six: Taxation of Retirement Benefits