General information
Processing time: 5-7 business days after receipt of all qualifying documents
Distribution Fee: generally $75 - check the plan information app to verify per plan
Overnight check fee $50.
For hardship guidance: Helpdesk : The Trust Company of Tennessee (freshdesk.com)
For RMD Call Guidance: Helpdesk : The Trust Company of Tennessee (freshdesk.com)
For ESOP Call Guidance: Helpdesk : The Trust Company of Tennessee (freshdesk.com)
A plan participant CANNOT terminate employment just to take a distribution, then return to work. This could put the plan at risk of disqualification.
Reminders
The process
We will send ppwk for elections and signatures.
Once returned - it can take a few days before we can review.
If we need additional informaiton, we will reach out.
If not, no news is good news. It can take anywhere from 5-7 business days to process the request.
After that, the check will be mailed or ACH initiated.
If sending via email, send from PlanInfo@thetrust.com as encrypted email.
Use the plan info app to choose the correct ppwk - spousal vs nonspousal.
Packets generally include:
Letter explaining options.
Form/Application to complete.
W4R for FTW elections, if applicable.
Special Tax Notice, if applicable.
Rollover requests will be mailed to the address we have on file. We don't mail to the institution. It's the ptps responsibility to get it to the right location.
Qualified Roth Distributions
Qualified distributions from a Roth 401(k) or a Roth IRA are tax-free and penalty-free. Non-qualified distributions may be subject to income taxes, and a 10% early distribution penalty on any taxable amount. An RMD must be taken before the rollover.
What is a qualified distribution from a designated Roth account?
A qualified distribution is generally a distribution that is made after a 5-taxable-year period of participation and is either:
1. made on or after the date you attain age 59½
2. made after your death, or
3. attributable to your being disabled.
If a distribution is made to your alternate payee or beneficiary, then your age, death or disability is used to determine whether the distribution is qualified. The only exception is when the alternate payee or surviving spouse rolls over the distribution to his or her own employer’s designated Roth account, in which case their own age, death or disability is used to determine whether the distribution is qualified.
A qualified distribution from a designated Roth account is not included in gross income.
We can designate distributions come from the Roth source, but we cannot designate funds to come from Roth basis or gains. Participants will not be double taxed at any point on Roth distributions, whether qualified or not.
Taxes
The Special Tax Notice - Rollover Options provides guidance for plan participants. This must be supplied to all plan participants requesting a distribution that is eligible for rollover (the exceptions are Hardships, RMDs, and ADP/ACP refunds).
This notice is a part of the distribution request packet. If it needs to be sent separately, the PDF is saved.
Forms for Tax elections for distributions include Form W4R and the Optional State Tax Withholding Form.
The election from W4R is included in the distribution request packet.
For RMD only requests, we may not need the distribution paperwork. Those participants can receive Form W4R separately.
Optional State Tax Withholding Forms can be supplied upon request. Plan participants must advise if they do not want state taxes withheld. For states with mandatory state taxes, the processors will have to manually adjust the disbursement.
Receipt of these forms follow the same process of distribution paperwork. Please see the location of saved forms below.
Tax forms saved here with distribution forms: L:\FORMS\DISTRIBU\DISTRIBUTION FORMS
Completed tax forms are here: L:\Alloca\Installment Election Forms\Non-Periodic, W-4R Forms and Tax Forms
If you see a signed Non-Periodic Form, those were received before 2023.
In 2023, the law changed to allow ONLY whole #s as FTW elections.
If allowed, FTW elections outside of the mandatory 20% are saved in Relius UDF #69.
Another form we very seldom use is Form W4P. This form is sent only for pension and annuity payments. The only time CSR should send this form is when specifically directed to do so.
Plans that use the form include ELD defined benefit plan and Sweetwater Utilities Board defined benefit plan.
10% Early Withdrawal Penalty (excerpt from the Special Tax Notice referenced above)
If you are under age 59-1/2, you will have to pay the 10% additional income tax on early distributions for any payment from the Plan (including amounts withheld for income tax) that you do not roll over, unless one of the exceptions listed below applies. This tax applies to the part of the distribution that you must include in income and is in addition to the regular income tax on the payment not rolled over.
Force out Provisions
Millenium Trust Company has been renamed Inspira Financial Trust, LLC effective Jan 17, 2024.