Distribution Election Form for Plans Providing Annuities
Landscape, Irrigation & Lawn Sprinkler Industry Trusts
Defined Contribution Pension Trust
c/o Southern California Pipe Trades Administrative Corporation
501 Shatto Place, 5th Floor, Los Angeles, California 90020 (800) 595-7473/Fax (213)365-0699
Distribution Election Form
Application & , Spouse’s Consent & Authorization
Complete all applicable sections and return pages 1 -– 3 4 to the address above. (Save pages 5-7 for your records.)
(Save pages 5-10 for your records.)
SECTION 1—PARTICIPANT INFORMATION
Participant Name Participant Social Security Number
Street Address (the address to which payments to you and Form 1099-R should be sent)
City, State, Zip Code Phone Number and/or Email Address
If this is a foreign address, additional forms are required. They are available from the Trust Fund Office.
MARITAL STATUS: ( Single ( Married ( Divorced (date of divorce: )
If divorce date is after Plan enrollment, attach divorce settlement papers
MARITAL STATUS (you must mark one): ( I AM MARRIED (Section 6 must be completed) ( I AM NOT MARRIED
Last Day Worked (month / day / year): Date of Birth:_________________________
Type of Withdrawal Requested (you must mark one):
( Normal Retirement at age 65 ( Early Retirement at age 62( Early Retirement at age
( Total Disability (attach copy of SSA disability award) ( Termination of Employment (two-year waiting period)
SECTION 2—PAYMENT OPTIONS—PLEASE SELECT A or, B, C OR D
A DIRECT ROLLOVER TO IRA (NOT AVAILABLE FOR A ROTH IRA)
OR
Choose one of the following options:
Rollover to a Traditional IRA
Rollover to a ROTH IRA (subject to current taxes—complete withholding elections in Sections 3 and 4)
Rollover to a Qualified Employer Plan
DIRECT ROLLOVER TO QUALIFIED EMPLOYER PLAN
IRA OR QUALIFIED PLAN INFORMATION
Any part of my account in the Plan which is eligible for rollover should be directly rolled over to my IRA or qualified employer plan, as I have indicated in this section. (Portion to be rolled over must be more than $500 if transferring less than 100% of amount eligible for rollover.)
NAME AND ACCOUNT # OF IRA OR NEW EMPLOYER PLAN:
MAILING ADDRESS OF PAYEE - ADDRESS WHERE CHECK SHOULD BE MAILED
CAPACITY OF PAYEE: ( Trustee ( Custodian (Check one)
Special Instructions:
B ISSUE CHECK DIRECTLY TO ME (Subject to tax withholding-complete Sections 3 and 4)
FEDERAL TAX WITHHOLDING: Any part of your distribution that is eligible for rollover is subject to 20% federal withholding
STATE TAX WITHHOLDING: State tax will be withheld according to the rules and rates in effect at the time of your distribution. If you reside in a state that requires mandatory withholding, your election to not have taxes withheld will be disregarded, and your distribution will be subject to the statutory minimum required withholding. CHECK ONLY ONE:
( I want state income tax withheld at the applicable rate from the taxable portion of my distribution.
(name of state)
( I do not want to have state income tax withheld from the taxable portion of my distribution.
C JOINT AND SURVIVOR ANNUITY (married participants only)
I understand that if I am married and my vested account balance is $5,000 or more, the normal form of distribution is a Joint and Survivor Annuity. I direct that my benefit be paid as a Joint and 50% Survivor Annuity.
D LIFE ANNUITY OPTION (unmarried participants only)
I understand that if I an unmarried and my vested account balance is $5,000 or more the normal form of distribution is a Life Annuity (no minimum number of payments guaranteed)
SECTION 3—FEDERAL TAX WITHHOLDING
A. Roth IRA Rollover. If you elected to roll over your balance to a Roth IRA in Section 2 above, federal withholding is not mandatory.
( I want _______% or $___________ withheld for federal income tax.
( I do NOT want to have federal income tax withheld from my benefit payment.
Note that if you elect federal income tax withholding on a rollover to a Roth IRA, you will receive a second 1099-R for the withholding amount. If you are under age 59 ½ and you elect withholding on a rollover to a Roth IRA the withheld amount may be subject to a 10% federal early distribution penalty and a state tax penalty where applicable. Consult with your tax advisor to understand the tax implications for you.
B. Direct Payment to You. If you elected to have a check made payable to you in Section 2 above, any part of your distribution that is eligible for rollover is subject to mandatory 20% federal withholding.
( In addition to the mandatory 20% federal withholding I want _______% or $___________ withheld for federal income tax.
SECTION 4—STATE TAX WITHHOLDING
STATE TAX WITHHOLDING: CA State tax will be withheld according to the rules and rates in effect at the time of your distribution. CHECK ONLY ONE:
( I do ( I do NOT want to have CA state income tax withheld from my benefit payments.
SECTION 3—TAX WITHHOLDING ELECTION FOR ANNUITY AND INSTALLMENT PAYMENTS
(COMPLETE ONLY IF YOU HAVE CHOSEN AN ANNUITY OR INSTALLMENT PAYMENTS—C, D OR E ABOVE.)
FEDERAL INCOME TAX WITHHOLDING
( I do ( I do NOT want to have federal income tax withheld from my benefit payments.
STATE INCOME TAX WITHHOLDING
State tax will be withheld according to the rules and rates in effect at the time of your distribution. If you reside in a state that requires mandatory withholding, an election to not have taxes withheld will be disregarded and your distribution will be subject to the statutory minimum required withholding.
( I do ( I do NOT want to have state income tax withheld from my benefit payments. (Name of state: ________)
IMPORTANT: Even if you elect not to have income taxes withheld, you are liable for the payment of federal and state taxes due on the taxable portion of your benefit payment. You may also be subject to tax penalties under the estimated tax payment rules if your payment of estimated tax and withholding are not adequate.
SECTION 5 —WAIVER OF THIRTY-DAY NOTIFICATION AND WAITING PERIOD
The IRS currently requires a thirty-day waiting period following receipt of the enclosed “Your Rollover Options” Notice. The purpose of this waiting period is to allow Plan Participants sufficient time to review tax options before taking a distribution. You have the opportunity to waive this period.
I received the Notice “Your Rollover Options” on (mm/dd/yy) , and
CHECK ONLY ONE: ( I understand that the distribution will not be processed before thirty days have elapsed.
( I understand the explanation of options and choose to waive the thirty-day waiting period.
Signing in Section 6 and marking neither box will constitute your waiver of the thirty-day waiting period.SECTION 4—WAIVER OF THIRTY-DAY NOTIFICATION AND WAITING PERIOD
The IRS currently requires a thirty-day waiting period following receipt of the enclosed IRS Special Tax Notice. The purpose of this waiting period is to allow Plan Participants sufficient time to review tax options before taking a distribution. You have the opportunity to waive this period.
I received the Special Tax Notice on (mm/dd/yy) , and
CHECK ONLY ONE: ( I understand that the distribution will not be processed before thirty days have elapsed.
( I understand the explanation of options and choose to waive the thirty-day waiting period.
Signing below and marking neither box will constitute your waiver of the thirty-day waiting period.
SECTION 65—PARTICIPANT DISTRIBUTION CONSENT
I hereby Acknowledge that I have been informed by the Plan Administrator as to the only normal form of payment under the plan which is a lump sum distribution and that I have a right to waive that form of payment, that I understand the effect of such a waiver and that I may revoke any waiver prior to the distribution of my benefit.
I have read and understand the attached document titled “Your Rollover Options”.the Special Tax Notice and the Description of Life Annuity/Joint and Survivor Annuity attached. I understand my rights and obligations regarding the joint and survivor annuity or life annuity form of payment. If I had any questions or if I was interested in the annuity options, I have contacted the Plan Administrator prior to making my benefit selection in order that the actual amount of my monthly annuity can be obtained from an insurance company.
In addition, I understand that it is my responsibility to obtain all necessary information from the IRA institution or new employer’s qualified plan for a direct rollover. I certify that (i) this information is correct and (ii) the IRA or employer’s qualified plan will accept a direct rollover whether in cash or in kind (e.g. mutual fund or stock shares). I acknowledge that I have been advised to consult a tax advisor regarding any tax consequences this distribution may have.
I have read and understand all the notices presented and if I had any questions, I have asked them of the Plan Administrator and have received acceptable answers. Upon payment in full of my benefit (account) in the plan, I release the Plan Administrator, the Trustees and my Employer(s) from and against any and all claims I may have or hereafter claim to have against said Administrator, Trustee or Employer(s), but only with respect to my interest in said Plan. Nothing contained in this release is intended to relieve any fiduciary of an obligation or duty under ERISA, or to violate the provisions of Section 410 of ERISA.
I understand that if the vested value of my benefit is less than $15,000 and I do not return this Distribution Election Form within 30 days, I may automatically be paid a lump sum payment in cash and all required (federal and state) income taxes will be withheld. I understand that if my balance is $15,000 or more I may be able to leave my balance in the plan until a later date. I understand that tax withholding elections, including any default elections, are irrevocable and that no correction can be made once the distribution payment has been issued.
I hereby apply to the Landscape, Irrigation and Lawn Sprinkler Industry Defined Contribution Pension Plan for distribution of my Individual Account. I declare under penalty of perjury that (1) as of the date shown in Section 1 above as my Last Day Worked, I have not been, or will not be, working in the geographical jurisdiction of United Association District Council #16, and (2) if I am requested a withdrawal before age 55, I understand that I may not work in said industry in any capacity within the territorial jurisdiction of the United Association of Journeymen and Apprentices of the Plumbing, Pipefitting, Sprinkler Fitting Industry of the United States and Canada during a one-year waiting period, and (3) the information regarding my marital status is true and correct. I understand that any false information may disqualify me for benefits, and that the Trustees have the right to recover any payment made to me because of such false information.
I hereby authorize payment of my vested account balance as indicated above.
X
Signature of Participant Date
Complete all applicable sections and return pages 1-34 to:
Southern California Pipe Trades Administrative Corporation
501 Shatto Place, 5th Floor
Los Angeles, CA 90020
(Save pages 5-10 for your records.)
SECTION 6—SPOUSE’S CONSENT TO WITHDRAWAL FROM ACCOUNT
Applicable only if account balance is $15,000 or more.
IF YOU ARE MARRIED, YOUR SPOUSE MUST COMPLETE THIS SECTION, OR THIS FORM WILL BE RETURNED TO YOU.
Spouse’s Name Spouse’s Social Security Number
I understand that my spouse has requested a withdrawal from the Plan and I hereby consent to and acquiesce in that withdrawal.
The Plan benefits have been explained to me and I have read and understand the Special Tax Notice, the Spouse’s Explanation of Joint and Survivor Annuity (QJSA), and any other material provided, including the description of payment options.
Related questions I had, if any, have been answered to my satisfaction.
I understand that the plan provides for Joint and Survivor annuity distributions and that I am under no obligation to consent to this distribution. I understand that any other possible payment rights or options available to me under the Plan would have been preserved per the terms of the Plan had I not given this consent.
I also acknowledge that I understand the following: (1) the distribution from my spouse’s vested interest in the Plan described above may adversely affect my right to any or all of the following: (a) a Qualified Joint and Survivor Annuity, (b) a Qualified Pre-retirement Survivor Annuity, (c) death benefits, and (d) distribution pursuant to a Qualified Domestic Relations Order; (2) subject to the Internal Revenue Code and Regulations and the terms of the above-named Plan, a distribution of my spouse’s vested interest in the above-named Plan may require my consent; and (3) my consent, once given, is irrevocable.
This consent is given voluntarily, and no coercion or undue influence has been exercised in connection with my decision to consent to the distribution requested by my spouse.
X
Signature of Spouse Date
SECTION 77—CERTIFICATION OF SIGNATURES
The signature ofs of BOTH the Participant and the spouse (if any) must be witnessed by the Southern California Pipe Trades Administrative Corporation OR notarized by a certified Notary Public.
EITHER
Witness by a representative of the Southern California Pipe Trades Administrative Corporation:
ID Provided by Participant ID Provided by Spouse
X
(Signature of SCPTAC Representative) Date
OR
Notary Public:
State of County of
On before me, ,
(date) (name and title of officer (e.g. “Jane Doe, Notary Public”)
personally appeared and ,
(name(s) of signers)
♦ personally known to me ♦ proved to me on the basis of satisfactory evidence
to be the person(s) whose name e(s) is/are subscribed to the within instrument, and acknowledged that he/she/they executed the same in his/her /their authorized capacity(ies) and that by his/her /their signatures(s) on the instrument the person(s) executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
X
(Signature of Notary Public)
[Notary’s Seal]
(Save pages 5-7 for your records)
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SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS
(Safe harbor explanation for plans qualified under IRC § 401(a), § 403(a) annuity plans, or § 403(b) tax sheltered annuities, issued as IRS Notice 2002-3)
This notice explains how you can continue to defer federal income tax on your retirement savings in your retirement plan (the "Plan") and contains important information you will need before you decide how to receive your Plan benefits.
This notice is provided to you by your Plan Administrator (your “Plan Administrator”), because all or part of the payment that you will soon receive from the Plan may be eligible for rollover by you or your Plan Administrator to a traditional IRA or an eligible employer plan. A rollover is a payment by you or the Plan Administrator of all or part of your benefit to another plan or IRA that allows you to continue to postpone taxation of that benefit until it is paid to you. Your payment cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account (formerly known as an education IRA). An "eligible employer plan" includes a plan qualified under section 401(a) of the Internal Revenue Code, including a 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; a section 403(a) annuity plan; a section 403(b) tax-sheltered annuity; and an eligible section 457(b) plan maintained by a governmental employer (governmental 457 plan).
An eligible employer plan is not legally required to accept a rollover. Before you decide to roll over your payment to another employer plan, you should find out whether the plan accepts rollovers and, if so, the types of distributions it accepts as a rollover. You should also find out about any documents that are required to be completed before the receiving plan will accept a rollover. Even if a plan accepts rollovers, it might not accept rollovers of certain types of distributions, such as after-tax amounts. If this is the case, and your distribution includes after-tax amounts, you may wish instead to roll your distribution over to a traditional IRA or split your rollover amount between the employer plan in which you will participate and a traditional IRA. If an employer plan accepts your rollover, the plan may restrict subsequent distributions of the rollover amount or may require your spouse's consent for any subsequent distribution. A subsequent distribution from the plan that accepts your rollover may also be subject to different tax treatment than distributions from this Plan. Check with the administrator of the plan that is to receive your rollover prior to making the rollover.
If you have additional questions after reading this notice, you can contact your Plan Administrator.
SUMMARY
There are two ways you may be able to receive a Plan payment that is eligible for rollover:
(1) Certain payments can be made directly to a traditional IRA that you establish or to an eligible employer plan that will accept it and hold it for your benefit ("DIRECT ROLLOVER"); or
2) The payment can be PAID TO YOU.
If you choose a DIRECT ROLLOVER:
Your payment will not be taxed in the current year and no income tax will be withheld.
You choose whether your payment will be made directly to your traditional IRA or to an eligible employer plan that accepts your rollover. Your payment cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account because these are not traditional IRAs.
The taxable portion of your payment will be taxed later when you take it out of the traditional IRA or the eligible employer plan. Depending on the type of plan, the later distribution may be subject to different tax treatment than it would be if you received a taxable distribution from this Plan.
If you choose to have a Plan payment that is eligible for rollover PAID TO YOU:
You will receive only 80% of the taxable amount of the payment, because the Plan Administrator is required to withhold 20% of that amount and send it to the IRS as income tax withholding to be credited against your taxes.
The taxable amount of your payment will be taxed in the current year unless you roll it over. Under limited circumstances, you may be able to use special tax rules that could reduce the tax you owe. However, if you receive the payment before age 59 1/2, you may have to pay an additional 10% tax.
You can roll over all or part of the payment by paying it to your traditional IRA or to an eligible employer plan that accepts your rollover within 60 days after you receive the payment. The amount rolled over will not be taxed until you take it out of the traditional IRA or the eligible employer plan.
If you want to roll over 100% of the payment to a traditional IRA or an eligible employer plan, you must find other money to replace the 20% of the taxable portion that was withheld. If you roll over only the 80% that you received, you will be taxed on the 20% that was withheld and that is not rolled over.
Your Right to Waive the 30-Day Notice Period.
Generally, neither a direct rollover nor a payment can be made from the plan until at least 30 days after your receipt of this notice. Thus, after receiving this notice, you have at least 30 days to consider whether or not to have your withdrawal directly rolled over. If you do not wish to wait until this 30-day notice period ends before your election is processed, you may waive the notice period by making an affirmative election indicating whether or not you wish to make a direct rollover. Your withdrawal will then be processed in accordance with your election as soon as practical after it is received by the Plan Administrator.
MORE INFORMATION
I. PAYMENTS THAT CAN AND CANNOT BE ROLLED OVER
II. DIRECT ROLLOVER
III. PAYMENT PAID TO YOU
IV. SURVIVING SPOUSES, ALTERNATE PAYEES, AND OTHER BENEFICIARIES
RETAIN FOR YOUR RECORDS
I. PAYMENTS THAT CAN AND CANNOT BE ROLLED OVER
Payments from the Plan may be "eligible rollover distributions." This means that they can be rolled over to a traditional IRA or to an eligible employer plan that accepts rollovers. Payments from a plan cannot be rolled over to a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account. Your Plan administrator should be able to tell you what portion of your payment is an eligible rollover distribution.
After-tax Contributions. If you made after-tax contributions to the Plan, these contributions may be rolled into either a traditional IRA or to certain employer plans that accept rollovers of the after-tax contributions. The following rules apply:
a. Rollover into a Traditional IRA. You can roll over your after-tax contributions to a traditional IRA either directly or indirectly. Your plan administrator should be able to tell you how much of your payment is the taxable portion and how much is the after-tax portion.
If you roll over after-tax contributions to a traditional IRA, it is your responsibility to keep track of, and report to the Service on the applicable forms, the amount of these after-tax contributions. This will enable the nontaxable amount of any future distributions from the traditional IRA to be determined.
Once you roll over your after-tax contributions to a traditional IRA, those amounts CANNOT later be rolled over to an employer plan.
b. Rollover into an Employer Plan. You can roll over after-tax contributions from an employer plan that is qualified under Code section 401(a) or a section 403(a) annuity plan to another such plan using a direct rollover if the other plan provides separate accounting for amounts rolled over, including separate accounting for the after-tax employee contributions and earnings on those contributions. You can also roll over after-tax contributions from a section 403(b) tax-sheltered annuity to another section 403(b) tax-sheltered annuity using a direct rollover if the other tax-sheltered annuity provides separate accounting for amounts rolled over, including separate accounting for the after-tax employee contributions and earnings on those contributions. You CANNOT roll over after-tax contributions to a governmental 457 plan. If you want to roll over your after-tax contributions to an employer plan that accepts these rollovers, you cannot have the after-tax contributions paid to you first. You must instruct the Plan Administrator of this Plan to make a direct rollover on your behalf. Also, you cannot first roll over after-tax contributions to a traditional IRA and then roll over that amount into an employer plan.
The following types of payments cannot be rolled over:
a. Payments Spread over Long Periods. You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least once a year and that will last for:
8. your lifetime (or a period measured by your life expectancy), or
9. your lifetime and your beneficiary's lifetime (or a period measured by your joint life expectancies), or
10. a period of 10 years or more.
b. Required Minimum Payments. Beginning when you reach age 70 1/2 or retire, whichever is later, a certain portion of your payment cannot be rolled over because it is a "required minimum payment" that must be paid to you. Special rules apply if you own more than 5% of your employer.
c. Hardship Distributions. A hardship distribution cannot be rolled over.
d. ESOP Dividends. Cash dividends paid to you on employer stock held in an employee stock ownership plan cannot be rolled over.
e. Corrective Distributions. A distribution that is made to correct a failed nondiscrimination test or because legal limits on certain contributions were exceeded cannot be rolled over.
f. Loans Treated as Distributions. The amount of a plan loan that becomes a taxable deemed distribution because of a default cannot be rolled over. However, a loan offset amount is eligible for rollover, as discussed in Part III below. Ask the Plan Administrator of this Plan if distribution of your loan qualifies for rollover treatment.
The Plan Administrator of this Plan should be able to tell you if your payment includes amounts that cannot be rolled over.
II. DIRECT ROLLOVER
A DIRECT ROLLOVER is a direct payment of the amount of your Plan benefits to a traditional IRA or an eligible employer plan that will accept it. You can choose a DIRECT ROLLOVER of all or any portion of your payment that is an eligible rollover distribution, as described in Part I above. You are not taxed on any taxable portion of your payment for which you choose a DIRECT ROLLOVER until you later take it out of the traditional IRA or eligible employer plan. In addition, no income tax withholding is required for any taxable portion of your Plan benefits for which you choose a DIRECT ROLLOVER. This Plan might not let you choose a DIRECT ROLLOVER if your distributions for the year are less than $200.
DIRECT ROLLOVER to a Traditional IRA. You can open a traditional IRA to receive the direct rollover. If you choose to have your payment made directly to a traditional IRA, contact an IRA sponsor (usually a financial institution) to find out how to have your payment made in a direct rollover to a traditional IRA at that institution. If you are unsure of how to invest your money, you can temporarily establish a traditional IRA to receive the payment. However, in choosing a traditional IRA, you may wish to make sure that the traditional IRA you choose will allow you to move all or a part of your payment to another traditional IRA at a later date, without penalties or other limitations. See IRS Publication 590, Individual Retirement Arrangements, for more information on traditional IRAs (including limits on how often you can roll over between IRAs).
DIRECT ROLLOVER to a Plan. If you are employed by a new employer that has an eligible employer plan, and you want a direct rollover to that plan, ask the plan administrator of that plan whether it will accept your rollover. An eligible employer plan is not legally required to accept a rollover. Even if your new employer's plan does not accept a rollover, you can choose a DIRECT ROLLOVER to a traditional IRA. If the employer plan accepts your rollover, the plan may provide restrictions on the circumstances under which you may later receive a distribution of the rollover amount or may require spousal consent to any subsequent distribution. Check with the plan administrator of that plan before making your decision.
DIRECT ROLLOVER of a Series of Payments. If you receive a payment that can be rolled over to a traditional IRA or an eligible employer plan that will accept it, and it is paid in a series of payments for less than 10 years, your choice to make or not make a DIRECT ROLLOVER for a payment will apply to all later payments in the series until you change your election. You are free to change your election for any later payment in the series.
RETAIN FOR YOUR RECORDS
Change in Tax Treatment Resulting from a DIRECT ROLLOVER. The tax treatment of any payment from the eligible employer plan or traditional IRA receiving your DIRECT ROLLOVER might be different than if you received your benefit in a taxable distribution directly from the Plan. For example, if you were born before January 1, 1936, you might be entitled to ten-year averaging or capital gain treatment, as explained below. However, if you have your benefit rolled over to a section 403(b) tax-sheltered annuity, a governmental 457 plan, or a traditional IRA in a DIRECT ROLLOVER, your benefit will no longer be eligible for that special treatment. See the sections below entitled "Additional 10% Tax if You Are under Age 59 1/2" and "Special Tax Treatment if You Were Born before January 1, 1936."
III. PAYMENT PAID TO YOU
If your payment can be rolled over (see Part I above) and the payment is made to you in cash, it is subject to 20% federal income tax withholding on the taxable portion (state tax withholding may also apply). The payment is taxed in the year you receive it unless, within 60 days, you roll it over to a traditional IRA or an eligible employer plan that accepts rollovers. If you do not roll it over, special tax rules may apply.
Income Tax Withholding:
Mandatory Withholding. If any portion of your payment can be rolled over under Part I above and you do not elect to make a DIRECT ROLLOVER, the Plan is required by law to withhold 20% of the taxable amount. This amount is sent to the IRS as federal income tax withholding. For example, if you can roll over a taxable payment of $10,000, only $8,000 will be paid to you because the Plan must withhold $2,000 as income tax. However, when you prepare your income tax return for the year, unless you make a rollover within 60 days (see "Sixty-Day Rollover Option" below), you must report the full $10,000 as a taxable payment from the Plan. You must report the $2,000 as tax withheld, and it will be credited against any income tax you owe for the year. There will be no income tax withholding if your payments for the year are less than $200.
Voluntary Withholding. If any portion of your payment is taxable but cannot be rolled over under Part I above, the mandatory withholding rules described above do not apply. In this case, you may elect not to have withholding apply to that portion. If you do nothing, an amount will be taken out of this portion of your payment for federal income tax withholding. To elect out of withholding, ask the Plan Administrator for the election form and related information.
Sixty-Day Rollover Option. If you receive a payment that can be rolled over under Part I above, you can still decide to roll over all or part of it to a traditional IRA or to an eligible employer plan that accepts rollovers. If you decide to roll over, you must contribute the amount of the payment you received to a traditional IRA or eligible employer plan within 60 days after you receive the payment. The portion of your payment that is rolled over will not be taxed until you take it out of the traditional IRA or the eligible employer plan.
You can roll over up to 100% of your payment that can be rolled over under Part I above, including an amount equal to the 20% of the taxable portion that was withheld. If you choose to roll over 100%, you must find other money within the 60-day period to contribute to the traditional IRA or the eligible employer plan, to replace the 20% that was withheld. On the other hand, if you roll over only the 80% of the taxable portion that you received, you will be taxed on the 20% that was withheld.
Example: The taxable portion of your payment that can be rolled over under Part I above is $10,000, and you choose to have it paid to you. You will receive $8,000, and $2,000 will be sent to the IRS as income tax withholding. Within 60 days after receiving the $8,000, you may roll over the entire $10,000 to a traditional IRA or an eligible employer plan. To do this, you roll over the $8,000 you received from the Plan, and you will have to find $2,000 from other sources (your savings, a loan, etc.). In this case, the entire $10,000 is not taxed until you take it out of the traditional IRA or an eligible employer plan. If you roll over the entire $10,000, when you file your income tax return you may get a refund of part or all of the $2,000 withheld.
If, on the other hand, you roll over only $8,000, the $2,000 you did not roll over is taxed in the year it was withheld. When you file your income tax return, you may get a refund of part of the $2,000 withheld. (However, any refund is likely to be larger if you roll over the entire $10,000.)
Additional 10% Tax If You Are under Age 59 1/2. If you receive a payment before you reach age 59 1/2 and you do not roll it over, then, in addition to the regular income tax, you may have to pay an extra tax equal to 10% of the taxable portion of the payment. The additional 10% tax generally does not apply to (1) payments that are paid after you separate from service with your employer during or after the year you reach age 55, (2) payments that are paid because you retire due to disability, (3) payments that are paid as equal (or almost equal) payments over your life or life expectancy (or your and your beneficiary's lives or life expectancies), (4) dividends paid with respect to stock by an employee stock ownership plan (ESOP) as described in Code section 404(k), (5) payments that are paid directly to the government to satisfy a federal tax levy, (6) payments that are paid to an alternate payee under a qualified domestic relations order, or (7) payments that do not exceed the amount of your deductible medical expenses. See IRS Form 5329 for more information on the additional 10% tax.
The additional 10% tax will not apply to distributions from a governmental 457 plan, except to the extent the distribution is attributable to an amount you rolled over to that plan (adjusted for investment returns) from another type of eligible employer plan or IRA. Any amount rolled over from a governmental 457 plan to another type of eligible employer plan or to a traditional IRA will become subject to the additional 10% tax if it is distributed to you before you reach age 59 1/2, unless one of the exceptions applies.
Special Tax Treatment If You Were Born before January 1, 1936. If you receive a payment from a plan qualified under section 401(a) or a section 403(a) annuity plan that can be rolled over under Part I and you do not roll it over to a traditional IRA or an eligible employer plan, the payment will be taxed in the year you receive it. However, if the payment qualifies as a "lump sum distribution," it may be eligible for special tax treatment. (See also "Employer Stock or Securities", below.) A lump sum distribution is a payment, within one year, of your entire balance under the Plan (and certain other similar plans of the employer) that is payable to you after you have reached age 59 1/2 or because you have separated from service with your employer (or, in the case of a self-employed individual, after you have reached age 59 1/2 or have become disabled). For a payment to be treated as a lump sum distribution, you must have been a participant in the plan for at least five years before the year in which you received the distribution. The special tax treatment for lump sum distributions that may be available to you is described below.
Ten-Year Averaging. If you receive a lump sum distribution and you were born before January 1, 1936, you can make a one-time election to figure the tax on the payment by using "10-year averaging" (using 1986 tax rates). Ten-year averaging often reduces the tax you owe.
RETAIN FOR YOUR RECORDS
Capital Gain Treatment. If you receive a lump sum distribution and you were born before January 1, 1936, and you were a participant in the Plan before 1974, you may elect to have the part of your payment that is attributable to your pre- 1974 participation in the Plan taxed as long-term capital gain at a rate of 20%.
There are other limits on the special tax treatment for lump sum distributions. For example, you can generally elect this special tax treatment only once in your lifetime, and the election applies to all lump sum distributions that you receive in that same year. You may not elect this special tax treatment if you rolled amounts into this Plan from a 403(b) tax-sheltered annuity contract, a governmental 457 plan, or from an IRA not originally attributable to a qualified employer plan. If you have previously rolled over a distribution from this Plan (or certain other similar plans of the employer), you cannot use this special averaging treatment for later payments from the Plan. If you roll over your payment to a traditional IRA, governmental 457 plan, or 403(b) tax-sheltered annuity, you will not be able to use special tax treatment for later payments from that IRA, plan, or annuity. Also, if you roll over only a portion of your payment to a traditional IRA, governmental 457 plan, or 403(b) tax-sheltered annuity, this special tax treatment is not available for the rest of the payment. See IRS Form 4972 for additional information on lump sum distributions and how you elect the special tax treatment.
Employer Stock or Securities. There is a special rule for a payment from the Plan that includes employer stock (or other employer securities). To use this special rule, 1) the payment must qualify as a lump sum distribution, as described above, except that you do not need five years of plan participation, or 2) the employer stock included in the payment must be attributable to "after- tax" employee contributions, if any. Under this special rule, you may have the option of not paying tax on the "net unrealized appreciation" of the stock until you sell the stock. Net unrealized appreciation generally is the increase in the value of the employer stock while it was held by the Plan. For example, if employer stock was contributed to your Plan account when the stock was worth $1,000 but the stock was worth $1,200 when you received it, you would not have to pay tax on the $200 increase in value until you later sold the stock.
You may instead elect not to have the special rule apply to the net unrealized appreciation. In this case, your net unrealized appreciation will be taxed in the year you receive the stock, unless you roll over the stock. The stock can be rolled over to a traditional IRA or another eligible employer plan, either in a direct rollover or a rollover that you make yourself. Generally, you will no longer be able to use the special rule for net unrealized appreciation if you roll the stock over to a traditional IRA or another eligible employer plan.
If you receive only employer stock in a payment that can be rolled over, no amount will be withheld from the payment. If you receive cash or property other than employer stock, as well as employer stock, in a payment that can be rolled over, the 20% withholding amount will be based on the entire taxable amount paid to you (including the value of the employer stock determined by excluding the net unrealized appreciation). However, the amount withheld will be limited to the cash or property (excluding employer stock) paid to you.
If you receive employer stock in a payment that qualifies as a lump sum distribution, the special tax treatment for lump sum distributions described above (such as 10-year averaging) also may apply. See IRS Form 4972 for additional information on these rules.
Repayment of Plan Loans. If your employment ends and you have an outstanding loan from your Plan, your employer may reduce (or "offset") your balance in the Plan by the amount of the loan you have not repaid. The amount of your loan offset is treated as a distribution to you at the time of the offset and will be taxed unless you roll over an amount equal to the amount of your loan offset to another qualified employer plan or a traditional IRA within 60 days of the date of the offset. If the amount of your loan offset is the only amount you receive or are treated as having received, no amount will be withheld from it. If you receive other payments of cash or property from the Plan, the 20% withholding amount will be based on the entire amount paid to you, including the amount of the loan offset. The amount withheld will be limited to the amount of other cash or property paid to you (other than any employer securities). The amount of a defaulted plan loan that is a taxable deemed distribution cannot be rolled over.
IV. SURVIVING SPOUSES, ALTERNATE PAYEES, AND OTHER BENEFICIARIES
In general, the rules summarized above that apply to payments to employees also apply to payments to surviving spouses of employees and to spouses or former spouses who are "alternate payees." You are an alternate payee if your interest in the Plan results from a "qualified domestic relations order," which is an order issued by a court, usually in connection with a divorce or legal separation.
If you are a surviving spouse or an alternate payee, you may choose to have a payment that can be rolled over, as described in Part I above, paid in a DIRECT ROLLOVER to a traditional IRA or to an eligible employer plan or paid to you. If you have the payment paid to you, you can keep it or roll it over yourself to a traditional IRA or to an eligible employer plan. Thus, you have the same choices as the employee.
If you are a beneficiary other than a surviving spouse or an alternate payee, you cannot choose a direct rollover, and you cannot roll over the payment yourself.
If you are a surviving spouse, an alternate payee, or another beneficiary, your payment is generally not subject to the additional 10% tax described in Part III above, even if you are younger than age 59 1/2.
If you are a surviving spouse, an alternate payee, or another beneficiary, you may be able to use the special tax treatment for lump sum distributions and the special rule for payments that include employer stock, as described in Part III above. If you receive a payment because of the employee's death, you may be able to treat the payment as a lump sum distribution if the employee met the appropriate age requirements, whether or not the employee had 5 years of participation in the Plan.
HOW TO OBTAIN ADDITIONAL INFORMATION
This notice summarizes only the federal (not state or local) tax rules that might apply to your payment. The rules described above are complex and contain many conditions and exceptions that are not included in this notice. Therefore, you may want to consult with the Plan Administrator or a professional tax advisor before you take a payment of your benefits from your Plan. Also, you can find more specific information on the tax treatment of payments from qualified employer plans in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on the IRS's Internet Web Site at , or by calling 1-800-TAX-FORMS.
RETAIN FOR YOUR RECORDS
YOUR ROLLOVER OPTIONS
You are receiving this notice because all or a portion of a payment you are receiving from the Landscape, Irrigation and Lawn Sprinkler Industry Defined Contribution Pension Plan (the “Plan”) is eligible to be rolled over to an IRA or an employer plan. This notice is intended to help you decide whether to do such a rollover.
This notice describes the rollover rules that apply to payments from the Plan and not from a “designated Roth account” because the Plan does not contain designated Roth contributions, rollovers, or earnings. .
Rules that apply to most payments from a plan are described in the “General Information About Rollovers” section. Special rules that only apply in certain circumstances are described in the “Special Rules and Options” section.
GENERAL INFORMATION ABOUT ROLLOVERS
How can a rollover affect my taxes?
You will be taxed on a payment from the Plan if you do not roll it over. If you are under age 59½ and do not do a rollover, you will also have to pay a 10% additional income tax on early distributions (unless an exception applies). However, if you do a rollover, you will not have to pay tax until you receive payments later and the 10% additional income tax will not apply if those payments are made after you are age 59½ (or if an exception applies).
Where may I roll over the payment?
You may roll over the payment to either an IRA (an individual retirement account or individual retirement annuity) or an employer plan (a tax-qualified plan, section 403(b) plan, or governmental section 457(b) plan) that will accept the rollover. The rules of the IRA or employer plan that holds the rollover will determine your investment options, fees, and rights to payment from the IRA or employer plan (for example, no spousal consent rules apply to IRAs and IRAs may not provide loans). Further, the amount rolled over will become subject to the tax rules that apply to the IRA or employer plan.
How do I do a rollover?
There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover.
(1) If you do a direct rollover, the Plan will make the payment directly to your IRA or an employer plan. You should contact the IRA sponsor or the administrator of the employer plan for information on how to do a direct rollover.
(2) If you do not do a direct rollover, you may still do a rollover by making a deposit into an IRA or eligible employer plan that will accept it. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes. This means that, in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of the payment, the portion not rolled over will be taxed and will be subject to the 10% additional income tax on early distributions if you are under age 59½ (unless an exception applies).
How much may I roll over?
If you wish to do a rollover, you may roll over all or part of the amount eligible for rollover. Any payment from the Plan is eligible for rollover, except:
• Certain payments spread over a period of at least 10 years or over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary)
• Required minimum distributions after age 70½ (or after death)
• Corrective distributions of contributions that exceed tax law limitations
If I don’t do a rollover, will I have to pay the 10% additional income tax on early distributions?
If you are under age 59½, 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 is in addition to the regular income tax on the payment not rolled over.
The 10% additional income tax does not apply to the following payments from the Plan:
• Payments made after you separate from service if you will be at least age 55 in the year of the separation
• Payments that start after you separate from service if paid at least annually in equal or close to equal amounts over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary)
• Payments made due to disability
• Payments after your death
• Corrective distributions of contributions that exceed tax law limitations
RETAIN FOR YOUR RECORDS
• Payments made directly to the government to satisfy a federal tax levy
• Payments made under a qualified domestic relations order (QDRO)
• Payments up to the amount of your deductible medical expenses
• Certain payments made while you are on active duty if you were a member of a reserve component called to duty after September 11, 2001 for more than 179 days
If I do a rollover to an IRA, will the 10% additional income tax apply to early distributions from the IRA?
If you receive a payment from an IRA when you are under age 59½, you will have to pay the 10% additional income tax on early distributions from the IRA, unless an exception applies. In general, the exceptions to the 10% additional income tax for early distributions from an IRA are the same as the exceptions listed above for early distributions from a plan. However, there are a few differences for payments from an IRA, including:
• There is no exception for payments after separation from service that are made after age 55.
• The exception for qualified domestic relations orders (QDROs) does not apply (although a special rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be made directly to an IRA of a spouse or former spouse).
• The exception for payments made at least annually in equal or close to equal amounts over a specified period applies without regard to whether you have had a separation from service.
• There are additional exceptions for (1) payments for qualified higher education expenses, (2) payments up to $10,000 used in a qualified first-time home purchase, and (3) payments after you have received unemployment compensation for 12 consecutive weeks (or would have been eligible to receive unemployment compensation but for self-employed status).
Will I owe State income taxes?
This notice does not in general describe State or local income tax rules (including withholding rules). California imposes a 2% state tax penalty for withdrawals if you are under age 59 ½. Withholding of California State tax is optional. The early withdrawal penalty rules vary from state to state. You should consult a properly qualified tax expert who knows about your state’s tax rules before taking any decision relative to this Notice.
SPECIAL RULES AND OPTIONS
If you miss the 60-day rollover deadline
Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the deadline under certain extraordinary circumstances, such as when external events prevented you from completing the rollover by the 60-day rollover deadline. To apply for a waiver, you must file a private letter ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user fee.
For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).
If you were born on or before January 1, 1936
If you were born on or before January 1, 1936 and receive a lump sum distribution that you do not roll over, special rules for calculating the amount of the tax on the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income.
If you roll over your payment to a Roth IRA
You can roll over a payment from the Plan made before January 1, 2010 to a Roth IRA only if your modified adjusted gross income is not more than $100,000 for the year the payment is made to you and, if married, you file a joint return. These limitations do not apply to payments made to you from the Plan after 2009. If you wish to roll over the payment to a Roth IRA, but you are not eligible to do a rollover to a Roth IRA until after 2009, you can do a rollover to a traditional IRA and then, after 2009, elect to convert the traditional IRA into a Roth IRA.
If you roll over the payment to a Roth IRA, a special rule applies under which the amount of the payment rolled over will be taxed.
However, the 10% additional income tax on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within 5 years, counting from January 1 of the year of the rollover). For payments from the Plan during 2010 that are rolled over to a Roth IRA, the taxable amount can be spread over a 2-year period starting in 2011.
If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are qualified distributions will not be taxed (including earnings after the rollover). A qualified distribution from a Roth IRA is a payment made after you are age 59½ (or after your death or disability, or as a qualified first-time homebuyer distribution of up to $10,000) and after you have had a Roth IRA for at least 5 years. In applying this 5-year rule, you count from January 1 of the year for which your first contribution was made to a Roth IRA. Payments from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings after the rollover, including the 10% additional income tax on early distributions (unless an exception applies). You do not have to take required minimum distributions from a Roth IRA during your lifetime. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).
You cannot roll over a payment from the Plan to a designated Roth account in an employer plan.
RETAIN FOR YOUR RECORDS
IF YOUR ARE NOT A PLAN PARTICIPANT
Payments after death of the participant. If you receive a distribution after the participant’s death that you do not roll over, the distribution will generally be taxed in the same manner described elsewhere in this notice. However, the 10% additional income tax on early distributions do not apply, and the special rule described under the section “If you were born on or before January 1, 1936” applies only if the participant was born on or before January 1, 1936.
If you are a surviving spouse. If you receive a payment from the Plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would have had, as described elsewhere in this notice. In addition, if you choose to do a rollover to an IRA, you may treat the IRA as your own or as an inherited IRA.
An IRA you treat as your own is treated like any other IRA of yours, so that payments made to you before you are age 59½ will be subject to the 10% additional income tax on early have the same options the participant would have (for example, you may roll over the payment to your own IRA or an eligible employer plan that will accept it). Payments under the QDRO will not be subject to the 10% additional income tax on early distributions.
If you are a surviving beneficiary other than a spouse. If you receive a payment from the Plan because of the Participant’s death and you are a designated beneficiary other than a surviving spouse, the only rollover option you have is to do a direct rollover to an inherited IRA. Payments from the inherited IRA will not be subject to the 10% additional income tax on early distributions. You will have to receive required minimum distributions from the inherited IRA.
If you are a nonresident alien. If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is generally required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you do a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN for claiming that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Other special rules
If your payments for the year are less than $200, the Plan is not required to allow you to do a direct rollover and is not required to withhold for federal income taxes. However, you may do a 60-day rollover. A mandatory cash-out of $1,000 or less from the Plan will generally be paid directly to you in a single lump sum with proper tax withholding.
You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces’ Tax Guide.
FOR MORE INFORMATION
You may wish to consult with the Plan administrator or payer, or a professional tax advisor, before taking a payment from the Plan. Also, you can find more detailed information on the federal tax treatment of payments from employer plans in: IRS Publication 575, Pension and Annuity Income; IRS Publication 590, Individual Retirement Arrangements (IRAs); and IRS Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are available from a local IRS office, on the web at , or by calling 1-800-TAX-FORM.
RETAIN FOR YOUR RECORDS
DESCRIPTION OF LIFE ANNUITY / JOINT AND SURVIVOR ANNUITY
As a Participant in your Employer's Qualified Retirement Plan, if you have accumulated a benefit of $5,000 ($3,500 may apply to some plans) or more, your benefit will be paid to you under the provisions of the Plan. Details concerning these benefits are as follows.
This notice will explain to you the life annuity and the joint and survivor annuity, which are the forms in which your benefits will be paid unless you make the election provided for in this notice.
If you are unmarried, the plan provides that your benefit must be paid in the form of a life annuity, unless you validly elect another form of payment. A life annuity is a level monthly payment for your lifetime, with no payment continuing after your death to your beneficiary. These payments are guaranteed for your lifetime.
If you are married, the plan provides that your benefit must be paid in the form of a joint and survivor annuity, unless you validly elect another form of payment. A joint and survivor annuity form of payment provides you with a monthly payment for your life, and, upon your death, a monthly payment during your spouse's life equal to at least 50% of the monthly payment you received prior to your death. These payments are guaranteed for the lifetime of you and your spouse. Because your spouse will receive at least 50% survivor payment, the relative financial effect of a joint and survivor annuity is to reduce the monthly payments you would otherwise have received had payments been made to you as a single life annuity.
Unless you elect otherwise, the Plan Administrator will use your vested account balance to purchase either a joint life annuity, if you are married, or a life annuity, if you are unmarried, from an insurance company. The Trustee will then distribute the contract to you as evidence of your right to receive the annuity payments from the insurance company.
The actual level monthly payments made under the annuity contract will depend on the annuity purchase rates used by the insurance company, your age and, if you are married, your spouse's age at the time payments commence, and the amount of your vested account balance at the time the Trustee purchases the annuity contract. The Trustee will charge your account for the cost incurred incident to the purchase of the annuity contract.
To determine the approximate level monthly payments you will receive under any of these annuity options as of your proposed distribution date, divide your vested account balance by the annuity factor below which most closely approximates your situation. Determine your age as of the birth date nearest the proposed distribution date. You may obtain a more accurate factor from the Plan Administrator.
Annuity Factor Table
Married 50% J&S Unmarried Life
Participant’s Annuity Participant’s Annuity
Age Factor Age Factor
55 164.31 55 155.63
56 162.19 56 153.26
57 160.01 57 150.81
58 157.70 58 148.25
59 155.31 59 145.60
60 152.81 60 142.85
61 150.22 61 140.01
62 147.52 62 137.07
63 144.74 63 134.05
64 141.86 64 130.94
65 138.87 65 127.75
NOTE: These annuity factors have been based on the 1983 GAM-UNISEX mortality tables, assuming a 6% interest rate. It is assumed that the spouse is the same age as the participant. The insurance company from which the Plan Administrator purchases the annuity contract may use different factors. Different factors will produce a different monthly payment.
The quotient of your annuity factor divided into your Vested Account Balance represents the approximate monthly payment you will receive during your lifetime if you elect to commence distribution on the proposed distribution date. If you are married, one-half of the quotient represents the approximate monthly payment your spouse will receive after your death, if your spouse survives you.
For example, if you and your spouse both are 65, your Vested Account Balance is $10,000 and you elect the Joint and 50% Survivor Annuity, your approximate monthly payment is $72.01 ($10,000 ÷ 138.87) and, if your spouse survives you, the approximate monthly payment to your surviving spouse is $36.01. If you are unmarried, age 65, and your vested account balance is $10,000, your approximate lifetime monthly payment is $78.28 ($10,000 ÷ 127.75).
The Plan will, upon request, provide a more precise calculation and explanation of the financial effect of electing an annuity form of benefit, rather than a single lump sum payment, that takes into consideration the actual account balance and ages of the participant and spouse, as applicable.
You may elect in writing not to receive your benefits in the form of either a joint and survivor annuity or a life annuity. You must make this election during the 90 day period before your benefits are due to be paid. However, if you are married, your spouse must consent in writing before a Plan representative or notary public to your election. You may also revoke this election before your benefits begin.
In the event you and your spouse elect to waive the joint and survivor annuity, or if you are unmarried, the life annuity form of payment, your benefits will be distributed in an alternative method. These alternative methods are described in your Summary Plan Description. You may also consult your Plan Administrator for details.
NOTE: Your signature on page 3 above constitutes certification that you have read this notice and that you understand your rights and obligations regarding the joint and survivor annuity or life annuity form of payment, and that if you had any questions or were interested in the annuity options you have contacted the Plan Administrator prior to making a benefit election in order that the actual amount of your monthly annuity could be obtained from an insurance company.
RETAIN FOR YOUR RECORDS
SPOUSE’S EXPLANATION OF QUALIFIED JOINT AND SURVIVOR ANNUITY (QJSA)
1. What is a Qualified Joint and Survivor Annuity (QJSA)?
Federal law requires the Plan to pay retirement benefits in a special payment form unless your spouse chooses a different payment form and you agree to that choice. This special payment form is often called a “qualified joint and survivor annuity” or “QJSA” payment form. The QJSA payment form gives your spouse a monthly retirement payment for the rest of his or her life. This is often called an “annuity.” Under the QJSA payment form, after your spouse dies, each month the plan will pay you 50% of the retirement benefit that was paid to your spouse. The benefit paid to you after your spouse dies is often called a “survivor annuity” or a survivor benefit.” You will receive this survivor benefit for the rest of your life.
Example
Pat Doe and Pat’s spouse, Robin receive payments from the plan under the QJSA payment form. Beginning after Pat retires, Pat receives $600 each month from the plan. Pat then dies. The plan will pay Robin $300 a month for the rest of Robin’s life.
2. How Can Your Spouse Change the Way Benefits are Paid?
Your spouse and you will receive benefits from the plan in the special QJSA payment form required by federal law unless your spouse chooses a different payment form and you agree to the choice. If you agree to change the way the plan’s retirement benefits are paid, you give up your right to the special QJSA payments.
3. Do You Have to Give Up Your Right to the QJSA Benefit?
Your choice must be voluntary. It is your personal decision whether you want to give up your right to the special QJSA payment form.
4. What Other Benefit Forms Can My Spouse Choose?
If you agree, your spouse can choose to have the retirement benefits paid in a different form. Other payment forms may give your spouse larger retirement benefits while he or she is alive, but might not pay you any benefits after your spouse dies.
Example of Lump Sum Payment Form
Pat and Robin Doe agree not to receive the special QJSA payments and decide instead that Pat will receive a single payment equal to the value of all of Pat’s retirement benefits. In this case, no further payments will be made to Pat or Robin.
If you agree, your spouse can name someone other than you to receive all or a part of the survivor benefits from the plan after your spouse dies. The person your spouse selects to receive all or part of the survivor benefits is often called a “beneficiary.” If you agree to let your spouse name someone else as the beneficiary for all of the survivor benefits, you will not receive any payments from the plan after your spouse dies. If you agree to let your spouse name someone else as the beneficiary for a part of the survivor benefits, your survivor benefits will be less than you would have received under the special QJSA payment form.
5. Can Your Spouse Make Future Changes If You Sign the Spouse’s Consent Section on Page 4 Above?
If you sign the consent, you agree that benefits under the plan will be paid in the form stated above. Your spouse cannot change the payment form unless you agree to the change by signing a new agreement. However, your spouse can change to the special QJSA payment form without getting your agreement.
6. Can You Change Your Mind After You Sign the Spouse’s Consent Section?
You cannot change this agreement after you sign it. Your decision is final.
7. What Happens to this Agreement If You Become Separated or Divorced?
Legal separation or divorce may end your right to survivor benefits from the plan even if you do not sign the Spouse’s Consent section. However, if you become legally separated or divorced, you might be able to get a special court order (which is called a qualified domestic relations order or “QDRO”) that would give you rights to receive retirement benefits even if you sign the Spouse’s Consent section. If you are thinking about separating or getting a divorce, you should get legal advice on your rights to benefits from the plan.
8. What Should You Know Before Signing the Spouse’s Consent Section?
This is a very important decision. You should think very carefully about whether you want to sign the consent section. Before signing, be sure that you understand what retirement benefits you may get and what benefits you will no longer be able to receive.
Your spouse should have received information on the types of retirement benefits available from the plan. If you have not seen this information, you should get it and read it before you sign the consent section. For additional information, you can contact the Plan Administrator.
F:\JOEL\Landscape Trusts\D.C. Plan\Distribution Election Form 12092011 For Use After 01012012 FINAL.doc
RETAIN FOR YOUR RECORDS
F:\SHARED\JOEL\Landscape Trusts\D.C. Plan\Distribution Election Form FINAL.docF:\SHARED\JOEL\Landscape Trusts\D.C. Plan\Distribution Election Form Draft.doc
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