Making decisions on how many years you should work and when you should actually retire can have a significant impact on your future.
If you are a member of the ASA Only plan, when you are ready to apply for retirement benefits, select Member Login to access your online account. Submitting your application online is quick and easy. You may also download a copy of the application here.
The effective date of your retirement benefits can be no earlier than the first day of the month following your last day in pay status.
If you have met age and years of participation requirements and have at least $15,000 in your ASA Only account balance, you may annuitize your ASA. Your rollover account may be used in the calculation of the minimum account balance. That is, you may take this money as a lifetime monthly annuity payment. You can also choose to receive a distribution of the ASA funds when you retire from PERF or defer distribution to a later date.
If you elect to withdraw your ASA at retirement, the balance will remain invested based on your pre-retirement investment allocations until we process your distribution.
If you decide to annuitize your ASA, the balance will be placed into a fixed value account. This happens no more than 30 days prior to processing your retirement application or your retirement date.
Any trailing contributions and amounts remaining in your account following any cancellation of the annuity will be moved to the Money Market Fund. You may also reallocate your money to any of the available investment options under the plan.
The decision of how to receive the distribution of your ASA can have significant tax implications, and we urge you to consult with a tax advisor. Customer service representatives can explain options to you, but cannot offer tax advice. The information below is included to aid you and your advisors with federal tax provisions as they apply to PERF benefits.
Any contributions to your ASA made with after-tax dollars are considered “tax basis” because you have already paid taxes on those dollars. Mandatory contributions paid by your employer were not taxed at the time they were paid. Therefore, they do not create “tax basis.” Upon retirement, any after-tax contribution (your tax basis) is reported by PERF as non-taxable on the IRS Form 1099-R issued to retired members and the IRS. However, it is important to note that your tax basis is recoverable under very specific IRS rules. For more information on "tax basis," go here.
You can elect to receive a lump sum distribution of your ASA Only. However, the entire tax basis is recovered in total since there are no recurring payments. If it is a partial lump sum and partial annuity, the basis will be split between the two, and the annuity recovery will be based on your age. If you annuitize your ASA Only, the basis allocated to the monthly annuity payment is divided up and recovered over a mandatory number of monthly payments, as determined by applicable IRS regulations. Therefore, a portion of each monthly benefit paid to you is non-taxable, for as long as basis remains.
If contributions are received after the member has requested a final distribution and the total account balance has been paid, the contribution is accepted and another distribution is paid using the previous distribution instructions. If a member was paid a disbursement in error, we will work to restore the money if the member subsequently returns to work.
This division of the basis is required because the IRS has issued a letter ruling to PERF concluding that the ASA and monthly annuity payment payable to you do not constitute separate accounts. The consequence of this ruling is that, upon retirement, basis from contributions to the ASA must be partially allocated to your monthly annuity payment, as we have described above. One exception to this basis allocation rule is also relevant: a special provision of federal tax law permits you to immediately recover any tax basis that you may have had in your ASA on Dec. 31, 1986. The post-1986 basis, however, must be allocated to your monthly annuity payment.
Leave Your ASA Invested: Upon separation from service, you may choose to leave your ASA invested with PERF. However, based on IRS regulations, you must begin distribution at age 70 1/2. Until you elect to receive your funds, they will remain invested according to your directions.
Withdraw Entire ASA: If you decide to withdraw your entire ASA, you must choose a direct rollover, complete withdrawal, or partial rollover to a qualified plan for the taxable portion of your ASA. Please consider the tax consequences you may face if you choose a complete withdrawal of the taxable portion of your account.
We are required by law to withhold 20 percent for federal income taxes for any part of the eligible rollover distribution that is not directly rolled over. You will have to pay federal and state income taxes on this taxable portion.