State of Arizona 457 Deferred Compensation Program

Transcription

1 State of Arizona 457 Deferred Compensation Program Administered by Nationwide Retirement Solutions 4747 N. 7th Street, Suite 418 Phoenix, AZ (602) Dear Participant: The Unforeseeable Emergency Withdrawal Application form you recently requested is attached. To apply for an unforeseeable emergency withdrawal, you must provide all required information on the application form with sufficient documentation to support your claim (documentation that may be required includes unpaid medical bills, physician s statement, police or fire accident report, copy of payroll earnings, etc.) The federal government has certain restrictions/rules that we must follow for any payment to you for an unforeseeable emergency withdrawal. Unforeseeable emergency withdrawals from the State of Arizona Deferred Compensation Plan must meet the requirements of Section 457 of the Internal Revenue Code (IRC). IRC regulations state that an unforeseeable emergency is a severe financial hardship to the participant that is real and unforeseeable. On the reverse side of this letter are the requirements to meet an emergency withdrawal. Your Unforeseeable Emergency Application and the documentation submitted will be reviewed to determine if it meets IRC Section 457 requirements for a withdrawal. If it is determined your situation meets the requirements, a distribution may only be made to the extent that it could not be relieved through other means such as reimbursement or compensation from insurance or other sources, liquidation of participant s assets to the extent such liquidation would not in itself cause a severe hardship, or discontinuation of deferrals. If you feel your situation meets the requirements above and on the reverse hereof, and your deferred compensation account is your only remaining alternative, please complete the Unforeseeable Emergency Withdrawal Application and return it along with sufficient documentation. This form must be fully completed, signed and documented before it can be reviewed to determine if your claim meets IRC Section 457 requirements. Your withdrawal will be forwarded to you within 7 to 10 working days of the date of approval. If you have any questions or need any assistance, please contact the local office at (602) Sincerely, The State of Arizona Deferred Compensation Plan Administrator

2 REQUIREMENTS FOR AN UNFORESEEABLE EMERGENCY WITHDRAWAL The State of Arizona Deferred Compensation Plan is an eligible deferred compensation plan and is regulated by Section 457 of the Internal Revenue Code. Unforeseeable emergency withdrawals allowed by the Plan must meet the definition of unforeseeable emergency as defined in Section 457 (see below). (4) Unforeseeable Emergency. For purposes of this paragraph (h), an unforeseeable emergency is, and if the plan provides for payment in the case of an unforeseeable emergency must be defined as, severe financial hardship to the participant resulting from a sudden and unexpected illness or accident of the participant or of a dependent (as defined in Section 1529a) of the participant, loss of participant s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but in any case, payment may not be made to the extent that such hardship is or may be relieved. (i) (ii) (iii) (iv) Through reimbursement or compensation by insurance or otherwise, by liquidation of the participant s assets, to the extent the liquidation of such assets would not itself cause a severe financial hardship, by cessation of deferrals under the plan, or by de minimus distribution. (To be eligible for this in-service distribution, your account balance must be $5,000 or less and your account must have been inactive for the last two years (no deferral activity). This distribution may only be elected one time. (5) Emergency Withdrawals. Withdrawal of amounts because of an unforeseeable emergency must only be permitted to the extent reasonably needed to satisfy the emergency need. The federal government has certain restrictions/rules that we must follow for any payment to you for an unforeseeable emergency withdrawal. Unforeseeable emergency withdrawals from the State of Arizona Deferred Compensation Plan must meet the requirements of Section 457 of the Internal Revenue Code (IRC). IRC regulations state that an unforeseeable emergency is a severe financial hardship to the participant that is real and unforeseeable. Following are the requirements to meet an emergency withdrawal: A sudden and unexpected illness or accident of the participant or of a dependent of the participant. In this situation, expenses that might be considered would be uninsured, unpaid medical costs for the participant and/or legal dependent (someone you claim on your income tax return) or unforeseeable loss of household income that was beyond the participant s control (i.e., unplanned sick leave without pay or insurance). Documentation needs to be submitted as to what portion is covered by insurance (i.e., an explanation of benefits). Loss of participant s property due to casualty (i.e., damage to the participant s personal property as a result of events beyond their control such as fire, wind, etc.) that are not covered by insurance. Other similar extraordinary and unforeseeable circumstances as a result of events beyond the control of the participant. Expenses that will not qualify for a financial emergency withdrawal include: Normally budgetable expenses (i.e., down payment on an house, delinquent income or property taxes, school tuition or payment of overdue credit card bills). Purchase, maintenance or repair of a car or major appliance; household repairs, maintenance or remodeling. Investment or business losses or cash flow problems; most expenses related to divorce or bankruptcy will not qualify unless there are extenuating circumstances beyond the participant s control. Your Unforeseeable Emergency Application and the documentation submitted will be reviewed to determine if it meets IRC Section 457 requirements for a withdrawal. If it is determined your situation meets the requirements, a distribution may only be made to the extent that it could not be relieved through other means such as reimbursement or compensation from insurance or other sources, liquidation of participant s assets to the extent such liquidation would not in itself cause a severe hardship, or discontinuation of deferrals. Some mutual funds may impose short term trade fees. Please read the underlying prospectuses carefully.

3 State of Arizona 457 Deferred Compensation Plan Request for Unforeseeable Emergency Withdrawal (Please complete all sections of this form) Participant Information (please print) Participant s Social Security Name Number: / / Address Birth Date: / / Number & Street Month Day Year Sex: M r F r City State Zip Home Phone ( ) Work Phone ( ) Agency Area Code Area Code Condition of Understanding Unforeseeable Emergency Withdrawals It has been explained to me, and I understand, that the Deferred Compensation Plan is not intended to replace an adequate savings program necessary to cover day-to-day financial shortages. The Deferred Compensation Plan was established as a voluntary contribution plan allowing me to enjoy the tax advantages of income deferral while providing retirement, disability and death benefits. However, I understand that the State may permit me to make a premature withdrawal from the plan to meet an unforeseeable emergency, as defined by the Internal Revenue Code. An unforeseeable emergency is defined as...severe financial hardship to the participant resulting from a sudden and unexpected illness or accident of the participant or a dependent of the participant, loss of the participant s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. I further understand that a withdrawal cannot be granted if it falls into one of the circumstances below: Purchase of real or personal property (i.e., home or car) Education expenses Bankruptcy Wage garnishment or levy Loss of real or personal property Payment of child support or alimony Payment of taxes or penalties to any taxing authority Home improvement I also understand that I am required to submit this request form with adequate supporting documentation detailing the circumstances of the unforeseeable emergency withdrawal and the dollar amount necessary to eliminate the hardship. All withdrawals, regardless of reason, are taxable in the year of withdrawal. Describe IN DETAIL the events which led to the emergency situation and explain why it was UNFORESEEABLE AND BEYOND YOUR CON- TROL. Use additional paper if necessary. TOTAL AMOUNT OF MONEY BEING REQUESTED TO MEET THIS EMERGENCY*: (*Taxes will be withheld from the total amount requested.) PLEASE CHECK ONE: I would like to r continue my deferrals r stop my deferrals Participant Signature: Date: For Office Use Only State of Arizona Deferred Compensation Board m Request Approved Account Balance: m Request Denied Amount Approved: Administrator or other Authorized Signature Date

4 Monthly Income Participant s Net Salary (attach a copy of current paycheck stub) Spouse s Net Salary (attach a copy of current paycheck stub) Investment Income (Real Estate, Stocks, Bonds, etc.) INCOME STATEMENT Other Employment or Business Income Child Support Income Miscellaneous Income TOTAL MONTHLY INCOME: $ Monthly Expenses (Not Payroll Deduction) Rent or Mortgage Payment Automobile Payment Telephone Loans Credit Cards and Charge Accounts: Insurance: Groceries Gasoline Child Care or Child Support Payments Miscellaneous: TOTAL MONTHLY EXPENSES: $ NET OVERAGE (SHORTAGE) : $ Assets FINANCIAL POSITION STATEMENT Cash Checking Account (current balance) Savings Account (current balance) $ Investments Stocks Bonds Mutual Funds (excluding Deferred Compensation) Precious Metals (gold, silver, etc.) Real Estate (current market value of home) Other Properties: Automobile (current market value) Other: TOTAL ASSETS: $ Liabilities Home Mortgage (current balance) Mortgage on other properties (current balance) Personal Notes (current balance) Credit Cards (current balance) Automobile Loan (current balance) Other Debts (current balances): TOTAL LIABILITIES: $

5 W-4P Federal Tax & A-4P Arizona State Tax Form Instruction Sheet W-4P Federal Tax Form Purpose of the form: The purpose of the W-4P is to provide the information necessary to withhold federal taxes on all 457 payouts for both participants and beneficiaries. Note: These monies will be taxed as ordinary income. PLEASE NOTE: We do not require that you complete the Personal Allowances Worksheet or the Deduction and Adjustments Worksheet. We do require that you complete the section entitled Employee Withholding Allowance Certificate. Information Required (please print or type all information): Name and Address information Name (First, Middle, Last) Home address (including apartment number or rural route if applicable) City, State and Zip Code Social Security Number Claim or Identification number (if any) of your pension or annuity contract Total number of allowances you are claiming and your marital status Indicate any additional tax amount you want withheld per pay Sign and date the form. A-4P Arizona State Tax Form Purpose of the form: The purpose of the A-4P Form is to provide the information necessary to withhold state taxes on all 457 payouts for both participants and beneficiaries. Note: These monies will be taxed as ordinary income. Lines 1-3: Name, Address, and Social Security Number information Name (First, Middle, Last) Your Social Security Number Home address (including apartment number or rural route if applicable) City, State and Zip Code Arizona Withholding Percentage Election Options - Choose only one of the two listed options. Sign and date the form.