Imrf Form 5 10 – Fill Out and Use This PDF

SEPARATION REFUNDS

•This application is for a total refund of your IMRF member contributions. You should file this form ONLY if you are no longer working, in any position, for the employer with whom you made these contributions AND if you are no longer working for any employer in an IMRF-qualifying position.

•By accepting a refund, you forfeit your right to all IMRF benefits including a future IMRF pension. However, you can reinstate forfeited pension credits by repaying the refund with interest. To be eligible to repay the refund, you must return to work for at least two years under IMRF or one of the other Reciprocal Act public pension systems

in Illinois. If you participate in IMRF’s SLEP plan, you can repay the refund after you have completed 1,000 hours of contributing IMRF service under SLEP.

•You are NOT eligible for a refund if:

•you change from participation with one IMRF employer to participation with another IMRF employer. If you continue IMRF participation with another employer, IMRF combines your contributions and pension credits in your IMRF account and will base any benefit payment on the total.

•you stop participating in IMRF but continue working for your employer. For example, you work for a school district as a teacher’s aide and accept a certificated teaching position with the same school district. Or, you work for a city as a dispatcher and accept a position as a police officer or firefighter with the same city.

•you are age 55 or older (age 50 for SLEP) and your service qualifies you for a monthly pension of $30 or more. Exception: you can receive a refund only if you will roll it over into another defined benefit plan to purchase qualifying service credit.

IMRF Form 5.10 (Rev. 01/2013)

www.imrf.org

ADDITIONAL TAX INFORMATION

•The taxable amount of most refunds will be subject to federal income tax and a 10% additional tax. The additional tax does not apply if you:

a)roll over your refund directly to an IRA or other qualified retirement plan; 401(a), 401(k), 457, or 403(a) or 403(b).

b)are age 59-1/2 or older when you take your refund;

c)are age 55 or older (50 or older if you are a police officer, firefighter or emergency medical personnel) in the year you terminate employment with your IMRF employer; or

d)roll over the taxable portion of your refund to an IRA or other qualified retirement plan within 60 days of receipt of the refund. Please note: You must also add the

20% withheld by IMRF to this rollover or pay the 10% additional tax on that withheld amount.

•For most IMRF members, contributions made before July 1, 1984, were already taxed (“previously taxed,” see column at right). When received as a refund, they are not subject to federal income tax.

•Contributions made after June 30, 1984, were not taxed and are subject to federal income tax when received as a refund.

•All member contributions received as a refund are not subject to Illinois income tax.

•Each January, IMRF issues tax statements for payments made the previous year. We will send your tax statement to the address shown on this form. If you change your mailing address, you should notify IMRF in writing of the change.

•Effective 1/1/2008, members may also elect to roll over their refund into a Roth IRA account. This rollover is treated as if you rolled your IMRF refund into a Traditional IRA account and then converted the IRA to a Roth IRA. To be eligible, you must have a modified adjusted gross income (MAGI) on your tax return of $100,000 or less. In addition, married taxpayers cannot file separately from their spouse. Please note: IMRF does not determine if you are eligible for a rollover (convert) to a Roth account.

A rollover to a Roth IRA is taxable in the year of the rollover. The amount rolled over does not maintain the tax- deferred status of your IMRF contributions. The amounts rolled over to a Roth IRA account will not be subject to the 10% additional tax (where applicable).

If you are considering a rollover to a Roth IRA account, we strongly suggest you review your choice with your tax advisor to ensure you have the correct withholding or estimated tax payments during the year to cover your tax liability.

•This distribution must be reported on your tax return even if a portion or all of it is rolled over to another qualified plan or IRA.

PREVIOUSLY TAXED CONTRIBUTIONS

•Generally, member contributions since 1984 have been “tax-deferred” (the money used to pay those contributions has not been subject to federal income tax). However, some members have “previously taxed” contributions (also known as “after-tax contributions”—the money used to pay those contributions had already been subject to federal income tax). Contributions made prior to 1984 or funds used to purchase past service are often previously taxed. If your IMRF account contains previously taxed contributions, they are shown separately on your IMRF Member Statement of Account.

•When you are refunded previously taxed contributions, those contributions are not taxable to you, and they are not subject to any income tax withholding. While most members choose to have these amounts refunded directly to them, tax laws allow you to roll over your previously taxed contributions into an IRA or a qualified employer retirement plan.

•If your IMRF member account contains previously taxed contributions and you wish to roll over these contributions into an IRA or a qualified employer retirement plan, please request IMRF Form 5.10B, “Previously Taxed Rollover Request.” Complete the form and return it to IMRF along with this form. Form 5.10B is available at IMRF Online (www.imrf.org) or you can call 1-800-ASK-IMRF (1-800-275-4673), Monday through Friday, from 7:30 a.m. to 5:30 p.m. to request it.

MEMBER’S FIRST NAME

MIDDLE INITIAL

LAST

JR., SR., II, ETC.

IMRF MEMBER ID OR LAST 4 DIGITS OF SSN

HOME STREET (MAILING) ADDRESS

CITY

COUNTY

STATE AND ZIP (+4 if known)

DATE OF BIRTH

DAYTIME TELEPHONE NO. (with Area Code)

NAME OF LAST IMRF EMPLOYER

MY LAST POSITION UNDER IMRF WAS AS A PUBLIC SAFETY EMPLOYEE

(See Special Tax Notice)

LAST DAY OF EMPLOYMENT WITH YOUR IMRF EMPLOYER

NO

YES

Member Signature (write; do not print)

I acknowledge if I accept this refund, I am giving up my IMRF pension (if any) as well as

any IMRF disability or death beneits.

X

Date

NAME OF FINANCIAL ORGANIZATION CHECK IS TO BE MADE PAYABLE TO

DEPOSIT ACCOUNT NUMBER (OPTIONAL)

TELEPHONE NUMBER (include area code)

ACCOUNT IS: (SELECT ONE)

TRADITIONAL IRA

DEFERRED COMPENSATION PLAN (457 OR 403B) ROTH IRA

RETIREMENT PLAN (re IRC 401)

OTHER ________________________________________

Member Signature (write; do not print)

I acknowledge if I accept this refund, I am giving up my IMRF pension (if any) as well as

any IMRF disability or death beneits.

X

Date

NAME OF FINANCIAL ORGANIZATION CHECK IS TO BE MADE PAYABLE TO

DEPOSIT ACCOUNT NUMBER (OPTIONAL)

TELEPHONE NUMBER (include area code)

ACCOUNT IS: (SELECT ONE)

TRADITIONAL IRA

DEFERRED COMPENSATION PLAN (457 OR 403B)

ROTH IRA

RETIREMENT PLAN (re IRC 401)

OTHER ________________________________________

You are receiving this notice because all or a portion of a payment you are receiving from IMRF (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. 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).

If you do a rollover to a traditional IRA or an eligible

employer plan, you will not have to pay tax until you receive payments later from the IRA or plan, and the 10% additional income tax will not apply if those payments are made after you are age 59½ (or if an exception applies).

If you do a rollover to a Roth IRA, you will be taxed on the amount rolled over (reduced by any after-tax amount). However, if you are under age 59½ at the time of the rollover, the 10% additional income tax will not apply. See the section on the following page titled “If you roll over your payment to a Roth IRA” for more details.

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 of the rolled over amount in the future. 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, the Plan is required to withhold 20% of the payment for federal income taxes. 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. 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).

The Plan administrator or the payor can tell you what portion of a payment is eligible for rollover.

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 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 from a governmental defined benefit pension plan made after you separate from service if you are a public safety employee and you are at least age 50 in the year of separation.

•Payments made due to disability.

•Payments made after your death.

•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.

If I do roll over 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 (QRDOs) 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 describe any State or local income tax rules (including withholding rules).

SPECIAL RULES AND OPTIONS

If your payment includes after-tax contributions After-tax contributions included in a payment are not taxed.

If a payment is only part of your benefit, an allocable portion of your after-tax contributions is generally included in the payment.

You may roll over to an IRA a payment that includes after- tax contributions through either a direct rollover or a 60-day rollover. You must keep track of the aggregate amount of the after-tax contributions in all of your IRAs (in order to determine your taxable income for later payments from the IRAs). If you do a direct rollover of only a portion of the amount paid from the Plan and a portion is paid to you, each of the payments will include an allocable portion of the after-tax contributions. If you do a 60-day rollover to an IRA of only a portion of the payment made to you, the after-tax contributions are treated as rolled over last. For example, assume you are receiving a complete distribution of your benefit which totals $12,000, of which $2,000 is after-tax contributions. In this case, if you roll over $10,000 to an IRA in a 60-day rollover, no amount is taxable because the $2,000 amount not rolled over is treated as being after-tax contributions.

You may roll over to an employer plan all of a payment that includes after-tax contributions, but only through a direct rollover [and only if the receiving plan separately accounts for after-tax contributions and is not a governmental section 457(b) plan]. You can do a 60-day rollover to an employer plan of part of a payment that includes after-tax contributions, but only up to the amount of the payment that would be taxable if not rolled over.

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 are an eligible retired public safety officer and your pension payment is used to pay for health coverage or qualified long-term care insurance

If the Plan is a governmental plan, you retired as a public safety officer, and your retirement was by reason of disability or was after normal retirement age, you can exclude from your taxable income plan payments paid directly as premiums to an accident or health plan (or a qualified long-term care insurance contract) that your employer maintains for you, your spouse, or your dependents, up to a maximum of $3,000 annually.

For this purpose, a public safety officer is a law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew.

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 (reduced by any after-tax amounts) 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.

You cannot roll over a payment from the Plan to a designated Roth account in an employer plan.

For more information, see IRS Publication 590, “Individual Retirement Arrangements (IRAs).” You should consult your tax advisor if you are interested in rolling over your distribution to a Roth IRA.

IF YOU ARE NOT A PLAN PARTICIPANT

Payments made after the 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 and the special rules for public safety officers 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 distributions (unless an exception applies) and required minimum distributions from your IRA do not have to start until after you are age 70½.

If you treat the IRA as an inherited IRA, payments from the IRA will not be subject to the 10% additional income tax on early distributions. However, if the participant had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the participant had not started taking required minimum distributions from the Plan, you will not have to start receiving required minimum distributions from the inherited IRA until the year the participant would have been age 70½.

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.

Payments under a qualified domestic relations order. If you are the spouse or former spouse of the participant

who receives a payment from the Plan under a qualified

domestic relations order (QDRO), you generally have the same options the participant would have (for example, you may roll over the payments 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 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

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.”

NOTICE PERIOD

Generally, payment cannot be made from the Plan until at least 30 days after you receive this notice. Thus, you have at least 30 days to consider whether or not to have your payment 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 payment will then be processed in accordance with your election as soon as practical after it is received by the Plan administrator.

FOR MORE INFORMATION

You may wish to consult with the Plan administrator or payor, 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 www.irs.gov, or by calling

1-800-TAX-FORM.