Portico Benefits Form – Fill Out and Use This PDF

You are receiving this notice because all or a portion of a payment you are receiving from the ELCA Retirement 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 make such a rollover.

This notice describes the rollover rules that apply to payments from the Plan that are not from a designated Roth account (a type of account with special tax rules in some employer plans).

annuity) or an employer plan (i.e., 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 (e.g., no spousal consent rules apply to IRAs and IRAs may not provide loans). Furthermore, the amount rolled over will become subject to the tax rules that apply to the IRA or employer plan.

Your Rollover Options

Rules that apply to most payments from a plan are described in the General Information About Rollovers section below. 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 make a rollover, you will also have to pay a 10% additional income tax on early distributions (unless an exception applies). However, if you make a rollover, you will not have to pay tax until you receive payments later and the 10% additional income tax penalty 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

How Do I Make a Rollover?

There are two ways to make a rollover. You can make either a direct rollover or a 60-day rollover.

If you make 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 make a direct rollover.

If you do not make a direct rollover, you may still make 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 make 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?

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)

•Hardship distributions

•Corrective distributions of contributions that exceed tax law limitations

Portico Benefit Services or Xerox HR Solutions (the recordkeeper) can inform you what portion of a payment is eligible for rollover.

If I Don’t Make 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 penalty 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 applies. This penalty is in addition to the regular income tax on the payment not rolled over.

The 10% additional income tax penalty 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 nearly 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 made after your death

•Corrective distributions of contributions that exceed tax law limits

•Payments made directly to the government to satisfy a federal tax levy

•Payments made under a qualified domestic relations order (QDRO)

•Payments made 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 Sept. 11, 2001, for more than 179 days

If I Make 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 penalty 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 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 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 nearly equal amounts over a specified period applies without regard to whether you have separated 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 except for selfemployed status).

Will I Owe State Income Taxes?

Please contact your state department of revenue or a qualified tax adviser to learn about 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. If you have pre-1987 after-tax contributions maintained in a separate account, a special rule may apply to determine whether the after-tax contributions are included in a 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 make 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 make a 60-day rollover to an IRA of only a portion of the payment made to you, the after-tax contributions are treated as a rollover 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 make 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 (e.g., 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 non-refundable user fee. For more information, see IRS Publication 590,

Individual Retirement Arrangements (IRAs).

If You Were Born On or Before Jan. 1, 1936

If you were born on or before Jan. 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 to 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 (i.e., reduced by any after-tax amounts) will be taxed. However, the 10% additional income tax penalty on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within five years, starting from January 1 of the year of the rollover). For payments from the Plan during 2012 that are rolled over to a Roth IRA, the taxable amount can be spread over a two-year period starting in 2013.

If you roll over the payment to a Roth IRA, later qualified distributions from the Roth IRA 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 five years. In applying this five-year rule, you start from January 1 of the year for which your first contribution was made to a Roth IRA. Non-qualified distributions from the Roth IRA 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 receive 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.

If You Are Not a Plan Participant

Payments after death of a participant. If you receive a distribution after a 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 penalty on early distributions does not apply and the special rule described under the section If You Were Born On or Before Jan. 1, 1936, applies only if the participant was born on or before Jan. 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 in this notice. In addition, if you choose to make 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 reach age 59½ will be subject to the 10% additional income tax penalty 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 penalty on early distributions. However, if the participant began receiving required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the participant had not begun receiving 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 reached 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 make a direct rollover to an inherited IRA. Eligible rollover distributions from an employer’s plan paid directly to a non-spouse beneficiary are subject

to a mandatory 20% withholding. Payments from the inherited IRA will not be subject to the 10% additional income tax penalty on early distributions. You must receive required minimum distributions from the inherited IRA.

Payments Under a Qualified Domestic Relations Order

(QDRO). If you are the spouse or former spouse of a participant and you receive a payment from the Plan under a QDRO, you generally have the same options the participant would have (i.e., 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 penalty on early distributions.

If You Are a Non-Resident Alien

If you are a non-resident alien and you do not make 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 (which is possible if you make a 60-day rollover), you may request an income tax refund by filing IRS 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 Non-Resident

Aliens and Foreign Entitles.

Other Special Rules

If a payment is one in a series of payments for less than 10 years, your choice whether to make a direct rollover will apply to all later payments in the series (unless you make a different choice for later payments).

If your payments for the year are less than $200, the Plan is not required to allow you to make a direct rollover and is not required to withhold for federal income taxes.However, you may make a 60-day rollover.

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 a professional tax adviser 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, at www.irs.gov or by calling 800.TAX.FORM (829.3676).

A rollover is a transfer of money from one tax-favored retirement arrangement (e.g., an IRA or other eligible retirement plan) to another tax-favored arrangement. By doing so, you postpone paying taxes on money you transfer (roll over).

Why Roll Money Into the ELCA Retirement Plan?

•Experience – Benefit from the extensive investment management experience provided by Portico Benefit Services and other well-known investment managers.

•Choice – The ELCA Retirement Plan’s 20 investment funds provide a broad range of investment options, including social purpose funds.

•Personal service – Our professional staff know and understand the unique needs of our members.

•Growth – No sales commissions means your account may grow faster.

•Simplicity – Put all your retirement savings in one place — one you know and trust. Receive one statement for all your retirement savings.

•Clergy housing allowance exclusion – Only money distributed from a church retirement plan can be designated as eligible for clergy housing allowance exclusion. You lose this option if you roll over money into a non-church plan.

When Can I Roll Over Money from Another Plan to My ELCA Retirement Account?

You can roll over money from your traditional IRA or other eligible pretax retirement accounts to this plan at any time.

What Types of Money can be Rolled Over to My ELCA Retirement Account?

The ELCA Retirement Plan accepts pretax rollovers of at least $200 from:

•Traditional IRAs

•401(k) plans

•403(b) plans

•Governmental 457(b) plans

•Other ELCA retirement plans (i.e., the ELCA Master Institutional Retirement Plan or the ELCA Retirement Plan for The Evangelical Lutheran Good Samaritan Society)

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Contact Information

Portico Service Center

800 Marquette Ave., Ste. 1050

Minneapolis, MN 55402-2892

800.352.2876 / 612.333.7651 F 612.334.5399

mail@PorticoBenefits.org

www.PorticoBenefits.org

Hours

7:30 a.m. – 5 p.m. (Central) Monday – Friday

The money you roll over to the ELCA Retirement Plan cannot be a:

•Required minimum distribution

•Hardship withdrawal

•Part of a series of substantially equal periodic payments

Rolling Money Into Other Retirement Plans

How your money is withdrawn can affect your taxes, how long the money remaining in your ELCA Retirement Plan account will last and your housing allowance exclusion (if you are a pastor). We encourage you to consult a tax adviser regarding your unique situation.

When am I Eligible to Make a Rollover from My Retirement Account?

In limited circumstances you can make distributed from your account and roll the money to another eligible retirement arrangement before separating from service. Withdrawals are allowed if you are:

•Under age 59½ and totally and permanently disabled as defined by the Internal Revenue Service

•Age 59½ or over

•Retired or

•Separated from service

You can make rollovers from the following types of money at any time:

•Rollover contributions

•Clergy housing equity contributions

•Pre-2003 additional employer contributions

Withdrawals are permitted in the case of financial hardship, but these withdrawals cannot be rolled over. Likewise, required minimum distributions after age 70½ are not eligible for rollover.

What Types of Money can be Rolled Over From My ELCA Retirement Account?

Once eligible, you can generally roll over:

•Up to 100% of any member pretax contributions plus earnings

•Up to 100% of any contributions plus earnings rolled into your account from another retirement plan

•Up to 100% of housing equity contributions plus earnings

•Up to 100% of pre-2003 additional employer contributions

•Up to 20% per year of the total employer balance (including earnings) on the prior December 31, or $20,000, if greater

Contact Portico Benefit Services for details on your specific situation.

Timing

A request to roll money into other retirement plans may take up to 15 business days to process once the completed request is received.

How do I Make a Rollover Into or Out of My Retirement Plan?

There are two types of rollovers, each with different tax issues.

Direct rollover – If you make a direct rollover, the custodian of the account issues a check payable to the successor plan and sends it to you, unless you provide complete mailing information for the trustee or custodian of the successor plan. No tax is due at the time money is withdrawn from the original account if it is rolled over directly to the IRA or other retirement arrangement. NOTE: Check with the plan’s administrator or custodian before making a direct rollover. Not all retirement plans accept rollovers.

Indirect rollover – This is also referred to as a 60-day rollover. If you make an indirect rollover, the custodian of the account sends the payment as a check payable to you. You have 60 days after receiving the payment to make the deposit into the IRA or other eligible retirement arrangement. Because this is not a direct rollover, the custodian of the account is generally required to withhold 20% of the payment for federal income taxes. This means, to roll over the entire payment in 60 days, you must use other money to make up for the 20% withheld. NOTE: If you do not roll over the entire amount, the portion not rolled over may be taxed and may, in most situations, be subject to a 10% additional income tax on early distributions if you are under age 59½.

Contact the IRA sponsor or the administrator of the original retirement plan for information on how to make a direct or indirect rollover to

its plan.

If I Roll Money Over to an IRA, Are Subsequent Distributions from the IRA Taxable if used for Housing?

In general, amounts withdrawn from the IRA may be subject to income tax for both clergy and lay employees. That means the potential benefit of the clergy housing allowance exclusion from federal gross income may be lost once the money is rolled out of the ELCA plan because generally only amounts distributed from a church retirement plan can be designated as eligible for clergy housing allowance. Consult with your tax adviser for more specific information.

For Tax Information

The IRS can provide more tax information on the federal tax treatment of payments from retirement plans. Visit www.irs.gov or call 800.TAX.FORM (829.3676).

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