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Retirement Plan: Withdrawals and Distributions

Each participant is entitled to receive Retirement Benefits under the options and subject to the conditions set forth in their respective contracts and applicable Laws and Regulations.

The following is a list of eligible withdrawals and distributions:

• Faculty and staff who have terminated employment with Vanderbilt can process withdrawals and distributions against their retirement account. You are responsible for paying applicable penalties (and income taxes for pre-tax contributions) on the withdrawal amount.

• Faculty and staff who have reached the age of 59½ can process withdrawals against their retirement account. You are responsible for paying applicable penalties (and income taxes for pre-tax contributions) on the withdrawal amount.

• Current faculty and staff may apply for a loan from their TIAA-CREF or VALIC account (not Fidelity or Vanguard accounts). Loans are limited to your elective contributions.

• Faculty and staff working at Vanderbilt, and under the age of 59½, are not permitted to take withdrawals from the Retirement Plan except in the case of a financial hardship as defined by the Internal Revenue Service. There are special rules and documentation requirements to process a Financial Hardship Withdrawal (see below for more information).

To Process a Withdrawal or Distribution:

1. Contact the investment company (TIAA-CREF, Vanguard, VALIC, or Fidelity) that holds your account and request a Withdrawal/Distribution Form or Loan Application.

2. Be sure to fill out the form completely. If you are married, your spouse must sign in the presence of a notary public.

3. You must mail the form to:

   Vanderbilt Benefits Administration

   VU Station B #357700

   2301 Vanderbilt Place

   Nashville, TN 37235-7700
   

   or deliver in person to:

   HR Express

   2525 West End Avenue, second floor

   Nashville, TN 37203

To apply for a loan:

1. Current faculty and staff should contact the vendor (TIAA or VALIC) by phone or via their website to initiate the process.

The vendor will advise you how much you have available for a loan, if any, and the terms of the loan (interest rate, number and amount of payments, etc).

3. The vendor will issue the loan form(s) to you or you may print them from the website.

4. You should sign and date the form and obtain spousal consent, if applicable, and return all sections of the form to the Benefits Office.

5. The Benefits Office will review the form, and if approved, sign and forward to the vendor for processing.

Information about Financial Hardship Withdrawals

Withdrawal of retirement benefits before termination of employment may be requested by the employee only on elective contributions (Basic and Supplemental) and only in the case of a financial hardship, generally defined by the Internal Revenue Service as:

1. Expenses for medical care previously incurred by the employee, the employee's spouse, or any dependents of the employee or necessary for these persons to obtain medical care;
2. Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments);
3. Payment of tuition, related educational fees, and room and board expenses, for the next 12 months of postsecondary education for the employee, or the employee's spouse, children or dependents;
4. Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage of that residence;
5. Funeral or burial expenses
6. Expenses relating to major natural catastrophes qualifying for Code Sec. 165 casualty deduction.

Hardship withdrawals are limited to two per calendar year. Participants must submit appropriate supporting documentation to the Office of Benefits Administration prior to being approved to receive a hardship distribution. If the distribution is approved, a suspension of the participant’s voluntary contributions will be implemented for a minimum of six months. The participant may choose to participate in the voluntary portion by submitting the Retirement Plan Election Form after their six month suspension ends.

Hardship withdrawals are subject to the terms of the applicable annuity contract or custodial agreement. Hardship withdrawals will be considered taxable income and are subject to a 10% penalty.

What is the process to apply for a financial hardship withdrawal?

1. Obtain and complete the appropriate distribution form from your investment company. Be sure to fill out the form completely. If you are married, your spouse must sign in the presence of a notary public.
2. Complete the Vanderbilt Retirement Plan Hardship Withdrawal Request Form (available on the HR Website and at HR Express).
3. Drop off or mail completed forms and copies of your supporting documentation to the Benefits Office.

Benefits Administration will review the application and if approved, send it to the appropriate investment company for processing. This review process could take up to 5 business days depending on the type of hardship request you are making and the amount of supporting documentation you submit. Incomplete applications will be returned to the participant via US postal mail to the address on file with Human Resources.

Note: The Office of Benefits Administration does not accept faxed forms. The best way to submit your completed forms is to deliver them in person to HR Express, 2525 West End Avenue on the second floor. You may also mail forms to the address at the bottom of the form.

 

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