"Two things are certain in life, death and taxes".
Internal Revenue Regulations permit all or any portion of the Participants Annuity Retirement
Benefit to be paid in a Direct Rollover, or paid to the participant. A Rollover
is a distribution by the Annuity Fund directly to a participants (IRA) or other qualified
employer plan. Under current tax law participants who select a Direct Rollover are
not taxed in the current year.
Retired participants receiving an Annuity Retirement Benefit are subject to 20%
withholding of Federal taxes as required by law. The withheld taxes are sent to the IRS
to be credited against the participant tax liability.
Option payments, participants that elect to have their Annual Optional amount paid
directly to them are subject to a mandatory 20% Federal Income Tax Withholding.
The payment is taxed within the year the participant receives the funds, unless
within sixty days the amount is rolled over to an IRA or another
plan that accepts rollovers. Participants under age 59 1/2 receiving their option
payment will also be subject to an additional 10% tax of the taxable portion of the
payment.
IMPORTANT - This information only summarizes the tax consequences encountered by
participants of the Annuity Fund. It does not provide a complete understanding
of tax liability and should not be used for planning purposes. The rules described
above are complex and contain many conditions and exceptions that cannot be
adequately presented herein. Participants may want to consult with a professional
tax advisor before making arrangements for the removal of Annuity funds.
