Payment Authorization
Plan Name ______
Participant (employee) Name ______
Hours worked in Plan Year ______Social Security Number ______
Address ______
______
Termination of Employment
Date of Termination ______
(Reason)______Resigned ______Involuntary ______Retirement ______Death ______Disability
Payroll date of last contribution ______
(mark one)______Employer provided IRS Tax Notice and Payment Option Form to the participant on ______
(Date)
______PENCO is to send IRS Tax Notice and Payment Option Form to the participant
______
Plan Loan
(Review plan rules regarding availability)
Amount requested $______or ______Maximum Available
Repayment Period ______Years (1 to 5) (May be longer for purchase of principal residence)
Payment frequency ______Monthly ______Bi-Weekly ______Weekly ______Semi-Monthly
Will payroll deduction be used for repayments ? ______Yes ______No
______
Withdrawal
(Review plan rules regarding availability)
Amount requested $______or ______Maximum Available
Increase withdrawal to provide ‘Amount’ net of mandatory withholding ______Yes ______No
(Reason)______Financial Hardship
(mark one)
______Over age 59 ½ In-Service Withdrawal
______Other (specify) ______
(mark one)______Employer provided IRS Tax Notice and Payment Option Form to the participant on ______
(Date)
______PENCO is to send IRS Tax Notice and Payment Option Form to the participant
______
Trustee Signature
As Trustee of the plan I authorize payment to the participant as indicated above, and payment of the applicable PENCO fee.
______
Signature Date
Instructions and Explanation
Plan Name and Participant (employee) Name: Required in order to process a payment.
Hours worked in Plan Year: Hours worked by the participant are required in order to update the vested percentage if a vesting schedule is used for employer contributions in the plan. Hours worked by terminated employees is also needed for year-end IRS testing. Hours are counted for the plan year of employment termination, or the plan year in which a plan loan is requested.
______
Termination of Employment
Date of Termination: Required
Reason: A plan may have different procedures that apply to fees or year-end contributions, based upon the reason employment terminated. Disability is documented by a physician’s written statement of participant’s inability to perform accustomed work for at least one year.
Payroll date of last contribution: For 401(k) plans, the payroll date which includes a terminated participant’s final salary reduction contribution is needed. PENCO compares this information to processed contributions, allowing the fastest processing of payment of the participant’s entire vested account balance.
IRS Tax Notice and Payment Option Forms: Participants must receive the IRS Tax Notice and be given the option to have a direct rollover to an IRA or another retirement plan for their vested balance. A Payment Option Form is used by the participant to select a form of payment.
For fastest processing of a distribution the Employer can provide the IRS Tax Notice and Payment Option Form to the participant at the Employer’s office. The employee participant can then mail the completed form to PENCO, or complete the form immediately and the Employer can send it to PENCO with this Payment Authorization.
A completed and signed Payment Option Form must be returned to PENCO before payment can be ordered, except that vested balances less than $5,000 can be paid to the participant between 30 and 90 days after the IRS Tax Notice and Payment Option Form were provided to the participant.
PENCO will keep copies and provide the signed Payment Option Form and a final statement to the plan sponsor. The payment check is mailed directly to the participant or rollover institution. A final statement is mailed directly to the participant by PENCO.
______
Plan Loan
Each retirement plan has rules regarding the availability of plan loans, which should be reviewed before completing this form. Owners and lineal ascendants in an S-Corporation are not eligible for plan loans. Generally, (if plan loans are allowed) a participant may borrow up to one-half of their vested account balance. The repayment period (term) may not exceed five years, unless the plan loan is used to purchase the principal residence (home) of the participant. A current purchase agreement is documentation of the purchase of a principal residence. The payment frequency should be chosen to match the payroll frequency for the participant when payroll deduction is used for repayments.
Loan documents will be sent by PENCO to the employee participant. Signed documents must be returned to PENCO before payment can be ordered. PENCO will keep copies and send signed loan documents to the plan sponsor. The payment check is mailed directly to the participant.
______
Withdrawal
Each retirement plan has rules regarding the availability of different types of withdrawals, which should be reviewed before completing this form.
Increase withdrawal to provide ‘Amount’ net of mandatory withholding: When mandatory IRS 20% tax withholding applies, it may be possible to increase the amount withdrawn to provide the total requested amount to the participant. Checking “NO” will result in the listed amount being withdrawn, and a lesser (after-withholding) amount actually paid to the participant.
Financial Hardship: IRS restrictions generally allow withdrawals of employee 401(k) contributions only for prevention of eviction, purchase of principal residence, payment of post-secondary tuition or medical expenses not covered by insurance. If available, a plan loan may be required before a financial hardship withdrawal can be processed. Financial hardship documents will be sent by PENCO to the employee participant. Signed documents must be returned to PENCO before payment can be ordered. Copies of invoices or notices are also required as documentation. PENCO will keep copies and send signed hardship documents to the plan sponsor.
IRS Tax Notice and Payment Option Forms: Participants must receive the IRS Tax Notice and be given the option to have a direct rollover to an IRA or another retirement plan for their withdrawal amount. A Payment Option Form is used by the participant to select a form of payment.
The payment check is mailed directly to the participant.
______
Trustee Signature
An original signature of a Trustee is required to process any payment from the Plan. The applicable PENCO fees are listed in the Service Agreement between PENCO and the plan sponsor. The fees are $65 for termination distributions or other withdrawals, and $100 for plan loans.
Send to: PENCO 1313 East Kemper Road #211 Cincinnati, OH 45246 Phone (800)742-9389 or (513)671-4222