Secure Your Future
2005 Required Minimum Distributions
Apr 14, 2005 1:12 AM
Do you participate in the Teachers’ Retirement System’s Tax-Deferred Annuity (TDA) Program? If so, you may be required to receive a distribution from your TDA account this year. The Internal Revenue Service (IRS) requires TDA participants to begin receiving a Required Minimum Distribution (RMD) from their TDA accounts after the later of the following: the year in which they separate from service (having elected TDA Deferral status), or the year in which they reach age 701/2.
If you are eligible for an RMD, TRS will send you information in May. This will include a notification letter that shows your 2005 RMD amount and an “RMD Election Form” (code TD39). TRS will also enclose a copy of a Required Minimum Distributions for Members brochure (code 5.4) to help you better understand RMD rules.
You may choose how to receive your distribution on the “RMD Election Form” by electing to (a) receive your payment from TRS in the amount of your RMD, (b) annuitize your entire TDA balance (if you have retired or are retiring), (c) receive payment from another Section 403(b) Program, or (d) receive a Direct Withdrawal or apply a Direct Withdrawal you have received in 2005 toward your RMD. If TRS does not receive your election form by the deadline indicated on your notification letter, TRS would issue a payment to you in the entire amount of your 2005 RMD at the end of the year.
If you are an in-service TDA participant age 75 or older, and you previously received an RMD of your TDA funds, you will receive a letter from TRS indicating that you will not receive an RMD in 2005. The letter, which will be mailed in May, will also explain that you are not required to resume receiving an RMD until you separate from service.
For more details about RMD requirements, please refer to IRS Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations, which may be accessed at www.irs.gov. You may also order this publication by calling the IRS at 1-800-829-3676. For tax-related questions, you may call the IRS at 1-800-829-1040.
Please see upcoming issues of the New York Teacher for more RMD information, including news about the UFT’s invitation-only annual RMD conference in June for members receiving an RMD for the first time
