Faculty Retirement Plan Alternative (RPA) guide
Under the RPA, once you retire, you determine when your retirement payments begin. Within the parameters of the Plan, when you retire or terminate your employment with the NSHE, you may maintain your accounts and/or elect with the fund sponsor to begin receipt of benefits based on the terms of the RPA plan. You are immediately 100% vested in your retirement accounts.
Although income usually begins at retirement, you may elect to begin to receive your retirement income at any time after termination of employment. You may also elect to receive income while you are actively employed, if you have reached the age of 65.
Retirement benefits must normally begin no later than April 1 of the calendar year following the year in which you attain age 70 1/2.
You will need to make decisions regarding the withdrawal of your retirement funds. These are important decisions that impact the level of income you will receive, the taxability of that income, and how long that income will last. For detailed information on the taxability, contact your investment carrier(s); a professional financial planner or tax advisor.
- You are responsible for selecting your retirement payment option. Contact your investment carrier(s) for distribution forms.
- You do not have to annuitize your accumulations even if your funds are invested with NSHE's annuity investment carrier TIAA.
- To obtain more specific information regarding your choices, please contact your investment carrier(s).
- You must be retired on our payroll system in order to take a distribution from your retirement plan. All distribution requests will require a Plan Administrator signature which can be obtained by contacting the Benefits Office at (775) 784-6082.
This payment option allows for flexibility in the amount and/or frequency of payments. You may change the amount or stop the withdrawal at any time.
- Systematic withdrawals may be appropriate if you are waiting for other income to begin (such as Social Security or an employer pension), or if you want to offset an income loss or reduction (such as transitioning into retirement by reducing your work schedule).
- Generally, systematic withdrawals are taxable as ordinary income.
- Specific funds may have restrictions that do not allow for systematic withdrawals. You will need to contact your investment carrier for further information.
Generally, full or partial withdrawals of account values may be requested at any time. Specific funds may have restrictions that do not permit full withdrawals.
An annuity can provide steady income that is guaranteed for your lifetime, regardless of how long you live. Once you have selected this option, you will not be able to change your election or the amount of the payment. Annuity payments may or may not keep up with inflation. There are two basic types of annuities:
Fixed Income Annuity
The company providing the annuity makes long term investments and the monthly income is guaranteed at a pre-set rate. For example, you receive the same benefit for life.
Variable Income Annuity
This type of annuity is based upon a variety of investment options such as stocks, bonds, and money markets. Market fluctuations will affect the income payments under a variable annuity and the resulting payment could decrease or increase.
Within these two types of annuities, you can choose from a variety of annuity income options, including, but not limited to:
The income is paid only during your lifetime. Upon death, payment ceases.
Joint and Survivor
Provides two people with income for as long as either one lives.
Guaranteed Period Annuity
An annuity that provides guaranteed income for a fixed period of years. Should you die before the period is complete, benefits will continue to your beneficiaries for the remainder of the period.
If you would like to elect an annuity distribution, arrangements must be made with your investment carrier(s). Once you have selected an annuity payment option and have signed and submitted the paperwork, your decision is irrevocable.
Eligibility for a cash withdrawal is dependent upon your years of service.
Fewer than Five Years of Service
If you separate from NSHE with less than 5 years of service, you are eligible to withdraw both the employer and the employee contributions in any form of withdrawal available from your RPA fund sponsor; this includes 100% cash withdrawals.
Five or More Years of Service
Employee contributions may be withdrawn as a cash withdrawal at any age if you separate from NSHE with 5 or more years of service.
Employer contributions may be withdrawn as a cash withdrawal only upon reaching the age of 55 or older if you separate from NSHE with 5 or more years of service. The employer contributions may be withdrawn as a lifetime annuity only, if you leave employment with 5 or more years of service and wish to begin receipt of your employer RPA funds before the age of 55. For more information, contact a representative from your NSHE Fund Sponsor.
You may wish to defer beginning your retirement income. However, you should be aware that there are federal minimum distribution rules, which require you to receive some income from your retirement plan contributions and earnings.
Minimum Distribution Laws
- Federal minimum distribution rules require that you begin receiving some income from your retirement plan accumulations by April 1 after the year you either (1) turn 70½, or (2) retire, whichever comes later.
- Once you begin minimum distributions, you must continue to receive income each year thereafter to satisfy these rules. You are responsible for beginning minimum distributions; your investment carrier(s) can provide you with guidance.
- If you do not comply with these rules, you could become subject to a 50% excise tax on your minimum distribution.
- If you are of sufficient age to begin minimum distributions, you may wish to select the minimum distribution payment option as your payment option. This option may be appropriate if you want to maximize income deferral and preserve your accumulation, you have other income that is adequate for your basic income needs or you want to postpone selecting an annuity or other distribution method.
Note: Please consult with your 401(a) investment carrier(s) to obtain more information