Distributions

Be sure you understand when you can request a distribution, how to apply for one and at what age you are required to take one.

Distributions While Still Employed

In some cases, you can request a distribution while you are still employed at Stanford

• If you are age 59-1/2 and still employed at Stanford, you can request an in-service distribution of your Tax-Deferred Account (TDA)
• If you are age 59-1/2 and working 50 percent or less in a non-tenured position, then you can also request an in-service distribution of your Contributory Retirement Account (CRA)
• All distributions are subject federal and state income taxes
• Employees who are under age 59-1/2 and receive a distribution may also be subject to a penalty tax

When Employment at Stanford Ends

All plan contributions stop at the time your employment with Stanford ends. You will, however, continue to receive quarterly statements and be able to direct your own investments. You remain subject to all plan rules.

Even though you are no longer employed at Stanford, it remains your responsibility to keep your mailing address up-to-date with the Stanford Retirement Manager. This is important so you can be notified of any future plan changes.

Learn more about when employment ends.

How to Apply for a Distribution

Before any payments can begin from the plan, you need to apply for benefits (also called a distribution) in advance and go through the application review and waiting period. If you want a distribution, consider the following:

• To begin the process, contact your investment provider(s) directly and specify if you want a lump sum payment, a retirement annuity or both. This process may take a minimum of 45 days
• Be sure to file your application at least 30 days before the date you want your benefit payments to begin. All distributions are subject to a minimum 30-day waiting period after your termination date
• In addition to the 30-day waiting period, allow at least 15 business days for the administrative review and approval process of your distribution request. Distributions may be subject to an administrative processing fee
• No distributions will be reviewed, approved or processed during the last two weeks in December when the University HR Service Team is unavailable due to the university's winter closure

Important

Your account will be valued as of the date your distribution request has been fully reviewed, approved and processed. You bear the gain or loss in any market fluctuations that occur between the date you apply for a distribution and the date the distribution is made.

“Controlled Group”

Stanford is required to follow IRS regulations that mandate the university treat its retirement plans and plans maintained by other Stanford-related employers as belonging to a single “controlled group” for various purposes. This controlled group includes:

• Stanford University
• Stanford Health Care (SHC)
• Lucile Packard Children’s Hospital at Stanford
• University Healthcare Alliance
• Packard Children’s Health Alliance
• CareCounsel
• SAA Sierra Programs LLC (Alpine Chalet)

Employees who work for any of these organizations will be considered, for certain administrative purposes, to be employed by the same employer: Stanford. If you have been transferred and/or hired by any of the other entities within the controlled group, you will not be eligible for a distribution because you are considered still employed by Stanford.

Questions?

Call the University HR Service Team at 650-736-2985.

Required Minimum Distribution: Age 70-1/2

When you participate in the Stanford Contributory Retirement Plan (SCRP) and terminate employment, you must receive a minimum amount from your SCRP account each year after you reach age 70 ½, starting no later than April 1 of the year following the end of the year in which you reach age 70 ½. This minimum amount is also known as a Required Minimum Distribution (RMD).

There is an exception to the RMD if you have been re-employed within the Stanford’s controlled group. If you become employed by Stanford Hospitals and Clinics, Lucile Packard Children’s Hospital, University Healthcare Alliance, Packard Children’s Health Alliance, SAA Sierra Programs LLC (Alpine Chalet) or another member of Stanford’s controlled group of employers, the IRS considers you to be employed by Stanford for purposes of distributions from the SCRP. This means that you cannot take a distribution from SCRP while employed by any of these entities (except for certain permitted in-service distributions) and, therefore, you do not have to take a RMD from the SCRP.

When you leave the Stanford controlled group of employers, you will again be required to take a RMD from the SCRP.

Distribution Deadline for 2015

To take a distribution, loan, or hardship from your account in the Stanford Contributory Retirement Plan before the end of 2015, your completed forms must be received by the Benefits Office no later than 5 pm on Tuesday, December 15, 2015. Contact your investment provider (Fidelity and/or TIAA) for the required forms and instructions.

Retirement Plan Limits for 2016

Plan limits will stay at the same level as 2015, based on IRS tax rules.