How to take recurring distributions
The Participant may elect to keep the account open and as part of the plan ($5,000 and above account balance).
The Participant is typically not required to take a distribution from the plan until they have attained the age of 70½, at which time Required Minimum Distributions might apply.
If the account remains part of the Plan, the Participant who is over the age of 59½ may elect to take recurring (systematic) distributions from their account. These distribution types have special tax considerations. For example, the Participant will be required to provide the tax withholding amount for the periodic or recurring distribution on the distribution form provided.
Be sure to complete the Participant Separation from Service Checklist. Then follow the steps below:
Step #1 - Participant - Obtain the Form from the Envoy Choice Web Portal
- Log on to the Envoy Choice Web Portal
- Visit www.EnvoyFinancial.com
- At the top of the home page, click Login
- Enter User Id, Password and make sure "Personal Account Holder" is selected as Role
- On the top menu, select Take Money Out > Distribution.
- In the "Distribution Options - No Longer Employed" section, locate the row entitled "Recurring - over age 59½ only". In the Request Method column, click "Paper based - click here for form" to access the Periodic Distribution Authorization Form.
- A copy of the Special Tax Notice Regarding Plan Payments is also available on the Select Form tool. If you have not already received a copy of this important notice from your former employer, print and review this notification.
- Click Submit
- Print a copy of the form.
Step #2 - Participant - Complete the Periodic Distribution Authorization Form and Obtain Spousal Consent
Complete and sign the Periodic Distribution Authorization Form. Instructions for completion are provided in Section 1 of the form. If you are married, your spouse must also sign the form. The completed form must then be returned to your former employer, the Plan Sponsor.
Step #3 - Plan Sponsor - Review, Authorize and Return the Form to Envoy
Verify that the Periodic Distribution Authorization Form is properly signed by both the Participant and their spouse (if applicable). Sign the form as the Employer in Section 7 - Employer Authorization. Save a copy of the form in the Participant's Human Resource file. In the event of a plan audit, a copy of the form will be needed.
Return the completed and fully executed form to Envoy TPA and Recordkeeping for processing. The form can be scanned and emailed as a PDF to PlanSponsor@EnvoyFinancial.com. This is the preferred method. The form can also be mailed to: Envoy Financial, 4194 Royal Pine Drive, Colorado Springs, CO 80920, Attention: Envoy TPA and Recordkeeping.
Step #4 - Envoy - Payment
- Envoy will deduct a distribution fee from the account prior to the first liquidation.
- Envoy will set up the recurring distribution in accordance with the Participant's election.
- Envoy will direct the payments to the Participant.
Step #6 - Envoy - Tax Reporting
A Form 1099-R will be mailed to the Participant in January of the following calendar year. The Form 1099-R will reflect the Participant's tax withholdings as authorized on the Periodic Distribution Authorization Form.