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SRSP FAQs

I have questions about my account. How do I get in touch with Vanguard?

 

You can reach Vanguard by logging into your account at vanguard.com/32bj or vanguard.com/retirementplans, on your mobile device by downloading the Vanguard app at vanguard.com/bemobile, or calling 800-523-1188 (Spanish: 800-828-4487).

How much can I contribute to the SRSP?

 

For 2016, the maximum amount the IRS allows you to contribute is $18,000. If you will be age 50 by the end of the year, or, if you are age 50 or older now, you can contribute additional “catch-up” contributions of $6,000 for a total of $24,000. These amounts may be adjusted each year by the IRS.

How can the SRSP help me save for retirement?

 

The SRSP is an important savings tool to use in planning for your retirement. Start saving early, deposit pre-tax dollars into your account each pay day. Along with the employer contributions deposited into your account, your account will have the opportunity to grow with interest in your choice of investment funds available in the Plan. Note that your account may experience investment gains or losses depending on the rate of return experienced by the investment fund(s) you choose. Any gains or growth in your account remains tax free until you receive a distribution when you retire.

Why should I contribute to the SRSP?

 

Ask yourself instead “Will I have enough money to retire when I am ready”? To answer this question, you will need to estimate what your expenses will be at retirement. Below are the typical expenses you may incur:

  • Food and clothing
  • Housing & utilities
  • Health care insurance and life insurance
  • Transportation expenses
  • Taxes
  • Debts - loans and credit card payments
  • Miscellaneous

If you start planning and saving early, your income from your pension and Social Security supplemented by your savings will be enough to cover your retirement expenses. If your budget permits, consider increasing your SRSP contributions every year in the December open enrollment period, or more frequently if your employer permits.

I plan to retire in the next few years. Is it too late to start saving?

 

It’s never too late to start saving, and the sooner you start saving, the more time your money has to grow. The easiest way to save is by participating in the SRSP. If you are not already contributing to the Plan, you should consider enrolling in the December open enrollment period, or earlier if your employer permits . Contributing is easy; your contributions are made through payroll deductions and deposited automatically into your account. You will receive a quarterly statement showing your contributions and your account balance. If you are already enrolled in the Plan, consider increasing your contributions each year. A slight increase each year will help you reach your retirement goals faster! Over time, your contributions, your employer’s contributions, and compound interest make a big difference in the amount you will accumulate. Your money will be invested as you choose and will be subject to investment market gains and losses. Note that your account may experience investment gains or losses depending on the rate of return experienced by the investment(s) fund you choose.

When am I eligible to take a distribution from the SRSP?

 

Generally, you can take your money out of the SRSP 180 days after you stop working in covered employment. However, if you are age 55 and retired (retired means you have completely with drawn from employment with all contributing employers), you are eligible to receive an immediate distribution.

Note: If you are under age 59½ when you receive a distribution from the SRSP, you may be subject to an additional 10% tax penalty by the IRS.

How do I apply for a distribution from the SRSP?

 

180 days after you leave covered employment, you will receive a distribution kit in the mail that includes a distribution form, special tax notice and other required forms. If you are eligible for immediate distribution, contact Vanguard by logging into your account at vanguard.com/32bj or vanguard.com/retirementplans, or on your mobile device by downloading the Vanguard app at vanguard.com/bemobile, or calling their Participant Service Center at 1-800-523-1188 (Spanish: 1-800-828-4487) and let the representative know that you are age 55 and have retired or stopped working in covered employment.

How will my account be paid out when I request a distribution?

 
  • You can receive payment from the SRSP in various ways: a one-time lump sum payment, installment payments, or combined lump sum and installments.
  • If you elect the lump sum payment option, you will receive your entire account balance in a single lump sum.
  • If you elect the installment payment option, you can elect to receive equal monthly installments over a fixed number of years, up to a maximum of 10 years.
  • If you elect the combined lump sum and installment option, you can receive part of your distribution in a lump sum and the remainder of your account balance will be distributed in equal monthly installments over a fixed number of years, up to a maximum of 10 years.
  • If your account includes prior annuity contributions (employer contributions made before January 1, 2001), special rules will apply when requesting a distribution. The SRSP is required by law to offer an annuity for that portion of your account. If you are not married and want to take a lump sum distribution of your prior annuity contributions, you will have to sign a form indicating your intention to waive the single life annuity option. If you are married, then you and your spouse will have to sign a form indicating your intention to waive the qualified Joint and Survivor option.

Can I roll over my SRSP distribution into an IRA?

 

Yes, you may roll over your SRSP lump sum distribution into an IRA or other qualified retirement plan. You may not roll over installment payments that are paid from the SRSP over a period of 10 years.

Can I withdraw money or take a loan from the SRSP while I am still working in covered employment?

 

You cannot get your money out of the SRSP for any reason while you are still working in covered employment. There are no loans, hardship withdrawals or other in-service withdrawals. The SRSP is designed to help you save for retirement and restricts any type of withdrawal until you retire or leave covered employment.

Can I leave my account in the Plan after I leave covered employment?

 

Yes, you may leave your money in the Plan after you stop working in covered employment. However, you must begin receiving distributions when you turn age 70½, your required minimum distribution age. if you fail to make a distribution election and turn 70 ½, Vanguard will begin required distributions in the minimum amount required by law. Those distributions are not eligible for rollover.

When should I contact Vanguard after I leave covered employment?

 

If you still have an account balance in the SRSP after you retire or leave covered employment, it’s a good idea to keep in touch with Vanguard if you need to:

  • Change your address
  • Change your beneficiaries
  • Provide notification of your spouse’s death
  • Get a replacement copy of your recent Form 1099-R for your annual IRS income tax filing

As well, your spouse or a close friend or relative should notify Vanguard or the Fund office of your death immediately upon your death. The Fund office is also here to answer any questions you may have about benefits that may be payable to your spouse or beneficiary after your death.

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*Answer all of the questions as accurately as possible for best results. For additional information or questions about your benefits, call Member Services at 800-551-3225.

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