NADART offers two types of individual accounts to plan participants who have left employment with a NADART plan sponsor. If you have a vested account balance in excess of $5,000, you may want to consider these options:
Deferred Account
If you have a vested account balance greater than $5,000, you may delay payment of your balance to a specific date in the future.
Advantages of establishing a deferred account include:
- Additional federal, state and local taxes, if applicable, are postponed
- Your account continues to grow on a tax-deferred basis
- If you are a participant in a Classic Plan, your assets are invested in the NADART Fund (PDF) (you may already be familiar with the NADART Fund as it is the investment vehicle for any employee pre-tax contributions and employer contributions for the Classic Plan). If you are a participant in an Investment Choice Plan you may continue to invest your assets in any of the Investment Choice Fund Options (PDF) (including the newly added Target Dated Funds (PDF)).
- Your ability to roll over or transfer your balance is preserved for the future
Periodic Payment Account
If you have a vested account balance greater than $5,000, you may choose to set up a schedule of periodic payments of your declining account balance. Each payment must be at least $100 and can be made on a monthly, quarterly, semi-annual or annual basis.
Advantages of establishing a periodic payment account include:
- Additional federal, state and local taxes, if applicable, may be postponed*
- Your account continues to grow on a tax-deferred basis during your stream of payments
- If you are a participant in a Classic Plan, your assets are invested in the Income Fund (PDF) (you may already be familiar with the Income Fund as it is the investment vehicle for any after-tax voluntary contributions for the Classic Plan). If you are a participant in an Investment Choice Plan you may continue to invest your assets in any of the Investment Choice Fund Options (PDF) (including the newly added Target Dated Funds (PDF)).
*NADART must withhold 20% of the taxable amount of each periodic payment as income tax withholding unless the distributions meet one of the following exceptions:
- Payments existing for a period of at least ten years
- Payment extending over your life expectancy, or over the combined life expectancy of you and your beneficiary
If you are a married participant whose vested account balance exceeds $5,000, you must receive plan benefits in the form of a Qualified Joint and Survivor Annuity unless your spouse signs a waiver of his/her right to this form of payment. A Qualified Joint and Survivor Annuity provides both a guaranteed payment amount distributed at regular intervals (monthly, quarterly, etc.) throughout your life and a similar benefit continuing for the life of your spouse. If you select another form of benefit, your spouse must sign the waiver section of the NADART Benefit Request Form (N-10).