YUM! 401(k) Plan Financial Hardship Withdrawal Form

Transcription

1 YUM! 401(k) Plan Financial Hardship Withdrawal Frm Withdrawal Request Infrmatin: The infrmatin requested n this frm is necessary t determine yur eligibility fr a financial hardship withdrawal. An incmplete applicatin may result in delay r denial f the financial hardship withdrawal request. Hardship withdrawals result in a 6-mnth suspensin f emplyee cntributins Name: Address: Scial Security #: Daytime Telephne #: Evening Telephne #: Wrk Lcatin:_ (i.e. KFC) Please check belw the reasn fr yur financial hardship request: Purchase f a primary residence Unreimbursed medical expenses Pst-secndary educatin (Tuitin and related expenses) Preventin f freclsure r evictin frm primary residence Burial r Funeral Expenses Repair f Casualty damage t yur Principal Residence Other immediate and severe financial need (Yu must attach prf f financial hardship see instructins n back) Can yur financial hardship be paid frm: Yes N 1. Funds in yur checking r saving accunts r marketable investments? 2. Assets that can be reasnably liquidated r sld (including yur spuse s)? 3. A lan frm a financial institutin r bank? 4. Debt that can be restructured r extended by the creditr? 5. Reimbursement r cmpensatin by an insurance plicy r cmpany? 6. Stpping yur YUM! 401(k) Plan cntributins? 7. Receiving a lan frm yur YUM! 401(k) Plan accunt? (We reserve the right t request dcumentatin t supprt these respnses.) Amunt f Withdrawal Request Calculatin: Ttal amunt needed t relieve yur financial hardship: $ Amunt yu can pay $ Yur hardship withdrawal request* $ *Hardship withdrawals are limited t yur cntributins and pre earnings. Earnings received after 1/1/89 are nt available fr withdrawal Withhlding: I elect t withhld the fllwing amunt frm my distributin: % (whle percents nly, 0% 10%) I understand that 10% will be withheld fr incme taxes, unless I specify an alternate amunt abve. I understand that I may elect t have n withhlding apply t my distributin. Certificatin: I hereby certify, under penalty f perjury, that t the best f my knwledge and belief the infrmatin prvided n this frm, including the Scial Security Number r Taxpayer Identificatin Number, is accurate and cmplete. Signature: Date: Return frm t: YUM! Brands 401(k) Plan P.O. Bx Jacksnville, FL

2 Hardship Withdrawal Infrmatin Befre taking a hardship withdrawal, yu must exhaust all ther resurces which includes taking a lan frm yur YUM 401k Plan accunt. Sme f the advantages f taking a lan in lieu f a hardship withdrawal are: (1) yu avid taxatin n the amunt yu received; (2) yu avid the 10% penalty fr early withdrawal; and (3) repayments increase yur Plan accunt because the interest yu pay ges int yur accunt. All hardship requests must be supprted by dcumentatin, as described belw. Generally, Internal Revenue Service rules allw hardship withdrawals nly if yu have an immediate and severe financial need and yu d nt have any ther resurces reasnably available t yu t meet yur need. This includes assets available by taking a lan frm yur YUM 401k Plan accunt, and assets f yur spuse r children, but des nt include prperty held fr yur children under an irrevcable trust r under the Unifrm Gifts t Minrs Act. Prf f financial hardship must be included with yur applicatin. If yu select: Purchase f primary residence yu must attach: Cpy f cntract, agreement f sale r binder signed by bth buyer and seller. Cntract f sale must stipulate cst f hme and amunt f mrtgage and dwn payment. Amunts frm mrtgage payments nly qualify if necessary t prevent freclsure (see belw). Unreimbursed medical expenses yu must attach: Explanatin f benefits frm medical plan/insurer indicating nn-reimbursable expenses. Bills r receipts fr unreimbursed expenses fr participant r family member r estimated medical expenses that wuld therwise be unaffrdable withut hardship withdrawal, must als be supplied. Pst Secndary Educatin yu must attach: Registrar/Bursar statement, including student s name and amunt f tuitin fr next semester r quarter. Tuitin related expenses include reimbursement f bks and ther educatin supplies fr which bills r receipts must be supplied. Preventin f Freclsure r Evictin yu must attach: Ntice f freclsure r evictin, tax lien r curt rder Burial r Funeral Expenses Payments fr burial r funeral expenses fr the participant s deceased parent(s), spuse, child(ren), r dependent(s). Yu must attach: A statement r invice including burial r funeral expenses specifying the payment amunt and a statement f the relatinship between the participant and the deceased. Include a cpy f the death certificate. Repair f damage t yur Principal Residence Expenses fr the repair f damage t yur principal residence that wuld qualify as a deductible casualty expense under federal incme tax rules, such as damage caused by fire r strm. Yu must attach: A cpy f the cntract agreement r estimate signed by bth parties. The cntract must stipulate the cst f the repair f the damage. Include a letter f explanatin f what caused the casualty and a statement frm yur insurance cmpany that the lss is nt cvered by insurance. Definitin f Spuse- Fr all purpses under the plan, yur spuse is yur legal ppsite sex r same sex spuse (including cmmn law spuses, where applicable). Same sex spuses are recgnized under the plan, if yu were legally married in a state r freign cuntry that authrized yur same sex marriage. This applies regardless f whether yu reside in a state r ther jurisdictin that recgnizes same-sex marriage r reside in a state r ther jurisdictin that des nt recgnize same-sex marriage. A civil unin partner r dmestic partner is nt cnsidered a legal ppsite sex r same sex spuse. Immediate and Severe Financial Need yu must attach: Written statement by yu describing the need and hw the withdrawn funds will be used. Dcumentatin t verify the expense/debt is als required. Examples f immediate and severe financial need are as fllws: YES Debt r expense incurred that if nt paid will jepardize yur family s health r welfare NO Any Debt fr which minimum r reduced payments can be made, such as credit cards, etc. Hme Imprvements Purchase f luxury items, such as a car r a vacatin As f January 1, 1999, hardship distributins n lnger qualify as an eligible rllver distributin. This means that mandatry 20% withhlding des nt apply t hardship distributins. Further, yu may n lnger rllver yur hardship distributin t an IRA r emplyer plan. While n amunt f yur hardship distributin is required t be withheld, the amunt f the distributin remains taxable incme t yu in the current year. Further, unless yu have attained the age f 59-1/2 prir t receiving yur distributin, yu may we an additinal 10% penalty tax. Please cnsult yur tax advisr if yu have any questins regarding the tax treatment f yur hardship distributin.

3 Yur Rllver Optins fr Payments Nt frm a Designated Rth Accunt Yu are receiving this ntice in the event that all r a prtin f a payment yu are receiving frm the Plan is eligible t be rlled ver t an IRA r an emplyer plan. This ntice is intended t help yu decide whether t d such a rllver. This ntice describes the rllver rules that apply t payments frm the Plan that are nt frm a designated Rth accunt (a type f accunt with special tax rules in sme emplyer plans). If yu als receive a payment frm a designated Rth accunt in the Plan, yu will be prvided a different ntice fr that payment, and the Plan administratr r the payr will tell yu the amunt that is being paid frm each accunt. Rules that apply t mst payments frm a plan are described in the General Infrmatin Abut Rllvers sectin. Special rules that nly apply in certain circumstances are described in the Special Rules and Optins sectin. GENERAL INFORMATION ABOUT ROLLOVERS Hw can a rllver affect my taxes? Yu will be taxed n a payment frm the Plan if yu d nt rll it ver. If yu are under age 59½ and d nt d a rllver, yu will als have t pay a 10% additinal incme tax n early distributins (unless an exceptin applies). Hwever, if yu d a rllver, yu will nt have t pay tax until yu receive payments later and the 10% additinal incme tax will nt apply if thse payments are made after yu are age 59½ (r if an exceptin applies). Where may I rll ver the payment? Yu may rll ver the payment t either an IRA (an individual retirement accunt r individual retirement annuity) r an emplyer plan (a tax-qualified plan, sectin 403(b) plan, r gvernmental sectin 457(b) plan) that will accept the rllver. The rules f the IRA r emplyer plan that hlds the rllver will determine yur investment ptins, fees, and rights t payment frm the IRA r emplyer plan (fr example, n spusal cnsent rules apply t IRAs and IRAs may nt prvide lans). Further, the amunt rlled ver will becme subject t the tax rules that apply t the IRA r emplyer plan. Hw d I d a rllver? There are tw ways t d a rllver. Yu can d either a direct rllver r a 60-day rllver. If yu d a direct rllver, the Plan will make the payment directly t yur IRA r an emplyer plan. Yu shuld cntact the IRA spnsr r the administratr f the emplyer plan fr infrmatin n hw t d a direct rllver. If yu d nt d a direct rllver, yu may still d a rllver by making a depsit int an IRA r eligible emplyer plan that will accept it. Yu will have 60 days after yu receive the payment t make the depsit. If yu d nt d a direct rllver, the Plan is required t withhld 20% f the payment fr federal incme taxes (up t the amunt f cash and prperty received ther than emplyer stck). This means that, in rder t rll ver the entire payment in a 60-day rllver, yu must use ther funds t make up fr the 20% withheld. If yu d nt rll ver the entire amunt f the payment, the prtin nt rlled ver will be taxed and will be subject t the 10% additinal incme tax n early distributins if yu are under age 59½ (unless an exceptin applies). Hw much may I rll ver? If yu wish t d a rllver, yu may rll ver all r part f the amunt eligible fr rllver. Any payment frm the Plan is eligible fr rllver, except: Certain payments spread ver a perid f at least 10 years r ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Required minimum distributins after age 70½ (r after death) Hardship distributins ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Lans treated as deemed distributins (fr example, lans in default due t missed payments befre yur emplyment ends) Cst f life insurance paid by the Plan Cntributins made under special autmatic enrllment rules that are withdrawn pursuant t yur request within 90 days f enrllment Amunts treated as distributed because f a prhibited allcatin f S crpratin stck under an ESOP (als, there will generally be adverse tax cnsequences if yu rll ver a distributin f S crpratin stck t an IRA). The Plan administratr r the payr can tell yu what prtin f a payment is eligible fr rllver. If I dn t d a rllver, will I have t pay the 10% additinal incme tax n early distributins? If yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins fr any payment frm the Plan (including amunts withheld fr incme tax) that yu d nt rll ver, unless ne f the exceptins listed belw applies. This tax is in additin t the regular incme tax n the payment nt rlled ver. The 10% additinal incme tax des nt apply t the fllwing payments frm the Plan: Payments made after yu separate frm service if yu will be at least age 55 in the year f the separatin Payments that start after yu separate frm service if paid at least annually in equal r clse t equal amunts ver yur life r life expectancy (r the lives r jint life expectancy f yu and yur beneficiary) Payments frm a gvernmental defined benefit pensin plan made after yu separate frm service if yu are a public safety emplyee and yu are at least age 50 in the year f the separatin

4 Payments made due t disability Payments after yur death Payments f ESOP dividends Crrective distributins f cntributins that exceed tax law limitatins Cst f life insurance paid by the Plan Cntributins made under special autmatic enrllment rules that are withdrawn pursuant t yur request within 90 days f enrllment Payments made directly t the gvernment t satisfy a federal tax levy Payments made under a qualified dmestic relatins rder (QDRO) Payments up t the amunt f yur deductible medical expenses Certain payments made while yu are n active duty if yu were a member f a reserve cmpnent called t duty after September 11, 2001 fr mre than 179 days Payments f certain autmatic enrllment cntributins requested t be withdrawn within 90 days f the first cntributin. If I d a rllver t an IRA, will the 10% additinal incme tax apply t early distributins frm the IRA? If yu receive a payment frm an IRA when yu are under age 59½, yu will have t pay the 10% additinal incme tax n early distributins frm the IRA, unless an exceptin applies. In general, the exceptins t the 10% additinal incme tax fr early distributins frm an IRA are the same as the exceptins listed abve fr early distributins frm a plan. Hwever, there are a few differences fr payments frm an IRA, including: There is n exceptin fr payments after separatin frm service that are made after age 55. The exceptin fr qualified dmestic relatins rders (QDROs) des nt apply (althugh a special rule applies under which, as part f a divrce r separatin agreement, a tax-free transfer may be made directly t an IRA f a spuse r frmer spuse). The exceptin fr payments made at least annually in equal r clse t equal amunts ver a specified perid applies withut regard t whether yu have had a separatin frm service. There are additinal exceptins fr (1) payments fr qualified higher educatin expenses, (2) payments up t $10,000 used in a qualified first-time hme purchase, and (3) payments after yu have received unemplyment cmpensatin fr 12 cnsecutive weeks (r wuld have been eligible t receive unemplyment cmpensatin but fr self-emplyed status). Will I we State incme taxes? This ntice des nt describe any State r lcal incme tax rules (including withhlding rules). SPECIAL RULES AND OPTIONS If yur payment includes after-tax cntributins After-tax cntributins included in a payment are nt taxed. If a payment is nly part f yur benefit, an allcable prtin f yur aftertax cntributins is generally included in the payment. If yu have pre-1987 after-tax cntributins maintained in a separate accunt, a special rule may apply t determine whether the after-tax cntributins are included in a payment. Yu may rll ver t an IRA a payment that includes after-tax cntributins thrugh either a direct rllver r a 60-day rllver. Yu must keep track f the aggregate amunt f the after-tax cntributins in all f yur IRAs (in rder t determine yur taxable incme fr later payments frm the IRAs). If yu d a direct rllver f nly a prtin f the amunt paid frm the Plan and a prtin is paid t yu, each f the payments will include an allcable prtin f the after-tax cntributins. If yu d a 60day rllver t an IRA f nly a prtin f the payment made t yu, the after-tax cntributins are treated as rlled ver last. Fr example, assume yu are receiving a cmplete distributin f yur benefit which ttals $12,000, f which $2,000 is after-tax cntributins. In this case, if yu rll ver $10,000 t an IRA in a 60-day rllver, n amunt is taxable because the $2,000 amunt nt rlled ver is treated as being aftertax cntributins. Yu may rll ver t an emplyer plan all f a payment that includes after-tax cntributins, but nly thrugh a direct rllver (and nly if the receiving plan separately accunts fr after-tax cntributins and is nt a gvernmental sectin 457(b) plan). Yu can d a 60-day rllver t an emplyer plan f part f a payment that includes after-tax cntributins, but nly up t the amunt f the payment that wuld be taxable if nt rlled ver. If yu miss the 60-day rllver deadline Generally, the 60-day rllver deadline cannt be extended. Hwever, the IRS has the limited authrity t waive the deadline under certain extrardinary circumstances, such as when external events prevented yu frm cmpleting the rllver by the 60-day rllver deadline. T apply fr a waiver, yu must file a private letter ruling request with the IRS. Private letter ruling requests require the payment f a nnrefundable user fee. Fr mre infrmatin, see IRS Publicatin 590, Individual Retirement Arrangements (IRAs). If yur payment includes emplyer stck that yu d nt rll ver If yu d nt d a rllver, yu can apply a special rule t payments f emplyer stck (r ther emplyer securities) that are either attributable t after-tax cntributins r paid in a lump sum after separatin frm service (r after age 59½, disability, r the participant s death). Under the special rule, the net unrealized appreciatin n the stck will nt be taxed when distributed frm the Plan and will be taxed at capital gain rates when yu sell the stck. Net unrealized appreciatin is generally the increase in the value f emplyer stck after it was acquired by the Plan. If yu d a rllver fr a payment that includes emplyer stck (fr example, by selling the stck and rlling ver the prceeds within 60 days f the payment), the special rule relating t the distributed emplyer stck will nt apply t any subsequent payments frm the IRA r emplyer plan. The Plan administratr can tell yu the amunt f any net unrealized appreciatin.

5 If yu have an utstanding lan that is being ffset If yu have an utstanding lan frm the Plan, yur Plan benefit may be ffset by the amunt f the lan, typically when yur emplyment ends. The lan ffset amunt is treated as a distributin t yu at the time f the ffset and will be taxed (including the 10% additinal incme tax n early distributins, unless an exceptin applies) unless yu d a 60-day rllver in the amunt f the lan ffset t an IRA r emplyer plan. If yu were brn n r befre January 1, 1936 If yu were brn n r befre January 1, 1936 and receive a lump sum distributin that yu d nt rll ver, special rules fr calculating the amunt f the tax n the payment might apply t yu. Fr mre infrmatin, see IRS Publicatin 575, Pensin and Annuity Incme. If yur payment is frm a gvernmental sectin 457(b) plan If the Plan is a gvernmental sectin 457(b) plan, the same rules described elsewhere in this ntice generally apply, allwing yu t rll ver the payment t an IRA r an emplyer plan that accepts rllvers. One difference is that, if yu d nt d a rllver, yu will nt have t pay the 10% additinal incme tax n early distributins frm the Plan even if yu are under age 59½ (unless the payment is frm a separate accunt hlding rllver cntributins that were made t the Plan frm a tax-qualified plan, a sectin 403(b) plan, r an IRA). Hwever, if yu d a rllver t an IRA r t an emplyer plan that is nt a gvernmental sectin 457(b) plan, a later distributin made befre age 59½ will be subject t the 10% additinal incme tax n early distributins (unless an exceptin applies). Other differences are that yu cannt d a rllver if the payment is due t an unfreseeable emergency and the special rules under If yur payment includes emplyer stck that yu d nt rll ver and If yu were brn n r befre January 1, 1936 d nt apply. If yu are an eligible retired public safety fficer and yur pensin payment is used t pay fr health cverage r qualified lng-term care insurance If the Plan is a gvernmental plan, yu retired as a public safety fficer, and yur retirement was by reasn f disability r was after nrmal retirement age, yu can exclude frm yur taxable incme plan payments paid directly as premiums t an accident r health plan (r a qualified lng-term care insurance cntract) that yur emplyer maintains fr yu, yur spuse, r yur dependents, up t a maximum f $3,000 annually. Fr this purpse, a public safety fficer is a law enfrcement fficer, firefighter, chaplain, r member f a rescue squad r ambulance crew. If yu rll ver yur payment t a Rth IRA Yu can rll ver a payment frm the Plan made befre January 1, 2010 t a Rth IRA nly if yur mdified adjusted grss incme is nt mre than $100,000 fr the year the payment is made t yu and, if married, yu file a jint return. These limitatins d nt apply t payments made t yu frm the Plan after If yu wish t rll ver the payment t a Rth IRA, but yu are nt eligible t d a rllver t a Rth IRA until after 2009, yu can d a rllver t a traditinal IRA and then, after 2009, elect t cnvert the traditinal IRA int a Rth IRA. If yu rll ver the payment t a Rth IRA, a special rule applies under which the amunt f the payment rlled ver (reduced by any after-tax amunts) will be taxed. Hwever, the 10% additinal incme tax n early distributins will nt apply (unless yu take the amunt rlled ver ut f the Rth IRA within 5 years, cunting frm January 1 f the year f the rllver). Fr payments frm the Plan during 2010 that are rlled ver t a Rth IRA, the taxable amunt can be spread ver a 2-year perid starting in If yu rll ver the payment t a Rth IRA, later payments frm the Rth IRA that are qualified distributins will nt be taxed (including earnings after the rllver). A qualified distributin frm a Rth IRA is a payment made after yu are age 59½ (r after yur death r disability, r as a qualified first-time hmebuyer distributin f up t $10,000) and after yu have had a Rth IRA fr at least 5 years. In applying this 5-year rule, yu cunt frm January 1 f the year fr which yur first cntributin was made t a Rth IRA. Payments frm the Rth IRA that are nt qualified distributins will be taxed t the extent f earnings after the rllver, including the 10% additinal incme tax n early distributins (unless an exceptin applies). Yu d nt have t take required minimum distributins frm a Rth IRA during yur lifetime. Fr mre infrmatin, see IRS Publicatin 590, Individual Retirement Arrangements (IRAs). Yu cannt rll ver a payment frm the Plan t a designated Rth accunt in an emplyer plan. If yu are nt a plan participant Payments after death f the participant. If yu receive a distributin after the participant s death that yu d nt rll ver, the distributin will generally be taxed in the same manner described elsewhere in this ntice. Hwever, the 10% additinal incme tax n early distributins and the special rules fr public safety fficers d nt apply, and the special rule described under the sectin If yu were brn n r befre January 1, 1936 applies nly if the participant was brn n r befre January 1, If yu are a surviving spuse. If yu receive a payment frm the Plan as the surviving spuse f a deceased participant, yu have the same rllver ptins that the participant wuld have had, as described elsewhere in this ntice. In additin, if yu chse t d a rllver t an IRA, yu may treat the IRA as yur wn r as an inherited IRA. An IRA yu treat as yur wn is treated like any ther IRA f yurs, s that payments made t yu befre yu are age 59½ will be subject t the 10% additinal incme tax n early distributins (unless an exceptin applies) and required minimum distributins frm yur IRA d nt have t start until after yu are age 70½.

6 If yu treat the IRA as an inherited IRA, payments frm the IRA will nt be subject t the 10% additinal incme tax n early distributins. Hwever, if the participant had started taking required minimum distributins, yu will have t receive required minimum distributins frm the inherited IRA. If the participant had nt started taking required minimum distributins frm the Plan, yu will nt have t start receiving required minimum distributins frm the inherited IRA until the year the participant wuld have been age 70½. If yu are a surviving beneficiary ther than a spuse. If yu receive a payment frm the Plan because f the participant s death and yu are a designated beneficiary ther than a surviving spuse, the nly rllver ptin yu have is t d a direct rllver t an inherited IRA. Payments frm the inherited IRA will nt be subject t the 10% additinal incme tax n early distributins. Yu will have t receive required minimum distributins frm the inherited IRA. Payments under a qualified dmestic relatins rder. If yu are the spuse r frmer spuse f the participant wh receives a payment frm the Plan under a qualified dmestic relatins rder (QDRO), yu generally have the same ptins the participant wuld have (fr example, yu may rll ver the payment t yur wn IRA r an eligible emplyer plan that will accept it). Payments under the QDRO will nt be subject t the 10% additinal incme tax n early distributins. If yu are a nnresident alien If yu are a nnresident alien and yu d nt d a direct rllver t a U.S. IRA r U.S. emplyer plan, instead f withhlding 20%, the Plan is generally required t withhld 30% f the payment fr federal incme taxes. If the amunt withheld exceeds the amunt f tax yu we (as may happen if yu d a 60-day rllver), yu may request an incme tax refund by filing Frm 1040NR and attaching yur Frm 1042-S. See Frm W-8BEN fr claiming that yu are entitled t a reduced rate f withhlding under an incme tax treaty. Fr mre infrmatin, see als IRS Publicatin 519, U.S. Tax Guide fr Aliens, and IRS Publicatin 515, Withhlding f Tax n Nnresident Aliens and Freign Entities. Other special rules If a payment is ne in a series f payments fr less than 10 years, yur chice whether t make a direct rllver will apply t all later payments in the series (unless yu make a different chice fr later payments). If yur payments fr the year are less than $200 (nt including payments frm a designated Rth accunt in the Plan), the Plan is nt required t allw yu t d a direct rllver and is nt required t withhld fr federal incme taxes. Hwever, yu may d a 60-day rllver. Unless yu elect therwise, a mandatry cashut f mre than $1,000 (nt including payments frm a designated Rth accunt in the Plan) will be directly rlled ver t an IRA chsen by the Plan administratr r the payr. A mandatry cashut is a payment frm a plan t a participant made befre age 62 (r nrmal retirement age, if later) and withut cnsent, where the participant s benefit des nt exceed $5,000 (nt including any amunts held under the plan as a result f a prir rllver made t the plan). Yu may have special rllver rights if yu recently served in the U.S. Armed Frces. Fr mre infrmatin, see IRS Publicatin 3, Armed Frces Tax Guide. FOR MORE INFORMATION Yu may wish t cnsult with the Plan administratr r payr, r a prfessinal tax advisr, befre taking a payment frm the Plan. Als, yu can find mre detailed infrmatin n the federal tax treatment f payments frm emplyer plans in: IRS Publicatin 575, Pensin and Annuity Incme; IRS Publicatin 590, Individual Retirement Arrangements (IRAs); and IRS Publicatin 571, Tax- Sheltered Annuity Plans (403(b) Plans). These publicatins are available frm a lcal IRS ffice, n the web at r by calling TAX-FORM. * * *