Disability Income Benefit. Retirement

Transcription

1 Disability Income Benefit Retirement

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3 General information This brochure accompanies the Disability Income Benefit Estimate of Benefits. Information in this brochure will help you understand the general rules related to your Disability Income Benefit from your retirement plan. This brochure addresses only your disability benefits from the state convention s participation in the Church Protection Benefit Program under the plan. This brochure does not discuss disability retirement income from retirement plans you may have with GuideStone, nor does it discuss other types of retirement income. If you have requested estimates from other plans or disability retirement income estimates, other brochures are provided to explain those illustrations. The Disability Income Benefit is a supplemental benefit and should not be confused with any regular disability insurance you may have. You should not consider this as a replacement to a disability insurance policy. Check with your church or insurance provider to see if you are eligible for any disability insurance benefits. You may contact GuideStone directly to request application forms or to discuss retirement income payment options. If you have questions or need additional assistance, call GuideStone at GUIDE ( ). 3

4 Disability Income Benefit Participation by the state convention in the Church Protection Benefit Program under the Southern Baptist Churches 403(b)(9) Retirement Plan can provide a Disability Income Benefit of up to $500 per month if you become disabled while in active service. A reduced benefit may be available for up to 12 months after you leave active service. General eligibility rules:» State Convention Protection Contributions made on your behalf to the Church Protection Benefit Program determine your eligibility. For you to be eligible for the Disability Income Benefit, the state convention must contribute during the 12 months immediately before your disability date.» You must be disabled as defined under the plan. Amount of benefit:» The plan bases the maximum $500 Disability Income Benefit on 12 consecutive, monthly State Convention Protection Contributions. The 12 consecutive months must immediately precede your disability date.» Fewer months of State Convention Protection Contributions reduce your benefit. For example, if the state convention submitted monthly State Convention Protection Contributions in just nine out of the last 12 months, your Disability Income Benefit would be $375 per month.» Your Disability Income Benefit can be effective after a five-month waiting period. The waiting period begins after the last day you worked. However, the plan will not pay benefits earlier than the seventh month following your last day of work. This two-month delay between the effective date and the first payment is necessary to prevent your benefit from being subject to Social Security and Medicare tax withholding. 4

5 Example Last day worked: January 15, 2014 Benefit effective date: June 1, 2014 Calculated benefit amount: $375/month First payment: $750 issued at the beginning of August 2014 Subsequent payments: $375/month beginning at the end of August 2014 Proof of disability:» You must submit medical proof of your total disability.» GuideStone may require an annual checkup on your status.» Disabled shall mean the inability to engage in any substantial, gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.» If you return to work, the Disability Income Benefit will cease after a short trial period. See Question 6 on page 7. Other benefits:» While you draw the Disability Income Benefit, the Survivor Benefit (also provided by the Church Protection Benefit Program under the plan) remains in effect for your beneficiary. In addition, the plan provides for a contribution to your State Convention Contributions Account while you are receiving the Disability Income Benefit.» Since the Disability Income Benefit will eventually cease, you may wish to delay retirement income from your contributions accounts. The accumulations will remain in the plan investment of your choice. 5

6 Questions commonly asked about Disability Income Benefit 1. When should I apply for benefits? You should return your completed forms to GuideStone prior to the beginning of the month in which you plan to receive your first benefit payment. 2. When can I expect to get my first benefit check? If the last day you worked was January 31 and GuideStone determines you are totally disabled under the plan, your benefit effective date would generally be July 1. In this case, you can expect to receive a retroactive benefit check by mid-september. Your retroactive benefit check represents the July and August benefit payments. The September check will be issued at the end of September. 3. Is my Disability Income Benefit taxable? Yes. 4. Can I continue to make contributions to my retirement account after I begin receiving the Disability Income Benefit? No. You cannot make employee contributions to your retirement account once you are no longer working. However, your employer may be able to continue to make contributions to the Church Retirement Plan if the church s policies and procedures state they will provide contributions to an employee who is disabled. 5. Can I designate my Disability Income Benefit as a housing allowance? If you are a Minister for Tax Purposes, you may ask GuideStone to designate all or a portion of your benefit as a housing allowance. If you designate a percentage, the amount designated as a housing allowance will automatically increase if your benefit amount increases. 6

7 You must decide if you are a Minister for Tax Purposes and how much you can exclude from income as a housing allowance. If you are eligible for a housing allowance, you can exclude from your gross income the least of these three amounts, subject to IRS rules: (1) the designated amount, (2) your actual eligible housing expenses or (3) the annual fair rental value of your home, furnished, including utilities. You are responsible for documenting these expenses. If you ask GuideStone to designate more than you can exclude from income as a housing allowance, you must report the excess to the IRS. Ministers must comply with other IRS rules about the housing allowance. If you have any questions about these rules, please consult your own tax advisor. You can make or change a housing allowance designation at any time by completing a form. Contact GuideStone to get this form. All requests for changes will apply to future benefit payments only and cannot be retroactive. For more information about who is a Minister for Tax Purposes, see our annual Ministers Tax Guide available on our website, GuideStone.org, or by calling GUIDE ( ). You will find more information in our brochure, Ministerial Tax Issues. Call the same number for a free copy. 6. What happens to my Disability Income Benefit if I return to work? If you return to work, the Disability Income Benefit ceases after a short trial period. This trial period is any nine months of gainful employment over a 24-month period. The nine months do not have to be consecutive. Gainful employment is earning the greater of the monthly Social Security allowance or 50 percent of your pre-disability monthly compensation (including housing allowance) not to exceed five times the Social Security allowance. 7

8 7. Will taking a Disability Income Benefit affect my retirement income? No. A Disability Income Benefit never reduces any of your retirement income. 8. If I delay receiving my money in my contributions accounts, what happens to this money if I die? The accumulated balance (all contributions and earnings) is payable to your designated beneficiary. 9. What happens to the money in my contributions accounts if my designated beneficiary and I both die before I begin receiving income? If none of the beneficiaries (primary or secondary) you have named is living, the balance in your account is paid to the beneficiaries designated under the plan. 10. What other rules apply to a beneficiary designation? Plan provisions: When you die, if you have not designated a beneficiary or if no named beneficiary survives you, the plan provides who your beneficiary will be. Spouse: If you are married, your spouse is automatically the sole primary beneficiary of your benefits under the plan. If you change your marital status, notify GuideStone. If you marry after making a beneficiary designation, your marriage will automatically invalidate the prior beneficiary designation and your spouse automatically will be your primary beneficiary. Minors: GuideStone cannot pay the death benefits directly to a minor. Generally, a probate court would have to appoint a guardian to receive and administer the death benefits for the minor. 8

9 Trusts: If you want to designate a trust (a testamentary trust or other trust), please contact your attorney for appropriate language to designate the trust. GuideStone will not be obligated to inquire into the terms of the trust agreement, will not be charged with knowledge of its terms, and is fully discharged of all liability regarding payment to the trustee. Organizations: If you designate your employer as beneficiary, you must designate a specific fund of the employer, such as a building fund. If you designate a nonprofit organization as beneficiary, you must provide the full legal name and address of the nonprofit organization. Estate: The wording to designate your estate as beneficiary is my estate or the estate of (your name). How to apply for benefits What you need:» Disability Income Benefit Estimate of Benefits» Proof of Total Disability: Attending Physician s Statement» Disability Income Benefit Application» IRS Form W-4P» Special Tax Notice General information about completing forms:» These forms must be typed or completed in ink. The forms cannot be signed more than 180 days before the date your payments begin. In addition, the benefit effective date may not be before the fifth month following your last day of work. 9

10 » Allow a few days for the benefit records to be established from the date GuideStone receives the completed forms. Review of the Proof of Total Disability form could extend the time required.» Incomplete applications cannot be processed and will be returned.» Return forms to: Benefits Administration, GuideStone Financial Resources, 2401 Cedar Springs Road, Dallas, TX » If you have other questions about the Disability Income Benefit, call our toll-free number, GUIDE ( ). Before you complete the forms:» Evaluate the Disability Income Benefit Estimate of Benefits.» Read the Special Tax Notice.» Read through the forms. Completing the Disability Income Benefit Application: 1. Complete Section 1, Participant Information. 2. Section 2, Housing Allowance Designation, applies only to eligible ministers. This section must be completed if you want GuideStone to designate a portion or all of a benefit as a housing allowance. 3. Section 3, Federal Income Tax Withholding Election, must be completed. Refer to the Special Tax Notice for information. 4. Section 4 must be completed to have your monthly benefit electronically deposited into your bank account. 5. Complete Section 5, Participant Signature. Completing the Proof of Total Disability form:» Your doctor must complete the Proof of Total Disability: Attending Physician s Statement form.» GuideStone will review this information to determine if you are considered disabled under the terms of the plan. 10

11 General terms Beneficiary: The beneficiary is the person who may become entitled to a benefit under the plan. Benefit amount: The benefit amount is the estimated dollar amount you will receive for each payment period quoted. This amount has been estimated based on many variables. Benefit effective date: Your benefit effective date refers to the first day of the month your benefit is calculated. Normally, your first payment will be due to you at the beginning of the seventh month following your last day of work. This first payment includes any retroactive payments due to you, including payments for the two months between the five-month waiting period and the date of the first payment. Monthly benefit payments are mailed no later than the last working day of each month. Length of payment: The time period for which the benefit will be paid. 11

12 2401 Cedar Springs Road, Dallas, TX GUIDE GuideStone.org GuideStone Financial Resources 12/