Request for Withdrawal from 403(b)/Tax-Sheltered Annuity ( TSA )

Transcription

1 Request for Withdrawal from 403(b)/Tax-Sheltered Annuity ( TSA ) For the Prudential Defined Income Variable Annuity Variable annuities are issued by Pruco Life Insurance Company (in New York, by Pruco Life Insurance Company of New Jersey) and distributed by Prudential Annuities Distributors, Inc. All are Prudential Financial companies and each is solely responsible for its own financial condition and contractual obligations. Prudential Annuities is a business of Prudential Financial, Inc. Use this form to request a full surrender, partial withdrawal, systematic withdrawal and Non-Lifetime withdrawal. Not for use for 72(t) withdrawals. Instructions: All information must be typed or printed using blue or black ink. We recommend that you carefully review the accompanying Special Notice Regarding 403(b) Tax Sheltered Annuity Payments or consult a professional tax advisor about distributions from your 403(b)/TSA before submitting this request. Please refer to your annuity contract and prospectus for provisions and tax considerations regarding withdrawals before submitting this form. You must meet certain conditions in order to be eligible to receive a distribution or perform a direct rollover from your 403(b)/ TSA. Please see Section 4 for a list of the situations that will allow you to receive a distribution or perform a direct rollover. SECTION 1 OWNER INFORMATION Annuity Number Address Owner Name (First, Middle, Last Name) Street City State ZIP Code Telephone Number Mobile Number Annuitant Name (First, Middle, Last Name) Please send me periodic service alerts via text message. By checking the box above, you are agreeing to receive periodic service alerts from Prudential, each of which may be delivered to your mobile phone using an automated system. Message frequency may vary. Standard Message and Data Rates may apply to any SMS or MMS you send or receive as part of this program. At any time, you may reply to a text with STOP to cancel future notifications. Terms and Privacy Policy at If we require additional information to complete this request, please indicate who Prudential should contact: Owner Financial Professional SECTION 2 DISTRIBUTION ELECTION A. Select Type of Distribution FULL SURRENDER PARTIAL SURRENDER - For partial withdrawals, please select a withdrawal type on page 2. Any Systematic Withdrawal program scheduled for less than or equal to the Guaranteed Income Amount (GIA) will be cancelled if a partial withdrawal is requested and the combination of the partial withdrawal and systematic withdrawal program now results in you exceeding your GIA for the current year. You must submit a new Systematic Withdrawal form if you wish to establish a new program. Any Systematic Withdrawal program scheduled for greater than your GIA will not be cancelled if a partial withdrawal request is processed. (Continued) ORD Ed. 6/17 p1 of 11

2 SECTION 2 DISTRIBUTION ELECTION (continued) If electing a Lifetime Withdrawal or Non-Lifetime withdrawal, you must specify a dollar amount below. Elections greater than your GIA will result in Excess Income. Please refer to the Important Notices for further details on Excess Income. Dollar amount $ If this request is received within 10 calendar days of your contract anniversary, and your contract is still subject to surrender charges, Prudential can hold your request until the anniversary date to reduce the amount of contingent deferred sales charges. By checking this box, you authorize Prudential to process this request as of the contract anniversary and not the date it is received. This option cannot be used if enrolling in a Systematic Withdrawal Program. Withdrawal Type: Please elect the appropriate box below. If no election is made, your request will be processed as a Lifetime Withdrawal. If you choose the Non-Lifetime Withdrawal option and it is not available on your contract, we will process as a Lifetime Withdrawal. Non-Lifetime Withdrawal - This withdrawal will not establish your GIA. Once processed, it may not be reversed. Requesting this withdrawal will proportionally reduce the GIA based on the percent this withdrawal amount (including any applicable CDSC) represents of your Account Value immediately prior to the withdrawal. Please refer to the prospectus for further details. Lifetime Withdrawal - This withdrawal will establish your initial GIA under the Defined Income Benefit. Once processed, it may not be reversed. Please refer to the prospectus for further details. B. SYSTEMATIC WITHDRAWAL PROGRAM Systematic Withdrawal programs from 403(b) contracts are permitted only if the owner is over the age of 59½. Multiple systematic distribution programs cannot be active at the same time. If you are currently enrolled in a Required Minimum Distribution (RMD) program, you MUST elect to cancel that program below before a new Systematic Withdrawal program can be established. If this election is not made your request cannot be established. Terminate current RMD and start new systematic withdrawal. I understand that by choosing this option I will be responsible for ensuring that my required minimum distributions are satisfied each year. Select only one Start new systematic withdrawal Update existing systematic withdrawal* Terminate systematic withdrawal Update will take effect with the next scheduled withdrawal after the receipt of the form. *If you are updating a systematic withdrawal we will only change your current elections if specified in the sections below. DATE FOR WITHDRAWALS (Month / Day / Year) If the start date or frequency section is left blank or the date provided is in the past, we will process a distribution immediately and set up your systematic withdrawal program on a monthly basis. Your check will normally be sent the business day after withdrawal date. It normally takes four to five business days for you to receive your check. Please take into consideration when selecting your withdrawal date. Note: The combination of the prior withdrawal(s) and future systematic withdrawal(s) may prevent a Systematic Withdrawal program from being established equal to your GIA. FREQUENCY For Systematic Withdrawal Programs Only. Systematic Withdrawals cannot be used to effect trustee to trustee transfers or a direct rollover to another qualified plan. Please choose one: Monthly Quarterly Semiannually Annually Withdrawal Amount (Select one): Withdrawals based on the Guaranteed Income Amount Dollar Amount $ Elections greater than your GIA will result in excess withdrawals. Please refer to the Important Notices for further details on your Systematic Withdrawal program and Excess Withdrawals. All systematic withdrawals are considered Lifetime Withdrawals for this annuity. IF AN ELECTION IS MADE IN A OR B PLEASE COMPLETE THE FOLLOWING: Please choose one option. NOTE: If no selection is made the withdrawal will be taken on a GROSS basis. Net amount (Check will be for the amount indicated above. Any applicable Contingent Deferred Sales Charge (CDSC) and/ or federal and state taxes will be deducted from the contract value, this may cause a withdrawal in excess of the GIA.) Gross amount (Check will be for the amount indicated above, less any applicable Contingent Deferred Sales Charge (CDSC) and/or federal and state taxes.) ORD Ed. 6/17 p2 of 11

3 IMPORTANT NOTICES: Any Systematic Withdrawal program running for less than or equal to the GIA will be cancelled if a partial withdrawal is requested and the combination of the partial withdrawal and systematic withdrawal program now results in you exceeding your GIA for the current year. You must submit a new Systematic Withdrawal form if you wish to establish a new program. Any Systematic Withdrawal program running for greater than your GIA will not be cancelled if a partial withdrawal request is processed. Withdrawals are subject to all of the terms and conditions of the Annuity, including any applicable CDSC. Withdrawals made while the benefit is in effect will be treated, for tax purposes, in the same way as any other withdrawals under the Annuity. If you make a withdrawal, you should be aware of whether the withdrawal is subject to a CDSC and how the withdrawal could affect the GIA under this benefit. If your withdrawal does not exceed the GIA, it will not be subject to a CDSC. You may change your systematic withdrawal or cancel enrollment at any time by submitting a new form. Excess Income Excess Income refers to a withdrawal that (i) exceeds your GIA and (ii) is not a required minimum distribution calculated by Prudential and distributed under a program that we administer. If you take an Excess Income, it proportionally reduces your GIA and will result in a permanent reduction to your GIA for current and future Annuity Years. If you would like to make an excess withdrawal and are uncertain how an Excess Income will reduce your future GIA, then you may contact us prior to requesting the withdrawal to obtain a personalized, transaction-specific calculation showing the effect of the Excess Income. Although you are guaranteed the ability to withdraw your Guaranteed Income Amount for life even if your Account Value falls to zero, if that particular withdrawal of Excess Income (described above) brings your Account Value to zero, your Guaranteed Income Amount also would fall to zero, and the benefit and the Annuity then would terminate. In that scenario, no further amount would be payable under the Defined Income Benefit (and the Death Benefit would not be payable upon death). For Contracts Enrolled In A Systematic Withdrawal Program: Any partial withdrawals taken while a Systematic Withdrawal program is in effect may cause you to exceed your GIA. If the combination of the requested partial withdrawal and your systematic withdrawal program will result in you exceeding your GIA for the current year, your systematic withdrawal program will be cancelled. In addition, each systematic withdrawal you take that is an Excess Income will proportionally reduce your GIA and will result in a permanent reduction to your GIA available in current and future Annuity Years. Please monitor your GIA carefully and review your Systematic Withdrawal program prior to taking partial withdrawals. All systematic withdrawals are considered Lifetime Withdrawals. Gross amount vs. net amount election: When a withdrawal that is subject to a CDSC and/or tax withholding, we use not only the amount you actually receive, but also the amount of the CDSC and/or tax withholding, to determine whether your withdrawal is an Excess Income. You may request a gross withdrawal amount and have any CDSC and/or tax withholding deducted from the amount you actually receive or a net withdrawal amount and have any CDSC and/or tax withholding deducted from your remaining Unadjusted Account Value. The portion of a withdrawal that exceeds your GIA would be considered an Excess Income. SECTION 3 TYPE OF DISTRIBUTION - THIS SECTION MUST BE COMPLETED Please choose one: Trustee-to-Trustee Transfer Direct Rollover to an Individual Retirement Account or an eligible retirement plan.* (Must Complete Part 4) Partial or full surrender payable directly to me. (Must Complete Part 4) Direct Rollover of 403(b) to Roth IRA (Must Complete Part 4) *A letter of acceptance must accompany Transfers and Direct Rollover requests from the new company/carrier that will be receiving the proceeds. Trustee to Trustee transfers and Direct Rollovers cannot be done through automated withdrawal programs. If a trustee to trustee transfer, direct rollover or roth conversion of the full contract value is requested when there is an active Required Minimum Distribution program running, the Required Minimum Distribution will be removed and sent to the Owner prior to the remaining funds being sent to the transfer institution. ORD Ed. 6/17 p3 of 11

4 SECTION 4 REASON FOR DISTRIBUTION - THIS SECTION MUST BE COMPLETED Please choose one: Attainment of Age 59½ Severance from Employment Financial Hardship I certify that my employer has determined this distribution is necessary to satisfy an immediate and heavy financial need, as described in the Internal Revenue Code and the accompanying regulations, which cannot be satisfied from insurance, reasonable liquidation of my assets, cessation of elective deferrals to my 403(b), or other distributions or loans from my employer s plans or a commercial loan. I understand that this distribution cannot exceed the amount necessary to satisfy the financial need and may only be made from salary deferral amounts and not the earnings attributable to them. IRS regulations require that further contributions be prohibited for a period of six months from the date of the withdrawal. Note: Financial Hardship is not rollover eligible. Qualified Domestic Relations Order (A copy must be attached along with a fully completed Instruction of Divorce and Transfer Instructions Form.) After review of the QDRO, additional documentation may be required depending on the circumstances and the division instructions. 12/31/88 Account Balance Your Account Balance as of 12/31/88 may be withdrawn at any time, if not previously withdrawn. Certification of Disability Distribution due to total and permanent disability. By checking this box I certify that I meet the Internal Revenue Service s definition of Disabled, which requires that an individual be unable 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. I also certify that if at some point I no longer meet this definition, I will notify Prudential in writing at the address listed on this form. If this box is not checked a premature/normal distribution based on age will be reported. This information is used to determine if a disability exception to the 10% federal income tax penalty on premature distributions is applicable. Removal of Excess Contributions Current Year Removal of Excess Contributions Prior Year (prior year must be removed by April 15th of current year.) SECTION 5 INCOME TAX WITHHOLDING NOTICE AND ELECTION Federal tax law requires Prudential to withhold 20% of any eligible rollover distribution that is paid directly to you. We will not withhold if the distribution is transferred or directly rolled over to another 403(b)/TSA or 403(b) account, traditional IRA, or an eligible employer plan. Note: The percent or dollar amount cannot be less than the minimum required by your state of residence. If the amount you selected is less, we will withhold the required default amount. Your withdrawal may also be subject to State income tax withholding in certain states. If your resident State requires mandatory withholding, we will withhold the default amount your State requires even if you elect no withholding. I elect to have Federal income tax withheld at % (not less than 20%) and % for state tax. For Required Minimum Distribution Payments, Hardship Withdrawals or a Direct Rollover to a Roth IRA (If this section is left blank, you are electing to NOT have Federal or State taxes withheld. However, you will still be liable for any applicable taxes. In certain circumstances including, but not limited to, what is described in section 7, Prudential may be required to withhold taxes. For all Michigan residents, please make an election in the box below.): I elect to have Federal income tax withheld at % (not less than 10%) and % for state tax. If you elect to have no income tax withheld from your withdrawal, or if you do not have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties if your withholding and estimated tax payments are not sufficient. This election will remain in effect until you revoke it. You may change your withholding election on future payments by notifying us. In addition, Michigan residents must complete the following. Please choose one: Michigan law now requires 4.25% income tax withholding from pension and retirement benefits, unless your payments are not taxable, or you opt out. Please check the appropriate box below if you are a Michigan resident. Your pension or annuity payments are not taxable or you wish to opt out. Note: Opting out may result in a balance due on your MI-1040 as well as penalties and interest. % Total percentage you want withheld from your annuity payment(s) (must be at least 4.25%). If no selection is made, we will withhold 4.25% ORD Ed. 6/17 p4 of 11

5 SECTION 6 PAYMENT AND MAILING INSTRUCTIONS Direct Deposit (ACH) to a Bank Please allow 1-3 business days from the processing date to receive the funds in your bank account. See check illustration below for help in completing this section and attach a voided check where indicated. Note: Payments made via EFT/ACH to a party other than the owner are not permitted. Bank Name Bank telephone number Bank account number ABA routing number (To ensure accuracy, verify with your bank.) Type of Account Checking Name of depositor on bank records Savings (first, middle initial, last name) ATTACH A VOIDED CHECK WHERE INDICATED (REQUIRED FOR NEW EFT/ACH REQUESTS and CHANGES TO EXISTING EFT/ACH INSTRUCTIONS). If a voided check is not attached a check will be sent to the owner s address of record. If requesting funds sent to a Savings Account we require account information from the bank. Please note that deposit slips for savings accounts may not provide accurate EFT/ ACH routing information - we suggest checking with the bank prior to submitting your request. Requests for third party EFT are not permitted. Funds must be sent to the Owner s bank account. Providing a voided check or bank letter that does not show the name of the owner and/or a current address can cause delays in sending your funds as requested. OR make check payable to: Owner (Address of Record or specify address below.) Special payee (Requires a Signature Guarantee in section 7. Please enter special payee s name and address below.) Please allow 3-5 days from the processing date to receive your funds by U.S. First Class Mail. Checks cannot be mailed directly to your Financial Professional s branch office. If your Financial Professional s branch office is provided, the check will be made payable to the contract owner and mailed to the Address of Record. Name of special payee if selected above Street City State ZIP Code Country OR Direct Payment to a Brokerage Account: Existing account Brokerage Account Number Brokerage account must be on file with Prudential. If the Brokerage account is not on file, a check will be made payable to the contract owner and mailed to the Address of Record. ORD Ed. 6/17 p5 of 11

6 SECTION 7 SIGNATURES TRANSACTION CONFIRMATIONS We may confirm regularly scheduled transactions, including, but not limited to, the Annual Maintenance Fee and Systematic Withdrawal/ Required Minimum Distribution / 72(t) programs, in quarterly statements instead of confirming those transactions immediately. By signing below, I (we) acknowledege that: Excess Income will permanently reduce the GIA available to me in current and future Annuity Years. Any Systematic Withdrawal program scheduled for less than or equal to the GIA will be cancelled if a partial withdrawal is requested and the combination of the partial withdrawal and systematic withdrawal program now results in you exceeding your GIA for the current year. You must submit a new Systematic Withdrawal form if you wish to establish a new program. Any Systematic Withdrawal program scheduled for greater than your GIA will not be cancelled if a partial withdrawal request is processed. If you are currently enrolled in a Required Minimum Distribution (RMD) program, you MUST elect to cancel that program before a new Systematic Withdrawal program can be established. If this election is not made above your request cannot be processed. If my Account Value is reduced to zero as a result of withdrawals, any death benefit will also be reduced to zero and the death benefit will not be payable. I certify that the information provided on this form is correct and complete. By signing below, I hereby discharge Prudential from further obligation to pay benefits to the extent the Annuity is reduced by this withdrawal. If you are a U.S. person (including resident alien), and your address of record is a non-u.s. address, we are required to withhold income tax unless you provide us with a U.S. residential address. If applicable, please include your U.S. residential address with this form. I authorize Prudential to initiate credit entries, and if necessary, debit entries and adjustments for any credit entries made in error, to the account and depository named in Section 6 (the Financial Institution ). I/we understand receipt of funds may take up to 2 business days. Please bear in mind that withdrawals from your Annuity may impact the benefits and/or associated values provided under livging or death benefit. Please refer to your contract and prospectus for further information or contact your financial professional with any questions. There may be tax implications as a result of this request(s) and the request(s) (including tax reporting and withholding) cannot be reversed once processed. Please consult tax and/or legal counsel before proceeding. Please refer to your annuity contract and prospectus for provisions and tax considerations regarding withdrawals prior to submitting this form. WE ARE REQUIRED TO WAIT 30 DAYS PRIOR TO PROCESSING ANY REQUEST FOR A DIRECT ROLLOVER OR A DISTRIBUTION PAID DIRECTLY TO YOU SO THAT YOU CAN CONSIDER YOUR REQUEST. UNLESS YOU CHECK THE BOX BELOW, BY SIGNING THIS REQUEST YOU HAVE WAIVED THE 30-DAY NOTICE PERIOD. I DO NOT WISH TO WAIVE THE 30 DAY NOTICE PERIOD. Note: by checking this box your funds will be held for 30 days. Note: All parties in interest must sign (e.g. irrevocable beneficiaries). Failure to do so may result in a delay in payment. Additionally, if you are signing on behalf of an individual or an entity in a capacity of Attorney-In-Fact or Trustee, the proper authorization must be on file or submitted with this request (Continued) ORD Ed. 6/17 p6 of 11

7 SECTION 7 SIGNATURES (continued) PLACE SIGNATURE GUARANTEE STAMP IN THE BOX (IF APPLICABLE) OWNER S TAX CERTIFICATION (Substitute Form W-9) - To be completed only by U.S. persons (including U.S. citizens and resident aliens). If not a U.S. person, you are required to submit the applicable IRS Form W-8 series (BEN, BEN-E, ECI, EXP or IMY). Social Security Number or Employer Identification Number Under penalties of perjury, I certify that the taxpayer identification number listed on this form is my correct SSN/EIN and I am a U.S. citizen or other U.S. person (including resident aliens). I further certify that I am exempt from backup withholding and/or FATCA reporting unless I check the applicable box(es) below: I have been notified by the Internal Revenue Service that I am subject to backup withholding due to the failure to report all interest or dividends. Prudential is required to withhold income tax on any payments which include interest and dividends when the owner is subject to backup withholding. I am subject to the reporting requirements of the Foreign Account Tax Compliance Act (FATCA). The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. SIGN HERE Owner s signature Date of signature (Month / Day / Year) SIGN HERE Party-In-Interest s signature and designation (if any) Date of signature (Month / Day / Year) By signing below, the employer confirms that the conditions for this withdrawal, as indicated in this form, have been met. SIGN HERE Employer s signature Date of signature (Month / Day / Year) Employer s title This form, and the information contained within, is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Neither Prudential Annuities, nor the Prudential entity(ies) set forth on this form, are acting as your fiduciary as defined by any applicable laws and regulations. Please consult with your qualified investment professional about managing or investing your retirement savings. Annuities Service Center Investor Line: Financial Professionals: :00AM 7:00PM ET, Monday Thursday 8:00AM 6:00PM ET, Friday Fax: (800) Regular Mail Delivery Annuities Service Center P.O. Box 7960 Philadelphia, PA Overnight Service, Certified or Registered Mail Delivery Prudential Annuities Service Center 2101 Welsh Road Dresher, PA ORD Ed. 6/17 p7 of 11

8 SPECIAL TAX NOTICE REGARDING 403(B) TAX SHELTERED ANNUITY PAYMENTS This notice is provided to you by Prudential Financial, Inc., and its affiliates (Company) because all or a portion of the payment that you will soon receive from your 403(b) plan may be eligible for rollover by you to an IRA or an eligible employer plan. This notice is intended to help you decide whether to do such a rollover. This notice describes the rollover rules that apply to payments from your 403(b) that are not from a designated Roth account (a type of account with special tax rules in some 403(b) plans). If you also receive a payment from a designated Roth account you will be provided with a different notice for that payment, and the plan administrator or payor will tell you the amount that is being paid from each account. Rules that apply to most payments from your 403(b) are described in the General Information About Rollovers section. Special rules that only apply in certain circumstances are described in the Special Rules and Options section. The Internal Revenue Code provides several complex rules relating to the taxation of the amounts you receive in this distribution. This notice merely summarizes these rules, and the information contained herein has been taken from a model notice prepared by the Internal Revenue Service. Please note that the Company and its agents and representatives assume no responsibility for the accuracy of this model notice, and cannot provide you with tax or legal advice with respect to these issues. You should promptly consult a tax advisor in deciding what course of action to follow with respect to this distribution.. If you have additional questions after reading this notice, you can contact Prudential at (888) GENERAL INFORMATION ABOUT ROLLOVERS How can a rollover affect my taxes? You will be taxed on a payment from your 403(b) if you do not roll it over. If you are under age 59½ and do not do a rollover, you will also have to pay a 10% additional income tax on early distributions (unless an exception applies). However, if you do a rollover, you will not have to pay tax until you receive payments later and the 10% additional income tax will not apply if those payments are made after you are age 59½ (or if an exception applies). Where may I roll over the payment? You may roll over the payment to either an IRA (an individual retirement account or individual retirement annuity) or an employer plan (a tax-qualified plan, section 403(b) plan, or governmental section 457(b) plan) that will accept the rollover. The rules of the IRA or employer plan that holds the rollover will determine your investment options, fees, and rights to payment from the IRA or employer plan (for example, no spousal consent rules apply to IRAs and IRAs may not provide loans). Further, the amount rolled over will become subject to the tax rules that apply to the IRA or employer plan. How do I do a rollover? There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover. If you do a direct rollover, your payment will be made directly to your IRA or an employer plan. You should contact the IRA sponsor or the administrator of the employer plan for information on how to do a direct rollover If you do not do a direct rollover, you may still do a rollover my making a deposit into an IRA or eligible employer plan that will accept it. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Company is required to withhold 20% of the payment for federal income taxes (up to the amount of cash and property received other than employer stock). This means that, in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of the payment, the portion not rolled over will be taxed and will be subject to the 10% additional income tax on early distributions if you are under age 59 ½ (unless an exception applies). Your Right to Waive the 30-Day Notice Period: Generally, neither a direct rollover nor a payment can be made from the 403(b) until at least 30 days after your receipt of this notice. Thus, after receiving this notice, you have at least 30 days to consider whether or not to have your withdrawal directly rolled over. If you do not wish to wait until this 30-day notice period ends before your election is processed, you may waive the notice period by making an affirmative election indicating whether or not you wish to make a direct rollover. Your withdrawal will then be processed in accordance with this election as soon as practical after it is received by us. How much may I roll over? If you wish to do a rollover, you may roll over all or part of the amount eligible for rollover. Any payment from your 403(b) is eligible for rollover, except: Certain payments spread over a period of at least 10 years or over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary); Required minimum distributions after age 70 ½ (or after death); Hardship distributions; Corrective distributions of contributions that exceed tax law limitations; Loans treated as deemed distributions (for example, loans in default due to missed payments before your employment ends); Cost of life insurance; Payments of certain automatic enrollment contributions requested to be withdrawn within 90 days of the first contribution. (Continued) ORD Ed. 6/17 p8 of 11

9 (Continued) The Plan administrator or the payor can tell you what portion of a payment is eligible for rollover. If I don t do a rollover, will I have to pay the 10% additional income tax on early distributions? If you are under age 59½, you will have to pay the 10% additional income tax on early distributions for any payment from your 403(b) (including amounts withheld for income tax) that you do not roll over, unless one of the exceptions listed below applies. This tax is in addition to the regular income tax on the payment not rolled over. The 10% additional income tax does not apply to the following payments from your 403(b): Payments made after you separate from service if you will be at least age 55 in the year of the separation; Payments that start after you separate from service if paid at least annually in equal or close to equal amounts over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary; Payments made due to disability; Payments made after your death; Corrective distributions of contributions that exceed tax law limitations; Cost of life insurance; Payments made directly to the government to satisfy a federal tax levy; Payments made under a qualified domestic relations order (QDRO); Payments up to the amount of your deductible medical expenses; Certain payments made while you are on active duty if you were a member of a reserve component called to duty after September 11, 2001 for more than 179 days; or Payments of certain automatic enrollment contributions requested to be withdrawn within 90 days of the first contribution. If I do a rollover to an IRA, will the 10% additional income tax apply to early distributions from the IRA? If you receive a payment from an IRA when you are under age 59½, you will have to pay the 10% additional income tax on early distributions from the IRA, unless an exception applies. In general, the exceptions to the 10% additional income tax for early distributions from an IRA are the same as the exceptions listed above for early distributions from a plan. However, there are a few differences for payments from an IRA, including: There is no exception for payments after separation from service that are made after age 55. The exception for qualified domestic relations orders (QDROs) does not apply (although a special rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be made directly to an IRA of a spouse or former spouse. The exception for payments made at least annually in equal or close to equal amounts over a specified period without regard to whether you have had a separation from service. There are additional exceptions for (1) payments for qualified higher education expenses, (2) payments up to $10,000 used in a qualified first-time home purchase, and (3) payments for health insurance premiums after you have received unemployment compensation for 12 consecutive weeks (or would have been eligible to receive unemployment compensation but for self-employed status). Will I owe State income taxes? This notice does not describe any State or local income tax rules (including withholding rules). SPECIAL RULES AND OPTIONS If your payment includes after-tax contributions - After-tax contributions included in a payment are not taxed. If a payment is only part of your benefit, an allocable portion of your after-tax contributions is included in the payment, so you cannot take a payment of only after-tax contributions. However, if you have pre-1987 after-tax contributions maintained in a separate account, a special rule may apply to determine whether the after-tax contributions are included in a payment. In addition, special rules apply when you do a rollover, as described below. You may roll over to an IRA a payment that includes after-tax contributions through either a direct rollover or a 60-day rollover. You must keep track of the aggregate amount of the after-tax contributions in all of your IRAs (in order to determine your taxable income for later payments from the IRAs). If you do a direct rollover of only a portion of the amount paid from your 403(b) and at the same time the rest is paid to you, the portion directly rolled over consists first of the amount that would be taxable if not rolled over. For example, assume you are receiving a distribution of $12,000, of which $2,000 is after-tax contributions. In this case, if you directly roll over $10,000 to an IRA that is not a Roth IRA, no amount is taxable because the $2,000 amount not directly rolled over is treated as being after-tax contributions. If you do a direct rollover of the entire amount paid from the 403(b) to two or more destinations at the same time, you can choose which destination receives the after-tax contributions. (Continued) ORD Ed. 6/17 p9 of 11

10 (Continued) If you do a 60-day rollover to an IRA of only a portion of the payment made to you, the after-tax contributions are treated as rolled over last. For example, assume you are receiving a distribution of $12,000, of which $2,000 is after-tax contributions, and no part of the distribution is directly rolled over. In this case, if you roll over $10,000 to an IRA that is not a Roth IRA in a 60-day rollover, no amount is taxable because the $2,000 amount not rolled over is treated as being after-tax contributions. You may roll over to an employer plan all of a payment that includes after-tax contributions, but only through a direct rollover (and only if the receiving plan separately accounts for after-tax contributions and is not a governmental section 457(b) plan). You can do a 60-day rollover to an employer plan of part of a payment that includes after-tax contributions, but only up to the amount of the payment that would be taxable if not rolled over. If you miss the 60-day rollover deadline - Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the deadline under certain extraordinary circumstances, such as when external events prevented you from completing the rollover by the 60-day rollover deadline. To apply for a waiver, you must file a private letter ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user fee. For more information, see IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs). If you have an outstanding loan that is being offset - If you have an outstanding loan from your 403(b), your 403(b) benefit may be offset by the amount of the loan, typically when your employment ends. The loan offset amount is treated as a distribution to you at the time of the offset and will be taxed (including the 10% additional income tax on early distributions, unless an exception applies) unless you do a 60-day rollover in the amount of the loan offset to an IRA or employer plan. If you are an eligible retired public safety officer and your pension payment is used to pay for health coverage or qualified long-term care insurance - If the Plan is a governmental plan, you retired as a public safety officer, and your retirement was by reason of disability or was after normal retirement age, you can exclude from your taxable income plan payments paid directly as premiums to an accident or health plan (or a qualified long-term care insurance contract) that your employer maintains for you, your spouse, or your dependents, up to a maximum of $3,000 annually. For this purpose, a public safety officer is a law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew. If you roll over your payment to a Roth IRA - If you roll over the payment from the 403(b) to a Roth IRA, a special rule applies under which the amount of the payment rolled over (reduced by any after-tax amounts) will be taxed. However, the 10% additional income tax on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within 5 years, counting from January 1 of the year of the rollover). If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are qualified distributions will not be taxed (including earnings after the rollover). A qualified distribution from a Roth IRA is a payment made after you are age 59½ (or after your death or disability, or as a qualified first-time homebuyer distribution of up to $10,000) and after you have had a Roth IRA for at least 5 years. In applying this 5-year rule, you count from January 1 of the year for which your first contribution was made to a Roth IRA. Payments from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings after the rollover, including the 10% additional income tax on early distributions (unless an exception applies). You do not have to take required minimum distributions from a Roth IRA during your lifetime. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs). If you do a rollover to a designated Roth account in the 403(b) plan You cannot roll over a distribution to a designated Roth account in another employer s 403(b) Plan. However, you can roll the distribution over into a designated Roth account in the distributing Plan. If you roll over a payment from the 403(b) to a designated Roth account in the 403(b) plan, the amount of the payment rolled over (reduced by any after-tax amounts directly rolled over) will be taxed. However, the 10% additional tax on early distributions will not apply (unless you take the amount rolled over out of the designated Roth account within the 5-year period that begins on January 1 of the year of the rollover). If you roll over the payment to a designated Roth account in the 403(b) Plan, later payments from the designated Roth account that are qualified distributions will not be taxed (including earnings after the rollover). A qualified distribution from a designated Roth account is a payment made both after you are age 59 ½ (or after your death or disability) and after you have had a designated Roth account in the Plan for at least 5 years. In applying this 5-year rule, you count from January 1 of the year your first contribution was made to the designated Roth account. However, if you made a direct rollover to a designated Roth account in the Plan from a designated Roth account in a plan of another employer, the 5-year period begins on January 1 of the year you made the first contribution to the designated Roth account in the Plan or, if earlier, to the designated Roth account in the plan of the other employer. Payments from the designated Roth account that are not qualified distributions will be taxed to the extent of earnings after the rollover, including the 10% additional income tax on early distributions (unless an exception applies). If you are not a 403(b) plan participant (surviving spouses, alternate payees, and other beneficiaries) Payments after death of the participant If you receive a distribution after the participant s death that you do not roll over, the distribution will generally be taxed in the same manner described elsewhere in this notice. However, the 10% additional income tax penalty on early distributions and the special rules for public safety officers does not apply. If you are a surviving spouse If you receive a payment from the 403(b) plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would have had, as described elsewhere in this notice. In addition, if you choose to do a rollover to an IRA, you may treat the IRA as your own or as an inherited IRA. An IRA you treat as your own is treated like any other IRA of yours, so that payments made to you before you are age 59 ½ will be subject to the 10% additional income tax on early distributions (unless an exception applies) and required minimum distributions from your IRA do no have to start until after you are age 70 ½. (Continued) ORD Ed. 6/17 p10 of 11

11 (Continued) If you treat the IRA as an inherited IRA, payments from the IRA will not be subject to the 10% additional income tax on early distributions. However, if the participant had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the participant had not started taking required minimum distributions from the 403(b) plan, you will not have to start receiving required minimum distributions from the inherited IRA until the year the participant would have been age 70 ½. If you are a surviving beneficiary other than a spouse If you receive a payment from the 403(b) plan because of the participant s death and you are a designated beneficiary other than a surviving spouse, the only rollover option you have is to do a direct rollover to an inherited IRA. Payments from the inherited IRA will not be subject to the 10% additional income tax on early distributions. You will have to receive required minimum distributions from the inherited IRA. Payments under a qualified domestic relations order If you are the spouse or former spouse of the participant who receives a payment from the 403(b) plan under a qualified domestic relations order (QDRO), you generally have the same options the participant would have (for example, you may roll over the payment to your own IRA or an eligible employer plan that will accept it). Payments under the QDRO will not be subject to the 10% additional income tax on early distributions. If you are a nonresident alien If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the payor is generally required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you do a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN for claiming that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. Other special rules If a payment is one in a series of payments for less than 10 years, your choice whether to make a direct rollover will apply to all later payments in the series (unless you make a different choice for late payments). If your payments for the year are less than $200 (not including payments from a designated Roth account), the payor is not required to allow you to do a direct rollover and is not required to withhold for federal income taxes. However, you may do a 60-day rollover. Unless you elect otherwise, a mandatory cashout of more that $1000 (not including payments from a designated Roth account in the plan) will be directly rolled over to an IRA chosen by the Plan administrator. A mandatory cashout is a payment from a payment from a plan to a participant made before age 62 (or normal retirement age, if later) and without consent, where the participant s benefit does not exceed $5,000 (not including any amounts held under the plan as a result of a prior rollover made to the plan). You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces Tax Guide. For more information - You may wish to consult with the Plan administrator or payor, or a professional tax advisor, before taking a payment from your 403(b). Also, you can find more detailed information on the federal tax treatment of payments from employer plans in: IRS Publication 575, Pension and Annuity Income; IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs); IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs); and IRS Publication 571, Tax- Sheltered Annuity Plans (403(b) Plans). These publications are available from a local IRS office, on the web at or by calling TAX-FORM. ORD Ed. 6/17 p11 of 11