Waiting by the mailbox for your check to arrive? PDFs/Refund App... · 2020. 4. 16. · Individual...

Form #: GU-0002ARev. 2/20

Waiting by the mailbox for your check to arrive?

MainePERS can take the guess-work out of when you receive your refund!

Instead of sending your check by mail, MainePERS can electronically transfer any portion of your refund, that is not rolled into another qualified plan, into your personal checking or savings account.

Complete and return the Authorization Agreement for Electronic Direct Deposit form, included with your refund application, and we will deposit your funds on the day we pay your refund. Once we have all the necessary information, we will send you a statement of the gross amount of your refund and the date of deposit.

After receiving your refund, we want to be sure you receive the associated year-end tax forms. Please notify MainePERS of any change in your address.

2020

Refund Application PackageA Guide for Members applying for a

refund of contributions from the

Maine Public Employees Retirement System


MainePERS Refund Application ChecklistBefore Maine Public Employees Retirement System (MainePERS) can process your refund application, the following forms and documents need to be completed. For assistance, contact MainePERS at (207) 512-3100 or toll-free at 1-800-451-9800. Submit your completed forms directly to MainePERS at:

MainePERS P.O. Box 349

Augusta, ME 04332-0349

Required for All Applicants

Notarized Refund ApplicationOn or after the effective date of your termination, complete the top two sections of the form. Have a Notary Public complete the bottom portion of the form.If you terminated your MainePERS-covered employment within the last three months, have a certifying official from your former employer complete the Employer Certification section of the application.Mail or deliver your original, completed application to MainePERS; we cannot act upon a faxed or electronic copy.

Rollover FormsProvide rollover forms for the receiving financial institution with the following information:

√ Type of IRA

√ Your account number

√ To whom we should make the rollover check payable, and

√ Address where we should send the rollover funds

If your financial institution does not have a rollover form, we will accept a letter of acceptance from them, including the information listed above.

Authorization for Electronic Direct DepositFor electronic deposit of your funds to a savings or checking account on the day your refund is disbursed, complete all sections of this form and submit with your refund application. You will find more details in the bottom section (“Refund Applicants”) on the back of the form.

Required for Those Rolling Funds Into Another Qualified Account

Optional for Those Directly Receiving All or a Portion of Their Refund

This booklet contains information to apply for a refund of your MainePERS contributions.

Refund Application Package

MainePERS members can take a refund of their MainePERS contributions, along with the interest those contributions have earned, when they leave all MainePERS-covered positions. You do not receive any contributions your employer made on your behalf. This booklet contains federal tax information that may affect how you choose to receive your refund. This booklet reflects MainePERS understanding as of the date of printing. MainePERS recommends that you consult with your own tax advisor before making your decision.

1. Read this information and contact MainePERS if you have questions about your eligibilityto receive a refund or about the effects of taking a refund.

2. If you have questions about taxes, please contact the Internal Revenue Service, yourState tax division, or your tax advisor. You may also want to learn more about specificinformation on the tax treatment of payments from qualified retirement plans in IRSPublication 575, Pension and Annuity Income, and IRS Publication 590-A, Contributionsto Individual Retirement Arrangements (IRAs) and IRS Publication 590-B, Disbursementsfrom Individual Retirement Arrangements (IRAs). These publications are available atwww.irs.gov.

3. On or after the effective date of your termination, complete the Refund Application formand, if necessary, have your former employer certify it.

4. If you are applying to directly receive any portion of your refund, complete theAuthorization Agreement for Electronic Direct Deposit.

5. If you are rolling any portion of your refund, attach Direct Rollover documentation and/or a letter of acceptance from your rollover company.


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What You Need to Do


You can expect your refund 22 to 60 days after MainePERS has received:

Your completed Refund Application; and

The last payroll report for you from youremployer. MainePERS needs this reportto confirm that we have your most recentcontributions and can include them in yourrefund.

Anyone who has terminated MainePERS-covered employment can take a refund of his or her contributions. MainePERS cannot pay you for a partial refund. If you request a refund, MainePERS must refund your entire member contribution account.

Your MainePERS Benefits: What You Will Give Up

If you take a refund, you waive all rights to your MainePERS benefits.

I f you are a contributing member of MainePERS, certain benefits may be available to you, including a disability retirement benefit and pre-retirement death benefits.

You also become eligible for a service retirement benefit when you reach your normal retirement age, as long as you meet one of the following conditions:

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When You Can Expect Your Refund

Who Can Take a Refund

Before YouTake a Refund

(1) You are a contributing member ofMainePERS and you have accruedat least one year of creditable serviceimmediately before retirement.

(2) You may or may not be a contributingmember of MainePERS now, but youmeet one of the following conditions:

Your last date as a contributingmember is prior to October 1, 1999,and you have 10 or more years ofcreditable service.

Your last date as a contributingmember is on or after October 1,1999, and you have 5 or more yearsof creditable service.

Instead of taking a refund or rollover, you may leave your contributions on account with MainePERS.Your contributions will continue to earn interest. If you leave the contributions in your account with MainePERS, you may withdraw them at a later date or apply for a retirement benefit if and when you become eligible.

If you are not an active member, are not vested, and your contributions remain on account, MainePERS will automatically refund them directly to you in the year after you turn 72 (70.5 for those turning 70.5 prior to 2020).

Rejoining MainePERS

If you withdraw your contributions and then rejoin MainePERS, you may be able to repurchase your refunded creditable service. Please contact MainePERS for more information.

The only payments from MainePERS that may be eligible to be rolled over into an IRA or another employer plan that will accept such payments are refunds for legitimate member contributions and accumulated interest.

MainePERS cannot roll over monthly benefit payments and refunds of contributions made in error. Also, a portion of any refund paid to you on or after April 1 of the year after you turn 72 (70.5 for those turning 70.5 prior to 2020), which is known as a “required minimum distribution” cannot be rolled over.

If you are an active employee older than 72 (or 70.5, if applicable) this rule does not apply to you until April 1 of the calendar year in which you terminate/retire.

Direct Rollover

Payments Eligiblefor a Rollover

You can take your refund as:

a payment made directly to you (directlydeposited into your personal checking orsavings account); or

a “direct rollover,” which means thatMainePERS pays the refund directly toan Individual Retirement Account/Annuity[IRA] or to another employer plan thataccepts rollovers; or

a combination of these two options.

Your Choices for Receiving a Refund

You can choose a direct rollover of all or any portion of your payment that is an eligible rollover distribution. In a direct rollover, no income tax is withheld. MainePERS pays the eligible rollover distribution directly to an IRA or another qualified employer plan that accepts rollovers.

MainePERS requires rollover forms and/or a letter of acceptance from the financial institution to which you are rolling your funds. The forms must show the type of IRA, your account number, to whom the rollover check is to be made payable and the address to which it is to be sent.

Direct Rollover to an IRA

You can open an IRA to receive the direct rollover. If you choose to have your payment made directly to an IRA, contact an IRA sponsor (usually a financial institution) to find out how to have your payment made in a direct rollover to an IRA at that institution.

If you roll after-tax contributions to a traditional IRA, it is your responsibility to keep track of, and report to the IRS on the applicable forms, the amount of these after-tax contributions. This will enable the nontaxable amount of any future distributions from the traditional IRA to be determined. Once you roll over after-tax contributions to a traditional IRA, those amounts cannot later be rolled over to an employer plan.

See IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) and 590-B, Distributions from Individual RetirementArrangements (IRAs), for more information onIRAs.

If you choose a direct rollover to a Roth IRA, MainePERS will not withhold income tax.For that tax year you must report the amount rolled over to a Roth IRA as part of your gross income.

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Payment Made to You

If any portion of your refund will be paid directly to you, MainePERS will deposit the net amount directly into your personal checking or savings account. Complete the form Authorization Agreement for Electronic Direct Deposit, which can be found in the back pocket of this packet or in the Forms section of our web site at www.mainepers.org.

Payments That Cannot Be Rolled Over

Required Minimum Distributions. Beginning in the year you reach age 72 (or 70.5 for those turning 70.5 before 2020) or the year you retire if later, a certain portion of your payment cannot be rolled over because it is a “required minimum distribution” that must be paid to you.

Mandatory Withholding

If any portion of the payment to you is federally tax deferred, MainePERS is required by law to withhold 20% of that amount. This amount is sent to the IRS as income tax withholding. We are also required by law to withhold 5% of any portion of the payment that is State tax deferred. This amount is sent to Maine Revenue Service as income tax withholding. For example, if you receive a refund of $10,000 that was both Federally and State tax deferred, you will receive $7,500. MainePERS must withhold $2,000 as Federal and $500 as State income tax. However, when you prepare your income tax returns for the year, you will report the full $10,000 as a payment from MainePERS. You will also report the $2,500 as tax withheld, and it will be credited against any income tax you owe for the year.

The $7,000 post-1988 contribution may be claimed on your State tax return as income modification. Refer to instructions on Schedule 1, Income Modifications on your State of Maine tax return. If you have further questions, contact your tax advisor or your State tax division.

Direct Rollover to a Plan

If you are employed by a new employer that has a plan that accepts rollovers and you want a direct rollover to that plan, ask the administrator of the plan whether it will accept your rollover from MainePERS. If your new employer’s plan does not accept a rollover, you can choose a direct rollover to an IRA.

Certain federal tax restrictions apply to these options. This is in part because since January 1, 1989, you have not paid federal taxes on your MainePERS contributions. If you began paying into MainePERS before January 1, 1989, you have paid federal tax on the contributions you made before that date, but you still owe federal tax on the contributions you made after that date. Regardless of when you began making contributions to MainePERS, you have not paid federal tax on the interest your contributions have earned.

Any service credit you may have purchased, or any “excess contributions” you may have made to MainePERS to increase your retirement benefit with “after-tax” dollars, are treated as though you had paid federal tax on them.

You have paid State taxes on all your contributions, but interest on refunded contributions is subject to State tax. You may be eligible for an income modification from the State of Maine for MainePERS members who transfer post-1988 employee contributions directly from MainePERS system into an IRA. In the year of the rollover distribution, MainePERS will send you a breakdown of your disbursement(s) that shows the amount of employee contributions.

Example:Pre-1989Contribution $ 2,000 tax-paid moneyPost-1988Contribution $ 7,000 tax deferred

by Federal Interest tax deferred byEarned $ 3,000 State and FederalTotal RefundFrom MainePERS $12,000

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Additional 11.5% Tax If You Are Under Age 59½

If you receive a refund payment before you reach age 59½ and you do not roll it over, then, in addition to the regular income tax, you may have to pay an extra tax equal to 10% of the federal taxable portion of the payment and an extra 1.5% of the State taxable portion of the payment. The 10% Federal Income Tax surcharge and the State surcharge are not withheld from your refund payment. The additional tax does not apply to your payment if it is:

(1) paid to you because you separate fromservice with your employer during or afterthe year in which you reach age 55;

(2) paid because you retire due to a disability;(3) used to pay certain medical expenses(4) paid to a qualified public safety employee

who is 50 and older(5) paid to you while on active duty if you are

a reservist called to duty after 9/11/2011(6) relating to federally declared disasters

See IRS Form 5329, “Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts,” for more information on the additional 10% tax, including how to claim one of the above exemptions when you file your tax return.

If your eligible rollover distribution is not rolled over, it will be taxed in the year in which you receive it. However, if it qualifies as a “lump sum distribution,” it may be eligible for special tax treatment. A lump sum distribution is a payment of your entire balance from MainePERS within one year of your reaching age 59½ or separating from service with your employer. For a payment to qualify as a lump sum distribution, you must have been a participant in MainePERS for at least five years.

Special tax treatments for lump sum distributions include:

Ten-Year Averaging If You Were Born BeforeJanuary 1, 1936. If you receive a lumpsum distribution and you were born beforeJanuary 1, 1936, you can make a one-time

Example:

Your eligible rollover distribution is $10,000, and you choose to have it paid to you. You will receive $8,000, and $2,000 will be sent to the IRS as income tax withholding. Within 60 days after receiving the $8,000, you may roll over the entire $10,000 to an IRA or employer plan. To do this, you use the $8,000 received from MainePERS and $2,000 from other sources. In this case the entire $10,000 is not taxed until you take it out of the IRA or employer plan. If you roll over the entire $10,000, when you file your income tax return you may get a refund of the $2,000 withheld.

Sixty-Day Rollover Option

If you have an eligible rollover distribution paid directly to you, you can still decide to roll over all or part of it to an IRA or another employer plan that accepts rollovers. If you decide to make a rollover, you must do so within 60 days after you receive the payment. The portion of your payment that is rolled over will not be taxed until you take it out of the IRA or the employer plan.

You can roll over up to 100% of the eligible rollover distribution, including an amount equal to the 20% that was withheld. If you choose to roll over 100%, you must find other money (savings, a loan, etc.) within the 60-day period to contribute to the IRA or the employer plan to replace the 20% withheld. The 20% withheld will be credited against your income tax obligation and all or part of it may be refunded. On the other hand, if you roll over only the 80% you received, you will be taxed on the 20% withheld.

On the other hand, if you roll over only the $8,000 you received, the $2,000 you did not roll over is taxed in the year it was withheld. When you file your income tax return, you may get a refund of part of the $2,000 withheld. However, any refund is likely to be larger if the entire $10,000 was rolled over.

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election to figure the tax on the payment by using “ten-year averaging” (using 1986 tax rates) . Ten-year averaging often reduces the tax you owe.

Capital Gain Treatment If You Were Born Before January 1, 1936. In addition, if you receive a lump sum distribution and you were born before January 1, 1936, you may elect to have the part of your payment that is attributable to your pre-1974 participation in MainePERS taxed as long-term capital gain at a rate of 20%.

There are other limits on the special tax treatment for lump sum distributions. For example, you can generally elect this special tax treatment only once in your lifetime, and the election applies to all lump sum distributions that you receive in that same year. If you have previously rolled over a payment from MainePERS, you cannot use this special tax treatment for later payments from MainePERS.

If you roll over your payment to an IRA, you will not be able to use this special tax treatment for later payments from the IRA. Also, if you roll over only a portion of your payment to an IRA, this special tax treatment is not available for the rest of the payment. Additional restrictions are described on IRS Form 4972, “Tax On Lump Sum Distributions,” which has more information on lump sum distributions and how you elect the special tax treatment.

Partial Direct Rollover

You may choose to roll only a portion of your MainePERS account to a qualified plan. If you do this and a portion of your contributions have already been taxed (i.e., pre-1989 contributions or any payments you made to purchase service that were not directly rolled from another qualified plan), the portion directly rolled over consists first of the amount that would be taxable if not rolled over. To the extent possible/applicable, your taxed contributions will be distributed as part of what you directly receive.

Example:Pre-1989Contribution $ 2,000 tax-paid moneyPost-1988Contribution $ 7,000 tax deferred by Federal Interest tax deferred byEarned $ 3,000 State and FederalTotal MainePERSfunds $12,000

If you choose to roll 90% and directly receive 10% of your funds, your disbursements would look like this:

In this example, MainePERS would not withhold Federal or State taxes since you already paid them on the full amount directly paid to you. The net amount of your refund would be $1,200.

Example:ROLLOVER:

Tax Deferred by InterestState and Federal $ 3,000 Earned

Tax Deferred by Post-1988Federal $ 7,000 Contributions

Pre-1989Tax-Paid Money $ 2,800 Contributions

Total Rollover $10,800 90% of Total

PAID TO YOU: Pre-1989 ContributionsTax-Paid Money $ 1,200 Not Rolled

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additional 10% federal and 1.5% Maine Public Employees tax described above, even if you are younger than age 59½. You also may be able to use the special tax treatment for lump sum distributions. If you receive a payment because of the death of a member, you may be able to treat the payment as a lump sum distribution if the member met the appropriate age requirements, whether or not the member had five years of participation in MainePERS.

How to Obtain Additional Information

You can find more specific information on the tax treatment of payments from qualified retirement plans in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) and IRS Publication 590-B, Disbursements from Individual Retirement Arrangements (IRAs). These publications are available from your local IRS office, by calling 1-800-TAX-FORMS, or visit www.irs.gov.

In general, the rules summarized above that apply to payments to MainePERS members also apply to payments to surviving spouses of members and to spouses or former spouses who are “alternate payees.” You are an alternate payee if your interest in MainePERS results from a qualified domestic relations order, which is an order issued by a court, usually in connection with a divorce or legal separation. Some of the rules summarized above also apply to a deceased member’s beneficiary who is not a spouse. However, there are some exceptions for payments to surviving spouses, alternate payees, and other beneficiaries:

If you are a surviving spouse, you may choose to have an eligible rollover distribution paid in a direct rollover to an IRA or paid to you. If paid to you, you can keep it or roll it over yourself to an IRA. You cannot roll it over to an employer plan.

If you are an alternate payee, you have the same choices as the member. Thus, you can have the payment paid in a direct rollover to an IRA or paid to you. If paid to you, you can keep it or roll it over yourself to an IRA or to another employer plan that accepts rollovers.

If you are a beneficiary other than the surviving spouse, you can choose a direct rollover to an inherited IRA, but you cannot roll over the payment yourself. IRS Publication 575, Pension and Annuity Income, gives specific information concerning this direct rollover option.

If you are a surviving spouse, an alternate payee, or a beneficiary other than a surviving spouse, your payment is not subject to the

Surviving Spouses,Alternate Payees and Other

Beneficiaries


www.mainepers.orgLocated on the internet at www.mainepers.org, the site is designed to provide members, retirees, participating employers, and other interested parties information about membership in the Retirement System and a general understanding of the functions of MainePERS.

Navigating through the site you will find:

√ Publications √ Newsletters√ Laws and Rules √ Member Booklets√ Downloadable Forms √ Employer Updates√ Frequently Asked Questions √ Retirement Legislation

Also included are a number of links to Web sites maintained by other entities that we think may be of interest for retirement planning purposes.

There are a number of forms available on the site that can be easily downloaded and printed. Some forms are available as a fillable option, where members can complete online, print, and then mail to MainePERS (submission online is not available at this time).

The information in this brochure is intended to give you a general understanding of benefits available to you as a member of the Maine Public Employees Retirement System (MainePERS). The contents are not the basis of any rights between MainePERS and its members, nor does this brochure provide all of the detail of the laws and rules that govern MainePERS membership and related rights. There are often changes to the statutes and rules relating to MainePERS, and the most recent law may not be reflected in this brochure. Before making a decision relating to your rights and benefits, contact MainePERS to be certain the information you have is current.


Contact Us

Reach us by phone or fax Main Line: 207-512-3100 Toll-free: 800-451-9800

Fax: 207-512-3101 Maine Relay: 711

On the webmainepers.org

Mailing AddressPO Box 349, Augusta, Maine 04332-0349

Office Hours Monday through Friday from 8am to 5pm with the exception of recognized holidays

Form# GU-0002b Rev. 7/2019 Page 1 of 5

SPECIAL TAX NOTICE REGARDING YOUR ROLLOVER OPTIONS

UNDER GOVERNMENTAL 401(A) PLAN

P.O. Box 349Augusta, ME 04332-0349Telephone: (207) 512-3100 Toll-free: 1-800-451-9800 Fax: (207) 512-3101Maine Relay: 711

You are receiving this notice because all or a portion of a payment you are receiving from the Maine Public Employees Retirement System (the “Plan”) is eligible to be rolled over to an IRA or an employer plan. This notice is intended to help you decide whether to do such a rollover. YOU MAY REQUEST A PAPER COPY OF THIS NOTICE FROM THE PLAN ADMINISTRATOR AT NO CHARGE TO YOU.

Rules that apply to most payments from a plan 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.

GENERAL INFORMATION ABOUT ROLLOVERS

How can a rollover affect my taxes?

You will be taxed on a payment from the Plan 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 (generally, distributions made before age 59 ½ 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).

What types of retirement accounts and plans may accept my rollover?

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 section 401(a) plan, section 403(b) plan, or governmental section 457(b) deferred compensation 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 of the rolled over amount in the future. 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, the Plan will make the payment 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 by making a deposit into an IRA or eligible employer plan that will accept it. Generally, you will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan 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 59½ (unless an exception applies).

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 the Plan 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) (This means that your lifetime monthly benefits are not eligible for rollover.);

• Required minimum distributions after age 70½ (or after death); and• Corrective distributions of contributions that exceed tax law limitations. 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 the Plan (including amounts withheld for income tax) that you do not roll over, unless one of the exceptions listed below applies. This tax applies to the part of the distribution that you must include in income and 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 the Plan:

• 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 from a governmental plan made after you separate from service if you are a qualified public safety

employee and you will be at least age 50 in the year of the separation; • Payments made due to disability; • Payments after your death; • Corrective distributions of contributions that exceed tax law limitations; • 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 (without regard to whether you itemize deductions

for the taxable year); • Certain payments made while you are on active duty if you were a member of a reserve component called to duty

after September 11, 2011 for more than 179 days; and• Payments for certain distributions relating to certain federally declared disasters.

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 on the part of the distribution that you must include in income, 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:

• The exception for payments made after you separate from service if you will be at least age 55 in the year of the separation (or age 50 for qualified public safety employees) does not apply.

• 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 applies 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 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 State income taxes be withheld?

MainePERS is required to withhold 5% for Maine income taxes from distributions other than direct rollovers.


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 the Plan 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 complete distribution of your benefit which totals $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 Plan to two or more destinations at the same time, you can choose which destination receives the after-tax contributions.

If you do a 60-day rollover to an IRA of only a portion of a 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. Under certain circumstances, you may claim eligibility for a waiver of the 60-day rollover deadline by making a written self-certification. Otherwise, to apply for a waiver from the IRS, 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 were born on or before January 1, 1936

If you were born on or before January 1, 1936 and receive a lump sum distribution that you do not roll over, special rules for calculating the amount of the tax on the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income.

If you are an eligible retired public safety officer and your 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 a payment from the Plan 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-A, Contributions to Individual Retirement Arrangements (IRAs), and IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

If you are not a Plan member

Payments after death of the member. If you receive a distribution after the member’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 on early distributions and the special rules for public safety officers do not apply, and the special rule described under the section “If you were born on or before January 1, 1936” applies only if the member was born on or before January 1, 1936.

If you are a surviving spouse. If you receive a payment from the Plan as the surviving spouse (as defined by state law) of a deceased member, you have the same rollover options that the member 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 59½ will be subject to the 10% additional income tax on early distributions (unless an exception applies) and required minimum distributions from your IRA do not have to start until after you are age 70½.

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 member had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the member had not started taking required minimum distributions from the Plan, you will not have to start receiving required minimum distributions from the inherited IRA until the year the member would have been age 70½.

If you are a surviving beneficiary other than a spouse. If you receive a payment from the Plan because of the member’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 Plan under a qualified domestic relations order (QDRO), you generally have the same options and the same tax treatment that 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). However, 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 Plan 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

Unless you elect otherwise, a mandatory cashout of more than $1,000 will be directly rolled over to an IRA chosen by the Plan administrator or the payor. A mandatory cashout is 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 on special rollover rights related to the U.S. Armed Forces, see IRS Publication 3, Armed Forces’ Tax Guide. You also may have special rollover rights if you were affected by a federally declared disaster (or similar event), or if you received a distribution on account of a disaster. For more information on special rollover rights related to disaster relief, see the IRS website at www.irs.gov.

FOR MORE INFORMATION

You may wish to consult with the Plan administrator or payor, or a professional tax advisor, before taking a payment from the Plan. 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 www.irs.gov, or by calling 1-800-TAX-FORM.

REFUND APPLICATION

D. EMPLOYER CERTIFICATION

ROLLOVER ONLY

Social Security Number: Daytime Telephone Number:

Information About You

Options For Receiving Your Refund

E-mail address: Termination Date:

I choose to directly RECEIVE all of my MainePERS refund. I understand that MainePERS will withhold 20% of this amount for federal taxes, 5% of any amount not already taxed by the state for state taxes and pay the balance directly to me. If the

refund amount is less than $200 neither federal nor state withholding applies.

I choose to ROLL OVER all or part of my MainePERS refund. MainePERS does not roll over amounts less than $200. I understand that no federal tax will be withheld from the amount rolled over. (Choose one):

I choose to rollover 100% of my eligible refund. Are you rolling over into a Roth IRA? Yes No

I choose to roll over _______% OR $_______________of my eligible refund. (Provide the percentage or dollar amount.) Are you rolling over into a Roth IRA? Yes NoIMPORTANT NOTE: You must provide rollover forms for the receiving financial institution showing the type of IRA, your account number, to whom we should make the rollover check payable and the address where it should be sent. If your financial institution does not have a rollover form, provide a letter of acceptance from the institution, including the information listed above.

Signature

MemberName:

Prefix First MI Last Suffix

City/Town StateStreet/PO Box ZIP

MailingAddress:

Employer CertificationThis is to certify that the applicant terminated employment on ____________________. The date we issued/will issue his/her last

pay is/will be _________________________.

_____________________________________________ _______________________________________ ____________________

Date

Date

Signature of Certifying Official Employer Name & Code Date

Form #GU-0002Rev. 2/20

P.O. Box 349Augusta, ME 04332-0349Telephone: (207) 512-3100 Toll-free: 1-800-451-9800Fax: (207) 512-3101Maine Relay: 711

(Forward to your employer if you terminated service within the last three months.)

By signing this form I state that:

• I have read all the information in the MainePERS Refund Application Package, including the Special Tax Notice Regarding Rollover Options Under a Government Plan.

• I understand that:

○ by receiving a refund, I am giving up all rights to any MainePERS benefits; ○ I must terminate all MainePERS-covered employment to be eligible for a refund; ○ This application will be void if I return to covered employment before the refund payment is issued; and ○ I am solely responsible for all tax and other consequences of my decision. _________________________________________________________________________ _______________________________Signature of Applicant Date

Notary (Must be completed by a Notary Public or Attorney at Law)

The foregoing instrument was acknowledged before me this ___________________________________ by the member, who is named and has signed above.

____________________________________________________ My commission expires on ______________________

____________________________________________________

Date

Signature of Notary Public/Attorney at Law Date

Printed Name SEAL

Form #AC-0400Rev. 12/18

DIRECT DEPOSIT FORM

Are you depositing to two accounts?

NO - Deposit All of My Benefit in the account indicated above.

YES - Fill out two forms (one for each account) and check below which applies to this account.

Deposit the exact amount of: $_____________ in this account (and any balance in my other account).

Deposit any balance after the deposit to my other account in this account.

P.O. Box 349Augusta, ME 04332-0349 Telephone: (207) 512-3100 Toll-free: 1-800-451-9800 Fax: (207) 512-3101 Maine Relay: 711

SECTION 1 YOUR INFORMATION

Print your full name: __________________________________________________________________________

Social Security #: _______ - _____ - ________ Daytime Telephone #:________________________ __

Do you receive more than one monthly MainePERS payment?

NO YES: Use this account for all? Yes No (explain: ____________________________________)

SECTION 2 BANK ACCOUNT INFORMATION (Only one account per form)

Section 3 YOUR AUTHORIZATIONBy signing this form, you authorize MainePERS to:

1. Remit any benefit payments due to you by crediting your account(s) indicated above and;2. Recover from this account any overpayments to the account due to death, change in benefit status, or other legitimate causes.

You authorize the financial institution named above to:

1. Accept any deposits initiated by MainePERS to this account and;2. Credit these deposits to the account without responsibility for their correctness.

___________________________________________________________ ____________________________________ Recipient Signature Date

Checking Account Information:

Attach a voided or cancelled personal check here.

Do NOT staple or paper clip. Do NOT attach a deposit slip.

Your name must be on this account or we cannot deposit your benefit.

Savings Account Information:

Your name must be on this account or we cannot deposit your benefit.

________________________________________________ _________________________Name of Financial Institution Phone #

____ ____ ____ ____ ____ ____ ____ ____ ____ _________________________ Routing # (9 digits) Account #

OR

WHAT YOU SHOULD KNOW ABOUT ELECTRONIC DIRECT DEPOSIT

MONTHLY BENEFIT APPLICANTS

Electronic direct deposit is a fast, safe and convenient way of receiving a benefit payment. Monthly benefit payments are generally posted to your account on the next to the last day of the month for which the payment is issued. When the last day of the month falls on a weekend, payments are posted on the preceding Friday.

MainePERS will mail an advice of deposit whenever the amount of your deposit changes by more than a dollar. An advice of deposit gives you details including payment amount, deductions and tax withholding, and where we deposited the net benefit payment. We will also mail your year-end advice in December for your tax preparation purposes.

Starting Direct Deposit: You must submit a completed, signed, and dated Direct Deposit Form form prior to the payment of your retirement benefit. We must receive your completed authorization form by the last business day of the month in order to issue a payment or make a change in the following month (i.e., by December 31st for January payment). We will not issue payment if we detect an error in either the transit routing number or the account number provided on the authorization form. If depositing to your checking account, we request that you attach a check marked "void" to your direct deposit form in order to guarantee accurate processing. We can deposit your benefit payment in up to two checking and/or savings accounts.

Changing the Direct Deposit Financial Institution or Account Number: You must submit a new Direct Deposit Form in order to change your financial institution and account number or to change the account number at your current financial institution. Changes we receive by the end of one month will be effective with the next month's payment. For example, forms received in May will be effective with June's payment. You should not close your old direct deposit account before we have made a successful transfer to your new account.

Multiple Benefit Recipients: If you select benefit payment option 5, both you and your beneficiary must submit separate authorization forms, even if you use a joint account.

If you have questions or need additional information about electronic direct deposit, please contact us at 1-800-451-9800 or via e-mail at [email protected].

P.O. Box 349Augusta, ME 04332-0349 Telephone: (207) 512-3100 Toll-free: 1-800-451-9800 Fax: (207) 512-3101 Maine Relay: 711

Form #AC-0400Rev. 12/18

REFUND APPLICANTS

Electronic direct deposit is a fast, safe and convenient way of receiving your contribution refund. We issue refunds every other Friday. Your refund will post to your account on the date we pay your refund. We will write to let you know your refund date and amount, once they are determined. We must receive your completed Direct Deposit Form or any changes to a form submitted with your application, at least one week before your refund date in order to deposit the funds in your account.

You can find more information about when you can expect to receive your refund in the Refund Application Packet or online at www.mainepers.org.

Complete a Refund ApplicationYou can call MainePERS, come in to our office or download an application at www.mainepers.org.

Our website is also a good source of information about refunds.

Form #: CL-0894Rev. 2/20

Application Received

When MainePERS receives your original, completed application,

a Pension Associate reviews it for completeness, accuracy and eligibility.

Refund Processing

We pay refunds every other Friday. The date of your refund will be no more than 60 days after we receive your final contributions or your application, whichever is later. Once we have your

application and final contributions, a Pension Associate calculates interest through the refund date, prepares the funds for payment and submits the refund for authorization.

Refund Authorization

A Retirement Services Specialist or Pension Associate reviews your application, eligibility, refund calculations and details for compliance with laws and

accuracy and then authorizes the refund payment. Once authorized, we mail you confirmation of the date and (gross) amount of your refund.

Refund PaymentIf you submit a form to authorize electronic deposit of your refund, your funds

will be deposited in your account on the date indicated in the confirmation letter. If you do not, that is the date we will mail a check to you or your rollover company.

Refund Application Flowchart

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