How to get agency matched money
December 10, 2019 1:13 PM Subscribe
I worked for a federal agency with the FERS retirement plan. The plan differed from the old PERS in that instead of a lifetime annuity, it relied on providing retiring employees the three legged stool of:
1) Social security benefits,
2) 401K savings, and
3) an employer match.
I have reached the eligible age for extracting the employer match. Is it automatically added to 401K earnings or kept separately. And if it is kept separately, how do I apply to the former federal agency to get it?
FERS is a three-legged stool, but the legs are "a Basic Benefit Plan, Social Security and the Thrift Savings Plan (TSP)."
All three parts involve employee contributions (mandatory for Basic Benefit Plan and Social Security, optional for TSP). All three have (effectively) government contributions.
If you have a TSP plan, or you rolled the TSP funds into an another account, the federal contributions would have been rolled over too, presuming they had vested.
Likewise, the federal contribution to Social Security is baked in.
For the Basic Benefit, if you left federal service before you were eligible to retire, but with five years of service, you may be eligible for a "deferred retirement benefit" at age 62. You have to apply.
Alternately, you could request a refund of your contributions (you can do this any time after leaving federal service), but then you can't get an annuity for the years of service for which your contributions were refunded, meaning that you lose the benefit of the employer contribution to the Basic Benefit. If you already received a refund of your basic benefit contributions, you won't be eligible for a FERS pension unless you redeposit. The only way you can access the employer contributions to the basic benefit is through the annuity.
Either way, go here for FERS information for former federal employees.
posted by Jahaza at 2:13 PM on December 10, 2019 [2 favorites]
All three parts involve employee contributions (mandatory for Basic Benefit Plan and Social Security, optional for TSP). All three have (effectively) government contributions.
If you have a TSP plan, or you rolled the TSP funds into an another account, the federal contributions would have been rolled over too, presuming they had vested.
Likewise, the federal contribution to Social Security is baked in.
For the Basic Benefit, if you left federal service before you were eligible to retire, but with five years of service, you may be eligible for a "deferred retirement benefit" at age 62. You have to apply.
Alternately, you could request a refund of your contributions (you can do this any time after leaving federal service), but then you can't get an annuity for the years of service for which your contributions were refunded, meaning that you lose the benefit of the employer contribution to the Basic Benefit. If you already received a refund of your basic benefit contributions, you won't be eligible for a FERS pension unless you redeposit. The only way you can access the employer contributions to the basic benefit is through the annuity.
Either way, go here for FERS information for former federal employees.
posted by Jahaza at 2:13 PM on December 10, 2019 [2 favorites]
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The term you are looking for is an "In-Service Withdrawal". See the "How to Apply for an Age-Based Withdrawal" section.
Your account will have two balances in it - pre-tax (Traditional) contributions and post-tax (Roth) contributions. Your employer matching contribution will go into the pre-tax contributions. Your personal contribution will either go to pre-tax or post-tax depending on your choice at the time of contribution. You can choose the withdrawal to be either pre-tax or post-tax depending on your particular tax situation. The choice may be moot if you have no post-tax contributions.
As far as I'm aware, there's no ability to withdraw specifically the matching contributions unless you have zero personal pre-tax contributions. The matching contributions are exactly equivalent to any other pre-tax contribution, so they are kept in the same account. On the off chance you have only post-tax personal contributions, you can withdraw only the matching contributions by requesting a withdrawal from your pre-tax balance.
posted by saeculorum at 1:40 PM on December 10, 2019