At time of termination/retirement you have choices regarding your 401(k) account at John Hancock Retirement Plan Services.
Account Options
You can leave all or part of your money in the Plan
If your 401(k) account balance is $1,000 or less, your Vested Account Balance will be distributed in a lump sum.
If your balance is between $1,000 and $5,000, your account will automatically be rolled over into an IRA unless you make an election for a cash distribution or rollover into another IRA.
If your balance is more than $5,000, you can:
You can roll over all or part of your account balance
Roll over to a New York Life Portfolio IRA
Roll over to another IRA or retirement plan
You can leave all or part of your money in the Plan
You must start taking the IRS Required Minimum Distribution at age 70 ½ (see RMD section below)
If you choose installment payments or leave all or part of your money in the plan, you will continue to have access to quarterly account statements at
mylife.jhrps.com.
John Hancock will mail a 1099-R to you by January 31 the following year if distribution. Your 1099-R will be stored on your online account under Statement Archives.
Required Minimum Distributions
If you are
retired, you must start taking the IRS Required Minimum Distribution (RMD) at
age 70 ½. For example, if you are retired and turn age 70 ½ this year,
you have until April of next year to take your first RMD then until Dec of that
same year to take the second RMD. John Hancock mails out RMD packets in
October of the year a retiree turns age 70 ½, giving enough time to take one in
that year should you choose thus spreading the taxable income over two
years. You can request an RMD packet any time during the year you turn
age 70 ½, i.e. you don’t need to wait until receiving it in October from John
Hancock.
Notes:
- The RMD will not automatically come from any traditional after-tax portion because that portion
is lower in the distribution hierarchy (see next section, Partial
Distributions). If you want to take some/all of any traditional after-tax
portion as a portion of your RMD, you can go online or call John Hancock’s Participant Service Center,
1-800-294-3575, to request a paperless Voluntary Withdrawal. A
distribution of any after-tax portion will be made with a pro-rated share of
taxable earnings (contributions not taxable).
- Roth after-tax portions are subject to RMD’s from 401(k) plans; Roth IRA’s are
not subject to RMD’s.
- RMD's must be processed by paper form; therefore, distributions by investment fund (described below) are not available.
Partial Distributions
When you take a partial distribution, funds are distributed in a preset hierarchy.
Generally the order is as follows:
Your pre-tax rollover contributions and associated earnings
Employer contributions and match with associated earnings
Your post-tax contributions with associated earnings: - Contributions - Rollover contributions
Your pre-tax contributions with associated earnings
Your Roth 401(k) contributions and associated earnings
Note: If you have a Roth portion in your account, you may specify a Roth-only partial distribution.
Online partial withdrawals by the fund or funds of choice
You can make online partial withdrawals by the fund or funds of your choice. Previously, a partial distribution would be taken from all the funds proportionately. If there are insufficient assets in any investment fund (due to market fluctuations, etc.) then the remainder of the distribution will come from the other investments included in the distribution, proportionally, until the full balance of all the included investments is exhausted.
Please note that distributions done via form will not have this functionality. Required Minimum Distributions (described above)
must be processed by paper form; therefore, distributions by investment fund
are not available.
