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					                                                                    Retirement Distribution
                                                                                  Options Guide




decide
 what to do with your FPPA DROP when you retire

 Congratulations! You’ll be retiring soon! You may want to consider how and when you would
 like to receive money from your DROP account for your retirement needs. You have a variety
 of attractive payment options offered within your Plan.

 It is important to remember that retirees may keep their DROP account invested with FPPA
 and maintain their current investment strategy offered through FPPA and Fidelity Investments.

 As a not-for-profit association and an institutional investor, FPPA is able to offer retirees the
 same low money management fees as active members. And remember that no sale fees or
 commissions are ever assessed.

 In preparation for retirement, take the following three steps!

 1. Evaluate your options

 2. Learn how FPPA and Fidelity Investments can help

 3. Act on your decision
Decide what to do with your DROP savings when you
leave your employer.


Decisions regarding your retirement plan savings can have

significant long-term financial consequences. That’s why

it’s important to review your options, assess their potential

financial consequences, and make a decision that reflects

your personal retirement savings goals. FPPA and Fidelity

Investments are committed to helping you plan for your future.
1.   evaluate
      your options
          When deciding what to do with your DROP, you can choose from the payment options
          listed below. These options can apply to all or a portion of your DROP account.
          Convert to a Monthly Lifetime Benefit*
          This option allows you to convert all or a portion of your DROP account into
          a monthly lifetime benefit. Consider this option as similar to using your DROP
          account to purchase an annuity through an outside provider. However, unlike
          purchasing an annuity, there is no fee with FPPA’s “Convert to a Monthly Lifetime
          Benefit” option. Because this is considered a portion of your pension, the survivor
          option that you elected for your pension, if any, would also apply. Additionally,
          should you elect this option, your benefit would receive the same cost-of-living
          adjustment (COLA) that is applied to your pension throughout retirement.
          Members who wish to convert this cash account to a monthly lifetime benefit
          without paying extra fees to purchase an annuity may want to consider this option.
          This option must be selected prior to receiving any funds from your defined benefit
          pension plan.
          *This option is available only for members of the Statewide Defined Benefit Plan and the Statewide Hybrid Plan.


          Periodic Payments Designating an Amount
          This option allows you to designate a dollar amount that you would like to receive
          each month until the account is depleted.
          For example, you may want to receive $1,000 per month until the account is
          exhausted. As the periodic payments are distributed, the balance of the account
          continues to be invested in the funds you have selected, and any earnings continue
          to accrue. As a retiree, you can still change your investment strategy at any time.
          The amount or time frame of your periodic payment may be changed in retirement.


          Periodic Payments Designating a Time Frame
          This option allows you to designate a time frame in which to receive payments
          from your DROP account.
          For example, you may want to receive a monthly payment over 15 years. As the
          periodic payments are distributed, the balance of the account continues to be
          invested in the funds you have selected, and any earnings continue to accrue. As
          a retiree, you can still change your investment strategy at any time. The payment
          amount is adjusted annually to ensure that the account will be paid over the
          time frame you have selected.
          The amount or time frame of your periodic payment may be changed in retirement.


          Minimum Required Distribution (per IRS Regulations)
          This option is typically considered when a member has left the fire or police
          department prior to the calendar year in which he or she is turning age 50. This
          method is one way in which the retired member may not be subject to the 10%
          IRS penalty that applies to an early distribution of a qualified plan. Estimates can
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          be provided by FPPA or Fidelity prior to making this selection.
    Defer Payment
    This option is typically considered by members who simply do not want income
    from the DROP account yet, or for a member who left the department prior to the
    calendar year in which he or she turns age 50. Deferring receipt of the funds to the
    later of five years or age 59½ is one way you may not be subject to the 10% IRS pen-
    alty that applies to an early distribution of a qualified plan. The IRS code permits a
    retiree to defer payment until April 1 of the calendar year following the year in which
    he or she reached age 70½. During this deferral period the balance of the account
    continues to be invested in the funds you have selected and any earnings continue
    to accrue. As a retiree, you can still change your investment strategy at any time.
    Lump Sum Payment
    This option may be elected if a member wants all or a portion of the DROP
    account paid out in a lump sum. We strongly encourage you to consult a tax
    advisor before receiving a lump sum payment from your DROP account.
    If you are looking to roll or transfer all or a portion of your DROP account to an
    outside provider, into an IRA, or to another similar investment, you may want to
    consider options offered through Fidelity Investments.
    You will want to consider the tax consequences of any of the above payment
    options prior to selecting your payment option. This is especially important
    if you leave the fire or police department prior to the calendar year in which
    you will turn age 50. The information in this brochure is not intended to be
    tax advice. Please contact your tax advisor for guidance and to discuss your
    specific situation.




     For information or help: Call FPPA at 1-800-332-3772 (Monday through
          Friday, 8:00 A.M. to 4:30 P.M. MT) or Fidelity at 1-800-343-0860,
                   Monday through Friday, 6:00 A.M. to 10:00 P.M. MT.




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2.   learn
      how FPPA and Fidelity Investments can help
           There are many advantages to leaving your account invested with FPPA and Fidelity.
           Choice. You have a wide variety of payment options from which to choose. Depending
           upon your specific needs in retirement, you can find options that are suited to your needs.
           Fees. Because FPPA is a large institutional investor, we are able to negotiate lower
           administrative fees. We are able to use institutional class mutual funds and avoid any
           wraps and loads.
           When shopping the marketplace for a company to invest with, it is very important to
           understand the fee structure that is associated with your potential investment.
           Service. FPPA has been in the business of serving Colorado Police Officers and
           Firefighters for more than 25 years. Whether you are an active member or a retiree,
           we are committed to providing you with the best service possible. FPPA has teamed
           up with Fidelity Investments, a leader among retirement plan service providers, to
           accomplish this task.
           Whether you like to do business in person, over the phone, or via the Web, we’ve
           got what you want!




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    To meet in          Fidelity has two service centers located in the Denver metro area, where you can sit
    person, visit one   down with a representative so that you can create, review, and assess your financial
    of the Fidelity     plan, discuss your investment options, or establish a withdrawal schedule suited to
    Service Centers     meet your goals. This same type of meeting can be accomplished over the toll-free
                        phone line. There is no fee for this service, and representatives receive no incentive
                        pay to sell any particular product or service. So, if you find yourself wondering “How
                        should I invest my money?”, you may want to visit or call a Fidelity Service Center.
                        Fidelity Service Centers are located at:
                        Denver South                                     Downtown Denver
                        9185 E. Westview Road                            1625 Broadway, Suite 110
                        Littleton, CO                                    Denver, CO
                        Near Park Meadows Mall                           On the 16th Street Mall
                        For appointments, please call:
                        Phone: 1-303-649-1708                      Phone: 1-303-825-7346
                        Hours of operation: 8:00 A.M. to 5:30 P.M., Monday–Friday.
                        To contact Fidelity’s main customer service center, please call 1-800-343-0860.
                        Representatives are available to assist you Monday through Friday, 6:00 A.M. to
                        10:00 P.M. MT.


    For a phone
    consultation
                            Please call for more information

                            1-800-343-0860
                            • Your FPPA plans through Fidelity
                            • Distribution options
                            1-800-544-3455
                            Portfolio Advisory Services
                            1-303-649-1708
                            Park Meadows Investor Center
                            1-303-825-7346
                            Downtown Denver Investor Center
                            1-800-544-2442
                            Fidelity fixed-income and variable-income annuities
                            1-800-332-3772
                            FPPA Retirement Benefits Department




    To connect          Visit the Fidelity NetBenefits® Web site at www.fidelity.com/atwork to access
    via the Web         tools, services, and calculators.




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Commonly          1. When are my DROP funds available for distribution?
asked questions
regarding         When FPPA has been notified that you have terminated service, we will mail you a
the DROP          DROP termination packet that will include your distribution forms. Once you have
Distribution      completed the distribution forms, FPPA and Fidelity can release the funds for payment.
                  If you are taking a lump sum distribution, we will issue the payment after final
                  contributions have been made to your DROP account. This takes approximately
                  30 days.
                  2. Do I have to take distribution of my DROP account at the time I retire?

                  No. You are not required to take a distribution of your DROP account at retire-
                  ment. You may begin distributions at any time after retirement up to as late as
                  April 1 of the calendar year following the year in which you reach age 70½.
                  3. What are the advantages of leaving my DROP account invested with
                     FPPA and Fidelity Investments?

                  There are many advantages: You will have a wide variety of distribution choices,
                  low fees, and valuable services available from FPPA and Fidelity, as mentioned
                  earlier in this brochure. If you wish to discuss your payment options and the many
                  advantages, please call FPPA at 1-800-332-3772 and ask to speak with a staff
                  member from the Benefits and Communications Division.
                  4. Can I roll my DROP account into my 457 Deferred Compensation account?

                  Yes. However, the DROP funds are still tracked separately and separate IRS rules apply.
                  5. Can I roll my DROP account into my Separate Retirement Account (SRA)
                     offered through the Statewide Defined Benefit Plan or the Statewide
                     Hybrid Plan?

                  If your SRA funds are still invested in the FPPA Members’ Benefit Fund, you
                  cannot roll your DROP account into your SRA. However, you can still leave
                  your funds invested with Fidelity Investments. If you have moved your SRA to
                  an outside provider, you may be able to consolidate those funds.
                  6. How are the DROP funds taxed?

                  DROP distributions are taxed as ordinary income, based on your income tax bracket
                  at the time you receive the funds in retirement. If you leave the fire or police
                  department prior to the calendar year in which you turn age 50, a 10% IRS early
                  distribution penalty may apply. We encourage you to contact your tax advisor to
                  discuss your specific situation.
                  If your DROP distribution is associated with a disability or survivor benefit,
                  please contact FPPA for additional information.




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    7. If I set up a periodic payment from my DROP account through FPPA and
       Fidelity, then change my mind, can I change the amount of my distribution?

    It depends on the type of payment you selected.
    If you choose periodic payments over a time frame, or periodic payments designating
    a dollar amount, you can change your payment option while there are still funds in
    your account.
    If you converted your DROP account to a lifetime monthly benefit or if you
    purchased an annuity, you cannot change your payment option.
    8. What are the advantages of selecting a rollover IRA with Fidelity?

    A Fidelity IRA offers you the ability to maintain your current investment strategy,
    educational resources, and superior customer service.
    9. If I leave my DROP funds invested with Fidelity through FPPA, do I still
       have the same investment options available to me?

    Yes. As a retiree you have the same investment options and services that are available
    to active members.

    10. Who can I talk to if I have questions about how much to withdraw during
       retirement, and other related questions?

    Fidelity Retirement Income Advantage® is a new set of products and services
    designed to help you plan, invest, and manage your income for living in retirement.
    Working with a Fidelity Retirement Specialist—or on your own, if you prefer—you
    can create a comprehensive retirement income plan to meet your expenses through-
    out your lifetime. A Retirement Specialist will review your investments, risk toler-
    ance, and time frame and help you craft an income plan. Once you develop your
    income plan, Fidelity’s retirement income planning tool can help you stay on track.
    For information on this free program, please call 1-800-FIDELITY.




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                     11. What considerations are important when developing an income plan?

                     There are four important considerations.
                     In the same way that you needed a formalized plan to accumulate assets for retire-
                     ment, you now should consider a well thought out plan to help make those assets
                     last for the rest of your life.
                     Contact a Fidelity Retirement Specialist who will help you understand and take
                     action on the four key phases, at no cost to you, through the use of Fidelity’s suite
                     of tools and services:
                     1. Understanding Your Risks—longevity, inflation, market risk, rate of withdrawal,
                        health care expenses.
                     2. Planning—estimate your expenses, retirement income, available assets, identify
                        gaps between income and expenses.
                     3. Investing—develop a strategy of investments that meets your individual needs.

                     4. Managing Your Income—a successful retirement income plan requires a periodic
                        review of your strategy—at least annually—to make sure it’s still meeting your
                        objectives. This is essential because your investment mix can shift out of balance
                        over time as different segments of the market go up and down.




Develop or review a retirement income plan with help from Fidelity
Fidelity offers resources designed to help you develop or review a retirement income plan:
• A Fidelity Retirement Specialist can help get you started on your retirement income plan. To schedule a consultation,
  call 1-800-887-4015.
• Fidelity’s new Retirement Income Planner is a comprehensive online tool that can help you find out how much your
  current savings may generate for you in retirement, and if you’ll have enough income to cover potential retirement
  expenses. Simply log on to NetBenefits at www.fidelity.com/atwork to access the Retirement Income Planner.
  Or access the tool from www.fidelity.com/retire.
• The Fidelity Retirement Resource Center at www.fidelity.com/retire provides information that can assist you at
  every stage of the income planning process, from assessing your current situation to helping ensure that your plan
  meets your specific needs throughout your retirement.
• Fidelity Retirement Health Care Calculator can help you estimate your personal medical expenses in retirement.
  From the www.fidelity.com/atwork home page, log on to NetBenefits for the Retirement Health Care Calculator.
• Fidelity’s metro Denver Investor Centers offer services beyond your retirement savings plan, which include
  complimentary seminars on a variety of topics, including income planning in retirement.
          Park Meadows Investor Center: 1-303-649-1708
          Downtown Denver Investor Center: 1-303-825-7346




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    3.     act
           on your decision
         Call for a      Call an FPPA Retirement Benefits Representative at 1-800-332-3772 to discuss the
         complimentary   information in your Termination Packet.
         Distribution
         Options         You may also want to call or visit a Fidelity Service Center to review your strategy
         Consultation    for retirement. (Please see the contact information elsewhere in this brochure.)

                         Complete your distribution forms and return them to FPPA’s Retirement Benefits
                         Representative. Please note that some “old hire” DROP plans require that the dis-
                         tribution form be completed within 30 days of your termination date. Please consult
                         your employer or FPPA regarding this issue to avoid any unintended consequences.

                         Relax and enjoy your retirement. Also, if you are still invested in the market,
                         remember to monitor your strategy and investments over time using the tools and
                         services offered through FPPA and Fidelity.




                            Simplify by consolidating your retirement assets
                            Consolidating your retirement assets in one account may make managing your money
                            much easier — with less paperwork and fewer decisions to make. Current tax law allows
                            you to consolidate eligible IRAs and retirement accounts from former employers into an
                            existing workplace savings plan, if allowed by your employer. Once you retire, consolidating
                            your retirement assets in a Rollover IRA can streamline your savings and simplify minimum
                            required distributions (MRDs) from your account.
                            Call a Fidelity Retirement Specialist for more information about consolidating your
                            retirement accounts, either to a current workplace savings plan or to an IRA. Fidelity
                            Retirement Specialists can be reached at 1-800-343-0860 or your plan’s toll-free
                            number, Monday through Friday, from 6:00 A.M. to 10:00 P.M. MT.




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Need help?
We’ve got answers. Call or visit FPPA at 1-800-332-3772
and www.fppaco.org, or Fidelity at 1-800-343-0860 and
www.fidelity.com/atwork.




The information contained herein has been provided by the Colorado Fire and
Police Pension Association and is solely the responsibility of the Colorado Fire
and Police Pension Association.




411406         1.799645.101
26816-FPPA-TRANS-0107

				
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