If your Retirement Benefit is very small, it will automatically be paid to you in a single sum. Your benefit is payable in single-sum form if its actuarial value is $1,000 or less ($5,000 or less on or after your Normal Retirement Date). Furthermore, if the actuarial value is greater than $1,000 but not more than $5,000, you may elect to receive a single-sum distribution in lieu of an equivalent monthly income (subject to spousal consent). If you receive a total single-sum distribution, no further benefits will be available from the Plan unless you return to work in Covered Employment. [Section XII(C)]
You may elect to have the Plan roll over all or some of the single-sum payment into an eligible retirement plan that you select. An eligible retirement plan could be an individual retirement account (IRA), an individual retirement annuity, or another employer’s eligible plan that accepts rollovers. Eligible plans include tax-qualified retirement plans and deferred compensation plans that satisfy the requirements of IRS Code Sections 403(b) (applicable to not-for-profit employers) and Section 457 (as it applies to state and local governments). You must notify Retirement Services of the amount of money to transfer and the name of the plan to receive the transfer. Amounts that are rolled over are not taxed until they are distributed from an IRA or another eligible retirement plan.
Any money you do not elect to have the Plan roll over will be sent to you in a single-sum payment. If you receive a single-sum payment, 20% will be withheld for federal income taxes. Within 60 days of the date you receive the check from the Plan, you can deposit it into an IRA or qualified retirement plan that accepts rollovers. You may wish to consult a tax adviser about your options in this situation. [Section XII(I)]