Distribution/Direct Rollover Request

Refer to the Distribution Guide beginning on page 6 while completing this form. You must return all pages (1-5) of the form.

1. Information about you

Last name First name MI Account ID or SSN (required)

Daytime phone number Alternate phone number Account Extension (if applicable)

U.S. citizen or U.S. resident alien q Yes q No If no, country of legal residence

2. Distribution date

Required only if electing a future dated distribution within the next 90 days.
If left blank, and the request is in good order, the distribution will be processed upon receipt.

q Effective date (optional)

Month Day Year

3. Distribution election

Distributions are not allowed until 30 days after your severance of employment date.
q Severance of Employment Date
Month Day Year
q QDRO Recipient
q Required Minimum Distribution ONLY (see page 7 of Guide) - proceed to Sections 5, 6, 7, and 8

4a. Distribution election - payable to me

A distribution made payable to you will be mailed to your address on file.

q Full distribution of my entire MNDCP account balance (pre-tax AND Roth after-tax) payable to me
q Partial distribution amount $ payable to me
Contribution source: otherwise follows Contribution Source hierarchy (see Guide)
optional
q Net amount (The amount I will receive after applicable income taxes and fees are withheld)
q Gross amount (The amount I will receive will be less than the requested amount after applicable income taxes and fees are withheld)

Optional: Complete the box below only if you want a partial distribution from specific investment option(s). If this section is not
completed, the distribution will be prorated across all investment options.
Investment Option Name Please Complete: % or $

Page 1 of 19
 Last name First name MI

4b. Distribution election - direct rollover

Proceeds of a rollover distribution will be payable to the Trustee/Custodian/Retirement plan provider listed below and will be mailed to your
address on file. You are responsible for forwarding the proceeds to your new Trustee/Custodian/Retirement plan provider.

Rollover of my Pre-Tax Balance Rollover of my Roth After-Tax Balance

Direct Rollover Amount $ OR % Direct Rollover Amount $ OR %

Direct Rollover to: Direct Rollover to:
Eligible Employer Sponsored Pre-Tax Retirement Plan
r r
Eligible Employer Sponsored Roth Retirement Plan

r
401(k) r
403(b) r
457(b) r
401(a) 401(k) r
r 403(b) 457(b)
r

r
Traditional IRA r Roth IRA
r
Eligible Employer Sponsored Roth Retirement Plan *

401(k)
r 403(b)
r 457(b)
r

r
Roth IRA *

* Taxable event subject to ordinary income taxes

Trustee/Custodian/Retirement Plan Provider to whom the check is made payable Trustee/Custodian/Retirement Plan Provider to whom the check is made payable

Retirement Plan or IRA account number Retirement Plan or IRA account number

RMD
If you attain Required Minimum Distribution (RMD) eligible age this calendar year (see page 7 of the Guide), or you are over this age
by the end of the year, your RMD amount for the year will be distributed before any funds are rolled over.
The RMD calculation for the current tax year will be based on a Uniform Life Expectancy.

If your direct deposit information is already on file with MNDCP, your RMD will automatically be sent as a direct deposit to that banking
information, or you can complete section 6 to add your banking information. Otherwise your RMD will be delivered to your address on file
via U.S. mail.

Distributions paid to you may be subject to federal and state income tax withholding. You have the option to provide tax withholding
instructions to MSRS. If no instructions are provided, the default withholding will apply.
* Federal tax withholding: The default withholding rate is 10%. To choose a rate between 0% and 100%, complete the IRS Form
W-4R Withholding Certificate. The form is available at www.irs.gov.
* State tax withholding: If you reside in a state that mandates state income tax withholding, it will be withheld on the taxable
portion of distribution at the required rate. The default Minnesota tax withholding is single and zero allowance. To choose
an alternate withholding rate, complete a Form W-4MNP Withholding Certificate. The Form W-4MNP is available to download at
www.revenue.state.mn.us/withholding-annuities-and-pensions.
If you reside in a state that does not mandate state income tax withholding, no state tax will be withheld from your distribution.

Page 2 of 19
 Last name First name MI

5. Required Minimum Distribution

The Uniform Life Expectancy calculation method is used on all distributions that include a Required Minimum Distribution. If your spouse is
your sole primary beneficiary AND is more than 10 years younger than you, you may choose the Joint Life Expectancy calculation method
by selecting the box below.
r Joint Life Expectancy
You must attach a copy of your spouse’s birth certificate or a copy of your spouse’s drivers license.
In order to use the Joint Life Expectancy method, your spouse must be designated as your sole primary beneficiary.
If they are not, you must complete a MNDCP Beneficiary Designation form before this Required Minimum Distribution
can be processed.
Name of spouse Spouse’s date of birth
Month Day Year

6. Delivery options

The distribution will be delivered to your address on file via regular U.S. mail (estimated delivery time is 7-10 business days) unless you
elect an alternate delivery option below. A recent change of address may delay your distribution due to additional required authentication.

Alternate Delivery Options

r Check by express delivery
Estimated delivery time is 1-3 business days after the distribution is processed, available for delivery Monday - Friday
only, with no signature required upon delivery. A $25 non-refundable fee will be deducted from your distribution amount.
If sending to a street address, check will be sent via United Parcel Service (UPS); if sending to a PO Box, check will be
sent via United States Postal Service (USPS) Priority Mail.

r New direct deposit via Automated Clearing House (ACH) - NOTARIZED SIGNATURE REQUIRED IN SECTION 8
Estimated delivery time is 2-3 business days after the distribution is processed. If the banking information requested below
is incomplete or not in good order, or this application is not signed in the presence of a notary, the distribution will be sent
as a check to your address on file via regular mail.

Checking
r account Include a copy of a preprinted voided check or you may attach a letter on
financial institution letterhead, signed by a representative from the receiving
institution, which includes your name, checking account number and ABA
routing number.
r
Savings account Include a letter on financial institution letterhead, signed by a representative from the
receiving institution, which includes your name, savings account number and ABA routing number.

All future MNDCP cash distributions will be deposited into this bank account.

Name
Address
City, state, zip code
Tape (do not staple) copy of preprinted

VOID
voided check here

Page 3 of 19
 Last name First name MI

7. Income tax withholding NOT APPLICABLE FOR DIRECT ROLLOVERS

Distributions paid to you may be subject to federal and state income tax withholding. You have the option to provide tax withholding
instructions to MSRS. If no instructions are provided, the default withholding will apply.

Federal Withholding
Pre-tax distributions – default withholding rate is 20%.
Distributions you receive that are eligible to be rolled over to an IRA or qualified plan are subject to federal tax withholding on the
taxable amount of the distribution. To choose a rate greater than 20%, complete a Form W-4R Withholding Certificate. Submit your
completed Form W-4R to MSRS with this form. A Form W-4R is available to download at www.irs.gov.
Roth distributions – default withholding rate is 20% (earnings only).
See page 9 Guide for explanation. Qualified distributions from your Roth account are not subject to federal tax withholding. However,
earnings on non-qualified distributions are subject to 20% federal tax withholding unless rolled over to another eligible Roth retirement
plan or Roth IRA. To choose a rate greater than 20%, complete a Form W-4R Withholding Certificate. Submit your completed Form W-4R
to MSRS with this form. A Form W-4R is available to download at www.irs.gov.
Required Minimum Distribution (RMD) – default withholding rate is 10%.
To choose a withholding rate between 0% and 100%, complete a Form W-4R Withholding Certificate. Submit your completed
Form W-4R to MSRS with this form. A Form W-4R is available to download at www.irs.gov.

State Withholding - Minnesota resident

The default Minnesota tax withholding rate is single and zero allowances (regardless of your marital status). We assume Minnesota
residency if the address on file is in Minnesota. To choose an alternate withholding rate or no withholding, complete a Form W-4MNP
Withholding Certificate. Submit the Form W-4MNP with this form. The Form W-4MNP is available to download at
www.revenue.state.mn.us/withholding-annuities-and-pensions.

State Withholding – Resident of another state

If you reside in a state that mandates state income tax withholding, it will be withheld on the taxable portion of this distribution at the
required rate. If you reside in a state that does not mandate state income tax withholding, no state tax will be withheld from your distribution.

You are encouraged to consult a tax advisor to determine your appropriate income tax withholding.
MSRS staff members are unable to provide advice regarding tax withholding.

Page 4 of 19
 Last name First name MI
8. Required authorization (please sign below)

Any person who knowingly presents a false or fraudulent claim is subject to criminal and civil penalties.
My signature acknowledges that I have received, read, understand and agree to all pages of the Distribution form for Governmental 457(b) Plans,
the Distribution Guide and the 402(f) Notice of Special Tax Rules on Distributions. I hereby agree to the provisions of the Plan, authorize disclosure
of any information necessary for administration of the Plan, and certify the information furnished on this form is true and correct to the best of my
knowledge and belief. I understand that funds may impose redemption fees on certain transfers, redemptions or exchanges if assets are held less
than the period stated in the fund’s prospectus or other disclosure documents. I will refer to the funds prospectus and/or disclosure documents
for more information. I understand that it is entirely my responsibility to ensure that this election conforms with all applicable provisions of the
Internal Revenue Code (the “Code”) and that the Plan into which I am rolling money over will accept the dollars, if applicable. I understand that I
am liable for any income tax and/or penalties assessed by the IRS for any election I have chosen. I understand that once my payment has been
processed, it cannot be changed.
Federal law requires that you must receive the attached Notice of Special Tax Rules on Distributions no less than 30 days and not more than 180
days prior to requesting a distribution. By signing, I acknowledge that I have read and received the Notice of Special Tax Rules on Distributions
within the last 180 days and/or waive my right to wait 30 days prior to requesting this distribution.
Data collected on this form will be used by MSRS staff for identification and documentation. The individual’s Social Security number, birth date
and address are classified as private and will not be shared with an unauthorized person without written consent.

Participant Signature Date (Required)

Month Day Year
NOTARY REQUIREMENT - FOR NEW DIRECT DEPOSIT ONLY
The date I sign this form must match the date on which my signature is notarized in this section.
NOTE: Notary seal must be visible.
This request was subscribed and sworn (or affirmed) to before me Notary Seal
Statement of Notary
on this day of , 20 , by
name of participant
State of )
proved to me on the basis of satisfactory evidence to be the person
)ss.
who appeared before me.
County of )
Notary public’s signature My commission expires
OR

MSRS Representative Signature Date(Required)

Month Day Year

Send or fax completed form to: Questions? Reminder to:

Minnesota State Retirement System Telephone: 651.296.2761 l Return all five pages of the form.
60 Empire Drive, Suite 300 Toll-free: 1.800.657.5757, option 3 l Sign and date the form.
St. Paul, MN 55103-3000 l Include a voided check and
notarized signature if requesting
Fax: 1-888-529-1832 Web: www.msrs.state.mn.us a new direct deposit.

Teletypewriter users and telecommunications-device-for-the-deaf (TDD) users should call the Minnesota Relay Service at 1.800.627.3529 and ask to be
connected to MSRS at 651.296.2761.
Page 5 of 19
Distribution/DirectRolloverRequest/MNDCP/10.03.22
Distribution/Direct Rollover Guide

Acknowledgement and Agreement Completing the Distribution/Direct Rollover Request Form

This form is divided into several sections; each section requires that
Before You Begin you provide information or make an election regarding your distribution.
When you sever employment with the employer that sponsored this plan,
Please read the instructions carefully.
you have several choices with respect to your distribution options. If you
are leaving your job because you are retiring, you may want to begin Information About You Section
taking distributions, or you may be required to begin taking distributions Last Name, First Name, Middle Initial
in accordance with the minimum distribution requirements. If you are Your full name is required in order to properly identify your account.
changing jobs, you are able to leave your money in your current Plan, or This must exactly match the name on our system or this request
roll it over to another retirement Plan, or to an Individual Retirement cannot be processed. Please login to your online account at
Account (IRA) that accepts such rollovers. Only you can make this www.msrs.state.mn.us or review your most recent account
personal decision after careful consideration of several factors statement to determine how your name appears on our records.
including your age, financial needs, and other sources of income.
Daytime Phone Number, Alternate Phone Number
Please read all pages of this guide before completing the Distribution This information will allow MSRS to contact you in the event that your
form. The guide provides information you need to make informed request is not properly completed.
decisions regarding your distribution. If you need further clarification Account ID or Social Security Number
about the information in this guide, please contact MSRS. Your Account ID or Social Security number is required to properly identify
You are strongly urged to consult with an accountant and/or tax advisor your account and report tax withholding information to the Internal
before making your final decision and in the completion of this Distribution Revenue Service.
form. While our representatives are able to explain the options to you, they Account Extension
cannot tell you which payment and/or tax withholding method is best for An account extension (if applicable) identifies funds transferred to a
you. MSRS will not provide tax or legal advice. Additionally, neither this beneficiary due to participant’s death or alternate payee due to divorce.
guide nor the Distribution form represents tax or legal advice.
If you are a Non-Resident Alien
Distributions are not allowed until 30 days after your severance of If you are not a U.S. citizen or resident alien you must submit IRS form
employment date. Your funds cannot be released until your employer W-8BEN with your distribution request. Download and print form W-8BEN
confirms that you are entitled to take a distribution or rollover from your at www.irs.gov. If the W-8BEN form is not provided or is not filled out
MNDCP account, when applicable. correctly, 30% of your distribution amount will be withheld for federal
If you have more than one account, you must complete a separate taxes. See page 9 for more information.
Distribution form for each account. Distribution Date Section
Incomplete or Inaccurate Information Effective Date
In the event that any section of the Distribution form is incomplete or The distribution will occur the later of the date you select as your effective
inaccurate, MSRS may not process your request. You may be required to date or the date MSRS receives a properly completed Distribution form. If
complete a new form or provide additional or proper information before a properly completed Distribution form is received after 1:00 p.m. Central
the transaction will be processed. Time, MSRS will make every effort to process the request by the end of
the business day (3:00 p.m. Central Time). Otherwise, the request will be
Changes to Your Request processed on the next business day.
If you make a change to the Distribution form as you are completing it,
you must cross out any previously elected choice(s) and initial all changes. The effective date you indicate on the form is the date your shares
If you do not initial all changes, the Distribution form may be returned to will be sold, not the date you will receive your proceeds.
you for verification.
Distribution Election Section
Self-Directed Brokerage (SDB) Account Notice You must elect a distribution type. The following is a brief description of
If you have an SDB account administered by TD Ameritrade, it is your each distribution type.
responsibility to contact the SDB provider to transfer the funds to be
Severance of Employment
distributed to the MNDCP core investments before MSRS can process
If you are taking a distribution from your account due to severance of
your distribution.
employment, check the appropriate box and indicate the date you severed
With respect to both full and partial distribution/rollover requests, in the employment with the employer that sponsored this Plan. Distributions are
event that the transfer of funds from your SDB account has not been not allowed until 30 days after your severance of employment date.
received by MSRS prior to MSRS receipt of the Distribution form, the
QDRO Recipient
following will occur: MSRS will process your request from the amount that is
If you received the MNDCP proceeds as a result of a Qualified Domestic
available in the core investment options in excess of the “core minimum.”
Relations Order (QDRO) and wish to take a distribution, check this box.
The core minimum is the amount of investment funds that must be maintained
in your core investment options at all times. For any further distributions/
rollovers, you must transfer the appropriate funds from the SDB account into
core investment options and submit an additional Distribution form. Page 6 of 19
 Distribution/Direct Rollover Guide

Required Minimum Distribution Recipient If both or neither of the Net or Gross boxes are checked, the request
Required Minimum Distributions from your MNDCP must start at age 70½ will be processed as a Gross distribution.
(if you were born before July 1, 1949) or age 72 (if you were born after
June 30, 1949). Distribution Election - Direct Rollover Section
Complete this section to request that the distribution be rolled to
If you would like to take a distribution of your required minimum amount another employer-sponsored retirement plan provider or IRA. It is your
ONLY, check this box. If you prefer to have your Required Minimum responsibility to determine if the IRA or retirement plan provider accepts
Distribution automatically calculated and sent to you each year, please eligible rollover distributions from a governmental 457(b) Plan.
request and complete an Automated Minimum Distribution Request form.
Indicate the amount of the rollover distribution and provide the financial
Distribution Election - Payable to Me Section institution/company account number and name in which the rollover
Full Distribution proceeds will be payable to. Proceeds will be mailed to your address on
Check this box if you want a full distribution of your entire MNDCP file. You are responsible for forwarding these proceeds to your new
account balance and both pre-tax and Roth after-tax savings. MSRS will retirement plan or IRA provider.
liquidate 100% from all investment options in which you have a balance.
Eligible rollover distributions are not subject to mandatory federal income
The monthly administrative fee and any applicable taxes will be deducted
tax withholding; however, any pre-tax account assets rolled to a Roth IRA
from the distribution.
or Roth employer-sponsored plan are subject to federal and state income
Residual Balance on Full Distributions tax in the year of distribution and will be reported as taxable income to you.
Residual balances represent an addition to an account after it has been You are responsible for paying any income tax due on this distribution.
fully (100%) distributed. Residual balances are most likely due to the
Beginning in the later of the year that you attain age 72 or the year
posting of dividend or capital gains distributions by a fund company.
during which you sever employment, you may not rollover that portion
Any residual balances will be paid in the same manner as stated in the
of a distribution equal to your required minimum distribution amount.
Distribution election sections of this Distribution form.
Roth Distribution Statement
Partial Distribution
MSRS will automatically send the eligible Employer Sponsored Roth
Check the box to request a partial distribution of your account balance.
retirement Plan or Roth IRA provider designated in Section 4b a Distribution
Indicate the amount of the partial distribution on the line provided. Partial
Statement. The Distribution Statement indicates that the withdrawal is from
distributions are prorated across all of your available investment options
a qualified governmental 457(b) plan and the amount of the distribution that
unless you indicate otherwise.
is tax-free.
If you have multiple contribution sources, you may elect which source your
partial distribution will come from. If you do not designate a source, the Required Minimum Distribution (RMD) Section
partial distribution will be taken in the following order: You are required to begin taking RMDs by your required beginning date,
which is the later of: April 1 of the year immediately following the calendar
1. Pre-tax MNDCP contributions year in which you turn age 70½ (if you were born before July 1, 1949) or
2. Pre-tax rollovers from another 457(b) Plan age 72 (if you were born after June 30, 1949); or separate service from
3. Pre-tax contibutions made to your MNDCP prior to July 1992 the employer sponsoring this Plan. You then must take an RMD by
December 31 of every calendar year thereafter.
4. Pre-tax rollover savings from an IRA or another employer’s retirement
plan including a 403(b), 401(k), 401(a) If you participate in more than one type of retirement plan (e.g., 401(a),
5. Roth after-tax MNDCP contributions 403(b), 401(k), IRA) your RMD must be calculated and taken separately
from each type of plan. MSRS only calculates your RMD on the assets in
6. Roth after-tax rollovers from another 457(b) Plan your MNDCP account.
7. Roth after-tax balance you converted from another 457(b) plan
If your account balance represents both pre-tax and Roth after-tax money,
8. Roth after-tax balance you converted from your pre-tax contributions
the RMD is taken first from your pre-tax account balance, or if none, from
9. Roth after-tax rollover savings from another employer’s retirement your Roth after-tax account balance following the hierarchy on page 7
plan including a 403(b), 401(k), 401(a) under partial distribution.
10. Roth after-tax balance converted from an IRA or another employer’s
RMD Calculation Method
retirement plan including a 403(b), 401(k), 401(a)
Your RMD is determined by dividing the prior year’s December 31 account
Distributions from multiple investment options or sources may balance (of both pre-tax and Roth after-tax amounts) by an applicable life
require multiple transactions over multiple days. expectancy factor taken from the IRS tables. The method determines the
amount of your annual RMD, and therefore, the length of time until the
If you select the Net Amount box, this is the actual amount you will
assets in the account could be depleted.
receive. The distribution amount will be greater than the amount you will
receive to account for applicable taxes and fees (if any). RMD Life Expectancy Methods
Uniform Lifetime - Your life expectancy will be based only on your age at
If you select the Gross Amount box, applicable income taxes and
the end of the calendar year. This is the default election.
fees (if any) will be withheld from the gross amount, resulting in a check
amount less than the requested amount.
Page 7 of 19
 Distribution/Direct Rollover Guide

Joint Life and Last Survivor - If the only primary beneficiary is your The name on your checking or savings account must match the
spouse and they are more than 10 years younger than you, you can have name on your MNDCP account.
your RMD calculated based on the joint life expectancy of you and your
If you have provided banking information, it will be added to your account
spouse. You must provide your spouse’s information and attach a copy of
for future distributions.
your spouse’s birth certificate or driver’s license to the form.
General Direct Deposit Information
Single Life - For use by beneficiaries only.
A direct deposit request cannot be sent to a prepaid debit card, business
Delivery Options Section account or retirement plan account. If the direct deposit information is
Delivery Timing missing, incomplete or inaccurate, this request may be rejected and your
Your payment will not be delivered until the withdrawal process is complete. distribution may be delayed. By requesting direct deposit, you certify,
This includes receiving your request in good order and any required information represent and warrant that the account requested for direct deposit is
or approvals from MSRS. established at a financial institution or a branch of a financial institution
located within the United States and there are no standing orders to
All distribution checks will be mailed via regular mail to your address on file. forward any portion of your direct deposit to an account that exists at a
financial institution or a branch of a financial institution in another country.
Please note: If your distribution amount includes both pre-tax and Roth
You understand that it is your obligation to request a stop to this direct
after-tax amounts you will receive two checks. If you elect express
deposit request if an order to transfer any portion of payments to a
delivery, additional fees will apply to each separate transaction.
financial institution or a branch of a financial institution outside the United
Express Delivery States will be implemented in the future. MSRS reserves the right to reject
Check this box if you want your check to be sent express delivery. the direct deposit request and deliver any payment via check in lieu of
There is a $25 non-refundable fee for this service. If requesting a full direct deposit.
distribution, the check will be reduced by this amount.
By choosing direct deposit, you are authorizing MSRS to initiate credit
If requesting a partial distribution, the fee will be deducted from your entries and, if necessary, debit entries and adjustments for any credit
distribution amount. If sending to a street address, the check will be sent via entries in error to your checking or savings account. You are also
United Parcel Service (UPS); if sending to a PO Box, the check will be sent authorizing your financial institution, in the form of an electronic funds
via United States Postal Service (USPS) Priority Mail. transfer, to credit and/or debit the same to such account.
Express delivery is available for Monday through Friday delivery only. MSRS will make payments in accordance with the directions you have
Express delivery is not guaranteed to all areas. It is not available for specified on the Distribution form.
periodic payments.
It is your obligation to notify MSRS of any address or other changes
The express delivery fee will apply to each separate type of distribution. affecting your direct deposit. You are solely responsible for any
The following scenarios require multiple transactions: consequences and/or liabilities that may arise out of your failure to
• A distribution that includes both pre-tax and Roth. provide such notification.
By selecting direct deposit, you acknowledge that MSRS is not liable for
• A distribution that includes both a prior year and current year RMD.
payments made by MSRS in accordance with the information you provided.
• Fund or Source specific distributions.
Direct Deposit via Automated Clearing House (ACH) Income Tax Withholding Section
You have received and must read the attached 402(f) Notice of Special
Check this box and complete this section only if you want the distribution
Tax Rules on Distributions, which provides additional income tax
amount electronically deposited into your checking or savings account.
withholding information. You are strongly urged to consult with a tax
Direct deposit is not available for Direct Rollovers.
advisor to determine your appropriate income tax withholding.
To establish direct deposit, your signature must be notarized. If you do not
If you do not have enough federal income tax withheld from your distribution,
provide a notarized signature, ACH will not be set-up on your account and
you may be responsible for payment of estimated tax. You may incur penalties
a check will be mailed to the address on file.
under the estimated tax rules if your withholding and estimated tax payments
There is no fee for direct deposit. are not sufficient.
For Deposit to Your Checking Account, you must attach a copy of a Federal Income Tax on Pre-Tax Distributions
pre-printed voided check for the receiving account. You may also attach Twenty percent (20%) mandatory federal income tax withholding will
a letter on financial institution letterhead, signed by a representative from automatically be withheld from your requested distribution amount unless
the receiving institution, which indicates your name, checking account you elect a direct rollover. To choose a withholding amount greater than
number, and the ABA routing number. 20%, complete a Form W-4R Withholding Certificate. Download the Form
W-4R at www.irs.gov.
For Deposit to Your Savings Account, you must attach a letter on
financial institution letterhead, signed by a representative from the receiving
institution, which indicates your name, savings account number, and the
ABA routing number. Page 8 of 19
 Distribution/Direct Rollover Guide

Federal Income Tax on Required Minimum Distributions If you are a non-resident alien, we will withhold taxes at a rate of 30%
Ten percent (10%) mandatory federal income tax withholding will apply unless your country of residence has entered into a tax treaty with the
to any Required Minimum Distribution. To choose a withholding amount U.S. that provides for a reduced withholding rate or an exemption from
between 0% and 100%, complete a Form W-4R Withholding Certificate. withholding. To claim this treaty rate, you must complete and attach IRS
Download a Form W-4R at www.irs.gov. If you elect a distribution amount Form W-8BEN. You can download this form by accessing www.irs.gov,
in excess of your Required Minimum Distribution amount, twenty percent clicking Forms and Instructions at the top of the page, and typing W-8BEN
(20%) federal income tax withholding will apply to the entire amount in the search bar.
unless you mark the applicable box in this section of the form. Use the tips below to make sure your W-8BEN form is in good order.
Federal Income Tax on Non-Qualified Roth Distributions • To receive the treaty rate, the country must be listed on the IRS
Amounts that represent a non-qualified Roth distribution are subject to website as having a treaty benefit.
twenty percent (20%) mandatory federal income tax withholding on the • Your name and country of citizenship must be spelled out and the
portion of the withdrawal that represents earnings only, unless you country cannot be the United States of America.
elect a direct rollover. To choose a withholding amount greater than 20%,
• Your address cannot be a P.O. Box
complete a Form W-4R Withholding Certificate. Download a Form W-4R
at www.irs.gov. • You must provide a valid date of birth
• Your form must be signed and dated.
A distribution of Roth balance is considered non-qualified if:
• Your foreign tax identifying number cannot match your U.S. Social
1. The distribution is made before age 59½; Security number or U.S. Taxpayer Identification number.
AND • All countries listed on the form must match.
2. The distribution is made before five consecutive taxable years from Required Signature(s) & Date Section
the first day of the year in which you made a Roth deposit. You must sign and date your Distribution form. By signing this form, you
Direct Rollover attest that you have received, read, understand and agree to all provisions
Eligible rollover distributions are not subject to mandatory federal income of the Distribution form, the Guide and the 402(f) Notice of Special Tax
tax withholding. Exception: Any distribution that represents pre-tax assets Rules on Distributions. The Distribution must be notarized or signed by a
rolled over to a Roth IRA are subject to federal and state income tax in the MSRS Representative if requesting Direct Deposit via ACH. The date of the
year of distribution and will be reported as taxable income to you. notary or MSRS Representative signature must match the date you signed
the form.
You are responsible for paying any income tax due on this distribution.
Tax Form 1099-R will be issued for reporting purposes even though no Submitting the Distribution Form
federal income tax will be automatically withheld from amounts directly Once you have completed the Distribution form, you must return all pages
rolled over. (1-5) to the address or fax number indicated on the form. If you do not
return all five pages of the form, your distribution request may be delayed.
State Income Tax
You do not have to return this guide or the 402(f) Notice.
Minnesota resident
The default Minnesota tax withholding rate is single and zero Important Note
allowances (regardless of your marital status). Although every effort is made to keep the information in this guide current, it
We assume Minnesota residency if your address on file is in Minnesota. is subject to change without notice. Federal, state and local tax laws may be
revised, and new plan provisions may be adopted by your Plan.
To choose an alternate withholding rate or no withholding, complete a
Form W-4MNP Withholding Certificate. Submit the Form W-4MNP with OFAC
the Distribution Direct Rollover form. The Form W-4MNP is available to MSRS is required to comply with the regulations and requirements of the
download at www.revenue.state.mn.us/withholding-annuities-and-pensions. Office of Foreign Assets Control, Department of the Treasury (OFAC). As a
result, MSRS cannot conduct business with persons in a blocked country or
Resident of another state any person designated by OFAC as a specially designated national or blocked
If you reside in a state that mandates state income tax withholding, it person. For more information, please access the OFAC website at:
will be withheld on the taxable portion of this distribution at the required treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-
rate. If you reside in a state that does not mandate state income tax Assets-Control.aspx.
withholding, no state tax will be withheld from your distribution.
Income Tax Withholding Applicable to Payments Delivered
Outside the U.S.
If you are a U.S. citizen or resident alien and your payment is to be delivered
outside the U.S. or its possessions, you may not waive federal income
tax withholding.

Page 9 of 19
402(f) Notice of Special Tax Rules on Distributions

For Payments Not From a Designated Roth Account 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.
Your Rollover Options Generally, you will have 60 days after you receive the payment to make
You are receiving this notice because all or a portion of a payment you the deposit. If you do not do a direct rollover, the Plan is required to
receive from a retirement plan (“the Plan”), administered by the withhold 20% of the payment for federal income taxes (up to the
Minnesota State Retirement System, is eligible to be rolled over to an amount of cash and property received other than employer stock).
IRA or an employer plan. This notice is intended to help you decide This means that, in order to roll over the entire payment in a 60-day
whether to do such a rollover. 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
This notice describes the rollover rules that apply to payments from the rolled over will be taxed and will be subject to the 10% additional income
Plan that are not from a designated Roth account (a type of account in tax on early distributions if you are under age 59½ (unless an exception
some employer plans that is subject to special tax rules). If you also applies).
receive a payment from a designated Roth account in the Plan, you will be
provided a different notice for that payment, and the Plan administrator or How much may I roll over?
the payor will tell you the amount that is being paid from each account. 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,
Rules that apply to most payments from a plan are described in the except:
“General Information About Rollovers” section. Special rules that only • Certain payments spread over a period of at least 10 years or over
apply in certain circumstances are described in the “Special Rules and
your life or life expectancy (or the joint lives or joint life expectancies
Options” section.
of you and your beneficiary);

General Information About Rollovers • Required minimum distributions after age 70½ (if you were born
before July 1, 1949), after age 72 (if you were born after June 30, 1949),
How can a rollover affect my taxes? or after death;
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 • Hardship distributions;
a 10% additional income tax on early distributions (generally, distributions • Payments of employee stock ownership plan (ESOP) dividends;
made before age 59½), unless an exception applies. However, if you do a • Corrective distributions of contributions that exceed tax law limitations;
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 • Loans treated as deemed distributions (for example, loans in default
after you are age 59½ (or if an exception to the 10% additional income due to missed payments before your employment ends);
tax applies). • Cost of life insurance paid by the Plan;
• Payments of certain automatic enrollment contributions that you
What types of retirement accounts and plans may accept request to withdraw within 90 days of your first contribution;
my rollover? • Amounts treated as distributed because of a prohibited allocation of S
You may roll over the payment to either an IRA (an individual retirement
corporation stock under an ESOP (also, there generally will be adverse
account or individual retirement annuity) or an employer plan (a tax-qualified
tax consequences if you roll over a distribution of S corporation stock
plan, section 403(b) plan, or governmental section 457(b) plan) that will
to an IRA); and
accept the rollover. The rules of the IRA or employer plan that holds the
rollover will determine your investment options, fees, and rights to • Distributions of certain premiums for health and accident insurance.
payment from the IRA or employer plan (for example, IRAs are not
subject to spousal consent rules, and IRAs may not provide loans). The Plan administrator or the payor can tell you what portion of a payment
Further, the amount rolled over will become subject to the tax rules is eligible for rollover.
that apply to the IRA or employer plan.
If I don’t do a rollover, will I have to pay the 10% additional
How do I do a rollover? income tax on early distributions?
There are two ways to do a rollover. You can do either a direct rollover or If you are under age 59½, you will have to pay the 10% additional
a 60-day rollover. 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
If you do a direct rollover, the Plan will make the payment directly the exceptions listed below applies. This tax applies to the part of the
to your IRA or an employer plan. You should contact the IRA sponsor or distribution that you must include in income and is in addition to the
the administrator of the employer plan for information on how to do a regular income tax on the payment not rolled over.
direct rollover.

Page 10 of 19
402(f) Notice of Special Tax Rules on Distributions

The 10% additional income tax does not apply to the following payments Additional exceptions apply for payments from an IRA, including:
from the Plan: • Payments for qualified higher education expenses;
• Payments made after you separate from service if you will be at least • Payments up to $10,000 used in a qualified first-time home
age 55 in the year of the separation; purchase; and
• Payments that start after you separate from service if paid at least • Payments for health insurance premiums after you have received
annually in equal or close to equal amounts over your life or life unemployment compensation for 12 consecutive weeks (or would
expectancy (or the joint lives or joint life expectancies of you and have been eligible to receive unemployment compensation but for
your beneficiary); self-employed status).
• Payments from a governmental plan made after you separate from
service if you are a qualified public safety employee and you will be at Will I owe State income taxes?
least age 50 in the year of the separation; This notice does not address any State or local income tax rules (including
withholding rules).
• Payments made due to disability;
• Payments after your death; Special Rules and Options
• Payments of ESOP dividends; If your payment includes after-tax contributions
• Corrective distributions of contributions that exceed tax law limitations; After-tax contributions included in a payment are not taxed. If you
• Cost of life insurance paid by the Plan; receive a partial payment of your total benefit, an allocable portion of your
after-tax contributions is included in the payment, so you cannot take a
• Payments made directly to the government to satisfy a federal tax levy; payment of only after-tax contributions. However, if you have pre-1987
• Payments made under a qualified domestic relations order (QDRO); after-tax contributions maintained in a separate account, a special rule
• Payments of up to $5,000 made to you from a defined contribution may apply to determine whether the after-tax contributions are included
plan if the payment is a qualified birth or adoption distribution; in the payment. In addition, special rules apply when you do a rollover, as
described below.
• Payments up to the amount of your deductible medical expenses
(without regard to whether you itemize deductions for the taxable year); You may roll over to an IRA a payment that includes after-tax contributions
• Certain payments made while you are on active duty if you were a through either a direct rollover or a 60-day rollover. You must keep track
member of a reserve component called to duty after September 11, 2001 of the aggregate amount of the after-tax contributions in all of your IRAs
for more than 179 days; (in order to determine your taxable income for later payments from the
• Payments of certain automatic enrollment contributions that you IRAs). If you do a direct rollover of only a portion of the amount paid
request to withdraw within 90 days of your first contribution; from the Plan and at the same time the rest is paid to you, the portion
rolled over consists first of the amount that would be taxable if not rolled
• Payments excepted from the additional income tax by federal over. For example, assume you are receiving a distribution of $12,000,
legislation relating to certain emergencies and disasters; and of which $2,000 is after-tax contributions. In this case, if you directly
• Phased retirement payments made to federal employees. roll over $10,000 to an IRA that is not a Roth IRA, no amount is taxable
because the $2,000 amount not rolled over is treated as being after-tax
If I do a rollover to an IRA, will the 10% additional income contributions. If you do a direct rollover of the entire amount paid from the
tax apply to early distributions from the IRA? Plan to two or more destinations at the same time, you can choose which
If you receive a payment from an IRA when you are under age 59½, you destination receives the after-tax contributions.
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 Similarly, if you do a 60-day rollover to an IRA of only a portion of a
exception applies. In general, the exceptions to the 10% additional payment made to you, the portion rolled over consists first of the amount
income tax for early distributions from an IRA are the same as the that would be taxable if not rolled over. For example, assume you are
exceptions listed above for early distributions from a plan. However, receiving a distribution of $12,000, of which $2,000 is after-tax
there are a few differences for payments from an IRA, including: 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
• The exception for payments made after you separate from service
rollover, no amount is taxable because the $2,000 amount not rolled over
if you will be at least age 55 in the year of the separation (or age 50
is treated as being after-tax contributions.
for qualified public safety employees) does not apply;
• The exception for qualified domestic relations orders (QDROs) does not You may roll over to an employer plan all of a payment that includes after-tax
apply (although a special rule applies under which, as part of a contributions, but only through a direct rollover (and only if the receiving plan
divorce or separation agreement, a tax-free transfer may be made separately accounts for after-tax contributions and is not a governmental
directly to an IRA of a spouse or former spouse); and section 457(b) plan). You can do a 60-day rollover to an employer plan of
• The exception for payments made at least annually in equal or close to part of a payment that includes after-tax contributions, but only up to the
equal amounts over a specified period applies without regard to amount of the payment that would be taxable if not rolled over.
whether you have had a separation from service. Page 11 of 19
402(f) Notice of Special Tax Rules on Distributions

If you miss the 60-day rollover deadline If your payment is from a governmental section 457(b) plan
Generally, the 60-day rollover deadline cannot be extended. However, If the Plan is a governmental section 457(b) plan, the same rules
the IRS has the limited authority to waive the deadline under certain described elsewhere in this notice generally apply, allowing you to roll
extraordinary circumstances, such as when external events prevented over the payment to an IRA or an employer plan that accepts rollovers.
you from completing the rollover by the 60-day rollover deadline. Under One difference is that, if you do not do a rollover, you will not have to pay
certain circumstances, you may claim eligibility for a waiver of the 60-day the 10% additional income tax on early distributions from the Plan even
rollover deadline by making a written self-certification. Otherwise, to if you are under age 59½ (unless the payment is from a separate
apply for a waiver from the IRS, you must file a private letter ruling account holding rollover contributions that were made to the Plan from a
request with the IRS. Private letter ruling requests require the payment tax-qualified plan, a section 403(b) plan, or an IRA). However, if you
of a nonrefundable user fee. For more information, see IRS Publication do a rollover to an IRA or to an employer plan that is not a governmental
590-A, Contributions to Individual Retirement Arrangements (IRAs). section 457(b) plan, a later distribution made before age 59½ will be
subject to the 10% additional income tax on early distributions (unless an
If your payment includes employer stock that you do exception applies). Other differences include that you cannot do a rollover
not roll over if the payment is due to an “unforeseeable emergency” and the special
If you do not do a rollover, you can apply a special rule to payments of rules under “If your payment includes employer stock that you do not roll
employer stock (or other employer securities) that are either attributable over” and “If you were born on or before January 1, 1936” do not apply.
to after-tax contributions or paid in a lump sum after separation from
service (or after age 59½, disability, or the participant’s death). Under the If you are an eligible retired public safety officer and your
special rule, the net unrealized appreciation on the stock will not be taxed payment is used to pay for health coverage or qualified
when distributed from the Plan and will be taxed at capital gain rates long-term care insurance
when you sell the stock. Net unrealized appreciation is generally the If the Plan is a governmental plan, you retired as a public safety officer,
increase in the value of employer stock after it was acquired by the Plan. and your retirement was by reason of disability or was after normal
If you do a rollover for a payment that includes employer stock (for retirement age, you can exclude from your taxable income Plan
example, by selling the stock and rolling over the proceeds within 60 payments paid directly as premiums to an accident or health plan (or
days of the payment), the special rule relating to the distributed employer a qualified long-term care insurance contract) that your employer
stock will not apply to any subsequent payments from the IRA or, maintains for you, your spouse, or your dependents, up to a maximum
generally, the Plan. The Plan administrator can tell you the amount of of $3,000 annually. For this purpose, a public safety officer is a law
any net unrealized appreciation. enforcement officer, firefighter, chaplain, or member of a rescue squad
or ambulance crew.
If you have an outstanding loan that is being offset
If you have an outstanding loan from the Plan, your Plan benefit may be If you roll over your payment to a Roth IRA
offset by the outstanding amount of the loan, typically when your If you roll over a payment from the Plan to a Roth IRA, a special rule
employment ends. The offset amount is treated as a distribution to you applies under which the amount of the payment rolled over (reduced
at the time of the offset. Generally, you may roll over all or any portion of by any after-tax amounts) will be taxed. In general, the 10% additional
the offset amount. Any offset amount that is not rolled over will be taxed income tax on early distributions will not apply. However, if you take the
(including the 10% additional income tax on early distributions, unless an amount rolled over out of the Roth IRA within the 5-year period that
exception applies). You may roll over offset amounts to an IRA or an begins on January 1 of the year of the rollover, the 10% additional
employer plan (if the terms of the employer plan permit the plan to income tax will apply (unless an exception applies).
receive plan loan offset rollovers).
If you roll over the payment to a Roth IRA, later payments from the Roth
How long you have to complete the rollover depends on what kind of IRA that are qualified distributions will not be taxed (including earnings
plan loan offset you have. If you have a qualified plan loan offset, you after the rollover). A qualified distribution from a Roth IRA is a payment
will have until your tax return due date (including extensions) for the tax made after you are age 59½ (or after your death or disability, or as a
year during which the offset occurs to complete your rollover. A qualified qualified first-time homebuyer distribution of up to $10,000) and after
plan loan offset occurs when a plan loan in good standing is offset you have had a Roth IRA for at least 5 years. In applying this 5-year rule,
because your employer plan terminates, or because you sever from you count from January 1 of the year for which your first contribution was
employment. If your plan loan offset occurs for any other reason (such made to a Roth IRA. Payments from the Roth IRA that are not qualified
as a failure to make level loan repayments that results in a deemed distributions will be taxed to the extent of earnings after the rollover,
distribution), then you have 60 days from the date the offset occurs including the 10% additional income tax on early distributions (unless
to complete your rollover. an exception applies). You do not have to take required minimum
distributions from a Roth IRA during your lifetime. For more information,
If you were born on or before January 1, 1936 see IRS Publication 590-A, Contributions to Individual Retirement
If you were born on or before January 1, 1936 and receive a lump sum Arrangements (IRAs), and IRS Publication 590-B, Distributions from
distribution that you do not roll over, special rules for calculating the Individual Retirement Arrangements (IRAs).
amount of the tax on the payment might apply to you. For more
information, see IRS Publication 575, Pension and Annuity Income. Page 12 of 19
402(f) Notice of Special Tax Rules on Distributions

If you do a rollover to a designated Roth account in the Plan If the participant had not started taking required minimum distributions
You cannot roll over a distribution to a designated Roth account in another from the Plan, you will not have to start receiving required minimum
employer’s plan. However, you can roll the distribution over into a distributions from the inherited IRA until the year the participant would
designated Roth account in the distributing Plan. If you roll over a have been age 70½ (if the participant was born before July 1, 1949) or
payment from the Plan to a designated Roth account in the Plan, the age 72 (if the participant was born after June 30, 1949).
amount of the payment rolled over (reduced by any after-tax amounts
directly rolled over) will be taxed. In general, the 10% additional income If you are a surviving beneficiary other than a spouse
tax on early distributions will not apply. However, if you take the amount If you receive a payment from the Plan because of the participant’s death
rolled over out of the Roth IRA within the 5-year period that begins on and you are a designated beneficiary other than a surviving spouse, the
January 1 of the year of the rollover, the 10% additional income tax will only rollover option you have is to do a direct rollover to an inherited IRA.
apply (unless an exception applies). If you roll over the payment to a Payments from the inherited IRA will not be subject to the 10% additional
designated Roth account in the Plan, later payments from the designated income tax on early distributions. You will have to receive required
Roth account that are qualified distributions will not be taxed (including minimum distributions from the inherited IRA.
earnings after the rollover). A qualified distribution from a designated Roth
account is a payment made both after you are age 59½ (or after your Payments under a QDRO. If you are the spouse or former spouse of the
death or disability) and after you have had a designated Roth account in participant who receives a payment from the Plan under a QDRO, you
the Plan for at least 5 years. In applying this 5-year rule, you count from generally have the same options and the same tax treatment that the
January 1 of the year your first contribution was made to the designated participant would have (for example, you may roll over the payment to
Roth account. However, if you made a direct rollover to a designated Roth your own IRA or an eligible employer plan that will accept it). However,
account in the Plan from a designated Roth account in a plan of another payments under the QDRO will not be subject to the 10% additional
employer, the 5-year period begins on January 1 of the year you made income tax on early distributions.
the first contribution to the designated Roth account in the Plan or, if
earlier, to the designated Roth account in the plan of the other employer. If you are a nonresident alien
Payments from the designated Roth account that are not qualified If you are a nonresident alien and you do not do a direct rollover to a
distributions will be taxed to the extent of earnings after the rollover, U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is
including the 10% additional income tax on early distributions (unless an generally required to withhold 30% of the payment for federal income
exception applies). 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
If you are not a Plan participant refund by filing Form 1040NR and attaching your Form 1042-S. See Form
Payments after death of the participant. If you receive a distribution after W-8BEN for claiming that you are entitled to a reduced rate of withholding
the participant’s death that you do not roll over, the distribution generally under an income tax treaty. For more information, see also IRS Publication
will be taxed in the same manner described elsewhere in this notice. 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of
However, the 10% additional income tax on early distributions and Tax on Nonresident Aliens and Foreign Entities.
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 Other special rules
January 1, 1936” applies only if the deceased participant was born If a payment is one in a series of payments for less than 10 years, your
on or before January 1, 1936. choice whether to do a direct rollover will apply to all later payments in
the series (unless you make a different choice for later payments).
If you are a surviving spouse
If you receive a payment from the Plan as the surviving spouse of a If your payments for the year are less than $200 (not including payments
deceased participant, you have the same rollover options that the from a designated Roth account in the Plan), the Plan is not required to
participant would have had, as described elsewhere in this notice. In allow you to do a direct rollover and is not required to withhold federal
addition, if you choose to do a rollover to an IRA, you may treat the IRA income taxes. However, you may do a 60-day rollover.
as your own or as an inherited IRA.
Unless you elect otherwise, a mandatory cashout of more than $1,000
An IRA you treat as your own is treated like any other IRA of yours, so (not including payments from a designated Roth account in the Plan) will
that payments made to you before you are age 59½ will be subject to be directly rolled over to an IRA chosen by the Plan administrator or the
the 10% additional income tax on early distributions (unless an exception payor. A mandatory cashout is a payment from a plan to a participant
applies) and required minimum distributions from your IRA do not have to made before age 62 (or normal retirement age, if later) and without
start until after you are age 70½ (if you were born before July 1, 1949) or consent, where the participant’s benefit does not exceed $5,000 (not
age 72 (if you were born after June 30, 1949). If you treat the IRA as an including any amounts held under the plan as a result of a prior rollover
inherited IRA, payments from the IRA will not be subject to the 10% made to the plan).
additional income tax on early distributions. However, if the participant
had started taking required minimum distributions, you will have to
receive required minimum distributions from the inherited IRA.

Page 13 of 19
402(f) Notice of Special Tax Rules on Distributions

You may have special rollover rights if you recently served in the U.S. For more information
Armed Forces. For more information on special rollover rights related to You may wish to consult with the Plan administrator or payor, or a
the U.S. Armed Forces, see IRS Publication 3, Armed Forces’ Tax professional tax advisor, before taking a payment from the Plan. Also,
Guide. You also may have special rollover rights if you were affected you can find more detailed information on the federal tax treatment of
by a federally declared disaster (or similar event), or if you received a payments from employer plans in: IRS Publication 575, Pension and
distribution on account of a disaster. For more information on special Annuity Income; IRS Publication 590-A, Contributions to Individual
rollover rights related to disaster relief, see the IRS website at Retirement Arrangements (IRAs); IRS Publication 590-B, Distributions
www.irs.gov. from Individual Retirement Arrangements (IRAs); and IRS Publication
571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are
Postponement of Distribution Notice available from a local IRS office, on the web at www.irs.gov, or by calling
If you elect to defer your distribution, the Plan will not make a distribution 1.800.TAX.FORM.
to you without your consent until required by the terms of the Plan or by
law. If you elect to defer your distribution, your vested account balance
will continue to experience investment gains, losses and Plan expenses.
As a result, the value of your vested account balance ultimately distributed
to you could be more or less than the value of your current vested account
balance. In determining the economic consequences of postponing your
distribution, you should compare the administration cost and investment
options (including fees) applicable to your vested account balance in the
Plan if you postpone your distribution to the costs and options you may
obtain with investment options outside the Plan.

Upon distribution of your vested account balance from the Plan, you will
be taxed (except to the extent your vested account balance consists of
after-tax contributions or qualified amounts held in a ROTH money source)
on your vested account balance at the time of the distribution if you do not
rollover your balance. As explained in greater detail in the 402(f) Notice
of Special Tax Rules on Distributions, you can roll over your distribution
directly or you may receive your distribution and roll it over within 60
days to avoid current taxation and to continue to have the opportunity to
accumulate tax-deferred earnings. There are many complex rules relating
to rollovers, and you should read the 402(f) Notice of Special Tax Rules
on Distributions carefully before deciding whether a rollover is desirable
in your circumstances. You should also note that a 10% penalty tax may
apply to distributions made before you reach age 59½, unless another
exception applies. If you defer your distribution of your vested account
balance, you may invest in the investment options available to active
employees. If you do not defer distribution of your vested account balance,
the currently available investment options in the Plan may not be generally
available on similar terms outside the Plan. Fees and expenses (including
administrative or investment related fees) outside the Plan may be
different from fees and expenses that apply to your vested account
balance in the Plan. For more information about fees, expenses, and
currently available Plan investment options, including investment related
fees, refer to the prospectuses and/or disclosure documents regarding
Plan investments and fees available from your Plan administrator and/or
Plan service representative.

When considering whether to defer your distribution, carefully review the

Plan Document and/or Plan’s Summary Plan Description, including the
sections on timing of distributions and available distributions.

Page 14 of 19
402(f) Notice of Special Tax Rules on Distributions

For Payments From a Designated Roth Account What types of retirement accounts and plans may accept
my rollover?
Your Rollover Options You may roll over the payment to either a Roth IRA (a Roth individual
You are receiving this notice because all or a portion of a payment you retirement account or Roth individual retirement annuity) or a designated
receive from a retirement plan (“the Plan”), administered by the Roth account in an employer plan (a tax-qualified plan, section 403(b)
Minnesota State Retirement System, is eligible to be rolled over to a plan, or governmental section 457 plan) that will accept the rollover.
Roth IRA or designated Roth account in an employer plan. This notice The rules of the Roth IRA or employer plan that holds the rollover will
is intended to help you decide whether to do a rollover. determine your investment options, fees, and rights to payment from
the Roth IRA or employer plan (for example, Roth IRAs are not subject to
This notice describes the rollover rules that apply to payments from the spousal consent rules, and Roth IRAs may not provide loans). Further, the
Plan that are from a designated Roth account. If you also receive a amount rolled over will become subject to the tax rules that apply to the
payment from the Plan that is not from a designated Roth account, Roth IRA or the designated Roth account in the employer plan. In general,
you will be provided a different notice for that payment, and the Plan these tax rules are similar to those described elsewhere in this notice, but
administrator or the payor will tell you the amount that is being paid differences include:
from each account. Rules that apply to most payments from a designated • If you do a rollover to a Roth IRA, all of your Roth IRAs will be
Roth account are described in the “General Information About Rollovers” considered for purposes of determining whether you have satisfied
section. Special rules that only apply in certain circumstances are the 5-year rule (counting from January 1 of the year for which your
described in the “Special Rules and Options” section. first contribution was made to any of your Roth IRAs).
• If you do a rollover to a Roth IRA, you will not be required to take
General Information About Rollovers a distribution from the Roth IRA during your lifetime and you must
How can a rollover affect my taxes? keep track of the aggregate amount of the after-tax contributions in
After-tax contributions included in a payment from a designated Roth all of your Roth IRAs (in order to determine your taxable income for
account are not taxed, but earnings might be taxed. The tax treatment later Roth IRA payments that are not qualified distributions).
of earnings included in the payment depends on whether the payment is • Eligible rollover distributions from a Roth IRA can only be rolled
a qualified distribution. If a payment is only part of your designated Roth over to another Roth IRA.
account, the payment will include an allocable portion of the earnings in
your designated Roth account. How do I do a rollover?
There are two ways to do a rollover. You can either do a direct rollover or
If the payment from the Plan is not a qualified distribution and you do not do a 60-day rollover.
a rollover to a Roth IRA or a designated Roth account in an employer plan,
you will be taxed on the portion of the payment that is earnings. If you are If you do a direct rollover, the Plan will make the payment directly to your
under age 59½, a 10% additional income tax on early distributions Roth IRA or designated Roth account in an employer plan. You should
(generally, distributions made before age 59½) will also apply to the contact the Roth IRA sponsor or the administrator of the employer plan for
earnings (unless an exception applies). However, if you do a rollover, information on how to do a direct rollover.
you will not have to pay taxes currently on the earnings and you will not
have to pay taxes later on payments that are qualified distributions. If you do not do a direct rollover, you may still do a rollover by making a
deposit (generally within 60 days) into a Roth IRA, whether the payment
If the payment from the Plan is a qualified distribution, you will not be is a qualified or nonqualified distribution. In addition, you can do a rollover
taxed on any part of the payment even if you do not do a rollover. If you by making a deposit within 60 days into a designated Roth account in
do a rollover, you will not be taxed on the amount you roll over and any an employer plan if the payment is a nonqualified distribution and the
earnings on the amount you roll over will not be taxed if paid later in a rollover does not exceed the amount of the earnings in the payment. You
qualified distribution. cannot do a 60-day rollover to an employer plan of any part of a qualified
distribution. If you receive a distribution that is a nonqualified distribution
A qualified distribution from a designated Roth account in the Plan is a and you do not roll over an amount at least equal to the earnings allocable
payment made after you are age 59½ (or after your death or disability) to the distribution, you will be taxed on the amount of those earnings not
and after you have had a designated Roth account in the Plan for at least 5 rolled over, including the 10% additional income tax on early distributions
years. In applying the 5-year rule, you count from January 1 of the year if you are under age 59½ (unless an exception applies).
your first contribution was made to the designated Roth account. However,
if you did a direct rollover to a designated Roth account in the Plan from a If you do a direct rollover of only a portion of the amount paid from the
designated Roth account in another employer plan, your participation will Plan and a portion is paid to you at the same time, the portion directly
count from January 1 of the year your first contribution was made to the rolled over consists first of earnings.
designated Roth account in the Plan or, if earlier, to the designated Roth
account in the other employer plan.

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402(f) Notice of Special Tax Rules on Distributions

If you do not do a direct rollover and the payment is not a qualified • Payments that start after you separate from service if paid at least
distribution, the Plan is required to withhold 20% of the earnings for annually in equal or close to equal amounts over your life or life
federal income taxes (up to the amount of cash and property received expectancy (or the joint lives or joint life expectancies of you and
other than employer stock). This means that, in order to roll over the your beneficiary);
entire payment in a 60-day rollover to a Roth IRA, you must use other • Payments from a governmental plan made after you separate from
funds to make up for the 20% withheld. service if you are a qualified public safety employee and you will be at
least age 50 in the year of the separation;
How much may I roll over?
• Payments made due to disability;
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, • Payments after your death;
except: • Payments of ESOP dividends;
• Certain payments spread over a period of at least 10 years or over • Corrective distributions of contributions that exceed tax law limitations;
your life or life expectancy (or the joint lives or joint life expectancies • Cost of life insurance paid by the Plan;
of you and your beneficiary);
• Payments made directly to the government to satisfy a federal tax levy;
• Required minimum distributions after age 70½ (if you were born
• Payments made under a qualified domestic relations order (QDRO);
before July 1, 1949), after age 72 (if you were born after June 30, 1949),
or after death; • Payments of up to $5,000 made to you from a defined contribution
plan if the payment is a qualified birth or adoption distribution;
• Hardship distributions;
• Payments up to the amount of your deductible medical expenses
• Payments of employee stock ownership plan (ESOP) dividends;
(without regard to whether you itemize deductions for the taxable year);
• Corrective distributions of contributions that exceed tax law limitations;
• Certain payments made while you are on active duty if you were a
• Loans treated as deemed distributions (for example, loans in default member of a reserve component called to duty after September 11, 2001
due to missed payments before your employment ends); for more than 179 days;
• Cost of life insurance paid by the Plan; • Payments of certain automatic enrollment contributions that you
• Payments of certain automatic enrollment contributions that you request to withdraw within 90 days of your first contribution;
request to withdraw within 90 days of your first contribution; • Payments excepted from the additional income tax by federal
• Amounts treated as distributed because of a prohibited allocation of S legislation relating to certain emergencies and disasters; and
corporation stock under an ESOP (also, there generally will be adverse
tax consequences if you roll over a distribution of S corporation stock If I do a rollover to a Roth IRA, will the 10% additional
to an IRA); and
income tax apply to early distributions from the IRA?
• Distributions of certain premiums for health and accident insurance. If you receive a payment from a Roth IRA when you are under age 59½,
you will have to pay the 10% additional income tax on early distributions
The Plan administrator or the payor can tell you what portion of a payment on the earnings paid from the Roth IRA, unless an exception applies, or the
is eligible for rollover. payment is a qualified distribution. In general, the exceptions to the 10%
additional income tax for early distributions from a Roth IRA are the same
If I don’t do a rollover, will I have to pay the 10% additional as the exceptions listed above for early distributions from a plan. However,
income tax on early distributions? there are a few differences for payments from a Roth IRA, including:
If a payment is not a qualified distribution and you are under age 59½, • The exception for payments made after you separate from service
you will have to pay the 10% additional income tax on early distributions if you will be at least age 55 in the year of the separation (or age 50
with respect to the earnings allocated to the payment that you do not roll for qualified public safety employees) does not apply;
over (including amounts withheld for income tax), unless one of the
• The exception for qualified domestic relations orders (QDROs) does
exceptions listed below applies. This tax is in addition to the regular
not apply (although a special rule applies under which, as part of a
income tax on the earnings not rolled over.
divorce or separation agreement, a tax-free transfer may be made
directly to a Roth IRA of a spouse or former spouse); and
The 10% additional income tax does not apply to the following payments
from the Plan: • The exception for payments made at least annually in equal or close
to equal amounts over a specified period applies without regard to
• Payments made after you separate from service if you will be at least whether you have had a separation from service.
age 55 in the year of the separation;

Page 16 of 19
402(f) Notice of Special Tax Rules on Distributions

Additional exceptions apply for payments from an IRA, including: If the distribution attributable to the offset is not a qualified distribution
• Payments for qualified higher education expenses; and you do not roll over the offset amount, you will be taxed on any
earnings included in the distribution (including the 10% additional income
• Payments up to $10,000 used in a qualified first-time home purchase; and tax on early distributions, unless an exception applies). You may roll over
• Payments for health insurance premiums after you have received the earnings included in the loan offset to a Roth IRA or designated Roth
unemployment compensation for 12 consecutive weeks (or would account in an employer plan (if the terms of the employer plan permit the
have been eligible to receive unemployment compensation but for plan to receive plan loan offset rollovers). You may also roll over the full
self-employed status). amount of the offset to a Roth IRA.

Will I owe state income taxes? How long you have to complete the rollover depends on what kind of plan
This notice does not address any State or local income tax rules (including loan offset you have. If you have a qualified plan loan offset, you will have
withholding rules). until your tax return due date (including extensions) for the tax year during
which the offset occurs to complete your rollover. A qualified plan loan
Special Rules and Options offset occurs when a plan loan in good standing is offset because your
employer plan terminates, or because you sever from employment. If your
If you miss the 60-day rollover deadline plan loan offset occurs for any other reason (such as a failure to make
Generally, the 60-day rollover deadline cannot be extended. However, level repayments that results in a deemed distribution), then you have 60
the IRS has the limited authority to waive the deadline under certain days from the date the offset occurs to complete your rollover.
extraordinary circumstances, such as when external events prevented
you from completing the rollover by the 60-day rollover deadline. Under
If you receive a nonqualified distribution and you were born
certain circumstances, you may claim eligibility for a waiver of the 60-day
rollover deadline by making a written self-certification. Otherwise, to apply
on or before January 1, 1936
If you were born on or before January 1, 1936, and receive a lump sum
for a waiver from the IRS, you must file a private letter ruling request
distribution that is not a qualified distribution and that you do not roll over,
with the IRS. Private letter ruling requests require the payment of a
special rules for calculating the amount of the tax on the earnings in the
nonrefundable user fee. For more information, see IRS Publication
payment might apply to you. For more information, see IRS Publication
590-A, Contributions to Individual Retirement Arrangements (IRAs).
575, Pension and Annuity Income.
If your payment includes employer stock that you do not
If your payment is from a governental 457(b) plan
roll over If the Plan is a governmental section 457(b) plan, the same rules
If you receive a payment that is not a qualified distribution and you do not
described elsewhere in this notice generally apply, allowing you to roll
roll it over, you can apply a special rule to payments of employer stock (or
over the payment to an IRA or an employer plan that accepts rollovers.
other employer securities) that are paid in a lump sum after separation from
One difference is that, if you receive a payment that is not a qualified
service (or after age 59½, disability, or the participant’s death). Under the
distribution and you do not roll it over, you will not have to pay the 10%
special rule, the net unrealized appreciation on the stock included in the
additional income tax on early distributions with respect to the earnings
earnings in the payment will not be taxed when distributed to you from the
allocated to the payment that you do not roll over, even if you are under
Plan and will be taxed at capital gain rates when you sell the stock. If you do
age 59½ (unless the payment is from a separate account holding rollover
a rollover to a Roth IRA for a nonqualified distribution that includes employer
contributions that were made to the Plan from a tax-qualified plan, a
stock (for example, by selling the stock and rolling over the proceeds within
section 403(b) plan, or an IRA). However, if you do a rollover to an IRA or
60 days of the distribution), you will not have any taxable income and the
to an employer plan that is not a governmental section 457(b) plan, a later
special rule relating to the distributed employer stock will not apply to any
distribution that is not a qualified distribution made before age 59½ will
subsequent payments from the Roth IRA or, generally, the Plan. Net
be subject to the 10% additional income tax on earnings allocated to the
unrealized appreciation is generally the increase in the value of the employer
payment (unless an exception applies). Other differences include that
stock after it was acquired by the Plan. The Plan administrator can tell you
you cannot do a rollover if the payment is due to an “unforeseeable
the amount of any net unrealized appreciation.
emergency” and the special rules under “If your payment includes
employer stock that you do not roll over” and “If you were born on or
If you receive a payment that is a qualified distribution that includes
before January 1, 1936” do not apply.
employer stock and you do not roll it over, your basis in the stock (used
to determine gain or loss when you later sell the stock) will equal the fair
market value of the stock at the time of the payment from the Plan.

If you have an outstanding loan that is being offset

If you have an outstanding loan from the Plan, your Plan benefit may be
offset by the outstanding amount of the loan, typically when your
employment ends. The offset amount is treated as a distribution to you
at the time of the offset. Generally, you may roll over all or any portion
of the offset amount.
Page 17 of 19
402(f) Notice of Special Tax Rules on Distributions

If you receive a non-qualifed distribution, are an eligible retired If you are a surviving beneficiary other than a spouse
public safety officer, and your payment is used to pay for your If you receive a payment from the Plan because of the participant’s death
health coverage or qualified long-term care insurance and you are a designated beneficiary other than a surviving spouse, the
If the Plan is a governmental plan, you retired as a public safety officer, and only rollover option you have is to do a direct rollover to an inherited Roth
your retirement was by reason of disability or was after normal retirement IRA. Payments from the inherited Roth IRA will not be subject to the 10%
age, you can exclude from your taxable income nonqualified distributions additional income tax on early distributions. You will have to receive
paid directly as premiums to an accident or health plan (or a qualified required minimum distributions from the inherited Roth IRA.
long-term care insurance contract) that your employer maintains for you,
your spouse, or your dependents, up to a maximum of $3,000 annually. Payments under a QDRO. If you are the spouse or former spouse of the
For this purpose, a public safety officer is a law enforcement officer, participant who receives a payment from the Plan under a QDRO, you
firefighter, chaplain, or member of a rescue squad or ambulance crew. generally have the same options and the same tax treatment that the
participant would have (for example, you may roll over the payment to
If you are not a Plan participant your own Roth IRA or to a designated Roth account in an eligible employer
Payments after death of the participant. If you receive a distribution after the plan that will accept it).
participant’s death that you do not roll over, the distribution generally will
be taxed in the same manner described elsewhere in this notice. However, If you are a nonresident alien
whether the payment is a qualified distribution generally depends on when If you are a nonresident alien and you do not do a direct rollover to a U.S.
the participant first made a contribution to the designated Roth account in IRA or U.S. employer plan, instead of withholding 20%, the Plan is
the Plan. Also, the 10% additional income tax on early distributions and generally required to withhold 30% of the payment for federal income
the special rules for public safety officers do not apply, and the special rule taxes. If the amount withheld exceeds the amount of tax you owe (as
described under the section “If you receive a nonqualified distribution and may happen if you do a 60-day rollover), you may request an income tax
you were born on or before January 1, 1936” applies only if the deceased refund by filing Form 1040NR and attaching your Form 1042-S. See Form
participant was born on or before January 1, 1936. 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
If you are a surviving spouse 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of
If you receive a payment from the Plan as the surviving spouse of a Tax on Nonresident Aliens and Foreign Entities.
deceased participant, you have the same rollover options that the
participant would have had, as described elsewhere in this notice. In Other special rules
addition, if you choose to do a rollover to a Roth IRA, you may treat the If a payment is one in a series of payments for less than 10 years, your
Roth IRA as your own or as an inherited Roth IRA. choice whether to do a direct rollover will apply to all later payments in the
series (unless you make a different choice for later payments).
A Roth IRA you treat as your own is treated like any other Roth IRA of yours,
so that you will not have to receive any required minimum distributions If your payments for the year are less than $200 (not including payments
during your lifetime and earnings paid to you in a nonqualified distribution from a designated Roth account in the Plan), the Plan is not required to
before you are age 59½ will be subject to the 10% additional income tax on allow you to do a direct rollover and is not required to withhold federal
early distributions (unless an exception applies). income taxes. However, you may do a 60-day rollover.

If you treat the Roth IRA as an inherited Roth IRA, payments from the Unless you elect otherwise, a mandatory cashout of more than $1,000
Roth IRA will not be subject to the 10% additional income tax on early (not including payments from a designated Roth account in the Plan) will
distributions. An inherited Roth IRA is subject to required minimum be directly rolled over to an IRA chosen by the Plan administrator or the
distributions. If the participant had started taking required minimum payor. A mandatory cashout is a payment from a plan to a participant
distributions from the Plan, you will have to receive required minimum made before age 62 (or normal retirement age, if later) and without
distributions from the inherited Roth IRA. If the participant had not started consent, where the participant’s benefit does not exceed $5,000 (not
taking required minimum distributions, you will not have to start receiving including any amounts held under the plan as a result of a prior rollover
required minimum distributions from the inherited Roth IRA until the year made to the plan). You may have special rollover rights if you recently
the participant would have been age 70½ (if the participant was born before served in the U.S. Armed Forces. For more information on special rollover
July 1, 1949) or age 72 (if the participant was born after June 30, 1949). 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.

Page 18 of 19
 402(f) Notice of Special Tax Rules on Distributions

Postponement of Distribution Notice For more information

If you elect to defer your distribution, the Plan will not make a distribution You may wish to consult with the Plan administrator or payor, or a
to you without your consent until required by the terms of the Plan or by professional tax advisor, before taking a payment from the Plan. Also,
law. If you elect to defer your distribution, your vested account balance you can find more detailed information on the federal tax treatment of
will continue to experience investment gains, losses and Plan expenses. payments from employer plans in: IRS Publication 575, Pension and
As a result, the value of your vested account balance ultimately distributed Annuity Income; IRS Publication 590-A, Contributions to Individual
to you could be more or less than the value of your current vested account Retirement Arrangements (IRAs); IRS Publication 590-B, Distributions
balance. In determining the economic consequences of postponing your from Individual Retirement Arrangements (IRAs); and IRS Publication
distribution, you should compare the administration cost and investment 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are
options (including fees) applicable to your vested account balance in the available from a local IRS office, on the web at www.irs.gov, or by calling
Plan if you postpone your distribution to the costs and options you may 1.800.TAX.FORM.
obtain with investment options outside the Plan.

Upon distribution of your vested account balance from the Plan, you will
be taxed (except to the extent your vested account balance consists of
after-tax contributions or qualified amounts held in a ROTH money source)
on your vested account balance at the time of the distribution if you do not
rollover your balance. As explained in greater detail in the 402(f) Notice
of Special Tax Rules on Distributions, you can roll over your distribution
directly or you may receive your distribution and roll it over within 60
days to avoid current taxation and to continue to have the opportunity to
accumulate tax-deferred earnings. There are many complex rules relating
to rollovers, and you should read the 402(f) Notice of Special Tax Rules
on Distributions carefully before deciding whether a rollover is desirable
in your circumstances. You should also note that a 10% penalty tax may
apply to distributions made before you reach age 59½, unless another
exception applies.

If you defer your distribution of your vested account balance, you may
invest in the investment options available to active employees. If you do
not defer distribution of your vested account balance, the currently
available investment options in the Plan may not be generally available
on similar terms outside the Plan. Fees and expenses (including
administrative or investment related fees) outside the Plan may be
different from fees and expenses that apply to your vested account
balance in the Plan. For more information about fees, expenses, and
currently available Plan investment options, including investment related
fees, refer to the prospectuses and/or disclosure documents regarding
Plan investments and fees available from your Plan administrator and/or
Plan service representative.

When considering whether to defer your distribution, carefully review the

Plan Document and/or Plan’s Summary Plan Description, including the
sections on timing of distributions and available distributions.

Page 19 of 19