Because the goal of the RPB Plan is to help you accumulate savings for retirement, you will most likely choose to wait until your retire to begin withdrawing your money. But depending on your financial situation, you may also take withdrawals at other times (see below). And, whatever the case, there are a variety of ways you may choose to receive your distributions, depending on your financial needs and preferences. We recommend that you consult with a financial advisor before making any withdrawal decision.

Distributions from the Reform Pension Board

The RPB Pension Plan offers several options for receiving distributions at retirement. Participants may establish a monthly distribution from their account under the Flexible Payment Option, rollover all or part of their account balance to another qualified retirement account, take a direct distribution of all or part of their account balance or purchase an institutionally priced annuity with MetLife through the RPB.

Participants may choose one or a combination of these distribution options. Please see further information on our retirement options in the following descriptions and chart:

  • Flexible Payment Option: The most popular distribution option with benefits including: continued exposure to the financial markets, which could provide growth potential to a pension account, investments managed by the RPB, and account balance transfer to beneficiaries in case of death. There is a certain amount of risk with this option: participants may outlive the money in their pension accounts depending on the level of actual earnings and distributions, and exposure to the financial markets could result in lower balances when the markets have negative results.
  • Lump Sum: The partial lump sum rollovers or direct distribution options can be taken no more than once per year. Please read our Special Tax Notice if you are considering a lump sum distribution.
    • Rollovers: A lump sum rollover to another financial institution carries both a potential benefit and a potential risk, since account and investment management is decided by the participant within the parameters of the entity receiving the rollover. If clergy roll money out of the Reform Pension Plan, they risk a likely loss of their parsonage exclusion exemption benefit.
    • Direct: A direct distribution gives full responsibility for investment and management of the funds to the participant and the entire distribution is subject to taxation. If clergy roll money out of the Reform Pension Plan, they risk a likely loss of their parsonage exclusion exemption benefit.
  • Annuity: You can purchase an institutionally priced annuity with MetLife through the RPB. The MetLife Guaranteed Income Program provides you (and your spouse/partner, if elected) with stable, predictable income payments that continue for life.* Payment options can be elected to keep up with inflation and ensure a cash refund to your beneficiary for any purchase payments not already received as income.** Clergy should note that annuity income is eligible for parsonage exclusion.

* This guarantee is based on the claims-paying ability and financial strength of Metlife.
** The amount of the distribution you receive will vary based upon the type of annuity that you purchase.

Please contact the RPB office for additional information and to request forms for the various distribution options.

Type of Distribution Benefits Risks
Flexible Payment Option
  • Exposure to market could provide growth potential to pension account
  • Account balance, if any, at death is transferred to beneficiary(ies)
  • RPB does the investing
  • Distributions are eligible for parsonage exclusion for clergy
  • Continued personalized service from professional RPB staff
  • Exposure to market could result in lower balances when financial markets have negative results
  • Participants can outlive the money in their pension account depending on the level of earnings and distributions
Lump Sum Rollovers to another Tax-Deferred Program or Personal IRA
  • Account and investment management is decided by the participant within the parameters of the entity receiving the rollover
  • Account and investment management is decided by the participant within the parameters of the entity receiving the rollover
  • Possible loss of parsonage for clergy
Lump Sum Distributions
  • Full responsibility for account investment and management is with participant
  • Full responsibility for account investment and management is with participant
  • Possible loss of parsonage for clergy
  • Entire distribution is subject to taxationy
Annuities Purchased through the RPB
  • Distributions guaranteed for life* including distributions to another person: spouse, partner, or child, if elected
  • Participants can select from a variety of payment options**
  • Institutional pricing
  • Fixed income payments not affected by market volatility
  • Distributions are eligible for parsonage exclusion for clergy
  • Value of distributions is affected over time by inflation (unless an income-protection option is elected)

* This guarantee is based on the claims-paying ability and financial strength of Metlife.
** The amount of the distribution you receive will vary based upon the type of annuity that you purchase.

SPECIAL TAX NOTICE – LUMP SUM DISTRIBUTIONS

The partial lump sum rollovers or direct distribution options can only be taken once a year. Please read our Special Tax Notice if you are considering a lump sum distribution.

DISTRIBUTIONS PRIOR TO AGE 55

If you are under age 55, you may withdraw all or a portion of your pension funds after a one-year waiting period in which you no longer work for an eligible employer as defined by the RPB Pension Plan Document. These withdrawals can be made as a direct distribution or as a rollover to another qualified retirement plan. IRS penalties may be incurred for direct distributions.

DISTRIBUTIONS BETWEEN AGE 55 AND 59 1/2

If you are between the ages of 55 and 59 ½, you may withdraw all or a portion of your pension funds with no waiting period after you no longer work for an RPB-defined eligible employer. These withdrawals can be made as a direct distribution or as a rollover to another qualified retirement plan. IRS penalties may be incurred for direct distributions.

DISTRIBUTIONS AT AGE 59 ½ OR OLDER

You may withdraw all or a portion of your pension funds with no waiting period and no employment restrictions once you reach the age of 59 ½. See above for the different types of distributions available from the RPB.

Parsonage

RPB facilitates parsonage declarations in retirement for clergy. Distributions from the Reform Pension Plan are considered as taxable income. When retirees draw on their pension accounts in retirement, they are receiving distributions of pre-tax contributions and associated earnings. Clergy can use their parsonage exemption to offset some or all of the taxable income on their distributions depending on their housing expenses. Retired clergy should check with a financial advisor to ensure compliance with the IRS parsonage rules. For specific information on retired ministers’ parsonage benefits from the IRS website, click here: Retired Ministers.

The RPB sends parsonage exemption forms to retired clergy each fall in advance of the upcoming year. The participant must confirm or lower the amount of parsonage that they declared for the past year and project the amount of parsonage that they wish to set for the upcoming year. The RPB transmits the collected information to the applicable financial institution, who then issues a Form 1099-R to the participant to reclassify the income from taxable to non-taxable. It is important to note that retired clergy are eligible to use a parsonage exemption and do not have to be associated with a congregation in retirement or need to have a title such as Rabbi Emeritus to utilize their parsonage exemption. For additional information on parsonage, including information from the “Minister’s Guide for Income Tax,” please contact the Central Conference of American Rabbis (CCAR) at info@ccarnet.org.

Hardship Withdrawals

The RPB allows participants who qualify to take hardship withdrawals from the Plan in accordance with IRS regulations. If you are considering requesting a hardship withdrawal, please read the “RPB Hardship Withdrawal Requirement Rules” and our “Q&A for Hardship Withdrawals” to learn the criteria necessary to qualify. We understand that you may be in a difficult situation. Please contact the RPB office if you need to obtain a hardship withdrawal request package or have questions.

Required Minimum Distributions (RMDs)

The IRS requires participants who have attained the age of 70 ½ and are retired (have stopped working for an eligible Reform Movement employer) to take a required minimum distribution (RMD) from their qualified retirement plan(s) each year. The RPB advises retired participants of their RMD obligation at the appropriate time. The amount of the distribution is based on factors such as the value of the retirement account as of December 31st from the previous calendar year and the age of the participant. The age of the participant’s spouse is also a factor if there is an age difference greater than 10 years. You can estimate your required minimum distributions in retirement by using the RMD calculator provided by Vanguard.

Please contact the RPB office if you have questions concerning your RMD.