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VALIC sends notifications regarding required minimum distributions on a monthly basis.
Eligible participants receive a notice no later than September of the year in which the
distribution is to be taken. Accompanying the notice are instructions for completing a
Minimum Distribution request, outlining the various payout options available to the
participant and all applicable regulations. The notice also details the opportunity for the
participant to delay the initial distribution until April of the following year, resulting in an
additional payment being made in December of the following year.
Paperless account distributions are available for amounts less than $25,000. The participant
can execute the transaction on the VALIC participant website or if they prefer they can call
our toll free customer care line and speak with a Client Service Specialist and the funds can
be delivered via EFT or a check can be issued.
We request that the participant make the request no later than 60 days after the receipt of
the notification mailed during the current year to ensure that the request is processed prior
to December 31. Recalculation options for the participant and beneficiary are available in
the system, as allowed by the plan document. VALIC’s recordkeeping system ensures that
distributions meet the pre- and post-death payment requirements of 401(a)(9), 403(b), and
457(d)(2)(B). Our financial advisors provide participants with the guidance they need in this
area.
f. Hardship withdrawals.
Once VALIC receives the appropriate withdrawal form in good order, one of our Client
Service Professionals enters the appropriate information (date of distribution, amount of
request, withholding details) into our recordkeeping system, and distribution processing is
typically completed within two business days. If requested by the plan sponsor, VALIC will
provide “pre-approved” withdrawal processing based on the plan’s established guidelines.
We also monitor the six-month deferral suspension period for hardship withdrawals
according to the plan’s provisions.
g. QDROs.
VALIC is pleased to review draft orders for compliance with Section 414(p) in accordance
with the administrative procedures and guidelines approved by the plan sponsor. Our QDRO
specialists are trained to have limited discussions regarding variances with the attorneys
representing the parties.
When a Qualified Domestic Relations Order (QDRO) is received, VALIC compares the
decree to a QDRO checklist containing IRC Section 414(p) requirements. If the decree
meets the Section 414(p) requirements and does not violate plan restrictions, VALIC honors
the instructions in the decree that pertain to VALIC accounts.
Once the domestic relations order is determined to be acceptable, VALIC administers the
order by setting up a new account in the name of the alternate payee, mailing quarterly
account statements to the alternate payee, reporting information on the alternate payee's
account to the Plan Administrator in conjunction with regular employees, and complying with