Benefits Plans - 457(b) Deferred Compensation Plan:
Cash Withdrawals - Current Faculty and Staff

The following information is for current faculty and staff members. See Former Faculty and Staff for information on cash withdrawals after termination of employment with the University of Michigan.

Age 70 ½ Withdrawal

How much can I withdraw?
You may withdraw any portion or your entire accumulations while you are a current member of the faculty or staff at age 70 ½ or older for any reason.

Is there a tax penalty for doing so?
No, but you will have to pay income tax on the amount you withdraw.

Is this a minimum distribution withdrawal?
No. The IRS requires you to take a withdrawal by April 1 after the year you retire or terminate. If you are over 70 ½ when you retire or terminate, the withdrawal must occur by the following April 1. In contrast, this withdrawal option is available to you while you are still working at 70 ½ or older and is not considered to be a minimum distribution but merely an in-service cash withdrawal.

Can I rollover this withdrawal?
Yes. Contact TIAA-CREF and/or Fidelity for assistance.

How do I arrange for a withdrawal?
Contact TIAA-CREF and/or Fidelity to request a withdrawal application and complete your sections of the form. Return the form to the appropriate investment carrier for processing. There is no employer authorization required for this type of withdrawal.

One-Time Withdrawal

What is the one-time withdrawal?
You may withdraw your entire accumulations under a special provision while you are a current member of the faculty or staff if the following conditions are met:

  • The total account balance (not counting rollovers you made into the plan) is no more than $5,000;
  • No amount has been deferred under the plan during the two-year period that ends on the date of distribution; and
  • No previous distribution was taken under this special provision.

Is there a tax penalty for doing so?
No, but you will have to pay income tax on the amount you withdraw.

How do I arrange for a withdrawal?
Contact TIAA-CREF and/or Fidelity to request a withdrawal application and complete your sections of the form. Return the form to the appropriate investment carrier for processing. There is no employer authorization required for this type of withdrawal.

Can I rollover this withdrawal?
Yes. Contact TIAA-CREF and/or Fidelity for assistance.

Former Faculty and Staff Members
Former employees who have terminated employment with the University of Michigan may take a cash withdrawal at any age. Termination of employment does not include being on a leave of absence, layoff (RIF), period of non-appointment, 0% appointment effort, phased retirement, retirement furlough, or being on long-term disability.

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Limitations
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.