Benefits Plans - Retirement Savings Plans: Cash Withdrawals -
SRA Disability Withdrawals (Current Employees)
What is an SRA disability withdrawal?
If you have an SRA with TIAA-CREF and/or Fidelity, you may withdraw your accumulations while you are still working for the University if you become disabled. There are no provisions for such a withdrawal for contributions made to the Basic Retirement Plan.
What is the definition of disability?
IRC Section 72(m) defines an individual to be disabled if they are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite duration. Individuals applying for a disability withdrawal must provide verification of disability to the Benefits Office.
What if I don’t meet the criteria of being disabled?
How much can I withdraw?
Your entire SRA accumulations (contributions and earnings) are available for withdrawal.
Is there an IRS penalty for doing so?
No. The IRS 10% early withdrawal penalty for withdrawals made before age 59½ does not apply to disability withdrawals.
Do I have to pay income tax on the withdrawal?
Yes, you will have to pay income tax on the amount you cash out.
Does a disability withdrawal affect my participation in the U-M plan?
No. You may continue your participation in the U-M Retirement Plan if you take an SRA disability withdrawal.
How do I arrange for an SRA disability withdrawal?
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.