When you take a distribution from your account, you take money out of the plan. If the distribution is the result of Retirement, Death, Disability, or Employment Termination, it is covered here.

Distributions in the form of a loan or withdrawal from the plan are covered separately under Loans and Withdrawals.

Distributions - Overview

Comprehensive Plan premiums paid by MMBB Financial Services on behalf of disabled members can only be converted to an annuity. No partial or complete settlements, loans or withdrawals on funds contributed by MMBB are permitted.

You have several options with regard to a distribution upon Retirement, Death, Disability, or Employment Termination.


  • Annuity Payment: When you retire, you can convert your Comprehensive Plan investment account into an annuity that provides lifetime income.

Note: If you have 5 or more years of service, you are required to annuitize 50% of your Comprehensive Plan investment account.

  • Lump-Sum Payment: When you retire, you can withdraw up to 50% of your Comprehensive Plan investment account after annuitizing . To request a lump-sum payment, contact Xerox, MMBB’s record keeper. Xerox will process and mail the check within two business days.

If you choose to have the account distributed to you directly, certain IRS tax regulations apply. You may defer paying taxes at the time you take a withdrawal by directly rolling over your eligible withdrawal to another qualified plan or IRA.

  • Deferring Payment: If any portion of your account remains after you purchase your annuity, you may leave the remainder invested with MMBB.
  • Installments: If retired, you may elect to establish an installment program. Installments may be processed monthly, quarterly, or on an annual basis.

Deferring Your Payment

If any portion of your account remains after you purchase your annuity, you may defer distribution of the remaining portion of your account.

You may elect to take your payment at any later date up to April 1 of the year following the later of (1) the year in which you retire or (2) the year in which you attain age 70 ½. In addition, distributions must be made by December 31 of each year thereafter.

  • Convert a portion or all of your account to an annuity at a later date.
  • Receive all or part of the remainder of your account in a lump sum.
  • Rollover all or part of the remainder of your account to another qualified plan.
  • If payment of your account is deferred, your plan accounts will continue to be credited with earnings and losses. You can continue to change the way your plan accounts are invested among the available investment funds. Loans or withdrawals may be taken from the Plan. You will continue to receive quarterly statements for the investments still under MMBB management. You may elect a lump sum distribution at any time.

Withdrawal After the Annuity Starting Date

Upon Retirement and annuitization of a portion of your Comprehensive Plan account, and upon written request you may withdraw a portion (net outstanding loans) of the remaining balance in your account.

If you are age 70 1/2, you are subject to minimum distribution requirements unless you are still employed by an employer eligible to participate in MMBB plans.

If you are a non-spousal beneficiary, you are permitted to take this withdrawal.

You may withdraw your plan assets, as follows:

  • Money may be withdrawn from your RP After-Tax Premium, RP Rollover and RP Premium. 
    Withdrawals and distributions are paid proportionately from all investment funds in which your plan account is invested unless instructed otherwise.
  • Once you withdraw money from the plan you cannot put it back into the plan.
  • Partial distributions are not limited to a percentage of your account or the lifetime cap of $50,000.
  • The minimum withdrawal amount is $500 unless your account balance is less.
  • You can make any number of withdrawals, provided money is available in your account.
  • The maximum amount you can withdraw is your total account balance.
  • You may defer paying taxes at the time you take a withdrawal by directly rolling over your eligible withdrawal to another qualified plan or IRA. Not all employer plans accept rollovers. You should check with the plan’s administrator before electing a direct rollover of your after-tax contributions to a qualified plan.

To request a withdrawal, contact a Senior Benefits Specialist.

Required Minimum Distribution


Federal law requires that at least a minimum amount, known as a required minimum distribution (RMD), must be withdrawn each year from retirement account balances. You will receive the first RMD by April 1 of the year after you reach 70 ½. In subsequent years, you will receive the RMD by December 31.

Distributions requested during the same calendar year of your RMD will reduce the amount of your actual RMD. If the amount of your distribution during the calendar year was equal to or exceeded the amount of your RMD for the same MMBB account, you will not receive an RMD for that account. Your distribution will be used to satisfy your RMD. If the amount of your distribution during the calendar year was less than the amount of the RMD, an RMD will be issued equal to the amount of the difference between what has already been withdrawn and the RMD.

The start of RMDs from MMBB-administered accounts can be delayed until April 1 following the year employment ceases if you are still employed at or beyond age 70 ½ by an eligible employer within ABCUSA or an affiliated group for which MMBB administers its plans.

Direct Rollover

You are not subject to federal income tax at the time you roll over amounts from the plan. If you do not elect a direct rollover to another retirement account, your distribution generally will be subject to tax withholding.

Your rollover distribution will be made payable to the recipient institution.  The check will be sent directly to the recipient institution.  For any amounts that you do not roll over, you will receive a single check payable to you that includes both taxable and non-taxable amounts. Your employer and MMBB will not be responsible for your failure to deliver rollover amounts to the recipient institution or the recipient institution’s failure to timely process your rollover amounts in a timely fashion. Not all employer plans accept rollovers. You should check with the plan’s administrator before electing a direct rollover to a qualified plan.

Outstanding Loan Balances


A loan is considered to be in default if six scheduled payments are missed. If you elect not to repay the balance, the defaulted loan will be considered a deemed distribution when six monthly payments have been missed and the outstanding balance plus applicable interest will be reported as taxable income.

The repayment of an outstanding loan may be continued in retirement or due to Employment Termination if you choose.

If you have an outstanding loan at the time of death, your surviving spouse may repay your loan.

See the Loans section for more information.

Tax Information


The taxable portion of your distribution includes Premiums, your before-tax contributions, rollover contributions, deductible contributions and investment earnings on all contributions.

Distributions of taxable contributions and their investment earnings are generally subject to a mandatory 20% federal income tax withholding. Federal income tax witholding is applied to the income taxes you owe on your withdrawal. If you are under age 59½, taxable contributions and investment earnings may be subject to a federal 10% early distribution penalty.

Rollovers are the exception to this rule:



  • Direct Rollovers – You can defer the 20% federal income tax withholding by directly rolling your distribution over into another qualified plan.
 
  • Indirect Rollovers – If payment of your rollover is made directly to you, the money distributed to you may be considered income for the calendar year in which it was distributed and may be fully taxable. The IRS requires a 20% withholding (prepayment of taxes) on the taxable portion of the distribution. Additionally, if you are under the age of 59½, you may be responsible for a 10% penalty tax on the taxable portion of the distribution.

When you complete the rollover to a new plan you have the option of making up the 20% withholding and depositing that amount into the new qualified plan or IRA as well. Remember, you have only 60 days to complete this transaction.

The taxable portion of your distribution includes Premiums, your before-tax contributions, rollover contributions, deductible contributions and investment earnings on all contributions.