Virginia Defined Contribution Plans

You may withdraw amounts from your account only when you:
• Terminate employment with your employer
• Retire
• Die (Your beneficiary receives your benefits.)

An IRS penalty for distributions prior to age 59½ may apply. Distributions are subject to state and federal income tax. You must begin taking required minimum distributions by April 1 of the calendar year following the later of: (1) the calendar year in which you reach 70½ or (2) the calendar year in which you retire from the employer sponsoring your Plan.

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What are my options if I leave my ORPPA eligible position and continue to be employed by the Commonwealth in a position covered by the VRS defined benefit plan?

If you cease to be employed in a position eligible for the ORPPA, but continue to be employed in a salaried position with the Commonwealth, you may use the funds in your ORPPA account to purchase VRS service credit at actuarial cost. Certain restrictions apply. Contact the VRS Member Services Department for more information.

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When will my benefit payments begin?

Your account is available to you when you terminate employment with the employer providing the Plan. Generally, you determine when your benefits will begin and the method of payment. You are required to begin taking minimum distributions by April 1 of the calendar year following the later of:

1. The calendar year in which you reach 70½ or
2. The calendar year in which you terminate employment.

A registered representative can help you evaluate the benefits of various options so you can select the one that best meets your individual needs.

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What are my distribution options?

Your options are:

Keep your money in the ORPPA until a future date (subject to required minimum distribution rules).
Receive:
— A partial or full lump sum
— Periodic payments/installments
— Annuity payments
— A partial lump sum with remainder paid as a periodic payment or annuity.
Roll over the money into an eligible retirement plan such as a 401(a), 401(k), 403(b), governmental 457(b) or IRA that accepts such rollovers.

NOTE: Required minimum distributions may not be rolled over.

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How do I request a distribution?

To request a distribution, complete the Distribution/Direct Rollover Request 401(a) Plan - ORPPA and send it to the Plan record keeper at the address on the form. Before the request can be processed you must have a break in service from the employer providing the Plan. A break in service is defined as a full calendar month during which you received no compensation or benefits from your employer. Summer breaks, periods of leave without pay, educational leave, sick leave and periods of time during which you would normally not be at work do not count toward the break in service.

You should receive your distribution within two weeks of the end of the month following the month in which you last received compensation or benefits from your employer.

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When do I pay income taxes?

Upon withdrawal, each payment you receive from your account is subject to federal and state income tax as you receive it. All income tax withholding, whether state or federal, will be in compliance with IRS regulations and state law. We recommend you seek the advice of a tax or estate-planning attorney for more information about income tax withholding. Also, if you take a distribution from the Plan prior to age 59½ an early withdrawal penalty may apply.

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Can I transfer or roll over my account if I leave my current employer?

If you leave employment with the employer that offers the Plan, you may roll over your account balance to an eligible retirement plan such as a 401(a), 401(k), 403(b), 457(b) or IRA or Federal Employee Thrift Savings Plan. However, distributions from these plans prior to age 59 ½ may result in an IRS early withdrawal penalty.

Note: Check with the plan that you are rolling into to ensure the plan accepts the rolled over monies and to determine what fees may apply, if any.

If you change positions within the State with no break in service and move to a position not eligible for the ORPPA, you may use your account balance to purchase VRS service credit.

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Once I receive payment, can I change my payment amount?

Yes. Except for the purchase of an annuity, you may change your distribution option for the balance remaining in your Plan. Contact ING at 1-VRS-DC-PLAN1 (1-877-327-5261) or go to www.varetire.org and select Optional Retirement Plan for Political Appointees under the Defined Contribution Plans tab.

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What happens to my Plan account after I die?

Your account balance will be payable to your named beneficiary according to the Internal Revenue Code, Treasury regulations and Plan Guidelines when he or she delivers a proper claim. You may designate both primary and contingent beneficiaries to receive your account balance at your death. You may change your beneficiary online or by completing a beneficiary designation form found on the web or by contacting ING.

If you do not designate a beneficiary, upon your death the account balance will be paid according to the following order of precedence: your surviving spouse, or if none, your children, and descendents of your deceased children per stripes*, or if none, your parents or if none the duly appointed executor or administrator of your estate, or if none, the next of kin entitled to inherit under the laws of your domicile.

"Per Stirpes” is used in reference to a bequest made to a group of individuals. It means that, should one of the beneficiaries named in the group die before the maker of the will, then the deceased beneficiary’s share shall go to that deceased beneficiary’s lineal descendants.

You may view your current beneficiary designation by logging into your account from the VRS Web site at www.varetire.org. Select Commonwealth of Virginia Deferred Compensation Plan from the Defined Contribution Plans menu and use your password and user ID to log into your account.

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