When am I eligible to withdraw from my account? What exceptions apply to withdrawals? What if I was automatically enrolled in DCP? read more/less
When you retire or separate from DCP-covered employment, you are eligible to receive payment from your DCP account. With DCP, there is no federal tax penalty for early withdrawals, which means you can withdraw your savings at any age. Because DCP is meant to supplement your income in retirement, DCP payments will not affect your other retirement or Social Security payments.
You could request a voluntary in-service withdrawal if the following is true:
You can request a distribution of your accumulated contributions if you are experiencing severe financial hardship because of an unforeseeable emergency. IRS requirements restrict this type of withdrawal, and may limit the amount that can be withdrawn. If your request for an unforeseeable emergency withdrawal is approved, you must stop making contributions to DCP for at least six months.
New employees automatically enrolled in DCP have up to 90 days after the first paycheck deferral to cancel DCP and withdraw any contributions. After 90 days, standard withdrawal eligibility applies.
What are my payment options? Can I leave my money in DCP? Can I complete a rollover or use my balance to purchase service credit? read more/less
Payment options include whole or partial lump sum, periodic payment amounts and an annuity purchase. Here are some of the choices you will make:
All distributions, with the exception of a rollover to another eligible retirement plan or a traditional IRA, are treated as income in the year you receive them and are subject to federal income taxes. For specific payment option information, see the How to withdraw section.
Can I change my payment options? Yes, once you begin recieving payments, you can change your payment amount, frequency of payments and payment date at any time. If you are age 70½ or older, your payments must meet minimum distribution requirements.
Can I leave my money in DCP? Yes, you can keep your DCP account. Keeping your money in DCP can provide you with tax savings and better retirement opportunities. Balances in DCP accounts continue to receive earnings according to the performance of your chosen investments. See section Six reasons to stay in the program."
Can one person's DCP account be consolidated with another person's account? No, accounts of different owners can not be consolidated. See the Benificiary section for more information about inheriting accounts.
Does payment from DCP affect my Social Security benefit? No, however at higher income levels portions of your Social Security benefit can become subject to federal income tax.
You might be able to use your DCP funds to purchase service credit or restore previously withdrawn retirement contributions in any qualified defined benefit government retirement plan. Both actions will increase your monthly retirement benefit from Washington state retirement plans. See Purchasing Additional Service Credit for more information.
The following payments can be rolled over to an Individual Retirement Account (IRA) or another eligible employer plan:
Except for a Roth IRA, if you elect a direct rollover, you will not owe federal income taxes on the rollover amount until distribution is taken from the traditional IRA or another eligible employer plan. Payments you receive that will exhaust your account in less than 10 years must have 20% withheld for federal income taxes.
When you are ready to begin receiving payments, complete and submit the withdrawal form that applies to you. Most employees can fill out the Separation from Employment Withdrawal form. However, sometimes your situation will require another form. read more/less
Separation from Employment Withdrawal: Use this form to request distribution after separation/retirement, change current distribution option.
Automated Minimum Withdrawal: Request ongoing minimum distributions from your account to meet your required minimum distribution after age 70½.
In-Service Withdrawal: Request distribution while still employed.
Beneficiary Withdrawal: Request distribution from your awarded beneficiary account.
Alternate Payee Withdrawal: Used to withdraw funds per a Qualified Domestic Relations order, this form can be obtained by calling 888-327-5596.
Automatic enrollment withdrawal: New employees automatically enrolled in DCP have up to 90 days after the first paycheck deferral to cancel DCP and withdraw any contributions. After 90 days, standard withdrawal eligibility applies. To obtain the form, call 888-327-5596.
Direct Deposit Authorization: Request direct deposit of your retirement benefit.
IRS Form W-4P: Request to have federal income tax withheld from each withdrawal or annuity payment you receive.
Whether you’re getting ready to retire or taking a break from employment, you have the option of maintaining your Washington State Deferred Compensation Program (DCP) account. Keeping your money in DCP may provide you with better retirement opportunities. read more/less
DCP offers investment choices, low fees, flexibility and access to valuable services. Call us for more information 888-327-5596.
The DCP account holder (participant) selects one or more beneficiaries. When DRS is notified of the participant’s death, we mail a letter and beneficiary form to each beneficiary on file. Once the form is returned to DRS, we set up a separate account under the beneficiary’s Social Security number. This account is called a “beneficiary account.” read more/less
Here are some questions beneficiaries commonly ask about their beneficiary account:
What are my withdrawal options? If you are a spouse, you have the same withdrawal options as the participant did. You can leave the money in the account, withdraw in full or withdraw it in payments. If you are not a spouse, you can withdraw the funds. For more specific information about withdrawal options, see the beneficiary withdrawal form.
Can I contribute additional funds to the awarded beneficiary account? No.
Can I roll my beneficiary account funds into my IRA? A spouse beneficiary can roll the funds into a traditional IRA. A non-spouse can roll the funds into an inherited IRA.
Can I roll my awarded beneficiary account into my own DCP account? No. The accounts must be kept separate for distribution purposes. However, you can withdraw the beneficiary account funds while you are still working for a DCP-covered employer.
How do I name a beneficiary for my awarded beneficiary account? You can’t. Upon your death, any remaining funds go directly to your estate.
Beneficiary or survivor, what is the difference? A survivor is the spouse or registered domestic partner of the participant at the time of passing. The survivor beneficiary has the same account withdrawal options as the participant did. A beneficiary who is not a survivor is a non-spouse.
Who can I contact? For more information about beneficiaries, contact DRS.
Internal Revenue Code 401(a)(9) requires that, unless you are still actively employed, beginning at age 70½, your payments must be an amount that will exhaust your entire account balance within your projected life expectancy. read more/less
RMD is usually determined by dividing the prior year’s Dec. 31 account balance by your distribution period obtained from the Uniform Lifetime table below. Complete the Automated Minimum Withdrawal form or contact DCP at 888-327-5596 for additional information.
Automated Minimum Withdrawal form: Request ongoing minimum distributions from your account to meet your required minimum distribution after age 70½.
For use by:
Visit the RMD section of the IRS website for tables, worksheets and information.
To cancel a withdrawal, send a written request with the date and your signature to the DCP record keeper.
Empower Retirement State of Washington DCP
PO Box 173764
Denver, CO 80217-3764
Or fax your request to 866-745-5766.
If you return to work for the state or a participating political subdivision, you can re-enroll in DCP. Whether or not you choose to re-enroll, your payments from DCP will cease.