Deferred Distribution - Example One:
Jane Doe, born 04/10/1944, files for Social Security spouse’s benefits in August 2010.
She retired from a community college in July 2010 and participated in the Texas ORP
based on her former non-covered employment with the community college. During the
interview, she informs the CR that, although she retired from the community college,
she has never received a distribution from the ORP plan. Jane’s Investment Plan confirms
her statements with a written response to the FO. Jane plans to start receiving distributions
from the ORP in the future. GPO will apply to the future distributions unless Jane
meets an exemption as specified in GN 02608.101 through GN 02608.107.
Jane will attain age 70½ in 2014. She can defer taking a minimum distribution from
the plan. However, she is required to follow the required beginning date (RBD) by
April 1, 2015, the calendar year following the year in which the NH attains age 70½.
The CR must diary the claim for GPO development of the future distributions from the
ORP plan. The NH can take a distribution at any time or wait until the RBD on April
1, 2015. If she waits until the RBD, GPO will apply April 1, 2015 if she does not
meet an exemption. The diary will alert the PSC to follow up on GPO development with
the SSA-3885, Government Pension Questionnaire. Development will ascertain whether
Jane has taken any distribution from the plan prior to the RBD.
Deferred Distribution - Example Two:
John Doe, born 11/05/1938, filed for Social Security widower’s benefits and participates
in the Texas ORP. The CR did not impose GPO during the initial filing of the spouse
claim. Mr. Doe visited his local FO for help in completing the SSA-3885, Government
Pension Questionnaire. Mr. Doe informed the CR that he has not retired and has not begun receiving a monthly pension or annuity. Although he attained age
70½ in May 2009, he did not begin ORP plan distributions until June 1, 2011. John
provides a letter from the Investment Plan confirming his current employment at a
local school. Additionally, he provided a copy of the ORP plan statement displaying
the Opening Balance as of June 1, 2011 as $95,528.48 and ending Balance as of August
1, 2011 of $80,528.48.
John attained age 70½ in 2009 and would have been required by IRS to take a minimum
distribution no later than April 1, 2010 if he had retired. Since he is still working and has not retired, GPO applies beginning June 1, 2011,
the date John received his initial distribution from the plan. For DC plans, we use the value of the fund
immediately before the initial distribution to derive the equivalent monthly amount
for offset purposes. We use $95,528.48, the Opening Balance as of June 1, 2011 as
a lump sum payment. According to GN 02608.400D, when a pension is paid in a lump sum, we convert the amount of the pension as if
it was paid monthly and derive a “life-time” equivalent monthly amount using the actuarial
value tables available in GN 02608.400D.4.