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6. What will happen with my 401(k) contributions when EAA ends?
If your employment with the EAA ends before June 1, 2017, you will forfeit the non-vested portion of your account immediately. If your EAA employment ends on or after June 1, 2017, you will forfeit the non-vested portion 180 days after termination if you have not secured employment with a public school or the State of Michigan within 180 days. If you take a distribution (including rollovers out of the plan) prior to reemployment within 180 days, or in the event of your death or termination from reemployment with a public school or the State of Michigan prior to becoming vested, you will forfeit the non-vested assets within your 401(k) account immediately. Participants are fully vested in employers’ 401(k) contributions upon attainment of four or more years of employment and are partially vested with at least two years of employment. Consult with Voya Financial or your tax advisor for additional information.
You are not required to roll over vested assets to another retirement account or otherwise take a distribution of vested assets when your EAA employment ends. You may leave your retirement assets within your Voya accounts. However, balances under $500 will be distributed automatically at no cost 45 days after termination from EAA if employment ends before June 1, 2017, or 180 days after termination if employment ends on or after June 1, 2017, and you are not reemployed with a public school or the State of Michigan within 180 days. However, you may roll over such distributions to another qualified plan or IRA within 60 days without penalty.
You may also roll over vested 401(k) assets to another qualified plan or IRA. Or you may take a full or partial distribution of vested 401(k) plan assets after termination, at which time all non-vested assets will be forfeited. In either case, Voya may charge a distribution processing fee. Before taking a distribution, consider how it may impact your future retirement readiness. All distributions may be subject to a 10% IRS penalty for early withdrawal. Consult with your tax advisor to determine if the 10% penalty will apply to you.