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REFUNDS
ARE REFUNDS REQUIRED?
• Is employee relocating to another activity?
• Is there a possibility of future NAF employment?
May be easier to leave contributions in the Plan
Saves buying back the service upon re-hire
REFUND ENTITLEMENTS
• If less than 3 years of Contributory Participation
Employee contributions only
• 3+ years of Contributory Participation
Employee contributions + interest
• Employer contributions are never refunded
VESTED EMPLOYEES
• 5+ Years of Contributory Participation
• Vested in Plan
• Annuity is funded by Employee & Employer contributions
VESTED EMPLOYEES
In lieu of refund:• Eligible for a Deferred Annuity at age 52
Reduced benefit
• Eligible for a Deferred Annuity at age 62
Unreduced benefit
•Annuity is funded by Employee & Employer Contributions
DO YOU KNOW…..
Why we do not recommend refunds for vested employee?
• Employee and spouse are forfeiting their rights to a future annuity benefit
• Total of employee contributions are usually paid in annuity payments within 1-2 years
• Balance of lifetime annuity is all EMPLOYER contributions
DEFERRED ANNUITY ESTIMATES
Your fiduciary responsibility:
• Provide written estimates to all terminating vested employees
• Provide estimates for commencement at ages 52 and 62
• Disclose amount of total employee contributions + interest
DEFERRED ANNUITY ESTIMATES
If vested employee still elects refund:
• Provide employee with Benefit Application Addendum specifying amount of benefit to be forfeited
Must be signed and witnessed
Must accompany refund application
APPLICATION FOR REFUND or
DEFERRED ANNUITY• Complete MCCS 89 (Rev. 3/2008)
• Refer to sample forms
Cash Withdrawal
Deferred Annuity
• Update PeopleSoft
Mailing address, cell phone # and personal email address
TIMING ISSUES
• Allow 60-90 days for processing of refunds
Begins on first of month following date of receipt of application at MRG
Vacation Payout issues, etc.
TIMING ISSUES
• Refund checks are processed once a month
• Checks generally mailed during the third week of month
DELAYED REFUNDS
Causes:
• Incomplete paperwork
• Annual Leave hasn’t been paid or transferred
• Estimates needed for vested employees
• Timing of final paychecks
DELAYED REFUNDS
Causes:
• Active Flex employees!
• Employee’s response to estimate letter / addendum
• Expired mailing address on application
• Check returned by post office
No forwarding address on file
YOU CAN HELP BY:
• Keeping MRG informed of new mailing address if changed after application was submitted
• Reminding employee that they will not receive the Employer contributions listed on their LES
A frequent misunderstanding!
CONTACT
QUESTIONS?
Contact:
Karen Oehlschlager
Voice: (703) 432-0423
Fax: (703) 432-0436
