If you've terminated your state police employment and you're ready to begin taking payouts from your account, you'll need to call the Plan Information Line at 800-748-6128. Participant Services Representatives (PSRs) are available 8:00 AM to 8:00 PM Eastern Time (ET), Monday through Friday (except on New York Stock Exchange holidays).
Leaves of absence and layoffs are not considered separation from service until the leave or layoff is over and you become separated from state police employment. Voya Financial™ must receive notice of your termination from the Michigan State Police before payment can be issued.
- If your retirement investment account balance is less than $500, you’ll automatically receive a lump sum payment if you do not request a withdrawal or rollover within 120 days of your termination date. If your account balance is $500 or more and you are less than age 70½, you have four choices:
- Leave the money in your retirement investment account and accrue tax-deferred growth. You must begin by taking distributions by April 1 of the year following the year you reach age 70½.
- Consolidate your retirement savings by rolling additional money in from other retirement plans — such as from a 401(k), 401(a), 403(b), 457, or IRA. You can do this as an active employee or within one year of your termination of employment.
- Roll your account assets over to an IRA or other eligible retirement plan.
- Select among several flexible payout options.
Contributions will be taken from your final paycheck in the same manner as from your other checks. If you are contributing a percent (i.e. 10 percent), that same percent will apply, even if your final check includes accumulated sick pay or vacation pay. If you want to make a change before your final check, contact Voya® at 800-748-6128 at least one pay period prior to receiving your final check.
You have several options, depending on your investment account balance, for taking distribution payments:
- You may elect to receive installments over a specified number of months or years, not to exceed your actuarial life expectancy. The amount of each installment will be calculated by dividing your retirement investment account balance at the end of each period by the remaining number of payments.
- You may elect to receive a specific dollar amount each month or year until the balance is exhausted.
- You may roll over all or a portion of your investment account balance to a pre-tax or Roth IRA. You may also transfer funds to another employer sponsored retirement plan, such as a 457, 401(k) or 403(b) plan, if that plan accepts such transfers.
- You may take all or a portion of your balance as a lump sum withdrawal.
If your account balance is less than $5,000, only options 3 and 4 are available. The minimum payment is either $100 per month, $1,000 per year, or your Required Minimum Distribution (RMD) if you are over age 70½.
Monthly or annual installment payments are made in the last week of the month for receipt by the first of the following month. A lump sum payment may be issued on any business day.
You have the option of purchasing an annuity through the State of Michigan 401(k) and 457 Plans. An annuity provides income for a certain period of time, or for life, in exchange for a lump sum payment. A Voya Retirement Consultant will guide you through the process.
Follow these steps if you wish to purchase an annuity:
- Call the Plan Information Line at 800-748-6128 and ask to speak with a Retirement Consultant.
- Discuss your individual financial situation and needs with your Retirement Consultant to identify the most appropriate type of annuity for you.
- Your Retirement Consultant will work with Brokers’ Services Marketing Group (BSMG) to obtain several annuity quotes from multiple insurance carriers that include different rates and pricing.
- Discuss the options from BSMG in detail with your Retirement Consultant.
- Determine which annuity is right for you.
- Work with your Retirement Consultant to complete the purchase.
To discuss your payout options upon separation from service or retirement, please call the Plan Information Line at 800-748-6128. Participant Services Representatives (PSRs) are available 8:00 AM to 8:00 PM Eastern Time (ET), Monday through Friday (except on New York Stock Exchange holidays).
Required Minimum Distributions
Internal Revenue Code §401(a)(9) contains Required Minimum Distribution (RMD) rules. These regulations require payment to begin before April 1 of the year following the year you reach age 70½, and your payments must be in an amount that will exhaust your entire retirement investment account balance within your projected life expectancy. If you wait until the later year to begin payments, you must receive a second annual minimum distribution payment before December 31 of that year.
If at age 70½ and thereafter your payment amounts do not meet minimum distribution requirements, you will be issued an additional payment in December of each year to comply with these requirements.
If you remain employed with the Michigan public schools beyond April 1 following the year in which you reach age 70½, payment must begin by April 1 in the year following the year you separate from service.
To determine your minimum payment amount, refer to the Minimum Annual Distribution Worksheet.
Taxation of Distributions
Payments from your retirement investment account are considered earned income and will be taxed as ordinary income, not capital gains, in the year payments are issued. Therefore, if you choose a lump sum payment, the amount will be taxable to you in the particular tax year when the payment is issued.
For federal income tax purposes, 20 percent will be automatically withheld from most pre-tax distributions according to IRS regulations. If you wish to have more than 20 percent withheld for federal taxes or if you wish to have state income tax withheld as well, you will need to complete the Tax Withholding Form available in the Forms section of this website or by calling Voya at 800-748-6128. RMD payments after age 70½ will have 10 percent, or another amount you choose, withheld for federal tax purposes. Local taxes for which you may be liable are not withheld.
Payments are reported to you and the IRS annually on form 1099-R.
Non-Michigan residents are not subject to Michigan income tax.
For more information about your payout options, call Voya at 800-748-6128.