RSP distributions

​The objective of the Retirement Savings Plan is to provide a vehicle to save money for retirement. ​Tax laws restrict distributions and withdrawals from RSP accounts.

You may withdraw funds from your RSP account only when you

  • retire (at age 55 or older);
  • reach age 59½;
  • become disabled;
  • enter military service;
  • terminate eligible employment; or
  • die.

In addition to the above restrictions, in order for Roth earnings to be withdrawn tax-free, the withdrawal must satisfy the five-year Roth holding requirement.

Tax treatment

Distributions of pretax salary deferrals and employer contributions and earnings associated with those amounts from the RSP are subject to income tax. Withdrawals taken prior to age 59½ may be subject to a 10 percent penalty tax, in addition to normal income tax. Roth salary deferrals and their earnings are not taxable at distribution as long as the withdrawal satisfies the five-year Roth holding requirement and you are age 59½ or older, or die or become disabled.

To initiate a distribution from an RSP account, you (or your beneficiary, if applicable) must call Fidelity at 800-343-0860 to speak with a customer service associate (reference plan # 57887). Fees are not assessed for the distribution of funds.

For specific advice based on personal circumstances, consult a qualified tax or financial adviser. 

Loans

You may borrow from your RSP account balance up to the lesser of 50 percent of your vested account balance or $50,000, minus your highest loan balance in the past 12 months. A loan from the RSP means that you are borrowing funds from your account that you will pay back to yourself with interest. You must repay a loan with interest within five years, and only one outstanding loan is permitted at a time. If the loan will be used to buy a primary residence, the repayment period may extend to 15 years. Before you take a loan, it’s important to consider all the potential costs and ramifications of doing so, including loan fees and the loss of compound earnings on the outstanding loan amount.  

Withdrawals

You may apply for a withdrawal from your RSP account in certain circumstances; there are rules that govern these transactions.

Hardship withdrawals

Withdrawal of funds from your account before retirement, age 59½, disability, military service, termination of eligible church service, or death is only permitted in certain cases of serious financial hardship. The Board is prohibited by law from permitting premature withdrawals unless a participant can establish an immediate and significant financial need that cannot be met from any other source.

Hardship withdrawals of pretax funds and earnings from Roth funds may be subject to a 10 percent penalty tax for early withdrawal in addition to normal income taxes.

Hardship withdrawals are generally permitted for you to

  • purchase a primary residence;
  • cover expenses to prevent your eviction or foreclosure;
  • pay for funeral expenses for your deceased parent, spouse, child, dependent, or designated primary beneficiary;
  • pay for post-high school education expenses for you, your spouse, children, dependents, or designated primary beneficiary; or
  • cover unreimbursed healthcare expenses for you, your spouse, dependents, or designated primary beneficiary.

Other hardships of a participant will be considered by the Board. In order to satisfy a financial hardship, participants may only withdraw elective employee contributions.

Employer contributions and earnings on your account are not eligible for hardship withdrawals, unless you are a minister of the Word and Sacrament making the withdrawal for the purchase of a primary residence. This would be considered a manse equity withdrawal, for which you would apply directly to Fidelity.

For specific advice based on your personal circumstances, you should consult a qualified tax or financial adviser.

The Board must review your complete documentation and approve your request before your funds can be distributed.

Rollovers

A rollover distribution is a request to transfer funds in your RSP account to another qualified plan — a 403(b), 401(k), certain pension plans, or an IRA. You also may roll over your plan account to a Roth IRA. Rollovers are limited by the tax laws.

A rollover is only allowed if you

  • retire (after age 55);
  • reach age 59½;
  • become disabled;
  • enter into the military;
  • terminate eligible employment; or
  • die.

The pretax portion of your rollover distribution is tax free if it moves directly from the RSP into a pretax account within the plan receiving your rollover. Rollovers of Roth funds into the Roth portion of a qualified plan are also not subject to federal income tax. A rollover of pretax funds into a designated Roth account within a 403(b), 401(k), or Roth IRA is subject to federal income tax.

If you elect to roll over the pretax portion of your account to a Roth IRA, your account will be taxable in the year in which it is contributed to the Roth IRA. You may enter into a voluntary tax withholding agreement with Fidelity.

You will be responsible for reporting and recognizing applicable taxable income associated with a rollover into a Roth IRA.

Rollovers of full or partial vested account balances are permitted.

In-service withdrawals

You cannot withdraw funds while still employed in eligible service unless you

  • have reached age 59½;
  • are eligible for a hardship withdrawal;
  • enter into military service; or
  • are a minister of the Word and Sacrament withdrawing employer contributions to purchase a home.

In order for Roth earnings to be withdrawn tax-free, the withdrawal must satisfy the Roth five-year holding requirement and the requirement that you are at least age 59½, deceased, or disabled at the time of distribution.

Types of Distributions

Several types of distributions are possible:

A single sum or partial payment paid directly to you: Generally, if you elect a single-sum payment or partial payment of your account balance, a 20 percent federal income tax withholding applies on (1) any pretax funds, and (2) any earnings on Roth funds that do not satisfy the five-year Roth holding requirement and the requirement that you are at least age 59½, deceased, or disabled at the time of distribution.

Rollover of your account balance to another 403(b), 401(k), or certain pension plans, or a traditional or Roth IRA: If you perform a direct rollover of any portion of your RSP balance to a pretax account of another qualified plan or IRA, federal income tax is not withheld. If you perform a direct rollover of any RSP pretax funds or employer contributions into a Roth IRA, you may enter into a voluntary tax withholding agreement with Fidelity.

Systematic Withdrawal Plan: You may direct Fidelity to send you a set dollar amount every month. This continues until either you direct Fidelity otherwise or your account has a zero balance. The 20 percent federal income tax withholding applies on (1) pretax funds, and (2) any earnings on Roth funds that do not satisfy the five-year Roth holding requirement and the requirement that you are at least age 59½, deceased, or disabled at the time of distribution.