DCHR encourages all employees hired on or after October 1, 1987, who are in the 401(a) Retirement Plan and are starting to consider or are currently planning retirement to review our District Retirement System Retirement Planning Guide. This guide provides detailed information on the benefits currently available to retirees and covers topics such as: Status of Benefits at Retirement, Retirement Plans, Continuation of Group Medical Coverage, Medicare Benefits, and more. For additional information, please see the list below:
District employees (except Police Officers, Firefighters, Teachers and Civil Service Retirement System employees) who were hired for the first time on or after October 1, 1987 are eligible to participate in the Plan upon completing one year of creditable service. You will automatically be enrolled in the Plan at the beginning of the first pay period, immediately following your completion of one year of creditable service*.
For eligible employees, the District contributes 5% of base salary (5.5% for Detention Officers) into an account in the employee’s name. Employees cannot make additional contributions to the DC 401(a) Retirement Plan.
*Creditable service is measured from the date you commence employment in a covered position with the District government until the date of separation from service. Creditable service is adjusted for breaks in service. You accrue service based on full years and calendar months, including any fractional parts.
It is important that you designate a beneficiary to receive your account balance in the event of your death. This should be done as soon as you are enrolled in the Plan. To designate your beneficiary, you must complete and return a signed Beneficiary Designation Form.
Under the DC 401(a) Retirement Plan, vesting is the term used to define when you have a right to the value of your account under the Plan. Effective December 8, 2009, a change made to the Plan’s vesting schedule may mean that you will become vested sooner. Please note, if you terminated prior to December 8, 2009, you will still fall under the old vesting schedule. The new vesting schedule only applies if you terminated employment after December 8, 2009.
Under the former vesting schedule, you became fully vested (earned the right to your entire account) after you completed five years of creditable service. With this new vesting change, your account becomes vested gradually based on the following schedule:
|Years of Creditable Service||% of Your Account that is Vested|
|Less than 2||0%|
|5 or more||100%|
Distributions are allowed only upon separation of service (vested portion only), permanent disability or death. All distributions from the Plan are accomplished via form. All forms are available online through ICMA-RC. When the form has been completed, please submit the form via email to [email protected] or via fax at 202.727.9070. DCHR will process your request within 14 business days from date of receipt.
Upon separation of service, notification from your employer — either voluntary, by retirement, or otherwise — you may be eligible to receive payment from your DC 401(a) Retirement Plan. In the event of your death, your beneficiary will receive payment.
You have several choices regarding the money in your Plan account:
- Keep the Money in the Plan
You may keep the entire balance in the Plan until age 70½, at which time you must do one of the following:
- Take required minimum distribution payments
- Take a lump sum distribution
- Payment Options
You have the following pay-out options. Prior to requesting a transfer, the District must certify marital status and receive the required spousal consent prior to forwarding the request to ICMA-RC.
- Lump Sum: You can elect to receive a one-time distribution for the entire amount of the available portion of your account balance.
- Lump Sum with Rollover*: You can elect to roll over all, or a portion of your distribution to another qualified plan or IRA.
- Partial Lump Sum: You can receive a portion of your funds in any amount at any time. The minimum withdrawal amount is $100 or 100% of the available amount. You must complete a Distribution Request form to begin the flexible payment option. Future payments may be requested by completing a Distribution Request form. You can elect to roll over the balance of your account to another qualified plan or IRA.
- Installments: You can choose Installment payments on a frequency of your choice (must be made at least annually). Once you begin to receive installment payments, you can change your payment amount to fit your needs at any time.
- Defer Payment to a Specified Date: You may elect to receive payment on a future date. However, you must elect to receive payment before you turn age 70½. If you are age 70½ or older, your payments must meet required minimum distribution. You can also refer to the Distribution Projection Tables and Worksheets in your Distribution Guide.
- Transfer to an Annuity (Joint & Survivor): You may elect to transfer 100% of the monies to an annuity.
All Distributions from the Plan are accomplished via form. All forms are available online through ICMA-RC.
Distribution choices and rules are complicated. You are encouraged to talk with your tax advisor or financial planner before deciding how to take your distribution.
Note: Periodic payments of ten years or more are not eligible for rollover.
*You can elect to have your distribution rolled over to a qualified plan, 401(a) plan, 403(b) plan, 457 plan, or IRA (if the plan accepts rollover money from other plans). If you elect a direct rollover, you will owe federal income taxes when you begin taking distributions in the years they are paid to you by the IRA or other plan. Prior to rolling money over, you may want to confirm with the plan receiving the plan receiving the money of any changes that may affect the distribution options of the rolled in money. If you do not elect a direct rollover, 20% of your distribution from the Plan will be withheld for federal taxes. Further, to the extent that you roll over money to a non-401(a) plan, you should review whether the 10% early withdrawal tax penalty will apply.
ICMA-RC administers the 401(a) Plan. Learn more about your retirement plan options and view Frequently Asked Questions.
All District employees can choose to participate in the 457(b) Deferred Compensation Plan, an optional retirement savings plan.