Retired Member Annuity
Annuity Summary
The Annuity Fund is an employer contributed plan. Contributions are made by the City of the New York into the Annuity fund on the behalf of the member while he/she is actively employed and these contributions terminate upon retirement. The Annuity Fund is a balanced fund with 75% in equities and 25% in fixed income. It is invested by various money managers hired by the board of trustees of the CEA and LBA. Currently, the annuity is invested in an S&P 500 enhanced index fund, a large cap value fund, large cap growth fund, an international fund, a small cap core fund, and a fixed income fund.
Checking Accumulated Share Value
To check the accumulated share value based upon the latest quarterly evaluation the member can call the SOC at 212.964.7500 (ext 1)
Withdrawing Annuity
Once a member is retired and the SOC has been notified of his/her retirement by the Payroll Section, the SOC mails the new retiree a package of paperwork including an Annuity Withdrawal Form. On this form, the member can elect to leave his or her accumulated share value in the Annuity Fund for continued reinvestment or elect for a lump sum distribution, or rollover or transfer into a qualified plan.
Requirements for Withdrawal
Annuity withdrawal is governed by an IRS trust agreement, and thus the SOC is required to follow the rules and regulations stipulated in that trust.
The Annuity Fund is evaluated quarterly and the member's accumulated share value is held for the completion of the quarter in which withdrawal is requested and paid on that quarter's market value. As a result, accumulated share values are paid four times a year with specific deadlines for paperwork:
- last business day of June for a payout in mid-September
- last business day of September for a payout in mid-December
- last business day of December for a payout in mid-March
- last business day of March for a payout in mid-June
Payout checks are issued via certified mail to the member if he/she is taking a lump sum distribution, or to the indicated qualified plan if he/she is transferring or rolling over.
Lump Sum Distribution
If the member elects to have a lump sum distribution of his/her accumulated share value, the SOC is required to deduct 20% federal withholding tax. The member is no longer required to pay state taxes but is responsible for any other income tax.
If the member elects for lump sum distribution and is under the age of 55, he/she will be responsable for an additional 10% in federal income tax. This penalty is avoided if the member retires and requests distribution in the same year and is over the age of 50.
Transferring and Rolling Over
Retired members can request that his/her accumulated share value be transferred or rolled over to any qualified plan. The SOC is not required to deduct any taxes on transfers or rollovers but the payment becomes taxable income once the member withdraws the funds from his/her qualified plan. The member is not penalized for withdrawing or rolling over before the age of 55.
Required Paperwork
For lump sum distribution, transfer, or rollover of his/her accumulated share value, the member may request an annuity withdrawal form from the SOC. This form is not available on this website and the member must pick up the form or contact the SOC to have the form mailed.
The form must be completed, notarized, and returned to the SOC by the dates listed above. If the member is transferring or rolling over, the member must attach a trustee to trustee transfer form from the institution that is receiving the accumulated share value. The institution must provide this form which can be a generic transfer form as acknowledgement of the rollover or transfer. The SOC cannot provide the trustee to trustee transfer form.
Beneficiary
In the event of the death of the member before the annuity is withdrawn, the annuity will be paid to the designated beneficiary. Multiple beneficiaries can be indicated with allotted percentage payment on beneficiary card. If a beneficiary has not indicated, the annuity will be paid to the following successive preference beneficiary:
- spouse or domestic partner
- children (biological, legally adopted, or of legal guardianship), in equal shares
- parents, in equal shares
- biological siblings, in equal shares
- the estate of the deceased
If the member wishes to change the beneficiary designation, he/she may request a new beneficiary card to be mailed. This card is not available on this website.
Required Withdrawal at age 70
The member's accumulated share value must be dispensed once the member reaches the age of 70. At 70, the SOC mails an annuity withdrawal form to the member. The transfer form must be completed, notarized, and returned within 60 days of the 70th birthday or his/her accumulated share value will be distributed as a lump sum evaluated in the quarter 60 days subsequent to his/her 70th birthday.