Questions and Answers on Relief from Required Minimum Distributions

November 18, 2009

Can I defer required minimum distributions in 2009?

Yes, legislation was passed in late 2008 that allows individuals who are subject to required minimum distribution rules to suspend required minimum distributions from their retirement plan or Individual Retirement Accounts in 2009 without penalty.

The law is intended to provide relief to people concerned about the potential impact of ongoing financial market volatility on their retirement accounts. The law does not apply to required minimum distributions in 2010.

If you expect to receive a required minimum distribution in 2009 that you would like to suspend, you will need to contact TIAA-CREF at 800 842-2776 to request a voluntary suspension.

The relief treats equally individuals who usually take the “required distribution” amount monthly and those who take a lump sum amount at the end of the year.

Will suspensions be available for beneficiaries (such as spouses or partners), or will they be limited to the original account holder?

Account holders or their beneficiaries who are required to receive a required minimum distribution payment in 2009 may voluntarily request that the payment be suspended.

What if I receive a minimum distribution payment in 2009 that I did not want to receive?

If you want to return a 2009 payment, you can do an indirect (60-day) rollover to an IRA or to a plan that accepts the rollover. For 2009 required minimum distributions, you have until the later of November 30, 2009 or 60 days from the date of the distribution to transact the indirect rollover. So if you received a distribution earlier in 2009, you can still roll it over as long as it is received by November 30. Note, however, that if you received a series of required minimum distribution installments from an IRA, you can only roll over one of them by the later of November 30 or 60 days after receiving such an installment, because under applicable tax law you are permitted only one rollover per year from an IRA.

Can I take a partial distribution?

Yes. You would first need to receive your 2009 minimum distribution payment and then return whatever amount you don’t want to take. The Minimum Distribution Statement you received from TIAA-CREF in January 2009 included instructions for returning all or part of your payment. For more information about partial distributions, please contact us at 800 842-2776.

I depend on my distribution and do not want to suspend it. What should I do?

You do not need to take any action. Participants who receive minimum distributions will continue to receive them unless you notify TIAA-CREF that you would like the payment to be suspended.

If you choose to receive your minimum distribution payment, keep in mind that since your 2009 required distribution is based on your 2008 year-end account value, the amount may be less because of fluctuations in the stock market in 2008 – particularly if your allocation includes equities.

If I suspend a minimum distribution in 2009, will I face any additional taxation or penalty when I take the distribution in subsequent years?

No. The law allows you to defer minimum distributions in 2009 without penalty.