AG Financial Solutions

According to our plan documents, an AG credentialed minister who is under age 59 ½, may not take early distribution from the 403(b) plan (exceptions for traditional after-tax and rollover balances; see FAQ below). This is because it is likely that the minister will continue to get AG-related compensation during their life.

For distribution purposes, the following criteria need to be met for there to be a severance from employment for lay workers and non-AG ministers who have been employed at an AG church or ministry:

• An employee has ceased regular employment at any and all AG ministries.
• There is no verbal, written, or other agreement to continue work on a regular basis or to guarantee a certain number of hours to be worked in any time period.
  * Exception: Former employees may be on call to temporarily fill in for absent employees or work on special projects. There would be a reasonable expectation for the former employee to work less than 20 hours per week.
• The former employer has certified to us in writing that the severance from employment, as defined above, has occurred.

Tax laws and plan restrictions put limitations on when you can take distributions from your 403(b) retirement funds.

You can withdraw traditional after-tax (but not Roth) funds and balances from rollovers at any time. Please be aware that taxes and a 10% early withdrawal penalty may apply to the earnings portion of the withdrawal.

All other 403(b) funds can be accessed only in the following situations:

• Severance from employment.
• Attainment of age 59 1/2
• A total and permanent disability
• For a financial hardship as defined by law and the plan document
• For your beneficiaries at your death

Early distribution is a distribution that occurs at severance from employment before age 59½ that is not due to disability or death.

According to our plan documents, an AG credentialed minister may not take early distribution from the 403(b) plan. This is because it is likely that the minister will continue to get AG-related compensation during their life.

For distribution purposes, the following criteria need to be met for there to be a severance from employment for lay workers and non-AG ministers who have been employed at an AG church or ministry:

• An employee has ceased regular employment at any and all AG ministries.
• There is no verbal, written, or other agreement to continue work on a regular basis or to guarantee a certain number of hours to be worked in any time period.
  * Exception: Former employees may be on call to temporarily fill in for absent employees or work on special projects. There would be a reasonable expectation for the former employee to work less than 20 hours per week.
• The former employer has certified to us in writing that the severance from employment, as defined above, has occurred.

Generally, no you may not access funds from a 403(b) before age 59 ½ if you are still employed at an AG ministry. The retirement account is just that - for your retirement. We do offer a hardship provision which allows for distributions upon certain hardship conditions. IRS-approved circumstances must be met in order for a hardship distribution to occur. We also have our 403(b) loan program. You may also get funds from your account through a plan loan. Please contact our offices for more information on hardship distributions and loans.

You may also access traditional after-tax and rollover funds at any time. Taxes and early withdrawal penalties may apply.

Because of the important tax benefits of the 403(b) accounts and because the government is interested in you having enough money during retirement, the provisions of Internal Revenue Code 403(b) were designed to prevent easy access to funds in retirement accounts.

If you meet one of the qualifications for a distribution, then you are eligible to move your money out of MBA into another qualified retirement plan. Please contact MBA for the proper documentation in order to process your request in a timely manner.

Our program is not set up at this time to receive double or additional payments. You need to make your monthly payments via ACH/bank draft or you can pay your loan off in full if you reach the point where you have the funds to do so. Please contact our office to find your current loan balance before you send in a check to pay off your loan.

A loan can take as little as a week to process. A lot depends on the timing and if your paperwork is accurate. Distributions occur once a week (on Fridays). Paperwork needs to be in our office by the Friday prior to the week of distribution. We must have a completed loan application from you to start the process. There are several documents that are needed. The manner in which the forms are sent and received also effect the timeliness of the distribution.

If your balance is over $1,000 you can leave your account with MBA. However, for simplification, we do recommend that you consolidate the number of retirement accounts you have with various vendors by rolling money into your account with MBA.

If the money you are rolling in is from income in the exercise of ministry and you qualify for retired clergy housing allowance then, yes, you can. If the funds you are rolling are not from income in the exercise of ministry, you cannot claim minister's housing with MBA.

MBA does not charge you a penalty. If you are under 59 ½ you may incur a 10% penalty for an early distribution. If your distribution is not covered by clergy housing you will incur a 20% mandatory IRS withholding. This is not a penalty. There are exceptions to the IRS penalty such as a withdrawal after you have had a total disability as defined in Internal Revenue Code 72(m)(7).

MBA does not limit the number of distributions you take in a calendar year. MBA allows for one change in a periodic distribution in each calendar year without a charge. A first-time start-up of a periodic distribution does not count as a change in your periodic distribution. MBA also allows one non-periodic distribution per calendar year without a charge. A periodic distribution is one that you take on a recurring basis either monthly, quarterly, semiannually or annually. A non-periodic is a distribution you need on a one-time basis. Every withdrawal over and above your free request for the calendar year is subject to a $50 fee.

There is no charge for starting a periodic distribution. MBA also allows you to make a once-a-year change in a periodic distribution and a one-time per year non-periodic distribution without a charge. Additional distributions may incur a charge. Due to additional costs that MBA incurs, we charge for special handling requests, such as for a bank wire. Retirement loan distributions incur additional fees for processing.

For certain distributions not covered by clergy housing allowance, the IRS requires us to withhold 20% of the taxable distribution. Additional tax withholding is required in other situations. We will also take some fees when you have requested distributions that require special handling, such as wiring funds to a bank account.

For those distributions not covered by clergy housing allowance, the IRS requires that 20% of the taxable distribution to be withheld. There are a few exceptions if your account is paying out over 10 years. If you do not have any income tax liability for a year, you may be eligible to get a refund of the taxes that were withheld. Please consult your tax professional to determine your tax responsibilities and rights.

We are required to withhold 30% of all taxable distributions if you live in a foreign country. Consult your tax professional to see how to treat clergy housing allowance declared on your retirement distributions while living in a foreign country.

Distributions are done once a week. For a non-periodic distribution a Payout Request Form must be received the Friday prior to the distribution date. If there are no problems with the form, the distribution should be paid the following Friday. Any issues with the form can, and most likely, will delay the processing of your distribution. In order to set up a periodic distribution the paperwork must be received two weeks prior to the first distribution date.

There are legal restrictions on distributions and the need for related verifications, the selling of investments for cash, and the reporting requirements, in addition, the administration of distributions is very time consuming. It is always advisable to budget for your retirement needs and plan your distributions accordingly.

A minimum balance of $1,000 is required.

As long as a faxed form is legible and completed accurately, we happily accept faxed Payout Request Forms for your distribution.

This is to protect your spouse's rights to the retirement account.

Tax laws and provisions of the plan restrict when you can take distributions from a 403(b) plan. If you have traditional after-tax contributions (not Roth) or a balance from rollovers from another plan, you can get a distribution at any time (taxes and early withdrawal penalties may apply). For all other contribution types, you must have a distributable event to get a distribution. A distributable even is one of the following:

• Attaining age 59 ½
• Becoming disabled (total and presumably permanent)
• In the case of a hardship (as defined by law and the plan)
• Have a severance from employment