401(k) Plan - Loans, Withdrawals & Distributions
When a financial need arises, you may take a loan from your 401(k) Plan accounts. You may have one loan outstanding from your accounts at any time. If you have a loan which remains unpaid, you will not be permitted to take another loan until you have fully repaid that loan.
When you take out a loan, you’re borrowing the money in your accounts. You pay it back, with interest, to your accounts through automatic payroll deductions. The Plan Administrator sets the reasonable interest rate you pay on your loan. The length of a loan may be up to five years for a general-purpose loan or up to 10 years if the purpose of the loan is to buy or build your primary residence.
To apply for a loan, log in to advocatebenefits.com>Retirement Benefits or call the Advocate Benefits Service Center.
There are three types of withdrawals while you remain employed.
- Age 59½ or Older Withdrawals—Once you reach age 59½, you may request in-service withdrawals from your vested Plan Accounts each calendar year. This amount is subject to income tax withholding (unless you roll over the amount you withdraw directly into an IRA or other qualified plan). You can also roll over the non-Roth 401(k) amounts of an age 59½ withdrawal into your Roth Account.
- Rollover Withdrawals Before Age 59½—As long as you are employed or considered employed by Advocate, you may request a withdrawal from your Rollover Account at any time and for any reason by following the procedures set by the Plan Administrator.
- Financial Hardship Withdrawals Before age 59½—In case of financial hardship, the Plan Administrator may permit you to withdraw some or all of the pre-tax contributions you made to the Plan (but not the earnings on those contributions), the vested portion of your Match Account and Appreciation Account and any Rollover Account you may have. You will be required to provide documentation supporting your hardship at the time of your application for withdrawal.
Distribution upon Termination
Advocate offers Installment distribution options for the 401(k) and 403(b) plans. This feature can help ease the transition into retirement by providing regular, predictable income. Associates age 55 and over can choose monthly, quarterly, semi-annual or annual payments from the Advocate retirement plans. You’ll receive payments until all account balances have been paid out. You are able to change your payment option at any time.
If you decide on installment payments, your money continues to stay invested in the Advocate 401(k) Plan. This allows you to continue taking advantage of a range of quality investment options and low management fees that may not be available to an individual investor.
You must elect one of the following options:
- Direct Distribution Option: This provides a distribution issued to you. If you elect this option, 20% in federal income taxes will be withheld from your distribution.
- IRA/Qualified Plan Rollover: This provides a distribution issued to an IRA or qualified employer plan and is mailed to you for delivery. You may elect to roll over a portion or all of your distribution.
- Installments: If your account balance is over $5,000 and you are age 55 or older, you may elect to have a defined number of payments or a specific dollar amount (paid monthly, quarterly, semi-annually or annually) made payable to you either by cash or by direct deposit to an account of your choice. Your installment election is made via the Termination Distribution form available online at advocatebenefits.com or by requesting one from a service representative. If you choose to receive installment payments, you may change that election at any time.
Review the 401(k) Plan Summary for further details about loans, withdrawals and distributions.