How to Remove Money From a Cash Balance Pension Plan
Original post by Emory Street of Demand Media
A cash balance pension plan is a defined benefit plan, which means that you receive a stated, preset amount upon reaching retirement age. Your employer takes on the potential risks of investments. Once you become eligible for retirement, you can take a lump sum payment or choose yearly distributions. If you terminate your employment before retiring, decide whether to withdraw the money early or move it to another retirement plan.
Request a cash balance pension plan withdrawal form from your plan administrator.
Fill out the form, providing your full name, Social Security number and reason for withdrawal.
Indicate whether you wish to withdraw a lump sum or an annuity, to be distributed in equal payments each year.
Indicate whether you prefer to rollover your pension plan into another retirement account, such as an IRA. If so, indicate your account number and IRA provider. You can only rollover the pension plan if you choose to withdraw the lump sum.
Provide your account information if you prefer to have the money wired to your bank account.
Tips & Warnings
- You may also rollover your cash balance pension plan into an IRA or to another employer's retirement plan when you terminate your current employment.
- The Pension Benefit Guaranty Corporation (PBGC) guarantees a limited amount of your pension benefits if your company declares bankruptcy or is otherwise unable to pay its pensions.
- U.S. Department of Labor: FAQs About Cash Balance Pension Plans
- Fidelity Investments: Fidelity Retirement Plan Single Withdrawal Request Form Instructions
- Prudential: Understanding Cash Balance Retirement Plans
About the Author
Emory Street has been a freelancer writer specializing in history and health topics for various websites since 2009. She holds a Bachelor of Arts in American studies from Skidmore College.