NJ ABP withdrawal before age 55 (loan, unemployment, university)

[halfscientist]

I have some financial difficulties due to unemployment. I was looking to withdraw NJ Alternate Benefit plan (401k or exactly called 401a) retirement contributions, but was told i can only withdraw my contribution and employer match will only be available after age 55. I have run out of resources. I am vested and employer contribution is mine to take but restricted by age.

I had a chat with HR and plan carrier, but they claim there are no provisions for hardship withdrawal. I had also called NJ division of pension and benefits, was told that i can withdraw, but they only handle ABP withdrawal submitted through employer. My learning thus far is that there are no clear rules on provisions permitted under ABP.

Does any one know any provisions/exception to NJ ABP which allows cash distribution from remaining employer match/contribution before age 55?


Division of Pensions and Benefits

Thank you

-- re-post from retirement forum

[Badfish740]

Originally Posted by halfscientist

I have some financial difficulties due to unemployment. I was looking to withdraw NJ Alternate Benefit plan (401k or exactly called 401a) retirement contributions, but was told i can only withdraw my contribution and employer match will only be available after age 55. I have run out of resources. I am vested and employer contribution is mine to take but restricted by age.

I had a chat with HR and plan carrier, but they claim there are no provisions for hardship withdrawal. I had also called NJ division of pension and benefits, was told that i can withdraw, but they only handle ABP withdrawal submitted through employer. My learning thus far is that there are no clear rules on provisions permitted under ABP.

Does any one know any provisions/exception to NJ ABP which allows cash distribution from remaining employer match/contribution before age 55?

I'm not really understanding. Do you work for a state agency, a local government, or a state college/state authority? Also, can you take a loan? Finally, depending on what you're specific situation is there might be better options than liquidating your pension.

[HalfFull]

You should be able to get a copy of the plan, and I would think that it would specify if/how withdrawals are permitted.

[Badfish740]

Originally Posted by HalfFull

You should be able to get a copy of the plan, and I would think that it would specify if/how withdrawals are permitted.

It sounds like an issue of the Division of Pensions and Benefits not talking to the HR rep of whatever state agency/organization he works for. There are two types of public pensions in NJ, Public Employees Retirement System (PERS), which is a defined benefit system, and Alternate Benefit Program (ABP), which is modeled after a private sector 401K. The employee contributes a percentage and the state matches it, but it is not a defined benefit plan. I can't imagine it wouldn't have an early withdrawal or loan option. I know that PERS does.

[halfscientist]

Originally Posted by Badfish740

It sounds like an issue of the Division of Pensions and Benefits not talking to the HR rep of whatever state agency/organization he works for. There are two types of public pensions in NJ, Public Employees Retirement System (PERS), which is a defined benefit system, and Alternate Benefit Program (ABP), which is modeled after a private sector 401K. The employee contributes a percentage and the state matches it, but it is not a defined benefit plan. I can't imagine it wouldn't have an early withdrawal or loan option. I know that PERS does.

Thank you Badfish740, and HalfFull.

I worked at University, participated in NJ ABP for 4 years, my contribution was 5% of my salary and employer matched with 8%, after one year of participation into ABP i am vested so i am entitled to take everything.

The loan option is not available after termination, and same for hardship withdrawal-they do not consider terminated employee for hardship.

They allow early withdrawals only to portion of my contribution with 10% penalty in addition to 20% tax, and was told that the employer contribution will only be allowed after i reach age 55.

I am trying to withdraw remaining employer contribution due to unemployment hardship, but they keep telling me age restriction.

My question is does anyone have idea of any provisions that allow withdrawal of remaining employer match?

Thank you

[halfscientist]

Originally Posted by HalfFull

You should be able to get a copy of the plan, and I would think that it would specify if/how withdrawals are permitted.

Here are the exact words
**
Lump-sum cash distributions to members under the age of 55 are limited to the member’s contributions and
earnings. The remaining employer contributions and earnings are only available after age 55.

There is no minimum retirement age under the ABP. A member may begin collecting an annuity, or take a
cash distribution, at any time after termination of employment; however, if you return to public employment
in New Jersey, you cannot participate in any State-administered retirement system. The member will
automatically be considered retired, regardless of age, if there is any distribution of mandatory contributions.

**

i keep getting same answers from HR people, they don't discuss any exception which would otherwise allow hardship withdrawal