Be sure you understand when you can request a distribution, how to apply for one and at what age you are required to take one.
You should also understand that federal and California laws guarantee certain rights to the spouses of retirement plan participants, even those who are no longer married. Marital community property laws apply to your Stanford Contributory Retirement Plan (SCRP) distributions, depending on your situation, and these rights vary according to the specific circumstance. Read more on Spousal Rights to Benefits.
NOTE: The following information pertains to ordinary distribution rules; you may have alternative options in 2020 as provided in the Coronavirus Aid, Relief, and Economic Security Act. Read more about the CARES Act and temporary changes to distributions, including Required Minimum Distributions, in this FAQ.
Distributions While Still Employed
In some cases, you can request a distribution while you are still employed at Stanford.
- If you are age 59-1/2 and still working at Stanford, you can request an in-service distribution of your Tax-Deferred Account (TDA)
- If you are age 59-1/2 and working 50% or less in a non-tenured position, you can also request an in-service distribution of your Contributory Retirement Account (CRA)
- Starting in February 2020, if you are age 59-1/2 and still working more than 50% time, you can request a one-time distribution of a portion of your employee contributions and earnings from your CRA, as calculated by Stanford Benefits
- All distributions are subject federal and state income taxes
- Employees who are under age 59-1/2 and receive a distribution may also be subject to a penalty tax
When Employment at Stanford Ends
All plan contributions stop at the time your employment with Stanford ends. You will, however, continue to receive quarterly statements and be able to direct your own investments. You remain subject to all plan rules.
Even though you are no longer employed at Stanford, it remains your responsibility to keep your mailing address up-to-date with My Retirement Savings. This is important so you can be notified of any future plan changes.
How to Apply for a Distribution
Before any payments can begin from the plan, you need to apply for a distribution and undergo an application review process and waiting period. If you want a distribution, consider the following:
- To begin the process, contact your investment provider(s) directly and specify if you want a lump sum payment, a retirement annuity, or both; this process may take a minimum of 45 days
- If you are applying for a one-time in-service withdrawal from your CRA, Stanford Benefits will first need to calculate the available amount for distribution, which can take up to 30 days to complete
- Be sure to file your application at least 30 days before the date you want your benefit payments to begin. All distributions are subject to a minimum 30-day waiting period after your termination date
- In addition to the 30-day waiting period, allow at least 15 business days for the administrative review and approval process of your distribution request. Distributions may be subject to an administrative processing fee
- No distributions will be reviewed, approved or processed during the last two weeks in December when the University HR Service Team is unavailable due to the university's winter closure
Your account will be valued as of the date your distribution request has been fully reviewed, approved and processed. You bear the gain or loss in any market fluctuations that occur between the date you apply for a distribution and the date the distribution is made.
Stanford is required to follow IRS regulations that mandate the university treat its retirement plans and plans maintained by other Stanford-related employers as belonging to a single “controlled group” for various purposes. This controlled group includes:
- Stanford University
- Stanford Health Care
- Lucile Packard Children’s Hospital at Stanford
- University Healthcare Alliance
- Packard Children’s Health Alliance
- Lucile Packard Foundation for Children’s Health
- SAA Sierra Programs (Alpine Chalet & Sierra Camp)
Employees who work for any of these organizations will be considered, for certain administrative purposes, to be employed by the same employer: Stanford. If you have been transferred and/or hired by any of the other entities within the controlled group, you will not be eligible for a distribution because you are considered still employed by Stanford.
If you term from the university and are hired at SHC, you can request for a “transfer in,” with Fidelity. Transfer in is moving your university SCRP account to SHC’s retirement savings plan. Please contact Fidelity directly at 888-793-8733 to initiate the process or for additional questions. Transfer in is only eligible for university and SHC employees only.
Call the University HR Service Team at 650-736-2985.
Required Minimum Distribution: Age 73 After Jan. 1, 2023
When you participate in the SCRP and terminate employment from Stanford, you must receive a minimum amount from your SCRP account each year after you reach age 73, starting no later than April 1 following the year in which you reach age 73. This minimum amount is also known as a required minimum distribution (RMD). Federal law (the SECURE Act 2.0) changed the age of the required distribution as of Jan. 1, 2023. Please note
- This change applies to anyone turning age 73 after Dec. 31, 2022, or later.
- If you left Stanford in 2019 at age 70-½ or older, your required minimum distribution date remains April 1, 2020, and every year thereafter.
- The IRS calculates how much you must withdraw, and you may have to pay income taxes on that amount. The penalty for not taking the distribution is 50% of the amount the IRS calculated you should take.
SECURE 2.0 Act drops the excise tax rate to 25% beginning in 2023.
Note that you must take the RMD when you no longer work at Stanford, which includes employment with any of Stanford’s "controlled groups" as explained above. If you become employed by Stanford Hospitals and Clinics, Lucile Packard Children’s Hospital, University Healthcare Alliance, Packard Children’s Health Alliance, SAA Sierra Programs LLC (Alpine Chalet) or another member of Stanford’s controlled group of employers, the IRS considers you to be employed by Stanford for purposes of distributions from the SCRP. This means that you do not have to take a RMD from the SCRP, and may only take an in-service distribution in the instances defined above.
When you leave the Stanford controlled group of employers, you will be required to take a RMD from the SCRP after age 73.
With the passage of the Secure Act 2.0, the rules and regulations around RMDs continue to evolve. We encourage you to visit the IRS website to stay informed of the changes. For additional information, read through What’s ahead for your RMDs, a Fidelity article that outlines how to calculate, withdraw or use RMDs, as well as TIAA’s 5 Steps to Taking Your RMDs article.
Retirement Plan Limits
Plan limits change from year to year, based on IRS tax rules. View the current contribution limits
Contact your investment provider (Fidelity and/or TIAA) for the required forms and instructions to take a distribution, loan, or hardship from your account in the SCRP.
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