Frequently Asked Questions - BENCOR

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BENCOR, Inc. specializes in the design, implementation and administration of specialized qualified and non-qualified retirement planA pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferred until withdrawn and are deductible to the employer as a current business expense.s for public employees throughout the United States. BENCOR currently administers hundreds of retirement plans, including Special Pay Plans and FICA Alternative Plans for a number of the largest school districts, community colleges and municipalities in the United States.

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The program is mandatory for all covered employee groups who retire or participate in the Deferred Retirement Option Program (DROP)DROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank.. According to Internal Revenue Service (IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.) guidelines, the program must be mandatory in order to qualify for the tax advantages of the plan.

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The BENCOR 401(a) / 403(b)A defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. Special Pay Plan (SPP) is a tax-qualified retirement planA pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferred until withdrawn and are deductible to the employer as a current business expense. for unused sick pay, vacation pay or severance pay.

The BENCOR SPP is a powerful retirement tool offered by your employer. If you are entitled to sick, annual-leave and vacation pay, as well as other forms of special pay, the BENCOR SPP will help ensure you never pay Social SecurityEvidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options). and Medicare taxes on that money. It will also give you the ability to defer payment of the related income taxes until you receive distributions at retirement.*

*Note: Income taxes are payable upon withdrawal. Federal restrictions and a 10% tax penalty may apply to a withdrawal after termination of employment if you are not at least age 55 by year end.

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Visit the BENCOR website at www.bencorplans.com and choose “Account Access” to login and view your account information online.

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Your employer will automatically deposit into your 401(a) / 403(b)A defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. Special Pay Plan account – up to the maximum allowed by law – any unused sick-leave, annual-leave or vacation pay that you have accumulated. If the accumulated sick-leave, annual-leave or vacation pay is greater than $98,000* (2010 maximum allowed) the remainder will be paid to you in cash, less payroll taxes of 7.65% and subject to current income tax.

*Note: The maximum contribution for a 401(a) and 403(b)A defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. Special Pay Plan may be reduced by, or require coordination with contributions by the same employer in the same year to other 401(a) and 403(b) planA defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½.s respectively.

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You are immediately 100% vested in all contributions to your account.

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Upon enrollment, contributions are automatically invested in the Guaranteed Pooled Fund (an interest bearing account) and will remain there until you decide otherwise.

You may choose to invest your money in any of the additional investment options that may achieve a higher or lower rate of return than the Guaranteed Pooled Fund. Those variable accounts carry no guarantees and the participant assumes all investment riskThe chance that an investor will lose all or part of an investment..

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You may change your investment options at any time with no transfer fees. You may make these changes either over the telephone, over the internet or by written instructions.

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If you elect to have your funds deposited into the fixed interest option, the principle and interest paid on the account carry a minimum rate of return guaranteed by the investment provider.  If you elect to invest your funds into the variable investment options, you assume all market riskThe chance that an investor will lose all or part of an investment.s.

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You may withdraw your funds from this account at any time after your termination of employment with no surrender charges.

Note: Please seek tax advice from competent counsel to determine the tax liabilityAny claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans. on withdrawals.

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You may borrow the lesser of $50,000 or 50% of your account balance, for any reason, and not pay taxes on the borrowed funds if the loan is prepaid as required by IRS guidelines.

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At the time you enter DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank., you have the option of receiving your accrued vacation leave at the beginning or end of your DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. period. With either option, your accrued vacation leave will be deposited into your account in the BENCOR 401(a) plan. If you elect to have your accrued vacation leave paid at the beginning of DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank., it will be used in the calculation of your five highest years of earnings, and to calculate your monthly retirement benefit under the Florida Retirement System (FRS). Your accrued sick leave is deposited into your BENCOR 401(a) account over the five-year DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. period or at sepA type of plan under which the employer contributes to an employee's IRA. Contributions may be made up to a certain limit and are immediately vested.aration of service.

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Funds may only be withdrawn after sepA type of plan under which the employer contributes to an employee's IRA. Contributions may be made up to a certain limit and are immediately vested.aration from service from your employer. However, a loan provision in this program allows you to access funds in your account while continuing to defer income tax. Contact BENCOR Administration Services directly should you have additional questions on loan provisions.

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At the end of your DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. participation, you can complete the "DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. Selected Payout Form" provided by FRS and have your DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. account "rolled" into your BENCOR 401(a) account - this will continue the Federal income tax deferral. If you are between the ages of 55 and 59 1/2, consider the BENCOR 401(a) account for your "rolloverA method by which an individual can transfer the assets from one retirement program to another without the recognition of income for tax purposes. The requirements for a rollover depend on the type of program from which the distribution is made and the type of program receiving the distribution." of DROPDROP is a program under which you may retire and have your monthly retirement benefits remain in the Florida Retirement System (FRS) Trust Fund instead of being paid directly to you or deposited in your bank. funds. Unlike an IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred. account, there is not IRS 10% early distribution penalty unless you retire prior to the year in which you attain age 55.

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You don’t need a current account to roll over your IRAContributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then they are taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred., 401(k)A defined contribution plan that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 401(k) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 ½. or 403 (b) assetAnything owned that has monetary value.s to a BENCOR account. If you’ve ever worked for a BENCOR plan employer, you’re eligible.

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If you have questions that weren’t answered here please call our office and schedule a personal consultation or fill out our online request information form.

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