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In-Service Distribution (ISD)

When you think of your pension, you think about the financial support you’ll receive when you retire. But now, through the in-service distribution option, you can commence your benefit while you are still actively working at Rockwell, giving you more flexibility and choice in how and when you receive your pension plan benefits.

Who is Eligible to Receive an ISD

If you are eligible for a Pension Plan benefit from Rockwell Automation, you will be eligible to receive an in-service distribution of your benefit beginning the December 1st following your attainment of age 59 ½.

What Happens to Future Retirement Benefits if You Elect an ISD

If you take an in-service pension plan distribution, you will give up future retirement benefit accruals in the pension plan and instead begin accruing retirement benefits through the Non-Elective Contribution (NEC) under the Rockwell Automation Retirement Savings Plan (401(k) plan).

When to Start the ISD Election Process

In-service distributions are only available for eligible pension plan participants to commence on December 1st of each year. If you are eligible and are interested in commencing your pension benefit as an in-service distribution, you may begin the process by requesting an in-service distribution election kit in early September but no later than November 30th of the year in which you’d like to commence.

How to Start the ISD Election Process

You can either:

  • Go online to Your BenefitsTM, within Your Retirement Hub select Get Started. You will then need to answer ‘Yes’ when asked if you wish to receive an in-service distribution. Or,
  • Call the RASC and say “pension” or “retirement” when prompted. Please let your retirement specialist know that you’re interested in receiving an in-service distribution.

What to Expect Next

You will receive an in-service distribution election kit either by mail to your home address or within your secure participant mailbox on Your BenefitsTM depending on your deliver preference.

Your kit will include these pieces:

  • Instructions on what to do
  • Pension Elections Worksheet for you to reference as you make decisions regarding your pension benefit
  • Pension Calculation Statement showing the personal information that was used to calculate your pension benefit and an estimated amount of your benefit under each payment option that is available to you
  • Pension Option Descriptions summarizing the payment options
  • Notice of Rights outlining the legal information we are required to provide to you before you make your pension choices
  • Special Tax Notice Regarding Plan Payments outlining the tax consequences of receiving your benefit

You will have an opportunity to make your benefit elections on Your BenefitsTM or by calling the RASC. After you’ve made your elections you will receive the following pieces that you would carefully review to make sure the information shown is accurate based on your personal situation:

  • Pension Election Confirmation Statement summarizing the choices you made
  • Pension Election Authorization Form that you need to complete and return to verify your choices

When Are ISD Payments Made

If you have successfully completed all the required documents to receive an in-service distribution, your benefit will be distributed on or around March 1st of the following calendar year. For example, if you elect to receive a lump sum in-service distribution on December 1st, 2024, your payment will be distributed on or around March 1st, 2025. If you elect to receive an in-service distribution as a monthly annuity on December 1st, 2024, your first distribution will occur on or around March 1st, 2025 with a retroactive payment back to December 1st, 2024.

In-Service Distribution Information Sessions

Consider These Things Before You Elect an In-Service Distribution

Before you complete the ISD process, please review the following supplemental documents as they relate to your pension benefit:

Plan Ahead

Before making an election, you should carefully consider your commencement date, early reduction factors that may apply and your distribution choice, as these may affect payment options and benefit amounts. Estimates of benefit amounts as of specific dates may be viewed on Your BenefitsTM or obtained by contacting the RASC.

The Effect of Interest Rates on Lump Sum Values

A lump sum payment provides the total value in today’s dollars of all your expected future annuity payments. The lump sum calculation factors in your age plus IRS-published life expectancy and interest rates.

Interest rates and lump sums have an inverse relationship. When interest rates increase, lump sum values decrease, and vice versa.

For example, let’s say that you are expected to receive a $100 annuity payment one year from today and the current one-year interest rate is 10%. If you had $91 today, it would grow with interest over the course of the year and reach $100 one year from today. Therefore, the lump sum value today of the future annuity payment is $91 when the interest rate is 10%.

If the current one-year interest rate is 5%, you would need $95 today to reach $100 one year from now. Therefore, the lump sum value today of the future annuity payment is $95 when the interest rate is 5%.

This illustrates the inverse relationship of interest rates and lump sums. At a higher interest rate, a smaller amount of money in today’s dollars is needed to meet the value of expected future payments.