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Your distribution choices if your vested account balance is at least $1,000

Contributions to your Retirement Savings Plan 401(k) account generally will stop with your last paycheck from Rockwell Automation. After you retire, you get to choose what you want to do with the money in your account as long as your vested account balance is at least $1,000. (Unlike with the Pension Plan, Retirement Savings Plan distribution choices cannot be made before you retire.)

Before you receive money from your Retirement Savings Plan account, it’s a good idea to seek the help of a trusted financial advisor for distribution advice, including how to receive any portion of your account that is invested in the Rockwell Automation Stock Fund.

Here are your distribution options (provided your vested account balance is at least $1,000) that you can make after you retire:

Distribution Options

Leave your money in the Rockwell Automation Retirement Savings Plan.

Your account balance will stay in your account where you can continue to defer taxes on this money and control your investments by using the investment choices available under the Plan.

 

NOTE: This is what will happen if you don’t make a choice when you retire (the Plan default).

Things to Consider

You can leave all of your money in the Plan up to age 70½. Taxes will apply when your taxable account balance is eventually paid to you.

 

NOTE: IRS rules require that you begin to take your money out of the Plan by April 1 of the year after you reach age 70½. The only exception to this is if you continue to work past age 70½.

Take a lump-sum cash distribution.

The full value of your vested account balance will be paid to you in a single cash payment, less the automatic tax withholding on the taxable portion of your payment, as required by law.

 

NOTE: If your account balance is $1,000 or less, it will automatically be paid to you in a single lump-sum cash payment after you retire, unless you elect to transfer it as a direct rollover into an IRA or a new employer’s plan that accepts rollovers.

Things to Consider

  • You receive a single cash payment of your entire vested account balance. No other benefits are payable from the Plan after you receive the payment.
  • You can defer paying taxes on your lump-sum payment by rolling it over to an IRA or other eligible employer’s retirement plan within 60 days of when you receive it.
  • If a portion of your account is invested in the Rockwell Automation Stock Fund, you’ll need to decide how you want it paid out—either as cash or as stock.

NOTE: If you don’t roll over your lump-sum payment, the IRS requires that 20% automatically be withheld and you will have to pay additional income taxes at tax filing time if the 20% withholding amount is not enough. If you are younger than 59½, early withdrawal taxes may apply. Your payment is also subject to state and local income taxes where applicable. Some states, such as Ohio, require automatic state tax withholding, and you may be required to pay additional taxes at tax filing time if the amount withheld is not enough.

Request annual installment payments.

You can only choose this option if your vested account balance is at least $10,000 and you retire at or after age 65, or at age 55 with at least 10 years of service.

Your account balance will be paid to you in annual installment payments, with estimated taxes automatically being withheld on the taxable portion of your payment as required by law. You choose the payment time period, up to a maximum of 10 years. If you die before receiving all payments, the remaining balance will be paid to your beneficiary in a single lump-sum cash payment.

Things to Consider

  • The IRS requires that 20% automatically be withheld on the taxable portion of your account balance. You will have to pay additional income taxes at tax filing time if the 20% withholding amount is not enough.
  • Your payment is also subject to state income taxes, and local income taxes where applicable. Some states, such as Ohio, require automatic state tax withholding. If you live in one of those states, you will have to pay additional state income taxes at tax filing time if the estimated withholding amount is not enough.
Request a partial withdrawal if you are 59½ or older.

You may elect to receive a portion of your account balance paid to you in a cash payment, less tax withholding as required by law. The remainder of your balance stays in your account tax-deferred, and you continue to control your investment choices.

Things to Consider

  • The IRS requires that 20% is withheld for federal income taxes on any taxable portion of your payment. You may have to pay additional taxes at tax filing time if the 20% is not enough, in addition to any applicable state or local taxes.
  • To select the amount, source or investment for a partial withdrawal after age 59 1/2, call the Service Center at Fidelity at 1.877.ROK.401K (1.877.765.4015).
Request a direct rollover.

Your vested account balance will be paid to an IRA (individual retirement account or individual retirement annuity) or a new employer’s retirement plan that accepts rollovers on your behalf.

Things to Consider

  • With a direct rollover, you can continue to defer taxes on your account balance. Taxes will apply when this money is eventually paid to you.
  • If a portion of your account is invested in the Rockwell Automation Stock Fund, you’ll need to decide if you want it paid out as cash or as stock.

When You Can Expect Your Distribution

Your distribution request (direct rollover or cash payment) from your Retirement Savings Plan account will be processed in one to two business days. It may take one to two weeks for you to receive it.

Retirement help from Financial Engines

As long as you maintain a balance in the Retirement Savings Plan, you have access to help from Financial Engines. You can talk to them about investing and spending strategies for the money you’ve saved in your 401(k) plan and how to make the most of all your sources of income. If you’re already receiving Professional Management, this service will continue until you cancel or withdraw your full balance from the Plan. To speak with an Investment Advisor Representative, call Fidelity Investments and ask to be connected to Financial Engines.

Take Note of These Rockwell Automation Stock Fund Details

If a portion of your Retirement Savings Plan account continues to be invested in the Rockwell Automation Stock Fund after you retire and that amount is more than 15% of your total account balance, Fidelity will automatically transfer the portion that exceeds 15% of your account balance out of the Rockwell Automation Stock Fund and into the default target date fund in the year after you retire. If this applies to you, Fidelity will notify you in advance of the transfer.